Credit Card Mania

Credit cards of the rich and famous

2011-05-20T12:01:00.001+10:00

What benefits don't the wealthy get these days? According to The New York Times, they even get VIP service from the major credit bureaus. (While the rest of us get limited help from a contracted overseas customer-service rep when we call about errors on our credit reports, these folks get immediate, personalized, stateside attention, the article says.)

But if you really want to show who's who, you want to present the right type of plastic or, in some cases, titanium. Creditcents, the blog at Creditnet.com, has a rundown on the "7 elite credit cards for the rich and famous."

The Black Card -- formally called the American Express Centurion Card -- is probably the best known. For a $5,000 initiation fee, plus a $2,500 annual fee -- oh, the perks:

Benefits: Everything included in the Platinum program, personal concierge service, complimentary companion airline tickets with certain air fares, dedicated personal shoppers, first-class upgrades, one free night at most Mandarin Oriental Hotels with paid stay, privileges at several luxury hotel chains, complimentary enrollment in select car rental programs, and VIP access to celebrity events.
You can get this card when they invite you to apply.

The benefits of the American Express Platinum Card aren't too shabby either. Kevin Fleming from CreditShout.com says, "The bar-setter for elite cards, the Platinum Card From American Express has been showing rich people a good time since 1984."

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Concierge service, upgrades of all sorts, access to VIP airport lounges, hotels and events, and attention from people who wouldn't normally give you the time of day are common features of elite cards. So are extra warranty protection, expanded travel insurance and other enhancements.

Here are a few details about some of the other cards on the list:
A $1 million account with Coutts may get you the Coutts World Card. (It's invitation-only.) The $500 annual fee is waived if you charge $100,000 in a year.
You don't need to be the head of a company to get the Citi Chairman American Express Card, but you do need a credit score of 700 or higher. Annual fee: $500. It comes with emergency translation services, among many other perks. (This card apparently is no longer available to new customers. Oh, shucks.)
The Bank of America Accolades Card is heavy on VIP access and upgrades, and offers "emergency medical evacuation," Creditcents says. The annual fee is a modest $295.
Barclays has the other black card -- the Visa Black Card -- with an annual fee of $495. Creditcents says:
How to get one: You must be in the top 1% of income earners in the United States, have a proven credit history of spending a minimum of $50,000 per year, and maintain an excellent credit score.
Finally, the U.S. Bank Stratus Rewards is another invitation-only card, known as the White Card. The benefits include access to "unique luxury experiences" and private jets, and even $5,000 in lost luggage insurance -- which is likely more than the value of my luggage and entire wardrobe combined. The annual fee is a steep $1,500.
We're not saying you should make one of these cards your goal. Sometimes it's just fun to read about how life is for people like the richest 1%, who, by the way, have 35.6% of the nation's wealth. (In fact, their share actually increased between 2007 and the beginning of 2010, The Wall Street Journal reports. "Meanwhile, share of national wealth held by the bottom 90% fell to 25% from 27%.")

Estimate your credit score for free
Besides, do you really need a card like one of the above? CreditCards.com says probably not.

Many banks issue cards with no annual fee that also come with excellent customer service, heightened insurance and warrantee protection and a decent load of enticing travel and shopping rewards.

Mobile apps for paying the tab, browsing beers

2011-05-18T17:13:00.001+10:00

You finished dessert a while ago but haven't been able to catch the waiter's eye. Asking for the check will produce only another wait. And when you do get the opportunity to pay, you're still left sitting at your table until the waiter returns with your change or the credit card receipt.

It's the endgame to many restaurant meals. Now a Maryland technology company is trying to send it the way of the rotary phone.

MICROS Systems Inc. of Columbia, which makes point-of-sale terminal equipment for restaurants, has partnered with a Texas startup to expand the use of Tabbedout, an app that enables diners to pay with their smartphones.

The companies' goal? To let people settle their checks when they're ready to leave, reduce table turnaround times and encourage online interactions between customers and restaurants.

The app is rolling out at Houlihan's in Columbia, one of two restaurants in Maryland where patrons may now pay their bills on their iPhone or Android mobile phones. With MICROS now promoting the service to its thousands of restaurant clients, hundreds more businesses are expected to offer it by the end of the year.

"I think it's a brilliant plan," said Julie Stevens, the restaurant owner. "I, as a consumer, would love it."

With the rise of smartphones, mobile apps and more powerful wireless technologies, high-tech startups, credit card companies, and hardware and software firms are working to revolutionize the restaurant experience, with tablet computer menus and mobile payments.

"As much as this is going to benefit operators and consumers, we're also going to watch a culture change," said Tim Pincelli, director of products and training at MICROS. "It's about changing the way people do business in restaurants."

Nationwide, the restaurant industry pulls in about $600 billion in annual sales, according to the National Restaurant Association. But only a tiny fraction of the nation's 960,000 restaurants have adopted wireless technologies such as smartphones, handheld credit card scanners and tablet computers.

Consumers, however, are a little further along. A nationwide household survey commissioned last year by the restaurant association found about one-third of frequent restaurant patrons use Facebook. One in 12 uses mobile phone applications such as Foursquare and UrbanSpoon, which help people find and interact with restaurants.

The notion of using a smartphone as a digital wallet has been around for years. Generally, the mobile payment industry has focused on two technologies to enable the transfer of money — with the second still in its infancy in the United States.

The first is a text-messaging system, in which a consumer uses a text code to buy an item, and the charge is added to the user's monthly cellphone bill.

A new type of mobile payment system that industry observers expect to ramp up this year involves a wireless technology known as near-field communication, or NFC. Mobile phones would come equipped with a new chip, which would allow consumers to simply wave their phones in front of an NFC wireless reader. The consumer's credit card would then automatically be charged.

Consumers can expect to see plenty of competition in mobile payments. Major players eyeing the technology include PayPal, Google and Apple, in addition to credit card companies.

Visa, the largest credit card processor in the United States, announced last week that it is developing its own mobile wallet system that will use NFC and other technologies. The plans call for enabling people to use their mobile wallets at retail locations and even to transfer funds between people.

Few phones now on the market are outfitted with NFC technology. Observers say it could take several years for the technology to gain widespread acceptance among retail establishments and the technology hardware and software business.

Until then, making mobile payments through a smartphone app may be the next best thing. MICROS officials said the Tabbedout app, which is built by ATX Innovation Inc. of Austin, Texas, makes sense in many restaurant settings.

NFC technology, they say, in many cases would require diners to hand their smartphones to a waiter to swipe at a terminal.

Plus, the Tabbedout app allows customers to broadcast their restaurant choices to social networks such as Twitter, Facebook and Foursquare, which means free publicity for venues. So far, Tabbedout has been deployed in about 200 restaurants in 90 U.S. cities. MICROS expects to introduce the application to 50 to 100 restaurants a month, according to company officials.

American Express Surpasses Other Credit Cards In Sales

2011-05-17T11:05:00.001+10:00

MasterCard's credit card purchase volume was $115 billion in the first quarter of 2011, a 5 percent increase compared with the year earlier. While the company does not break down that spending, it said its consumer credit card spending rose. It was essentially flat in the fourth quarter of 2010 and negative going back to the second quarter of 2008. Analysts said that could mean consumers were returning to discretionary spending. "As the company looks to move beyond traditional charge and credit products, expanding our distribution network to new and innovative locations like post offices is key to accelerating the company's growth in new payments and digital platforms," said Alpesh Chokshi, president of Global Payment Options for Amex, in a statement.

Actual Costs
While market competition usually drives prices towards actual costs down, plus reasonable profits, the credit card companies and banks have put together cartel-like arrangements that have sidelined normal market dynamics. Three card companies – Visa, MasterCard and American Express – account for some 80 percent of cards. They recruit banks to their networks by promising them the major cut of the average 2 percent swipe fees added to every card transaction. The banks then use of big slice of the fees they collect to attract new, well-to-do subscribers with reward program financed through these fees.

Trading
American Express (NYSE:AXP) closed Thursday's positive trading session at $49.54. In the past year, the stock has hit a 52-week low of $37.13 and 52-week high of $50.47. American Express stock has been showing support around $48.94 and resistance in the $50.10 range. Technical indicators for the stock are Bullish and S&P gives AXP a positive 4 STARS (out of 5) buy rating. For a hedged play on this stock, look at the Jul '11 $49.00 covered call for a net debit in the $47.42 area. That is also the break-even stock price for this trade. This covered call has a duration of 64 days, provides 4.28% downside protection and an assigned return rate of 3.33% for an annualized return rate of 19.00% (for comparison purposes only). A lower-cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the AXP Jan '12 $35.00 call and selling the Jul '11 $49.00 call for a total debit of $13.03. The trade has a lifespan of 64 days and would provide 3.05% downside protection and an assigned return rate of 7.44% for an annualized return rate of 42% (for comparison purposes only). American Express has a current annual dividend yield of 1.44%. [ABR-Seven Summits Research]

Protect yourself from debit card fraud

2011-05-14T11:06:00.001+10:00

Davenport investigators said debit card fraud is happening frequently, and it is worse than having your credit card stolen.

"The problem with debit cards is when someone takes a hold of that account the money is withdrawn automatically from your checking account and your savings account," Officer Hank Jacobsen with the Davenport Police Department said.

Jacobsen said with credit cards the loss is not as great. That is because money can not be directly taken out of an account. There is also more time to stop transactions. Police said in light of the fraud at Michael's, you should take steps to protect your money.

"One of the best ways to protect yourself is to monitor your bank statements, credit card statements. You want to do that on a regular basis," Officer Jacobsen said.

You should check on a daily basis according to police, and if you notice any unusual transactions contact your bank.

"We recommend notifying your financial institution; your credit card company. Then, call your local law enforcement agency so you can file a report," Officer Jacobsen said.

Station owners say pump prices determined by competition

2011-05-13T10:15:00.000+10:00

The price of a gallon of gas exploded Wednesday in Louisville. AAA says the average price for a gallon of regular in the Metro is $4.02, though we've seen prices even higher. Tuesday, it was $.18 less. As the price at the pump goes up, so does frustration and concern from many consumers across Kentuckiana.

"It seems like we're working just to pay for our gas these days," Adrienne Burgstaller said.

Burgstaller filled up when the prices was $4.13. Working for her and others getting gas, we went to John Zikias with Thorntons to ask about how they came up with that price. There's a lot that goes into the price: trading, speculation, and natural disasters, but there's one more piece of the puzzle.

"It's really more determined by what other stations are charging," he said.

Zikias said they want to have the lowest price in the market and will drop their price first and up it last.

"Our stores will keep us updated throughout the day on what's going on in a particular marketplace. If competition is moving the price," he said.

Consumers aren't the only ones feeling the pinch. Gas station owners say it's costing them, too. Every time you fill up with a credit card, the station has to pay a percentage of the sale to the credit card company.

"As retail prices go up, so do our credit card fees. For instance, last month our credit card fees were over $.05 cents a gallon. We had days we weren't even making $.05 a gallon so we're losing money when you use a credit card," Zikias said.

Some experts are speculating the price could drop several cents overnight.

HSBC may sell US cards as targets $3.5 bln in costs

2011-05-12T11:35:00.000+10:00

HSBC is to streamlineits wealth management business, retreat from retail banking in some countries and may sell its U.S. credit cards arm as new CEO Stuart Gulliver attempts to cut $3.5 billion in costs and revive flagging profits.

Europe's biggest bank said the savings would help it cut costs as a share of revenue to 48-52 percent by 2013 from 61 percent in the first quarter. Many banks, including HSBC, have seen this ratio rise sharply as they compete for staff in Asia.

By comparison, rival Standard Chartered's cost/income ratio was 56 percent last year. But others have done more to reduce costs to below 50 percent, such as Spain's Santander, where it was 43 percent.

The extent of HSBC Chief Executive Gulliver's task was laid bare on Monday, after a jump in costs dragged quarterly profits down some 14 percent.

'A target of 2013 will give them enough time,' said John Wadle, an analyst with Mirae Asset Securities in Hong Kong. 'They are going to streamline high-cost income businesses and my personal guess is that the actual cost cutting may result in only about $1-2 billion.'

HSBC will focus its wealth management business on 18 of the most relevant economies, and limit retail banking to markets where it can achieve profitable scale, it said.

Currently, the bank has operations in 87 markets, 95 million customers and employs 307,000 staff.

In retail banking it will focus on core markets such as Hong Kong and Britain, high growth markets like Mexico, Singapore, Turkey and Brazil, and smaller countries where it has a strong position.

It has already said it will exit retail banking in Russia and review its U.S. operation, where it has 475 branches.

Gulliver reckons he can get $4 billion in additional revenues from winning business from wealthy customres in fast growing markets, and get an extra $1 billion from making commercial and investment banking work more closely together.

The U.S. card and retail business delivered profit before tax of $306 million in the first quarter of this year, down about 15 percent from a year ago. HSBC could free up to $25 billion from selling the credit card operations, analysts at Barclays Capital had estimated before the statement.

The United States has typically been seen by many analysts as a low-return area for the bank, following HSBC's disastrous purchase of the Household mortgage business there before the global financial crisis.

Top 10 U.S. Bank Protects Banking, Credit Card Applications With Vanguard Policy Manager

2011-05-11T16:32:00.001+10:00

Vanguard Integrity Professionals, the largest independent provider of enterprise security software for System z®, today announced that a top ten U.S. bank has selected Vanguard Policy Manager™ to secure its critical z/OS® banking and credit card business applications. Vanguard Policy Manager reduces the bank's overall security risks by automatically enforcing security policies and preventing employees and contractors from unauthorized System Special access to z/OS systems.

The top ten bank recently outsourced user provisioning for its zSeries® systems, which introduced security risks and compliance violations. The outsourcer's team lacked specific training on z/OS systems and RACF® security servers, and was routinely granting new users higher-level z/OS security access than they should have received. These policy violations were a result of team members accidentally entering inaccurate parameters into the multi-platform application they were using to provision users across all systems. Although the bank's in-house, z/OS security team reviewed user access change reports daily, problems with unauthorized access often went undiscovered for more than a day.

"The bank needed to find a way to safeguard its z/OS systems from unnecessary security exposures and prevent the outsourcer from granting unauthorized access to new users," said Jim Yurek, professional services consultant at Vanguard. "The bank's z/OS security team chose Vanguard Policy Manager to solve its security provisioning problems because it is the only software that precisely controls security policies and enables the bank to protect its critical data and applications."

Before Vanguard Policy Manager was deployed, z/OS security team members spent 30 minutes to several hours analyzing and remediating each unauthorized or mistaken user provisioning. This situation reduced productivity and added another serious risk to the bank as team members were focusing on remediation rather than addressing other security issues. With Vanguard Policy Manager, for the first time, the bank's security managers are able to specify which commands each user, or group of users, can not issue. Then if someone attempts to issue a command that does not comply with established policies, Vanguard Policy Manager either prevents the command from executing or automatically changes it to one that adheres to the bank's internal security policies.

Vanguard Policy Manager helps the bank:

Enable real-time protection of internal security policies.
Prevent the execution of unauthorized commands.
Achieve more granular control over which users can do what.
Apply policy controls that are more easily activated and deactivated.
Educate users by automatically issuing messages about why commands are blocked.

"By continuously monitoring all users, even those with highly privileged access, Vanguard Policy Manager enables enterprises to precisely enforce security policies," Yurek continued. "Vanguard Policy Manager significantly reduces an organization's security risks and delivers an immediate return on investment by reducing the time and costs required to analyze and remediate access control list problems."

For more information, or to read the complete case study about how the bank is using Vanguard Policy Manager, visit www.go2vanguard.com.

About Vanguard Integrity Professionals

Vanguard Integrity Professionals, an IBM® Business Partner, provides enterprise security software and services that solve complex security and regulatory compliance challenges and deliver a rapid return on investment. With automated solutions for Audit and Compliance, Operational Security and Intrusion Management, Vanguard enables government agencies and corporations around the world to ensure continuous monitoring of z/OS systems, safeguard cloud computing secure domains, and protect critical data and applications from cybersecurity threats. Vanguard provides live, 24/7/365, customer support.

IBM, RACF, System z, z/OS and zSeries are registered trademarks of International Business Machines Corporation in the United States and/or other countries. Vanguard Policy Manager is a trademark of Vanguard Integrity Professionals, Inc. in the United States and other countries.

Banking on more bad debts

2011-05-10T17:48:00.000+10:00

The change in consumer buying behaviour is accelerating – and it's happening most markedly among higher income families. Liquor retailers tell me that high income males are cutting back their purchases. Other retailers find incredible price consciousness among all levels of consumers forcing them to cut prices to generate sales.

Foxtel says that subscriber renewals are good but it's becoming harder and harder to attract new subscribers. When you see such events taking place in the market place it's not long before the bankers experience the trend.

Here in Australia our banks have had a strong profit reporting season but suddenly hairline cracks are appearing. ANZ chief Mike Smith reveals that more people are not paying their credit card minimum balances. Westpac chief Gail Kelly alerted shareholders to a rise in consumer arrears.

Inflation for people – the real cost of living – is rising rapidly but in most cases it is not being matched by incomes, although people still have their jobs and there are other jobs to go to. The cutbacks in expenditure are most severe in the higher income families who have bought large houses on big mortgages. And their problems are reducing the value of dwellings as their friends become cautious about falling into the same trap.

There is no sign that these problems are going to recede unless people are working in boom industries. Accordingly, further interest rate rises will now really bite into bank profits because we will start to see rises in bad debts.

The commercial building unions are now pressing very hard to have the Victorian desalination plant pay rates of $200,000 to $300,000 a year with big tax free components and very generous days off become the norm around Australia. So far the builders have found it hard to get the clients to pay the enormous rise in construction prices that are required to pay these rates – a situation that has the potential to delay the commercial investment boom.

In this environment, one of the most important indicators will be the banks' problem loans. If those cracks that have been isolated by ANZ and Westpac start to widen and spread, we will suddenly find ourselves living in a world a little more like the rest of the globe.

Consumers borrowed more on credit cards in March

2011-05-09T10:56:00.001+10:00

Consumers used their credits card more in March, marking only the second increase in more than two years since the height of the financial crisis.

The Federal Reserve says consumers increased their borrowing by $6 billion in March, the sixth consecutive monthly gain. Consumers borrowed more to finance car loans for the eighth straight month. And a category of borrowing that includes credit card use rose for only the second time since August 2008.

More frequent credit card purchases could be a sign that consumers are feeling more confident about the economy.

The 3 percent overall increase pushed consumer borrowing to a seasonally adjusted annual level of $2.43 trillion, still just 1.3 percent higher level than a nearly four-year low of $2.39 trillion hit in September.

No Cash? No Problem! Domino’s now accepts credit card for delivery

2011-05-06T10:30:00.001+10:00

Domino's Pizza, a leading food services brand and the market leader in the organized pizza home delivery segment in India is trialing credit card payments over the phone. In a move to make ordering Domino's Pizza even more convenient for customers, the service will allow customers to pay for their pizzas through credit cards over phone. This service is powered by PayMate, India's leading mobile payments company.

With this service, when a customer calls to order a Pizza, the customer service representative will connect the call to the IVR payment system and the customers can then enter their credit card details and OTP (bank provided One Time Password) over the secure IVR call to process the payment.

Domino's and PayMate intend to trial this service in selected Domino's outlets across the country. So next time you are craving for a pizza but find you are low on cash or struggling to find the right change, there is no need to walk to an ATM before you order; just call Domino's and pay with your credit card and have a hot and tasty Pizza delivered right at your doorstep.

Mr. Harneet Singh Rajpal, Vice President- Marketing, Domino's Pizza India said "our endeavor is to be at the forefront in using new technologies to extend more service convenience to our customers. Payment through credit card has been a latent need of our customers and with the launch of this new service, which is powered by PayMate, on trial basis, we believe that our customers would find it even more convenient to order with us. We are delighted to provide this service to our customers."

"Based on customer feedback, many of the Domino's customers are keen to use their credit cards to pay for pizza delivery" said Ajay Adiseshann, Founder & Managing Director, PayMate. "This service will fulfill this need and enhance the overall customer experience."

Credit card payments via phone will start in Noida and Mumbai before being rolled out across the country.

Discover Open Road Gas Credit Card

2011-05-05T14:59:00.001+10:00

Discover credit cards always gets less attention than rival offering from Visa, MasterCard, and American Express. At the same time, those who actually have a Discover card are intensely loyal to the company's way of doing business: since J.D. Power began studying credit card customer satisfaction, Discover has ranked second every year, bested only by American Express. By offering low interest rates and fees coupled with a high rewards payout, it is easy to see why Discover has become the card of choice for so many people who also hold other cards. The Discover Open Road Card is a perfect example of this philosophy in practice.

Discover Open Road Card Features
To start with, the Discover Open Road Card excels at the basic level of offering low fees and interest rates. There is no annual fee and their introductory offer is 0% APR on both purchases and balance transfers for a full year. Next, card holders can expect a variable interest rate of 11.99% – 19.99 APR (as of today), depending on their credit worthiness.

When it comes to rewards, members receive cash back so that they are not subject to the whims of airline award availability or reductions in the value of credit card points. The first $250 per month on purchases made at gas stations and restaurants earn a full 2% cash back. Card holders also receive .25% cash back on their first $3,000 in annual spending. All subsequent purchases will receive 1% cash back.

The Discover Open Road Card also offers a range of cash back opportunities when you make purchases from major retailers through their online portal, ShopDiscover. The discounts range from 5%-20% at retailers such as Best Buy, Macy's, Zappos, and Bloomingdales. The Discover Open Road card has a 2% foreign transaction fee on all charges processed outside of the United States. This is in the middle of the road for today's credit cards. While some cards charge no foreign transaction fees, most others still charge as much as 3%.

Who Is the Open Road Card Best For
The Discover Open Road card, with its generous discounts at gas stations and restaurants, is clearly targeted at those who are more interested in driving than flying. By offering 0% APR for 12 months on purchases and balance transfers, they are making a remarkable offer for those who need carry a balance sometimes.

By backing up these favorable terms with a competitive reward, they are able to appeal to those who don't really plan on paying off their balances immediately. Finally, Discover is offering a $75 Restaurant.com gift certificate a sign up bonus to new customers. These certificates give you $75 off of any meal of $150 or more at select restaurants. This is a great way to save serious money on a big night out.

New federal rules could mean no credit cards for stay at home parents

2011-05-05T11:17:00.001+10:00

Stay-at-home parents may no longer be allowed to get their own credit card.

That's because new federal rules that say banks will no longer be able to give credit cards to people who can't prove an individual source of income.

The new rules are meant to keep credit cards out of the hands of people who can't afford it, but they could negatively impact stay-at-home parents, and people who have a spouse in the military. They could also mean that if a couple gets divorced, the stay-at-home parent would have no credit history.

The federal rules don't go into effect until October 1st, but banks could start enforcing them at any time.

11 ways to boost your chances of cheaper credit

2011-05-04T11:19:00.001+10:00

In the current economic climate it can be difficult to get accepted for a new credit card, loan or mortgage. Use our 11 top tips to maximise your chances of being accepted at the best interest rate.

1. Correct credit report mistakes
OK, so this sounds obvious - but if potential lenders are seeing incorrect information on your credit report, it will affect their decision to lend (or not to lend). Checking your credit report regularly will also help you detect ID fraud, should someone else by trying to obtain credit in your name.

2. Get a credit card
This piece of advice is rather more surprising. Many consumers are turned down for credit even though they don't have a bad credit history. Often this is because they have not applied for credit in the past and therefore have little or no credit history at all – known as having a 'thin credit file'. A possible solution is to apply for a 'low and grow' credit card – these cards start you off with a very low credit limit, but increase it over time as you prove you can handle the account responsibly. You must pay off the balance on the card every month, as the APRs on these cards can be very high.

3. Set up a direct debit
One of the quickest ways to ruin your credit score is to make late or inadequate payments on your credit card. Set up a direct debit for at least the minimum payment each month and you'll never miss a repayment. You can always make an additional manual payment on top to help clear your debt faster.

4. Split the bills between you and your spouse
Having all the household credit bills are in one partner's name can makes sense for keeping track of your household finances, but it also means that if that partner dies or if you get divorced, their husband or wife will have no credit history of their own and will therefore struggle to apply for credit at just the moment they need it most. Putting some credit bills in each name means you'll each build up your credit file.

5. Don't be an additional cardholder on a credit card
You've probably heard of some car insurers offering a no-claims bonus to named drivers on a policy. This doesn't work with credit cards. Not only may additional cardholders enjoy fewer legal rights if things go wrong, they're also not building up their credit score.

6. Get yourself on the electoral roll
If you're not on the electoral roll, you will find it very difficult to get credit – this is probably the single most important aspect of your credit file that lenders look at, so it's important to ensure you are registered to vote.

7. Don't apply for loads of credit at once
Every time you apply for credit, it is likely to leave a 'footprint' on your credit file, which will be visible to other lenders. A high number of applications in a short space of time will make you look desperate for credit and could reduce your chances of a successful application.

8. Ask lenders for a 'quotation search'
If you're shopping around for finance (and particularly if it's a mortgage), ask potential lenders to run a 'quotation search' or 'enquiry search' instead. This will give you an idea of whether your application will be accepted and what interest rate you'll be charged, but without leaving a full 'footprint' on your file until the moment you actually apply for the deal you eventually pick.

9. Apply for a credit card or loan before moving house
Lenders like to see evidence of stability, and you will be asked how long you have been at your current job and address during the loan or credit card application process. If you know you need to borrow and have a big change coming up, it makes sense to apply for credit sooner rather than later.

10. Close old credit card accounts
Lenders will look not only at how much debt you are in, but at how much credit you already have available. Their worst nightmare is that once they've lent to you, you'll go on a spending spree with your old credit cards and thereby get into problem debt.

11. End financial associations with ex-partners
Cohabiting with or being married to someone with a bad credit rating won't affect your own credit score – but taking out a joint financial product (such as a current account in both names) with them will.

If you have ever jointly held a financial product with someone you no longer have a relationship with, ask all three credit reference agencies to add a 'notice of disassociation' to your file.

How to Play the New Credit Card Offers

2011-05-03T19:49:00.001+10:00

Free airfare. A Kindle . Zero interest on a cash advance. To lure new consumers, credit card companies are getting more creative and more generous with their promotional offers – in some cases, tripling mileage and cash-back rewards. For credit-savvy and disciplined consumers, this marks the return of a bygone opportunity: The chance to play one card against another and come out ahead.

Credit-card issuers are honest about their motives. If the bonuses and promotions push a customer to choose one card over another, it's worth it, says a spokeswoman for American Express. Or, as a Chase spokeswoman puts it, "Chase wants to be the first card people choose for all of their spending."

Meanwhile, as promotions become more widespread, issuers launch bigger offers or expand on existing ones to compete for borrowers, says Papadimitriou.

While the offers are better and more readily available than they've been in the past, consumers still need to be aware of the perennial pitfalls, like interest rates that spike or fees that kick in down the road. To come out ahead, cardholders usually need to pay off their balance quickly and make all payments on time, says Bill Hardekopf, chief executive at LowCards.com , which tracks credit-card offers.

Furthermore, the nature of the offers can make them good in some circumstances, dangerous in others. Here are the new rules.

Use blank checks

Before the recession, consumers often used 0% APR offers on blank checks from their credit-card issuer for a form of arbitrage: They'd park the money in a high-yield savings account or certificate of deposit, pay back the loan, and keep the interest. With rates so low these days, that's hardly worth the hassle. But consumers can often use these checks for balance transfers, paying down high-interest debt that they've racked up elsewhere.

Consumers who can pay off the balance transfer in full within the promotional period save the most money, paying only a balance transfer fee of typically 3% to 5%. (Some don't even pay that: USAA's World MasterCard currently offers a convenience check to some existing cardholders with 0% interest through March 2012 and it eliminates the fee of up to $75 for those who take up the offer by May 16.)

But even consumers who don't pay off their balance in full can come out ahead. Consider the average consumer with credit card debt, who owes about $3,340, according to the most recent data from CardHub.com. To be debt-free in two years at 16% APR (about the average on cards right now), the cardholder would have to pay $164 per month, and would pay almost $600 in interest. If instead the cardholder did a 0% balance transfer for 12 months, then paid the rest off at 20% interest over one more year, he could pay a little more than $300 in interest and fees -- about half what he would have paid by sticking with the original card.

Make money off a purchase

Many cardholders already earn rewards when swiping their credit card, but new cardholders increasingly have more to gain from the get-go. "We've also noticed that sign-on bonuses have gotten substantially sweeter," says Lauren Guenveur, study director for the financial services practice at Synovate. That can be an extra perk for someone who's already planning to make a large purchase in the next few months – if they can pay off the balance in full. Most of these cards don't offer a 0% APR, even as a promotional rate, and the interest charges can quickly eat up the value of the rewards, and more.

The types of rewards range widely. With the Chase Freedom credit card, new cardholders who make $500 worth of purchases in the first three months get $150 cash-back – up from the $100 bonus the card issuer was offering in early April. For spending the same amount in the same period, some consumers who sign up for American Express' Premier Rewards card can get a 3G-enabled Kindle – retail price $189 – and a $100 American Express gift card. On the travel front, consumers who sign up for the British Airways Visa Signature card through May 6 earn 50,000 miles with their first purchase and another 50,000 if they spend $2,500 in the first three months. The possible 100,000 miles total is good for four round-trip domestic flights within the continental U.S. on American Airlines or two roundtrips from North America to London on British Airways – easily a $1,700 value.

Help a teen build credit

When the credit card laws changed in February 2010, making it impossible for anyone under 21 to get a card without a co-signer or proof of income, credit enthusiasts complained that it would be hard for young people to build credit. But now analysts say credit card companies are rolling out more secured cards -- a cross between a debit card and a credit card, and a perfect way for parents to help their children build credit and protect their own histories at the same time.

Anyone under 21 still usually needs a co-signer (or proof of income) to get a secured card, but the credit lines are typically smaller and the potential for unconstrained spending is more limited. To get a secured card, a borrower gives the credit card issuer what is essentially a security deposit, usually at least $200, which establishes a line of credit. The activity on these cards is reported to credit bureaus each month like a regular credit card, says Papadimitriou, which means it can help build credit.

But interest rates are high, and carrying a balance is expensive. Capital One's Secured MasterCard and First Premier's Secured Card each require a $200 deposit, and charge 22.9% and 19.9% interest, respectively, when monthly payments aren't made in full. And both banks recently introduced what are called "partially-secured" cards, where the credit line is higher than the deposit, though the interest rate on First Premier's card spikes to a whopping 50% for the first year. With "fully secured, there is a lower risk to us," says a spokesman for First Premier, adding that after the first year, the interest rate drops to a still hefty 40% for cardholders in good standing.

Credit card surcharges hurt motorists

2011-05-02T11:36:00.001+10:00

With a daily commute to Red Bank, Middletown resident Tom Sullivan keeps a keen eye on which gasoline stations charge a different price for cash or credit when he needs a fill-up.

"I don't often carry enough cash so I'm using a debit card to fill up my gas tank," said Sullivan, a Web developer. "I've become very aware of what gas stations do charge surcharges."

Separate cash and credit prices are nothing new. They became widespread after prices in New Jersey spiked in 2008. But with gas prices in overdrive yet again — and headed to more than $3.90 per gallon for regular grade by early next week, according to oil analyst Tom Kloza — the dual prices are on drivers' minds.

"People may be noticing it more now that prices are elevated and they no longer have $50 to $100 in their wallet to fill up their tank of gas," said Tracy Noble, spokeswoman for AAA Mid-Atlantic. "Where they would have gone to put it on the credit card, they would wind up paying the extra fee."

But gasoline station owners say the higher charge for using a credit card enables the station to recoup the costs for credit fees that rise as gas prices skyrocket, cutting deep in an already slim profit margin.

"It costs us over 2 percent for the credit card," said John Paolantonio Jr., owner of Branch Spirit, a service station in West Long Branch. "We're making less now on a gallon of gas then I did in 1976 when it sold for 60 cents a gallon. Ridiculous."

In Monmouth and Ocean counties, the average price for regular grade gasoline was just less than $3.80 a gallon, up 42.5 cents in the past month, according to AAA's Fuel Gauge Report. And there are no signs of a halt in the rise anytime soon.

"In N.J., we'll be in the $3.90s by early next week," said Kloza, chief oil analyst at the Oil Price Information Service in Wall, in an email. "It promises to be a wild week because of a cluster of refining issues."

Gasoline retailers can't afford to absorb the cost of accepting a credit card, said Sal Risalvato, executive director of the New Jersey Gasoline C-Store Automotive Association, a trade group of gasoline stations, repair shops and convenience stores.

Visa adding clout to Square

2011-04-30T10:37:00.001+10:00

Last May, Andréa Cecil introduced the Square, a mobile payment system. The credit-card reader device — founded by Twitter's cofounder, Jack Dorsey — lets anyone accept credit card payments via their mobile device. The apps for iOS and Android are free, as is the card reader. The only fee you'll pay is a per-transaction payment of 2.75 percent.

Since its debut, Square has seen considerable growth with merchants that typically don't accept credit cards. The company processed more than $66 million during the first three months of 2011 and is expected to triple that amount during the second quarter. Merchants of all types are signing up and changing their approach to payment collection. Here are a few examples of the individuals and small businesses (from the Square website) flocking to the service:

Food trucks needing a simple and easy way to accept payments on the move.
Small corner stores tired of the complexity and high rates incurred by their credit card machine.
Photographers who want to be paid on the spot instead of waiting weeks for checks to arrive.
Arts and craft vendors who don't want to pay a monthly fee for a merchant account since they only sell seasonally.
Housemates who need to split utility costs.

The big news this week was that Visa announced its strategic investment into Square. The partnership will help Square become mainstream as it competes with entrenched companies that sell terminals to merchants that process credit card payments. The arrangement is also a vote of confidence for Square's enhanced security features; instant email/SMS receipts and photo and location of transaction.

Like many payment companies, Visa is interested in the enormous small-business market. The digital payment juggernaut already offers a cashless person-to-person payment process, but transfers are only available between Visa accounts.

This partnership follows on the heels of Square's agreement with Apple to make its plug-in device available in the 235 U.S. Apple retail stores and the announcement of a new card reader geared at adding additional anti-fraud measures. Visa hopes the arrangement will provide access to the estimated 27 million merchants that don't already accept credit cards.

First Hawaiian Bank to accept Korean credit card

2011-04-29T19:36:00.001+10:00

First Hawaiian Bank, the state's largest credit card processor with 7,500 locations, said today it will now accept the BC Global Card, a South Korean credit card, to make it easier for South Korean tourists to shop in Hawaii.

The issuer, BCcard, implemented an agreement with Discover Financial Services that allows the card to be used on the Discover network, as well as the Diners Club International and PULSE networks.

First Hawaiian Bank, which has a long-standing partnership with Discover, processed the first global transaction yesterday during a ceremonial purchase of a Koa wood bowl by BCcard President and CEO Jong Ho Lee at a Halekulani Hotel boutique.

BCcard, founded in 1982, has 54 million cards issued through 11 financial institutions and has marketed the BC Global Card as the first Korean domestic card with international acceptance. Altogether, Korean cardholders spent more than $13 billion outside of Korea in 2010, according to the Korea Tourism Organization.

Aussie PSN User Has $2000 Of Unauthorised Charges On His Credit Card

2011-04-29T12:07:00.001+10:00

The ABC has just run the story of an Adelaide PSN user whose credit card has been compromised in the wake of the PSN breach. His card has racked up $2000 of debt over the past couple of days.

Rory Spreckley noticed that the charges were preceded by a handful of $1 charges, a technique cyber criminals typically use to test if credit card details check out.

"I logged into my bank account just to check everything was OK and I found out there was some just over $2,000 in charges which I didn't personally accrue," claimed Spreckley.

Although we can't be 100% sure if this is related to Sony's breach, this is a timely reminder to be vigilant with your details, and contact your bank the second you see any suspicious activity on your account.

Bank of America's New Credit Card Penalty Interest Rate Is Nearly 30%

2011-04-28T09:38:00.001+10:00

Bank of America credit card holders, beware. If you're late on a monthly payment, that little "oops" might become a big "ouch": Your future balances could be subject to a penalty rate of nearly 30%, notes a report Wednesday in The Charlotte Observer. The penalty rate will not be applied to previous balances, however.

Nor will the penalty interest rate be applied automatically, the article notes, but rather on a case-by-case basis after other risk factors are considered. And, if the bank does chose to hit an account with the penalty rate hike, it will give the customer a 45-day heads up before the new rate goes into effect, as required under 2009's Credit Card Accountability, Responsibility and Disclosure Act, otherwise known as the CARD Act. Bank of America (BAC) began notifying customers about the penalty rate increase via their bills this month: Those who are affected soonest will see their rate increase coming afterJune 25.

The penalty interest rate can scale up to a maximum of 29.99% on future balances, and card holders will have their accounts reviewed every six months as required by the CARD Act for potential reductions in the penalty rate, BofA spokeswoman Betty Riess told DailyFinance.

Before the CARD Act went into effect, consumers faced an interest rate death spiral with their credit cards, Greg McBride, a senior financial analyst with Bankrate.com, told DailyFinance.

"Prior to the CARD Act, penalty interest rate increases were a one-way ticket," says McBride. "Now, they have to review them every six months. And while the requirements are still kind of loose, it's a step in the right direction."

He added another major change that came out of the CARD Act is that any penalty interest rate increases can only be applied toward future credit card balances and not existing balances, unless the payment is delinquent by more than 60 days.

The bank's adoption of a penalty rate follows a path that other financial institutions have taken since the late 1990s, according to a CreditCards.com report. Back in 1998, for example, the average default rate hovered at 22.75% and remained in a relatively tight range in the years that followed, reaching as high as 25.28% in 2009. But despite the passage of the CARD Act, penalty interest rates have continued to climb.

Last summer, banks were charging an average median penalty interest rate of 29.99%, according to a BankRate.com report. That puts Bank of America squarely in the middle of the pack with its competitors. If it's any consolation to their customers, CreditCards.com noted last year that HSBC's penalty rate had exceeded the 30% threshold -- topping out at 31.99%.

To avoid those penalty interest rates, credit card users simply need to make payments on time, advises McBride.

Says McBride: "People complain about the penalty interest like they complain about speeding tickets. If you don't want the ticket, then don't speed."

PSN Down: Security expert warns users should cancel credit cards

2011-04-27T21:39:00.001+10:00

Marc Chacksfield over at TechRadar is reporting the expert from security specialist Sophos said PSN users should "cancel that card immediately". Potentially at least seventy million users are at risk from identity or financial fraud.

The security expert Graham Cluely said "now isn't the time to sit back on your sofa and do nothing". He goes on to say the criminals who may now have the information, won't just hang around and do nothing.

Other information at risk besides credit card details include, email account information, dates of birth, and names and address. A senior threat researcher form GFI Software Christopher Boyd, is also concerned about the risks of the data breech.

He said that the issue is really serious but wondered if details of all the PSN users were obtained, or just some of them. Another problem is that for the time being no one knows if there information has been obtained of not.

Will you be cancelling your credit cards?

PlayStation hacking scandal: police chief says contact your bank now

2011-04-27T17:11:00.001+10:00

The head of the NSW Police fraud squad has warned Australian PlayStation users that they may have to cancel their credit cards after hackers stole enough information to even take out loans on the victims' behalf.

The Australian Privacy Commissioner, Timothy Pilgrim, said he was "very concerned" and would contact Sony for more information on the breach, which security researchers have said may be the largest theft of identity data on record. His office has begun an "own motion investigation" into the matter.

Story continues below Despite its PlayStation Network being knocked offline for the past week, Sony waited until today to notify its 77 million customers that an "illegal and unauthorised person" gained access to their names, addresses, email address, birthdates, usernames, passwords, logins, security questions and more.

The company also could not rule out credit card numbers and expiry dates being stolen. But even if no credit cards were stolen, the other details are enough to cause significant identity theft issues.

"If you're armed with enough personal information you could basically do anything that the legitimate person could do themselves ... [such as] obtain various forms of credit, you could target their banking accounts," said NSW Police Detective Superintendent Col Dyson in a phone interview.

Detective Superintendent Dyson said those who obtained the personal information could use it to commit identity crimes or use the information to build a profile of the victims, which would then be used to gather further information about them before committing the crime.

"Personal or financial information is a valuable commodity and generally these days we find organised groups harvesting information and then selling it to other groups to use," he said.

NSW Police advises affected Australians to consider cancelling their credit cards or at the very least call their banks to inform them that their cards may have been compromised. People should also change their passwords if they use their same PlayStation Network password for other services.

Sony Australia confirmed that the issue affected all PlayStation Network users, including Australian account holders. It said it had not received any reports or claims that credit card information had been used improperly to date.

"For the security of our valued customers, we are encouraging all account holders to be aware of email, telephone, and postal mail scams that ask for personal or sensitive information," Sony Australia said.

The Australian Bankers' Association said there had yet to be any Australian reports of credit card details being compromised or other fraud that has occurred as a result of the Sony breach. It said banks would be in contact with individual customers if their cards need to be re-issued and any credit card holders who become affected would be protected from loss in genuine fraud cases.

With many web services now requiring users to give out personal information, which is then stored on company servers in the internet "cloud", privacy breaches such as this are becoming more common.

Detective Superintendent Dyson said the move to storing personal information in the cloud had created new issues for law enforcement as the data was usually stored overseas, often in multiple jurisdictions.

"People should always be cautious about putting any personal information online or providing information to companies and the fact that the information or data is stored overseas is a challenge for law enforcement on a global scale really," he said.

"It creates issues for law enforcement and makes the importance of us having a strong network with overseas law enforcement more important than ever."

Detective Superintendent Dyson said he would wait for the lead overseas law enforcement agency on this matter to make contact and provide a briefing before he would assign local officers to investigate.

"There's no use in us going out and starting interviewing people without knowing the full background of it and receiving a formal request," he said.

It's not clear how the PlayStation Network break-in occurred or how many Australians out of the 77 million global users are affected, but it is believed to include everyone with a PlayStation Network account.

The loose-knit group of online miscreants, Anonymous, has denied that it was responsible for the hack, despite it issuing a statement last week warning Sony it would be targeted as payback for Sony suing customers who cracked the PlayStation 3 software.

Colin Jacobs, chair of the online users' lobby group Electronic Frontiers Australia, criticised Sony for the delay in notifying customers of the breach, which Sony said occurred between April 17 and April 19.

"A week is too long. If that information fell into the wrong hands, and you have to assume that it did immediately, those users could have been receiving sophisticated scams all week long," he said.

"It's a shame that it has come to this, but mandatory reporting laws might be necessary to prod companies to do the right thing regardless of the public relations consequences."

Since Australia does not have mandatory notification laws for when data breaches occur, companies are not obligated to even inform customers when their personal information has been stolen. Dell Australia opted to inform customers when their details fell into the wrong hands recently but there were many more affected companies who did not come forward.

A recent report on privacy laws compiled by the Australian Law Reform Commission recommended that new data breach notification requirements be implemented, but the Federal Government has yet to say whether it will take this recommendation on board.

The Australian Privacy Commissioner, Timothy Pilgrim, said when breaches occur it was important for organisations to "notify their customers promptly" as this would help "mitigate any potential impact on individuals such as the risk of identity theft and fraud".

"This is a massive data breach, with millions of users' personal data compromised," said Jacobs.

"Sony have an uphill battle in restoring their reputation and we can only hope their users don't suffer too much for this lapse."

Despite the criticisms that it took too long to notify people, Sony Australia believes it "responded quickly and are behaving responsibly". It said that as soon as it learned of the issue it temproary turned off the PlayStation Network, engaged an outside security firm to conduct a full investigation and took steps to enhance security and strengthen its network infrastructure.

Man used a forged credit card

2011-04-27T12:36:00.001+10:00

AN electrician tried to buy more than £700 worth of cigarettes and lottery scratch cards using a forged credit card.

Arburas Sabirovas, 31, went into Tesco in Hollington, St Leonards, and tried to buy £336 worth of Marlboro cigarettes using a Visa card.

But the signature he used was completely different to the one on the back of the card and the transaction was declined.

Less than two hours later Sabirovas tried again, this time at Tesco in Ravenside Retail Park in Bexhill.

He asked for £385 worth of cigarettes and scratch cards but the card was refused. He was arrested and police discovered the credit card was a forgery.

At a court hearing on Monday, Jeremy King, prosecuting, said the crimes happened on May 11 last year but it took almost a year to track down Sabirovas.

He was due to return to the police station in Hastings on June 8 last year.

Sabirovas, who lives in London, pleaded guilty to fraud and one Bail Act offence when he appeared in the dock in front of Hastings magistrates on Monday.

Lynda Kerry, defending, said: "He failed to return to the police station when he had to, and because he was back in London and not working it was expensive to travel down to Hastings.

"The defendant also lost the paperwork telling him when to return. He was spotted in London during a routine police check in London on Saturday."

Magistrates gave Sabirovas a 12-month conditional discharge and ordered to pay £85 court costs.

Misinformation exacerbates student debt peril

2011-04-26T17:35:00.001+10:00

As if we needed more alarming statistics in a post-recession economy, student loan debt has recently surpassed collective credit card debt in the United States.

Even more worrisome, student loan debt is projected to top $1 trillion in 2011, partially the result of poor job markets for students after college graduation. Also contributing to the increasing weight of loan debt is the rise of college tuition, another consequence of post-recession budget restrictions.

These statistics present students like us with the perilous situation of wanting college degrees to ensure future success, while also acknowledging the true lack of job opportunities and consumer protection.

Exacerbating the situation is the misleading communication of those with interest in the financial aid market, namely the Office of Student Financial Aid.

In response to the state of student loan debt, Office of Student Financial Aid Director Jim Brooks thought it worthwhile to mention MU's context in the national scheme of debt issues. Citing a national average of about $24,000, Brooks said MU's average student loan debt upon graduation is $20,689.

Although it's encouraging to hear things could be worse, it's not particularly satisfying knowing ultimately, our situations are still bad, and our incurred debt is often not just "average."

Even worse, through years of legislation, student loans have curiously found themselves in a position of unusual stipulation, as, unlike credit card debt, they cannot be claimed under bankruptcy.

Therefore, if a person cannot pay for his or her government student loans, the government has the power to dig into that person's salary until the loan is finally paid off.

As students who hope the government has a vested interest in the education of its constituents, we find it agitating that student loan policies handcuff those whose intentions are to get an education. We want a degree, we want jobs, yet we are treated with a vastly different attitude than someone who, say, wants to partake in a thousand-dollar, credit-card-funded shopping spree.

Government policy aside, though, we do not feel the Office of Student Financial Aid is adequately fulfilling their responsibility to inform us of the realities of student loans. Students need more than just cursory, basic definitions of their loan situations to navigate the difficult and paralyzing world of student loans, and we hope financial aid advisors communicate more honestly, more consistently.

Consumers once again feel comfortable with credit card debt

2011-04-26T15:19:00.001+10:00

Americans are making more money these days than they were during the depths of the national recession, and the improvement in their financial situation has led them to increase their spending, according to a new report on credit card spending from comScore. In addition, card companies have tried to entice consumers to open news accounts by offering lower interest rates and fees on their credit cards.

In all, 20 percent of consumers said they shopped around for a new credit card in the last year, and 34 percent indicated they were feeling more confident about the economy, the report said. Low interest rates on their credit card debt was deemed the most important factor in selecting such an account, with 40 percent saying this was their primary consideration. Another 28 percent cited cards with no annual fee as being most important.

"As we see consumer economic sentiment improve, we're also seeing a corresponding increase in retail and e-commerce spending along with increased card shopping, especially among those in the subprime sector," said Sarah Lenart, comScore vice president of financial services. "With shopping and card applications expected to continue to increase in 2011, consumers are likely to place even greater emphasis on competitive card features and offerings as well as enticing rewards programs."

However, many consumers - 13 percent - also wanted to earn rewards points for every dollar of credit card debt they took on, the report said. Among these options, 57 percent of respondents said they would like to earn cash back rewards the most. Meanwhile, the ability to earn points with a specific merchant and flexibility in redeeming accrued rewards were tied for second-most popular at just 13 percent.

Most consumers also spent the year adopting new digital banking methods, as 74 percent of respondents said they learned about their account by going online, and 59 percent said this was their primary method. Another 29 percent used their mobile phone - either through a Web browser or specific application - to complete transactions.

Consumers may be getting a better handle on their finances, as instances of delinquent and defaulted debts of all types have been steadily declining in the last year.

improving your credit

2011-04-25T18:41:00.001+10:00

Q. I am paying debt settlements on my credit cards from several years ago. I fell behind because of unemployment. We do not use credit cards now. We pay all of our bills with a debit card. It feels great to pay directly and on time. Plus, we are not accumulating any more debt. How long does a debt settlement stay on a credit report? I have heard that it's seven years. Also, does this mean we will never be able to get loans or credit at reasonable rates? How will debt settlement affect our ability to finance a car or obtain student loans?

A. In most cases, negative items are removed from your credit report seven years after the first date of delinquency. In your case, think back to the date you first fell permanently delinquent on the debt that got charged off. This is the start date of your seven years. (A bankruptcy may remain on your credit report for 10 years, however.)

You mention the accounts you are settling are already several years old, so you won't have to wait seven more years for their removal. From your letter, I'm estimating it will be more like four years or so.

As far as future credit, paying the past due accounts in full would be best. But paying an agreed-upon settlement amount is better than paying nothing.

Here's a hypothetical illustration of how lenders will feel about you. Let's say you have a cousin who borrowed $1,000 from another relative. You happen to know that the relative was repaid only $500, and the cousin long ago missed the repayment deadline. Now the cousin is asking you for a $1,000 loan. What would you do?

Your priority should be to add positive information to your credit report once you have completed settling all your accounts. Here are some thoughts on how to do that.

You say you are strictly using your debit card for purchases and bill paying. I understand your pride in paying cash, and appreciate your determination not to get into credit card trouble again. But debit card purchases are not reported to the credit bureaus. So this record of on-time payments doesn't make it to your credit report.

If you don't have any revolving or installment accounts — other than a mortgage — consider opening one of each. You can get the positive reporting on your credit report with a secured credit card. Secured cards are issued with a low credit limit, based on the amount of money you have deposited in a savings account with the bank issuing your card. A low limit will help you refrain from overspending.

Shop around for a secured card with no annual fee that reports to the credit bureaus. Likewise, you can open a passbook savings account and take out a passbook installment loan from a lender that reports to the bureaus. That will also get some positive reporting for your credit score.

The key to improving your credit is to make on-time payments as agreed, on the credit card and the loan. The more time that elapses from your old credit troubles and the more positive information you add to your credit report, the more likely you are to receive affordable rates and terms for new loans in the future.

Credit card companies will be forced to help customers under new laws

2009-10-26T14:57:00.001+11:00

New laws requiring credit card companies to help customers to reduce their debt rather than encourage them to increase it will be proposed tomorrow.

What the Prime Minister dubbed "sharp practices", including card companies raising people's credit limit without being asked and increasing interest rates on existing debt, will be stopped.

Companies will be banned from using people's monthly payments to pay off the cheaper debt left on the card while charges incurred for higher interest debt, for example cash withdrawals, are untouched.

This often means that people who make only low monthly repayments for years end up spending longer paying off their credit card than their mortgage.

Gordon Brown said that the proposals were aimed at making "credit and store card companies clean up their act and give people a fairer deal. Sharp practices by lenders — such as hiking interest rates on existing debts without explanation and raising credit card limits without being asked — these sharp practices should end."

Kevin Brennan, the Consumer Minister, said that the Government wanted the credit card companies to change some of the unclear and unfair practices that had contributed to high levels of debt for many people.

"People may not realise that expensive debt like cash withdrawals could stay on their card gathering interest for years because their cheapest debts are paid off first.

"Some people are making low monthly repayments for years, meaning it can take them longer to pay off their card than their mortgage and costing them significant amounts in interest charges.

"When many people were struggling to pay their bills every month it was astonishing that credit card companies were continuing with practices which work against the interests of consumers.

"People have a serious responsibility to manage their finances effectively, but they also have a right to clear and unambiguous information about their finances from credit companies to enable them to do that."

Government officials said that it was common for credit card customers to discover that their credit limit had been increased without their consent. Research by uSwitch, the comparison website, showed that in the past year, 5.7 million consumers had their credit limits changed without their agreement.

Ministers are also concerned about companies increasing interest rates without a proper explanation. They said that consumers who had used their cards responsibly should not pay for excessive risk-taking by financial institutions.

House committee votes to speed up credit card reforms

2009-10-25T06:43:00.000+11:00

Legislation that could help more Americans manage their credit card debt took a step closer to becoming reality this week on Capitol Hill.

A proposal currently pending in Congress would speed up the implementation of various credit card reforms that were already approved this year, ranging from limits on the late fees and interest rates consumers are saddled with for late payments, to ways cards can be marketed to college students.

Existing law calls for these reforms to take effect in late February. However, some members of Congress have been dismayed by what they see as unfair behavior towards consumers as they take some final measures to boost their profit margins in advance of the new law. With that in mind, the current bill would move the effective date of the reforms up to December 1.

Earlier this week, Federal Reserve Chairman Ben Bernanke advised against the proposal, saying that lenders still need sufficient time to implement new policies and resolve any regulatory and compliance issues that will be raised by the new reforms.

However, members of the House Financial Services Committee apparently disagreed, and unanimously voted to speed up the reforms. With the committee vote now accomplished, the legislation is set to move on for a full House vote, after which it will await Senate action.

"Just in time for the holidays, Congress can lock in a ban on interest rate hikes on existing balances and the tricks that have kept far too many consumers trapped in a never-ending cycle of debt: tricks like double-cycle billing, due-date gamesmanship, and applying payments to lowest rates first," said Congresswoman Carolyn Maloney, a New York Democrat who is sponsoring the measure, after the vote.

Supporters of the reforms point out that consumers will get some badly-needed help when it comes to managing credit card debt, while the industry has opposed the bill, maintaining that people also need to be responsible for their own spending decisions.

Credit Card Woes

2009-10-24T09:22:00.001+11:00

Michelle Higgins's Practical Traveler column "For Americans, Plastic Buys Less", about the refusal by European merchants and automated kiosks to accept American credit cards, which use magnetic strips to store data and not the newer, safer "chip-and-PIN" technology, lets the U.S. card industry off the hook very lightly.

Perhaps the spokesperson for Visa who said "by and large the majority of Visa cards are seamlessly accepted internationally" has never stood in the Lyon train station trying to buy a ticket from an automated kiosk and found that none of the four cards in her wallet will work. Or maybe she hasn't experienced the thrill of being locked in an underground parking garage in Aix-en-Provence for the same, inexplicable, reason.

US Publishes Rules on Credit Card Marketing to Students

2009-10-21T22:40:00.001+11:00

The Federal Reserve on Wednesday proposed new regulations to govern the marketing of credit cards to college students. The rules, which were published in the Federal Register, would carry out changes to the Truth in Lending Act that Congress made as part of the Credit Card Accountability Responsibility and Disclosure Act of 2009, which was designed to give consumers more protections from the practices of credit card companies. Among the provisions aimed at helping young people is a requirement that credit card issuers and colleges and universities disclose agreements they make to market or distribute credit cards to students, including so-called affinity cards.

Join the credit card revolution with Fifth Third

2009-10-21T11:18:00.001+11:00

Fifth Third gave the RevolutionCard a big boost by deciding to issue this new emerging credit card. What makes this credit card so special is that your name never appears on it.

If the card is stolen the thief must know your pin number to use it. You can change your pin number as often as you like. This feature can greatly reduce credit card fraud.

When using the card, you press Debit/ATM at check out rather than the credit button, because you will need to enter a pin number.

Your ability to use this new card is limited to the stores currently accepting it, but that does include some big names such as Barnes & Noble, Bed Bath & Beyond, Bloomingdale's, Office Depot, Publix, Rent-A-Center, T.J. Maxx, U-Haul International and about 50 others. As the RevolutionCard network grows you will be able to use it at more stores.Retailers save money with this card too. The RevolutionCard charges no interchange payments between banks, so it costs the retailer only 0.50% for transaction processing and settlement. That can save the retailer as much as 80% per transaction.

With the great fraud protection, the retailer has less of a chance that a charge will be questioned due to fraud. Many retailers that do accept the card share their cost savings with customers through loyalty programs and other incentives.

"With Fifth Third as an issuing bank we have our largest opportunity yet to significantly grow the RevolutionCard business," Jason Hogg, CEO of Revolution Money, told Reuters. Other issuers of the card include ChasePaymentech, RBS WorldPay, Cardinal Commerce (online acceptance) and Keystone (petroleum processing for paying at the pump).

Revolution Money also runs the MoneyExchange that enables merchants to collect money from customers and send money to family and friends. It also has features that allow organizations to collect dues from members.

If you're frustrated with your credit card company after they jacked up your fees and interest rates, you may want to check out the RevolutionCard as an alternative. The revolution may take a while but it's time to show the banks and current current card issuers that they are not the only game in town.

Twitter ex-CEO to sell iPhone credit card reader

2009-10-19T14:55:00.001+11:00

There is finally some more solid news about the hardware venture being started up by Twitter cofounder Jack Dorsey to turn the iPhone into a credit card reader.

Dorsey, who co-founded Twitter along with Biz Stone, Evan Williams, and others in 2006 stepped down from his position as CEO in 2008. There has been a lot of buzz about his current project, which allows the iPhone and the iPod Touch to be used as credit card readers. The product, known as Square, would come in two parts, a small plastic cube that plugs into the iPhone and an app. As reported in a story by CNET, the connection between the device and Dorsey was made by Coolhunting, who says:

The innovation is in a small, plastic card reader that fits in to the headphone jack of an iPhone (or iPod Touch) and transfers the credit card's swipe data to the app. After the employee enters the amount to charge, the customer confirms by scrawling their signature with their finger and then either one enters the customer's email address to send the receipt to. The payment is processed by Square for a small percentage plus a fixed fee; the funds are transferred directly to the store's bank account, cutting both time and complexity on the processing side. The customer's receipt includes a map showing the location of the transaction which is handy for those who record, sort and file such things.

One interesting note is that Dorsey feels that the company can keep costs low enough to give the device itself and the app to customers. Apparently, he feels that it can be manufactured for about 40 cents each. The revenue for the company, which is called Square-Up, will come for taking a fixed fee for each transaction, plus a percentage of the sale price on a sliding scale according to the price of the item purchased by the customer and processed through Square-Up. One must admit that companies such as Visa International have turned this sort of processing into a multi-billion dollar business, and it is certainly possible that Dorsey could do the same. It is absolutely a better business model that is in place at Twitter just now.

Outsourced Credit Card Programs Help Small Banks Attract Customers

2009-10-17T17:59:00.001+11:00

If it seems like just about every small bank or credit union offers credit cards with perks and benefits just like those from major lenders, you can thank service providers like TSYS. The payment solution company recently announced the formation of TSYS Program Solutions, a new division that offers turnkey credit card marketing and management programs for community lenders across the United States.

According to TSYS Chairman and CEO Philip Tomlinson, community banks enjoy a rare opportunity to win new credit card accounts away from major lenders. "Recent regulatory changes have altered the landscape and we believe the case for re-entry is there if we can demonstrate a compelling and profitable business case," Tomlinson told reporters.

By outsourcing credit card servicing and operations, Tomlinson said, more local lenders can use their neighborhood storefronts to lure business from larger banks that have been perceived as out of touch with consumers. TSYS and its competitors help level the playing field by offering customers of small banks access to the same levels of customer service and product perks as larger institutions.

Call for credit cards liability limit to be reduced or waived

2009-10-16T17:16:00.001+11:00

Consumer groups want the maximum liability limit imposed on credit cardholders for unauthorised transactions for lost or stolen cards to be lowered or even scrapped amid the rising number of complaints.

Many feel the RM250 limit is not justified as it is not helping innocent cardholders in view of the rising number of such unresolved cases.

National Consumer Complaints Centre chief executive officer Muhammad Sha'ani Abdullah said there was no question that this limit should be reduced or waived as this amount itself was "not respected and adhered" to by banks.

"Even though the RM250 maximum liability has been in existence for a few years, not many are aware of it or informed of it by banks as there are still hundreds of unsolved cases where the innocent cardholders are non-negligent and without fault," he told StarBiz.

"Even the Financial Mediation Bureau (FMB) seems to be siding with the banks without taking appropriate actions."

When contacted, FMB chief executive officer John Thomas denied there were hundreds of such cases pending. He advised complainants to lodge the matter as soon as possible to the FMB to facilitate mediation.

"Our mediators will look at the case in totality backed by evidence and our decision must be fair to both parties," he said.

The FMB is an independent body set up to help settle disputes between customers and their respective financial services providers.

Consumer Association of Penang (CAP) president S.M. Mohamed Idris said the maximum limit on liability could be reduced to between RM50 and RM100. There were complainants (cardholders) whom CAP thought should not even be paying the RM250 at all, he said.

"As far as we know, the cardholder's limit for unauthorised charges in the United States under its Fair Credit Billing Act is US$50. We have even come across a few cases in Malaysia where cardholders managed to get the fraudulent card charges waived," he added.

Mohamed Idris said in cases where the signatures on the sales slip were obviously different from those on the credit cards, the cardholders should not be held responsible but instead the merchants, as the signature was after all part of the security measures to protect cardholders.

According to the Association of Banks in Malaysia (ABM), the maximum credit card liability of RM250 came into effect in June 2004.

This limit applies only in the event the cardholder has not acted fraudulently or has informed the bank as soon as reasonably practicable after having discovered the card is lost or stolen. Many cardholders were not aware of this limit until the landmark decision by the Kuala Lumpur High Court which stated that Bank Negara Guidelines on Credit Cards limited the liability of cardholders to only RM250 where loss is reported promptly.

Several banks contacted declined comment on the matter when asked whether the limit should be reviewed. ABM in a statement said there was no need for a review of this liability limit with the intent of lowering it.

"In fact, some banks excuse their cardholders from liability for any transactions effected with the use of a lost or stolen card if the bank is satisfied that the cardholder has used all reasonable precautions and diligence to prevent such loss or theft and has notified the bank promptly.

"We advise consumers to be vigilant when it comes to the security of their credit cards. Whilst banks have spent large sums of money to put in place security measures to protect the consumer from credit card fraud, consumers must also play their part and take necessary steps to avoid becoming a victim of credit card fraud," ABM noted.

Sha'ani expressed dissatisfaction with Bank Negara for not having issued the guidelines to the public for transparency and clarity on credit card charges.

Consumers want credit card rules to kick in soon

2009-10-15T21:52:00.001+11:00

Fed up with rising fees, interest rate hikes, limit cuts and other harsh changes to their credit cards, most consumers want the date for major reforms moved up.

But some observers say those impending reforms have prompted banks to issue even more of the changes at a time when credit card holders are down.

The latest proof that consumers are having trouble paying their credit card bills came early Wednesday, in JPMorgan Chase's third-quarter results.

The bank, the largest U.S. credit card issuer measured by both the number of cards it has out, more than 119 million, and the amount of debt its customers carry, over $165 billion, reported a $3.59 billion profit. But its credit card division lost $700 million, as it set aside almost $5 billion to cover bills consumers can't pay. It was the only one of seven units to post a loss for the quarter.

JPMorgan said nearly 6 percent of cardholders were at least 30 days behind on their payments.

Analysts expect no better results from the credit card divisions of Citigroup, the second-largest U.S. issuer, and Bank of America, the third largest, when they report on Friday.

That's in part because statistics that measure consumer behaviors like bill paying trail the broader economy. Even if a recovery is under way, JPMorgan said it expects credit card problems to continue through the first half of next year, a view echoed by most who follow the industry.

But the way many consumers see things, while they are struggling to pay off their debts, banks have been moving to make it harder to do so.

A new survey done for Credit.com found that 45 percent of consumers said their card company has changed their agreements by doing things like hiking fees, upping interest rates, raising the minimum payment due and cutting credit limits. The latest move was by Bank of America, which said late Tuesday it will impose annual fees of up to $99 on certain cards starting next year.

There was some hope among consumer advocates after the Credit CARD Act was made law in May that card companies would ease up with such measures, but the opposite has happened, said Adam Levin, chairman of Credit.com, a consumer-oriented Web site. That's one reason that 56 percent of the people who responded to the survey said they want the new regulations moved up. "They're doing what they do and they're going to continue to do what they do, until their ability to do what they do is curtailed," Levin said.

Congress is considering pushing up the date most of the Credit CARD Act takes effect to Dec. 1, instead of Feb. 22. A bill that would change the date is currently before the House Financial Services Committee, and will be voted on in coming days.

But it's unlikely that moving the date will provide the help consumers are hoping for.

For one thing, the part of the law that requires banks to give consumers 45 days notice before they change terms like card interest rates, fees or minimum payments already took effect in August.

That part also requires banks to offer consumers a chance to opt out of such changes by closing the account and paying off the balance at the old interest rate. But closing accounts can backfire on consumers by causing their credit scores to fall.

Meanwhile, the interest rate hikes and other changes keep coming.

The Credit.com survey found that 27 percent of respondents said their interest rate was increased, up from 19 percent in a similar survey done in June. Just short of 19 percent said fees were increased, up from 14 percent in June. And 17 percent said minimum payments were increased, up from 12 percent in June. The telephone survey of 1,000 people was done Oct. 10 and 11.

These changes are part of the "unintended consequences" of the tighter regulations, said Peter Garuccio, a spokesman for the American Bankers Association.

"Both the regulators and Congress understood that in taking the steps that they did, there would likely be higher prices and reduced credit availability," Garuccio said. Congress essentially accepted higher costs as a trade-off in exchange for more consumer protection, he said.

It's not just the CARD Act, but also the weak economy that has led banks to make these moves, he added, noting that the rate at which banks write off bad credit card debt typically tracks the unemployment rate. JPMorgan posted a 10.3 percent charge-off rate, and expects that to rise to 10.5 percent in the first half of 2010. The unemployment rate reached 9.8 percent is September and is predicted to pass 10 percent in the coming months.

Credit card issuers have to take into account both the broader economic risks and the regulatory landscape, Garuccio said. "The two can't really be separated right now."

In the big picture, consumers shouldn't expect friendlier practices any time soon, no matter when the new regulations kick in.

That makes it more important that consumers take control of their own credit, and make sure they use it responsibly, said Levin, of Credit.com. "The reality with all of this is hopefully a better informed, better prepared consumer will be a better borrower, a less risky borrower over time."

Credit Card Act To Bring Sweeping Changes

2009-10-13T16:27:00.001+11:00

Sweeping changes are coming to the credit card industry.

The Credit Card Act of 2009 is being hailed as the largest reform ever imposed on the credit card industry, and the move is meant to increase consumer protection -- but it could also have some negative effects for those with good credit.

In the current fast-paced world fraught with economic challenges, paper or plastic has taken on a whole new meaning. More and more people are relying on plastic for their purchases, but credit cards as we know them today are undergoing a big change.

"It's going to be a different playing field," said Michael Johnson, finance instructor at Madison Area Technical College. "It's not going to be quite as easy to get into trouble as it has been in the past."

The Credit Card Act of 2009 is 33 pages of very complicated material, but it is full of important information for those who use credit cards. For example, under the legislation, 18 to 20 year olds will no longer be able to get a credit card without a co-signer.

Another change aimed at protecting consumers adds the right of the cardholder to reject an interest rate hike.

Starting in February, when the legislation takes effect, credit card companies must inform you in writing that they're going to increase your rate -- and you can say no. The rejection would close your account, but would still allow you to continue paying off the balance at the current interest rate.

Another thing that will change is how credit card companies apply your monthly payments to your credit card balance.

As an example, say you have a $1,000 balance at 12 percent APR and then transfer $2,000 to that card at a zero-percent promotional rate. Under the act, credit card companies, would be required to use your monthly payment to pay off the balance with the larger interest rate first. Therefore, in this case, your payments would pay off the $1,000 at 12 percent first, thus preventing consumers from getting stuck with large interest charges.

Those are just a few of the major changes coming, and experts say the act will make the credit card industry a lot more consumer friendly.

"I think this is a really big step in the right direction towards giving consumers some of their rights back -- that they really should have had from the beginning," Johnson said.

If you have good credit, here's the bad news: those low, promotional rates -- like zero-percent interest -- are going to be a lot harder to find, even for those with good credit. Experts also say that it's likely that annual fees, which most credit card company have strayed from, will be making a comeback.

Credit card-stealing device makes its Minnesota debut

2009-10-13T10:54:00.001+11:00

A device called a "skimmer" that steals credit card information just by swiping the card has been implicated in incidents in Eagan and Maplewood. The item looks extremely similar to a normal payment-swipe device, so it's easy for criminals to hide their intentions when stealing card info.

Abe Smith worked at an Eagan Wendy's and it looks like he allegedly swiped customers' info as he rung up their orders. He and his friend, Gabriel Langford, allegedly transferred the credit card info to gift cards and used their new cards to go on a shopping spree. We have to admit, if we worked for minimum wage slinging burgers, this would sound like a pretty sweet plan.

Ion Datcu and Stelian Cipu were convicted in September of an even more devious scheme when they attached a skimmer to a TCF ATM in Maplewood; the pair had collected the info 230 credit cards, according to Maplewood police and the Secret Service.

How to make the most of credit cards' reward points

2009-10-12T21:01:00.001+11:00

Credit cards are now a common instrument used by most urban Indians and there are several benefits of using them. One aspect is the reward points that come along with the expenses made on the card and these can be used effectively to get additional gains. However, there can also be a loss of opportunity if the benefit is not taken properly.

Reward points
There are reward points available on the use of a credit card. The conditions are different for each card.

For example, there might be two points available for every Rs 100 spent on a card given by one bank, while some other bank might give only one point for every Rs 100 spent. This would determine the extent and manner of the accumulation of points.

Wells Fargo raises credit card rates

2009-10-08T16:57:00.001+11:00

Wells Fargo & Co. plans to raise interest rates on a majority of credit card customers by 3 percentage points before new rules limiting such increases take effect, a company executive said. "This is something we've been contemplating for quite a period of time,'' Kevin Rhein, group head of card services, said yesterday.

Wells Fargo began advising customers this week that the change takes effect Nov. 30. That's one day before the chairman of the House Financial Services Committee, Massachusetts Democrat Barney Frank, wants curbs on rates and fees under a new US credit card law to take effect. He plans a hearing today on moving up the date to Dec. 1, from February, to head off increases by card issuers.

Rhein did not comment on whether Frank's bill had any bearing on Wells Fargo's decision.

The bank is also eliminating over-limit fees, which are imposed when customers exceed their credit limits, he said.

Wells Fargo, the eighth-biggest US card lender, accepted $25 billion from the federal bank bailout program.

Bank of America Corp., the second-biggest US credit card lender, has said it won't raise rates and fees on customers in good standing before the effective dates of the Credit Card Accountability Responsibility and Disclosure Act, which takes effect in stages.

Bank of America not to hike fees, interest on credit cards

2009-10-08T14:16:00.001+11:00

Call it a policy of appeasement, a move to quell anger amongst customers, or a fire-fighting measure, Bank of America Corp (NYSE: BAC) has declared that it will not alter the fees and interest rates levied on consumer credit cards. Bank of America bucks the trend at a time when all credit card issuing banks are hiking interest rates. BoA has pledged to keep them unchanged till the Credit CARD Act is implemented. The lawmakers have urged the other banks to follow suit

The charges would not be hiked till the time the new federal regulations take effect next year, claimed the largest bank in the United States.

North Carolina-based Bank of America, which is the second-biggest credit card lender after JPMorgan, announced that it "will not implement any change in terms (risk or economic based) re-pricing of consumer credit card accounts between now and the effective date of the CARD Act."

Customer-oriented move
The decision has been taken in wake of the concerns raised by the customers. "We believe that this is responsive to the concerns we have heard and is consistent with other consumer-oriented policy changes we have made recently," said Collingwood.

Bank of America's proclamation comes after many of the credit card issuing banks increased the interest-rates and fees in recent times.

Majority of the new law's provisions, such as limiting banks from raising charges, increasing fees on existing balances and other controversial practices, are scheduled to come into effect in February.

The hikes by the banks on an immediate basis thus made commercial sense; however, these upward revisions of the fees have been condemned by the customers and regulators alike.

Credit CARD Act
The Credit Card Accountability Responsibility and Disclosure Act of 2009, popularly known as Credit CARD Act of 2009, is a federal law passed by the Congress in the United States.

The U.S. President Barack Obama signed it on May 22, 2009, and it will come into effect in February 2010.

Upon signing the bill, President Obama had said, "With this new law, consumers will have the strong and reliable protections they deserve."

The objective of this comprehensive credit card reform legislation is "to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes."

Among other provisions, the Credit CARD Act restricts the banks from arbitrarily raising the interest rates. It requires the card issuing banks to give cardholders 45-days notice of any interest rate increases.

The Act also prohibits card companies from charging interest on debt that is paid on time during the grace period. This clause essentially puts a stop to the so-called "double-cycle billing" practice.

The Credit CARD Act also requires the card companies to mail the billing statements 21 calendar days before the due date instead of the present mandate of 14 days. The act also contains new protections for college students and young adults.

Merchants Seek Lower Credit Card Interchange Fees

2009-10-08T14:13:00.001+11:00

Are American shoppers and businesses paying billions of dollars more than they should be to use credit cards? That's the big question that the House Financial Services Committee will look at Thursday.

The issue: interchange fees, the roughly 2% of every credit card swipe that goes to the bank that issued the card. That's a real cost for small merchants that do a lot of credit card sales, particularly in thin-margin businesses like grocery or convenience stores. (7-Eleven is lobbying aggressively on this issue.)

How much do interchange fees cost? $48 billion a year, according to the Merchant Payments Association, a coalition of mostly retail trade associations lobbying to restrict the fees. How much do merchants pay? To put that in perspective, Home Depot pays more in interchange fees than for employee health care. Some of those costs get passed on to consumers.

It's not a black-and-white issue. I think opponents who call interchange "hidden fees" aren't quite right. Credit cards provide a service (both to merchants and consumers) that someone needs to pay for. Card issuers say interchange fees fund rewards programs, protection against fraud, and other costs.

But interchange fees are the largest piece of the costs associated with accepting credit cards. Here's a look at how the fees on a typical credit card transaction break down, according to Dan Price, founder of Seattle credit card processor Gravity Payments:

On average, 1.75% goes to the bank that issued the credit card; 0.1% goes to the network (Visa or MasterCard); and between 0.5% and 1% goes to the processor. (Price says Gravity Payments, whose business model depends on holding onto customers longer than most processors, charges about 0.33% for processing.)

There's not a lot of transparency about how these fees are calculated. From Floyd Norris in the NY Times last week:

How much less depends on what kind of business the store has. (Food stores pay smaller fees than clothing stores.) It depends on what kind of market power the store has. (Home Depot gets a bigger share than Fred's Hardware.) It depends on whether the card is a credit or debit card. (Debit cards have lower fees.) It even depends on whether a credit card offers rewards. So when I use the Visa card that gives me airline miles, the merchant gets less than if I use a basic Visa card.

How opaque is it? You can look at the interchange rates for Visa and MasterCard. (The networks set the rates, even though the fees are paid to the banks that issue the cards.) The MasterCard document is 100 pages.

UK credit card fraud falls by 23%

2009-10-08T14:11:00.001+11:00

Credit card fraud in the UK fell by a dramatic 23% in the first half of 2009 with £232.8 million stolen by thieves against £304.2 million in the first six months of 2008. It is believed that a mixture of improved detection systems and new scams in different areas of the economy were behind the impressive fall. However, even though credit card fraud has fallen we all need to be on our guard in the future to put more pressure on the criminal gangs.

It was interesting to see that so-called credit card skimming or cloned credit card fraud fell from £88.8 million last year to £46.3 million this year and there was also a significant fall in Internet, phone and mail order credit card fraud which fell from £163.9 million to £134 million. The report also shows that there are 38 million dormant credit cards in the UK with total credit facilities of over £200 billion. While many people like to keep credit card on hand in case they encounter troubled times, these particular cards and customers may well be a "godsend" to criminal gangs.

Stay vigilant, stay on your guard and above all, ensure that you read your credit card statement each and every month and question any anomalies.

Man goes to jail for credit card fraud

2009-10-06T21:51:00.001+11:00

A Pierce County man is headed to prison for theft and credit card fraud. A Pierce County judge found 41-year-old Raymond Edward Jackson guilty on one count of theft and one count of fraudulent use of a credit card.

In January, a woman told deputies Jackson stole her heart and her credit card and took off. Investigators say they found Jackson in Hawaii where he had used the woman's credit card and married another woman. Monday, Jackson was sentenced to a year and a half in prison and two years of extended supervision.

Picking The Right Credit Card

2009-10-06T17:40:00.001+11:00

In yesterday's KERA economy segment, we looked at what new changes in credit card regulations will mean for consumers when they take effect in February. Today, we go a step further with help for choosing a credit card. Todd Mark of Consumer Credit Counseling Services of Dallas says avoid the mail offers and shop around, but know your credit score determines what you'll get.

Mark: If you've got a great score, guess what? The sky's the limit and you should be looking for what's the best cash back opportunity. Is it frequent flyer miles or is it one percent cash back to your favorite shopping stores?

Sam: But now aren't those kind of incentives just to get you to spend more money?

Mark: It is, but if you've got a good score there's a good chance you're using credit the way I want to see you use credit. And that's using it where you're paying it off on time and in full every month. Remember if you do that it doesn't matter how much you spend, it's not costing you a penny in interest.

Sam: Let's say then that you're someone who carries a balance every month, but you pay more than the minimum.

Mark: At that point, you're looking for what's the cheapest card, what are the cheapest interest rates. And of course if you're carrying a serious balance, or say you've had delinquencies in the past, and your score is problematic. You may not qualify for the best deals and you're saying do I have to worry about annual fees or application fees? What are my late fees or balance transfer fees? And certainly, what kind of interest rate are we looking at? You would generally see folks in the ten to fifteen percent range if they've got decent credit and you'll certainly find teasers in the zero, three, six percent range. But if you've got problem credit, we see people regularly in the high twenties, the thirties. And folks that are really troubled, we see some forty percent interest rates on credit cards.

Sam: I didn't know interest rates went that high.

Mark: They do. If you are truly subprime and you are dealing with a lender that is not necessarily looking out for your best interest, you can go that high.

Sam: Shopping around though almost means doing business perhaps with a bank or credit card company that is not maybe even in your city.

Mark: Certainly

Sam: Is that wise? Are you better off dealing with whomever you regularly do business with?

Mark: Well, there's banking relationships and then there's a credit card relationship. For banking, I always want to have a relationship with a local bank or a credit union so that you're not just a number or you're not some process on the internet. But you can go in, sit across a desk from somebody and say here are my needs or I need a loan or there's a problem you need resolved you want to be able to have that face to face relationship. Now if we're talking about a credit card. I've got two credit cards in my wallet. One of them I opened up twenty years ago when I was back in college. I didn't know the bank at the time and I don't have a relationship with anybody at a local bank now, although it's a very well known national bank. I've never had a problem of dealing with them because I always pay it off in time and in full every month. So for me, I don't really care about the relationship with the credit. It was what they were giving back to me as far as a loyalty program, and that's the most important thing.

Sam: Are those offers that come in the mail all the time so bad?

Mark: You know, it always depends on your credit. You may get a preapproved offer, or it says it's preapproved, and it's a mass mailing that they send out to millions of people. And you reply back and say, "This is the deal I want- it's better than anything I found online." And they say "Oh well we're so sorry you didn't qualify for this one but with your credit score we can give you this." So it's almost like a lost leader to get you on the phone or online with them to talk about what you truly would qualify for. So some of the deals, if you qualify for them, they could be fantastic But I'd rather you proactively go out and seek, with your credit, what's the best you can do. Don't just accept what comes through the mail.

Sam: In the end, with all of these choices out there for how to manage credit, what type of credit cards to use, does any of that matter if you're using credit irresponsibly?

Mark: Absolutely not. Credit is a very powerful tool if used responsibly. But if you're using it to buy today what you can't pay for tomorrow, you're just becoming enslaved to a debt that's going to cost you so much over.

Todd Mark is Vice President of Education for Consumer Credit Counseling Services of Dallas.

Most of the provisions in the Credit CARD Act take effect in February. Provisions concerning more time to pay, retroactive rate increases, and more advance notice of rate hikes began in August of 2009.

Schools ex-director broke credit card policies

2009-10-06T14:08:00.001+11:00

Metro Schools employees have rules they must follow when using taxpayer-backed credit cards. Their former boss, Pedro Garcia, often broke them.

Garcia regularly violated purchasing card policies by exceeding limits on tips and travel allowances, as well as failing to turn in proper receipts.

The former director, who left the district in January 2008 and is now a professor at the University of Southern California, did not return calls for comment. A review of months' of credit card statements found several questionable expenses by the former schools chief.

Garcia was the third-highest-paid public employee in Nashville, earning $216,000 annually. On top of that, he used taxpayer dollars to buy a $600 iPhone and dine out at restaurants like J. Alexander's and Sunset Grill. School officials said the director returned the iPhone when he quit.

Garcia also liked to eat well when he traveled. Records show that on a trip to New York for a conference, Garcia and top assistant Sandra Tinnon, who still works for the district, had a $122 lunch at the upscale Central Park restaurant Tavern on the Green. The two dined on chicken and salmon, and capped the meal off with desserts of cheesecake and crème brûlée.

For dinner, Garcia took Tinnon and her spouse to a $195 dinner at Victor's Cafe, and then stayed at the $379-a-night Millennium Hilton, where the event was being held. The original expense claim for Victor's indicated Garcia's wife was also at dinner, but Garcia said in an e-mailed response that she was not present on the trip.

"I have no idea what the district document indicate," he wrote. "All I know is my wife did not go to NYC and was not on the trip and Mr. Tinnon was."

Sandra Tinnon, through a school district spokeswoman, said Garcia offered to pay for the meal, but she did not know it was purchased with a district credit card. Tinnon's husband is a school employee but was not approved to attend the conference.
Online shopping

Garcia also used his district credit card to shop online at Amazon.com for what appear to be a series of religious-themed books titled Expository Sermons on the Book of Revelation.

Director Jesse Register, who was hired in January to replace Garcia, does not have a district credit card, though his secretary does and makes occasional charges on his behalf. Register has ordered a top-to-bottom review of business practices in the district. He said axing the purchasing card program may be one way to control spending.

Prepaid, but Not Prepared for Debit Card Fees

2009-10-06T13:59:00.001+11:00

Buying a prepaid debit card these days is just about as easy as picking up a bottle of shampoo or a candy bar. Walk into a Wal-Mart or almost any major drugstore, and rows of plastic worth $25, $100 and even $500 beckon from kiosks alongside prepaid phone cards and gift cards for retailers.

Tyrell Blocker of Brooklyn said that fees started to accumulate on his card as soon as the cash from his paycheck landed on it. He complained to Pay-O-Matic and only then was provided a detailed list of card fees.

"No Credit Check. Safer Than Cash. No Bank Account Needed," says the Green Dot Visa Prepaid Card: Just pay at the register and the card is ready for A.T.M. withdrawals, store purchases and online shopping.

For many people who do not have bank accounts, or cannot get a credit card, the appeal is irresistible, making the reloadable cards among the consumer banking industry's fastest-growing products. But their convenience comes with a catch: fees, often hidden in the fine print.

The MiCash Prepaid MasterCard docks cardholders a $9.95 activation fee. Like many competitors, it then charges numerous recurring fees, including $1.75 for each A.T.M. withdrawal, $1 for each A.T.M. balance inquiry, 50 cents for each purchase, $4 for monthly maintenance, $2 for inactivity after 60 days and $1 for a call to customer service.

The Millennium Advantage Prepaid MasterCard goes further, listing an application fee of up to $99. The Silver Prepaid MasterCard advertises that it does not charge for overdrafts as many debit cards do, but it gives itself the option of charging a $25 shortage fee if customers exceed their balance.

"It's a very expensive way to bank," said Jean Ann Fox, director of financial services at the Consumer Federation of America.

A cottage industry only 10 years ago, reloadable prepaid cards have tapped into the vast pool of about 80 million consumers who have little or no access to bank accounts. The market includes college students who do not want to carry around wads of cash and consumers who do not want to type their credit card number into the Internet.

More typically, it comprises low-income people and immigrants who have fewer financial options than other Americans. Often, they turn to these cards because they cannot open a bank account, or they become fed up with the costs of check-cashing stores or overdraft fees on checking accounts.

Industry officials say the cards are a good deal because users can avoid the fees charged on low-balance bank accounts and at check-cashing stores.

"If you look at these products today compared to even a checking account, many consumers have found that they can be far less expensive," said Gary Palmer, chairman of the Network Branded Prepaid Card Association.

But even as the industry expands, many prepaid cards continue to charge fees — including for purchases and paying bills — that can quickly accumulate.

Like many workers, Tyrell Blocker, 20, of Brooklyn, could ill afford the surprise when he took such a card last week to a Pay-O-Matic Financial Services store in Manhattan after a bank turned him down for an account because he lacked one of two required pieces of identification. As soon as the cash from his paycheck landed on his card, he noticed fees accumulating. Mr. Blocker returned to Pay-O-Matic to complain and only then was provided a detailed list of more than two dozen fees, he said.

"I need every last dime I got; I've got a newborn," Mr. Blocker said. A spokesman for Pay-O-Matic said the card was fairly new and the firm was working to make the fees more transparent.

Little Regulatory Scrutiny
Because it is a relatively new industry, prepaid cards have not undergone the Congressional and regulatory scrutiny of credit and debit cards. In the spring, lawmakers restricted interest rate increases and hidden fees on credit cards, and regulators are now examining stricter rules on overdraft fees on checking accounts. Even gift cards, which expire when the money runs out, will soon be subject to new rules limiting monthly fees and expiration dates.

Congress has asked regulators to determine if prepaid cards warrant the same protections extended to debit and credit cards. The industry's trade association says such measures are unnecessary and would make cards more expensive.

But consumer advocates say the lack of regulation means that prepaid card users can continue to be blindsided by hidden fees, and have few legal protections to recover their money if a card is lost or a charge disputed.

Credit card deals could save retailers millions

2009-10-05T11:50:00.002+11:00

The Commerce Commission says agreements unveiled today with seven financial institutions could save retailers tens of millions of dollars.

The agreements with the financial institutions follow settlements reached in August with Visa and MasterCard that paved the way for credit card interchange fees in New Zealand to be set by competition.

A result of the settlements is that merchants can surcharge customers when they use credit cards to make purchases.

Today the commission said the agreements ushered in a new competitive landscape for the credit card industry in this country.

Commission chairman Mark Berry said savings to retailers during the next three years as a result of the settlements were expected to be in the order of $70 to $80 million.

"This represents a significant reduction in the cost of doing business for retailers who offer credit card payment options, and we would expect to see this passed on to consumers over time through lower retail prices," said Berry.

The institutions announced today to have reached settlements with the commission are ANZ National, ASB, Westpac New Zealand, Bank of New Zealand, Kiwibank/New Zealand Post, TSB Bank, and The Warehouse Financial Services.

Berry said the commitments made by the institutions would put immediate downward pressure on interchange fees while ensuring that those fees remained transparent and open to competitive forces.

The commission said that in High Court proceedings it claimed that the parties breached the Commerce Act by agreeing and implementing the Visa and MasterCard credit card scheme rules in New Zealand which, among other things, provided for the payment of multilateral interchange fees.

The commission said it alleged those rules substantially lessened competition by artificially inflating the cost to retailers of accepting credit cards and ultimately raising prices paid by all consumers.

Each of the financial institutions would contribute towards a combined total of $1m to cover the unmet costs of the commission's proceedings, the commission said. It previously recovered $5.6m towards its costs from Visa and MasterCard.

Also today, a group of retailers said it had reached a settlement with MasterCard over interchange fees and scheme rules.

The settlement, along with the commission's settlement with MasterCard and Visa, was significant for the retail industry, spokeswoman Louise Evans said.

The settlement reaffirmed retailers' ability to pass on the cost of accepting credit card payments through a reasonable surcharge as provided in MasterCard's settlement with the commission, which retailers were previously prevented from doing.

"This new level of transparency means that for the first time the actual cost of using a credit card will be known to consumers," said Evans.

"This may ultimately result in customers choosing to use different payment options. It is this development which may have the greatest impact for customers."

The retailers group was made up of Progressive, Foodstuffs, Dick Smith, Farmers, Noel Leeming and Whitcoulls.

"After spending the last three years preparing to go to court, we're pleased to have a satisfactory result and be able to get back to our businesses," Evans said.

Cash is back as credit card technology affects travel

2009-10-05T11:49:00.001+11:00

A change in travel may be on the way. However, unlike most things, we may be going backwards rather than forwards as many travelers may be exchanging and carrying cash rather than using debit and credit cards.

In a recent New York Times article, For Americans, Plastic Buys Less Abroad, new technology in credit cards in Europe and other countries may be making the magnetic stripe cards in the US more difficult to use. The new cards are called chip-and-PIN cards which store information on the card which is accessed by a pin making counterfeiting and fraud more difficult. While many stores will still accept the magnetic stripe cards used in the US, kiosks and many ATMs may not making it more difficult to make purchases and access cash.

While Europe is leading the way in this new credit card technology, these aren't the only countries using it. Mexico, Brazil, and Japan are also using the chip-and-PIN cards with China, Canada, and Latin American countries rolling this out soon. Unfortunately, the US banks don't seem to be in a hurry to make this move which may make traveling a bit more difficult as cash, exhanging currency, and more old fashioned ways of traveling may be necessary. For Americans traveling abroad, it may be out with the new and back in with the old.

While this may or may not be a huge hindrance in traveling, it is something to be aware of. One of the scariest things that can happen is landing in a different country and then realizing you have no access to money. And from recent comments and articles out there, the inconvenience caused by this is real.

If anyone has had experiences with this, please feel free to share. The more we understand the effects of this on our travels, the more well informed we can be. Hopefully, this isn't as scary as it sounds but we all need to be made aware of these changes which could impact our travels.

Why American Credit Cards Suck

2009-10-05T11:48:00.001+11:00

If you prefer to use a credit card when traveling abroad due to safety and better exchange rates, bad news. Other countries have adopted smartchip technology in their bank cards, and soon we Americans may be forced to use cash when traveling.

Smartchip technology is sort of a banking equivalent of the metric system—it's superior to magnetic stripe cards, every other country is using it, and the American banking system simply isn't interested.

Twenty-two countries, including much of Europe, Mexico, Brazil and Japan, have adopted the technology, according to the Smart Card Alliance, a nonprofit association that promotes chip cards. About 50 other countries are in various stages of migrating to the technology in the next two years, including China, India and most of Latin America, according to the association.

In the last year, Canada began rolling out chip-and-PIN cards and plans to stop accepting magnetic stripe debit cards at A.T.M.'s after 2012 and at point-of-sale terminals after 2015.

These governments like the cards because they reduce fraud. With an embedded microcontroller, large amounts of data can be stored on the card itself rather than in a central database, and counterfeiting such a card is difficult.

Balance-transfer deals are getting scarcer

2009-10-04T22:43:00.001+11:00

Can we really trust the banks anymore to adhere to the terms they offer us?

Balance-transfer terms aren't quite as sacrosanct as they used to be. A few lenders have boosted their minimum payments, and Chase tried charging a $10-a-month "inactivity fee" before customer outrage forced it to back off.

But the biggest risk with balance-transfer offers right now isn't that lenders will renege on the deals midstream. A greater concern is that the good deals are getting scarcer. It's possible that when the low teaser rate you're offered expires, you might be stuck with a double-digit rate and few options to get a better deal.

If you can pay your debt off before the low rate expires, and you would save money even after taking into account the 3% to 4% balance-transfer fee most lenders charge, then you might want to consider one of those low-rate deals. Otherwise, consider looking for a card with a low regular interest rate.

Lawmakers to Debate Credit Card Fees

2009-10-04T16:34:00.001+11:00

House lawmakers this week will debate a controversial financial bill that aims to limit the interchange fees that credit card companies exact on transactions at retail stores, according to a report by The Hill.

Democratic Reps. Peter Welch of Vermont and Zoe Lofgren of California have sponsored legislation aimed at clamping down on the fees. Welch appeared at a rally on the issue last week joined by a group of 7-Eleven store operators and NACS -- The Association for Convenience and Petroleum Retailing. The group collected 130 boxes of petitions with more than 1.6 million signatures in support of the new interchange restrictions.

The House Financial Services Committee will hold a hearing on the bill Thursday.

Retailers argue the fees are excessive and eat into their profit margins, forcing them to pass on the cost to consumers, while financial groups argue that the bill is misguided and the campaign against the fees is not about protecting small retailers.

"The big-box retailers, hiding behind some of the convenience-store folks, want to use the electronic payment system for free, which is ridiculous when they get higher sales, convenience from having to deal with cash, guaranteed payment for their services and products, and all the risk associated with credit cards gets passed onto the financial institutions," Dan Berger, executive vice president of the National Association of Federal Credit Unions (NAFCU), said in The Hill report.

Credit cards are first Wells Fargo products rolled out to Wachovia customers

2009-10-03T20:22:00.001+10:00

Wells Fargo executives see a lot of potential for the credit card division to grow with the Wachovia merger.

Now, 15 percent of Wachovia's retail bank customers have a credit card with the bank. That compares with 36 percent of legacy Wells Fargo bank customers who have one.

"So we think there is tremendous opportunity for legacy Wachovia customers to benefit," said Mike McCoy, who works from West Des Moines and is president of Wells Fargo Consumer Credit Card.

To ensure it takes advantage of those opportunities, the company is turning to Steve Samuelson, leader of the integration team for the Consumer Credit Card division — one of about 20 teams throughout Wells Fargo with the task of merging the company's technological and operational systems.

He has 30 to 40 full-time employees and hundreds of others who work on the merger at least part time. "We call on a lot of Wachovia employees. They are very much at the table," said Samuelson, who heads to Charlotte, N.C., from Des Moines about once a month to see employees there.

The division is finishing timelines and planning for merging, Samuelson said. Execution of the plans begins in earnest in November and will continue through much of 2010 and 2011.

"The merger is a great opportunity to grow the business, and it is an opportunity for team members to be building something special," he said. "A lot of times people talk about having new challenges and opportunities, and this really is a chance to step up and take on something new."

Samuelson, who worked on the integration of Norwest and Wells Fargo in 1998, said the company "dusted off that playbook and applied the same type of tried and true principles." He said that merger was successful because the focus on the customer.

It helps that the banks weren't that far apart. "Considering the size and complexities of the two businesses and the success that both have had before the merger, there are far fewer differences than you might think," he said.

Credit cards will be one of the first Wells Fargo-branded items distributed to Wachovia customers. Credit cards will be distributed as cards expire, or get lost or stolen and as new credit card customers sign up after April, he said.Most of the work before April is on the technical side, getting the programs and processes aligned and ready to distribute cards.

For Samuelson, though, the work that goes into the integration is supposed to be invisible.

"The customer didn't ask us to do this merger," Samuelson said. "So our goal is to make this as seamless as possible from a consumer perspective."

Credit Card Act Is Affecting the Job Market

2009-10-03T14:29:00.001+10:00

Despite the economic stimulus and various financial bailouts, our economy continues to shed jobs. One of the reasons for continued job losses is the decline in new hires, especially the lack of new hiring by small business.

As bank analyst Meredith Whitney discusses in the Wall Street Journal, all the major credit programs created by Congress and the Federal Reserve have been targeted at big corporations and Wall Street firms. However, small companies, especially start-ups and partnerships, do not issue bonds in the debt markets, nor do they borrow from Goldman Sachs. So these firms have been left out in the cold, as federal credit inventions have favored corporate America.

Adding insult to injury is that not only has Washington subsidized credit to large firms, it has taken actions that restrict the credit available to small firms and start-ups. The prime example of this is the Credit Card Reform Act signed by President Obama in May.

As Whitney reports, "Credit cards are the most common source of liquidity to small businesses, used by 82 percent as a vital portion of their overall funding." In restricting the usage of credit cards and reducing the ability to risk-base price, Washington has eliminated the most important source of credit to small business.

Of course, being unable to project their future health care costs, or tax burdens (yes, they are going up, but by how much), many small businesses have either been forced to or chosen to sit on the sidelines of our economy. Washington needs to recognize that Wall Street and corporate American are not the sum of our economy, if we hope to turn the employment situation around.

The earlier credit card rules change, the better

2009-10-03T14:28:00.001+10:00

After President Barack Obama signed a landmark credit card reform bill into law in May, credit card issuers had almost a year to implement the legislation's major provisions.

The first phase of the law took effect in August and, among other things, required card issuers to give you 45 days' notice of any significant changes in card terms, such as an increase in your interest rate.

The full force of the new law is scheduled to kick in Feb. 22, but the protections could take effect Dec. 1 if a new bill passes.

U.S. Reps. Carolyn Maloney, D-N.Y., and Barney Frank, D-Mass., have proposed legislation that would speed up the new regulations by almost three months. The House Financial Services Committee, where Frank is the chairman, has scheduled a hearing on the bill for next Thursday.

The sooner, the better

As far as I'm concerned, the sooner the new rules take effect, the better. Card issuers have used this time to slash credit limits, raise interest rates and bring back annual fees.

"The motivation for Maloney and Frank pushing up the implementation of the [law ] is apparently to outflank issuers who have begun raising rates on people and their existing balances to beat the February 2010 date," agreed Ben Woolsey, spokesman for CreditCards.com.

According to a study by the Pew Safe Credit Cards Project, the median lowest advertised interest rate among 400 credit cards it studied in July rose 20 percent since December.

"It's clear that credit card companies are taking advantage of this period between the signing of my bill and the current effective date," Maloney said. "The breadth and depth of the rate hikes happening now point to the need for faster consumer protections."

Many of my readers who use credit responsibly and always repay on time are understandably angered by the card companies' moves. They need protection now.

New limits

Restrictions scheduled to take effect in February include:

• Prohibiting interest rate increases on existing balances except in limited circumstances, such as when a promotional rate ends, the rate is variable or you make a late payment.

• Eliminating "universal default," or the practice of raising interest rates on customers based on their payment records with other credit issuers.

• Requiring credit card companies to apply a consumer's card payment to the highest-interest balances first. Issuers currently apply all amounts over the minimum payment to the lowest-interest balances first, which extends the time it takes to pay off higher interest rate balances.

Bankers say advancing the implementation date could end up hurting consumers because card issuers need the time to overhaul their computer systems. Without the extra time, they say, mistakes and confusion could ensue.

"It would be extremely difficult, if not impossible, for them to meet the new deadline contemplated by this bill," said Kenneth J. Clayton, senior vice president of card policy at the American Bankers Association. "Behind every credit card account is a complex network of data systems, risk management systems, pricing mechanisms and funding sources."

Mistakes seen ahead

To not be given the time to make the correct adjustments "could lead to mistakes in account statements and create confusion and uncertainty for millions of American consumers, not to mention posing significant legal penalties for banks."

This is a stall tactic.

"If the roles were reversed and they had the opportunity to take an increase in APR or changes that would lead to more revenue, I bet they could make those changes faster," said Bill Hardekopf, chief executive of LowCards.com.

Let's not drag this out. Congress should speed up the implementation date of the law so consumers can be fully protected and not be jacked around by last-minute maneuvers by card issuers.

Credit Crunch Continues

2009-10-03T11:09:00.001+10:00

Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan.

Since the onset of the credit crisis over two years ago, available credit to small businesses and consumers has contracted by trillions of dollars, and that phenomenon is reflected in dismal consumer spending trends. Equally worrisome are the trends in small-business credit, which has contracted at one of the fastest paces of any lending category. Small business loans are hard to find, and credit-card lines (a critical funding source to small businesses) have been cut by 25% since last year.

Unfortunately for small businesses, credit-line cuts are only about half way through. Home equity loans, also historically a key funding source for start-up small businesses, are not a source of liquidity anymore because more than 32% of U.S. homes are worth less than their mortgages.

Why do small businesses matter so much? In the U.S., small businesses employ 50% of the country's workforce and contribute 38% of GDP. Without access to credit, small businesses can't grow, can't hire, and too often end up going out of business. What's more, small businesses are often the primary source of this country's innovation. Apple, Dell, McDonald's, Starbucks were all started as small businesses.

What's especially disturbing is how taxpayer dollars have supported "too big to fail" businesses yet left small businesses unassisted and at a significant disadvantage. Small businesses do not have the same access to government guarantees on their debt. After all, most of these small businesses don't issue public debt.

As is true in most recessions, banks' commercial lending portfolios shrink as creditworthy customers pay down their debts and the less-worthy borrowers are simply denied loans. Banks, in other words, want to lend only to those that don't want to borrow. Challenging as that may be, in the last cycle small businesses at least had access to their credit cards.

Small businesses primarily fund themselves through credit cards and loans from local lenders. In the past two years, credit-card lines have been cut by over $1.25 trillion. During the same time, 10% of all credit-card accounts have been cancelled. According to the most recent Federal Reserve data, small business lending is down 3%, or $113 billion, from fourth-quarter 2008 peak levels—the first contraction since 1993. Credit cards are the most common source of liquidity to small businesses, used by 82% as a vital portion of their overall funding. Thus, it is of merit when 79% of small businesses surveyed tell the Small Business Association that credit-card lending standards have tightened drastically and their access to credit lines has decreased materially.

Incentives should be provided to smaller banks to step up small-business loans on a greater scale. Smaller banks could not only bridge gaps created by the shut down in the securitization market but also gaps being created by a massive contraction in credit-card lines. Arguably credit would perform better with these types of loans as they would reintroduce and reinforce the most important rule in banking: "Know Your Customer."

I believe that we are only in the early stages of the second half of this credit cycle. I expect another $1.5 trillion of credit-card lines to be removed from the system by the end of 2010. This includes not only the large lenders reducing exposure but also the shuttering of several major subprime credit-card lenders. Beginning in the fourth quarter of 2007, lenders began reducing available credit by zip code. During the past four quarters, lenders have cut "inactive" accounts (whether or not the customer viewed the account as a liquidity vehicle).

The next phase will likely be credit-line cuts as lenders race to pre-emptively protect themselves from regulatory changes associated with the Credit Card Accountability, Responsibility and Disclosure Act, passed in May of this year, and the 2008 Unfair and Deceptive Acts and Practices Act.

Regulators should be mindful that regulatory change during the midst of a credit crisis often ends with unintended consequences. Those same consumers that regulators are trying to help are actually being hurt by a vast reduction in available credit.

Main Street represents the foundation of this country. Reviving it should take priority over any regulatory reform or systemic overhaul.

Cops warn of scam targeting credit-union members

2009-10-03T09:17:00.001+10:00

Suffolk investigators are probing a scam involving attempts to steal card numbers and personal identification numbers from credit union debit card holders, Suffolk police said Friday.

Suffolk residents have told police they have received text or voice messages saying their debit card numbers had been deactivated, and they were instructed to contact their credit unions by phone to reactivate the accounts, police said.

The messages instructed cardholders to provide their credit union account numbers and PINs, police said.

The scam has targeted members of several different credit unions, police said.

Financial institutions do not contact customers by mail, phone or the Internet to request account information, police said.

The scam is under investigation by the Police Identity Theft Unit.

Residents who have received messages they believe are fraudulent should contact their financial institutions immediately, police said.

The text messages, sent to customers' cell phones, and calls to landline phones seem random. Scammers name a credit union in hopes of contacting a customer of that financial institution and tricking the customer into giving out account information, police said.

Cardholders who receive an inquiry via mail, telephone or e-mail from someone claiming to represent their financial institutions, and asking about bank, credit card or loan accounts, should not give out information about their card and personal ID numbers, police said.

Cardholders should contact their financial institutions directly and ask whether the inquiry is legitimate, police said.

Caller IDs displayed on the phone should not be trusted, even if they appear to identify the caller as a legitimate financial institution, because the display information can be "spoofed," or changed to display a fake number or identifier, police said.

3 accused of stealing diners' credit card ids

2009-10-03T08:54:00.001+10:00

Three Philadelphia men were indicted yesterday on charges of illegally using the credit and debit cards of customers of two city restaurants by recruiting servers and other workers to steal their account information and then using it to create false - but functioning - cards.

According to the federal grand jury indictment, the fraud and identity-theft ring targeted other restaurants and businesses in addition to the two named: T.G.I. Friday's, 4000 City Ave., and Ruby Tuesday, 16th and Chestnut Streets.

The investigation is ongoing, said Patty Hartman, a spokeswoman for U.S. Attorney Michael L. Levy.

The same T.G.I. Friday's has been targeted by other credit-card skimmers, according to an August grand jury indictment.

In the latest case, Michael Lewis, 35; Cantrell "Man Man" Fletcher, 27; and Keith "Goat" Pearsall, 39, all of Philadelphia, are charged with conspiracy and numerous counts of fraud and aggravated identity theft.

The indictment states that beginning in December 2007 and continuing until this spring, Lewis and Fletcher provided skimming devices "to employees of restaurants, hotels and retail stores throughout the Philadelphia area."

The "skimmers" - waitresses referred to as Co-conspirators Nos. 1, 2, and 3 - would record credit- and debit-card information from unsuspecting customers.

Lewis and Fletcher would then use encoding devices to transfer the stolen information onto the magnetic strips of other credit, debit, or plain-white plastic cards, the indictment says.

Lewis, Fletcher, and Pearsall used the cards to buy merchandise and gift cards, pay for home and car renovations, and pay the restaurant employees who worked for them, according to the indictment.

In charging the men, prosecutors only had to list aggregate amounts exceeding $1,000. For example, the indictment says that Lewis used four credit- and debit-card numbers to make $2,437.35 in unauthorized purchases.

However, the indictment says that on May 6, Lewis possessed 57 stolen credit- and debit-card numbers with the intent to make unauthorized purchases.

Assistant U.S. Attorney Nancy Potts, who is prosecuting the case, declined to provide the total amount alleged to have been stolen, citing the ongoing investigation.

If convicted on all counts, the men would face a maximum of 32 years in prison.

Brazil Seeks Credit Card Rules to Foment Competition

2009-10-02T11:46:00.001+10:00

Brazil's central bank proposed new measures to stimulate competition in the credit-card market in Latin America's biggest economy.

The proposals, which weren't provided in detail, were sent to the government for consideration, according to a statement on the bank's Web site today.

"The commitment of the regulatory bodies is with the adoption of measures that will increase competition and transparency," the central bank said.

Market failures allowed Redecard SA, the Brazilian processor of Mastercard Inc., and Companhia Brasileira de Meios de Pagamento, known as Visanet, to post profits higher than what can be considered "fair," the central bank said in a March 31 report.

Redecard fell 0.3 percent to 27.17 reais at 10:32 a.m. New York time in the Sao Paulo trading. Cia. Brasileira de Meios de Pagamento slid 0.6 percent to 17.47 reais.

The proposals will ensure retailers will be able to use a single terminal to receive payments from different brands of credit cards, the central bank said. The measures also seek more "transparency" on certain credit card tariffs.

Visanet raised 8.4 billion reais ($4.72 billion) in the world's biggest IPO in more than a year in June 26.

The number of credit and debit cards in Brazil rose 12 percent in June to 540 million cards, from 482 million cards in June 2008, according to figures compiled by the Brazilian Credit Card Companies Association.

Alliance partners with Pacific Dental for credit card program

2009-10-01T19:33:00.001+10:00

Alliance Data Systems, a provider of loyalty and credit card services, has signed a multiyear agreement with Pacific Dental Services (PDS). As part of the deal, Alliance will supply PDS with patient financing and marketing services through a private-label credit card program for dental procedures.

Alliance will handle receivables funding, credit authorization, statement generation, remittance processing, customer service functionality and marketing services to PDS to support the credit card program. Alliance will also integrate account acquisition, authorization and settlement services into PDS' practice management system.

Based in Irvine, CA, PDS works with 195 affiliated dental practices in California, Nevada, Arizona, Colorado and Texas.

Shelley Whiddon, director of external communications at Alliance, said the technology could be used if a dentist determined that a patient needs braces, a root canal or an elective procedure like teeth whitening and he or she is not insured, among other examples.

"If the patient has no insurance or if it's not paying at the level they wish it would, they may need credit," she said. "We're providing PDS a program for financing those dental services."

Whiddon explained that patients in that case generally have to go through an office manager to apply for credit, then wait for approval.

"By integrating the Alliance Data services into PDS' practice management system, there's an interface where that application and approval process can happen very quickly," she said.

Whiddon did not disclose the deal's financial terms. Calls to PDS were not returned.

Keep the Rate or Keep the Card?

2009-10-01T14:14:00.001+10:00

Ann has $10,000 in credit card debt.

She had been paying it off month by month -- always on time -- at an interest rate of 7.15 percent.

"Then all of a sudden, when I received my September statement the APR had jumped to 14.99 percent," Ann wrote to me.

This must be a mistake, Ann thought.

So like a conscientious consumer, she called the company that issued her credit card.

There was no mistake.

Ann joined millions of other cardholders across the country who have been notified that their interest rates are rising. They, like Ann, are being told to deal with it or get kicked to the curb.

"I called the credit card company," Ann said. "The gentleman said they had chosen several of their 'products' to raise the interest rate." Ann has two choices. She can accept the higher interest rate -- but says she "can't afford to pay double interest on a $10,000 balance."

Or she can reject the rate hike. "If I reject the terms, I would be able to pay the old rate on the existing balance," she said.

If Ann says "no deal," however, the credit card company will close her account.

Under the new Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 and Federal Reserve rules, a cardholder who is notified of a change in terms on or after Aug. 20 has the right to close the account and reject that change for the existing balance. If the consumer does so, the card issuer must allow the cardholder to repay the balance on the existing terms, make minimum monthly payments that include no more than twice the percentage of the balance included before the change in terms, or pay off the balance over at least five years.

Ann is worried about her ability to get another credit card at a decent interest rate. She's also concerned that canceling the card will lower her credit scores.

In advance of tougher credit card regulations taking effect next year, many consumers have been receiving notices of lower available balances, interest rate increases or a switch to variable rates.

What the credit card companies are doing is wearing down a lot of good customers who, if left alone with decent interest rates, would have a better chance of paying off their debts.

The Federal Reserve's rules implementing the CARD Act require that Ann be given the right to reject (or opt out of) the interest rate hike. Generally, however, the issuer is permitted to apply the new interest rate to any transactions that occur more than 14 days after notice is given.

Ann has a legitimate concern about getting another credit card with a rate as good as the one she had. With a tightening of credit standards, she may have difficulty getting another credit card at all.

She has less to be worried about concerning her credit score because she does not have any other credit cards.

"A person's FICO score is influenced by everything in the person's listed credit history, so the impact of a change to one account will be strongly influenced by the other information on her credit report," said Craig Watts, public affairs director for FICO (formerly known as Fair Isaac Corp.), the creator of the widely used credit-scoring system.

What most affects a person's score when an account is closed is the presence of outstanding balances on other open accounts -- not the closure of the account in itself. The scoring system looks at how much credit you are using compared with how much you have available.

So for example, if someone has three credit card accounts, all with zero balances, that person could close one of them with confidence that the closure won't change her FICO score, because it won't change her credit utilization rate, Watts said.

Watts also cleared up a common misconception. Closing a credit card account won't affect the duration of someone's credit history. That's because credit reports include the history of closed accounts for a number of years after closure, and FICO scores consider both open and closed accounts when calculating the person's length of credit history.

So, deal or no deal for Ann?

Ann, tell your credit issuer you won't be played. Similar to the weary, downtrodden worker in David Allan Coe's song "Take This Job and Shove It," have the nerve to walk away.

Ann shouldn't be carrying $10,000 on her credit card, but she shouldn't stand for this treatment. She should pay off this debt -- and until she does, she doesn't need another credit card.

So, Ann, don't take the banker's offer.

No deal.

New government proposals could help consumers with credit card debt

2009-10-01T13:20:00.001+10:00

The Federal Reserve has proposed new rules that could help consumers who are struggling to pay down credit card debt.

According to the Fed's announcement, the new proposal would mostly prohibit rate increases for the first year that an account is opened or for existing credit card balances. Creditors would also be prohibited from issuing new accounts to people under age 21 unless that person can demonstrate an ability to pay their balance or can obtain permission from a financially solvent parent or guardian.

Other provisions would limit the fees that can be associated with subprime credit cards, ban two-cycle billing and other tactics that maximize interest costs, and require customer permission before imposing fees on transactions over the credit limit.

"This proposal is another step forward in the Federal Reserve's efforts to ensure that consumers who rely on credit cards are treated fairly. The rule bans several harmful practices and requires greater transparency in the disclosure of the terms and conditions of credit card accounts," said Federal Reserve Governor Elizabeth Duke.

The proposals also mirror a number of reforms approved by Congress that will take effect in early 2010, which will further help those struggling with credit card debt.

American Express to End Monthly Fees on Gift Cards

2009-10-01T08:58:00.001+10:00

American Express announced on Wednesday that it would eliminate monthly fees on its popular gift cards, a move that is likely to pressure its competitors to do the same.

The company's decision, which takes effect immediately, goes further than legislation Congress enacted in the spring that would limit, but not eliminate, monthly fees on gift cards.

Alpesh Chokshi, president of American Express's Global Prepaid unit, said consumers loved the gift cards but often complained about the monthly fee that ate away at their balance. There were no monthly fees in the first year, but on the 13th month, American Express began charging $2 a month.

Mr. Chokshi said eliminating the monthly fee was now possible because the gift card business had enough scale to remain profitable without the fees. The company will continue to make money from the purchase charge, which ranges from $2.95 to $6.95, as well as from its share of transaction fees, up to 4 percent each time the card is swiped.

Gift cards began as a plastic replacement for paper gift certificates and were originally embraced by retailers like Blockbuster, Starbucks and Barnes & Noble. In those instances, the cards could be used only at a specific retailer.

The major credit card networks, like American Express and Visa, now offer gift cards that can be used at any retailer that accepts their credit and debit cards. Mr. Chokshi said American Express began selling gift cards five years ago, and it now sells more than $1 billion worth of cards a year.

The gift card legislation was tacked on to a much broader credit card bill that sought to limit the most onerous interest rates and fees on credit cards. As part of the bill, Congress prohibited inactivity fees or monthly service charges on gift cards, unless there had been no activity on the card for 12 months.

"Consumers no longer need to worry about their gift card losing value if they don't use it quickly," Mr. Chokshi said.

He declined to say how much American Express had made from charging monthly fees.

FDIC safe harbor uncertainty may impact credit card ratings

2009-10-01T08:56:00.001+10:00

Uncertainty over whether the FDIC will continue to grant "safe harbor" status to the securitizations of banks in receivership, as new accounting rules go into effect, may spur negative rating actions on top-rated credit card securities, Moody's warned in a report.

The American Securitization Forum, a leading financial industry group, submitted a proposal to the FDIC in late September, on behalf of market participants to address those concerns as new accounting rules get set to go into effect.

"There are a variety of possible outcomes, ranging from full protection from repudiation and stay risk to no protection at all," said William Black, a senior vice president at Moody's Investors Service.

"In the worst case, absent further clarification from the FDIC, we believe that some credit card ABS will be exposed to repudiation and stay risk," Black said.

According to the Moody's report, "these incremental risks amplify the linkage between the ratings of the sponsor bank and the related credit card ABS and, assuming they remain unmitigated, there will likely be rating downgrades on some credit card ABS."

The credit strength of the sponsor will be among the factors that determine the magnitude of any downgrade.

"Generally, the weaker the credit strength of the sponsor, the more likely that these incremental credit risks will materialize, and the greater the magnitude any rating action to senior ABS -- virtually all of which are currently rated Aaa," said Black.

Credit card securitizations that are structured as legal true sales may be less at risk of repudiation and stay despite the loss of the safe harbor. "Even so," said Black, "a multi-step true sale transfer does not allay all our concerns."

Moody's said it will continue to assess new transactions, and to the extent they are sponsored by banks rated at least Aa3, may assign Aaa ratings.

"Despite the uncertainty surrounding the future actions of the FDIC, the likelihood of a downgrade to ABS sponsored by Aa3 or above rated banks is low, and should it occur, the degree of rating transition will be very limited," said Black.

If the safe harbor issue remains unresolved, Moody's will likely place under review for downgrade those outstanding Aaa-rated credit card transactions that are not sponsored by banks rated at least Aa3.

The timing of any review would coincide with the effective implementation date of the new accounting rules, with fiscal years beginning after November 15, 2009, the rating agency said.

Feds announce credit card regulations to take effect within months

2009-10-01T08:53:00.002+10:00

Canada's banks will now be required to increase payment details on credit card statements and to provide a standardized grace period to pay off purchases.

This, despite a warning from the Canadian Bankers Association about "unintended consequences" that could hurt consumers.

After a brief consultation period, Finance Minister Jim Flaherty on Wednesday said most of the new regulations will take effect Jan. 1, including a new summary box on credit contracts and application forms that highlights interest rates and details about how long it would take to fully repay the balance if only a minimum payment is made each month.

The biggest change — mandating Canada's federally registered banks to grant their customers a minimum 21-day, interest-free grace period on all new credit card purchases when a customer pays the outstanding balance in full — won't take effect until next September. Flaherty said this switch will cost banks "tens of millions of dollars" in lost revenue.

"Our government understands the pressures Canadians face in these tough economic times," said Flaherty. "The last thing they need is a surprise on their credit card statement. By increasing transparency, our government is taking real action to protect consumers."

The newly published regulations also will require cardholders' consent for credit limit increases; limit debt collection practices used by financial institutions; and prohibit over-the-limit fees solely arising from holds placed by merchants.

Banks also will be required to provide advance disclosure of interest rate increases prior to their taking effect, even if this information had been included in the credit contract; currently, banks are already required to provide 30 days' notice when they plan to hike rates.

After Flaherty presented the proposal in May, the Canadian Bankers Association warned that its members were "concerned about the potential for negative impacts on consumers" if the government moved forward with the regulations, including limiting the number of credit cards options available and reducing the availability of credit to some customers."

In an interview Wednesday, association president Nancy Hughes Anthony reiterated these concerns, saying each bank will have to assess its own business plans as it implements the new regulations.

"It's complex, it's obviously very costly for banks to implement all these things within the time frame required, and I hope that it will have the benefit to consumers that the intent is and we're going to try and absolutely make that happen," said Hughes Anthony.

Opposition politicians, however, say the regulations are incomplete.

"Obviously, it's missing the most important thing in our opinion, which is the high interest rates, the excessive fees and the unsolicited premium cards with even higher interest rates. So there's no protection and no relief coming there, and that's what I think Canadians with credit cards are looking for," said Ontario MP Glen Thibeault, consumer protection critic for the New Democrats.

Added Dan McTeague, the Liberal consumer affairs critic, "Notification that your interest rates are going up doesn't provide any real help to consumers."

Millions of consumers who don't deal with Canada's big banks won't see any difference in the way interest is calculated on outstanding balances.

That's because financial institutions such as National Bank, HSBC Bank, Laurentian Bank and the HBC retail credit card issued by GE Money Canada, along with provincially regulated financial institutions, already meet or exceed the federal government's new threshold for a minimum 21-day grace period and the accompanying new rule that will require cardholders to pay interest only on any balance — but still enjoy a 21-day grace period on new purchases.

However, the method currently used by the Bank of Montreal, Royal Bank, TD, Scotiabank and CIBC for the application of grace periods will have to be changed.

For example, if a customer currently using a card issued by BMO, CIBC, Scotiabank, RBC or TD carries a balance of $300 from April into May, and makes a new purchase of $50 in May, he has to pay interest on the $300 and on the new purchase of $50 in June, without any grace period, because he carried a balance from April.

Credit cards questioned

2009-09-29T21:56:00.001+10:00

QUESTION: Do the City of Cookeville and Putnam County offer government credit cards to use on job expenses? Are there limits on how much the employees can spend and what items they can use the cards to pay for? Do all employees have them or just certain departments -- which departments?

ANSWER: Mike Davidson, finance director for the City of Cookeville, said the city provides a credit card to each departmental director and police detective to use for business and travel related expenses. Directors are authorized to purchase items that do not exceed $500 in value without approval from the city manager. Also, the police department maintains a training credit card that is not assigned to an individual officer, but used by any officer for travel related training expenses. Kim Blaylock, Putnam County executive, said Putnam County does not have credit cards. Some of the departments have "store" cards. Only employees authorized to make purchases have assess to these cards.

New law requires credit card applicants to be 21

2009-09-29T18:02:00.001+10:00

Students applying for credit could soon hear a familiar motto: 21 means 21.

Beginning in February 2010, a federal law will prohibit those under 21 from acquiring a credit card without a co-signer or proof of sufficient income.

The changes stem from the 2009 Credit CARD Act, a measure that will tie lenders to responsible practices and full disclosure.

It could ultimately end up tying the hands of financially strapped students.

According to The Wall Street Journal, credit card issuers have already begun to increase interest rates and annual fees in anticipation of the changes.

In addition, credit will become more expensive as laws force lenders to be more selective in choosing clientele.

"You know, it's hard right now," said Tarin Acaron, a marketing officer for Campus USA Credit Union in Gainesville.

"A lot of people are using their credit cards to get by and pay their bills because they just lost a job," Acaron said.

In the tumultuous economic environment, Campus USA offers a student-friendly alternative that considers a range of factors apart from credit scores and employment income.

"I don't know if people understand how important [credit] is," she said.

"It takes just a little bit to hurt it and so much to fix it."

According to the Counsel of Economic Education, mounting credit card debt trumps all other reasons for why students drop out of college.

Some students rely on credit cards to purchase expensive necessities.

UF falls in this swipe-happy camp.

Lynne Vaughan, director of bookstores at UF, said students without financial aid primarily use credit to purchase textbooks.

While some see burden on the horizon, others expect gain.

Companies like nFinanSe, a publicly traded financial services provider based in Tampa, specialize in reloadable prepaid cards.

The company looks to fill the credit card void with a product that doesn't include overdraft fees or charge interest.

The card is free to college students who apply online.

"In this day and age, there is a plastic gap," said Clare Morgan, the vice president of marketing for nFinanSe. "You need plastic to shop online, rent movies, place an order."

"Who wants to walk around with a wad of cash?"

Unlike credit or debit, an nFinanSe prepaid card isn't connected to a bank account and charges a monthly usage fee of $2.95.

It teams with the Discover Card network, which means users can add funds at more than 72,000 locations nationwide.

Morgan said her company's younger target market is more savvy with money now.

She said she isn't sure whether Americans as a whole will continue to over-consume.

"I don't have a crystal ball," she said. "I wish I did. I would like to think we have all learned our lesson."

The law will force credit providers to issue 45-day advanced notices of rate changes, limit interest hikes on existing balances and prevent solicitation to those under 21.

Congress suggests that universities require marketers to alert the school when conducting on-campus registration.

The law will also require companies offering free credit reports to say in ads that consumers can get to one report from each federal credit bureau per year.

cutting board accident, credit card stolen, assault

2009-09-29T16:05:00.001+10:00

NU student slices thumb in cutting board accident
University Police and the Evanston Fire Department assisted a female Northwestern student Sunday evening at the Theatre and Interpretation Center, 1949 Campus Drive, police said.

The student had sliced her thumb while using a stationary cutting board, lost consciousness and hit her head, said University Police Deputy Chief Dan McAleer.

Police observed a cut on the student's thumb, as well as a quarter-sized lump on her forehead.

Credit card stolen from student through mail
An NU student reported a missing credit card Sunday afternoon, police said.

Last week, the student's mother mailed his debit card along with the PIN number to the student's on-campus residence, McAleer said. However, the student, who lives in the Sigma Chi fraternity house, 2249 Sheridan Rd., never received the card in the mail. He later received a debit card statement which included two unauthorized charges completed in Evanston totaling more than $500, McAleer said.

The incident remains under investigation.

Five men assault man, steal wallet on Lake St.
A man reported a robbery Saturday at the intersection of Lake Street and Pitner Avenue, police said.

The victim was approached by five unknown suspects who, with no provocation, knocked the victim to the ground and kicked him repeatedly in the torso, said Evanston Police Department Cmdr. Tom Guenther.

The suspects, who are believed to be teenagers, stole the victim's wallet, which contained a small amount of cash, Guenther said.

The incident remains under investigation.

Essential Credit Card Debt Facts

2009-09-29T14:13:00.000+10:00

The obsession with credit cards has put the US citizen in over $1 trillion of credit card debt in a spending frenzy that has brought many to the brink of financial despair. This is not just an American problem though as this obsession has become worldwide and we will highlight the main credit card debt facts and what the next course of action should be.

Love them or loathe them, the credit card is actually a good thing. We are all searching for a better credit score and a credit card is very often the best way to build good credit, but misuse it and they suddenly become your most hated financial outlay.

The credit card debt facts are these:
The pros are;

1# Emergency Financial Aid: A credit card can be used, as is the case by many users, as an emergency source of funds.

2# Free Insurance: when used to purchase items many cards offer the security of free purchase insurance.

3# Improved Credit Status: As long as your use is controlled and you don't run into problems your improved credit status will make it easier to gain loans for cars etc.

The negatives are;

1# Card Misuse: Using your credit card as an extension of your paycheck and maxing it out will get you way in over your head very quickly.

2# Missing payments will have an adverse affect on your credit for SEVEN years and becomes affective almost as soon as you miss your first payment.

When deciding to get a credit card the two important factors to give consideration to are the Interest charged by the card supplier and the balance payable at the end of each period.

Different Credit card companies offer different interest rates, but an acceptable Fixed interest rate is between 8 and 11 percent. You can then compare the various special offers that each supplier in that bracket is offering before making your final choice.

With regards to payable balance that comes down to you, how much you can comfortably afford to pay each month, remember this sum should include the added interest rate; for example: If you can only afford to pay $100 each month and your credit card has an interest rate of 10% APR you should only spend around $90 to $95 as there will be a minimum monthly interest charged.

However should these credit card debt facts go unheeded it is likely that you will end up looking to consolidate your credit card debt and quite often a debt consolidation loan is the best option to do this, but before looking into a credit card debt consolidation loan there are methods that many are now using to achieve financial freedom in remarkably short periods of time.

The methods mentioned are not widely known but are both ethical and legal and are not liked by the financial institutions who DO NOT want you or anyone else using them to reduce and eliminate debt as it would be very damaging to their interest related profits.

Credit card ratings by JD Power & Associates

2009-09-29T14:12:00.001+10:00

J.D. Power and Associates recently released the results of a customer satisfaction survey of credit card issuers in conjunction with their 2009 consumer satisfaction awards. According to J.D. Power and Associates: "The study measures customer satisfaction with credit cards by examining six key factors: interaction; fees and rates; billing and payment process; rewards; benefits and services; and problem resolution."

In these categories, they found that Discover Card and American Express Credit Cards topped the list in nearly every category along with National City (except in the category of Problem Resolution where the sample size was too small). American Express ultimately received the J.D. Power and Associates Award for Credit Card Satisfaction. In some categories, these big three were rivaled by Wells Fargo. U.S. Bank also, notably, scored above average in Fees and scored an outstanding in Problem Resolution. Target Visa, WaMu, GE Money, Credit One Bank, and First Premier Bank scored below average (2 out of 5) across nearly all categories. Interestingly enough, Bank of America scored only average in all but two categories (Rewards and Problem Resolution) where it scored below average.

According to J.D. Power and Associates, the survey shows that overall credit card customer satisfaction has fallen to its lowest level since the study began in 2007, and that customer satisfaction with credit cards is the least among all the financial products measured by surveys conducted by the J.D. Power and Associates marketing company.

While we find certain aspects of this survey enlightening, we would like to point out that in some respects the survey is comparing apples to oranges. First Premier Bank issues, for instance, cards to people with poor credit scores, whereas, American Express only issues cards to people who have excellent credit. The question of Fees, Rewards, and Product Benefits between the two companies is somewhat self evident. American Express is going to offer lower fees, more generous rewards, and better product benefits than First Premier Bank. How First Premier Bank does against other credit card companies catering to a similar clientele is the right question and a question that unfortunately this survey cannot address. So, in categories like Fees, Rewards, and Product Benefits, we expect that the credit cards designed for people with poor credit simply aren't going to do very well, nor do we think they should. At the same time, giving American Express the J.D. Power and Associate 2009 award for Credit Card Satisfaction, while admirable in acknowledging their outstanding customer service, doesn't do much for people whose credit scores preclude them from getting an American Express card and the survey doesn't tell them which of the companies that caters to this segment will offer them the best deal for their money.

Congress may fast-track new credit card relief

2009-09-28T23:02:00.001+10:00

Lawmakers are taking another swipe at the credit card industry.

Representative Carolyn Maloney is looking to speed up enforcement of a new law that would limit a credit card company's ability to change interest rates.

It was supposed to take effect in February, but some lawmakers want to move the date to December because many companies are raising their rates and fees now, ahead of the deadline.

"The abuses by some in the industry which led Congress to pass my original legislation have only increased since the bill's signing," Rep. Maloney said.

As the battle between Congress and the credit card companies intensifies, there is also a noticeable shift in the industry.

The Blueprint card from Chase allows consumers to determine the types of everyday purchases, like groceries, gas, or entertainment, that they want to pay off every month interest free, even while accumulating interest on other "big-ticket items".

Others in the industry have announced similar programs aimed at helping customers manage their spending.

Still, some credit card companies have pushed back on the deadline shift.

They're worried they can't have the infrastructure or system in place to handle all of the new requirements if lawmakers move the deadline up to December or even January.

Man admits illegal use of charge card

2009-09-28T19:41:00.001+10:00

A Detroit man pleaded guilty Friday to using a fraudulent credit card at the Genoa Township Meijer to make purchases.

Emmanuel Thomas Dawson pleaded guilty as charged to illegal use of a financial transaction device in exchange for prosecutors dismissing a charge of conspiracy to commit the same crime.

Dawson, 29, admitted that he and co-defendant John Thomas Cotton used the fraudulent credit card at the store in August.

Dawson, who will be sentenced as a habitual offender, faces up to eight years in prison. Sentencing is set for Oct. 29 before Judge Michael P. Hatty.

Dawson's criminal history includes a conviction for armed robbery and felony firearms.

Dawson also faces new charges in Livingston County for delivery or manufacture of a controlled substance. Details on the Drug Enforcement Administration's investigation was not immediately available Friday.

Cotton, 20, was sentenced last week to 15 days in the county jail and given credit for 15 days already served. He was given two years of probation under the state's Holmes Youthful Trainee Act, which means he will have no public criminal record if he is successful on probation.

Both Dawson and Cotton were ordered to pay $7,684 in restitution.

New rules due on credit cards for those under 21

2009-09-28T19:17:00.001+10:00

Starting Feb. 22, college students won't be tempted with free stuff to sign up for credit cards. That's when new marketing restrictions and other rules will take effect, and the end result should be fewer plastic-driven shopping sprees for consumers below the age of 21.

The average college senior had credit card debt of $4,100 in 2008, up from $2,900 in 2004, according to a Sallie Mae survey. Credit card companies expect young consumers to stay loyal to the first credit card brands that make it into their wallets. The card issuers sometimes get data on students directly from colleges, for a fee.

Students can end up with cards with very high interest rates or big fees that can make it easy to accumulate a lot of debt. The average college student is already awash in credit. Most have four or more cards, and only 17 percent said they always pay off their balances every month, according to Sallie Mae.

Of course, many college students use credit cards responsibly. Andrew Merki, chairman of student consumer advocacy organization the Indiana Public Interest Research Group, notes that some of his classmates use cards for necessary items like textbooks. But consumer advocates say the new credit card rules will protect young consumers by cutting down on unfair or pushy practices.

Under the new rules, credit card companies will no longer be able to give out free gifts in exchange for filled-out credit card applications.

"This is going to make it somewhat less likely that students that are not ready for credit will be tempted into it by easy access or freebies," says Gail Hillebrand, senior attorney for the nonprofit advocacy group Consumers Union, publisher of Consumer Reports magazine. In addition, card issuers will be required to disclose any marketing contracts they have with colleges.

A second big change could prove trickier. Americans under age 21 will be required to prove they have a source of income to pay off any charges, or will need to get a co-signer before they can get a card.

The new rule gives parents a chance to say "no" and teach kids a lesson about money, spending and personal responsibility, says Susan Beacham, chief executive of Money Savvy Generation, which teaches parents on how to talk to their kids about money.

A co-signer -- whether it's a parent or an older friend -- is "agreeing to take personal responsibility for the debt the child incurs," notes Beacham.

That means the cosigner's credit score can get dinged if the cardholder does not pay his or her bills on time. "We don't need to do that to ourselves or give our children that ability."

Hillebrand says she's concerned that students will simply ask older friends or romantic partners to cosign for them.

"Even for adults, it's hard to understand that a single mistake can stay on your credit for seven years," she says, noting that a low credit score can make it more expensive -- or impossible -- to get a loan. "They could sign away their futures."

As an alternative, parents can set up checking accounts for their kids, or get them a debit card that is tied to a pre-funded account. Once the young adult has demonstrated that he or she can be responsible with money, credit card talks can begin.

Then there is the argument that an 18-year-old needs a credit card to build up his or her credit history, in order to qualify for loans in the future. Consumer advocates say it's fine to wait until the consumer is 21, because it takes just six months to a year of credit card usage to build up enough history to develop a score. "There is plenty of time to do that," says Hillebrand. "It's better to have a thin credit record than a crushing debt load."

Credit Debt Consolidation Via Credit Counseling

2009-09-28T17:27:00.001+10:00

People today continue to struggle with credit card debt, but why? There are many ways to help your financial situation. Credit card debt consolidation without damaging your credit long term, without bankruptcy is one way. Lower your interest rates and maintain your credit card payments on a monthly basis without actually having to call your credit card companies. Consumer credit counselors will work with your creditors and help you obtain an interest rate that's manageable. Sick of paying 24% for a loaf of bread you bought two months ago. Consumer credit counseling helps you lower your rates to where you can see the light at the end of the credit tunnel.

Credit Card Debt Consolidation - Did YOU know?

Did you know that paying your credit card earlier than the due date will help you save money? It's true. Credit Card companies charge interest on a daily basis, so cardholders who carry a balance from month to month will actually pay more over the long run. For Example, if you carry a balance of $10,000 at 18% and make a minimum payment of $350, which is the typical minimum needed by the credit card industry at 3.5%. And you wait until the last day to make the payment you are being charged interest of $9,989, but if you make the payment on the 2nd day of the billing cycle you are paying 18% on $9,661. This will save you around $60 a year, or enough to buy a combo meal a month.

Credit Card Debt Consolidation by Debt Settlement Part 2

If you are like most consumers out there and just want out of the debt without the hassle of dealing with interest rates, you should look into debt settlement. Yes, debt settlement does have a negative feel to your credit, but when you are able to obtain financial freedom, is there really a price behind it? Or like in the commercials…its priceless!! I think debt settlement is one of the most under rated ways to help eliminate consumer debt in the market today. We had a client who owns his own garage business and was paying upwards of 25% on a daily basis to keep it open. He turned his debt over to us and we were able to keep him in business and settle his debt for 24% of what he actually owed the creditor. By the way, we still get our cars serviced at his garage.

Recurring charges follow your cards

2009-09-28T16:27:00.001+10:00

If you have ever purchased an Entertainment Book, you need to listen to Trudy Fletcher's story.
Advertisement

The Entertainment Book is a compilation of discount and 2-for-1 coupons that are valid during the year.

The 2010 Entertainment Book for Fort Myers and Naples is now on sale for $35. According to the Web site ad, it contains more than $15,000 in local savings on dining, attractions and shopping.

Fletcher purchased an Entertainment Book in 2007 on an automatic renewal plan. Every year, she would be shipped a new one.

But Fletcher wasn't pleased with the 2009 book.

"This past year I found the book totally unhelpful and decided I would not get one for the upcoming year," Fletcher said.

She received two notices from Entertainment Publishing, telling her the credit card number it had on file was no good, and if she wanted to continue to receive the book, she should contact them.

The credit card account Fletcher used two years earlier was no longer valid. But because she didn't want the Entertainment Book anyway, why bother to contact the company because it didn't have her new account number?

Because, it turns out, Entertainment Publishing would charge her anyway, as Fletcher discovered when she saw a charge on her credit card for the 2010 Entertainment Book.

"I immediately called the company ... and said I didn't want the book and asked how the company got my credit card number since the one they had on file had been cancelled," Fletcher said. "I was told that the ... company will research to find new credit card numbers as long as the customer still has a credit card with the same bank."

OK, did you get that? Is your jaw dropping the way mine did?

How did this happen and who authorized it?

I called Entertainment to see if the company knew, and although in a statement the company apologized for any inconvenience this caused Fletcher, they provided no answers about how the charge got on her account.

"We are currently looking into Trudy Fletcher's specific incident to clarify what might have occurred," the statement read. "We will work with her directly to resolve this matter."

I'm translating that as, "It's none of your business."

It was Bank of America, where Fletcher has her Visa card account, that solved this mystery for me.

"If a transaction is flagged as a recurring charge and an authorization comes in on the old card, the transaction will be approved and then posted to the new card," spokeswoman Christina Beyer wrote.

There's two lessons to be learned from this tale.

First, closing a charge account obviously is not enough when you want to cease doing business with a vendor. You have to contact them and get them to stop billing you and sending the merchandise.

Second, avoid automatic purchase programs and subscription services that allow vendors to charge your credit card or withdraw money from your checking account.

With credit tight, borrowers turn to peers

2009-09-28T15:31:00.001+10:00

With banks tightening their lending standards and credit card companies raising interest rates, borrowers are increasingly turning to an unusual source of money: other people.

Despite a recent regulatory hurdle, websites that facilitate peer-to-peer lending, in which people--often strangers -- lend money to each other with no involvement from a bank, are growing in popularity. Borrowers usually get loans with lower rates than they would from banks or credit cards, while investors often get higher returns than they would from traditional bank products such as certificates of deposit.

Analysts expect the industry to grow as customers who face rising credit card rates search for new ways to refinance their debt. Many investors, meanwhile, have lost confidence in the rocky stock market and have sought other places to park their cash. Membership in peer-to-peer lending groups is climbing fast, and so is the money involved. About $282 million US in peer-to-peer loans were made in 2006, according to Celent, a Bostonbased research firm. By 2010, the firm expects such loans to grow to $5.8 billion.

The industry has gained so many followers that the U. S. Securities and Exchange Commission last year ruled that companies engaging in peer-to-peer lending must register with the agency because the loans are considered securities. After temporarily suspending their operations for several months, Prosper and Lending Club completed its registrations. Loanio and IOU Central have filed their papers, an SEC spokesman said. Others are expected to follow.

"With this credit crunch, the timing couldn't have been better for this industry to really gain a foothold and grow," said Curtis Arnold, founder of CardRatings.com and co-author of the Complete Idiot's Guide to Person-to-Person Lending. "It offers a viable option for folks who are getting turned down for credit elsewhere. There's a lot of people fed up with banks. From the investment side, that is intriguing. When you can get nine to 10 per cent returns in this market . . . that's pretty amazing." Since registering with the SEC in October, Lending Club has gained 300,000 members. In January, it oversaw$1.8 million in loans. Last month, $3.4 million in loans were made.

Between the time it launched in 2006 and registered with the SEC in July, Prosper has grown to 850,000 members and facilitated $180 million in loans.

Officials at the lending sites said much of their increased traffic has come from borrowers whose interest rates on their credit cards have spiked. Card issuers have been raising rates in anticipation of a new law, set to take effect in February, that could hinder rate increases. During the housing boom, many consumers were able to get out of their card debt through home-equity lines of credit. But home values have plummeted in many areas, leaving borrowers without a source of money they once fell back on. About 50 per cent of Prosper's loans go to borrowers trying to consolidate credit card debt, said Chris Larsen, Prosper's chief executive. Prosper's loans can come with interest rates as low as four per cent. "With their credit card debt, it could take 20 years to pay it off," Larsen said.

Other peer-to-peer lending sites operate differently. Prosper allows lenders to bid on the interest rates for borrowers, which results in low-rate loans. Virgin Money codifies loans between friends and families. Other companies specialize in particular types of loans. TuitionU, for example, helps students get loans to pay for school.

The sites typically vet borrowers by pulling their credit reports and requiring minimum credit scores. But the loans do not come without risk. Lending Club's borrowers have a default rate of about three per cent. Prosper's default rate is about five per cent. If a borrower misses payments, the sites report him to credit bureaus. Officials at the sites point out that credit card default rates are in the double digits.

Still, Mark Schwanhausser, a research analyst at California-based Javelin Strategy and Research who has studied peer-to-peer lending sites, said investors should be vigilant for signs that borrowers are struggling to repay their loans.

"It's not a 'buy it and tuck it away' kind of thing," he said. "I think you want to pay attention."

Victim comes face-to-face with identity thief

2009-09-28T14:04:00.001+10:00

Was it fate that brought the thief to her that day? Hubris? Malice perhaps?

It was impossible to know. Yet there was Michelle McCambridge, a 23-year-old J.C. Penney sales clerk, looking at the woman who not long before had stolen thousands of dollars worth of jewelry, video-game consoles and other merchandise by claiming to be Michelle McCambridge.

As their eyes locked, McCambridge felt herself go numb, a mix of adrenaline and anger. The woman in front of her stood impassively.

"Oh my god, I can't believe it's her, I can't believe she's there," McCambridge recalled thinking. "I remember wanting to go and knock her out myself."

The odds of an identity thief trying to pull a scam that involves one of her own victims must be 1 million to 1, federal authorities said. But in this case, McCambridge not only clued into the doppelganger, but her quick response helped topple an identity theft ring that had targeted more than 40 victims around Washington.

"These are some of the most difficult cases to work because they're so ... time-consuming. But when Michelle recognized her and pulled the (store surveillance) video, it gave us a fighting chance," said Joseph Velling, the special agent for the Social Security Administration who led the investigation.

Identity theft is one of the fastest-growing frauds. In 2008, the Federal Trade Commission received 313,982 complaints. But law enforcement authorities said that an estimated 65 percent of identity theft victims, probably mindful of the dismal odds of catching the culprit, never even call police.

McCambridge's difficulty started in January when the sociology student received a call from her mother asking about several credit card bills. McCambridge didn't know what her mother was talking about. The charges came from stores at which McCambridge had never opened an account.

"She said, 'You have a bill from Sears here.' She opened it and it was for several thousand dollars worth of jewelry.

"Then she called me back a few minutes later. 'What about Kohl's?' And then there was J.C. Penney, Toys-R-Us, Babies-R-Us. Those were all on the same day. I didn't get a statement from them. It was like, 'Congratulations, here's your new card.' "

Someone who produced a driver's license with McCambridge's name on it and who knew her Social Security number had taken out lines of credit at all the stores within just a day or two in December.

There were four $500 gift cards purchased at Penney's and others from Home Depot - about $13,000 worth of gift cards and merchandise in all.

McCambridge immediately called the retailers to report the fraud. She asked the Penney's security department to pull the surveillance recordings for the date that the identity thief had come in to apply for credit. She made similar requests to the other stores the next day.

When Velling, a friend of her father's, looked at the videos, he noticed they had one thing in common: a young black woman with distinctive, heavy-framed rectangular eyeglasses, a high forehead, a small waist and large hips.

McCambridge studied the still photographs that Velling had compiled.

Before the advent of digital video, stores routinely taped over their surveillance footage every 30 days. Even now, however, victims rarely call retailers to request the images; neither do police, who often must try to trace a single case of credit fraud that is rooted in a ring operating in several cities.

That task has become even more difficult as identity thieves become more sophisticated.

"The credit card companies have eliminated a lot of the ways that (security) can be compromised," Velling said. "But there's a huge problem now, and that's instant credit. You get in-store credit and you've defeated all the ... security. But it means you've got to move fast, because the credit card's going to get mailed to the victim, and they're going to know about it in three or four days."

The woman standing at McCambridge's cash register a few weeks after the surveillance photos had been obtained was applying for instant credit to purchase several garments under a different name. "She said, 'I want to apply for one of your J.C. Penney cards. How does that work, and what do you need?' " McCambridge recalled.

And that struck her as strange. Most of the time it's the clerk pushing instant credit on the customer, not the other way around.

"I said, 'We just need your ID and for you to fill out the application.' I went to grab it and, at that point, I really looked at her. I was thinking, 'You have exactly the kind of black-frame glasses as the woman in the picture ... the exact same high forehead.'

"I started getting this fishy feeling in the pit of my stomach. Then I looked over the counter, and she had the exact same body shape as the woman in the picture."

McCambridge raised her hand to cover her badge so the woman wouldn't see her name, and then excused herself to go to another cash register, where she called security. The woman, appearing antsy, made a phone call, and a manager was sent out to take her credit application while store surveillance cameras zeroed in on her.

The suspect produced a fake driver's license bearing the name of a woman whose purse had been stolen from her car a few days earlier. She also had the woman's checkbook. The Penney's manager kept her talking for a while, but she left before Tukwila police arrived.

While scanning surveillance videos from parking lots of the stores where McCambridge's identity was used, Velling and his partner, Special Agent Matt Lavelle, had noticed many showed the same black Cadillac Escalade - prompting them to suspect the work of a single ring.

They started comparing them to other identity fraud cases working their way through the courts. Lavelle was looking over one of them - a man who had tried to open a fraudulent instant credit account at a Kohl's store in February - when he recognized the name of a woman from a previous case he had been involved in.

Going back to that identity theft, the agents started tracing all the suspects connected to the case.

"Buried within one of those old police reports was the name of a woman, Stephanie Locke, and we requested her booking photo. It matched the video we had from the identity theft of Michelle McCambridge," Velling said.

Finally, the mysterious woman in the rectangular glasses had a name and an address.

In the end, Locke and four others were indicted by a federal grand jury. Locke pleaded guilty in June in U.S. district court in Seattle to bank fraud and Social Security number misuse. She faces up to 35 years in prison when she is sentenced this month.

Two other defendants also have entered guilty pleas.

Federal agents still haven't answered the question of how the ring obtained McCambridge's identity to begin with and who produced the high-quality documents that managed to fool so many retailers. That investigation is ongoing, they said.

Velling said identity theft victims must do more than report the fraud to the banks or department stores and put an alert on their credit report. As McCambridge did, they need to ask stores to hold video surveillance of the transactions for police.

"I'm still trying to figure out how they did it. I mean, I understand how they got the other woman's Social Security number - they stole her purse. But how did they get mine?" McCambridge said.

"And then she walks in the store like that? The whole thing is just completely unbelievable," she said. "I feel like I should go buy a Lotto ticket or something. Really, what are the chances that something like that's going to happen?"

Credit card scammers covet 3-digit security code

2009-09-27T13:56:00.001+10:00

Credit card scams are nothing new, but here's a new twist on them. In this case, scammers already have your credit card information, but need the card's security code, the three-digit number located on the back of your credit card a vendor uses to ensure the card's actually in your possession.

Here's how the scam works. Someone calls you claiming to be from your credit card company's security and fraud department. The caller already has your credit card number by some form of identity theft. He or she may provide a badge number and tells you your card's been flagged for unusual purchasing activity.

The caller recites your address and asks you to verify it so a statement can be sent showing your account was credited. He or she also states a fraud investigation will be started, tells you to call the 800 number on the back of your card if you have questions and gives you a six-digit control number to refer to.

Finally, the scammer needs to verify the credit card is in your possession and hasn't been stolen and asks you to recite the three-digit security number on the back. Once read, the caller thanks you, asks if there's anything else he or she can do and hangs up. Sounds harmless, right?

Unfortunately, now the scammer has your verified address and credit card's security code.

The Better Business Bureau advises the best protection against schemes like this is to always verify the legitimacy of requests for personal information. While you may be asked to confirm your identity, your credit card company won't ask you to verify information it has on file, disclose security codes or prove the card is in your possession.

Financial counselors 'overwhelmed'

2009-09-27T09:10:00.001+10:00

Val Sherwood has seen it all when it comes to people in financial crisis because of overwhelming credit card debt.

From the college student with $50,000 in credit card bills to the retired senior whose minimum credit card payments exceed his Social Security income, people of all types have come seeking help from Sherwood and the financial counselors at Consumer Credit Counseling Service of the Central Southern Tier, where Sherwood is branch manager. The office is at the Metrocenter, Binghamton.

"I have two full-time counselors," Sherwood said. "Each does seven to eight appointments a day, and we are booked out for 10 days. It's overwhelming."

But starting Feb. 22, new marketing restrictions and other rules will take effect that aim to result in fewer plastic-driven shopping sprees for consumers below the age of 21.

Under the new rules, credit card companies will no longer be able to give out free gifts in exchange for filled-out credit card applications. Card issuers will be required to disclose any marketing contracts they have with colleges. And Americans under the age of 21 will be required to prove they have a source of income to pay off any charges, or will need to get a co-signer before they can get a card.

Consumer advocates say the rules should help bring down credit card debt among students, who by the time they are seniors in college, on average had balances of $4,100 last year, according to a Sallie Mae survey. That's up from $2,900 in 2004.

Most have four or more cards, and only 17 percent said they always pay off their full balances every month, according to Sallie Mae.

"These new rules are long overdue," Sherwood said. "It's going to protect them in the long run from getting in over their head because it happens really quickly."

And it's not just people who are simply spending too much on "wants" versus "needs," she said.

"We are hearing more and more from people of all ages that it's simply the cost of living is increasing so fast," Sherwood said. "They are not getting raises substantial enough to take up that slack. I have elderly folks who are trying to choose between buying food and buying medicine."

Two tasty balance transfer deals

2009-03-13T09:04:00.001+11:00

This means if you took out a 0% transfer deal, then made a purchase which
attracted a rate of 15.9%, any payments you make towards your credit card
debt would pay off the balance transfer first, leaving your purchase to
rack up high ...
<http://www.lovemoney.com/news/credit-cards/two-tasty-balance-transfer-deals-3213.aspx>

VivoTech tacks on $8.6M for wireless credit-card transactions

2009-02-23T19:25:00.001+11:00

VivoTech, provider of infrastructure for wireless credit-card transactions,
just added $8.6 million to a now $40 million third round of ...
<http://venturebeat.com/2009/02/18/vivotech-tacks-on-86m-for-wireless-credit-card-transactions/>

How to Apply for a Business Credit Card

2009-02-19T08:24:00.001+11:00

The first thing to be taken into account is what kind of business building
business credit card you are looking for. Research your options and read
the fine print. Even within a financial institution, you may find a myriad
of offers for ...
<http://www.squirrelandporcupine.com/artists-studios/1189>

Benefits of Secured Credit Cards

2009-02-13T10:53:00.001+11:00

If you've never had a credit card, secured cards are a good first step in
building credit. "A secured card is most useful for the person starting
out on ...
<http://www.cardratings.com/creditcardnews/2009/02/benefits-of-secured-credit-cards.html>

How Identity Theft Occurs

2008-12-30T08:14:00.001+11:00

Please use common sense with your credit cards, credit card bills, and
other personal identity information. As you can see from the above article,
Identity Theft is something to take into serious consideration. ...
<http://personalsafetyebook.wordpress.com/2008/12/28/how-identity-theft-occurs/>

The real story about credit card rewards

2008-12-26T19:07:00.001+11:00

Here are some more tips, don't over spend just so you get the reward and
select a credit card with rewards that benefit you. For an example, if you
travel a ...
<http://www.kvoa.com/Global/story.asp?S=9578740&nav=HMO6>

Low Rate Credit Card Options To Make Purchases And Save Money

2008-12-13T13:08:00.001+11:00

Many credit card issuers allow you to make a balance transfer from another
card to take advantage of your new lower rate on an existing balance. This
way when you decide to make your balance transfer, you can pay off the
other card and ...
<http://www.bisnis-review.com/2008/12/low-rate-credit-card-options-to-make.html>

Woman arraigned over theft, use of credit card, checks

2008-12-06T11:19:00.001+11:00

Teairra Boyd, 22, whose last known address was in the 800 block of East
Kerr Avenue, Urbana, was arraigned Tuesday on charges of residential
burglary, misuse of credit card and identity theft.
<http://www.news-gazette.com/news/local/2008/12/02/woman_arraigned_over_theft_use_of_credit_card_checks>

Illegal Use of a Credit Card - Two Charged

2008-12-03T07:31:00.001+11:00

Albertville police were called, and after some investigation, Amanda Brown
and Keshia Nelson were arrested and chaged with illegal use of a credit
card. ...
<http://www.waaytv.com/Global/story.asp?S=9437918>

Credit card fraud hits R420m

2008-12-02T08:31:00.001+11:00

Credit card fraud cost South Africa R420-million in the past year and has
increased by 146 percent, the South African Banking Risk Information Centre
...
<http://www.iol.co.za/index.php?set_id=1&click_id=15&art_id=nw20081124130533934C493734>

Choosing Your Credit Card

2008-11-13T21:42:00.000+11:00

As you probably already know, there are many credit cards out there. The one you choose however, should reflect your lifestyle and your ideal spending amounts. If you are looking for the best possible deal and the best company for your credit card, you’ll obviously need to look around at what you have to choose from and what works best for you.

The first thing you’ll need to decide when choosing your credit card, is why you need one in the first place. Some people choose to get a credit card for cash flow purposes. With a credit card, you can make purchases and buy things, leaving your paycheck or other source of income in your bank account to draw interest. This way, your money will continue to grow while you continue to buy the things you need. Then at the end of the month, simply pay your bill.

Others will choose to get a credit card and use it for instant cash purposes. This way, they can use their credit card at an ATM and get instant cash, which is great for travel or going on a long and extended vacation. If this is why you want a credit card, you should look for one that has the lowest rate possible for instant cash transactions.

With a credit card, you’ll also need to think about the payments. You’ll need to decide if you want to pay the balance in full each month, or only the required amount. When you select your credit card, you should look at the introductory rates, balance transfer rates, and other offers that may apply to new credit cards and new holders. Some will offer you truly amazing deals, especially if you have good credit.

Another important area to look at when choosing your credit card is the incentives. There are several cards out there that will give you incentives, such as reward points and even cash back with purchases that you can use towards paying back what you owe. There are several incentives out there with credit cards, all you have to do is look around and compare.

The key area you’ll need to look at and compare is the APR (Annual Percentage Rate). The APR is what you will pay on what you purchase when the incentive period runs out. APR rates will vary among credit cards, so it is always in your best interest to compare and shop around. The lower APR rate you get, the better off you’ll be.

Another concern with choosing your credit card is the minimum payment amount. Most minimum payment balances will start around 3%, although some can be lower while others tend to be quite a bit higher. The interest free period is a concern as well, as you will obviously want to choose the longest period that you can keep the payments down.

When you make that final decision and choose your credit card, you should always make sure that you know exactly what you are getting. Credit cards are great to have, although they can lead to a downfall if you don’t choose them carefully. If you put some time and research into choosing your credit card, you’ll find the best one for you. As long as you take care of your credit card and pay the bill on time, you’ll help raise your credit and eventually be able to purchase even bigger things - such as a car or even a house.

Banks cut credit card limits, even for prime borrowers

2008-11-07T18:32:00.002+11:00

About 20 percent of domestic banks, on net, reported having reduced credit
limits on existing credit card accounts to prime borrowers… ...
<http://www.businessweek.com/smallbiz/running_small_business/archives/2008/11/banks_cut_credi.html>

Credit Card Processing Company Hires Bankcard Security Expert

2008-11-04T18:00:00.002+11:00

Mr. David Press is a recognized expert in the field of controlling the
risks associated with credit card processing. He has joined Integrity
Payment Systems ...
<http://www.prweb.com/releases/2008/11/prweb1551534.htm>

American Express to cut jobs

2008-11-01T12:09:00.002+11:00

Grand Forks Herald American Express to cut jobs: In a stark
acknowledgment of the tough times ahead in the credit card industry,
American Express Co. ...
<http://www.grandforksherald.com/articles/index.cfm?id=91411&section=Business>

Stolen credit card details getting cheaper

2008-10-31T07:16:00.002+11:00

The once highly exclusive market segment of stolen credit card details, is
today's commodity market segment trading with a virtual asset that has
become so ...
<http://blogs.zdnet.com/security/?p=2084>

College student credit card debt

2008-10-23T21:36:00.001+11:00

Credit card debt doesn’t shy away from anyone who doesn’t want to shy away from it. It treats everyone equally irrespective of whether the person is a seasoned professional or just a college student. So college student credit card debt isn’t uncommon either. Since the credit limit on college student credit cards is much lower, the college student credit card debt cannot rise to the levels it does for other credit cards. However, college student credit card debt is an even bigger menace because a lot of students are already in debt due to the loan they have taken for their education. If they pass out of college with college student credit card debt, they will have to payback not just the loan they taken for studies but also their college student credit card debt.

Since most of the college students are inexperienced in the usage of credit cards, they can easily fall prey to what we call as ‘college student credit card debt’. In fact, college student credit card debt is one reason why the credit card suppliers keep a lower credit limit on college student credit cards. The solution for avoiding college student credit card debt is similar to what it is for avoidance of any type of credit card debt. So, the first thing for avoiding college student credit card debt is to understand the concept that credit card is not free money and that whatever you pay-for using your credit card has to be paid back to the credit card supplier when your credit card bill arrives. So don’t treat credit card separate from hard cash. Avoid overspending e.g. do not buy things just because they are on sale, sales keep coming and going and there are always better offers each time; buy only those things that you really need. A good thing to do is to prepare your monthly budget and follow it religiously. Never budge from your budget. Another very important preventive measure for avoiding college student credit card debt is to avoid going for a second credit card. Some students have a tendency to go for multiple credit cards just because the credit limit on college student credit cards is very low. However, this is a perfect recipe for getting into a college student credit card debt. This is how college student credit card debt builds up. One credit card is more than enough for any student.

College student credit card is really meant to be treated like a training ground for learning more about credit cards. It should not be make an instrument of debt (college student credit card debt).

Credit card debt

2008-10-23T21:32:00.000+11:00

‘Credit card debt’ is a much discussed topic in the commercial and social circles. A big section of the population has been bit by this bug called ‘credit card debt’. Can’t blame them much; as such, it’s pretty easy to fall prey to this bug.

The main reason behind so many credit card casualties (rather credit card debt related casualties) is that many people don’t understand the concept of credit cards properly. They treat credit card as free money that is never to be returned. Thus all the discipline, which would otherwise have been exercised with spending hard-earned money, goes for a toss. That means people overspend and get into credit card debt. They keep spending till they reach the credit limit on their credit card. Some people go to the extent of treating that like a game and consider it a defeat (or consider their credit card under utilised) if they don’t hit the credit limit quick enough. These unnecessary spends result in a situation where they are not able to payback their credit card bills and end up paying interest on the amount they owe. This keeps building up their credit card debt and they soon find that the interest component has become a regular feature in their monthly expenses and it is there even if they spend nothing on their credit card. That is credit card debt on the prowl. Soon they find that their current credit card can no longer handle their needs and start looking to get another credit card. With the new power of credit, they let themselves loose again and follow a ‘shop till you drop’ routine. Soon the credit limit of the new credit card is reached too and they again default on payments. This is how credit card debt builds. Soon they learn about credit card debt consolidation and other credit card debt elimination techniques. They are quick to grab such credit card debt reduction techniques, but that’s not because they are serious about reducing their credit card debt but because of the attractive low APR offers. As if it were booty, they again get back to building up their credit card debt. All the while they are spoiling their credit card rating and they soon realise that no one is ready to lend them money because of their credit history. They can only get a secured credit card now (where you first deposit money into your credit account and then only you get the privilege of spending it (50-100% of it) using their credit card. Credit card debt collection agencies, auction of their goods and bankruptcy is the next thing that hits them and their dream run is blown away in a moment.

The moral of the story – “Understand the concept of credit cards and treat credit card debt with all seriousness”.

Credit card defaults up 54% and growing

2008-10-19T17:34:00.001+11:00

Over the past 10 years, credit card debt has gone up 75 percent as
Americans' real wages and savings rate have stayed flat. That means
Americans have been spending beyond their means -- and fueling economic
growth with borrowed money. ...
<http://www.americablog.com/2008/10/credit-card-defaults-up-54-and-growing.html>

Look for insurance costs on your credit card bills

2008-10-13T18:45:00.001+11:00

You could be paying for insurance you didn't know you had on your credit
card balance. Usually sold by telemarketers, the insurance has a small
monthly fee ...
<http://www.thestar.com/Business/article/516200>

The Credit Card Crisis

2008-10-11T21:01:00.001+11:00

Along with adding climbing rates, inconspicuous charges, and adjusting
credit-card terms, credit card companies like American Express are now
penalizing customers based on where they shop and who holds their mortgage.
...
<http://minnesotaindependent.com/12016/credit-card-users-beware-how-the-crisis-will-affect-you-and-your-bills>

Credit Card Rewards Programs Research

2008-10-02T10:32:00.001+10:00

It is called "Pointing in the Right Direction: Rethinking Credit Card
Payment Rewards in a Challenged Economy." The report explores today's
hurting economy and offers insight into what credit card companies can do
to help customers make ...
<http://www.pcbs.org/research-sheds-light-on-credit-card-rewards-programs/>

2009 is when bad credit card debt will hit hard

2008-09-30T16:37:00.001+10:00

Bad credit card debt will hit early 2009
ReportonBusiness.com - Canada
A hurricane of bad credit card debt will start crashing ashore in the
United States in the first quarter of next year, even as the mortgage
crisis continues ...
<http://www.reportonbusiness.com/servlet/story/RTGAM.20080929.wcreditcards0929/BNStory/Business/home>

Balance Transfer Credit Cards

2008-09-23T08:10:00.001+10:00

Balance Transfer Credit Cards
By nadia
Once in a while, we understand that our credit card is not the best,
offered by the credit card companies. In this case, we wish to close down
the credit card account as soon as possible by paying the full balance. ...
<http://www.partnership-usa.com/credit-cards/balance-transfer-credit-cards/>