Posts Tagged credit card
How to Fix Your Finances in 2010
Posted by Tetyana Matychak in Budget on March 4th, 2010
Still mulling over your New Year’s financial resolutions? - David Laibson, a Harvard University economics professor, has one for you—one that many of us may wish we’d made last year.
“Promise that you’ll never try to time the market again,” he suggests, a not-too-subtle gibe at the many investors who sold their stock in the depths of the downturn early this year and then missed the huge rally that followed.
That’s not the only thing many of us could afford to improve. We would also like to save more, earn more and spend more wisely in 2010. But despite the fresh promise of a new year and a new decade, tackling all our goals at once can be overwhelming.
So to help you accomplish your many New Year’s ambitions, here’s a year’s worth of personal-finance aspirations, timed to major holidays to raise your chances of success: Read the rest of this entry »
Credit-Card Fees: the New Traps
Posted by Tetyana Matychak in Budget, Favourites on February 26th, 2010
A new federal credit-card law that takes effect Monday could erase billions of dollars a year in fees and interest charges paid by consumers. But card issuers are already deploying new tactics that could prove costly for even the most cautious cardholder.
The law made some important changes. Card companies must now tell customers how long it would take to pay off the balance if they only make the minimum monthly payment. Customers can only exceed their credit limit if they agree ahead of time to pay a penalty fee. And unless a cardholder misses payments for more than 60 days, interest-rate increases will affect only new purchases, not existing balances.
Banning these and other profitable tactics is expected to cost the card industry at least $12 billion a year in lost revenue, according to law firm Morrison & Foerster. This has sent the industry scrambling to find new sources of revenue. So get ready for higher annual fees, higher balance-transfer charges, and growing charges for overseas transactions.
“There are countless fees that can be introduced and rates can go through the roof,” says Curtis Arnold, founder of U.S. Citizens for Fair Credit Card Terms Inc., a consumer-advocacy group.
Consider the new offer from Citigroup Inc. The bank will give cardholders a credit of 10% on their total interest charge if they pay on time. That sounds enticing, except that if you don’t pay on time, your interest rate is 29%. Read the rest of this entry »
Credit regulations aim to help students
Posted by Tetyana Matychak in Budget, Favourites on February 23rd, 2010
A new credit card legislation that went in effect Monday could help prevent college students from falling prey to credit card companies, but the effects of these laws might not be seen for a while.
Along with the set of benefits for consumers planned in May 2009 came a number of changes credit companies made in order to continue earning profits after restrictions were applied, student legal services attorney John Connor said.
“These credit card companies had nine months to prepare,” he said. “And so that gave them an opportunity to decide where to increase their fees. I’m sure it will take a number of years to determine whether or not, in fact, it had any positive effect.”
Some of the changes in the credit card law are specifically aimed at colleges and students, banning credit companies from offering gifts in exchange for having students sign a contract with them. It also encourages universities to require credit companies to notify them of any location on campus they are marketing credit card plans. Read the rest of this entry »
Banks Apply Pressure to Keep Fees Rolling In
Posted by Tetyana Matychak in Banks on February 22nd, 2010
For many households trying to improve their finances, tossing out pitches from the bank has become almost automatic. But in recent weeks, Chase has been fanning special letters out to consumers with an offer that it urges them not to refuse.
“Your debit card may not work the same way anymore, even if you just made a deposit. Unless we hear from you,” the message, emblazoned in large red type, warns. “If you don’t contact us, your everyday debit card transactions that overdraw your account will not be authorized after August 15, 2010 — even in an emergency,” with “even in an emergency” underlined for emphasis.
As the government cracks down on the way banks charge fees for overspending on debit cards, the industry is mounting an aggressive campaign aimed at keeping billions of dollars in penalty income flowing into its coffers. Chase and other banks are preparing a full-court marketing blitz, which is likely to include filling mailboxes with various aggressive and persuasive letters, calling account holders directly, and sending a steady stream of e-mail to urge consumers to keep their overdraft service turned on.
Starting this summer, banks must get consumers to agree, or “opt in,” to a service covering purchases on a debit card when there is not enough money in their account. The Federal Reserve has ordered the same restriction for banks that want to let people withdraw more than their balance at an automated teller machine. Many banks now automatically provide such coverage for fees of up to $35 or more. Read the rest of this entry »
Steps you can take to build credit, get a card
Posted by Tetyana Matychak in Banks, Favourites on January 19th, 2010
Gone are the days when credit card companies barraged you like a lovestruck suitor. Today, bruised by economic losses and consumer defaults, many credit card companies are spurning the customers they once wooed.
And if you’ve got a dinged-up credit score or no credit history, getting a new credit card is next to impossible.
We know one young man – a recent college graduate with a decent-paying job and no major credit dings – who’s been turned down for a credit card repeatedly, even from department stores like Macy’s.
“Credit is still tight, so issuers are not approving as many people with no credit or bad credit as they did 18 months ago when the economy was good,” said Bill Hardekopf, founder of LowCards.com. “It is a very big challenge for them.”
Those with bad credit have long had trouble getting credit cards or finding cards with affordable interest rates. Read the rest of this entry »
Look Who’s Peeking at Your Paycheck
Posted by Tetyana Matychak in Budget, Favourites on January 13th, 2010
You may think your income is private information. But the credit bureaus may have your number.
And starting in February, your income—as estimated by the bureaus—may be used to help determine whether you get a new credit card.
Tuesday, the Federal Reserve issued its final rules related to last year’s Credit Card Act, which, among other things, will require credit-card companies to consider an applicant’s income or assets and current debts before approving credit. To provide flexibility, however, the Fed said that issuers can use “a reasonable estimate” of income or assets based on “statistically sound models.”
In hopes of such a decision, the three big credit bureaus have been updating or rolling out products that seek to estimate consumers’ incomes, based on information in their credit reports, such as the size and age of their mortgages or the size of their credit limits.
The products also are responding to banks’ efforts to tighten credit standards in order to reduce losses and risk. “We look to fill in the blanks where they need the blanks filled in,” says John Cullerton, vice president, product management, for Equifax Inc., an Atlanta-based credit bureau. Read the rest of this entry »
Is Brand Loyalty A Thing of the Past?
Posted by Tetyana Matychak in Budget on September 25th, 2009
Nearly a year on, the financial crisis has changed the way companies and consumers view the brand names in their wallets.
But is this a temporary change, or will it stick?
Some consumers, including those who have had their credit cards canceled, limits lowered or mortgages left in standstill, all say the same thing: “I’m never doing business with company X ever again.”
But some consultants and financial institutions say they aren’t worried about consumer ire toward brands today. They say that consumers have short-term memories and are fickle. And when the economy turns around, people will drift back to brands that they once dismissed.
Robert Passikoff, founder of Brand Keys, a research consulting firm, disagrees. He says that in the past it was easier for companies to win back consumers, but thanks to the Web, it’s easier for more consumers to get more information about brands before they buy. “This is not going to be a forget-and-forgive society,” he says. Read the rest of this entry »
Can a Credit-Card Company Cancel Your Card and Not Tell You?
Posted by Tetyana Matychak in Banks, Favourites on July 17th, 2009
In the last few months, we’ve heard from plenty of readers that not only are their cards being canceled, but they’re also finding out the hard way: At the cash register while trying to make a purchase.
Over at Consumerist is the tale of Joey, who saw four (yes, four) of his Chase cards canceled. Plus, his Chase Freedom rewards are no more.
From Joey’s letter:
The rep told me my card had been canceled. Not only my Freedom card, but also my 3 other Chase credit cards (I use them for different rewards). I told him it was outrageous that I hadn’t received any early notification, and all he could say was that I would be getting something in the mail soon. I asked why my cards were canceled, and his response was that I had too many loans out so Chase considered me a risk. For the record, I do have loans that I’m paying off - my student loans and the loan on a recently purchased house. However, I’ve always paid the balance on my Chase credit cards in full every month and rarely ever am I late (the last time was at least 6 months ago). Nothing in my history with them would cause them to think I would not pay my bills. The rep couldn’t do anything for me so I asked to speak to a supervisor. I was told they were busy and that one would call me back. No one has since. Read the rest of this entry »
Is Paying for Your Kid’s Education Still a Top Priority?
Posted by Tetyana Matychak in Budget on June 2nd, 2009
In a perfect world, we wouldn’t have to rank one financial priority over another.
But now, more than ever, Americans are faced with many tough financial trade-offs. Paying off debt or saving for retirement? Raiding the 401(k) to pay the bills or putting them on a credit card? Trying to slog it out with a tough mortgage or walking away from a home?
New survey data from Country Financial highlights some of the tension parents are face when it comes to juggling their stressed retirement accounts and the ballooning cost of higher education for their kids.
Forty-seven percent of the 1,241 surveyed said that their children’s college plans are a higher priority than retirement savings, whereas 41% said that retirement savings came first. A majority (61%) said that the recession was not going to impact their plans for their children’s college education. Considering all of the belt-tightening — both from families and financial-aid offices strained by anemic endowments — we’ve heard about in the last few months, this is particularly astonishing. In spite of one of the worst economies in generations, parents say they’re still willing to shell out a lot for college education. Read the rest of this entry »
Dream On, Credit Card Companies!
Posted by Tetyana Matychak in Banks, Favourites on May 20th, 2009
Charging your best customers just won’t work
I’m a credit card deadbeat, and I’m proud of it. And if credit card companies think they’re going to start making any more money off me, then they’d better think again — and they better make sure that every single card issuer sticks with the party line.
Credit card companies have taken it on the chin lately. Many of the banks that issue credit cards have already gotten hurt with bad mortgages and other toxic assets. Four card issuers — American Express (NYSE: AXP), Citigroup (NYSE: C), Bank of America (NYSE: BAC), and Wells Fargo (NYSE: WFC) — saw card charge-offs jump over the 10% level in April. Delinquencies are also up, and Washington will likely pass new restrictions on practices like increasing interest rates on existing balances without notice and charging over-limit fees.
But recently, some have talked about trying to get those with good credit to contribute more to credit card company profits. While it’s easy to understand why card companies would like to find any way they can to earn profits, there’s a simple reason why imposing fees on the customers they call “deadbeats” won’t work: Unlike balance-carrying, interest-paying borrowers, we actually have a choice — and we’ll vote with our feet, happily leaving the credit card industry with even less revenue. Read the rest of this entry »
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Credit-Card Fees: the New Traps
26 February 2010
Credit regulations aim to help students
23 February 2010
The worst is yet to come
17 February 2010
Afflictions of liberty
8 February 2010
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