Credit Card Lowdown

All that you ever wanted to know about MasterCard® Credit Cards

MasterCard® was born in 1966 when a group of banks created a member-owned association. It has since moved from the earliest days of simple credit cards to the today’s contact-less and wireless payment options. In a way it has led the industry in driving this evolution, advancing global commerce and accelerating business development.

Today it has grown to a state wherein it offers personal cards of various types to suit different requirements. The range includes, debit cards, credit cards, gift and prepaid cards and MasterCard® PayPass. 

MasterCard credit cards help you enjoy the benefits, services, and superior purchasing power that come with it. The four basic types of credit cards on offer are:

• Standard Card -This card is for those individuals who are just starting out or starting to re-establish their credit.
• Gold Card – Offers all the amenities of a Standard MasterCard along with superior purchasing power for those who have a strong credit standing.
• Platinum Card – Offers its owner exceptional spending power for daily purchases and also big-ticket items. It also offers him an opportunity to earn rich rewards on purchases.
• World Card – Offers premier services and benefits by combining no pre-set spending limit along with an exceptional selection of personalized rewards.

Citi Student Credit Card – Is it really good?

Here is one credit card that a student would always want to have. Not only does it give the student the sense of power that a credit card brings with it, but also helps instill good and wise spending habits.

This card goes by the name of ‘Citi Platinum Select Card’ and is ideally suited for young adults since they can have it despite not having a credit history. They do not have to pay annual fees and can enjoy the cash back reward program. They can get back cash up to 5% for purchases made at supermarkets, drugstores and participating merchant partners. Cash rebates are issued through $50 checks with rebates for general purchases are limited to $300 a year. And the card holders enjoy a 20 day interest free grace period every month.

However they must not ignore the fact that the APR of their card is based on a variable rate with the figure tied to the prime rate. The APR of the student card is also higher than other credit cards. Therefore it is advised that the card holder be wise in using this card!

Debt problems? Foreclosure need not be the answer

If you have used up all the equity on your home, you are probably feeling extremely lost and dejected. You have probably even thought of walking away from the whole thing and letting things take their own course. In other words, you probably think foreclosure is the only option available. Take heart. It need not be so. One of the first things you need to do is banish the thought of foreclosure from your mind.

Apart from the emotional aspect, it will also be a big financial loss to you. How? Well even if you allowed foreclosure, you would still owe your loan amount or the balance on it, in addition to the fees. So if you allow the bank to sell your house and the price it gets is not as good as you thought it should be, you are left with a huge deficit. Whatever you decide to do, be sure you understand the long-term consequences of your actions, including the effect of your choice on your family situation. There is more than money at stake here.

Here is a viable option that could help you come back from the brink. It’s a simple plan, which can help you increase your income or reduce your expenses until you can come up with the mortgage deficit. You might consider renting your home. While this is a last-option kind of thing, if you can do it carefully, you will find that you can earn some money from it. Although not ideal, this might buy you some time for saving the required amount. With the right people in your home and a little luck, you may be able to ride out the storm.

Tired of credit card offers? Try ‘opting out’

Why are we so neck-deep in debt? Blame it on the mail. I’m serious. Haven’t you noticed the increased volume of credit card offers in your mailboxes recently? I have and so has Mail Monitor, the direct mail offer tracking service from global market research firm Synovate. And the findings are overwhelming: Over six billion credit card offers were mailed to U.S. citizens in 2005.

This type of mail volume gives consumers more options – customers find ‘test’ offers like new marketing strategies and programs, which they are tempted to try out. Nearly 60 percent of credit card offers in 2005 included some type of rebate or rewards program. This does give credit card users greater selection to choose the card that works best for them, but it also leads to a credit card glut, which makes consumers tired. So, what can you do to prevent this regular diet of credit card offers? You can ‘opt out’ or stop the major credit bureaus—Experian, TransUnion, Equifax and Innovis—from selling their name to mailing lists.

New card for small businesses courtesy Discover

Discover Financial Services recently launched their first credit card for small businesses. With the new Discover Business Card, which will carry cash-back bonus rewards, the company is targeting the small business market to make it easier for them to make payments. Business.techwhack.com reports:

Roger C. Hochschild, president and chief operating officer of Discover Financial added that small businesses would be able to obtain fee-free checks to pay merchants and suppliers who do not accept credit cards for transactions.

Read more:Discover to launch credit card for small businesses

Your credit card pays your mortgage while you shop

Imagine using your credit card to purchase something and at the same time earning points to pay off your mortgage for every retail dollar you spend. Sounds like fiction? No I'm not fibbing. If you live in the Connecticut region, you may earn points toward paying off their mortgages by shopping with a new credit card issued by William Raveis Real Estate & Home Services. The William Raveis Rewards Card is an American Express card with no annual fee. If you are a cardholder, you can earn one point for every retail dollar they spend.

You can also expect to earn extra points when you make purchases at selected home improvement, electronics and home furnishings retailers. And don't worry if you are not a William Raveis client. Anybody can apply for the card and the only condition is that additional points are awarded only to those who buy a home, obtain a mortgage or buy insurance through William Raveis. Rismedia.com reports:

Points can be used to pay down home mortgages, Raveis said, adding that the company is the first in the region to offer such a program. Each increment of 5,000 points will be converted into a $50 value.

Read more: Real Estate Firm Offers Unique Credit Card in Shelton, Conn

Tough bankruptcy law throws up new questions

The new bankruptcy law, which took effect in October last, was designed to make it more difficult for people to write off their debts under Chapter 7 bankruptcy. And for the first time, the new law mandated that anyone filing for bankruptcy would have to compulsorily go through credit counseling to consider alternatives before filing -- but the moot question is; does this solution work? Orlandosentinel.com reports:

Steve Bartlett, president of an industry association called the Financial Services Roundtable, supports the law but says it's flawed. "Early on, most of the pre-bankruptcy counseling is not especially useful because it's only occurring for people right before they go into bankruptcy," Bartlett said. "The flaw is that the bankruptcy counseling is only occurring at the end of the process when you have little option."

Read more: Bankruptcy law put to the test

Is credit counseling a waste of time and money?

Meet Jack. He had a job as a salesman at a local departmental store. He’s not doing too badly for himself – he’s got himself a home, and manages to pay his monthly installments on time and has even managed to save a little from his monthly salary towards his retirement. He was quite well off until an ownership change laid him off. In his mid-40s, Jack is suddenly jobless and has been trying without success to find some kind of employment for the past five months. In the meanwhile, his bills have piled up. Collectors started calling, threatening to repossess his home and his car.

Jack soon realized that the matter was getting out of hand and that he had only one option left – file for bankruptcy. Once he made the decision, he didn’t waste any time contacting a credit-counseling agency, so he could get over this first step towards bankruptcy. Here he was supposed to review his finances and find a way to repay his creditors. And that’s when he realized the futility of this provision in the new bankruptcy law.

This is a story that most people who have filed for bankruptcy, are familiar with. You approach a counseling agency hoping to get some kind of advice and the only kind they can suggest is to file for bankruptcy! The basic problem with the credit-counseling provision of the bankruptcy law is that usually, it's too late by the time many consumers get counseling. Their financial situation is so bad that they have no choice but to file for bankruptcy. And according to some observers, credit counseling isn't working as intended. It doesn't appear to be shifting more people into debt-management plans instead of filing for bankruptcy. And the worst part is that credit counseling is proving to be pricey for the consumers with most of them being unable to cough up the high fees required by the agencies.

Is credit counseling a waste of time?

The new bankruptcy law that took effect last fall, makes credit counseling an important step before a person can file for bankruptcy. to review his finances and consider repayment options. However, there is one problem with this provision: By the time many consumers get counseling, it's way too late as they are already in dire financial straits, with debts far outweighing income, and they have no choice but to file for bankruptcy. Montereyherald.com reports:

"Early on, most of the pre-bankruptcy counseling is not especially useful because it's only occurring for people right before they go into bankruptcy," said Steve Bartlett, president of an industry association called the Financial Services Roundtable. "The flaw is that the bankruptcy counseling is only occurring at the end of the process when you have little option. That's not what we wanted or the agencies wanted."

Read more: Credit counseling falling short

Checked your credit card statement? Your interest rates may have just doubled

Ida Warshay is a 40-year-old woman whose credit history isn’t much to write about. She did pay her credit card bills and wasn’t too late in her payments either. So, she was violently shocked when she discovered that J.P. Morgan Chase & Co., the nation's second-largest credit card issuer, was charging her an annual rate of 29.99 percent instead of 15.49 percent.

And she doesn’t remember getting a phone call or a letter informing her of the raise. The next time you pull out your credit card, remember Ida. Also remember that your card company can raise your rates to almost 30% and you can do next to nothing about it. Of course, many years ago, quite a few states had placed some caps or limits on credit card rates. But various court decisions in the 1990s led to a change in the business. Freep.com reports:

"Many consumers assume that paying late is the only way this can happen to them," said Linda Sherry, a spokeswoman for Consumer Action, a national nonprofit group that monitors credit card troubles. But a study by San Francisco-based Consumer Action last summer concluded that anyone -- not just people with financial difficulties -- could be hit with a much higher rate.

Read more: Beware of credit card interest rate that can double

Credit card use in bankruptcy

If you are in debt and see no way of repaying it then filing for bankruptcy may be a good option for you. It will not only help you get a fresh start, you can also save the skin on your backs if you are careful. Here is a list of the common mistakes that people make when filing and how you can avoid them.

Once you’ve decided to file for bankruptcy, one of the first things you need to do is stay away from your credit cards. If within 90 days of filing, you incur a debt for luxury goods and services and owe in excess of $500 to a single creditor, then this amount is presumed to be nondischargeable. This means you will have to pay up. If you have a retirement account, don’t make the mistake of draining it to pay down your credit card. A retirement account is generally protected, which means that you can eliminate your debt and keep whatever you have in an ERISA qualified account, free and clear.

Student Credit Cards

Not sure how we missed this, but I don't believe we've ever made a post about student credit cards! If you're a college student, NOW is the time to start building credit responsibly (just always, always, always pay off the balance IN FULL and ON TIME). Read more information about student credit cards, or apply for one today.

Discover introduces new card plan for small businesses

Discover Financial Services, the credit card division of Morgan Stanley, recently launched a card targeting small business owners. The more than 23 million small businesses in the United States spend more than $4 trillion a year and yet the segment is largely untapped. Washingtonpost.com reports:

Companies can get credit lines of up to $50,000, with spending caps on each card and cash rebates on some purchases. Discover has also added dedicated customer service staff.

Read more: Discover targets small business with new card plan

High credit card debts? Use these tips

According to a recent report released by the American Bankers Association, most Americans are behind on credit card payments. This may not come as news to you, but the fact that the increasingly deplorable debt situation of most Americans is worrisome. According to the report, the months from July through September 2005 saw the number of credit card accounts 30 days past due — or more, reaching its highest levels ever.

Agreed that the times are bad, there is a recession on, and natural disasters have taken their toll and well, things are not as good as they used to be. And worse, another hurricane season is upon us, which means increased premiums on various types of insurances like homeowner’s, health and loans… the list is endless. But instead of wallowing in self-pity, we can do a few things to better our credit standing. One of the most important things to do is take control of our credit card debts. They are the most debilitating and difficult-to-pay-off-debts. But there are things you can do to avoid or wipe out credit card debt:

• Shop around for the plan that best fits your needs.
• Even before you accept the card, make sure you understand a plan's terms.
• Hold on to receipts to reconcile charges when your bill arrives.
• Protect your cards and account numbers to prevent unauthorized use. Draw a line through blank spaces on charge slips so the amount can't be changed. Tear up carbons.
• Keep a record — in a safe place separate from your cards — of your account numbers, expiration dates and the phone numbers of each issuer to report a loss quickly.
• Carry only the cards you think you'll use.

Bankruptcy staring you in the face? Try these tips

While some run up their credit cards on consumer products, others are hit with a medical emergency -- whatever the cause, the end result is the same -- a severe debt that could lead to bankruptcy. There are several options for reducing and eliminating debt, however you will not eliminate your debt overnight. Bestsyndication.com reports:

On a recent Oprah Winfrey series of shows called The Debt Diet, experts agreed the best approach is to make more and spend less. Don’t get me wrong, I am not saying this is an easy thing to do. Part time jobs or a sideline business were the most common methods given for making extra money. Cutting expenses is just as hard.

Read more: How to Get out of Debt - Debt Consolidation and Ideas - Avoid Bankruptcy and Reduce Payments Using Credit Counseling Agencies

Colleges don’t want credit card tuition payments

Bogged down by rising tuition fees and don’t know which way to turn? This is an extremely painful situation and the timing couldn’t be worse. I mean, here you are thinking of the rising cost of education and just about everyone is screaming consolidation from the rooftops. Well, if you do think of putting that upcoming tuition bill on a credit card, just check with your university before you try to do so. Many universities now impose additional fees on students and parents who pay by plastic. Some of them even refuse to accept certain credit cards altogether.

Universities have to incur increasing costs in processing credit card transactions. Like merchants, universities and colleges are charged a fee every time a credit card is swiped. Usnews.com reports:

"When you charge $20,000 or more, the consumer loves it because they get points or miles or some sort of benefit," says Jon Speare, codirector of the Treasury Institute for Higher Education, www.treasuryinstitute.org which offers financial advice to colleges and universities. "But it's a very high fee for the actual school."

Read more: Colleges clamp down on credit card tuition payments

Customers get credit-savvy

Let me admit, this piece of news made me very proud. Even as doomsayers are predicting the demise of America under a mountain of debt, credit card companies are discovering a very disturbing fact – the fact that all is not well with their business. Of course, there are more people using their credit cards for miscellaneous purchases than ever before. And the industry has managed to rope in young college-goers as well. So, what could be the reason for the worry among industry circles?

There is a very interesting phenomenon going on right now that is troubling credit card companies. Although Americans are deeper in debt than ever, they are paying off bigger portions of their monthly credit-card bills. And timely payment of bills is one thing card issuers don’t like. That’s because card issuers profit from interest on unpaid balances. In the past, when interest rates crept up, fewer cardholders could afford to pay down balances.

New bankruptcy law seems to work

A recent survey by the National Foundation for Credit Counseling (NFCC) found that the biggest reason consumers face bankruptcy is poor money management. And the new bankruptcy law which insists on credit counseling sessions before filing for bankruptcy, has seen filings drop phenomenally since it was introduced. Lsj.com reports:

Nationally, debtors who received prefiling counseling had average debts of $40,673 and an average income of just $31,255, according to a survey by the National Foundation for Credit Counseling, the umbrella organization for Consumer Credit Counseling Services.

Read more: Is bankruptcy reform working? Here's the difference between the two options

GE to launch new credit card

General Electric Co. recently said that it would collaborate with eBay Inc. and Internet payment service PayPal Inc. to launch and market a new credit card. The PayPal Plus credit card expands on the two-year relationship between GE and PayPal. Chron.com reports:

In 2004 they launched PayPal Buyer Credit, a revolving credit line for registered PayPal customers. This new agreement also includes GE eventually launching an eBay branded credit card, while eBay promotes the new card.

Read more: GE Teams With PayPal, EBay on Card

Card firms unhappy with credit-savvy customers

You would think that the credit card industry is in great shape. I mean there are more people using their credit cards for miscellaneous purchases than ever before. And the industry has managed to rope in young college-goers as well. So, what could be the reason for the worry among industry circles?

There is a very interesting phenomenon going on right now that is troubling credit card companies. Although Americans are deeper in debt than ever, they are paying off bigger portions of their monthly credit-card bills. And timely payment of bills is one thing card issuers don’t like. That’s because card issuers profit from interest on unpaid balances. In the past, when interest rates crept up, fewer cardholders could afford to pay down balances. Azcentral.com reports:

Although consumers are using plastic for more of their daily purchases, they are giving card issuers fits by juggling their debts more shrewdly. When cardholders are hit with high interest rates, they transfer balances to cards at lower rates. And in recent years, more consumers wiped out credit-card debts by borrowing against their homes.

Read more: Card balances shrink, as do creditors' profits