Credit Card Lowdown

Banking on the Devil

What do you do that when you cannot repay your credit card debts due to rising interest rates and increasing prices? It’s a pretty painful situation – one that you would not like to be in. But that’s the thing about debt – nobody wants it but it comes. So, what’s the next best thing you can do to moping and feeling bad about life and yourself? Well, you can be a (wo)man and look for a solution. And if you cannot think up a solution on your own, don’t worry; there’s still a way out. All you need to do is call your credit card issuer. I know that’s like asking the hangman if there is a way to escape the death penalty, but hey, guess what!

These guys are not so bad after all! Banks like Citigroup and Bank of America insist that you can call your credit-card issuer, and seek debt counseling or even use their debt workout programs. Not only do they support debt-counseling services, but they also offer debt workout programs. Now that’s what I call a real devil. I mean these buggers are actually the reason you are in debt… they give you cards and say, “Go and spend all you want. We’ll pick the tab.” And then when it dawns on you that nobody’s gonna pay for you and that you are stuck real bad, these guys lend you their shoulder to cry on. Can it get any better?

Well getting back to the topic, Citigroup offers various options such as reducing minimum payments, reducing interest rates, waiving fees going forward or crediting back fees that have already been billed. But, hold your horses. There’s more to the story. According to consumer activists, some cardholders found that their interest rates were raised after they told card issuers they were in trouble. So what’s your take on this?

Busting Credit Card Debt Myths

It’s that time of the year again when you go on a year-end splurge and forget about your more pressing debts. But did you know that every time you spend more than what you earn, you are being pulled down an enormous debt trap? Today, entire families are reeling under a debt epidemic and according to a CNN report; the average American household owes over $9,000 on credit cards.

Credit card companies love to portray those who declare bankruptcy as irresponsible shop-a-holics, who cannot hold onto their money for long. Hence the fault lies with the consumer, not with the credit card company. Is this allegation really true? Fact is that 90 percent of those declaring personal bankruptcy do so because of the financial impact of sickness, job loss or divorce. The inconvenient fact for the credit card companies is that 50 percent of the personal bankruptcies in the United States are due to illness in a country where almost a third of all adults are not covered by medical insurance.

And now... photo credit cards!

Are you the type who likes to show off your family photos or your car, dog... anything? Well, you are going to get a lot of chance to do that every time you whip out a credit card. An increasing number of credit providers are today, offering photo credit cards, in which a favorite image is emblazoned on the face of the plastic. USAtoday.com reports:

The idea isn't entirely new. Companies have been putting customers' faces on credit cards as far back as the 1970s, says Diogo Teixeira, president of the American Credit Card Collectors Society.

Read more: Smile! You're on Dad's credit card

And now... photo credit cards!

Are you the type who likes to show off your family photos or your car, dog... anything? Well, you are going to get a lot of chance to do that every time you whip out a credit card. An increasing number of credit providers are today, offering photo credit cards, in which a favorite image is emblazoned on the face of the plastic. USAtoday.com reports:

The idea isn't entirely new. Companies have been putting customers' faces on credit cards as far back as the 1970s, says Diogo Teixeira, president of the American Credit Card Collectors Society.

Read more: Smile! You're on Dad's credit card

Know the finer points of your credit-card miles

When you are shopping for a credit card that earns miles, you need to consider quite a few aspects before you zoom in on the card most suitable to you. For example, if you prefer to fly nonstop, you'll want to choose cards affiliated with the biggest carrier in your area, such as American in Miami or Northwest in Detroit, but you may get more bang for your buck with cards from connecting carriers. Sun-sentinel.com reports:

US Airways offers both Visa and MasterCard, and if you have a family of three and travel more than once a year, you may want both. The World MasterCard offers 15,000 bonus miles when you sign up, and the annual fee of $79 is waived the first year. The Signature Visa offers a 25,000-mile sign-up bonus and costs $90 per year.

Read more: Best fares: Going over the finer points of credit-card miles

Moving from credit to debit

Of course, credit card debt is rising and going through the roof. But that is something that our policy makers need to worry about. Not us… for we can now use another, less worrisome path – that of debit cards. Msnbc.msn.com reports:

Credit cards let you pay in the hereafter, allowing you a misty view of what you can afford. Debit cards limit you to the cash you actually have. To avoid "bouncing" a debit, you can add overdraft protection to your bank account. A funny thing about overdrafts—borrowers tend to pay them off rather than string them out, as you might with credit-card debts.

Read more: A Debit-Card Nation

Are Visa and MasterCard charging too much? Your retailer thinks so

Visa and MasterCard are feeling the heat and how! They were on a roll until now as an increasing number of consumers resorted to plastic to beat the rise in costs. As gasoline rates increase, more customers are opting to use their credit cards to pay. So, what could be the problem?

Well, retailers are not too happy with how events are shaping up. They have gone to the extreme of asking Congress to step in and control certain procedures in credit card companies. Their main grouse relates to how much and in what way credit-card companies and issuing banks charge retailers for processing transactions. Retailers are asking for more regulation on interchange rates – the fee charged to retailers for processing a credit-card transaction. Washingtontimes.com reports:

Visa this week announced that it would make interchange rate factors available to participating retailers online, but only to those that sign a non-disclosure agreement.

Read more: Retailers seek fee rules for credit cards

Learn to select your trump card from a pack of credit cards

If you are a college student then you’ve probably been wooed by credit card companies with just about everything from free T-shirts to beach towels. Have you ever wondered why they love you so much? These companies can go to any extent to get you over to their side and use their cards. One of the biggest reasons is because you like to spend and don’t give a thought to tomorrow. That’s something that can wait until you get out of college… right? Well, the credit card companies bank on exactly this sentiment when they woo you. You are potentially lifelong customers who will spend, spend, and spend.

Some statistics to make you go cold in the feet – according to a study conducted by student lender Nellie Mae, the average college freshman carries over $1,500 worth of credit card debt. And by graduation, this amount more than doubles. And the worst part, even before you begin your professional life, your credit score is in ruins. So you spend the better part of your youth trying to repair the damage so you can buy yourself a home, a car… the list is endless. Not a fun scene to imagine.

Agreed you need them. I mean today we cannot do without credit cards, so the smart option available to you is to find the credit card that is best suited to your needs. You will get thousands of offers from issuing banks. Don’t get snowed under or tempted by the gifts. Be smart. Don’t go in for a credit card just because it announces zero percent interest for the first six months. It may sound like a good deal, but what students should keep an eye on when shopping for a new credit card is the annual percentage rate. These rates can reach as high as 18 percent! Next time, I will discuss more tips on how to choose your credit card.

Want to use plastic to settle online wagers? Don’t bet on it

If you are one of those who like to bet online and then use your credit cards to settle these bets, this news is a bit of a dampener. In an effort to halt mushrooming interest in Internet gambling, the House recently voted to forbid the use of credit cards for these purposes. However state-run lotteries and the horse racing industry are exceptions to this rule – could this favor have something to do with powerful patrons in Congress? Latimes.com reports:

The legislation would clarify and update current law to spell out that most gambling is illegal online, and would prohibit most payment forms from being used to settle online wagers.

Read more: House OKs Measure to Outlaw Credit Cards in Online Gaming

Is your credit card safe or IS it safe?

Identity theft and other credit card crimes have today become the bane of our existence. Once you realize how open our society has become thanks to the electronic revolution, you’d understand how these crimes are rising. Today we live in a world where everything including our tax records to Social Security numbers and credit card data are recorded on databases. These can easily be hacked and used unscrupulously by enterprising individuals.

Thieves find it quite easy to target the information embedded in ATM, debit and credit cards. They just need to break into or even compromise the equipment and systems that are used for processing payments. And the results are there for all to see. Credit card companies like Citibank and Visa that have been hit are reissuing their cards or using some other methods to counter this fraud.

Credit card debt consolidation facts

Too many credit cards leading to debt from various sources and causing confusion? There’s an easy way out. Just consolidate all your credit card debts into one big loan. A simple and easy method of bringing some semblance of order into your debts. Or is it?

While consolidating your credit card debt may be a good idea, you can never be sure unless you know everything there is to know. What I mean is if you think it is good for you, then go in for consolidation by all means but only after you’ve weighed the pros and cons. For instance, do you know that once you’ve consolidated, you cannot transfer your credit balance to another credit card provider who may be offering you better terms than your present one. Although it may seem like a good idea to extinguish an old credit card if a better offer comes along, one downside with this is you also extinguish the records of one of your oldest credit histories.

Three steps to help your teen stay debt-free

If you are parent to a teen, then you know what it means to have an outgo that is much larger than your income. Well, you really cannot blame your teen for all your expenses, but fact is, those ‘wonder years’ of your children do leave a dent on your purse. According to reports, teens spent around $160 billion last year. By the time a student enters freshman year of college, his/her average debt on a personal credit card is about $1,500. So how do you help them get over their have-now-pay-later attitude? You can either hope they grow out of it OR you can do something about it before your child drowns in debt. You can try a couple of these tips to help your youngster get back on track:

Teach them that money matters: Financial education seems to be passé today and most schools don’t bother with imparting it. So that means, the onus lies on you to tell your child that every dollar s/he spends has to be accounted for. Help them create a budget and learn to control their spending to remain within their means.

Supervise: It’s not enough to teach them to budget; you must also keep a watchful eye and ensure that they spend within their means. This is especially true if your child holds a part-time job and has control over his own money. If they earn a decent sum, you could even open a joint account with them and encourage them to save their money.

Be a role model: You can lecture them until you are hoarse or you can lead by example. Agreed that debt is an integral part of life today and you cannot escape it. But the least you can do is try to stay out of debt as far as you possibly can. If you show your teen that money matters to you and that you are scrupulous with it, chances are, they will catch on fast.

Credit card use jumps as interest rates go up

If credit card use and debt created thereof is a mark of our economic strength, then the country’s economy is not in such a good shape. Consumer credit, or nonmortgage loans to individuals, rose $4.4 billion, or 2.5 percent at an annual rate, to $2.174 trillion. Nytimes.com reports:

The figures suggest that Americans are using their credit cards to finance more purchases as rising interest rates and slowing increases in real estate values discourage borrowing against home equity.

Read more: Borrowing Rises as Credit Card Use Jumps

Credit Cards – APR basics

APR stands for Annual Percentage Rate. What it really indicates is the rate of interest that you will be charged in the event of you carrying forward your payable balance. This interest is also applicable if you transfer a balance from another card. The interest is expressed as yearly rate of interest.

A single credit card may have several APRs at one time. Different types of APRs that are generally applicable are as follows:

• Introductory APR – Here a different APR will apply once the introductory rate expires.
• Delayed APR – Indicates a promise from the company that for a limited time the said APR will be valid but after the expiry of the stated time duration, a different APR will be applicable
• Tiered APRs – When an individual has an outstanding balance that extends across different levels, he is likely to be charged tiered APRs
• Penalty APR – is charged when the card holder is late in paying the outstanding balance.
• Different APRs for purchases, balance transfers, cash advance – Here different APRs are charged in different cases.

Credit Card Classification

The types of credit cards that are being offered are simply mind boggling. Co-branded credit cards have flooded the market and a credit card aspirant can understandably be confused as to which card to go for.

Here is a list of types of credit cards and the options available within each category that can help you somewhat negotiate yourself in the credit card maze.

Type of card - Standard Credit Cards
Options available - Citi® Platinum Select® Card, AT&T Universal Platinum Card, HSBC Platinum Mastercard®

Type of card - Cash Rebate Credit Cards
Options available - Citi® Dividend Platinum Select® MasterCard®, Chase Perfect Card, American Express® Blue Cash, Discover® Platinum Clear Card, Discover® Platinum Card, Discover® Gas Card

Type of card - Airline Miles Credit Cards
Options available - The Gold Delta SkyMiles® Credit Card, United Mileage Plus Visa® Card, The Miles Card from Discover® Card, WorldPerks® Visa® Platinum

Type of card - Shopping Reward Credit Cards
Options available - Universal Entertainment Mastercard® from Chase, The GM Platinum Card®, Hilton Honors Platinum Credit Card, Subaru® Mastercard® From Chase

Type of card - Student Credit Cards
Options available - Citi mtvUTM Platinum Select Visa Card, Citi® Platinum Select® Visa® Card for College Students, Universal Entertainment Student MasterCard®, Discover® Student Clear Card

Type of card - Business Credit Cards
Options available - Advanta Platinum WIth Rewards, Blue Cash® For Business From American Express, American Express Business Gold, CitiBusiness® Card

Type of card - Cards For New or Damaged Credit
Options available - Orchard Bank® Secured MasterCard®, Orchard Bank® MasterCard®, Aspire Visa, New Millennium Bank Secured Gold Visa® or Mastercard®, Imagine Gold MasterCard®