New Credit Card Billing Rules

The bill for the new credit card rules has been approved, but the rules do not take effect until July 1, 2010. The rules sound good to me, but there are some who say it will make matters worse. They say the banks will try to make the money they will lose in other ways. But it makes more sense to me that by that time the banks would extend less credit to those who would be a high risk. See what you think by reading the following.

The new rules include five key protections for consumers who use credit cards.

1. Banks would be prohibited from increasing the rate on a pre-existing credit card balance, and must allow the consumer to pay off that balance over a reasonable period of time. The consumer would be given 45 days notice before a rate increase. The increase will typically apply to future purchases rather than current balances. However, the rate can be increased if
   • it is a variable rate and the rate index changes
   • a promotional rate expires
   • the minimum payment is not received within 30 days of the due date

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Online Credit Card Fraud Prevention Mechanisms

Are you afraid to use your credit card online? Most credit card companies limit your liability for unauthorized or fraudulent charges to $50. You do not have this security with a debit card. Keep reading to discover a way to limit your liability for online credit card use to $0!

Databases that store your credit card number are frequently hacked. Just because you do not use your credit card to make online purchases, does not mean that your credit card number is not stored in a database that can be hacked.

I had an online purchase show up on my credit card once. However, in that case I think that the purchaser had incorrectly entered the credit card number, and just happened to have the same expiration date. So that is one reason that the three digit CW2/CID number on the back of the card helps identify the correct number was entered. To fix the problem, I just called the credit card company and explained that I had never shopped online with that retailer, and they reversed the charge.

I found another great way to protect yourself with online purchases that limits your liability to $0!

Discover Card has set up a zero dollar liability program. The way it works is they generate secure account numbers. Instead of using your real credit card number, Discover Card assigns you a secure number that is linked to your account through a secure database. When you shop online, you enter your assigned secure number.

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Never Live on Just Cash

Many of us blame credit cards for getting us into debt, which leads us to believe that credit cards are evil and should be eliminated from our lives. While the idea of not spending more money than you have is on point, the notion of eliminating credit cards is just silly. Consider the following points before deciding to live solely on cash.

VS.

Spending cash can’t make you cash like credit cards can.
You don’t get rewards or discounts for paying in cash. But you do get rewards such as cash back when you use credit cards. With rewards credit cards, you can even earn points for gifts, travel, gas etc. If there is something you are going to buy, then you might as well buy it with a rewards credit card and get rewards for making the purchase. Buying in cash doesn’t give rewards, but credit cards do.

Cash is unsecure.
If your cash is stolen, then it is gone forever. But if your credit card is stolen, then your money can still be secure by simply reporting your card stolen. Carrying around tons of money just isn’t a good idea.

Cash isn’t accepted everywhere.
More and more places these days aren’t accepting cash, such as car rental agencies. It’s always good to have a credit card handy just in case.

Cash doesn’t leave a paper trail.
By leaving a paper trail it’s easier to see where all of your money is going. Unless you’re great at writing all your expenses down, your credit card bill can be used as a simple way to document your expenses. Knowing where all of your money is going can help you budget your money for the future.

Living just on cash isn’t the solution to anyone’s money problems. Credit cards are great for helping you save money by giving you cash back or rewards when you use them. Just remember to not spend more money then you have.

Do you have an opinion about cash vs. credit cards? Share it with us by leaving a comment!

How to Manage Too Many Credit Cards

Recently a friend asked me the following question: “If I have 4 Visa cards, 1 American Express, and 3 Store Cards, is that too much? I am never late and pay off almost all of them. Should I be closing some or just keep them open without using them?” -Jeffery

The Answer
The amount of credit cards you have open do not directly impact your credit score. However, your amount of debt to credit ratio does. For example if you have $10,000 worth of credit and $2,000 worth of debt, then you debt to credit ratio would be 20%. The higher this percentage is, the lower your credit score will be. It is a good rule of thumb to use less than 30% of your line of credit on any single credit card.

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Establishing First Time Credit for College Students

It is easier to get a credit card while you are a college student then if you wait until after you get out of college. This is because several credit card companies offer college student credit cards because they know that the student’s parents will usually bail them out if the student cannot pay the bill. The student cards will start with a low credit line of up to $500.

If you wait until after you get out of college, it will take you longer to get a credit card if you have not established your credit worthiness by showing your capability to pay back a loan. For instance on the Discover Card Student application it says: “Except for full-time students, you must have a minimum annual household income of $15,000 to be considered for any Discover Card account.” So establishing first time credit while you are a full-time student is the easiest way to get credit established.

The first step for establishing credit is to have a checking account.

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How to Get a Prepaid Credit Card

As students are heading back to college, many parents are wondering how to make sure their child has the money they need for school and food, and extra money for emergencies. Prepaid credit cards for teens is a great way to make sure that your teenager has the money that he or she needs.

The advantage of using prepaid credit cards for teenagers is that they can only spend the amount that you prepay to the card company. This prevents them from running up credit card debt.

We recommend the prepaid Visa Rushcard from BabyPhat that allows you to use free direct deposit if you want to add funds to your students credit card every time you get paid. The card comes with a PIN number so it can also be used at ATMs. The advantage of this card is that you can track your student’s spending online.

The minimum amount that can be added to the prepaid Visa Rushcard is $25. The card can also be loaded through PayPal or by mailing in a check or money order. There are also CheckFreePay locations that will load the card for a small fee of $3.95, but there is no charge for the other options listed above.

To check out other prepaid offers, go to Find a Prepaid Credit Card.

The benefit of using a prepaid card is that you do not have to qualify for the card, and your credit report is not checked. There are no interest charges either since you are not borrowing any money. However, they will not establish credit. Tomorrow I will write about how to establish credit.

Who Else Wants Free Money?

Who said money doesn’t grow on trees? You just have to know how to plant one!

Have you noticed how credit card companies and banks make lots of money off of us by charging interest on the debt we owe them? Well I have a solution to outsmart the credit card companies and banks to start making money off of them. It does not require that you have a lot of money already, nor does it require you to be a rocket scientist. Almost anyone can do it. And I say almost because you still have to be careful; we are talking about money here, free money to be precise. This isn’t some scam. It is perfectly legal and there are plenty of people doing it as you read this.

The Concept
You’ve probably heard of leaving money in a high interest savings account or certificate of deposit (CD) to gain interest or invest your money in stocks etc. This is the general concept, but the problem with these methods of obtaining free money is that you have to have money to start with. So what do you do if you don’t have money to start with?

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The Reality Of 5 Credit Card Myths

1. I am a hopeless, failure because I am in debt.

Stop being so pessimistic, literally. Your inability to get out of debt is all psychological. Debt is just an obstacle that you have to be motivated to overcome. If you believe that you are stuck, then you are. But if you believe that you will get out of debt, then you will. Some of the most financially successful people in the world such as Donald Trump, had tons of debt to the extent of filing for bankruptcy. But today he has a $2.5 billion fortune because he knew he wasn’t a hopeless failure. It is your own state of mind that will determine who you are and what you are capable of. You are not hopeless and you are not a failure.

2. Your credit card is not opened until you call the company to activate it.

Wrong! Your credit card is opened and shows up on your credit report the instant it is approved. So if you ever decided that you no longer what a credit card after you apply for it because it will hurt your credit score, you can’t just consider it not opened if you don’t activate it. Calling the company for activation allows the credit card to be used and by that time it is already opened.

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10 Things You Didn’t Know About Credit Cards

1. Fixed interest is not fixed
2. Comparing APR is not an effective way to determine which credit card offers are better
3. You do not need a credit card to build your credit score
4. The universal default clause in your cardholder agreement states that your card issuer has the right to do anything they want (ei. increase interest, charge fees) if they think you pose a risk to them
5. If you apply for a credit card and get turned down it will hurt you credit score
6. Closing credit card accounts can hurt your credit score
7. In order to obtain a credit card, you should make at least a $95 per week income
8. Only 29% of U.S. households owe $1000 or more on their credit cards
9. About 50% of U.S. households do not pay their full credit card balance each month
10. 40% of U.S. households spend more than they earn

Do you know a fact about credit cards that you want to share? Leave a comment!

Slick Credit Card Tricks

Credit cards are the product of a manipulative, sneaky, conniving credit industry. They are a ploy to give you a sense of financial security and power, but once you fall for one of their card tricks they suck the money out of you. The credit industry has manipulated their way into every part of our lives today. There’s barely anything that you can do without credit. It is almost a necessity to have a credit card in today’s society. This makes everyone of us prime targets for credit card issuers to dwindle our money.

Keep reading to find out everything you need to know to outsmart credit card issuers. Credit cards have lots of advantages and perks as long as you know the secrets to avoiding debt and unnecessary fees. Here are the tricks to look out for and perfect solutions to avoid them.

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Visa

Life Takes Visa

Visa is a network that connects cardholders (everyday people, like you), financial institutions (banks, etc.) and merchants (stores, etc.). Visa is the operator of the world’s largest retail electronic payment network. Visa does not issue cards to cardholders, set cardholders’ fees, set cardholders’ interest rates or give loans to cardholders. These interactions are the responsibility of the financial institutions, which Visa is associated with. Visa makes money from financial institutions by charging fees based on payment volume, transactions processed and more.

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Getting Started With Credit

Having credit is a very important part of living in today’s society. The amount of credit you have represents how trustworthy and responsible you are when it comes to money. Your credit is measured using a credit score. Your credit score is checked every time you apply for a credit card, mortgage, buy a car or even apply to get your phone line installed. Checking your credit score is becoming more and more prevalent, because lenders and organizations are becoming more careful about whom they can trust giving credit to.

Your credit is dependent on the items listed below:

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Types of Credit Cards

There are so many types of credit cards; it’s easy to get confused.  That’s why we broke it down for you, plain and simple.  Here is what you should know about credit cards. 

Balance Transfer Credit Cards
Balance transfer credit cards are very popular.  They allow people to transfer a previous credit card balance onto them.  The interest rate for balance transfer credit cards normally start out very low or even at 0% APR introductory rate / teaser rate.  But the catch is that after a year or a few months, however long the introductory rate is stated to last, the APR increase to a normal rate, definitely higher than any introductory rate.  Balance transfer cards are considered unsecure cards, because you are not required to deposit money to demonstrate that you have money to pay your balance before using the card. 

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