Information Center – News and Articles about Credit Cards
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Use Common Sense Before You Mail That Credit Card Application
With the increase of online credit card applications, it can literally just take you moments to ruin your credit. Just a few bad purchases or an over-used card can cause mounting credit card debt that will take most people years to overcome. Do not fool yourself: even the most sensible spenders using excellent credit cards are capable of making the same mistakes as a freshman using college student credit cards. There are several rules of thumb that should be followed to ensure your will always have good credit and will qualify for low interest credit cards now and in the future.
1. Do Not Have Too Many Cards
Most credit counselors agree that two credit cards are plenty. Many people have found that it's just too easy to pull out their American express credit cards or their visa credit cards when they are stressed. When you fill out credit card applications, select only the ones that are best for your lifestyle and then stick with only the cards that offer the lowest interest and best rewards programs. Carry only one card with a low limit with you for emergencies. Leave the largest at home locked in the file cabinet.
2. Solicitations - Beware!
You will most likely receive numerous credit card applications/solicitations in the mail. Think hard about whether or not you can afford more gold credit cards before you fill out that application. Borrowers that have a lot of different credit cards are more likely to incur fees. It is these fees that drive the credit card business. You may have been "Singled out because of your fantastic credit score", but in reality you may have been singled out because you have poor credit. People with poor credit tend to have spending histories that show heavy credit usage. Most credit card applications are mailed based on marketing profiles such as where you shop, what magazines you subscribe to and even your zip code. They are not based on your income or credit rating. In fact any credit card application or offer is going to specifically state that you still have to qualify for the offer that is being advertised.
3. Consider the Terms
Always try to keep a low interest credit card — but there are other important things to consider. Lenders can change the rate on your cards without having a reason. If you pay your balance off each month, then pay close attention to your statement each month. Watch for membership fees or finance charges for not paying within a specific date known as the free period.
4. Read the Offer in its Entirety
Most solicitations have a sales pitch and then of course in fine print are the disclosure of the actual terms of the credit card. Don’t feel bad if you can’t understand. Simply call the lender and have them explain the terms to you before you fill out the credit card application. For example is you receive a credit card no fee offer, the issuer is required to explain to you the many ways that you can in fact incur fees on that card.
5. Understanding ‘Teaser’ Rates
Just about every offer you receive will contain a 'teaser' offer. The rates in an initial offer are attractive, but they are only good for a few months and after that the rate usually increases. Each issuer may insist that they offer the best low interest credit cards, but the issue to consider is what happens when that ‘teaser’ rate expires.
6. Be Weary of Variable Rates
Accountants and attorneys have difficulty understanding these rates, let alone the average person. If you don’t understand the rates, simply avoid the card. Not only is it confusing, but also some have significant disadvantages that aren’t always obvious. Small business credit cards are known for having difficult calculation methods.
7. Late Charges & Penalty Rates — Watch Out
Missing a payment can be a nightmare even on a low interest credit card. Late charges can be extremely high. More importantly though, you should realize that lenders have the right to raise your interest rate if you miss a payment. You will usually find this information in small print on the back of the form when applying for a credit card. If you are having financial problems, terms like this can have an extremely negative effect on your ability to get out of debt.
8. Grace Periods
There is usually a 25-day grace period on credit cards that begins with the date of your billing statement. You can then pay off the entire balance and avoid any further finance charges. Not all cards have grace periods though, and the ones that do may differ from each other. It is also important to remember that just because you mailed your payment today, it doesn’t mean that it will be received and processed tomorrow. Also keep an eye on your credit card statements, the grace period or billing dates are also subject to change.
9. Pay More Than the Minimum
Consumers sometimes will only make the minimum payment on their credit card. This could be because of lack of income or neglect. Because of the high interest penalties on the card, this just makes their financial problems worse. You can protect yourself by realizing this simple fact: Minimum payments may increase, and lenders often raise the interest rates when your credit score begins to decline.
10. Extra Solicitations - Beware
Most likely you will receive solicitations for extra services such as insurance, credit card protection, travel clubs, and other offers after you receive your card. They are usually always bad deals. By signing up for extra services you are only signing up for additional fees that can increase your balance without you even realizing it.
11. Keep Your Priorities in Check
When financial problems arise, decide which payments come first. You should definitely pay for the necessary items such as food, clothing and shelter first. Watch out for credit cards in which the lender reserves an interest in your home equity. Your home is by far the most valuable asset you will ever obtain and it should be the last thing you pledge as security for a debt-no matter how desperate you may be. If you do apply for a secured credit card by using your home as collateral, make sure that you pay off your high interest credit cards and then the rest in your home.
12. Don’t Jump From Card to Card
Many think they can save money by switching from card to card to get the low interest credit cards or the 0 balance transfer credit cards. But if your timing is off, you can end up in a financial mess. Lenders don’t make money on these low interest credit cards, but rather when you, as the borrower, lose track of the rate changes get behind. You are then locking yourself into higher interest rates.
13. Cancellation Might Be the Thing to Do
If you don’t like your card, you can cancel it at any time. You are still responsible for the unpaid balance though of course. If more people cancelled cards because they didn’t like the terms, then maybe the terms would disappear. Lenders often lower rates or remove terms to compete with other card issuers.
14. Live Within Your Means
Don’t use your credit cards to pay for something that you can’t afford. You can’t live on borrowed money forever. Do not use your cards to get out of financial problems. Quite frankly it doesn’t work. Watch out for offers to increase your credit limit. And try to pay more than the minimum payment - if you are paying only interest, your debts will keep rising. This is possibly one of the most important rules to follow and yet it is the most ignored.
15. Know Your Rights
There is a mechanism for disputing incorrect credit card bills called the Federal Truth-In-Lending Act. There are instructions on the back of each monthly statement. The lender must cooperate with these procedures and if they don’t, they are assessed penalties. Once the lender receives your dispute, they must investigate the charge. If the merchant cannot substantiate the claim it will then be taken off of your bill along with the interest associated with it.
During the investigation, you will not be required to pay the bill or interest, however you must pay the portion of the bill that is not under dispute.
Credit cards can a great financial tool or your worst financial nightmare. Using just a little common sense when using your card will ensure that the latter is not the case.
The XXI century is the century of high-speed and nanotechnologies. It seems people strive to speed up all processes to make this already hectic and sometimes chaotic rhythm of life even crazier. They are ready to shrink everything they can lay hands on to make nanotechnologies work. In fact people just want to make their life more convenient.
Contactless credit cards are another product designed to upgrade our life quality through saving customers' time during the checkout process. These new-age credit products are gaining more and more popularity with customers. The so-called wave card makes the checkout process easier and faster. The recent opinion poll proves that contactless plastics won many hearts. According to the survey's result, over 90% of wave cards owners find them to be very convenient and user-friendly. Plus such plastics are accepted nearly everywhere regular credit products are accepted.
The financial economy crisis in the US has been admitted the largest financial shock for America since Great Depression. US banks incur billion-dollar losses. The number of delinquencies keeps rising. Associated Press has announced the results of data processing on 17 trusts dealing with securitization of credit cards.
The results leave much to be desired, to put it mildly. The volume of credit card debt with a delay of 30 or more days has gone up by 26% as compared to October, 2007. Now it makes up $17 billion. It stands for over 4% of credit card debts. The information on card holders debts for Associated Press was provided by the leading US companies.
We are used to see credit cards the way they look today, and it is hard to imagine that they looked different and served for another purpose than paying for goods and services. We call them plastics. In fact, a century ago credit cards had a different shape, size and were not made of plastic.
The appearance of credit cards dates back to the beginning of the XX century. Who were they created for? The target audience was wealthy people. The cards could be used as business certificates and licenses for the so-called "loyalty programs" at some restaurants, gas stations and merchants. Those cards, you can be surprised, were made of cardboard.
Rapidly growing credit card crime rate causes more and more concern of credit consumers and credit providers as well. Credit card fraud is a number one card holders complaint to Federal Trade Commission. According to the statistics, over 85% of credit card owners that fell victims to credit scam discover the fraud only after they get turned down by credit issuers, having applied for a new credit card or loan.
Credit bureaus cannot stay indifferent to the problem of credit fraud and identity theft, in particular. Equifax, one of the three US major credit bureaus has introduced a new ID theft protection service. "ID Patrol" is a multifunctional tool that allows protecting customers from identity theft.
