Posts Tagged ‘Credit cards’

CARD Act & Act of Credit card companies

August 5th, 2010 Vijaianand

Few months back, I got a letter from Citibank regarding my cashReturns credit card like many other consumers. The letter states  that they will start charging annual fees from April 2010 onwards.
 

Thanks to new credit card rule changes by CARD(Card Accountability Responsibility and Disclosure) Act 2009 which took effect last month.(July 2010) It is causing waves of destruction to many good credit card holders. It’s good and dandy to have rules to protect creditcard consumers but it shouldn’t come at the cost of efficient credit handlers causing lot of hassles and loss of benefits.

Click here to refresh your memory by taking a Quick lookup at CARD Act.


After Effects, Moves and Maneuvers

Adding to the bloodshed caused by the economy downturn and higher defaults, the new law changes costs more for the credit card companies. In order to compensate the loss, many companies worked tirelessly since last year when the bill was signed, trying to find new ways to tackle the bills and balance their income sheet. They either hiked the already existing fees or invented new fees and pushed to consumers. Afterall credit card companies are in the business to make money.

Below are the list of some common after effects and maneuvers by companies to get over this bump.

Resurection of Annual fees: Annual fees are back again after 10 years to make another round. They used to only exists for air miles related cards but now it is going to be ordinary credit cards as well. Several banks adding these annual fees to even existing accounts like Citirgroup. Many Citigroup customers will start paying a $60 annual fee on April 1. They offered an option on how to get the fee waived by averaging monthly charges above or equal to $200. According to their new process, they will credit the fee first and reimbursed part of the fees every month depending on the usage of the card $200/average per month. Check out the letter copy if you want.


Vanishing Rewards Programs: My Visa credit card provided by DCU offered reward points and it is going away as per their recent communication. Their excuse, high cost associated with the program and also CARD act. They are planning to offer reward programs seperately with high percentage credit cards. It doesn’t make sense. If a good consumer who has a credit card with low percentage won’t get rewarded and cannot earn points for their best effort to their account. That’s totally not right. 

Raise old fees and add New fees: These include a $1 processing fee for paper statements for cards issued by stores such as Victoria’s Secret and Ann Taylor. Inactive fee starting from $15 will be charged if the card is not used for certain period, example $19 inactivity fee charged by Fifth Third Bank. no customer activity for six months. Also overdraft fees are increased as well.

Rate Increases: The average rate offered for a new card climbed to 13.6 percent last month from 10.7 percent during the same week a year ago — meaning cardholders had to pay almost 30 percent more in interest, according to Bankrate.com. Many banks including JPMorgan Chase raised their cost of balance transfers to 5 percent of the transfer from 3 percent.


Some cards linked to rewards programs for purchases like gasoline were shut down. Card companies also slashed credit limits for millions of accounts that remain open. Besides making credit more expensive, banks also made it harder to get and keep credit cards. One big reason: Since the financial meltdown, many credit card issuers have been trying to reduce risk.

These changes might not come as surprise to many but still we have to adapt and make proper changes in our credit card usage. As per me, I already closed my Citigroup card which started charging annual fees and will continue carry cards with no annual fees.  There are many good things came out of this bill particularly now the bills are clear and very detail. That will be very good thing for average consumers.

Recommendation

Keep an eye out for credit card statement and policy changes and take the decision to whether you want to continue to carry the costliest card or go for cover under a better card with no strings attached like Costco Truesavings or Bank offered credit cards.

Sources: chronicle.northcoastnow.com & Chron.com

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Credit Card – Things you should know – Final Part

December 7th, 2008 Vijaianand

I been talking about one of my favorite topic for the past 4-5 weeks or so with some deviation to other topic as and when needed. We covered IDENTITY THEFT in a large extent from top to bottom starting out from, what to do when your cheque book is lost, what are the way scammers can steal your identity over the Internet, how can you protect your identity and finally moved on to Credit card arena. In Credit card, I mentioned why credit card rules and how to get your first credit card taking different people into perspective in my last post.

This post, I am going to talk about how to manage your credit card, how to handle it safely, what are the ways identity can be stolen in real world and What to do when credit card is stolen.


I got the credit card, now what?



Wait a sec, not so fast!! I am might sound too PRO to Credit cards but only if you have taken these safety steps. As I mentioned earlier, Credit card is a real tricky instrument. If you know how to handle or use it, it helps you a lot but if you don’t it has tendency to put you in debt.

1. Whether you are a student or smart adult, you better make up your mind and plan before start using your first ever credit card. You should plan on how to spend and how are you going to make payment to your charges. It is as simple as it.

2. If you are already an experienced credit card user, I don’t have to tell you anything except be cautious at this credit crisis time. Many banks these days are changing their agreement and how they operate their credit card business. They are jacking up on their ATM charges, so try not to take money out using your credit card. Just use for purchases.

3. Be wary and very careful not to go beyond your credit limits. You might end up paying hefty charges which is the norm but it might be more expensive these hard days as many banks have increased their charges.

4. Check the fine prints which comes to your mail box from credit companies all the time. Don’t throw it out or tear them off. Read them careful if you are really using the credit cards.

Precautionary Measures

Precaution is always better than cure. You can avoid all your worries if you can just take a little of precautionary measure before something bad happens.

1. Don’t carry too many credit cards in your wallet to show off. If you end up losing your wallet, your identity is at the mercy of beholder(thief).

2.Take a Wallet Blueprint – Write down all the credit card numbers and its corresponding 1-800 numbers to call when its lost. Try to write down all other things you carry in the wallet to help out in rare situation when it is lost.

3. Always keep upto date on your credit card statements by signing in online as many banks offer it as free service. You never know bad times hit, these thieves are very smart. So checking often helps you to be act fast instead of waiting for a monthly statement to arrive.

4. Don’t use every card for online purchase. Analyst suggest to keep one card designated for online purchase, that way you don’t have to deal with too many problems at the same time.

5. Check your credit report regularly using credit report services or from the free credit report website http://www.annualcreditreports.com/

6. Opt-out of any credit card offers which is a pain in the first place but it also helps to see whether you are getting a good balance transfer offer. So its upto you whether you want to go thru the pain or not.

7. Shred your mails instead of just throwing them. If you don’t have a shredder, try to atleast tear them tiny bits and pieces.

Thieves Tricky ways

Identity theft is the number one crime in American and even in entire world. It is mainly caused by credit cards. Bad days never knock your door asking for your permission to show up in your life. It just comes and you won’t know when and which avatar it shocks to wet your pants off. These are some common ways thieves steal your identity,

1. Stealing your Wallet with SSN Card and Credit card from your car
2. Cheque books from Mails or Mail box
3. Bills and documents from Trash
4. Scam emails
5. Emails from Classified website which you posted to sell or buy
6. Emails from Phisher pretending like a Bank or mortgage company
7. Calling Kids and offering freebies to gather information
8. Phone call from Banks for SSN info
9. ATM Machines
10. Film Rental Machines
11. Online shopping stores
12. Changing rooms in Mall
13. Parking lots – Underneath your car
14. Pickpocket in Malls by distracting you and so much more.

My Credit Card is Stolen, What to do now?

If it just your credit card stolen, don’t panic. Call your credit card company and report the lost or stolen credit.

If you lost your wallet which had SSN card and everything,
1. Call the local sherrif department or police station and file a compliant.
2. Call all the credit card companies to intimate that your card is stolen and ask them to deactivate it.
3. Call the credit card bureaus and put a freeze on your credit report
4. Put a fraud alert with Credit Bureau as well. Please do everything in writing and send mails via certified mail.

To make your life easier, there are lot of Identity Protection services like Lifelock.com which can help you to stop your identity theft and act on your behalf to stop the leak.

That concludes the series of blogs about IDENTITY THEFT and CREDIT CARDS. I hope it enlightened you all with some useful information and ways you can start using to protect your identity. Please don’t hesitate to add comments and send me an email if you have any questions.

Happy Holidays to all of you!!!

Posted in Credit card, Finance, Financial Literacy, Saving Tags: , No Comments »
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