CARD ACT: CREDIT CARD STATEMENTS NEW LOOK

August 18th, 2010 Vijaianand No Comments »

Beginning of this month, we saw an update on the CARD Act and talked about possible changes expected to happen in response to the bill both from credit companies perspective and personal level.  Making credit card statement simple and easy to read is one among many changes requested by law. Many credit companies and banks made those changes way ahead and you should be getting new version of your credit card statements now. It is really very detailed in every aspect for the consumer.  Thanks to Card Act 2009.

If you are an American express credit card member, you should have also got a pamphlet explaining the changes in your credit card statement. Not all banks and credit unions spent time and money to explain the changes to their consumer. Let us see the changes in details by looking at the old and new statement side by side.












OLD NEW




Click the images to zoom


OLD Statement

If you look at the old statement, it is simple and abstract with just about details. It shows the amount due, minimum amount due,  transactions details and available credit. That’s about it. If you incur any financial charges, it shows that in the bottom. It doesn’t explain, whats it is the minimum payment due, how it can affect your balance? What are the fees on this statement? It is very basic and only helps people who are familiar about how credit card works.

NEW Statement

On the other hand, new statement is very elaborate and detailed. Even for first timer, it is clear and tells what happens when only minimum payment due is only paid.  It surely will help many consumer looking for answers to their basic questions on their statement.  Lets look at new sections added in the statement one by one.



1. Warnings Section

This warning section clearly explains about late fees and minimum payment due. It will really help to put the things into perspective if they only make minimum payments. We can hope many consumers who will be alarmed to see the numbers and may consider paying full on time.





2. Summary Section

In this section, they summarized full activity of the credit account clearly to give a detail picture by breaking it down to show the fees, advances, interest and so forth. It is a very important section which will surely help even experienced credit consumer.




3. Fees and Interest Breakdown

This last section at the bottom might seem redundant but it another break down of fees and interest charges. If you have fees for late payment or cash advances, this will break it down to show them. Also if you have many different interest changes, Interest charged section will show that in detail.  Last but not least, Interest charge calculation section gives an idea how interest is calculated and charged.



I took my DCU credit card statement and AMEX had similar sections and most credit card statements should have them as well according to the law. These new addon sections to the credit card statement comes real handy for any type of consumer. We can only hope atleast now everyone reads their credit card statement and not give silly excuses they don’t understand it.

Money really matters, Why? – Five Factiods

August 13th, 2010 Vijaianand No Comments »

When I was choosing the name for this website, I thought different and various possible names. Finally, I ended up with money really matters because I really made sense. Money really matters to every human being in this world. Don’t you think?
 

Money really matters to our livelihood.  It  obviously matters to each and every one of us to exist in this world. We all want a money tree or Duck laying golden eggs. But, let me rephrase with a caveat. It is not only that matters for our life. In our life many important things matters like family, friends, love, joy, fun and much more. “Life shouldn’t be printed on dollar bills“, said by Clifford Odets. socialist.  I totally agree but those bills surely brings and binds it all together. Let me share 5 factoids which I came up, why Money really matters to each and every one us.

Fact #1: The Life Supporter




Money is our life support like breathing to our body. Without taking breath, human cannot survive. Similarly one cannot survive without money in this earth. It helps to satisfy our essentials, needs and wants.  Zig Ziglar, an American author and motivational speaker once said, Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the “gotta have it” scale. 


 


Fact #2: The Driving Force

Money is the driver behind all our lives. Almost every one of us wake up every morning and run to work or to their business just to make buck or more so all can live our lives and take care of our family.  It is the driving force but you are the driver behind the wheels. Don’t ever make the money drive you crazy.  Robert Orben, famous magician and comedy writer once said, “Every day I get up and look through the Forbes list of the richest people in America.  If I’m not there, I go to work“.


Fact #3: The Problem Creator & Solver

Finally, Money  is the problem creator and as well the solution for it. Studies in many countries have shown that the main reason for breakup in relationship or divorce is money. It is the force behind your muscle which need to be controlled and never let it give a loose punch. “Money is neither my god nor my devil.  It is a form of energy that tends to make us more of who we already are, whether it’s greedy or loving”  said by Dan Millman, former Tramphilon world champion athlete, college professor

Fact #4: The Dream Enabler

Money is the enabler of our dreams. It helps to reach our life financial goals which leads to personal growth. When you set a timeline to your dreams, it becomes goals. When you pave the way to achieve them, you draft a plan. When you implement your plans to get to your goals by taking action, it becomes a milestone or success. Money many times helps you get to your dreams whether its a dream vacation to visit 7 wonders or buying a home.


Fact #5: The Social Signature

Money gives you a strong signature in the society to show your status. If you say, you are millionaire or billionaire. You are surely going to good reception in society. Having a luxury car, bigger home or beach house really adds up to your image. Money identifies you and me to this world whether by categorizing as middle class, lower, higher or upper middle class. 

But Mr. Warren Buffet, one of richest man in the world said, “Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.” It is that simple.

So money really matters to us but you decide how it actually matters to you. Whether to you shape your life or actually start a life. What is your factiod about Money? Share with us..

Image sources: universityofvirgina.com, newbeetleclub.com
Quote sources: quotegarden.com,brainyquote.com

CARD Act & Act of Credit card companies

August 5th, 2010 Vijaianand No Comments »

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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