Credit Card Blog

It’s that season again: the leaves are falling, the holidays are coming, and the Salvation Army’s red kettles will soon be out in force. If you’ve got the holiday spirit but don’t like to carry cash, consider donating with your credit or debit card. You can swipe your card right in person at certain locations, or you can make a donation online at the Salvation Army web site.

Salvation Army members say that this convenient new payment arrangement was put in place to help young adults give more. The organization is also branching out online by incorporating social networks such as Facebook.

The nation’s high unemployment rate has caused many families to turn to the charity for aid. The Salvation Army helps feed and clothe 4.5 million people during the holiday season, and they accept donations of money and goods all year long.

The Red Kettle campaign will kick off on Friday, November 13th. To find out more, visit the Salvation Army’s web site today.

When you’re in the midst of preparing vacation plans, the cost will certainly be at the forefront of your thoughts. It’s best that you not carry a large amount of cash, so set that cash aside and put it towards credit used for vacation expenses. Using a credit card for purchases such as lodging, shopping, eating out and car rental can be a great money saver. Some of the best priced deals are found on the Internet where you can find lodging packages that include discounts on area restaurants, events, and theme parks.

Lodging can be unbelievably inexpensive if you make your reservation online by credit card. Websites such as Expedia.com, CheapHotels.com, and PriceLine.com save considerable amounts of money. By taking advantage of these website offers, you may never pay over $80 for a room.

Car rental is a popular choice for those who use the airlines to reach their destination, and then rent a vehicle there. Once again, making reservations online in advance can not only save money but also ensure you reserve the vehicle you want, rather than getting what’s left over.

Whether you’re flying or driving, you can only take so much food with you on vacation. Remember to use any package discounts you may have received with your lodging reservations. Check in advance for your favorite restaurants in the area to help choose ahead of time where’d you like to eat.

Activities such as theme park passes are items that can be purchased online in advance. Making these purchases in advance also affords you to take advantage of pre-season discounts or special holiday offers. Many attractions offer Family Packages which may include dining, shopping or lodging discounts.

Taking your vacation on credit can take away the worry of cash on hand so you can truly enjoy your time. Lodging, car rental, airfare, food, and entertainment are only a few of the ways to use credit for your vacation expenses.

Between ballooning interest rates and hidden charges, you’ve finally reached that pinnacle point with your finances when you’re ready to pull your hair out and take the hedge trimmers to your credit cards. If the largest portion of your debt is on high interest rate credit cards, take heart in knowing there is a solution.

Transferring all your debt over to one card with a zero percent interest rate can be one debt-reducing solution; not to mention also a stress-reducer. There are currently two available through Discover: Discover More American Flag card offers 0% interest for twelve months with a 5% balance transfer fee; the Escape card offers 0% interest for six months with a 3% balance transfer fee.

Discover More Card-0% interest for twelve months with 5% balance transfer fee.

After the first year of 0% Annual Percentage Rate, the standard rate of 10.99% - 18.99% will apply. Standard rates depend on your credit history. There are multiple designs to choose from and there are over 50 million Discover Card users. Also, there is no annual fee with the Discover More Card.

Escape Card-0% interest for six months with 3% balance transfer fee.

After the initial six months, the standard APR rate of 11.99-18.99% will apply, according to your credit rating. Although there is only a 3% balance transfer fee during the first six months, there is a $60 annual fee in addition to other fees and charges.

Neither of these options will make your debt disappear but can certainly reduce your stress level. Knowing your monthly payment is paying completely for principal and not interest, is a priceless peace of mind. Which card you choose depends on how soon you can realistically pay off your debt; six months or twelve. For your convenience, you can apply for either the Discover More or Escape Card online or by phone.

Credit card defaults are tied to the unemployment rate. It’s a simple fact that when people don’t have jobs, they cannot pay their credit card bills. But just how high will America’s credit card default rise?

As of June 2009, Moody’s Credit Card Index was reporting a credit card default rate of 10.76%. In that same month, the national unemployment rate was reported to be 9.5%.

Things are expected to get worse in 2010, with the jobless rate projected to climb to 10.5% and credit card defaults reaching a record 12-13%.

While credit card defaults are at record highs, delinquencies hit their lowest point in June of 2009: 5.81%. Experts believe that was a reflection of consumers using their income tax returns to catch up on their credit card payments, as well as a generally cautious attitude toward spending. Some analysts believe the federal stimulus funds also helped.

Consolidating your debts into one can be done in a number of ways. A few common options are a debt-consolidation loan, a personal loan, or a 0% credit card. With just one payment versus multiple ones, you no longer have the need to track countless payment dates or experience numerous late fees and finance charges that only increase your debt.

A debt-consolidation loan is strictly for compiling all your debts into one and establishing one affordable payment. The payment amount you establish will also depend on how quickly you wish to achieve financial freedom. One payment is much easier to manage than multiples with varying fees and charges, not to mention several different payment due dates.

Personal loans have multiple uses. There are some lenders, like E-Loan.com, who don’t charge an application fee. Although your credit history is a determining factor, loan limits and interest rates vary between different lenders. For example, you may secure a $30,000 loan but with a 9% interest rate or maybe a $15,000 loan with only a 4% interest rate. Be sure to compare lenders in order to find the best provider.

O% credit cards may sound too good to be true but they are not a mirage. They are a current source of good opportunity offering the chance to consolidate all your debts into one with no interest rate for six to twelve months. The two currently available are Discover More and Escape both by Discover. For twelve months, you get 0% interest rate with the Discover More and there’s no annual fee. With the Escape card, you get six months of 0% interest with only a 3% balance transfer fee and an annual fee $60.

Once you’ve consolidated your debts into one and are making one payment, it’s time to establish a budget that’s customized according to payday and payment due dates. Implementing this crucial money management tool will keep you from accumulating future debt because all your funds will be preallocated. With a budget, you stay in control of your money rather than wondering where it all went.

It’s a scenario we’re all too familiar with: consumers take on too much debt and, because of a combination of shady lending practices, a soft job market, and the increasing cost of living, find that they have no hope of paying off that debt. It happened with mortgages, and now the scenario is poised to repeat itself with credit cards as more and more cardholders give up hope of ever paying off their balances.

In the past, credit card write-offs stayed pretty much on par with layoffs. Now lenders are seeing their number of uncollectible debts increase more rapidly than job losses.

The bank stress-test predicts that America’s 19 major banks could lose at much as $82.4 billion in bad debts by the end of 2010. Experts believe that the figure could go much higher if the national unemployment rate reaches 10% (it’s currently at 8.9%). In such a scenario, the credit card industry could lose as much as $186 billion.

In recessions past, homeowners were able to tap their home equity to stay afloat. That’s no longer an option for millions of homeowners. And, in a survival situation, “optional” bills, like credit card payments, are often the first to go. This doesn’t paint a very optimistic future for the banks. Only time will tell which ones survive and which ones fold.

Today, entrepreneurs have a vast array of business credit cards and options to choose from, yet only 40% of the 2/3’s of small businesses take advantage of benefits by using a business credit card. It’s imperative that businesses account for each expense, whether it’s for quarterly inventory, tax purposes, or expense reports. Here are just a few ways entrepreneurs can benefit through the use of a business credit card.

A monthly itemized statement is provided that makes it easy to track expenses. With this, the business isn’t doing a last minute scramble, hunting down receipts and expense reports. Using a business credit card also gives the entrepreneur the opportunity to quickly build their business’s credit. This is especially beneficial when a need arises to apply with a local lender for a line of credit for inventory or larger office space.

Monitoring employee purchases is no longer a dreaded hassle. Since there are usually just a few designated employees with purchasing privileges, tracking is now simplified and removes the time-waster of filling out expense reports. It’s still a wise practice to require employees keep and submit their receipts.

Put rewards to good use for business travel for seminars & meetings, office supplies, and discounts on services such as internet or phone.

When applying for a business credit card, entrepreneurs should apply with the financial institution they personally deal with and take advantage of their existing relationship.

Take advantage of the 21-day grace period for payments, offered by most business credit card companies. This is important when an entrepreneur is building initial cash flow.

Pay card bills on time to build your business’s good credit. Also, consider paying those bills online, thus avoiding the ever rising cost of stamps and post office hours and lines.

When entrepreneurs fully take advantage of the many benefits of using a business credit card, their financial management stress lowers significantly. Using a business credit card to track expenses, obtain useful rewards, and establish good business credit are just the immediate perks with many others to follow.

With all the headlines lately, you’d think that the upcoming credit card reforms are the cure-all for the debt that plagues modern Americans. And you’d be half right; credit card companies should play fair, and if it takes a rolled-up newspaper (in the form of tough legislation) to make them behave, so be it! But reform is only one half of the equation. All the legislation in the world isn’t going to do much if consumers don’t control their spending.

If there’s one good thing to come out of the recession, it’s the fact that millions of us have had to take a good, hard look at our financial situations. It’s scary at first, especially if you’ve been buying things here and there and making minimum monthly payments. You might be shocked to see how much of your income is being eaten by interest, bank fees, and finance charges. The sour economy has given us an opportunity to rethink our spending habits, and the upcoming credit card reforms will make it even easier for us to reduce our credit card debt.

With that in mind, it’s important for us to remember what we’ve learned once the economy struggles back to its feet and credit becomes readily available once more: don’t carry more cards than you need; don’t carry a monthly balance on your cards; and don’t spend beyond your means. Cardholders will soon have new, more enforceable rights. Let’s live up to those rights with a new level of responsibility.

Capital One introduces the Progress Card for consumers with bad credit. It will be available in time for Christmas shopping but beware of the starting interest rate. In addition to no annual fee, cardholders are rewarded for paying on time and at or above minimum payment, by having their interest rate reduced by 5% every six months; but this rate starts out at 34.9%. This rate may seem astronomical but keep in mind, if after eighteen months you’ve been a smart Progress cardholder then your interest rate will be down to 19.9% which is just above average. By the fourth statement of responsible credit usage, some cardholders may be offered an increased line of credit.

To be eligible for a Progress card, you must be over the age of 18, with at least some credit history. If you’ve declared bankruptcy within the past year or have absolutely no credit ratings, then it’s likely your application for a Progress card will be rejected. The Progress card can be compared to a progress report with incentives and rewards for good management efforts.

Although quite out of character for the credit card industry, the Progress card may prove to be a revolutionary concept. With the unemployment rate about to surpass a historically high 10%, there are thousands of individuals desperate to find ways to reestablish their credit. Even though the Progress cardholder’s interest rate is reduced by 5% per month of smart usage, users should inquire of the lowest level the rate will reach. This card can be a wise and cost-effective tool for young adults trying to implement good credit or for those individuals in dire need of an opportunity to rebuild their credit score. The Progress card may be just that opportunity, not available elsewhere.

Recently, over 45% of American credit card consumers experienced either a rise in their interest rates, having their credit limit lowered, an increased minimum monthly payment, or reduced user rewards.

Congress is considering upping the compliance date on the CARD Act from February, 2010 to December 1, 2009. This may have a significant impact on retailers and holiday shopping of consumers. Many retailers may have to provide extra incentive for their customers in order to make up for the lag in credit card purchases. Already, consumers are using cash more and credit cards much less. Even with the CARD Act effective before Christmas, consumers dealing with a lowered credit limit and higher interest rates implemented before hand are not likely to charge their holiday purchases.

One recent shows reveals the following statistics:

• 113% rise in consumers facing possible lower credit limits.
• 42% rise in those having their minimum monthly payment increased.
• 33% are seeing their rewards program decline.
• 36% are experiencing increases on various fees.

Understandably, it’s these consumers and countless others who agree this bill should be enacted in December not February. Some representatives are angered and acknowledge the fact the numerous credit card companies are abusing this delay by raising interest rates, charging hidden fees, lowering credit limits, or all of the above. This acknowledgement is a start but needs to be followed by swift action.

With the number of consumers resorting to cash over credit increasing every day, credit card companies are searching for ways to keep and please their cardholders. Some are offering zero percent interest rate for six months or increased cash-back rewards for certain credit purchase amounts. As the holidays quickly approach, with the looming possibility of the CARD Act becoming effective, consumers may see credit card offers that are either completely out of the ordinary or absolutely astronomical.