Credit Card Blog

This holiday season, you might want to check your credit card statements to make sure that you actually purchased all the items you’re paying for. That’s because ’skimming’ has become very popular among credit card thieves, and it’s costing a lot of people a lot of money.

Skimming is the preferred method of stealing card holders’ information because it’s fast to pull off and hard to detect. The skimmers, cheap card swiping devices that can easily fit into the palm of one’s hand, record all of the card holder’s information with one quick swipe. All the unwitting customer has to do is hand over their card to a cashier or waiter, who then swipes the card through the skimmer and the cash register and returns it to the customer, who is none the wiser. Thieves can even reprogram a new card with stolen card holders’ information. And then the spending starts.

Skimming is not a new scam, but the number of skimming incidents soars around the holidays. To protect yourself, monitor your credit card statements carefully. If you see unauthorized charges, cancel that card immediately and get a replacement. Use only cards with low credit limits when shopping for the holidays, and keep only the number of credit cards you really need.

If you’re the environmentally conscious type (You are, aren’t you?), there’s good news on the plastic frontier: you can put your credit card to good use, helping to fund renewable energy projects and offset CO2 emissions.

Brighter Planet has teamed up with Bank of America to offer the Brighter Planet Visa credit card. For each dollar spent in purchases, card holders will earn an EarthSmart point. The points are then used to help renewable energy projects. Brighter Planet claims that every 1,000 points earned will offset a ton of carbon dioxide. That’s a pretty good reward for just doing what you do every day - shopping.

If Visa or Bank of America isn’t right for you, there are other options out there: Wells Fargo launched a similar program in April. GE launched its GE Money Earth Rewards Platinum MasterCard in July, though some have branded this gesture as ironic, since GE is basically helping to erase carbon footprints it helped create by supplying parts for coal-fired plants. And MetaBank offered its GreenPay MasterCard in August; rewards from this card go directly toward the purchase and retirement of carbon credit offsets. Overseas, Barclaycard offers a green credit card, nicknamed ‘Breathe’, which gives card holders discounts on home insulation, green energy, and holidays in the UK.

The housing market crisis has left plenty of folks without homes, and it’s also been speculated that it will impact the automobile industry; when adjustable mortgage rates jump up, home owners will have less money to spend on cars. But how will mortgage rate hikes affect our credit cards?

Higher rates and more stringent terms are two possibilities. As consumers lose more of their monthly income to inflated mortgages, they turn to credit cards to make up the difference. The debt trickles down as they use some credit cards to pay off their balance on others. Now imagine what would happen to all this credit card debt if a lot of these folks were to declare bankruptcy. Yikes.

The credit card companies are feeling the strain. Citi, American Express, and Bank of America recently saw their worst numbers since 2001. Across the board, delinquencies are beginning to rise while repayment amounts are starting to dwindle. Only time will reveal the full impact that the sub-prime mortgage mess will have on the credit card industry, but, at a glance, the looming situation is a bit of a nail-biter.

Do you have lots of Reward cards? Maybe you’re just thinking of getting some. Before you do, be sure to read and understand all the terms and conditions. According to a survey by the Braun Research group, one third of all cardholders either don’t read or don’t really understand the fine print on their card agreements. If you’re among their number, speak with customer service until you feel confident about the terms you are agreeing to. If customer service can’t help you, there are plenty of competitors out there with better help lines. Take your business to them.

If you do decide to go for a rewards card, expect to pay a lot of money in order to reap substantial rewards. 5% cash back incentives are dying down, and 1-2% is now typical. But some cards have great rewards for specific needs, like pet care, online shopping, or special events. The new Sotheby’s MasterCard offers a birds eye tour of California’s vineyards, via helicopter. Card holders can also earn the use of an official Sotheby’s auctioneer to hold a charity auction for them.

Finally, to maximize rewards benefits, avoid being a ‘revolver’ – the industry term for card holders who carry a balance from one month to the next. If you’re paying 15% interest on your purchases, 1% cash back isn’t going to help much.

Samsung SDI and Kookmin Bank have taken credit card holders into the future.  Just when you think your wallet is complete with the plastic sleeves that traditionally held your credit cards safely inside,  now, with one of these new card cases, you can watch video clips, view photographs, and even check on the status of your credit card transaction histories on a AMOLED display.

Credit cards with a memory chip can be used with the card holder and allow the owners to view and search for information stored on the credit cards memory chip, finding select transactions, browse bank history and check on rewards program points.

Kookmin Bank plans to issue the high tech card holders by the end of February and they will be selling for around $80 US.  Eventually, they plan to release a credit card that has a display panel on it so that they don’t need to use the card case, but don’t expect them to be released for another two years or so.

Small businesses need to take credit card payments to survive. It’s estimated that 60% of consumers ages 18-25 use credit cards as their primary form of payment.

But small business owners quickly realize the high cost of taking plastic. Between the purchase itself and the final processing of the payment, fees can be charged by as many as twelve intermediaries. In fact, credit card payment processing is usually one of the top business expenses for small businesses. Bob Carr, CEO of Heartland Payment Systems Inc., is sympathetic. “Small merchants are eaten alive by all the middlemen,” he says.

How do the major credit card companies stack up? MasterCard has the most complex system, with 170 rates categories. Visa has about 100. American Express has fewer, but their per-transaction fees are higher. Discover has low fees and few rates categories.

It’s recommended that small business owners shop around for processors that offer the best terms possible; negotiate for better fees; request to see paperwork from similar businesses; and ask for references from local customers before choosing your processor. Many financial institutions offer credit card processing services, but they might not be the best deal. PayPal is a popular source if you do business online. You can also get card processing services through non-traditional sources, like Sam’s Club and Costco.

I guess functionality isn’t enough for some card holders. Stylish cards are gaining popularity. Whether they contain personal photos or sports teams’ logos, digital prints and vanity stickers can transform the plain exteriors of our favorite credit cards.

But those decorations are child’s play compared to the latest offer from GK Power in Seoul, South Korea: Diamond-encrusted credit cards for “VVIPs”. What does it take to be a VVIP? Kim Sam-sung, president and CEO of GK Power, says the cards are targeted specifically at the “top millionaire class” around the world. These big spenders, he says, want to stand out from everyone else.

The luxury High End credit cards are glossy, black, and covered in 1mm by 1.65mm diamonds. If that’s not fancy enough for you, GK Power also produces the Royal Legend card, a black and gold card embedded with diamonds and only available to royal Middle Eastern families through Dubai First Bank.

What do you give a fabulously wealthy socialite that has it all? A credit card that lets them visually boast about their wealth, of course. Don’t leave (your second) home without it!

Have you ever been standing behind someone in a check out line who opens their wallet to get out their credit card to pay… and noticed a rolodex-style wallet containing what looks like a hundred different credit cards?

Are you that person?

How many credit cards is reasonable?  I guess it really depends on each individual, but the general recommendation is to carry somewhere between two and six different credit cards at the most, and they should be the top issuers- Visa, MasterCard, Discover or American Express. 

You should also have a goal to pay off your credit card statements in full each month, so keep that in mind when deciding how many cards you should have in your wallet.  If you know you have a tendency to carry a balance from one month to the next, look for cards with no or low interest rates, and you should be receiving some sort of rewards from using your credit card, whether it’s in the form of cash back or airline miles or something else- with all of the various rewards programs, there is no reason not to have one you can benefit from.

The more credit cards you have, the harder it is to remember when each of the payments come due.  it’s better to select two or three cards with great rates and a solid rewards program than to try and spread your purchases out among fifteen different cards and attempt to remember when each are due!

Some of the biggest names in credit card issuers, including Bank of America Corp, JPMorgan Chase & Co, Citigroup Inc and Washington Mutual, spent about $25 million between 2004 and 2005- working to get changes to bankruptcy laws that would help protect their profits when people filed bankruptcy.

 They got what they wanted- and it is increasingly difficult for consumers to write off their credit card debt by declaring bankruptcy.  So what’s happening? People are putting their credit card payments ahead of their mortgages- and the number of foreclosures is skyrocketing.  About 70% of individuals who are more than three months late on their mortgage are making payments on time for their credit card accounts.

The changes to the bankruptcy code makes it more difficult for consumers to qualify for a Chapter 7 bankruptcy.  Chapter 7 is the one that would wipe out non-mortgage debts (like credit cards).

Princess Cruises and Barclays announced a new co-branded rewards card: the Princess Rewards Visa Signature card. The card has no annual fee, and launches the new ‘Princess Points’ program that promises one point for every dollar spent on everyday purchases, and two points for every dollar spent on Princess purchases.

Starting at 2,000 points, card holders can enjoy discounted Princess merchandise, discounted air travel, cruise discounts, spa credits, champagne, and onboard credits. Princess also offers free cruises, starting at 150,000 points (no blackout dates or capacity limits).

Lloyd M. Wirshba, CEO of Barclays U.S. credit card business, said, “Working closely with Princess, we customized a credit card program that would help cruise enthusiasts earn reward travel and other amenities faster, thus making everyday purchases with the card almost as rewarding as the cruise itself.”

Jan Swartz, Princess Cruises’ senior vice-president, said that passengers have been asking for this type of credit card for a long time. Princess will start taking card applications on December 10th.