Credit Card Blog

That’s the finding of Representative Jodi Tymeson of Iowa, along with a legislative committee that studied the impact of credit card companies marketing their products on college campuses.

Officials from Iowa State University, and the University of Iowa appeared before the committee on Tuesday to defend their decision to allow credit card companies to target students. The officials cited records that compared average student credit card debt to average student loan debt. The students carried a credit card debt of about $1,100, versus about $23,000 in student loan debt.

Says Tymeson, “The aggressive marketing of credit cards to students is not as big a problem as we thought.”

The universities have an exclusive contract with Bank of America, which they say protects students from being bombarded by a multitude of credit card providers. Other providers can still market their cards to students off-campus or through the mail. Student addresses are public information, and easily obtained by companies for marketing purposes.

Iowa State University Alumni Association president Jeffrey Johnson thinks students should get credit cards and learn to use them responsibly: “If our students are going to do normal society, adult-related purchases or transactions, they have to have some form of credit.”

The FTC wins another round! Peter J. Porcelli II was ordered to repay nearly $12 million that he had obtained through fraudulent practices. His Florida companies, Bay Area Business Council, Inc. and American Leisure Card Corp., offered low-interest, unsecured credit cards over the phone. Customers who took the bait paid between $199 and $400, which was taken from their bank accounts.

But instead of receiving their credit cards, customers received “dummy” cards bearing the MasterCard logo and the name of one of Porcelli’s businesses. The cards also had non-magnetic black strips to make them look more convincing. The FTC web site describes what happened next:

“When consumers complained or tried to activate the card they were told for the first time that, for an additional fee, they could obtain a debit card, but never a credit card. The defendants also did not tell consumers that in addition to the requirement that they deposit their own money in advance for any purchases they wished to make with the debit card, they would pay substantial fees every time they attempted to use the card.”

Porcelli’s other business interests named in the case include Bay Area Business Council Customer Service Corp.; Bay Memberships, Inc.; Bay Vacations, Inc.; Sr. Marketing Consultants, Inc.; and Special Technologies, Inc.

Most of us have gotten unsolicited credit card offers in the mail, but what if you got an unsolicited, working credit card with your name printed on it?

It actually happened to several inactive Macy’s card holders. Macy’s sold their customer information to CitiBank, who mailed notifications to the customers telling them they had to let CitiBank know if they didn’t want a MasterCard. Those customers who didn’t respond (some said they never received the notice) had CitiBank MasterCard accounts opened in their names. This was potentially harmful, as credit scores take a bruise when new accounts are opened.

However, since CitiBank merely replaced inactive Macy’s cards with CitiBank cards, they didn’t break any laws. Customers have the right to cancel the cards. Let’s just hope they find the cards before tossing the envelopes into the trash!

Beginning today, consumers will be able to charge their gag gifts and stocking-stuffers on their Visa credit cards. The Dollar Tree discount stores now take Visa. Discover is also accepted at all Dollar Tree stores. MasterCard is accepted at about 980 of their 3,300 locations.

This is good news for Visa card holders that need to buy cheap decorations, holiday candy, or anything else priced at $1. Dollar Tree stores can be found in malls and shopping centers in all 48 contiguous states. The more payment options, the better!

While most people agree the new non-customer ATM fee hike by Bank of America and others is simply a rip-off, these banks actually think the strategy will encourage people to become customers of the bank.

The strategy is that consumers who have smaller banks with fewer branch locations will decide they should switch to a bank with several thousand branches, in order to avoid having to pay the fees when they need to use the ATM to withdraw money.

Personally, it makes me want to steer clear of these banks all together, and find another bank that isn’t pulling such a stunt with fee increases to try and force customers to get an account with them. I might just take the money out of my ATM before I leave town; or write more checks instead of withdrawing cash. Plenty of options to avoid that ATM fee. I see no reason to run inside the bank and open a new account!

More details about Revolution Money were revealed at the Web 2.0 Summit in San Francisco. Revolution Money’s online money exchange program will go live in November. Their first distribution platform will be AOL’s instant messenger (AIM). The messaging client will contain a link to the new service. Steve Case, who formed Revolution LLC, is a co-founder and former chairman and CEO of AOL.

Revolution Money will also offer RevolutionCard, a credit card with a 0.5% interchange fee. (1.9% is typical.) The card was designed with security in mind; it does not contain personally identifying information such as names or account numbers. Instead, it uses a PIN, much like a debit card.

Ted Leonsis, the chairman of Revolution LLC, hopes that his service will offer a better payment option for small purchases, such as buying songs online. He also wants to place links to Revolution Money on social networking sites. Says Leonsis, “We want to become for social networks what PayPal is for EBay.”

He describes Revolution Money’s services as “PayPal meets MasterCard without the high fees.”

In the spirit of the Halloween season, we’ve dredged up information on one card that should be avoided at all costs. Consumerist.Com recognizes the Continental Finance MasterCard as the worst credit card in the world.

How did this card earn such a dubious honor? It was designed for high-risk card holders with bankruptcies and poor credit histories, but those things alone do not a scary card make.

The terror is in the details: a $300 credit limit that costs $247 to set up. Plus a $10 monthly account maintenance fee. Plus 20% interest on all purchases. Plus a $4 charge whenever you make an online payment. Card holders do get automatic upgrades to their credit limit when they qualify for such, but the upgrades come in $100 increments, each tagged with a $25 fee.

There are so many better alternatives. For some helpful advice, check out our articles on credit cards for consumers with poor or no credit. There are some scary cards out there in Low Credit Land; when confronted by them, make information your weapon of choice.

This is a nice little “diddy” of a song, found it while browsing around youtube. It basically describes the problem many people have with credit cards. It’s not that credit cards themselves are all that bad, it’s that most people don’t really know how to use them responsibly. We get caught up in the “gotta have it” and spend more than we should because let’s face it, it’s just so much easier to swipe the card than to worry about setting aside cash to save for the latest “gotta have it” item. I wonder how many of us would actually save up for that pair of shoes or new phone if we had to save for it BEFORE we bought it?

Click Here to watch video

We might actually benefit more from credit card rewards programs and benefits if we were able to use the cards more responsibly. So I hope you enjoy this video and that it inspires you to use your credit cards more appropriately!

In the credit card world, “fixed” doesn’t necessarily mean “fixed”. For example, credit card companies who advertise fixed interest rates aren’t obligated to leave those rates in place forever, or even for very long. The rates are fixed for as long as the company wants them to be. All the companies have to do is give two weeks’ notice before the changes take place.

If the Federal Reserve Board has its way, such practices will soon be a thing of the past.

The Fed has proposed amendments to Regulation Z, the “Truth in Lending” regulation. One such proposed amendment calls for card issuers to mean what they say when advertising fixed interest rates. Under the proposal, issuers who offer fixed interest rates would indeed have to leave those rates fixed for the life of the card, or for a clearly specified period of time.

“The goal of the proposed revisions is to make sure that consumers get key information about credit card terms in a clear and conspicuous format and at a time when it would be most useful to them,” said Federal Reserve Board Chairman Ben S. Bernanke.

Additionally, the Fed wants card issuers to give 45 days notice instead of the standard 15 when interest rates are increased. The reasons for rate hikes would also have to be clearly explained to the customer. Also, credit card companies would be required to put rates and fees in an easy-to-read, itemized list.

Says Bernanke, “Greater clarity in credit disclosures allows consumers to make more-informed credit decisions and enhances competition among credit card issuers.”

We reported earlier that TransUnion and Equifax were offering credit freezes to their customers. This was good news, save for the fact that Experian hadn’t made mention of joining them. In order for the freezes to be effective, all three credit bureaus would need to participate.

Experian has now jumped on the bandwagon. They will begin offering credit freezes to customers on November 1st. A freeze prevents new lines of credit from being opened in the customer’s name. This is useful for those who worry about identity theft, or those who have already been victimized. When the customer wants to use their credit for legitimate reasons, they can lift the freeze by using their PIN.

One question remains: How much is all of this going to cost? The credit bureaus will charge hereto unspecified fees for freezing your credit (unless you can prove that you’ve already been the victim of identity fraud), and more fees when the freeze is lifted. Those fees can really add up. Consumer advocates are urging lawmakers to step in and lay down some structure and limits for these charges.