Credit Card Blog

Many small business owners use zero-percent interest offers to get their businesses off the ground.  While it can be a reasonable solution to starting a business for individuals who don’t have access to the necessary capital available; you definitely want to be careful that you don’t get in over your head.  Credit cards make it easy to spend more than you can afford if you are not disciplined.  Here are some tips for using a credit card to start a business:

• Avoid spending more than you can reasonably afford to pay each month based on your current income level - just in case your business doesn’t turn a profit or generate cash flow as quickly as you plan.
• Look for zero-percent credit card offers that offer no interest for at least twelve months, followed by a low, fixed-interest rate.
• If using a credit card to fund your business start-up; be sure to use one that also offers a rewards program that you can benefit from (travel rewards, cash back programs, or discounted merchandise, etc).

A home equity line of credit is a ‘revolving credit’, similar to a credit card in that you have a maximum limit that you are able to use, but that money can be used again as soon as it’s been paid off.  The major difference between a home equity line of credit and a credit card, however, is that home equity lines of credit are secured against your home.  If you fall too far behind on your payments, the lender can take possession of your home in order to recover the debt.

Previously, home equity lines of credit were made available with special checks that allow consumers to access the money when needed.  A check could be written and deposited into your checking account, or used to pay a vendor or when shopping at your favorite retailer.  More recently, many lenders have started providing the home equity line of credit on a credit card.

While having a card in your wallet that accesses your home equity line of credit is convenient - it can also be extremely tempting for many people.  If you take a HELOC to make improvements on your home, for example, and have more money than you need for the repairs, you may find yourself shopping for a new wardrobe with your HELOC credit card.  Think twice about doing this - is it really worth putting your home on the line for unnecessary purchases?

When we think of identity thieves, we tend to picture shady characters pawing through trash bins or calling people up and asking for their personal financial information while posing as IRS officials. But two young people are now admitting to a jet-setting identity theft scam that took them around the world in luxury. And their targets were their friends and neighbors.

Jocelyn Kirsch and Edward Anderton were taken into custody in December. Law enforcement officials found a computer that contained photos of the couple’s lavish vacations, including some from Paris, France.

The couple used the identities of co-workers and other acquaintances to fund expensive purchases and a high-rent apartment. Additionally, Anderton is accused of scamming his way through Ebay, using false identities and sales to rake in $30,000.

Identity theft is no laughing matter. Use every resource at your disposal to prevent thieves from getting hold of your financial information. And remember:  thinking that you know someone well doesn’t mean that you can trust them. Keep a careful eye on your credit report and your monthly billing statements to make sure all of your purchases were made by you.

Sharpe James, the former mayor of Newark, won’t be going to trial a second time. He was convicted on fraud and conspiracy charges stemming from shady real estate transactions. A second trial, accusing James of fraudulent credit card purchases, was scheduled for July. But due to the costs such a trial would incur, coupled with James’ existing sentences, prosecutors decided to drop those charges.

In an all-too-familiar debacle, James was accused of using government-issued credit cards to finance travel trips with various women.  He was also said to have used the cards to improperly finance dinners and movie dates with those women.

Credit cards can definitely be a temptation, but public officials should set a good example for everyone by using those cards for their intended purpose. When government cards are used for personal pleasure, it smacks of stealing taxpayers’ money.

U.S. Attorney for New Jersey, Christopher Christie, said: “We believe that justice was well served on the day the jury convicted the former mayor on all of the corruption charges against him and, as a consequence, by the significant prison term he likely faces.”

American Express is hooking up with Universal Studios to bring customers a credit card with perks that center on two favorite pastimes:  theme parks and movies. If you visit a Universal Studios theme park in Orlando or Hollywood, you can sign up and receive one of the new affinity cards right there on site.

The deal gives American Express, among other things, the opportunity for product placement in upcoming Universal films. Their brand will be seen throughout the theme parks, and they will be named as the sponsor for several rides and attractions.

Card holders will receive all kinds of perks, such as movie ticket and DVD rewards. By signing up at one of the parks, customers can earn immediate VIP treatment and spots in the front of the line for Universal’s rides. Other rewards include the chance to win walk-on roles in Universal’s films. Some lucky affinity card holders will even win a private jet trip to all the world’s Universal theme parks. Now that’s a perk!

Foreign hackers used packet sniffing software to obtain the credit card numbers and expiration dates from customers at eleven Dave & Buster’s restaurants across the US. While this incident pales in comparison to the 4.2 million card numbers stolen during the Hannaford security breach, these hackers did manage to find buyers for their ill-gotten information. It’s estimated that they did $600,000 in damage. Luckily, the hackers were tracked down and brought into custody in various overseas locations.

Situations like this can make card holders wonder if all the paper-shredding in the world will protect their personal data. It won’t. When sophisticated criminals target businesses, it’s up to the businesses to have the best and most up-to-date security systems in place. The minute you discover unauthorized charges on your account, cancel the card and file a fraud report with your credit card company. Use online banking to monitor your account. You can even get real-time alerts sent to you when any charges are made.

For the record, though, you should still shred those paper statements and pre-screened credit offers to ward off low-tech identity thieves.

In India, mobile phone users are paying for purchases through their phones.  The phone number acts as the card number, with a lot of behind the scenes processing taking place to look up the real credit card information based on the user’s telephone number and initiate the payment to the retailer.  The retailer itself never actually has access to the credit card number.

Cell phone credit cards are actually available in the US, as well, although are extremely limited.  Trials are beginning with contactless payments, using cell phones, at many McDonald franchises, CVS pharmacies, and with American Express ExpressPay. 

Contactless payments may make you nervous, but you may already be using it in some form without even thinking about it.  Have you ever driven through a toll booth and watched the indicator light change from red to green without handing over cash?  You’ve just paid for your toll.  Ever pulled up to the gas pump and flashed your keychain at the light on the pump to fuel up?  You just paid for your gas. 

Most people don’t leave home without their cell phones.  Credit card companies and retailers picture higher spending when buying is as easy as showing your cell phone at the checkout line, rather than finding the credit card in your wallet and lining up the magnetic strip in the reader to initiate payment.

Times are rough, with Americans facing increasing costs of living while their incomes stay the same. In the past, families turned to their home equity when they needed a low-interest loan to make ends meet. But the mortgage crisis has taken that option away from many. How are consumers coping now? By turning to their credit cards.

Credit cards have become a necessity for daily purchases and bills. Interest rates aren’t typically as low as home equity rates, but the cards are widely available and convenient to use. Anyone in any credit situation can obtain a credit card, but the very best terms and rates will go to those with high credit scores. Nobody likes being in debt, but low-interest or 0% APR credit cards can be life-savers in tough financial times. Reward cards can also benefit consumers who charge purchases every day.

The economic stimulus packages, designed to help Americans contribute more money to the economy through spending, are mostly being put toward credit card debt. Credit cards are a safety buffer for consumers who want available funds in case of emergencies. They are paying down their debt so that they’ll have more available credit when they need it the most - the immediate future.

The thought of sky-high credit limits often provokes a strong response in people. Some fear these limits and their potential. Others long for them. So when is a really high credit limit actually a good thing?

High credit limits can make or break a credit score. The effect depends on how those credit limits are used. For example, a card holder who has an untapped combined credit limit of $100,000 will look great to lenders. They will assume that the person has been financially responsible to have earned so much credit, and even more responsible to have left most or all of it unused. This will open many doors for the card holder.

Now, if that same card holder suddenly racked up a debt of $50,000, lenders would start turning up their noses at such a potential risk.

A person’s utilization rate is the key to their success. A high credit limit with little or no debt is the ideal situation. Some consumers find that their utilization rate is much more important than their stellar payment history when it comes to hiking up a credit score.

The bottom line? If you’re been declined for credit, pay down your debt. Ask for credit limit increases on your available credit cards, or open new ones that offer more favorable terms. With great power comes great responsibility, though; when your limits skyrocket, it will be tempting to take that dream vacation you’ve been putting off. Just keep your cool and keep your eye on the prize: an excellent credit score.

Have you ever been to a gas station that advertises two different prices per gallon of gas?  One price for cash purchases (listed in larger numbers and in a more eye catching place, of course!) and another, slightly higher price, for credit card purchases?

Is it legal to charge more for gas to people who pay using their credit card?

Sal Risalvato, the executive director of the New Jersey Gasoline C-Store Automotive Association in Springfield, is quoted in an article posted on DailyRecord.com, “they are not charging for credit. They are giving a discount for cash.”

The discount for paying with cash may only be a couple cents per gallon over paying with your credit card, but it’s becoming almost a necessity for gas stations to try and encourage more cash sales.  Gas stations average a profit of about 10 cents per gallon.  The fee the retailers pay for credit or debit card payments is 3% of the total sale.  If you purchase 15 gallons of gas at $3 per gallon with a credit card, the profit for the gas station is about $1.50 - until they pay the credit/debit card fee of $1.35.  Suddenly, their profit is all of 15 cents on your gas purchase!