Credit Card Blog

If you read the terms and conditions for your credit cards, you’d probably read that your credit cards’ billing cycle is “between 20 and 25 days”, or something similar.  In other words – the cycle varies, give or take a few days.  You might be thinking, so what?  Here’s the issue with billing cycles that are not set in stone:

Many people like to use their bank bill pay feature.  Many banks offer this feature for free and it’s extremely convenient.  You simply set up your accounts with your bank account, decide which day of each month you’re going to pay the bills and schedule with a few clicks of your mouse.

At first – everything will work out perfectly.  But then the varied billing cycle days will rear it’s ugly head.

At some point, your due date will change.  Depending on how close to your actual statement due date you schedule your monthly payments, eventually – that due date could change enough to cause your scheduled payments to get paid AFTER the due date.  Since your payments are all scheduled in advance (set it and forget it), you probably aren’t watching your statement closely to make sure each payment will be applied on time.

If you’re using an automatic bill payment for credit cards with a billing cycle that is variable – make sure to set your payments so they’re being paid a good ten days or more BEFORE the due date.  It should give you enough of a buffer that even as the billing cycles fluctuate, your due date won’t come before your scheduled payment.

On YouTube.com there are a number of people and companies with videos to help people get out of debt or straighten out their financial situations.  Most of them are obviously created to promote a particular debt settlement company or information product – but every once in awhile you come across one that is interesting and informative – and not a commercial.

In this particular video, this man calls one of his credit card companies to negotiate a lower rate.  The video shows just how simple it is to get on the phone and ask – you won’t always be successful but what harm can it do to check into it?

Negotiating credit card interest rates

Credit scores can be mysterious things. They’re formulated by taking many factors into consideration, including your total debt load and payment history. For consumers who want to see how their data is affecting their credit score, Credit Karma has a new offering: the Credit Report Card.

This free service requires customers to register with their date of birth and Social Security number. (This information is not stored.) The tool uses this information to pull data from the customer’s credit report. Then they can see a breakdown of how their credit card use and other factors are helping – or hurting – their credit score.

Credit Karma believes that consumers deserve full access to their credit scores. To check out the new tool and get a free copy of your credit report, go to www.creditkarma.com.

Are you a merchant or retailer who’s tired of paying high interchange fees? Help might be on the way.

On Thursday, new legislation was introduced by House lawmakers that aims to give merchants more control over what they have to pay for credit card processing. The bill, called the Credit Card Fair Fee Act, will allow merchants to negotiate fees with Visa and MasterCard.

Because Visa and MasterCard handle two-thirds of all general-purpose card transactions, and because merchants have no negotiation power at present, there have been accusations that the card companies are engaging in anti-competitive practices and setting high fees. This bill would encourage competitive fee structures by giving merchants the chance to negotiate with banks in the presence of an anti-trust lawyer from the Dept. of Justice.

The bill is opposed by some credit union representatives, who claim that small credit unions will suffer from the proposed changes more than larger banks will. The Electronic Payments Coalition also criticized the bill, saying it was just a move on the part of retailers to make consumers absorb the costs of doing business.

Interchange fees brought in $48 billion last year, and made up roughly 1.75% of total purchases.

Bank of America has announced that it will be launching new pink-ribbon credit cards, debit cards, and checking accounts to promote breast cancer awareness and prevention. These products will support the organization ‘Susan G. Komen for the Cure’. For every new pink-ribbon account opened, Bank of America will donate a portion of their proceeds to support the search for a breast cancer cure. They will also donate a portion of all check and credit card purchases to the foundation.

Katrina McGhee, the vice president of global partnerships for Komen, lauded the new partnership and called it “a great opportunity for the breast cancer movement.”

The program is available at Bank of America centers nationwide, and applications will be available at selected Susan G. Komen events as well. To learn more about the new program, visit Bank of America’s news room.

Have you taken a personal financial stress test to see how you’re faring in these tough times? Credit cards can be a source of stress if your balances are too high and payments eat up too much of your monthly income. Experts have identified other factors that might be stressing you out:

Higher interest rates and lower credit limits. Many cardholders have experienced a spike in interest with a corresponding reduction in credit, even if they used their cards responsibly. Consider whether or not you can comfortably afford the higher interest rate. If your credit limit gets slashed, can you afford cash purchases rather than credit?

Your debt-to-income ratio. The higher your debt, the higher your stress level. Unsurprisingly, consumers with the least amount of disposable income were also some of the most stressed out. To find your DTI, take the sum of all your unsecured debt and divide it by your yearly gross income.

Not having an emergency fund. It’s important to have a financial cushion for hard times. Stocks aren’t a good option for short-term returns, and 401k withdrawals come with hefty penalties. Savings accounts are recommended, as are credit cards – if you can resist the temptation to use them for non-emergency purchases.