Credit Card Blog

Credit card companies are on the hunt again, looking for new customers and using tantalizing cash back reward programs as bait. In this rough economy anything laced with money seems like a good idea. With careful consideration, planning and acknowledgment of the new rules that come with the new cash back, you can use this system to your advantage.

Basically speaking, when credit card companies are talking about cash back rewards, they are saying that they will give you back a percentage of what you spend on certain things. For instance, Discovery card gives a 5% cash back reward on fashion shopping. Lets say you make a $400 purchase: At 5% you get $20 back for buying things you were going to buy anyway. Typically speaking Discovery card actually rotates what goods are available for rewards, but generally rotates between gas, fashion items, and amusement park tickets.

Many credit cards are making new rules to tie with these cash rewards, so be aware. If you pay late even once, you risk any and all rewards you accrued up until that point in time, though some will offer reinstatement fees to get you back into the rewards program. Many have annuals charges, or spending caps that make you eligible, for instance they may require a certain amount spent before its eligible for cash back. Some companies are even limiting what stores qualify for rewards. So if you’re applying for a card with cash back rewards make sure you understand all the terms and conditions, and any penalties that may come up.

There are some things you can do to kind of get an edge on these programs. First and foremost, understand your contract, including penalties for late payments and spending requirements to remain eligible for rewards. Pay on time every month to stay eligible. Try not to keep a balance you can’t pay off in a month, especially since the interest rates are high in the double digits now. Keep in mind that many cards have a maximum they will pay out, so spend what you would need to be eligible for rewards, but then not any higher as there is no added incentive to do so. Lastly watch out for expiration dates and changes half way through your program, as changes can happen with out any prior notice, and most companies have a history of doing so.

A bill approved by the U.S. Senate on May 13^th will allow merchants to set minimum and maximum transaction amounts for debit card purchases. Previously, you could buy anything with a debit card, regardless of the amount, and for store owners – if the purchase was small, like a pack of gum, it meant paying more in debit card service fees than the profits made on the purchase. With this bill, merchants will be able to set limits to ensure their profitability on debit card purchases.

MasterCard and Visa have been concerned over credit and debit card regulation for a long time. They are credit and debit card processing networks, and don’t receive all of the interchange fees directly, but their revenues do depend on how much people spend on their cards. If merchants restrict purchases, they fear they will experience large drops in revenues as people will be less likely to use their cards.

MasterCard is determined to fight this bill until it is finalized into law. While the bill isn’t restricting the amount Visa or MasterCard can charge in interchange fees to merchants on credit card purchases, they’re concerned that the regulation on debit transactions will open the door to more regulation in the future.

Reuters reports:

“MasterCard U.S President McWilton said in a speech earlier on Sunday that MasterCard was “very concerned” about the amendment and “working very hard to make sure” that it would not be attached to the final financial regulation bill.”

Swipely is a new twitter-like social network, however instead of tracking your status, it tracks your purchases. It launched with venture capital of $8.5 million dollars.

What does Swipely do? You simply link your credit card to your Swipely account, and any purchases you make will appear throughout the day, similar to a tweet. For instance, if your friend purchased a McDonalds meal, it will simply show up as “Andrea just purchased a meal at McDonalds” on her Swipely account.

The first thought through your mind should be about the security of the network and access to your credit card information. Swipley promises that third party security specialists protect your credit card, so your credit card information will never show up anywhere, just announcements of what you‘re buying.

Unlike a similar Facebook application, this one won’t post how much you spent, just merely the services and where you purchased.

The idea behind it is to give your friends something to talk about. They may find they have more in common with you or vice versa based on purchases made. Or more commonly it’ll give you something to tease them about or vice versa. It’s just another way to start a conversation, or share interests. It’ll allow you to share more details about what you do in any given day with your friends and family.

Of course there are people who will say that this is way too intrusive, and people who feel that way don’t need to use the program. Most bloggers discussing Swipely don’t understand the purpose or need to share credit card purchases with friends and family in order to generate conversation.  But, maybe Swipely will be used by parents who give their teenagers debit or credit cards to monitor their kids spending habits as it happens – rather than waiting for the statements to arrive?

Will you use Swipely?

There is a new application available for the iPhone and the iPad that will make it easier for companies and businesses to process credit cards on the go.  The app is called “Square“. From the mind that brought us Twitter comes this new application, free for the iPhone but it does requires a device that plugs in that will actually “swipe” the credit card. It will have some other features like saving recurring purchases and frequently visited clients or consumers.

The application seems geared to traveling businessmen or any one who may need to process credit card sales on the go. It has great potential for street vendors who previously could only handle cash transactions, direct sales representatives doing home parties, or any other retailer that was primarily cash only (or who had to wait until they returned home with their credit card purchases filled out on paper to enter into their computer-based credit card processing software).

Taxis will now be able to charge for the cab with debit or credit transactions, which may also add to the safety of the drivers, who are all too often targets of robberies.

People trying to make extra money at garage sales and flea markets may still tap in to the potential of the “Square” application, allowing them to sell things to  people who don’t carry cash on them, but have their debit or credit cards.

This is a great application for any one who is in business that would like to expand out of the cash only situation and not be limited to a store front or their computer to process payments. Flea market vendors, street vendors, livery personnel, on the road salesmen and others will see a great use out of this product. The best part is the only investment, if you already have the iPhone or iPad, seems to be the purchase of the plug-in device, as the actual software is free.

Credit card skimming is a crime on the rise. Simply speaking, card skimming is when someone other then you obtains your pin and your card number and then uses it to withdraw the money in you account or makes purchases with your card number and pin. These type of crimes generally rise with a bad economy. The worst part is that you can be victimized by someone in another country, and they don’t actually need to have physical possession of your card to use it.

Generally speaking there’s multiple ways to get this information, although most involve literally watching you type in your pin and seeing your credit card number. Sometimes cameras are put above ATMs to spy on you will you enter the info, but most often the person is peeking over your shoulder.

Online purchases may also be the target of these thieves, however in ever case you essentially give them the information, and that’s what makes it so scary. Vigilance is going to be the key here. Keep an eye on your card the entire time the transaction is going on, and keep any receipts you receive and destroy them properly.

So a few tips on how to stop yourself from being a victim:

First and foremost, get your money from a teller whenever possible. If your going to use an ATM, use only one you trust, for instance, the grubby looking one in a convenience store, may not be your best choice. Hunch over the screen, cover the key pad with your free hand, and take and destroy your receipt. Look carefully at the swiper on the ATM before sliding your card through, to ensure it’s the one that belongs on the machine and not one installed by a card skimmer.

If your going to be making a lot of purchases online or in a few stores, then you might use a “disposable” credit card you can purchase at gas stations and banks. Load those up and use those online, that way even if it gets skimmed it’s limited to the amount of money you put on the card, and they don’t have access to your actual bank account.