Credit Card Blog

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Recently, over 45% of American credit card consumers experienced either a rise in their interest rates, having their credit limit lowered, an increased minimum monthly payment, or reduced user rewards.

Congress is considering upping the compliance date on the CARD Act from February, 2010 to December 1, 2009. This may have a significant impact on retailers and holiday shopping of consumers. Many retailers may have to provide extra incentive for their customers in order to make up for the lag in credit card purchases. Already, consumers are using cash more and credit cards much less. Even with the CARD Act effective before Christmas, consumers dealing with a lowered credit limit and higher interest rates implemented before hand are not likely to charge their holiday purchases.

One recent shows reveals the following statistics:

• 113% rise in consumers facing possible lower credit limits.
• 42% rise in those having their minimum monthly payment increased.
• 33% are seeing their rewards program decline.
• 36% are experiencing increases on various fees.

Understandably, it’s these consumers and countless others who agree this bill should be enacted in December not February. Some representatives are angered and acknowledge the fact the numerous credit card companies are abusing this delay by raising interest rates, charging hidden fees, lowering credit limits, or all of the above. This acknowledgement is a start but needs to be followed by swift action.

With the number of consumers resorting to cash over credit increasing every day, credit card companies are searching for ways to keep and please their cardholders. Some are offering zero percent interest rate for six months or increased cash-back rewards for certain credit purchase amounts. As the holidays quickly approach, with the looming possibility of the CARD Act becoming effective, consumers may see credit card offers that are either completely out of the ordinary or absolutely astronomical.

It’s a problem that many card holders have faced lately: interest rates are increasing across the board, even for long-time customers who’ve never missed a payment. When faced with such a situation, card holders have two choices. They can keep the card and agree to the higher rate of interest, or they can close the account and pay off their balance at the previous low rate.

It’s not a choice many people are happy with, especially since closing credit accounts can affect your FICO score. But experts insist that closing the account won’t do much harm to your credit score, since your credit report will keep the history of that account for several years after it’s closed. Since the length of your credit history is one factor in your overall credit score, this is welcome news to card holders who want to dump their high-interest cards.

One warning: as credit standards continue to tighten, it might be difficult to get approved for another credit card, especially at a low interest rate. If you only have one or two cards and don’t plan to carry a  monthly balance, you might be better off keeping your accounts open for now.

How long can one man live under an assumed (and stolen) identity? If that man is Clark Lee Mower of Seattle, the answer is 35 years.

It’s said that the worst thing you can steal from someone is their good name. According to prosecutors, that’s exactly what Mower did to his victim when he made off with the man’s identity, caused trouble with the IRS, racked up over $139,000 in debt, and declared bankruptcy.

The victim of the identity theft spent a great deal of time and effort clearing up his credit following Mower’s bankruptcy in the 1980′s. Then, when the victim tried to buy a house in the late 90′s, he learned that Mower’s activities disqualified him for a mortgage loan. Luckily, the victim was able to use the services of a local credit union that knew of the identity theft.

Mower had also been using the victim’s identity to receive government benefits and medical care. He was arrested on July 29, and faces charges of aggravated identity theft.

If you’ve tried to get a loan or even a credit card in the past year, you might have noticed how tough the lending standards have become. The Fed’s recent survey of loan officers brought tentatively good news. It looks like the credit freeze is getting ready for a long-awaited thaw.

The Fed polled US banks in July 2009. 35% of the banks reported that they’d tightened their standards for issuing a credit card. 60% of banks polled six months ago reported using stricter standards, and 65% said the same a year ago.

Experts say that banks must start lending again in order to bring about economic recovery for all. While that may be true, few of the banks that were hurt by the economic crisis seem prepared to loosen their purse strings.

In summary, the Fed’s report is cautiously optimistic. A dwindling number of banks are ratcheting down their lending, but celebration at this point would be premature. When the banks loosen up and start lending again, we’ll know the economic rebound is in motion.

With all the talk of reform and banking woes, you might be wondering if the credit card industry is really in trouble. While industry insiders would like you to believe that credit card reform is the death-knell of their business, the truth is that the industry will live on.

A recent study from Keefe, Bruyette and Woods suggests that credit cards will continue to be a primary source of bank revenue even after the new laws go into effect. And there’s more reform on the horizon; Congress is deciding what to do about interchange fees, those fees that merchants have to pay for the ability to accept credit card payments.

The study’s analysts believe that interchange fee reform will affect Capital One, American Express, and Discover more harshly than Visa and MasterCard. The latter two companies will be more affected by interest rate reform, but experts predict that all of the primary card issuers will survive the meltdown.

Credit card stocks are on the rise again, a hopeful sign that the economy is clawing its way out of the grave. This is a great opportunity for new card holders to learn from the mistakes of their predecessors.

Trekkies and bargain hunters, rejoice! Now you can carry a credit card that features William Shatner in his best Priceline Negotiator combat stance.The new Priceline Rewards Visa Card shows Shatner getting ready to put a serious smack-down on high prices.

The Priceline Rewards Visa Card costs $29 annually. Card holders receive $50 or 5,000 points after they make their first purchase. After that, the rate is 1 reward point per $1 spent, plus additional rewards when shopping at priceline.com. Customers can also choose a category that will reward them with 2 points for every dollar spent. The choices are Utilities, Groceries, or Home Improvement.

There is also a no-fee card plan that gives slightly lower rewards. Both plans have a 0% APR on balance transfers for the first 9 months.

The Priceline Rewards Visa Card does offer good values, but its perks go beyond mere reward points. As Shatner said, “Any shopkeeper will tremble in fear of you, a true Negotiator, when you flash that card.”

And really, what more could you ask for?

When you see an erroneous charge on your credit card bill, your first response might be to call up your credit card company to dispute it. The good news is, you’re already taking care of your finances by keeping a watchful eye on your credit card statements. The bad news is, your credit card company might not take your side in the dispute.

To maximize your chances of success, follow these 3 tips when disputing credit card charges:

1. Make a strong case for yourself. If you can prove that the merchant violated the law or their own written contract by charging your credit card, you’ll have a better chance of success. Some charges turn out to be clauses that were hidden in the fine print of legal contracts. Needless to say, those charges aren’t typically refunded.

2. Try to work with the merchant first. They might be willing to fix the mistake and credit the charge back to you without getting the credit card company involved.

3. Know your rights and responsibilities. The Fair Credit and Billing Act protects cardholders against fraudulent charges, but you’ll need to provide documentation backing up your claim. You’ll also need to file your dispute shortly after the charge occurs.

If your credit card company does not rule in your favor, you can complain to the FTC and file a lawsuit to recover your money. If you feel that your credit card company sides with merchants much more often than it sides with you, don’t hesitate to take your business to a competitor.

There has been much grumbling among credit card execs who oppose the pending changes in the way they do business. The new credit card laws will put severe limits on how much and how often interest rates can be raised. This is bad news for big corporations like CitiGroup and Bank of America, who generate much of their revenue from interest income.

On the other hand, smaller players like JP Morgan Chase, Discover, and American Express are in pretty good shape, even with the changes at hand. That’s because these companies didn’t expand their lending as quickly as their larger competitors. As a result, they haven’t suffered as much from the sub-prime credit crisis and the upcoming credit card reform.

JP Morgan Chase is the largest issuer of Visa credit cards. American Express and Discover have their own card networks, and don’t rely heavily on repricing and interest for their revenue. AMEX has reported losses, but the company has managed to stay profitable throughout the turmoil.

What will a restructuring of the big credit players mean for the average cardholder? Hopefully it will mean more competitive credit card terms, but it could also mean an end to “easy credit”.

You’re at a bar. You want to have a few drinks. Before you begin, the bartender asks you for a credit card to secure your bar tab. What do you do?

First, realize that this is a common practice in most bars and clubs. If you don’t want to use your credit card, bring enough cash to cover your purchases. The credit card-secured tab is a safety measure for the bartender; if a customer leaves without paying their tab, the bartender is often required to cover the charges from their own pay.

What if you handed over your credit card, and now you’re seeing unauthorized charges on your account statement? Unfortunately, mistakes and fraud do happen sometimes. The best thing to do is check your account regularly. When you see questionable charges, give them a day or two to resolve. Sometimes they will come off. If the charges remain, get in touch with your credit card company and dispute the transactions.

For the most part, credit card bar tabs are good things. They’re convenient for the bartender, and they keep your card filed away from others so that you’re only charged for the drinks you actually order.