Economists might be true, or they may speak out of turn, because they were asked. However, the evidence must not improved. The unemployment rate does not improve, placement rate is still down, and can be down for, and not the company’s significant growth plans.

Although we, consumers, cannot do much to change the economic situation, we can at least try to ensure we don’t suffer as much as we did in past. People with poor credit score are the ones who would be affected the most. Hence, it’s important to maintain our score, and save as much as we can, so we don’t sink into another debt hole.

One of the things that we don’t want to spend on is late payment fees. On an average, a credit card company charges around $39 as late fee, and most of the revenue they earn is charged by such fee. Alright, we are talking about improvement in economy, and increase in bank’s revenue may a bit helpful. But you don’t have to sacrifice your $39 simply to boost the economy. Pay bills on time, and save $39 every month.

I know it’s not easy, especially when you have to tackle many bills many bills with similar due dates, and all you are left with is one paycheck. Sometimes, late fee is simply unavoidable. Besides, you also fight the risk of increase in interest rate due to missed payments.

How Do You Pay Bills on Time?

You need to probably start with understanding how it works. If you due date is 1st of the month, and they charge you late fee after fifteen i.e. 15th of the month, understand your due date is not 15th but 1st..

If you are not very sure about how it works, you must call up the service provider and take necessary information about it. Besides, you can pull out the copy of your application form or the initial kit, and read the fine print.

To make sure you do not forget your expiration date, access to effective operation of your way. Remain on your desktop, a prompt or write it down in your log or mark the date in the calendar. But do not forget the date.

Spread Out Dates

You can pay your bills in difficult, because most bills are delivered at the same time. May leave some pressure to change the date and help you return balance. You call your creditors and pass the request to do this to another date of payment.

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Stop Using Credit Cards

Sounds obvious? It is. Yet many people can’t give up because they are addicted to using credit. Only when you completely eliminate the use of credit you could get out of debt.

Change Your Priorities – Repay Your Debts First

Instead of spending money on entertainment, you can make payments toward your debt. You cannot have a debt-free life unless you make it your priority to repay your debts.

Have a Budget

If you still don’t have a budget, it’s time to have one. Having a budget helps you recognize your spending habits, and reduce expenses considerably. Besides, it can help you repay your debts quickly.

Debt Consolidation

If your debt is too big and complicated to control, you should consider seeking the help of debt consolidation companies. They can help you reduce your debt by 50-60%, and offer flexible repayment options.

Note that credit card debt elimination is not an easy task. It takes discipline and effort going to have a life debt-free.

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According to the Federal Reserve Board, the new credit card law obliges credit card providers to inform customers about any major change in the terms, at least 45 days in advance.

The overdraft facility, which was initially provided by default, will now be optional and not automatically assigned. Therefore, if you’re shopping for something that exceeds your current account overdraft, he would deny. And obviously you will not be charged any fee.

However, this new rule wouldn’t keep you safe from the clutches of these plunderers. Hence, here is a list of few tips that you will need after the rule is applicable.

1. Go for Fixed Rates :
   According to the new credit card law, companies cannot change or increase the interest rate of your card without prior notice. However, the law wouldn’t protect you if your card comes with a variable rate conditions or if it is an introductory offer for few months. If possible, try to avoid such cards and stick to the ones that offer fixed interest rates.
2. Understand Reward Programs:
   With a curb on their most reliable income source, credit card companies are now deriving various other methods to earn profit. Award programs and other such services can actually benefit them more than it will to you. I am not restricting you to avail such services. However, make sure you understand everything before you go for such programs.
3. International Use :
   This new credit card law has been introduced for American population and is applicable with the premises of the US. However, it wouldn’t stop card providers from levying stiff fees, if the card is being used for international transactions. This can happen with or without traveling physically out of the US. If the item you bought only is provided by an international vendor, you will be charged with some additional fees. However, not every company will levy such fees. Hence, learn these policies before you go for a credit card.

Maybe they are just three things that I’m aware of, that may be a result of surcharges. However, there may be many other ways that a company by the credit card you might use to exploit you and the new credit card law as well.

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1. Raise your Credit Limit
It is difficult to convince credit providers to increase your credit limit these days, because of the recession. But Ken Clark, a certified financial planner, has a smarter way to work it out. According to him, you can apply at the same time a larger purchase. Tell them you want to raise your overdraft because you want to buy a new car or repair your home and you have it. However, the only criteria is to have a decent record of past i.e not missed many payments.

2. Skip a payment
Yes, skip a payment. This is one of the benefits you enjoy if you are a customer in good standing. Sometimes, it gets difficult even to pay the minimum amount of your credit. But that is Okay, you can pay it the following month. You just have to inform your credit card provider about your delay in payment in advance and they are likely to waive off your late fee. Isn’t it great? Yeah, but I said likely, not definitely. So, it all depends on your past payment records and your relation with the credit provider.

3. Late Fee? Waive it off
Late fees are waived off if :
- you try paying online, but it doesn’t go through or
- you failed to receive an invoice from the provider

Use any of these two reasons and there are very good chances that the fee will be waived off, provided you hold a good past payment history. Even if it’s your fault, don’t worry. You may still get it waived off from the next bill. However, this benefit will help you just once, so use it when you really need it.

4. Lower your Interest rate
This is the easiest among all. Find a credit card provider which asks for a lower interest rate. Call up your credit card provider and inform them about what you have got. Tell them that you really liked their service but you have got a better option. They cannot afford to lose you as a customer. Even they are hit by recession. So, chances are pretty high that they will come down to the competitor’s interest rate or even lower. Try it.

5. Transfer funds in your bank account for free
When you transfer your credit card balance to your bank account, you are normally charged a fee of $50 to $75. But tell them you are going make a big purchase or Money Market Mutual Fund, and you will receive a free transfer opportunity. You can then receive a good amount of interest on your saving account balance. Great, isn’t it? However, make sure that you repay the card amount before the grace period ends, or you have to pay more interest than you received.

6. Remove surcharges charged by merchants
It is illegal for any merchant to charge additional fee for your credit card transactions, with the exception of government offices and schools. If you see any additional fee charged by merchant, ask them to waive off the fee. If your invoice still displays the merchant fee, report the incident directly to your credit card company. As per merchant Abuse Policy, you merchant fee will be waived off.

7. Increased warranty on new purchases
Generally, all stores offer an extended warranted on purchase of new machines like a laptop or a television. But why to but this warranty when you can avail this for free? Yes. If you use a major credit card to purchases these products, you provider will directly match the warranty up to a year.

8. Free rental car insurance
If you are worried about the damage of your rental car, ask your card provider to pay for the insurance. However, not all companies pay for it. So, call up your credit card provider to check whether they do and whether you are eligible for it.

9. Get discounted on hotel stays and meals
Many providers by large credit card offers a meal and a stay expected in almost all hotels and restaurants in the United States. These offers are generally mentioned in our welcome pack, but we note only. Also you can find important information on new and existing offers in the website of the issuer by credit card. Why spend more?

10. Best Value Guarantee – Get refund
Best Value Guarantee (BVG) is nothing but a partial refund of the amount you pay to buy a new article in your card. There are very card providers that offers such an advantage and very few articles. American Express Gold offers reimbursement up to $250 on selected items. Do not miss it if you’re one of those lucky people with an Amex card.

Aren’t these wonderful ways to save some money on your credit card?

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Overdraft Fees
According to Consumer’s Union : “People who use debit cards to pay more than 20 times the average $223 a year being bounced check fee. The one who doesn’t use a debit card at all pays an average of $40.”

You can avoid a thoughtful plan with these charges. Here are some great tips from Bankrate.com:

Most banks provide “convenience” overdraft protection — which is basically a high-interest loan to cover the shortfall in the account — a consumer who’s trying to manage money responsibly could get hit with a fee of around $35.

Be sure to note all debit transactions in your check register and sign up for overdraft protection linked to your savings account to be on the safe side.

Consumers should also ask their banks in what order payments are made. Ask where you can find information on non-sufficient funds. Most banks manage payments by paying the largest items first and on down to the lowest. If your biggest item overdraws your account, you’ll pay an NSF fee for every subsequent check or debit.

Keep in mind the average American pays $1,200 a year in credit card interest fees.  If you minimize your overdraft fees with the basic precautions listed above, you will most likely pay less fees by using a debit card.

Protection Against Fraudulent Charges
One of the major benefits of credit cards is that they offer generous protection against unauthorized charges.  Under federal law, debit cards do not have the same level of protection as credit cards.

However, many debit card issuers are offering extended liability protection to make up for the legal differences.  As MSN pointed out, “in effect, check cards now have the same protections as credit cards.”  I wanted to verify this for myself.  Since Visa is one of our sponsors I was able to get a very quick response back from their spokesperson:

Despite the popularity of debit cards, consumers are often confused about the security features and consumer protections debit cards offer. Many of the same features and protections provided by credit cards are also offered with debit cards. It’s important to know that Visa debit cards carry the same protections as Visa credit cards.

All Visa cardholders (prepaid, debit or credit) are protected by Visa’s Zero Liability policy.

This policy means you pay nothing if unauthorized purchases are made on either a Visa Check card or credit card when you choose to sign for your transactions. Some issuing financial institutions offer Zero Liability protections for certain PIN debit transactions as well, but the best way to ensure you are protected is to sign for your purchases. Visa’s Zero Liability policy actually surpasses protections mandated by federal law, which in most cases caps liability at either $50 (for credit) or $500 (for debit).

The Verdict
Of course, the more cash than debit card or credit card is almost always good. Great reasons to use credit cards such as strengthening the credit ratings and income rewards points. However, if the cost overruns and fraud protection back to replace debit card from your collection, perhaps the time to look at the second.

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The question is : have you performed an insurance needs analysis, or you make a decision whether to take under the impulse and the nature of the insurance?

There are typically four different types of credit card insurance:

• Involuntary Job Loss: After you shrink or temporarily laid off by following the loss of your job that pay your monthly minimum payment for a specified period.
• Disability: Like above, your monthly minimum payment is covered for a specified time period upon becoming disabled and unable to work.
• Critical Illness: Similar to above.
• Life or AD&D (Accidental Death & Dismemberment): If you die, your entire credit card balance will be paid.

The cost may initially seem small at between $0.75 and $1.50 per $100 of outstanding credit card balance each month, but in the spirit of being frugal, is that money wisely spent?

Consider the fact that with the exception of credit life protection, this insurance doesn’t actually pay off your debt. It simply makes the minimum payments on your outstanding balance for the term of the contract. In fact, depending on the credit card and interest charges, you may sometimes find that the balance at the end of the contract is actually higher than when the claim occurred due to compounding interest.

Are those minimum payments something that would cripple you financially in the event of an illness or job loss? The answer will be different for everybody – this is just food for thought.

Similar to individual Critical Illness, Disability, or Life Insurance policies, there are a few things that bear consideration in order to make a sound decision:

• What are the terms of the policy? (For example, what are the specific definitions under which the insurance company will pay)?
• What coverage do you need? If you lose that income or become ill, will minimum payments on your credit cards be of benefit to you, or do you have other funds that will suit the purpose?
• What coverage to you already have? There is no point in duplicating your insurance coverage if you already have a CI policy in place.
• In the case of job loss insurance, what are the exact terms? You may be surprised at the restrictions of this initially appealing option.
• Is it cost effective? As a case study, let’s examine the life insurance as an example. On a $10,000 credit card balance, at $0.80 per $100 of outstanding balance, your monthly charge would be approximately $80/month. For $80/month, a 35year old non-smoking female in good health can purchase upwards of $500,000 of Term Life Insurance.
• Can you cancel the policy, and under what terms? If you do decide to take it, make sure you keep all your documentation together so canceling it when the time comes is easy.
• Are you insurable? Many balance protection policies don’t require any evidence of insurability to qualify. If you have medical issues that make you a higher risk such that individual policies would either be cost-prohibitive or unavailable to you, then maybe this is just the protection you need.

On the flip side, a type of credit card insurance, you may not realize that you may automatically have travel insurance. Use goes on the card, many credit card if you pay by automatic flight travel features and mobile coverage. In fact, you go out and purchase travel insurance before it afford to tell your credit card company to find their coverage of a specific period. You may find that you do not have to go out and get through the additional travel coverage to save a few extra bucks!

With all insurance policies, take a look at what you need, what you can afford a good hard, and is “easy option” for the long run you are providing the phone is easy.

source article : Nora Dunn

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The first step to reducing your credit card rates is to know your history. You pay for what rate? How many years is your company? Do you always pay at least the minimum payment? You are late? When asked to lower the rate of credit card companies, this information will come in handy.

The second step will tell the company and tell them you want a lower rate. More, for the first time you request more than likely, they will tell you no. Why? Due to the high rate you, the more money they earn! But do not take no answer! If they tell you not to inform them of your positive history with the company. Do not remind them of how you are a loyal customer for 10 years, or post paid. If the answer is still not asked to address supervisors. If the supervisor against, wait 15 minutes and then told. You speak a completely different person.

What if they keep telling you no? Or what if you’ve been a less than stellar client? What if you haven’t paid on time or didn’t make the minimum payment? Then it’s time for the Credit Card Rate Hail Mary. Tell them that you’ve received other offers in the mail, and if they do not meet those offers you will cancel your card. (Make sure you have a few real or pretend offers to give to them as examples.)

The key to lowering your rate is to be persistent and to remember that the credit card business is fiercely competitive. They would rather keep you as a customer than spend money on attracting a new customer. Even if you aren’t a great customer, you should still ask for a lower rate. If you carry a balance, two or three percentage points lower on your credit card rates can make a sizable difference! Remember : If you don’t ask, you’ll never know.

Below is a sample script to read to the credit card company:

“Hi, my name is __________________ . I have been a good customer for _________ years, but I’ve received numerous offers in the mail from other companies offering much lower rates. Visa/MasterCard/Discovery is offering me a _________ APR. I want to stay with your company, but I also want a lower rate on my card. What can you do for me?”

These tips will also work for increasing your limit. Just replace “lower rates” with “higher limits” and “APR” with “limit”.

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The following 6 reasons why they can cause trouble.

1. High Interest Rates
Facilitate the screening of charges than credit cards usually carry a high interest rate, often exceeding 20%. If you have low interest rates introduced to promote, read fine print to understand the promotion period, and what the default rate will be during the time expired.

2. Immediate Interest Accrual
Interest charges begin immediately after a convenience check is cashed, unlike with credit card where you have a “float” of several weeks before interest starts accruing. In other words, when you buy an item and pay with a credit card, you don’t pay interest on the amount owed until after the payment due date (if there is a balance). If you buy an item with a convenience check, the interest rate clock starts ticking when the check clears.

3. Fees
Convenience checks have a transaction fee attached, which can be up to 5%. For example, if you use a check to pay a $1000 bill, you could be charged a $50 fee. Using the check to do a “low interest” balance transfer from a higher interest card could also trigger a transfer fee.

4. Lower Credit Availability
As stated earlier, a convenience check is taking out a loan using the credit availability on your card. If you aren’t sure about the amount of available credit on your card, call the credit card company to verify the amount before using the check. These days, credit limits can be changed (i.e., frequently lowered), so if your check puts you over your limit, it could bounce or you could be charged over the limit fees. In addition, your credit score is closely tied to your credit availability, so if your convenience check uses up most of your available credit, your score will be negatively affected.

5. Less Protection
Actions under the fair credit notices, as with credit card purchase when the consumer has some protection against defective goods. These protect the don’t when you use the convenience checks apply.

6. Temptation for Thieves
If you accept to facilitate the registration message and you aren’t the temptation to use them, and realize that other people may be tempted. Left blank check will be invited to theft, so shred the checks to avoid being on the hook for someone else’s spending spree. Studies show that most cases of identity theft is caused by a friend or family member.

In short, don’t use convenience checks, unless you understand the term and know all the potential consequences. Otherwise, these checks can be truly inconvenient.

source article : Hollis Colquhoun

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Some features are specific to the consumer may instill financial discipline and business owners credit card. If you want convenience and security of credit card, without incurring the risk of financial debt and to pay charge card can be for you.

No revolving credit. A true charge card, such as the ones offered by American Express, Diner’s Club International, and MasterCard International (Eurocard), allows cardholders to pay with plastic, but the requirements for each statement cycle balance of payments. Since credit is not extended, there is no financial charge, not to consider the APRs. However, late payments may incur as a percentage of the unpaid balance of fixed costs to be calculated and charged.

Business owners have additional flexibility. American Express, for example, has an “extended payment option” for travel expenses or capital equipment purchases; finance charges are applied to outstanding balances associated with these transactions. Additionally, their Plum Card allows cardholders to defer payment up to 60 days.

No pre-set limit. Another charge card feature is the no pre-set spending limit. There are limits, just not numbers that show up on card offers (which often mention the highest possible limit) or on monthly statements. Charge card providers may authorize card charges based on criteria such as credit scores, income, and payment history. According to American Express, “No pre-set spending limit does not mean unlimited spending. Purchasing power adjusts with your use of the Card, your payment history, credit card record and financial resources known to us, and other factors.”

The charge card, then, could help instill discipline in cardholders as they may be less apt to overspend if they realize that balances must be paid in full every month. And, not having to pay finance charges could reap cost savings. Similarly, though, a well-disciplined credit cardholder could use the same pay-in-full tactics and also avoid finance charges.

In researching types of charge cards, I noticed that Kohl’s offers a Kohl’s Charge Card, which is really a credit card that finances Kohl’s store transactions only (its name may distinguish it from an affinity credit card that can be used with other merchants, such as L.L. Bean’s credit card). Balances can be carried over from month to month, and interest is charged on these balances. So, check the terms of the agreement rather than relying on the card’s name to understand its uses and your obligations.

So, why bother with a charge card? Being required to pay balances is a great incentive to keep spending in check while enjoying the convenience of plastic. But consider all features and your planned purposes before signing up for a new card.

Charge Card Summary

Essential features

• No finance charges
• Balances must be paid monthly or every statement cycle
• No funds are automatically taken from bank account*

Typical features

• No pre-defined spending limit
• Late charges billed for late payments*

Possible features

• No annual fee*
• Discounts on certain products or services*
• Specialized insurance (such as travel insurance)*

* These features may also be found in a credit card.

source article : Julie Rains

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In particular, it will eliminate some of the past practice of the more shocking as the so-called “‘double cycle of billing,” arbitrary rate of increment and exceed your credit limit heavy fees. However, when the new law also promised consumers that their credit card bills on time for more transparency, card holders still need to beware of traps and tricks of a whole new series.

Higher Fees
For starters, consumers could suddenly find themselves socked with a variety of new fees and charges.

Banks and other card issuers have already been aggressively implementing new fees or raising existing ones to help make up for any potential revenue lost as a result of the CARD Act.

Last May, for example, Discover Financial Services announced it would start charging a 2% fee on all purchases made outside the United States.

And whereas 3% was once the standard charge for rolling over a balance from one credit card to another, issuers like JPMorgan Chase are now assessing customers a 5% fee, according to Bill Hardekopf, CEO of the card rating site LowCards.com.

But with the new law setting no restrictions on the types of fees issuers can implement, consumers should pay particularly close attention to the “Terms and Conditions” section of their statement so they know exactly what they are being charged for, warn experts.

“Fees are the one source of revenue that will become more and more important,” said Hardekopf.

Tougher to Get a Card
As Congress moved closer to passing the law last spring, banking industry advocates cautioned that shaking up the status quo would mean that credit would be more difficult to come by for consumers.

So far, that seems to be playing out as predicted.

The amount of credit made available to consumers by credit card companies plunged by $252 billion, or 7%, between March and September of last year, according to IRA Bank Monitor.

Credit is poised to tighten even further. As part of the CARD Act, credit card companies will be severely restricted in how they market cards to college students, potentially shrinking an important part of their business.

But issuers are also expected to implement much more severe underwriting practices. Some may demand, for example, details on an applicant’s income or proof of other savings.

Consumers with poor or even a mediocre credit history, as a result, may find it much more difficult to get a card or have their credit limit extended after the new law takes effect on Feb. 22, said Joseph Ridout of the advocacy group Consumer Action.

“I think it is fair to assume that credit card companies are going to scrutinize their potential customers a lot more closely than they did in the past,” he said.

Fewer Rewards
Consumers may also be increasingly unable to enjoy the fruits of their spending as a result of the new law.

It wasn’t that long ago where a cardholder could easily earn credit towards a free airline ticket or cash back for every dollar spent. But issuers are now quietly becoming more stingy with their rewards in an effort to save money.

American Express, for example, recently told its co-branded card customers they would not be able to accrue reward points on their purchases if they were late with a payment. Only by paying a $29 fee could they recoup those points.

To avoid missing out, experts suggest that consumers carefully read any notices they get from their credit card company about changes to their loyalty or rewards program.

“Rewards can be another way of penalizing people too,” notes Nick Bourke, manager of the Pew Safe Credit Cards Project.

Rising Rates
One of the biggest victories for consumers in the new law are a series of limits on how and when credit card companies can set interest rates.

Whereas in the past, banks could raise your annual percentage rate just for missing a payment on your cell phone bill or without giving a consumer much advance notice, such practices will soon be outlawed. Issuers now have to alert you at least 45 days in advance before raising your rate under the CARD Act.

The new law won’t shield consumers from rate hikes altogether, though.

In recent months, banks have moved consumers over to so-called variable rate cards, whose rates fluctuate based on the direction of the prime rate. And with that rate at historic lows, experts said consumers should be prepared for at least a moderate increase in their APR at some point.

The new law does not include any class of interest rate cap banks and issuers can charge a late payment in the month of their customers before or more.

Credit card companies may still be forced by the second half of this year for the Bank scheduled to open those days to complain Federal Reserve will impose penalty rates and fees in the prior review of any usury rate.

But that doesn’t always means big rate rise to, Bourke said – especially consumers flooded the grounds of debt. Therefore, experts suggest that consumers should take care to stay current in their additional notes.

“The [CARD] Act doesn’t absolve anyone from having to pay back their bills or take people out of harm’s way if they run into trouble,” said Bourke.

source article : David Ellis

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