Credit Cards

How to Master Your Credit Cards

December 13, 2015 by arizona

Mastering the credit cards used to be difficult for many people. Unless financially savvy, most did not have a clue until it was too late. Now there is so much information out there and so many financial consultants willing to help, that young or old, someone is willing to help the consumer understand.

[Read: How To Dispute Credit Card Charges]

Mastering the Choice of a Credit Card

You need to know how to choose the right credit card that is going to work for you. Here are just a few cards:

Standard Card – revolving balance, no rewards
Balance Transfer Credit Cards – low introductory rate
Reward Credit Cards – cash back, points, and travel.
Student Credit Card – for college students and new to credit
Charge Cards – preset spending limit
Secured Credit Cards – credit is equal to secured amount
Subprime Credit Cards – high-interest card for poor credit
Prepaid Cards – does nothing for credit history
Limited Purpose Cards – used like credit cards with a minimum payment and finance charge
Business Credit Cards – standard business credit and charge cards

Mastering the Research of a Credit Card

Now here is where you are going to put your research skills to the test.

1. Reading the Agreement

Understanding Different Interest Rates
Annual Percentage Rate (APR)
Finance Charge
Prime Rate
Penalty APR
Periodic Interest Rate
Daily Rate

2. Know and understand your fees

Application fee – the fee for the application
Annual fees – fee charged for the convenience of having the credit card
Balance transfer fees – the fee to transfer the balance
Cash advance fee – the fee for the cash advance service
Finance Charge – the monthly charge for carrying a balance past the grace period
Late fee – making a payment after the due date or less than a payment by the due date
Over-the-limit fee – balance beyond your limit
- Return check fee – insufficient funds in checking account
- Foreign transaction fee – for currency made in a foreign transaction

Get to know your credit Card Statement

One of best ways to master your credit cards is to get to know just how to read your credit card statement. You can either have them sent through the mail or get them electronically, once you set up an account online.

A great example I found that explains a credit card statement is “How to Understand Your Credit Card Billing Statement, “at credit.about.com. The article shows what the summary area should look like. It also shows what a payment information area should look like. The monthly interest calculations are pictured so it can be found more easily on the statement. Each section is pictured and explained so that it is easy to become familiarized with the credit card statement.

One of the biggest hurdles to overcome is the ability to master your credit cards instead of allowing them to master you by becoming dependent on them. Try not to carry them unless there is a specific purchase you intend to make. Avoid using the convenience checks or taking out cash advances, as well. They are the most expensive transactions a credit card company offers their customers.

Another way that you can master your credit cards is to keep up with the payment schedule, paying the balance in full, or at least paying the minimum due before the due date. It is best if you keep the purchases you make on your credit card within your budget.

If you are starting to feel like you are being caught up in a credit card merry-go-round, start working towards paying off one card at a time while making the minimum payments on your other cards. This way you will be eliminating your debt and eventually you will become debt free sooner than if, you had continued to pay the minimums on all your cards.

Another way to master your credit cards is to stay on top of them. Know your balances. Whether you are going shopping or making sure that a transaction has cleared. It is a good practice to check your balances. Another reason is to watch your balance for suspicious activity.

To master your credit cards may be as simple as limiting your credit cards. It may be handy to have a fistful of cards, but it is tempting and could cost your credit score. Sometimes it is better to close a credit card account down if it has a high-interest rate. Make sure the card is paid in full before you do this, though. It will have an impact on your score, but a lender looks at your file more than at your score. They will see it was paid prior to being closed.

[Read: Using A Balance Transfer Credit Card]

When you begin to start mastering your credit cards, you need to watch for better deals on interest. If you have any questions about your credit cards you should always contact your customer service. Don’t be shy about it. They are there to explain and help you.

How far are you when it comes to mastering your credit cards?

How Many Credit Cards Are Needed For Good Credit

October 24, 2015 by arizona

Have you ever gone out to dinner with your best friends and when the time came to pay the bill, your card had been declined? Have you ever gone grocery shopping and when you got to the front of the line your card had been declined? Soon after were you informed by your credit card company that your credit card account had been closed unexpectedly? Either of these situations could cause a lot of distress. Many people experience the unexpected closing of their credit card account due to various reasons. In this article, I will explain how a creditor can unexpectedly close your account without your consent. The closing of your account can leave you in sticky situations so it’s best to know how to prevent the situation from occurring.

[Read: Key Signs That You Own Too Many Credit Cards]

Unexpected Credit Card Account Closure

The unexpected closure of a credit card account by the creditor can happen for various reasons. Credit card account shut downs can happen for the credit cardholder’s irresponsibility. If the card user is not paying the bill on time, is exceeding the credit limit, or is defaulting on the account, the credit card company will typically close the account. Other card users experience account closures for not using their credit card frequently enough. If you are not spending frequently, credit card companies are allowed to close your account without warning. This is legally allowed because companies feel that if a user is given any notice about their account closure beforehand, he or she would have the possibility to rack up the charges just before the account closure. Since credit card companies are businesses working to make a profit, they often close unused accounts to save on account operating expenses. Unused accounts are costing them money but are not allowing them to make money.

How To Avoid A Credit Card Being Cancelled

To avoid being in an embarrassing and sticky payment situation, it is best to know the steps to avoiding an unexpected credit card cancellation. Different credit card companies have different requirements and spending standards that they abide by. Because credit card companies are all unique, there is no direct way to avoid an unexpected account closure, but I can provide general suggestions.

Be A Good Patron: The most obvious way to prevent your account from being closed unexpectedly by the creditor is to be a good customer. Pay your bills on time and every month. Also do not exceed your credit card limit and do not spend money that you cannot afford to pay back.
Use Your Card: The second most obvious way to prevent your account from being closed is to use your card. Making regular purchases keeps your credit account active and the credit card company pleased. If the credit card company is making money from your spending, they will not close your account.
Keep Your Account Active: Whether you use your credit card as often as recommended or not, you can still keep your account active, even with little spending. If you are spending frequently and paying responsibly, your account will automatically be active. It is recommended that if you do not plan on using your credit card often, make one purchase on the card and pay it off slowly. Doing so will keep your account’s activity level high, while keeping your credit card bill and actual spending low.
Consider Closing The Account Yourself: If for any reason that you have a card and you have decided that you do not like having it for various reasons, close the account yourself. You can always find a more suitable credit card and cancel the old one. Often people close their own credit card accounts due to high interest rates or lack of perks and benefits. Just ensure that you replace it prior to closing the account to prevent an increase in your credit utilization ratio.

How Many Credit Cards Are Needed For Good Credit?

On average, Americans own 2-4 credit cards. With that being said, there is no ideal number of credit cards that one should own in order to obtain good credit. How many credit cards an individual has is variant on his or her financial needs and goals. However, having more available credit is better than having little available credit when trying to build credit. At the end of the day it’s about how well you manage the credit cards that you do have.

[Read: Finding the Best Cash Back Credit Cards]

Whatever your decision is for the amount of credit cards that you want to own should suit your lifestyle and financial goals. Think carefully about the responsibility of owning numerous cards. But also think about the benefits and assistance that credit cards can provide you for maintaining your life and financial goals. Many banks such as Bank of America offer wealth management classes to get you started.

Key Signs That You Own Too Many Credit Cards

January 11, 2015 by arizona

As a consumer, you’re targeted day in and day out with credit card offers in your mailbox and email, at the grocery store and on the television, so it’s no wonder that a majority of Americans have debilitating credit card debt riding over their heads. The average adult in America has at least four thousand dollars ($4,000) in credit card debt while the average adult who doesn’t pay down their balances has more than eight thousand dollars ($8,000) in debt.

Get Serious about Your Debt

More Americans are making it a point to downsize when it comes to credit cards, but there are some people that are so wrapped up in their plastic world that they can’t see a way out. It’s already been proven that using a plastic card for purchases creates a dissociation from the monetary value one is racking up, so it almost goes without saying that having multiple cards could only prospectively make the situation worse. Do you recognize signs that you own too many credit cards? Keep reading to learn more about the key signs that you own too many credit cards.

Signs That You Own Too Many Credit Cards

You’ve got no more free card slots in your wallet. If your favorite wallet comes with six credit card slots, that’s great: but that doesn’t mean you need six credit cards! In fact, you want most of the cards in your wallet to be rewards cards or gift cards: the kinds of cards that don’t come with a line of credit attached. When you have multiple credit cards, it becomes very difficult to keep track of balances, interest rates and which cards were used for what purchases and this could be one of the signs that you own too many credit cards. This will make it more difficult to maintain a budget you can afford. It’s also make it easier for a potential thief to ruin your credit score if you ever lost or misplaced your wallet.
You can’t keep track of which in-store credit cards you’ve already applied for. It happens all the time: you’re checking out at a store you love to shop at when the clerk asks if you’d like to open up an in-store credit card account. They reel you in with the prospect of saving ten or fifteen percent off of your in-store purchases, and of course that’s going to pique your interest. If you can’t remember if you even have an in-store credit card with that establishment already, that’s one of many signs that you own too many credit cards!
You’ve already been denied additional credit cards before. If you’ve already got one or two credit cards under your belt and you’ve tried to get another only to be denied, this is one of those signs that you own too many credit cards. Your existing lines of credit and the requirements of eligibility are the reasons for your application being denied. Your spending habits and payment history are sending out warning flares to those credit card providers and they’d rather not take the chance on you.
Can you remember the mailing address associated with that card? When you’re shopping through an online portal, the mailing and billing addresses need to be provided for a purchase to be completed. If you’re trying to buy something and you can’t seem to remember either of those crucial bits of information, you’re probably facing the signs that you own too many credit cards. Consolidating your balances might be a wise idea for you.
Your spending is all over the place! If it’s a challenge for you to keep your spending in order, that’s one of the big signs that you own too many credit cards. Having a credit card account requires a certain level of accountability and responsibility. Spreading your expenses around on different cards with different due dates won’t ease your financial burdens. If you can’t organize your credit card balances around your budget, you’re setting yourself up to fall down a rocky slope. You only want to have as many credit cards as you can truly afford to pay off in full each month. You also have to be sure that you’re not missing due dates so you avoid all of those extra fees that can come into play and damaging your credit score.
You can’t view all of your active credit cards on a single webpage. If you’ve got a budget tool like Mint, you know how useful it can be when setting budgets and staying on track with payments. You might have a problem if your Mint account is chock full of different accounts though. Even if you tend to each account with careful planning, having too many credit cards is like asking for an avoidable disaster. One wrong step or missed payment could derail all of your finances!

Weirdest Cases of Credit Card Theft

November 14, 2014 by arizona

So, you have had your home burgled well this is not just an invasion of your property but also your privacy. Whilst this is no fun at least if someone steals your and uses your credit card you at least get to spy on the thief when the statement arrives and you can see what they have been trying to buy in your name.

However, if someone steals your identity and opens new accounts in your name you need to act quickly reporting this to the police and then jumping through a number of obstacles just to clear your name.

If it is just a stolen credit card or card number you do not have the worry as the consumer liability is limited by law for losses up to $50 with the majority of companies not holding the account holder responsible for any amount, so once you have reported the crime you can sit back and spy on the crook!

The following are some real examples of the weirdest cases of credit card theft:

1. Must Have Been a Really Nice Litter Box

Martin Bowling, a success in the search marketing field, was charged with the theft of a subscriber list from his former employer, the Woodcraft magazine. He went on to use the information to charge more than $4,000 worth of goods, and these charges included a self – cleaning cat litter box. In his defense most cat owners have times when they would do anything to get out of cleaning the cat litter box!

2. Unusual Wallet

Another weird case of credit card theft was undertaken by Ann Hernandez, this time it was not what she brought but where she supposedly stored the stolen credit cards and information. Whilst one cannot reveal the exact whereabouts it would be fair to say that she would have been asked by police officers to squat and cough to reveal the evidence.

3. I Just Wanna Be Me

Another weird case of credit card theft occurred when a Chinese graduate student Li Ming tried to commit fraud by impersonating himself. He ran up debts on his cards and instead of paying these he faked his own death complete with obituary and then at a later date tried to use a copy of his own birth certificate to apply for a new driving license. His though process was that because his surname was one of the most common in China he thought no one would notice. Unfortunately for him they did and he was exposed.

4. Weekend at Eunice’s

An Afghan war widow in England received a bank statement addressed to the former owner of her home. After Mrs Nicola Marlton Thomas looked into the details she found that Eunice Lees, the account holder had been dead for two years and left no other family. Marlton Thomas withdrew all of the money in the women’s accounts and applied for credit in the name however this weird case of credit card theft was unveiled as the purchases were not typical for a 91 year old!

5. The $9.84 Scam

Another weird case of credit card theft occurred earlier this year when a lot of consumers made complaints about a mystery charge of $9.84 on their statements and it was unclear where the charges were coming from or whether the victims had a link. There was just one common denominator and this was that it became clear that most people won’t check their statements carefully enough to report a charge under $10!

6. Straight to the Top

The weird case of credit card theft concerning Abraham Abdallah is bizarre in its brazenness. He picked up the Forbes’ list of the richest Americans and started at the top gathering social security numbers, birthdates, home addresses, and even credit card numbers through a combination of Internet research and social engineering. This thief then tried to use the credit card numbers of the likes of Oprah Winfrey, Steven Spielberg, and Warren Buffett to purchase expensive goods, and reportedly according to the New York Post also bought two brownstones in Brooklyn!

7. Spielberg Part Deux

Speilberg fell victim to not one but two weird cases of credit card theft when James Rinaldo Jackson tapped into his American Express account whilst he was in prison. Whilst James Rinaldo claimed that he just wanted to snoop on his idol’s purchases. However he stole other people’s credit accounts to pay for goods that he used to pay other inmates with. Allegedly he then sent a letter to Hollywood director and Yahoo! CEO, Terry Semel, which contained the personal information for many Hollywood personalities as part of an unsuccessful movie pitch. When he never got the movie deal he is said to have used the information to buy all manner of things.

8. Beyond the Pale

The final weird case of credit card theft is one of the worst cases of theft that I have heard of for a long time. Apparently the site of the Malaysia Airlines crash has been plundered for credit cards and other personal documents for possible use in identity theft.

As you can see there are many weird cases of credit card theft that are quite unimaginable however it is big business so do not let yourself fall prey to these fraudsters.

The Situation with Secured Credit Cards

August 17, 2014 by arizona

When most people think about – or hear about – secured credit cards, they begin to think that a secured line of credit can only be used by people with a bad credit score -it’s not for anyone other than that group of people. That conception isn’t necessarily true! Secured lines of credit aren’t just for people with bad scores – it’s for people who don’t have any score, like students or internationals who don’t have any credit history within the United States. Secured credit cards aren’t just for people with bad scores: it’s for people who are just starting.

So How Do Secured Credit Cards Work?

You place in a security deposit which acts as a form of collateral should you have to default on your payments. Your credit limit on the secure card? It’s based on how much money you deposit. Makes enough sense, doesn’t it? How much credit you get depends on the particular lender, but it normally is between 50% and 100% – sometimes it goes a little higher, but you can expect to be getting somewhere in the above neighborhood of your deposit in credit. (So if your lender offers a 50% rate and you put in $300, you have a credit limit of $150.)

Whatever your circumstances are, a secured credit card can be the right choice for building up your credit for a good financial future. Because you’re taking the risk and responsibility by way of the security deposit, and not the lender, it’s easy to get approved to begin building you score. If you’re worried about what people think – don’t! It’s not as if a secured credit card really looks any different from a normal credit card.

What Card Should You Get?

If you look around, you’ll find people offering secured lines of credit. The organizations that do are everywhere – banks, major lenders and even credit unions probably offer one. What you want to keep an eye on is the fine print: while a secured line of credit can be a smart investment for the future, if you aren’t careful, it can cause more harm than good. Make sure the card reports to every credit bureau in the US (Experian, TransUnion and Equifax) and make sure the APR isn’t so high as to break the bank.

Be sure to apply a little bit of common sense – look for incentives for your future, the lowest rates you can find and the best sort of fee structure. It’s more important with a secured credit card – because all of the benefits that these companies offer are usually tied up in prime (that is, traditional) credit cards.

Start reading into the contract Look at the fees, interest rates, the function of grace periods and other kinds of costs that you wouldn’t normally have to deal with – and look for what will help you in the future.

Does the contract allow you to increase your line of credit over time if you are responsible, and does it have a fee?
Will lender allow you an ‘upgrade’ to a traditional line of credit over time, and will it cost you?
Does the card give any kind of interest or benefits like deposit, points or miles?

Mistakes to Avoid with Secured Credit Cards

A secured credit card is not the same as prepared cards! The deposit made when you are approved for the card is not used to pay off your credit – you need to pay from another account on your credit every month in order to keep your fees from lagging. As always, remember to read the fine print: see what happens to the security deposit after you close the account. You might only get some of it back, you might get all of it back, but be sure that you know what!

Keep an eye on your interest rate! The annual rate is often lower if there are a lot of upfront fees in order to apply for the card, and higher if the initial cost is cheaper – and the lender might ask for different fees depending on their own mode of operation.

Remember that on a secured credit card you cannot negotiate fees. They ignore the credit score entirely – whether you have a great line of credit or a bad line of credit or no line of credit, the fees of a secured credit card don’t take that into account. Also keep in mind that chances are you won’t be getting rewards or benefits for the secured card – look forward to that in the future.

What It Means:

Secured credit cards can be a good way to first build or to rebuild a score of credit – and it’s a slow process. Remember to be patient, and remember that a secured line of credit isn’t a magical, instant fix: it’s something you will have to use responsibly for it to reflect well on your score.

Finding the Best Cash Back Credit Cards

November 18, 2013 by arizona

If you are using a credit card then you must look for the best cash back credit card this will enable you to be able to make the most of the money that you are spending. There are lots of different options available and you will need to know the best way of finding out the best cards for you and your pocket.

If a credit card is going to give you money every time you spend some money then it is important that you find the right card for you. If you use the card wisely you will be able to pay of the balance each month and then at the end of the time period you could get a substantial payment in the form of a cash back payment. This can vary depending on the rate that they are offering and the amount that you use the card for.

Different Types of Cards

There are some different types of cards that are available and it will depend on what you are looking for in terms of reward as to which card you go for.

Travel cards – These cards allow you to collect points which you put towards the cost of flights. There is little point collecting these points if you have no intention of going on holiday where you need to catch a plane.
Reward points – These cards you collect points as you spend money on your card and you are rewarded with a point, the ratio of points to amount of money spent can vary as to the place of shopping as well as to the card itself. These points can then be exchanged for goods or services up to the value of the points balance.
Cash back – These cards actually give you a percentage of the amount that you spent back. This amount will add up over time, but normally you only get the cash back at certain times of the year. The amount of money that you can earn can vary with some offering more cash-back depending on the store that you are shopping in. There are so many of these types of cards available it is important that you find the right card for you.

Looking for the best cash back credit card can be difficult and being able to understand some of the terms that are mentioned will make that choice a bit easier.

Bonus

Many cards are offering a bonus just for signing up for the card and this can mean that even before you have used the card you will be eligible for a payment. This can be great but often there are terms and conditions that you will need to meet to get the payment, so caution is required that you are sure that the criteria is acceptable.

Percentages

The best cash back credit cards will have the higher percentage attached to them. This percentage can be as high as 6 % and that will give you more in return for your spending than a card that offers just 1 or 2 %. But you need to check out the terms and conditions first, there might be a minimum monthly spend and this could be more than you can afford and this might jeopardize the amount of cash-back that you receive.

Places to Spend Verses the Return

Some of the best cash back credit cards are the ones that are offering different percentages in return for spending on different areas of your budget. They know that people need to eat and they could offer higher cash-back in return for using the card to pay for your groceries. It is a way that the companies are trying to get their cards used for everyday purchases and this is alright as long as the person who is spending is paying all the balances back at the end of each month, otherwise it is the credit companies that are winning because they are claiming interest on the purchases that you have made and that will be more than the cash-back that they are offering.

Fees

There are still cards that will charge an annual fee for using the cards, these cards are the ones that claim to offer you even more than what you would normally get from a credit card. If the annual fee is still payable and you are getting limited benefits then it might be time to reconsider paying a fee, there are plenty of cards available that do not require the person to pay a fee and this might be worth checking out if you are looking for the best cash back credit card.

Strings Attached

If you are looking for the best cash back credit card for you then you will need to read the terms and conditions of getting the cash-back. If they are within your boundaries then the card might be for you. The best way to work a credit card is to pay the balance every month, this way you will not be subjected to high interest charges.

Bankruptcy on Credit Cards

September 6, 2013 by arizona

Bankruptcy on credit cards is fairly common in the US. Every year, millions of Americans lose their jobs or experience unanticipated expenses, making it impossible for them to make minimum payments on previously incurred credit card debts without sacrificing the necessities of life, or borrowing additional money to pay older debts. Bankruptcy is a legal procedure designed to stop what might otherwise become an irreversible downward spiral. Making a bad credit card debt situation steadily worse.

The US Bankruptcy Code and Credit Card Debt

There are two Chapters of the US Bankruptcy Code that can provide bankruptcy on credit cards to individuals needing such protection. Chapter 7, often referred to as “total bankruptcy” requires liquidation of all of the petitioner’s nonexempt property, with proceeds distributed to creditors. Chapter 13 involves a court ordered restructuring of all debts, including credit card debts, allowing repayment over 3 to 5 year period.

Filing for Chapter 7 Bankruptcy protection may be particularly advantageous to qualifying individuals with very few or no nonexempt assets that could be liquidated. Chapter 13, the other hand, is a better option for individuals who do not qualify for Chapter 7, or who have substantial assets they would prefer to keep well paying off credit card debts over time.

Petitioning for Chapter 7 Bankruptcy Protection on Credit Card Debt

Filing a petition for Chapter 7 protection against collection actions by credit card companies is a long and somewhat detailed process. Petitioners for bankruptcy on credit cards may it necessary to employ the services of an attorney or a company specializing in the preparation of bankruptcy petitions. Steps in the filing process include:

Declaring whether the petitioner is filing as an individual, jointly with a spouse, or jointly with another party, such as a business partner. If the petitioner files as an individual, protections, which may be provided by the Court will apply only to that individual. A spouse or business partner may still be fully liable for debts they incurred with the petitioner.
Providing evidence that the petitioner has participated in an approved budget and credit counseling program within the past six months.
Paying required fees including the $245 case filing fee, $46 miscellaneous administrative fee, and $15 trustee surcharge (unless the court agrees to waive those charges based on the petitioner’s inability to pay).
Listing all creditors and the amounts of their claims, including any non-credit card creditors.
Identifying the sources, amounts, and frequency of the debtor’s income.
Providing a detailed list of all the debtor’s personal property, real estate, and other assets, including bank and investment account balances.
Declaring which of the above listed assets the petitioner considers “exempt from seizure” under State Law or Federal Law.
Providing a detailed list of the debtor’s monthly living expenses, including such items as food, clothing, transportation, shelter, medical costs, utilities, taxes, etc.

All of the above information must be provided on court supplied forms or schedules. In cases where there are multiple parties to the petition, the forms must include required information for all parties to the petition.

When all required information has been received, and presuming that the court determines that the petitioner meets eligibility requirements, including the “Means Test” requirements as set forth in Chapter 7 of the US Bankruptcy Code, the court will issue an order stopping all credit card company collection activities. That order may not apply to certain other kinds of debt owed by the petitioner.

A Bankruptcy Court Trustee will then schedule a “Creditor Meeting“, normally within 40 days of the completion of the filing. All named creditors are invited to the meeting, as are other individuals not named in the filing, who believe they have a legitimate claim against the petitioner. It is important that the petitioner clearly understand the procedures involved in the Creditor Meeting, which include:

The Court Trustee will place the petition or petitioners under oath.
The Court Trustee will ask a series of questions designed to ensure that all parties to the petition understand the potential consequences of having debts discharged under bankruptcy, including impacts on their credit history and credit score.
The trustee will also ensure that the petitioners are aware of alternatives to Chapter 7 bankruptcy.
The Court Trustee will review written information provided by the petitioner, and require the petitioner to reaffirm the accuracy of that information under oath.
Named creditors and others who believe they have legitimate claims against the debtor are given the opportunity to challenge information provided by the petitioner, and provide their own perspective surrounding the debt owed to them.

Under certain circumstances, the trustee may declare the petition “presumptively fraudulent”, and refer the petitioner to alternate sources of relief such as bankruptcy under Chapter 13 of the Bankruptcy Code. Alternatively, the trustee may summarize the findings of the Creditor Meeting, and pass them along to the bankruptcy judge presiding over the case.

Petitioners for bankruptcy on credit cards go have only credit card debt may then be granted the relief they seek, and restart their financial lives with a clean slate.

Final Thoughts

Individual seeking bankruptcy on credit cards may find the relief they need through the Chapter 7 Bankruptcy process. It should be clear, however, that the path to that relief is not an easy one, and that the path has redundant capacity to root out fraudulent petitions.