New Credit Card Rules Give Consumers a Break – in 2010
Deceptive credit card practices that have kept consumers permanently in debt are now being reined in by Federal Regulators. That’s the good news. The bad news is that the new rules don’t go quite far enough, and they don’t take effect until 2010.
You know you should read every contract before accepting it, but credit card contracts are often 30 pages long and written in a form of “legal-eze” that even lawyers find hard to decipher. Thus, most consumers don’t even attempt it. If you’re like most people, you probably don’t even know where you put it.
In recent years, credit card companies have added a variety of clauses designed to maximize penalties and fees, while allowing them to increase interest rates to 25% - and in some cases even higher.
A common ploy to lure consumers into the debt trap has been to offer rock bottom introductory rates – some even at zero percent for the first few months. Accompanying those offers are a few checks – with a letter encouraging consumers to “take that vacation” or “purchase that new furniture” with the checks.
Once the introductory rate period ends, rates go back to “normal” – or higher.
To be fair, some companies offer those rates on balance transfers and convenience checks until the balance has been paid off. But they don’t stress the fact that if you use your credit card to make a purchase, the interest on that purchase will be at a high rate. And – your payments will be applied first to the balance transfer or check at the low rate. Thus your high-interest purchases are buried where you can’t begin chipping away at them until you’ve paid off the low rate balance.
Under the terms of “Universal default” credit card issuers are allowed to raise those introductory rates in the event you are late with a payment – and that’s fair except for one thing. The late payment doesn’t have to be on their account – it can be a late payment on any other account that is reported to the credit bureau.
The new rules won’t completely prohibit Universal default, but they will prohibit the card issuers from
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Bad Economy, No Job – How Can I Repay My Debts?
When you have collection agencies calling you and you are in debt up to your eyeballs, it’s time to take action and quick. First step you need to take is to get a job, sooner than later. You cannot afford to use the bad economy as an excuse any longer. The bad economy may be standing in the way of you getting the job that you desire, but it shouldn’t keep you from obtaining gainful employment that will help you start paying your bills. Your only priority when you have debt to repay should be to get a job that allows you to have enough income to start repaying those creditors.
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Credit Card Debt – ‘Til Death Do Us Part
There are a lot of things you can’t take with you when you die, and in the case of credit card debt, it can be a good thing. However, this can change depending on where you live and whose names the credit card is under. Of course, the simplest scenario is that the credit card was on your name alone, with no joint account holders. In this case, any debt owed on the card, after death, would belong to only you and no one would inherit it.
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Prepaid Credit Cards – The Alternative for those with Bad Credit
In today’s technological era, it seems that more and more business and personal transactions are being done over the phone or online. As opposed to the old days when things were done through the mail or you had to go in person, the electronic age makes everything quicker. You can conduct routine transactions, from the comfort of your home, during almost any time of the day. You can do almost anything within minutes from making hotel reservations, booking airline tickets, or purchasing something from across the country on EBay or Amazon.
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Credit Repair Companies-Buyer Beware!
After some unfortunately bad financial decisions, you find yourself with a very low credit score and collections agencies hounding you on a daily basis. You are desperate to find a way out of this mess that you have landed yourself in. The credit repair commercials on TV and radio seem so attractive. They claim they can make all your credit woes go away with magic solutions that seem almost too good to be true. Well, most of the time these claims are really not true and may even be illegal. Although legitimate credit repair companies do exist, you must be aware of some very key facts if you plan to sign up with one.
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Build Good Credit from the Get-Go
As a young person just starting out, the best way to ensure your credit file stays healthy is to take all the right steps from the get-go. It’s never been more important to have a solid credit history than it is in today’s world. Creditreportblog.com offers some basic steps to ensuring that you get started in the right direction.
· Open up checking and savings accounts, if you don’t have one already. Having a bank account is sort of sign of stability in the eyes of lenders.
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Credit Card Consolidation-Making Life Simpler?
When consumers have mounting debt on their hands and interest rates keep rising, some look towards finding ways to consolidate their credit card bills. If you are a consumer that falls into this category, Creditreportblog.com recommends that now is the time for you to consider transferring high-interest balances to 0% or low interest cards.
When looking towards doing balance transfers, shop for the lowest interest rate, not the lowest payment. Some companies that offer lower monthly payments are just stretching out your repayment, which ends up just costing more in the long run. Although many credit card companies offer this option to transfer balances, you should read the fine print so that you know exactly what the terms are and what costs they may incur if you choose to balance transfer.
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Avoid Digging Deeper into Debt
So you’re already in as much debt as you can possibly handle? The key now is to stop digging yourself a deeper hole that might be impossible to get out of. You need to stop and tell yourself that enough is enough! Once you have started down that road to financial ruin, it is sometimes hard to get off unless you really just stop and think of what are the real important things in life. Most people will discover that the material items that they “must have” take a back seat to the peace and tranquility you feel when you are debt free. Creditreportblog.com recommends looking at the following tips that can help you get on that right path of financial responsibility.
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Maintain the “You” in Your Credit Union
However, when it comes to credit, too much togetherness can be bad for your bottom line. Even though there’s no such thing as a “couples” or “joint” credit report, if you both are named on a loan or listed as joint account holders, any flub-up (late payments, defaults) on the account will mar both of your credit files, no matter who forgot to put the mortgage check in the mail.
CreditReportBlog.com recommends that all couples make looking at each other’s credit reports a part of the screening process once things start to move towards the marriage phase. As skeptical as it sounds, there is never a guarantee that any marriage is going to last forever. An uncomfortable conversation now can avoid an even more uncomfortable situation later, if things turn sour with your finances.
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Increasing Credit Worthiness
If you have none to little credit history, there are steps you can take to start building that credit history and in turn, improve your personal credit worthiness. Until you have a history of favorable transactions in your credit file, lenders do not know whether you are a good credit risk or not. Here are some unique steps you can try to increase your credit worthiness:
· Try applying for multiple credit cards within 1 year. Although they say that any inquiry into your credit file as a result of a credit card application automatically lowers your score, there is a hidden secret behind this. An inquiry for 1 credit card application has the same effect as 10 inquiries from 10 different applications if they hit the credit bureaus within 1 calendar year.
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Honey, I cheated with your checkbook
Twenty nine percent of people in a committed relationship admitted to lying to their partner about their spending habits, according to a Harris Interactive survey of 1,796 people ages 25-55.
Money can be a source of happiness and dismay in a marriage. Having too much or not having enough can spell out problems for an otherwise happy couple. It gets worse when secrets are kept from one another and spending habits threaten the financial well-being of the marriage. More and more Americans admit to lying to their partners about their spending habits. Read more
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FICO 08 May Change Your Credit Score
The credit scoring formula has been periodically updated over the past 20 years, with changes in technology. FICO 08 will make the scoring system more sensitive to multiple late payments and less sensitive to isolated incidents of late payment or those that occurred a few years ago,� states Craig Watts, Public Affairs Manager, for Fair Isaac Corporation, the creator of the credit scoring system.
CreditReportBlog.com - As credit reports are increasingly being used as the basis of making major decisions concerning many facets of a person’s life, it is more and more important that the FICO score be as precise as possible in giving a true picture of one’s financial well-being. As we all know, your FICO score can affect possible employment, all loan applications ( big or small ), rental applications, etc. Read more
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Easier, cheaper credit report freezes
SACRAMENTO - Gov. Arnold Schwarzenegger Monday signed legislation to put the deep freeze on fees charged for freezing credit reports.
http://weblog.signonsandiego.com
CreditReportBlog.com - Well, we can hardly call this piece of legislation a “deep freeze”. There a few good changes, but anything huge. It calls for the fees charged by credit reporting agencies to now be $10 instead of $12, gives seniors a rate of $5, and calls for agencies to comply to all freezing requests within 3 days. Another little tidbit, requests can now be made through regular mail, instead of only certified mail.
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Payday Loans-The Good, Bad, and the Ugly.
The Good
Payday loans are basically quick cash advances made to qualifying individuals. These loans are hassle-free and very convenient to get. They are great for people who are capable of paying them back. They are used for making an unexpected payment, going on a short trip or buying something you absolutely need, but don’t have the money for at the moment. Almost anyone that is over 18 years old has a monthly income and a checking account can qualify for a payday loan. People with bad credit are also eligible. A person can apply for payday loans even over the phone or online. The convenience of getting payday loans makes them very attractive to people in need of fast cash. Approval can take at the most, 24 hours.
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The Good and Bad about using Credit Cards
Although many Americans these days are swimming in an ocean of debt, there are still many upsides to using credit cards. For consumers with a track record of having discipline and keeping their debt under control, credit cards offer huge convenience, security, and money saving perks. Sometimes the benefits offered by credits companies are so good that it makes using cash seem foolish.
When you have the choice of using either cash or credit card, there are times when using “the plastic” is definitely the better option. Many times, using a credit card can help you buy that item or service you need plus additional perks for paying using a particular credit card.
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Why does a potential employer need your credit report?
Many times people wonder why a potential employer may require a credit report before they decide to hire someone. They ask, “What does doing a job have to do with how I pay my bills?” Also, you may wonder what an employer is looking for when they ask you to sign an employment credit report permission slip. Different employers have different reasons for running a credit check on a potential employee. An employer cannot request a credit report for an applicant without written authorization from the applicant.
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The Major Credit Bureaus
The 3 major credit bureaus are Equifax, TransUnion, and Experian. These companies collect financial information from various creditors and sell this information in the form of credit reports to lenders or others who have a legitimate use for it. Each individual has a right to see what is contained in their credit report at the various credit bureaus. Individuals are entitled to receive one FREE copy of their credit report from each bureau, once every 12 months. The information contained in the credit reports may be as follows:
· Individual’s full name, address, place of employment, and spouse’s name, if married.
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Get Free Credit-Monitoring Services
The settlement applies to everyone who had an open credit account or open line of credit from any lender from January 1, 1987, to May 28, 2008. Anyone with a credit card, car loan, mortgage, student loan or any other loan qualifies, which means most adults do.
Credit Report Blog.com urges all its readers to take advantage of this great deal. Best of all, nearly everyone is eligible. TransUnion’s monitoring services can be very valuable to consumers, especially when you won’t be paying a dime for them! Read more
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Reasons to Check Your Credit Report
Most people don’t check their credit report until it is time to make a purchase that requires a degree of creditworthiness, i.e. buying a house or a car, opening up a credit card, etc.
Credit Report Blog.com would like to take this opportunity to reinforce to its readers the importance of consistently checking their credit reports for various reasons, as mentioned in this report. When an important decision is to be based on your credit report, it may cause unforeseen delays or rejections, if surprises pop up on your credit report which you were not expecting. The causes of these surprises could be the result of identity theft, reporting errors, mistaken names, etc.
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3 bureaus’ credit scores can be widely varied
Most lenders look at a consumer’s credit scores to decide whether to grant a loan and how much to charge. Consumers can buy a report on their credit scores, but these scores vary — sometimes widely. “There is a pervasive myth that there is one credit score,” said Rod Griffin of Experian.
CreditReportBlog.com advises that everyone get a copy of their FREE credit report from each of the 3 credit bureaus. Although most of the time the information should not be too different on all the credit reports, your credit score may vary somewhat depending on few bits of info that one credit bureau may or may not have. Before applying for any type of loan, a consumer should be aware of where they stand, in terms of their credit score. Read more
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