All About Credit Cards

One of the best ways to help prepare your young college student for the realities of life concerning finances is to educate them about the perils of personal finance, in particular the use of college student credit cards. Many companies offer them and they do come with a number of benefits. As recently as about 15 years ago, it was nearly impossible to get a credit card as a college student, but now the times have changed. Here are a few things to look for when you go to apply that will help you to get the best.

0% Interest

This feature allows your student to be able to make purchases and not owe any interest for an initial period up to 6 months. This time frame is pretty standard on credit cards for college students. After that time frame, the regular interest on the card comes into effect. Of course, every young person with a credit card also needs to know that by paying the monthly balance when it is due will bring most any card to 0% interest – on a continual basis.

Balance Transfers

Most college credit card companies assume that this is the first card that students have ever owned and will not offer a balance transfer option. While there are a few card issuers that offer this card feature, a balance transfer is an undoubtedly rare feature in a college credit card. If they do allow it, then it still would only apply for the 6-month introductory offer period.

Higher Interest

The credit cards for college students do normally have a higher interest rate than your general cards – about 16.99% up to 18.99% and beyond. So if the compound interest effect is demonstrated and emphasized to your student, it may help them to realize that they need to be fiscally responsible - or they will pay a steep price. Also, you need to know that it is more than likely that the introductory offer may be forfeited by just a single late payment.

Build Their Credit Rating

Many of the advertisements for college student credit cards emphasize that this is a good way for your student to build their credit. It is a good thing for them to understand too that how they treat this card will have a definite reflection on their credit ratings for the foreseeable future. So they may need some extra instruction on this, as well as knowing the importance of paying their bills on time. Many ads for these cards also point out that their card records may be accessed online and they can make payments electronically, yet another nice feature for internet-savvy students.

Rewards

Here is one of the ways that the card starts to make it worthwhile. For each dollar spent, rewards or points are given that can be redeemed either as cash, or as a gift. The rewards on these rebate credit cards include such things as air miles, concert tickets, gift cards, studio tours, and up to 5% cash back on certain items - usually groceries, gas, and medicine, and then 1% on others. Some college student credit cards even give special rewards for keeping a good GPA!

Another Option

If you think that traditional credit cards for college students might be a little beyond your student's readiness to be responsible, then there is another way to go when they go off to college. The prepaid debit card can also give them the ease of plastic without having to carry any cash around, or in their dorm rooms. Amounts can be easily transferred to the card, and some cards even permit amounts to be transferred from one family member’s card to another family member’s card.

Getting your student off to college is a big step in their life – and yours. Getting the right college student credit cards can sure take a load off of your mind by knowing that they do not have to carry a lot of cash. They are also protected against any wrongful uses of the card, too. And best of all, your favorite student can learn to become fiscally responsible, with time, and get an even better card later on.

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Mileage Cards – Pluses and Minuses
Doing The Math on Credit Card Rewards

A mileage card can be both a bane and a boon. If you’re someone who pays off the balance well in time, then a mileage card can well be your friend, but if you’re not a big spender and don’t havethe resources to keep up with the cycle of card balance payments in time, a mileage card can be yourbiggest foe. The article below elaborates more on this phenomenon, so don’t throw caution to thewind while utilizing your mileage card.

A mileage credit card is an asset to any dedicated flyer if used correctly, no doubt. But the catchremains in the phrase “if used correctly.” Just because you are earning extra miles for charges on your mileage cards does not necessarily mean you have the upper hand in this game. If you don’t look closely, there just might be some loss of money involved (and then some), so be sure to review how you’re using the mileage card — you might just discover that all those miles are not worth it!

What Is So Different About A Mileage Card?

A mileage card is one amongst the bewildering array of ways to earn credit cardrewards that savvy consumers are being offered these days. A mileage card will convert milesearned for purchases into hotel stays or restaurant meals, typically enabling you to use these miles for a variety of different reward options.Pros of Mileage Cards what’s a bigger plus to the spender than earning a travel dividend for money that has to be spent on additional card purchases anyway? Did you know that business travelers get double miles with certain card offers if they charge their tickets with mileage cards? It sounds too good to overlook!

Especially when you have acknowledged the priciest part of any major trip is airfare, you simply cannot ignore the thought of your routine grocery store purchases bringing you closer to that Caribbean cruise that you’ve always dreamt of going on. Your mileage cards might just bring you a little closer to that dream. It Can’t Be All Good!

*If you can’t afford to pay off your card balances consistently, then a mileage credit card is definitely not the best choice for you, because the exorbitant rates of interest that are typically found with this type of card would do nothing less than shock you. Of all the major mileage cards, the lowest ongoing APR carries an interest rate of about 17 percent. Ouch!

*Heard of blackout dates yet? If not, then you definitely aren’t the informed mileage credit card owner that you thought you were. Blackout dates (which can happen frequently with certain rewards programs) are the ones, which fall on major holidays, making your accumulated mileage and off-limits for redemption.

*Forget about using the card for those large purchase items (for example, electronics, appliances, cars) with your mileage credit cards to earn those big points. Typically, there will be a yearly limit or "cap" on how many miles you can accumulate with these cards, limiting your ability to accumulate large point totals in a given period of time.

*Also, since there is a time limit attached, make sure that you shop the expiration times for accumulated mileage on your mileage cards. The rewards offer would really be futile if the miles expire just as you draw near to a free ticket.

*The biggest drawback for these card offers tends to be the membership fees. If them embership fees that you have paid up all this while are more than your points earned benefit, then it’s obviously not worth the effort.

And finally, even though we want to ensure that you enter into this subject with the knowledge of what to watch out for, this should not deter you from benefiting from mileage cards. As we have previously outlined, there are definitely numerous benefits associated with this type of card offer so, understanding full well what the pitfalls are and what to be wary of with mileage credit cards, we should give them the benefit of the doubt!

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It's Your Credit - What Are You Going to do to..
Doing The Math on Credit Card Rewards

With the increasing popularity of credit cards in America, it's no surprise that credit card companies and banks continue to flood the market with all manner of cards--rewards credit cards, cash back credit cards, 0% APR credit cards--all in an effort to appeal to as many potential cardholders as possible by offering a wide variety of incentives for use. The major problem with the strategy, however, is that there's often little explanation of exactly how credit card rewards work in their respective programs: what's the difference, for example, between cash back cards and rewards credit cards? And which card will, in the end, save you more? The variety and sheer number of rewards programs leaves some potential cardholders confused about the actual market value of their "points" values.

The most prevalent credit card rewards plans out there today fall into two different categories -- percentage-based rewards and points-based systems. The former offers a percentage of your money back on purchases in certain targeted categories, most commonly gas, travel, and in some cases entertainment. The latter offers a series of "points" for all purchases made, which can eventually be redeemed for reimbursements on various expenses, most commonly travel. The percentage rewards plans are fairly straightforward (except for a few obscure snags, such as how your cash actually gets back to you and how much you can earn in any given year through credit card rewards), but in the case of "points", it's often difficult to determine exactly what you're getting for your purchases using a points-based rewards credit card.

But in the end, it all comes down to the numbers, specifically the math formula used to calculate the rewards. A good percentage-based rewards credit card will offer anywhere from 3-5% back on targeted purchases (again, commonly gas and travel.) If you spend $1,000 at the pump in a given year (which, with current gas prices, is a pretty low amount to spend on gas in a year), you'll earn $50 back in rewards at a 5% rate. For a year's worth of gas purchases, $50 isn't a huge amount of money, but it'll fill you up twice and it's certainly better than nothing.

Compare this to "points" systems. One points system (from Chase's Free Cash Rewards Visa) offers a rewards rate of 2,500 points for $25, with one point earned for every dollar of purchases. That's only a 1% rate of return on the money you put into the card. Certain airline credit cards offer a slightly better deal, such as American Express's Blue Sky, which allows you to redeem points (again, one dollar per point) in 7,500 increments for a $100 reimbursement on travel expenses, meaning about a 1.3% rate of return. Again, even a low rate of return can help to offset any expenses you may incur, and can make certain purchases essentially free. But 1.3% versus 5% -- you do the math.

On non-targeted purchases, points systems and percentage rewards credit cards even out, since most percentage reward cards offer a 1% rate of return on the majority of non-targeted purchases you make. And the "points" cards can offer a few incentives that a percentage rewards credit card can't, such as bonus points on sign-up, anywhere from 1,000 to 15,000 and up (depending on the value of a given points system, of course.) But, assuming that you frequently purchase the targeted items on a percentage rewards credit card (and who doesn't make frequent gas, travel, and entertainment purchases?), you've got a slight edge with percentage-based rewards programs.

Check all of the fine print and consider your specific purchasing needs, of course, but remember one of the first rules of finance: when dealing with credit card rewards, always look at the long term and make sure to do the math.

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It's Your Credit - What Are You Going to do to..
Bad Credit Credit Card- The Downside

The world of the internet is changing the way the world conducts financial business. The internet naturally lends itself to some types of businesses some types of business, And financial is a perfect fit. For the most part financial instruments are easy to compare and choose using the internet. It makes it much easier for the consumer and it brings customers in droves to institutions. With large websites dedicated solely to finding mortgages for you the mortgage market has become dependant on the internet to conduct its business.

Credit cards are no different. Over the past few years credit card companies, banks and other lending institutions have become more reliant on the world wide web as a way of doing business. In a few years the web will more than likely take over the financial industry as its sole source of business. The biggest advantages to this style of business is realized by the consumer.

With an internet connection you can quickly find the best deals for credit cards. you can find cards that are very specific to exactly what you are looking for. This can all be accomplished in a matter of minutes if you know where to look. The other great advantage is you can apply and receive instant approval in a matter of minutes from right at home. This also saves us from possibly receiving bad news in person, face to face in some cases. The ability to do all this anonymously takes a lot of pressure off of the applicant.

The market for new customers is so hot right now that you can get really great deals if you take your time and do your homework. Card companies are offering lots of reward programs and very good interest rate can be secured.

How To Obtain A Credit Card With Bad Credit Status...
It's Your Credit - What Are You Going to do to..
Bad Credit Credit Card- The Downside

Often when someone has had the bad luck and bad circumstances to find themselves in trouble with their credit, it is tempting to try to right the situation by answering one of the following familiar taglines: “Credit problems? No problem!”, “We can erase your bad credit – 100% guaranteed!”, “Create a new credit identity – legally!”, “We can remove bankruptcies, judgments, and liens and bad loans from your credit file forever!” These promises and assurances can be very seductive when one is in the throes of a credit nightmare, but not all of these promises are worth trusting, and some of those assurances could get you into bigger trouble than you were in before.

Often credit card debt comes from circumstances that, as consumers, are beyond our control. Access to credit can be a heady and sometimes dangerous perk. Before most people know it they can end up deeply and dangerously in debt. Quick fix answers will not always (or more accurately, barely ever) really help relieve the stress and damage of bad credit. Frugality, conscientious spending and careful planning are the only things that can truly reverse the terrible effects of bad credit. However, even these tactics take time, sometimes years, and can put a terrible financial strain on those trying to pull themselves out of debt.

Though many online advice sites do not suggest it, some do suggest that getting a bad credit credit card is a good idea. A bad credit credit card that is paid on time is one of the best ways to improve credit. If, however, the customer perceives that he or she will be unable to make payments on time every month, an unpaid bad credit credit card is the easiest way to cause even more damage to already dismal credit.

In order to start the process of getting a better credit score the first and most important step is to find out exactly what you have against you on your record currently. Major, nationwide consumer reporting companies such as Equifax, Experian and TransUnion are required to provide consumers with comprehensive credit reports detailing the judgments against them in the credit universe. Once the consumer has this document from one of the major nationwide consumer reporting companies they are better able to see and take the necessary steps to improve and alter their credit history and their credit future. For many, this is the first step to financial freedom


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It's Your Credit - What Are You Going to do to Protect it?

For anyone who has, has had and wants to avoid being had, this series of articles reflects years of continuing research. I'll discuss the worse that can ever happen to people thrown into credit situations - whether through their own doing or as victims and how they were able to come of them in one piece. These article are based on facts as I read and understood them.

A credit report is a history of your bill payments record. These can be bills such as home loans and mortgages, revolving credit and even cell phones. There are three credit-reporting agencies that are commonly referred to as credit repositories. Each uses a different type of symbol. When looking at your credit report, be aware of the very first page. This will most often contain the explanation of the symbols that are used by that company. There are various symbols that are utilized to identify payment histoy, types of accounts and whether or not the account is individual, joint or involves a cosigner.

Credit reporting agencies are NOT part of the U.S. Government. They are privately owned companies that get paid to sell information about you to your creditors. They get paid for good and bad information. You are NOT their customer. You do not purchase any goods or services from the Credit Reporting Agencies.

They do not care whether your credit is perfect or poor. They receive their money from the creditors in the form of charges and memberships. Why should a credit reporting agency care about you? You are only a consumer of goods or services.

In fact, Experian, which is one of the three large Credit Reporting Agencies is owned by a British conglomerate. Think about that. Why would a foreign company own a credit reporting agency in the United States? The answer is simply for the profit. Those are the facts.

Remember, most credit reports identify the consumer (you) by your name and your credit entries by the name, account number and the date that the account was opened. Being able to identify information that is not accurate can help you to raise your credit scores. One of the single most important parts of the following articles is your ability to identify on your credit report your legal right to know WHEN an account is first delinquent.


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How To Obtain A Credit Card With Bad Credit Status

People attempting to build credit for the first time or have an already existing bad credit history often have a hard time obtaining a credit card. There are credit cards now available for people in these situations. Obtaining a secured credit card for people with bad credit is the most helpful way to improve your credit score.

The first step to take in obtaining a secured credit card is to do your research. Inquire about fees that may apply and whether or not said fees will be refunded if you are denied credit.

The most common form of a secured bad credit card is a debit card. The cardholder deposits a fixed amount of funds into the account with the card holding company. This amount can range anywhere from $500 to $1000. When a purchase is made using the credit card, money is withdrawn from the account. Funds need to be deposited into the account periodically for continued use.

Secured bad credit cards are normally easier to obtain by people with bad credit scores because the cardholder is supplying the capital which will be charged against. Since the credit card company is not required to supply any funds for any transactions made, they are not at risk. Although the process of obtaining a secured bad credit card is simple, it may become quite costly if fees are involved. For that reason, research is imperative.

It is wise to first apply for bad credit cards at smaller retail stores rather than large institutions. It is recommended not to keep more than three credit cards for risk of over spending.

Obtaining a secured credit card is a useful way to begin to build credit or to attempt to repair a bad credit history. Be sure to make payments on time and you will be on your way to improved credit.


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Airline Cards - To Own or Not to Own?

Everyone’s needs are different depending on their various lifestyles and living patterns. Therefore choosing an airline card from the various airline cards available will depend on your choice entirely. Eventually, it's up to you as to how hard your airlines credit card will work for you. But by reading these simple tips, and asking these questions, you can definitely wedge out a few more benefits out of your airlines credit card.

What is an Airlines Credit Card Anyway?

With an airlines credit card, one can earn credits or points whenever one uses the airlines credit card. After a certain number of “points” have been accumulated from purchases made on the card, cardholders can redeem points for airline travel, just the way one might utilize frequent flyer miles.

Be sure to know how many points you need to accumulate on your airlines credit card so as to qualify for free air travel. It’s also vital to know when these points will expire if not put to use within a certain amount of time. Since most of the top airlines credit card reward programs are typically quite costly for credit card companies, any airlines credit card will usually come with an annual fee and will also have higher corresponding interest rates than other credit cards.

How Do I Select the Best Airline Card?

The first step in determining which airline card to select is to know which airline you frequent the most. If you have an airline preference for most of your trips, find out if the same airline has an airline card.

Another thing to analyze would be the frequency of your flying. If you fly once every few years or so, you are least likely to benefit from an airline card. If, however, you fly often, you might want to consider owning an airline card. However, there is a catch involved in this as well. Many airline cards place restrictions on the number of points that can be earned in a year. So, if you are not able to utilize points before they expire, owning an airline card would be futile.

As we’ve already mentioned, any airline card will have an annual fees attached to it besides having higher corresponding interest rates than a non-airline card, so watch out for that as well.

Getting the Best Out of Airline Cards

To get the best out of your airline cards, use them carefully. For instance, take a little amount off your monthly budget each month towards paying the balance on the airline cards and make sure that you are only spending that amount. Otherwise, you are most likely to end up paying quite a tidy sum as finance charges can add up from the high interest rates typically associated with airline cards.

Another way to maximize the utility of your airline cards is to choose your purchases through the airline cards very cautiously. Quite a number of times, even though you will get points for every purchase made with the airline cards, there will be additional points for specific purchases. The beauty of airline cards lies in utilizing them for the purchases that count while using other credit cards for those that do not.


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Cash Back Credit Cards Offer Equal Benefits

Cash back credit cards are becoming more common as more and more merchants and retailers accept credit cards as a form of payment. Although cash back cards might seem like an altruistic move by card issuers, the reality is that these cards generate significant profits for them. But the truth is that these cards also provide the significant opportunity for cash back rewards and rebates, offering potentially equal benefits for all parties involved.

Thanks to the growing resurgence in online business (and thus the growing resurgence in online credit card transactions), the market is seeing a variety of new, individualized credit cards unprecedented in history. And, in keeping with the online retailing trend, one of the most prevalent of the new credit cards is the cash back credit card. Cash back credit cards work on a very simple principle: when you shop--using your cash back credit card--at certain targeted retailers or stores, a portion of the money you spend comes back to you, either in the form of a credit to your account or a check (or in some cases a gift certificate to a particular retailer.) Although the rewards are fairly small, the money you get at the end of the year amounts in some ways to a free gift from the credit card company: a way of saying "thanks". How generous the card issuer is, right--altruistic, even?

It's a bit more complex than that. Cash back credit cards can only function as a promotional mechanism for the card issuer and can only offer them as an incentive for increased purchase activity. You might think that the company just doles out these rewards from the money that cardholders inject into the company in the form of monthly interest, annual fees, and such, or simply from the credit card company's cash reserves. But that's not usually the case. The money that returns to you when you use a cash back credit card at a retailer wasn't originally your money, or the credit card company's money. It comes out of the retailers and merchants pocket where your transactions occur.

If you've ever had a credit card turned down at a restaurant or retailer because they don't take your particular credit card, here's why: in order to process credit card transactions, retailers pay a small percentage of the purchase amount as a fee that is payable to the credit card company. These fees are a significant profit center for the card issuers who have figured out how to co-op increased purchase activity be sharing a percentage of the merchants transaction costs with the cardholders. Ingenious, isn’t it?

If a credit card company has a cash back credit card that offers 5% of your money back on all gas purchases, you have a real incentive to buy gas from your local station more often and to buy it on credit. This means that the credit card company benefits, first because you're using their services more often (and thus accruing higher balances), and second because every time you use your card at a gas station, the station pays right along side you.

However, this is not a bad deal for the gas station, either, since more cardholders are frequenting their station and buying more gas, only a percentage of the price of which goes to the credit card companies. This means that they're more likely to deal with that particular credit card company, since doing so is now a powerful source of revenue for them (as well as a slightly more powerful source of expense.) And finally, once cardholders get their cash back, guess where they'll probably take at least a portion of it, using the freshly-added credit on their cash back cards?

It's a clever, yet symbiotic relationship. But everyone in the cash back credit card circle seems to benefit. The credit card company and the gas station generate more business, and the individual cardholder gets essentially a discount on purchases in the form of cash rebates or rewards. While the cost of these programs for card issuers will likely increase as more cardholders begin to understand and utilize these card products more effectively for their personal gain, the popularity of cash back credit cards with consumers is not likely to wane anytime soon. While not entirely altruistic, for everyone in the cash back benefit loop, cash back cards still make sense.


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Compare Credit Cards Before You Buy

If you need a new credit card, it's easy just to fill in the first application form that arrives in your mailbox.

Easy, but wrong. Nowadays there are thousands of different credit cards available, all with different combinations of terms, offers and incentives. It's important to take the time to compare credit cards carefully, therefore, before you actually apply for one.

One essential fact to grasp is that there is no single "best" credit card for everybody. Different cards suit different purposes. Your aim should be to pick a card that will meet your current financial needs and is a good match with your personal circumstances.

If you are currently paying interest on credit or store cards, for example, then you need a credit card that offers 0% interest on balance transfers for up to 12 months. You can then transfer the debts from your other cards to your interest-free card, and aim to pay off the balance before the end of the interest-free period.

If you don't have any current outstanding debts, you could choose a card that offers 0% interest on spending for an introductory period (again, cards offering up to 12 months are available). Put all your everyday spending on the card during this period, and put the money you would otherwise have spent into a high-interest savings account. At the end of the introductory period, pay off the balance on the card and pocket the interest you have earned. Remember, however, that you will still need to make the minimum repayments required by your card issuer during the introductory period.

You could also look for a card offering cashback. This is a popular incentive offered by many credit card issuers. It means that for every dollar you spend, your card company will give you back a small amount, usually in a single payment once a year. The amount returned as cashback is calculated as a percentage of your total spending, and typically ranges from 0.5% to 2%. Some card companies pay higher rates of up to 5% for purchases in certain categories or made through particular retailers. In a year you can earn hundreds of dollars in rebates, but always pay off your balance at the end of each month, or interest charges will wipe out your cashback benefits.

Cashback is a popular incentive, but there are others that may be of greater interest to people with particular lifestyles or interests. Anyone who stays regularly in hotels, for example, might benefit from a hotel credit card, which allows you to claim upgrades, free meals and merchandise at the hotel chain concerned. Sports fans, meanwhile, can get credit cards linked to popular sports such as NFL and NASCAR. Every time you use one of these cards, you get reward points that can be exchanged for sports-related goods and even tickets to see the sport concerned.

Lastly, if you need to borrow over a long period at a low interest rate, consider obtaining a lifetime balance transfer card. The interest rates on these cards are as low as the best personal loans, but with the big advantage that you can choose how long you take to repay your debt.

So if you need a new credit card, do take the time to check and compare different credit card offers and see which one will suit you best. Independent credit card comparison websites can help by listing all the best current credit card offers, and they also provide independent advice and information.

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Business Credit Cards: Three Solutions to Business Difficulties

Business credit cards can be one of the easiest ways for a new company to acquire needed financial capital, as well as an excellent way for existing companies to ease the transition into the Internet-age by simplifying the company purchasing process, making travel and expense accounting by employees all the easier. However, there are a number of other benefits to a good business credit card that companies can take advantage of in order to improve their financial stability and level of customer support still more, including rewards programs, variable credit limits, and multiple cards with fixed limits for different employees with different needs.

The most common business credit card rewards programs involve frequent flier miles, cash back rewards for gas and other travel expenses, and sometimes even office supplies or construction materials. This makes business credit cards ideal for virtually any type of business: investment firms can save a certain amount of money on the constant flights and travel necessary to attend faraway meetings. Furthermore, savings can be found as well on simple purchase items such as paper, toner, binder clips and other office supplies needed to keep any good corporate office running. But with the right kind of business credit card, even a small construction, landscaping or delivery firm can take a significant chunk out of their monthly gas or materials needs. The cash back isn't spectacular, with something like 1% - 3% cash back on purchases being the general standard. But if your business spends the entirety of a $10,000 credit limit in a month and receives a $300 rebate check over the course of that month,those savings can add up in a big way over time.

Variable credit limits are another advantage of a good business credit card. Often startup companies aren't sure, no matter how good their business plans, about exactly how much money they'll need in a given month, and in the case of certain industries (notably travel and tourism), business is tends to be a seasonal affair. At certain times, a $15,000 credit limit may be practical, but during the off season, you may find yourself with only $7,500 worth of expenses that need to be paid in credit. With a variable credit limit, you can spend however much or however little you want in a given month, as long as you're able to pay off the interest. Variable credit limits do come with a monthly fee for use, of course, but with the standard monthly fee falling somewhere in the $100 range, this should be an easily absorbable business expense, and an easy way to use business credit cards to make your accounting procedures and general operations run that much smoother.

Finally, business credit cards frequently allow multiple cards for use on a single account, each with an individually-defined credit limit. This allows you to allot only a certain amount of purchasing power to certain trusted employees, and is a very good way to control your company's purchasing operations and travel expenses without having to give each employee the same access to a single, high-limit credit account. Although you should always make sure that your employees can be responsible for their particular credit limit (since, in the case of startup businesses, a business credit card is most often placed in the name of an individual cardholder rather than in the business's name), business credit cards can help make your employees more autonomous, fostering a better work environment and requiring less time spent in tedious financial arrangements and year-end accounting crunches.


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TransUnion Leads Discussion of New Bankruptcy Reform at 14th Annual Credit Card Collections Conference; Online Collections and Scoring Expertise Also

CHAMPIONSGATE, Fla. -- TransUnion, a leading global information solutions company, today led a general session panel discussion entitled "Gearing up for Bankruptcy Reform - A Unique Industry Perspective" at the 14th Annual Credit Card Collections Conference in ChampionsGate, Florida.

The panel was comprised of industry leaders from Citibank; the Association of Independent Consumer Credit Counseling Agencies; Money Management International, a credit counseling company; and a leading bankruptcy law firm. Participants discussed their respective roles in preparing for the bankruptcy reform laws that went into effect today. The panel also addressed new technologies and processes aimed at helping lenders, collection agencies and credit counseling companies more effectively work together in the post-reform environment.

Addressing a crowd of more than 200, panel moderator Mike Rosenthal, director of Debt Management Solutions at TransUnion, initiated the discussion by saying, "some innovative tools have entered the marketplace to assist credit grantors in devising treatment strategies that match an individual consumer's financial situation. Our panelists today represent industry leaders who are adapting and improving their roles based on this technology and on the needs of both consumers and businesses."

Earlier this year, TransUnion announced a debt management model, which credit counseling companies can use along with their core services to quickly assess whether consumers exhibit strong indicators for rehabilitation through temporary budget restructuring or a debt management plan. The score also assists lenders in making objective decisions to offer improved concessions, such as lower minimum payments, reduced interest rates or the removal of late penalty fees to those consumers who are most in need.

In addition to the bankruptcy reform discussion, TransUnion shared insights during the conference's "Collection Technology Showcase" on October 16. Michael Browning, president of TransUnion's direct marketing agency, Douglas-Danielle, contributed to a panel discussion on Online Collections. TransUnion offers an Online Payments solution that provides collectors with a customized Web site for collecting past-due payments that is cost-effective and less confrontational for consumers than traditional collection methods. Kevin Derbyshire, senior consultant in TransUnion's Analytic Decision Services group, shared his expertise in a panel discussion on Scoring and Strategy Management. In the scoring arena, TransUnion offers incidence-based models to help collections organizations identify which customers are most likely to pay in order to prioritize work effort and apply the most cost-effective treatment strategies.


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Global Grocer
Play your cards

Jacqueline Cubici-Gonzalez, a self-professed Interact shopping addict, visits a grocery store Web site once a week to buy meat, vegetables, canned goods and toiletries. But she doesn't have the items delivered to her home in Camberley, England. She sends them instead to her mother's home in Maracay, Venezuela, through the Web site of the Venezuelan grocery store El Plazas, ElPlazas.com.

"I used to send her money, but this way I have more control," says Cubici-Gonzalez, a Venezuelan who has lived in England for 14 years. "Knowing my mother, I had the feeling that when I sent her money, she would run out and not have everything she needed in the fridge."

Cubici-Gonzalez is part of a growing number of people outside Latin America using the Internet to send groceries to relatives in the region. It's an alternative to sending money that customers like because it lets them avoid fees charged by money-wiring services and ensures that their money is spent on food. And, at a time when many countries in the region are dealing with severe economic downturns, Latin Americans living abroad feel a great need to support family members in their home countries.

>From El Plazas in Venezuela to Peru's E. Wong, grocery stores throughout Latin America now accept Web orders paid with foreign credit cards. Argentina's Disco Virtual began offering service to foreign customers in March 2003, and Mexico's Gigante plans to begin in the first half of 2004. "I have clients from London, Spain, China, Japan," says Maria Teresa Mendez, e-commerce manager for El Plazas. The chain saw its overseas orders increase from virtually none to 6% of Web sales after Venezuela's political instability led to a recession in late 2002.

Disco Virtual, at discovirtual.com.ar, has about 1,500 foreign customers, says the Web site's director, Diego Baron. The store's marketing campaign targets Argentines living abroad by advertising in cities such as Miami, Madrid and Barcelona, where many Argentines have moved in the past three years following the country's debilitating financial crisis. The grocery store also advertises on Web sites that expatriates visit, such as Argentine newspaper sites.

Instead of just groceries, Disco Virtual also offers gift certificates for use in the grocery store. "People don't necessarily know what sort of food their relatives need, so they prefer to buy them vouchers," Baron says. "That way, they know they're not buying clothes."

Baron says he sees the overseas purchases as a niche market with significant growth potential. Web sales account for a small percentage of most grocery companies' annual revenues, and purchases by foreign customers are just a fraction of those Web sales. But companies are continuing to tap the foreign market, in part because Web sales within the region have been somewhat disappointing.

In theory, online grocery delivery businesses should fare better in Latin America than they did in the United States, where many flopped with the dot.com bust, perhaps for being overly ambitious. Many of the U.S. start-ups had no brick-and-mortar stores, counting solely on elaborate warehouses with fleets of delivery vehicles and an army of workers that proved too costly to maintain. In Latin American cities, labor is cheaper, distances are shorter than in U.S. suburbs, and the stores use existing in-store staff to fill Web orders.

Yet in Latin America there are not enough Internet users to support these businesses. And those who do use the Internet don't yet feel completely comfortable buying over the Web. "People in Mexico are afraid to give their credit card number online," says Ernesto Valdez, vice president of the Mexican Internet Association (AMIPCI). "We are working on a marketing campaign, educating people so that they understand that buying on the Internet is safe, that there is technology that protects credit card information."

Another problem for Web-based grocery stores in Latin America is demographics. The group of people using the Internet in the region is not the same segment of the population that does the grocery shopping. About 65% of Mexico's 10 million Internet users are between the ages of 18 and 34, and about 68% are men, according to a 2003 AMIPCI study.

Most grocery store shopping, meanwhile, is done by middle-aged or elderly women, says Carlos Gonzalez, e-commerce director at Gigante, whose Web grocery service has not made a profit since it started in 2001. But Gonzalez says he's willing to wait for his customers to come.

"Right now, the young Internet users are living at home with their parents," he says. "But as these new generations get married and have their own homes, Internet grocery shopping is going to Increase."

Play your cards
Password Profiler Secures and Automates Online...

PURCHASING CARD PROGRAMS are moving to a new level of value. The first wave of change, which began about twenty years ago, put buying authority in the hands of front-line employees throughout their organizations. The benefits were clear: first, purchasing necessary goods and services became fast and convenient; taking even a part of the procurement process out of the paper-based world generated considerable savings in time and money; and, suppliers received payment almost instantly. Today, a second wave of purchasing card functionality is putting strategic information on the desks of senior managers. The difference is in the data.

At the most basic level of purchasing card use, managers receive monthly statements with "level one" data: date, supplier, dollar value and, of course, the name associated with the card, whether it is assigned to an individual employee or a work unit.

"Level four" data, on the other hand, is enhanced to the customers' specifications. Wendy Hall, Public sector Relations director at BMO ePurchasing Solutions said, "We may be the only provider that can pass level four data, custom data based on unique specifications of a client. An example would be time-sheets from a temp help agency, so we would work with the supplier and the government of Canada to deliver that custom data." she said.

Across levels one to four, there is a world of useful data, including order number, item product code, description, quantity, unit of measure and price. Managers can see where products are coming from and where they are going. If the organization is using temporary services, they can look up spending by individual contractor or the types of work performed. If materials are being sent out for analysis and testing, purchasing information could include tracking numbers. In fact, any information about a purchasing card transaction that can be described in alphanumeric terms can be delivered electronically.

Five years ago, when Ken Babich joined the purchasing services department at the University of Victoria, there were only about 70 purchasing cards in use on campus, with very restricted use, manual reconciliation and a monthly spend of only about $15,000.

Shortly after he arrived, he wrote a visionary article called "Bridging The Gap" that looked at the challenge of creating a seamless merger of purchasing card programs with enterprise resource planning (ERP) software to create an all-electronic process. At that time he wrote, "... purchasing cards should seriously be considered as the preferred method of purchase and payment." Since then, he has pursued that goal.

Today, there are 770 purchasing cardholders at the university and a total spend of nearly $4 million a year. And, best of all, "The entire process is electronic, from the actual commitment right to encumbering it in our budget."

Within the University of Victoria e-procurement website, an e-merchant site hosts the purchasing card solution. Employees use their purchasing cards to buy from approved vendors and each morning all the transactions for the prior period, including the day before, are reported.

"We take that information in spreadsheet format and we apply the tax tables to it, the PST and the GST, based on where the goods initiated from and so we have that all embedded in code through a product from a company called Millennium Computer Systems which is here in Victoria," Babich said. When data enters the financial software system, money immediately leaves the appropriate budgets.

As Babich said, "The end user can buy something today and within 24 hours, they can go to their financial statement, click on the transaction and see that it is a p-card transaction, what the value is and what it is for, all electronically. That was 'bridging the gap'."

Looking back, Babich said there is more to a solution than just technology. "One is the management of the program itself and the degree to which there is an entrepreneurial spirit attached to it. In other words, how willing is an organization to go ahead and engage technology, particularly p-card technology and some of the inherent risks that they think might come with it."

Once the gap is bridged, and data is flowing into an organization, the next step is to turn it into useful information. Brent Needham, the commercial solutions senior manager at Visa Canada said organizations really capture value with a fully automated procure-to-pay process.

"If you use an ERP system integrated with your electronic procurement system, and it automatically goes on a p-card, then it is much easier to take that enhanced data electronically and, if you're a compliancedriven organization, make sure people are in compliance," he said. "If you're an organization that really values strategic sourcing, you use that to figure out how much you're buying from suppliers and then try to negotiate better deals because you understand how much you're spending with each supplier over each twelve-month period."

Online Lenders
Password Profiler Secures and Automates Online...

Passwords are the most critical safeguard for your online identity, but you end up juggling dozens or compromising your security by using the same string for everything from your favorite news outlet to your online banking site. Or worse, faced with the fear of forgetting a critical password, you end posting the keys to your online well-being all over your monitor on sticky notes—not a secure password management strategy.

Let Password Profiler strip the little stickies off. Our latest PC Magazine premium utility will manage your passwords efficiently, easily, and securely, safely storing your log-ons, passwords, pin numbers, and other sensitive information in an encrypted file, and even letting you access and log on to your favorite Web sites with a single click. The utility can even fill in Web forms with any data you choose, including address and credit card information, if you desire.

Once you've downloaded Password Profiler from the PC Magazine Utility Library to a folder on your Windows 2000 or XP machine, unzip the file PasswordProSetup.zip and double-click on PasswordProfilerSetup.exe.

When you first launch Password Profiler, it will prompt you to create your Master Key—the password that, from this point on, will allow you access to the entire utility and all the information stored within it, including other passwords. Don't lose your Master Key! Without it, you cannot access information in the utility.

Note that we did not build in a method for you to regain your Master Key should you forget it, because such a capability would create a security hole an interloper could exploit. We strongly recommend that, when creating your Master Key, you use the helpful Hint option to enter a word or phrase to jog your memory should you forget your Master Key.

When setting up the utility, security junkies can pick which Crypto Service Provider and Encryption algorithm to use. Password Profiler lets you chose from the native cryptographic service libraries built into Windows (which you can read about in Microsoft's MSDN Library). For most users, though, staying with the utility's default selections is the best course.

Manage Passwords and Automate Log-On Sequences

Once you've set your Master Key, the Create Your Master Key window will disappear, replaced by the UserID/Password Manager window, where you can create, edit, and delete the profiles or sequences you use to log on to sites (or for other purposes). A profile can include any information—such as your user name, password and pin, the log-on URL, and more—required for a particular purpose. A profile may correspond to a specific Web site, but it doesn't have to. You can keep any personal information in Password Profiler that you wish. Examples we use in this article, however, will show how to create profiles for use with Web sites.

To add a Web site profile, click on the New button. The Add New Web Site Profile dialog will pop up. This is where you enter any information that the corresponding Web site requires for you to log on. You can also categorize the site profiles using the Category pull-down menu. To enter a new category, just type in the Category: text box. You do not need to hit enter. Completing any of the other fields and hitting OK records the new category automatically.

Filling Out a Web Site Profile

Site Name can be anything you wish; it lets you identify the site profile once you've stored it in the utility. URL should be the address of the log-on page for the Web site you're profiling. Sometimes the URL of the homepage will work, but the typical sign-in page URL is usually different. In the case of PC Magazine, for example, the log-on page URL isn't http://www.pcmag.com, but http://www.pcmag.com/sign_up/0,3017,,00.asp?success_page=/default/0,1007,,00.asp. The best strategy for obtaining the correct address is to navigate to the sign-in page of the site, copy the URL from the browser, and paste it into Password Profiler.

Enter your Web site user name in the User ID field, and of course, your password into the Password field. Reenter your password into the Repeat Password text box to insure that you haven't typed incorrectly, since the actual characters don't display. The Pin # field gives you a place to enter a personal identification number for Web sites that require one, and the Misc text box lets you add one other piece of unspecified data a site may demand. In the Comments area, you can make any notes you may wish to keep.


Online Lenders
HSBC Credit Card Lending

But you can't compare rates until after you've filled out the application.

Can the same online auction techniques that work for buying Beanie Babies and baseball cards work for the largest financial transaction most people ever make? Maybe--but for now, don't take the "name your price" pitches for online mortgages too literally.

At least two Internet sites promise to put your mortgage application on the block to get you the lowest interest rate. MortgageAuction.com guarantees the lowest rate and backs it up: If you find a better deal elsewhere, MortgageAuction.com promises to pay $250 toward your closing costs. Unfortunately, you have to complete a lengthy application to get rate quotes.

The site puts your application up for auction, along with your credit scores, for 24 hours. Currently, up to 50 lenders--depending on how many are licensed to do business in your state--can bid on your loan.

MortgageAuction.com reviews the bids and proclaims the one with the lowest annual percentage rate (APR) the winner. Borrower and lender are each notified by e-mail. You won't have any credit-application fees charged to your credit card unless you agree to proceed.

APR, however, is not as useful a gauge for mortgages as it is for other types of credit, mostly because people tend not to keep the loan for the full 30 years on which the APR, which includes points, is figured. If you plan to keep the loan only a couple of years, a low- or no-points loan (with a higher APR than a lower-rate loan with points) could be the cheaper deal.

You take more risk with Priceline.com. The site asks you to name your interest rate and terms. In practice, however, you're more likely to get a counteroffer from one of up to four lenders who review your bid (and your credit scores). You can choose whether to accept the counteroffer, but the rate is not guaranteed until you lock in later.

A lender who accepts your offer through Priceline.com may charge a $200 application fee to your credit card. You won't be told whether it's refundable until after you are charged. Typically, the tee will be credited toward closing costs if you choose the loan.

What if you bid too high? Mitchell York, president of LendingTree Inc., the company that handles mortgage auctions for Priceline.com, says that borrowers who bid too high have actually been countered with lower deals. "If they qualify for 7%, they're going to get 7%," he says.

GIVE THEM A PASS. One of the biggest drawbacks of the online-mortgage sites is that you have to take them at their word that they can find the lowest rate--at least until after you've applied and allowed them to pull your credit report. Repeated credit inquiries can damage your credit score, although inquiries for mortgages and car loans in the past 30 days don't count against your score. And inquiries clustered within a 14day period count as only one inquiry.


Do Stores Guard your Data?
HSBC Credit Card Lending

HSBC bank, one of the 10 giant financial services organizations, is well known for its wide range of personal financial services, private, commercial and mortgage banking. It is the third biggest provider of sub-prime lending but it is also abundant in good and excellent credit card applications displayed on the market.

HSBC credit card offers are generally designed for various credit consumer groups with individual social and financial backgrounds and up to very recently there has been an overall satisfaction with their services. However, there have appeared a number of complaints relating the bank's policy concerning low-income customers from ethnic minorities and, which is especially disappointing, the US military members.

HSBC has been accused of applying predatory practices towards the US military personnel who are on the watch or duty in Iraq. How is it expressed and how are soldiers affected under the new arrangement which is a serious violation of Servicemembers' Civil Relief Act?

If you have ever heard of the Act, you probably know it is a legislation providing for the ease of the economical and legal pressures on the military personnel who are on the active duty in Iraq (Operation Iraqi Freedom).

In point of credit cards, mortgages and other loans, the Act required companies to restrict interest rates on the balances to a maximum of 6% a year, no matter what part of the military service period a soldier is carrying.

Now, HSBC is reported to be floating the rule and keeping the interest rates too high for most of the military to manage. Thus, they plan to make more revenues from the bad debt interest rates collected with servicemen and women.

Just for comparison, let's take Chase bank that has gained firm recognition among military members for the caps on the interest rates and even abolition of credit card late payment fees.

HSBC, on the contrary, is blamed by soldiers' wives for continuing to charge unmanageable high rates. Once a soldier cannot repay the debt, his account is handed over to debt collection agencies.

The most deploring thing is that the military debts were incurred through no fault of the cardholders - when they were wounded and couldn't make payments - but they were still subject to the tough actions of the debt collectors.

Well, as long as HSBC is quite loyal to its other consumer categories, businesses and students, offering them lowest APRs, no annual fees and frequent flyer rewards, the military sector seems to be discriminated.

So, HSBC's relationship with the US military is declared to be a sham and the servicemen's credit troubles are openly ignored even though these servicemen help to invest the company in the Middle East.

If we restrain from making any undisputed conclusions, we can suggest the following. HSBC is attempting to make more profit in Iraq and Iran at the expense of the US military. But to succeed in their enterprise, the bank needs to have support from the rest of the American consumers.

So, it will continue courting its customers with irresistible credit card terms and various benefits.

Do Stores Guard your Data?
A credit card crunch coming?

Credit card companies regularly warn consumers about how to protect themselves from fraud when using plastic: scour statements for unauthorized purchases, shred paperwork that includes account numbers and don’t leave bills or cards on the kitchen counter when people are in your home.

But shoppers are pretty much left in the dark if they want to know if a store is keeping their credit card and debit-card transactions secure. There are a few things savvy consumers can do to check up on a retailer’s security practices before plunking down their plastic.

The card industry itself is cracking down on merchants who don’t follow industry guidelines known as the Payment Card Industry Data Security Standard, or PCI. Starting this month, Visa Inc. will start levying fines of $25,000 a month for noncompliance.

Merchants who accept plastic must install firewalls and take other measures to keep computer systems safe from hackers. They aren’t allowed to store certain sensitive data that hackers can use to make phony purchases or produce fraudulent cards.

Merchants, unfortunately, have been slow to respond. Of the 327 largest merchants, just 44% of them have validated their compliance, according to Visa.

The card companies won’t tell you who’s still breaking the rules. “Disclosing the name of compliant merchants would be like drawing a road map for the thieves,” says a Visa spokeswoman. Cardholders aren’t liable for unauthorized purchases.

Merchants also tend to be tight-lipped for similar reasons. That pretty much leaves it up to the consumcredit er to figure out. It’s not easy: Shoppers can’t see inside a merchant’s computer system.

But there are a few things to watch for.

First, industry rules and federal law prohibit merchants from printing more than the last five digits of an account number on a customer receipt. So the first clue: If a merchant is printing too much data on receipts, chances are that’s not the only hole in its system.

Look at the equipment. If the cash register has one of those old-fashioned green computer screens, chances are its security is also from a bygone era. Card-swipe devices should be enclosed in tamper-proof plastic. And as silly as it sounds, if the swipe device “looks old, dusty and dirty, it probably hasn’t been retrofitted,” says one security expert.

Some online merchants have seals on their Web sites that provide security credentials. Designersreplica.com, which sells sunglasses, has a small “credit card guard” insignia on its Web site that identifies it as a “PCI Tested Website.”

“We believe that merchants enjoy more sales because they show they are PCI-compliant,” says Michael Johnson, chief executive of ComplyGuard Networks, a New York company hired by merchants to test their systems. Next month, ComplyGuard will start providing “no-fraud zone” stickers to brick-and-mortar customers who comply with the rules.

The fact is, there are still too few guarantees when it comes to card security. Except, of course, for the foolproof method: Pay with cash.

By Robin Sidel
Credit Card Scammer Must Repay $12 Million
New Weapon against I.D. Theft?
A credit card crunch coming?

The FTC wins another round! Peter J. Porcelli II was ordered to repay nearly $12 million that he had obtained through fraudulent practices. His Florida companies, Bay Area Business Council, Inc. and American Leisure Card Corp., offered low-interest, unsecured credit cards over the phone. Customers who took the bait paid between $199 and $400, which was taken from their bank accounts.

But instead of receiving their credit cards, customers received “dummy” cards bearing the MasterCard logo and the name of one of Porcelli’s businesses. The cards also had non-magnetic black strips to make them look more convincing. The FTC web site describes what happened next:

“When consumers complained or tried to activate the card they were told for the first time that, for an additional fee, they could obtain a debit card, but never a credit card. The defendants also did not tell consumers that in addition to the requirement that they deposit their own money in advance for any purchases they wished to make with the debit card, they would pay substantial fees every time they attempted to use the card.”

Porcelli’s other business interests named in the case include Bay Area Business Council Customer Service Corp.; Bay Memberships, Inc.; Bay Vacations, Inc.; Sr. Marketing Consultants, Inc.; and Special Technologies, Inc.

New Weapon against I.D. Theft?
A credit card crunch coming?

Some homeowners struggling to keep up with their adjustable-rate mortgages are choosing a short-term fix that will only compound their troubles down the road, consumer protection experts say.

“We’ve had some people who are using their credit cards to cover basic living expenses so they can actually make their mortgage payments,” Rebecca Palmer, director of education for Consumer Credit Counseling Service of New Hampshire and Vermont, told the New Hampshire Sunday News. “It’s absolutely horrifying.”

“Because the thing is, they’re digging a deeper hole instead of finding a solution to the problem,” she said.

Counselors at her organization, which provides free, confidential counseling, are increasingly hearing from homeowners that they are taking cash advances on credit cards to make their monthly mortgage payments — or even contacting their mortgage companies to see whether they can pay with a credit card, Palmer said.

“Unfortunately, they don’t realize how much worse they’re going to make it for themselves,” she said.

David Deziel, director of communication and development for CCCS NH-VT, said the agency recently counseled one such family from Alton.

“Their monthly mortgage payment right now is a little over $3,100 a month, and these are folks whose household income is under $100,000,” he said. The married couple, who are in their 40s and have two children, are also paying off a home equity loan.

When the wife became ill, Deziel said, “They started making heavy use of credit cards to make ends meet.”

And by the time they came to the credit counseling agency for help, “They had almost $23,000 in outstanding credit card debt.”

Another recent client with an adjustable-rate loan had seen his mortgage payments jump from $900 a month to $1,700 a month — with a 14 percent interest rate, Deziel said.

The trend is bad news, said David Rienzo, assistant attorney general in the Consumer Protection and Anti-Trust Bureau at the AG’s office.

“If you can’t pay your normal monthly expenses and your mortgage, the smart thing to do is go get some credit counseling right away, rather than use a credit card until you not only can’t afford the mortgage but also now are stuck in over your head on a credit card as well,” Rienzo said.

Mortgage payments typically include both principal and interest, he pointed out; putting such payments onto a credit card means you’re paying interest twice.

According to Deziel, there are several “trip wires” that can increase your interest rate on a credit card, such as exceeding your credit limit or making a payment late. “That rate can jump to 28, 29, 30 percent on all of your outstanding balances,” he said.

According to Rienzo, credit card companies are bound by the laws of the states in which they are headquartered. And some states, including New Hampshire, do not have usury laws, so there’s no cap to the interest rates the companies based in those states can charge.

Taking on credit card debt will also worsen your credit score, Rienzo noted, which could increase the cost of future borrowing.

And then there’s something called “universal constructive default,” which, Rienzo explained, means if you default on one credit card, your other card companies can raise your interest rates too.

Recent changes in bankruptcy laws have also made it more difficult to walk away from credit card debt, experts say.

Dan Hebert has 23 years of banking experience, and is now president of New Hampshire Jumpstart Coalition, an all-volunteer organization dedicated to improving financial literacy for children.

Hebert noted a recent report by Mintel International Group, a consumer research company, found that credit card companies are actually pushing subprime borrowers to open new accounts.

The report found direct-mail offers from card companies to these borrowers rose 41 percent in the first half of 2007, while offers to customers with the best credit fell by 13 percent, according to published reports.

Subprime borrowers typically pay higher interest rates on credit cards because of poorer credit scores, and are more likely to only make minimum payments, which extends their card balances, Hebert said.

Deziel’s advice: “If you’re tempted to use your credit card because your mortgage payments have become too high, just stop yourself for a moment and think about what the problem is. The problem isn’t that you’re spending too much on groceries; the problem is the mortgage.”

And that’s where homeowners need to start, by contacting their mortgage companies to try to restructure their loans and avoid foreclosure, he said.

His agency can help consumers, but they need to seek help early, Deziel stressed, before the debt load becomes insurmountable.

He noted CCCS often gets calls from people whose homes have already been advertised for foreclosure auction.

“At that point, it’s too late. There really isn’t much we can do about it.”

As bad as the subprime mortgage mess has been so far, Hebert says the worst is yet to come. “The other shoe to drop will be a spike, in another 18 months, of bankruptcy filings for folks who weren’t able to hold onto those homes,” he predicted.

By Shawne K. Wickham

Credit Card Scammer Must Repay $12 Million
New Weapon against I.D. Theft?
Revolution Online Money Transfer Service...

Before you begin your holiday shopping, there’s one thing you should strongly consider doing — and it’s not making a list!

Evidence suggests that more people have their identity stolen during the busy shopping season than at any other time of year, and that could be a big, expensive headache.

But, The Early Show money maven Ray Martin explained Thursday, there’s a new way to protect yourself.

It’s called a credit freeze.

Although it’s been available in some states, now everyone in the country can shut down access to his or her credit report, thanks to a move by credit bureaus last week.

A credit freeze, Martin points out, is exactly what it sounds like: It prevents potential new creditors from accessing your credit report without your explicit permission. That means no one can use your name to take out a loan or sign up for a credit card.

Ray says it’s a fabulous idea, and he plans to sign up immediately himself.

He stresses that we’re talking about preventing identity theft here, not preventing credit card fraud. Freezing credit does NOT someone from getting your credit card number and using that information to charge things. However, it WILL stop someone from opening new credit accounts in your name, putting their utility bill in your name, etc.

In general, identity theft is much more serious than credit card fraud. There are express limits in the law on your liability in the event someone uses your credit card number, but no such limits exist for I.D. theft, and you might not even realize your identify has been stolen for long periods of time.

A credit freeze, Martin observes, is like the ultimate lock-box around your precious credit report. However, the freeze also stops you from accessing the report.

Let’s say you walk into a department store, do a lot of holiday shopping and decide to open a store credit account in order to save 10 percent on your purchases. You wouldn’t be able to. You can’t apply for and receive instant credit like that. Instead, you would have to call the credit bureaus beforehand, ask them to lift the freeze, apply for the credit, then have your accounts re-frozen.

There’s the other catch: You must pay each of the three credit bureaus $10 to freeze your credit. You also have to pay to lift the freeze. For a couple, that means $60 to enact the freeze, $60 more if they want to apply for a loan and lift the freeze, then $60 more to reinstate the freeze.

But, if you’ve been a victim of identity theft, it’s all free.

More good news: All states have different rules, so the standard $10 fee doesn’t apply across the country. In some states, the service is offered for free, and others charge only $5.

Regardless of some of the apparent hassles, Martin says everyone should freeze their credit reports before doing any holiday shopping. In particular, he recommends that anyone who has been a victim of identity theft sign up for a credit freeze immediately. That also makes a lot of sense for kids, who are a growing target of I.D. thieves and won’t be applying for credit anytime soon. It could also be a good option for “mature” creditors — adults who don’t plan to apply for a loan anytime soon.

But, Martin notes, even if you do intend to apply for credit soon, you shouldn’t dismiss this new opportunity: The associated fees are small compared to what it will cost you in both time and money to straighten out a stolen identity.

To have your reports frozen initially, you need to send a certified letter to each credit bureau. Check out each bureau’s Web site for details on what needs to be included in the letter. For the most part, they need very basic information, such as your Social Security number, birth date, etc., and a copy of your drivers license and/or utility bill.

A credit freeze is the only thing you can do to stop identity theft before it begins. But, if the credit freeze sounds a little extreme for you and you still want to do something to protect your identity, you have two other options, Martin says.

You can institute a “fraud alert,” a special message you request be placed on your credit report, requiring lenders and merchants to verify your identity before issuing any new credit. This is free, but there’s a chance lenders could ignore the alert. And you could sign up for credit monitoring, and pay a credit bureau $5 to $15 a month to send you an e-mail alerting you to any changes in your credit report. That could alert you to unusual activity, such as a card being opened in your name that you didn’t know about.

by Ray Martin
Credit Card Scammer Must Repay $12 Million
Applying for Another Credit Card...
Revolution Online Money Transfer Service...

The company is marketing its new RevolutionCard credit card payment service as a more secure option to traditional credit cards from MasterCard or Visa.

Startup Revolution Money, an online payment service that’s up against eBay’s popular PayPal, launched on Thursday as a new alternative money-transfer service.

The company’s Revolution Money Exchange service enables subscribes to transfer money from their bank accounts to each other. People interested in the service, which is available at no charge, must sign up through the company’s Web site.

Revolution Money is a subsidiary of Revolution LLC, an investment company formed by Steve Case, AOL co-founder and former chairman and CEO. The subsidiary hopes to reach young adults on the Web who are active in social networks and other online communities.

“We want to become for social networks what PayPal is for EBay,” Ted Leonsis, chairman for Revolution Money, said last month at the Web 2.0 Summit in San Francisco.

The company has recently launched a RevolutionCard credit card that the payment service is marketing as a more secure option to traditional credit cards from MasterCard or Visa.

“First, the card itself is anonymous, so it doesn’t have the cardholder’s name on the card,” Jason Hogg, CEO and founder of Revolution Money, told InformationWeek in a recent interview. “Nor does it contain any information about the cardholder in the magnetic stripe.”

In addition, the card cannot be used without knowing the user’s personal identification number, and it displays what the company calls a “disassociated account number,” which means that the number on the card is not the actual account number.

Revolution Money hopes to interest merchants with an interchange fee of 0.5%, which is considerably less than the 1.9% charged to merchants by other credit card companies. The company’s initial distribution platform is AOL’s instant messaging server AIM. A link to Revolution Money is available through the AIM client.

In trying to grab a piece of the online payment market, Revolution Money is competing against far larger players. eBay-owned PayPal is the dominant service with 143 million user accounts worldwide.

Google (NSDQ: GOOG) has an online payment service called Google Checkout, launched about a year ago. That service, however, has yet to make any headway against PayPal.

In addition, Google has filed an application with the U.S. Patent and Trademark Office for a mobile payments service that would allow users to make payments at retail shops using their mobile phones.

by Thomas Claburn

A credit card crunch coming?
Applying for Another Credit Card...
Playing the Big Game with Rewards Credit Cards...

America is a truly wealthy country - it is irrefutable. But can the same be said about its residents, common consumers? Where is most customers' money concentrated and who actually owns it? It appears, and it is also irrefutable, that most people live on credit borrowed from a bank or credit card company and these institutions are the real owners of the national money.

It has been assumed that applying for credit cards became a common way for many American households to make ends meet. Demos, a think tank where social and political changes are analyzed, has published a report documenting this reality based on the indebted household's income, age and race.

Facing a steep rise in costs for healthcare, education, home partnership and fuel on the one hand, and continually flat wages on the other, the average American family had to turn to a credit card as a rescue in most hard financial times.

Lots of outside observers are convinced that most credit consumers in the USA are addicted to credit cards just out of their "get now and pay later" inclination. But not many seem to be aware of the actual reason for making the first credit card application.

In most cases, it is not the lavish credit card rewards and not the all-round acceptability and convenience of use. Many customers may have first applied for a bank card to be able to pay for groceries or for utilities or gas. The situation has not changed and consumers are becoming more and more dependent on the small plastic in their pockets which allows them to pay for everyday small but necessary expenses.

This habit initiated and still keeps up the consumer's bad debt, known simply as credit card debt. According to the Federal Reserve's survey of 2004, three out of every four American customers carried at least one credit card and since then the number of plastic cards per household has been rising, adding up to the huge national credit card debt.

Following from this, there turn up big questions - is borrowing to make ends meet paying its way? Does credit really give rescue? Have American families got any relief from the ever growing financial pressure or have they got poorer giving the last they have to the credit card companies?

It appears the answer lies in the behavior of the cardholders themselves. Credit card misuse, that is spending in excess and not paying the balances, causes an even worse financial situation. Smart users, on the other hand, enjoy various credit card benefits and dictate their own rules to the lenders. Smart users never forget that companies are always ready to challenge their spotless behavior and charge them exorbitant fees and charges which first appeared in the time of credit card industry deregulation.

The deregulation shifted credit companies' priorities and prompted them their present-day predatory policies however avoidable for disciplined cardholders.

Many people today have forgotten about the ringing cash in their pockets, depending on the convenience and benefits of credit cards. But they should never forget that a plastic card is most useful in urgent situations - not at a nearest fast food - that's how it helps you make ends meet.


The Next Subprime Crisis?
American Families Rely on Credit Card Debt to Make......
Playing the Big Game with Rewards Credit Cards...

How many credit cards are their in your wallet? What do you use them for and do you carry balances on them? These simple questions show whether you can qualify for rewards credit cards and how well you can play the big game with the credit card issuer.

Once you apply for a rewards credit card, you join a big and risky game of drawing credit company's interest over to your side. What interest are we talking about? The interest of making more revenues from keeping you paying high-sky rates and fees of rewards credit card or just cutting down the rewards. In both the cases the lender wins.

However, there are some lucky and credit smart customers who venture to play the credit card rewards game and, following the right tactics, they come out as winners. The number of such cardholders is still rather small and credit companies are taking all the possible measures to prevent their spreading.

Why do credit card companies renounce the rewards they initially offered in their credit card application? Why is the amount of cash back reduced and why are frequent flyer points so hard to redeem?

The answer is simple. Credit companies give up any of their programs if it does not bring revenues. Wisely used credit card rewards have recently made up a segment that is too expensive and even unprofitable for the lenders to maintain.

Customers who have decided to join the game have worked out firm rules of managing rewards credit cards right, and the issuers started to lose revenues. Let's have a look at these rules which are as valuable as interesting, considering that rewards cards have often been one of the most effective ways of taking a customer to debt.

* A wise and provident customer who hopes to earn and redeem credit card rewards knows it beforehand that carrying balances is not the right strategy. To be more exact, it is utterly intolerable with rewards cards. APRs on such credit cards are so high that once you miss a payment, all that you earn later on will never make up for what you've paid in interest.
* The most gaining cardholders are those who spend big amounts on their credit cards. The more dollars you spend, the more point rewards you usually get. If you charge little, a reward credit card becomes useless piece of plastic.
* Customers who want to make sure they get a reward in the long run get a cash back credit card. Just imagine that paying at certain retailers with the Chase rewards card or a Discover card, you are eligible for a 5% cash back which can be claimed or added to your credit card account.

When a credit cardholder sticks to these rules, a credit card company begins to lose revenues. That is the reason why creditors are cutting off cash back from 5% to 2% or toughen the terms for redeeming earned points for a free airline ticket. Or they jack up APRs or charge huge annual fees to compensate for losses.

In any case, there is a golden rule for rewards credit cardholders - paying off the whole balance every month, you do not pay extra in interest and thus, there is always a chance that you will be rewarded as generously as you spend.


The Next Subprime Crisis?
American Families Rely on Credit Card Debt to Make......
Is the use of credit card info legal?

Americans’ Credit Card Debt Grew by 315 Percent-to $876 Billion-Since 1989; Families Depleting Home Equity to Cope.

American families are using credit cards to bridge the gaps created by stagnant wages and higher costs of living and balances have grown dramatically since 1989, according to a new report published today by Demos. “Borrowing to Make Ends Meet: the Rapid Growth of Credit Card Debt in America” documents the disturbing trends in sky-rocketing credit card debt, and also provides detailed data based on age, race and income demographics. The report discusses how these trends relate to the housing market crisis and the increase in predatory and sub-prime lending in the financial services sector.

Since “income volatility”, or the rate of fluctuation in family incomes, has almost doubled in the last two decades while wages have remained flat, families have turned to credit cards as a safety net in tough financial times. As of 2004, when the most recent Survey of Consumer Finances was conducted by the Federal Reserve, three out of every four American households had a credit card. The average debt among households with balances is $5,219. In total, American cardholders owe a staggering $876 billion on their credit cards.

“There’s a common misperception that families with credit card debt live beyond their means,” said report author and Demos Senior Policy Analyst Jose Garcia, “but the findings presented here show that credit card debt is a serious and quickly growing problem for millions of families who don’t have enough income to cover the basic costs of living.“

Borrowing to Make Ends Meet shows how credit cards aggravate the financial distress many households now feel—as healthcare, education and fuel costs rise and mortgage payments reset upward—by trapping cardholders in a cycle of debt with unnecessarily punitive fees and interest rates. Exorbitant charges were not always the industry standard; deregulation in the 80’s and 90’s enabled companies to raise rates far in excess of the risk factor of unsecured debt. Between 2004 and 2005, credit card issuers took in $8 billion in fees alone.

To cope with the rising pressure of credit card debt, and after exhausting other income and assets to meet unexpected costs, America’s families have turned to the equity of their homes. Over the last six years homeowners have cashed out a $1.2 trillion (2006 dollars) in equity, further endangering their financial well-being.

Faced with limited or non-existent assets, rising costs, sluggish wages, and increasing credit card debt, many Americans live on the brink of financial ruin. Borrowing to Make Ends Meet documents this reality by providing data on credit card indebtedness by household income, race/ethnicity, and age.

KEY FINDINGS (all figures in 2004 dollars, unless otherwise noted):

* Between 1989 and 2006, Americans’ overall credit card debt grew by 315 percent from $211 billion to $876 billion (2006 dollars).
* From 2001 to 2006, homeowners cashed out $1.2 trillion (2006 dollars) in home equity, often in an effort to cope with mounting credit card debt and to cover basic living expenses.
* Nearly six out of 10 households with credit cards revolved their balances in 2004. The average amount of credit card debt among those households reached an all-time high of $5,219, an increase of 89 percent from $2,768 in 1989.
* From 1989 to 2004, the percentage of cardholders incurring fees due to late payments of 60 days or more increased from 4.8 percent to 8.0 percent.
* In 2004, the average credit card-indebted family allocated 21 percent of its income to servicing monthly debt compared to the 13 percent dedicated to debt payments among all households.
* In 2004, 46 percent of very low-income (under $9,999) credit card-indebted households spent more than 40 percent of their income to pay off debt.
* From 1989 to 2004, credit card debt among very low-income households quadrupled from an average of $622 in 1989 to $2,750 in 2004.
* While white households carry more credit card debt, African Americans and Latinos have a higher percentage of credit card-indebted households. In 2004, of those with credit cards, 84 percent of African-American households and 79 percent of Latino households carried credit card debt compared with 54 percent of white households.
* Over 90 percent of African-American families earning between $10,000 and $24,999 had credit card debt.
* Since 1989, Americans over 65 have experienced the greatest increase in the amount of credit card debt carried. The average balance for this age group increased 194 percent from $1,669 in 1989 to $4,906 in 2004.

Borrowing to Make Ends Meet: the Rapid Growth of Credit Card Debt in America argues for a legislative overhaul to restore fairness in lending practices with a proposed Borrowers Security Act. It also urges Congressional leaders to address the economic factors behind rising debt by promoting increased savings, improving wages for working families, strengthening the unemployment insurance safety net, and tackling the problem of health care costs and insurance.

“Addressing the debt crisis is long overdue,” said Tamara Draut, Director of Demos’ Economic Opportunity Program. “Using credit cards as a way to make ends meet should not be a part of everyday American life. Neither should borrowing against your house to cover credit card debt or to deal with rising costs. It’s time that policymakers recognize the full context of the economic forces hitting the average household today, and take innovative steps to provide stability and opportunity to all families before this credit crisis worsens.”

To view the full report, Borrowing to Make Ends Meet: the Rapid Growth of Credit Card Debt in America, visit demos.org.

The Next Subprime Crisis?
Credit or debit?
Is the use of credit card info legal?

At 3:40 am on Friday morning, Former BestBank owner Edward Mattar took a hammer and smashed out a window of his 27th floor, Denver apartment. He then leaped to his death, landing in the courtyard in front of the building.

Mattar had run out of options. It was either this or face a 14-year jail term for fraud.

The bank, once labeled as one of America’s most profitable small banks, paid high rates of interest to attract deposits, then turned around and issued more than 500,000 credit cards to credit-challenged borrowers. As losses mounted, Mattar and fellow defendants hid the numbers from regulators while receiving performance bonuses.

Giving credit cards to subprime customers was a poor business decision by Mattar, but it is a lesson that Wall Street has yet to learn.

Bill Gross, the chief investment officer of one of the largest bond funds in the world, said this morning that the subprime-mortgage market was a “$1 trillion problem … There are $1 trillion worth of subprimes and Alt-As and basically garbage loans.” He expects another $250 Billion in losses from the subprime mortgage crisis.

It’s because of these massive losses that so many investors have turned away from the mortgage-backed securities that Wall Street has been peddling for years now.

The problem is that Wall Street is addicted to the high rates of return on these risky bonds. They just can’t help themselves when it comes to making a quick and easy buck.

You see low-grade, subprime debt means high interest rates, and therefore high return on investment (assuming the borrower can maintain the payments). That’s what makes it attractive.

So as investors all over the world turn away from buying subprime, mortgage-backed securities, Wall Street has turned to another market that is even riskier.

It isn’t just Wall Street that is addicted to cheap credit. Main Street is too. For years the American consumer has been sucking equity out of his/her home in order to pay for a lifestyle that he/she can’t afford.

But now that overvalued homes aren’t rising in price anymore, and in fact are starting to fall, the overstretched consumer can no longer extract equity to pay the bills.

Normally this would mean that the American consumer would cut back on expenses and start saving money. That’s how it has typically worked in history.

But instead, the consumer has turned to the most destructive of all types of debt - revolving credit.

Unlike mortgages, credit card debt is unsecured. So a default on this kind of debt means a total loss for investors (as opposed to mortgage debt, where a home auction could at least partially reimburse the bond holder).

Turning to credit cards to maintain a lifestyle that you can’t afford is financial suicide. Credit card interest is typically more than double the most risky of subprime mortgages. Once a consumer has gone too far down this path their bankruptcy is assured.

Of course it is also suicide for the lending institution. But like the consumer, American banks are dependent on those high-yield products, despite the near certainty of rising defaults and losses.

So why is the consumer taking this self-destructive path?

As Bonddad has so eloquently explained, wages aren’t keeping up with the cost of living.

The consumer cannot afford the lifestyle that he/she is accustom to. They are already starting to cut back on luxuries, but that isn’t enough. So instead of humbling him/herself, they are taking on debt to meet their basic needs.

Credit card debt growth is accelerating at a time when retail sales growth is slowing suggests that more consumers are turning to their cards to finance their basic monthly cash flow. As I have said previously, it appears that the credit card banks have become the consumer lender of last resort.

But credit card companies are blood-suckers. They are today’s equivalent of a legal loan shark. This is not sustainable and is sure to end in tears.

US banks… are adding to reserves not just for defaults on mortgages, but also on home equity loans, car loans and credit cards.

“What started out merely as a subprime problem has expanded more broadly in the mortgage space and problems are getting worse at a faster pace than many had expected,” said Michael Mayo, Deutsche Bank analyst.

“On top of this, there is an uptick in auto loan problems, which may or may not be seasonal, and there is more body language from the banks that the state of the consumer was somewhat less strong [than thought].”

by Garrett Johnson


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Credit or debit?
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