It’s like Consuming Interests is running a series on card issuers doing things that drive their customers crazy.

Now, the Associated Press is reporting that Citibank closed certain Shell MasterCard accounts without much notice to customers. According to the wire service, Shannon Burdette of Sykesville, Md., discovered her card had been canceled when she tried to use it at the gas station and the plastic was rejected. Burdette said she and her husband used the card regularly and always paid on time.

AP reports: “People across the country have been reporting similar experiences in postings on various consumer Web sites. Citi confirmed the basics. The bank said in a statement it "decided to close a limited number of oil partner co-branded MasterCard accounts."

That includes not only Shell, but Citgo, ExxonMobil and Phillips 66-Conoco cards. The close date was Wednesday, and letters were sent out Monday to customers informing them of the change, a Citi spokesman said. The bank would not say how many cards were shut down or how much available credit they represented.”

Has anyone else experienced this? Has anyone else had luck finding a new card in this environment? And take the poll below!

Update: Join us for a live chat at noon Tuesday, Nov. 3, with credit card guru Curtis Arnold, founder of CardRatings.com.

He'll be able to answer questions on what tactics credit card issuers are now taking with consumers, and what are your rights. Plus, we'd like to hear what your experience with cards has been of late. You can also submit questions in advance to eileen.ambrose@baltsun.com  

Posted by Eileen Ambrose at 9:59 AM | Permalink | Comments (52)
Categories: Credit cards
        

After hearing that Bank of America has started charging annual fees of $29 to $99 on some credit cards, Consuming Interests readers told us loud and clear: they plan to cancel their credit cards if the card issuer starts levying a yearly 'membership' payment.

Today, business columnist Eileen Ambrose reviewed the potential impact canceling a credit card would have on your credit history and credit score.

It might come as a surprise to discover that a good payment history for a card would remain on your credit report long after you've canceled it.

Also, you can mitigate some of the other negative effects, like having a smaller amount of available credit, by opening another card with a similar credit limit as the one you plan to close. Eileen's column has more details.

But, consumers tend to be very loyal to their credit cards, Eileen said. So, we're wondering: what would prompt you to go to the trouble of dropping the plastic you've been using for years? Let us know in the poll and feel free to elaborate in the comments below.

Posted by Liz Kay at 9:37 AM | Permalink | Comments (17)
Categories: Cheap/Frugal, Credit cards, Naughty businesses/NBotW
        

And so it begins!

Bank of America has informed a small group of its credit cardholders that they will be charged an annual "membership" fee starting in February 2010, according to the Associated Press.

Customers could reject the fee by the Dec. 16 deadline, but then the account would be closed, according to the story.

Apparently the fees, which will range from $29 to $99, are targeted at those who rarely carry a balance or incur penalties. 

This is exactly the kind of tactic that banking experts predicted credit card issuers would try. And unlike the friendly incentive Andrea Walker's credit card company offered her, this punishes consumers AND the credit card company alike.

Why so?

Continue reading "Bank of America begins charging annual fees on some credit cards" »

Posted by Liz Kay at 8:43 AM | Permalink | Comments (49)
Categories: Cheap/Frugal, Credit cards
        

We've written a lot about credit card companies lowering credit card limits and canceling cards for lack of use.

Well, I got a call from one of my credit card companies last night asking what they could do to get me to use my credit card more.

Like many people, I worry about job security, so have stopped using my credit cards. The representative from the card company asked me what is the primary thing I look at when deciding to use a credit card. Interest rate, I told him. So, he lowered my interest rate to zero percent for six months.

"We want our card to be the primary one you turn to when making purchases," he said.

I took the offer, but don't know that it's going to make me start using the card again. My goal is tostop using credit. I'm sure the credit card company is hoping that I'll make purchases and not pay them off in the six months and then they make money off of me. They also make money when I use the card off of interchange fees it charges retailers.

So are others of you out there also getting offered perks to use your credit cards more? Tell us your story.

Posted by Andrea Walker at 11:29 AM | Permalink | Comments (2)
Categories: Credit cards
        

Looks like more of us are cutting up our credit cards, or putting them in the freezer for safe keeping.

The Associated Press is reporting that the Fed says consumers cut debt by a record $21.6 billion in July from June, the most since 1943.

Looks as if the bad economy could be making people think a little harder about how they use credit. Perhaps, the free spending ways of the last decade are behind us.

Anyone else finding that they are depending less on credit? Where else are you cutting back?

Posted by Andrea Walker at 5:38 PM | Permalink | Comments (1)
Categories: Budgeting, Credit cards, Credit reports, Debt
        

Maybe the reminder of how much you still owe is painful, but please: examine your credit card statements carefully, even if you won't be able to send more than the minimum payment.

What happens if you don't? Your card issuer might find you liable for fraudulent purchases made by scammers or identity thieves, if you continue to pay the bill without contesting the illegal charges.

A Colorado man knows this all too well, as he has had to emerge from retirement to pay off $11,000 in fraudulent charges made on his Bank of America credit card, according to this KMGH-TV story. He was told he couldn't contest the charges since he continued to make $200 minimum payments, and so transferred the debt to another card.

There's lots of good reasons to review your credit card statements. Sun dining blogger Elizabeth Large has said that occasionally servers will supplement their tips on credit card receipts,for example. 

Posted by Liz Kay at 11:09 AM | Permalink | Comments (0)
Categories: Credit cards
        

The drumroll, please. The credit card that generates the highest satisfaction rate is......American Express.

That’s according to the 2009 Credit Card Satisfaction Study released this morning by J.D. Power and Associates.

Overall customers’ satisfaction with their plastic fell to the lowest level since J.D. Power started the survey three years ago, a decline largely driven by unhappiness over fees and rates.

The group looked at satisfaction with rewards, benefits and services, problem resolution, interaction, fees and rates, and billing and payment process. Findings are based on replies from more than 9,000 card users.

J.D. Power found that one out of five customers saw their interest rate go up in the past year. Twice the percentage that said so in last year’s survey.

And consumers who carry a balance month to month are the ones who reported the biggest drop in satisfaction over fees and rates. Of this group, about 25 percent saw an increase in the interest rate since last year.

Maybe we shouldn’t be so surprised about American Express grabbing first place. Every year, the card has come out on top. The card ranks especially well in rewards, benefits and services, and billing and payment process, J.D. Power says.

The study ranks cards on a 1,000 point scale, and American Express got 762 points.

No. 2, with 751 points, is the Discover Card. After that, comes National City, Wells Fargo, Barclaycard, U.S. Bank and Chase, which come in above the industry average for satisfaction.

Coming in below the industry average: Citi Cards, First National Bank of Omaha, Bank of America, Fifth Third Bank, HSBC, Capital One, Target Visa, WaMu, GE Money, Credit One Bank and First Premier Bank.

So what’s in your wallet? And do you agree with J.D. Power’s survey?

Posted by Eileen Ambrose at 7:00 AM | Permalink | Comments (4)
Categories: Credit cards
        

Consumerworld.org gives us a heads up to a troubling loophole in the Credit Card Accountability, Responsibility and Disclosure Act (otherwise known as the credit card reform bill).

Under the new credit card reform bill, banks have to give consumers 45 days notice before changing fees or interest rates. And consumers have a right to opt out of those changes within that time frame.

However!

According to the federal Office of the Comptroller of the Currency, part of the Treasury Department, banks can go ahead and start applying those changes to new transactions after 14 days of issuing the notices --- even if you ultimately reject the changes.

Government officials may address this problem with regulations but until then, be on the lookout for any notices from your bank or credit card issuers. 

Posted by Liz Kay at 9:14 AM | Permalink | Comments (1)
Categories: Credit cards
        

As students head back to college campuses in the next couple of weeks, they're going to be met by credit card companies hawking plastic.

With credit card reform passed this year, credit cards have gotten a pretty bad reputation in some circles. College kids are getting warnings from everybody to stay away from the cards.

So now marketers are pushing prepaid cards. Parents put money on the cards that their kids then use. No more racking up debt. At least we hope.

But as my colleague Eileen Ambrose writes in a story in The Sun today, debit cards might not be that great of an alternative either. The cards come with fees, some which are hidden, she said.

Ambrose writes that a checking account with a debit card tied to it might be a better option. And when students learn to handle that responsibly over time, they can graduate to a credit card.

Posted by Andrea Walker at 9:40 AM | Permalink | Comments (4)
Categories: Budgeting, College/Financial aid, Credit cards
        

FICO, the company that gave us the widely used credit score, studied the impact of credit card companies lowering the credit limit on millions of consumers.

The result, FICO concludes, little impact on many customers, especially those who tend to have low balances.

But here are more amazing stats from the survey:

—33 million card holders had their credit limits cut between October 2008 and April 2009. (That’s on top of 25 million consumers getting limits cut for a similar period a year earlier.)

Of the 33 million, nearly 9 million of them had negative items, such as late payments, which could have triggered the reduction in credit limit. That means about 24 million had their credit limits reduced for no fault of their own.

FICO studied cardholders in the group of 24 million. The median FICO score was 760, on a scale of 300 to 850. The average reduction of their credit limit was $5,100.

The FICO folks say these consumers typically carry low balances anyway, so the reduction in the credit limit had little impact. Of the one-third of this group that saw a drop in score, the loss was “well under 20 points,” FICO said.

Of course, you have to wonder how far did the scores drop for those with higher credit balances.

Anyone seen a drop of more than 20 points?

Posted by Eileen Ambrose at 1:00 PM | Permalink | Comments (0)
Categories: Credit cards
        

Sears and Kmart today announced the introduction of a Christmas Club card that the retailers claim will help shoppers save for holiday shopping. Shoppers can put aside money on the card from now until Nov. 14. They can earn rewards of up to $100 on the car based on how much they save.

The announcement comes as retailers are bracing for a slow Christmas season and consumers are depending less on credit cards. The retailers have also been touting their layaway program.

Susan Ehrlich, president of financial services for Sears Holding said in a press release: “We heard our customers were concerned about how they are going to pay for their holiday shopping this year and we wanted to provide a way to ease their concern.”

But the card is also good for Sears and Kmart sales. It guarantees people who sign up for the card will have to shop their stores when the holiday season hits.

I’m all for the notion of saving. Too many people are probably still paying for their holiday purchases from last year. But consumers can save on their own too. Open a savings account you don’t have easy access to. Or put 50 bucks a week aside in your drawer if that’s what makes you save.

The rewards Sears and Kmart are offering are good if that’s the only place you plan to do your shopping. Then you might consider signing up for the card. But I bet there will be pretty good deals at all the retailers given the gloomy holiday shopping season that is expected.

Posted by Andrea Walker at 5:54 PM | Permalink | Comments (0)
Categories: Budgeting, Credit cards, Debt, Holiday shopping, Shopping
        

I fell for it. The lure of a 20 percent discount on the spot and the promise of more coupons in my mailbox convinced me to open a Macy’s credit card even though I knew better. What I didn’t know is that I was opening two credit cards in one.

My new credit card is used as a Macy’s card when I shop at the department store. But it can also be used as a Visa card anywhere else.

How did I find this out? I paid my bill online, only to get a paper bill saying I hadn’t paid. I was charged a late fee and an exorbitant interest rate on the “unpaid” balance.

 When I called Macy’s, the customer service guy said I paid the Visa bill, but not the Macy’s. Can we say, confusion? I didn’t even know I had a Visa bill. And with a very high limit too.

The guy transferred my payment to the Macy’s bill. But I have to say I’m still a little peeved. Like a lot of people, I’m not using much credit these days. And I definitely don’t want that much open credit.

It just reminded me to be very, very careful with credit cards. Credit card companies are raising interest rates and cutting limits as they prepare for more stringent rules to take effect in February. Banks also say they are seeing higher default rates because of the economy. Read what my colleague Eileen Ambrose recently wrote about one man’s experience. 

Here are tips from Consumers Union about credit card traps to avoid.

(Photo courtesy of AP)

Posted by Andrea Walker at 9:13 AM | Permalink | Comments (1)
Categories: Banks, Consumer protection, Credit cards, Debt, Shopping
        

Heads up: Annapolis Police believe a skimming device had been installed on a Bank of America ATM in Annapolis between June 25 and July 5 to steal customers' debit card information, and they're looking for two suspects.

Bank employees reported that a customer spotted a suspicious box on the ATM on July 5. Annapolis detectives also noted several reports of bank fraud in which the victims had used that Church Circle ATM.

Skimmers are devices that copy the information from the magnetic stripe on ATM users' cards. The Annapolis Police have surveillance images of two suspects they believe installed the device onto the ATM.

Later, the card numbers were used to make online purchases, including cell phones in the United Kingdom as well as memberships to porn and other sites. 

If you, too, were prey to these criminals, contact the Annapolis Police at 410-268-9000.

Nicole Nastacie, spokeswoman for Bank of America, said the company does not comment on specific incidents but does work with law enforcement as well as monitors its ATMs for unusual activity. Anyone who spots fraudulent charges should contact their bank. 

How can you protect yourself from skimmers?

Continue reading "Skimmer suspected at Annapolis ATM" »

Posted by Liz Kay at 8:58 AM | Permalink | Comments (0)
Categories: Consumer protection, Credit cards, Identity theft
        

A week ago, I wrote about the Rev. Nathaniel Pierce who was upset that Chase had changed his credit card terms on him, essentially raising his minimum monthly payment from 2 percent of the balance due to 5 percent.

Here’s the update:

Pierce says he got a letter from Chase late last week, suggesting he contact its Proactive Solution Team if the change in terms will present a hardship for him. Pierce called and was told he qualified for one of Chase repayment plans. His minimum monthly payment goes back to 2 percent and his interest rate of 3.99 percent was also cut in half.

But as part of the payment plan, Pierce must close his account, so he can’t use the card any more. Pierce took the offer.

He wrote in an email, “Well, as I told the very nice woman member of the PS team, I was planning to close the account anyway because I did not want to do business with a bank which unilaterally changed the terms of our deal executed three years ago.”

Posted by Eileen Ambrose at 11:55 AM | Permalink | Comments (34)
Categories: Credit cards
        

Earlier this week, I posted a comment from Mary, who was charged a fee by her credit card for a foreign currency conversion, even though she made her purchase in Switzerland in U.S. dollars.

I asked if anyone knew of a card that didn't do this.

Curtis Arnold, founder of CreditRatings.com wrote in: "Just wanted to let you know that we track these for the NY State Banking Dept. every quarter and also that the Charles Schwab credit card does NOT charge any currency fees.

And he provided the link.

Posted by Eileen Ambrose at 5:04 PM | Permalink | Comments (1)
Categories: Credit cards
        

Credit card companies are clamping down on any consumer who suddenly seems like a financial risk.

But according to Robert Manning, author of Credit Card Nation, card companies are doing data mining to look at where we spend our money to determine if we might have lost our job or appear to be having money problems.

In an interview with Marketplace, Manning compiled a list of 10 things you shouldn’t buy with your credit card lest it send up red flags to your card company.

Among them:

Purchases at 99 cent stores or Wal-Mart, if you never shopped those bargain places before. From the card issuer’s viewpoint, it’s suspicious that you are suddenly a discount shopper.

Retread tires. What, you can’t afford new ones?

Porn or strip clubs. Are you trying to take your mind off financial problems?

Marriage counseling. Could it be that you are your spouse are fighting about money?

Taxes. Bad sign if you add debt on a card to pay off another debt obligation.

Check out the list and tell us what you think. Do you really believe card companies are scanning statements for such purchases?

Posted by Eileen Ambrose at 12:02 PM | Permalink | Comments (3)
Categories: Credit cards
        

World travelers, check your credit card. You might be charged a foreign exchange conversion fee even when making purchases in U.S. dollars.

Here's an email I got from Mary E.:

For our occasional international travel, we purposely keep a Capitol One Visa credit card that charges no foreign currency conversion fee. On a recent trip in Switzerland, several times when we used the card, we were asked whether we wanted to pay in U.S. dollars or Swiss francs. We did not know which would be to our advantage. In each case, we were told by the business that it would usually be to our advantage to pay in dollars. We chose dollars, but noticed when presented with the receipt that the transaction processing entity charged a currency conversion fee that was included in the exchange rate. Would we have been better off paying in Swiss francs, since our Capitol One card charges no conversion fee?

I'm somewhat familiar with Mary's issue because of an article I wrote yesterday on credit card issuers changing terms on consumers before credit card reforms kick in February.

In my reporting, Greg McBride of Bankrate.com told me that issuers have been getting more creative with fees. One of them is foreign conversion fees.

Usually, you only trigger a fee when you are making a purchase in a foreign currency. But McBride says card issuers have started adding the fee even if you are making purchases with U.S. dollars outside the country. The Caribbean, for example, is one place where you have the option of paying in dollars or other currency.

"Now we are seeing issuers assess the fee regardless of the currency...as long as the transaction takes place on foreign soil," McBride says.

If any of you know of a card that doesn't charge a foreign coversion fee, let us know. We'll pass the word onto Mary.

Posted by Eileen Ambrose at 12:03 PM | Permalink | Comments (1)
Categories: Credit cards
        

Card companies don’t nickel and dime you. It’s more like $10 or $30.

Bankrate.com released its first Credit Card Study that looks at the terms offered by major credit card issuers.

Among the findings:

— Late fees averaged from a low of $20.70 to as much as $38.50

— Go over your limit and pay an average fee of $32

— You’ll pay at least 3 percent on cash advances, or more if your card comes from Bank of America, Wells Fargo or US Bank

— If you talk to a human while making a payment over the phone, you’ll pay $10 to $15

— Grace periods now run from 20 to 25 days

 Makes you want to use cash.

Posted by Eileen Ambrose at 2:12 PM | Permalink | Comments (0)
Categories: Credit cards
        

Reader Mary Ellen Stepowany made my Friday afternoon when she called to say that the lights along the Harbor Promenade were finally lit after dark.

The waterfront path connecting Federal Hill and Canton is a popular destination for many people whether their usual mode of transportation is bike, stroller or their own two feet.

It's been more than two years since street lights were installed along Union Wharf, an undeveloped property, and more than a year since we first mentioned the unlit street light problem in Watchdog. It was determined that although the city's department of transportation built the path in this area (near where Wolfe Street and Thames streets deadend at the water) the developer Larry Silverstein needed to connect the lights to power.

And as we told you in Sunday's Watchdog update, transportation staff worked with the developer to locate the conduits and connect the lights. Stepowany, who can see the path from her home, saw workers at the lights early last week and spotted the lit fixtures later.

Elsewhere in the Sunday paper ...

Continue reading "Credit card reform and Harbor Promenade lights: Consumer Sunday" »

Posted by Liz Kay at 9:06 AM | Permalink | Comments (2)
Categories: Cheap/Frugal, Credit cards, Watchdog
        

Credit card companies will still make tons of profit off credit card users, even with the reforms passed by the Senate yesterday, sez Sun business columnist Jay Hancock over at his blog.

Thus, he's not spooked by the ominous threats posed by the spokesman of the American Bankers Association in a New York Times story predicting credit card issuers will punish people who pay off their bills on time by charging annual fees and interest on purchases as soon as they are made.

I see Jay's point and would also add ... 

Continue reading "Credit card reform bill results in annual fees?" »

Posted by Liz Kay at 9:01 AM | Permalink | Comments (2)
Categories: Credit cards
        

We told you yesterday about skimming, just one of the potential threats users of credit and debit cards face with every swipe.

On the other hand, paying with plastic definitely offers users a lot of advantages: you get the convenience of not carrying cash (which can be stolen) as well as multiple records of your purchases. These forms of electronic payment allow you to take advantage of lower prices on the Internet --- although we've told you about alternate payment methods such as Billeo and BillMeLater that are also available.

In some situations, you need a credit card to secure a reservation --- for hotel rooms or rental cars, for example.

And with credit ... 

Continue reading "Credit versus debit cards: what's in your wallet? " »

Posted by Liz Kay at 9:27 AM | Permalink | Comments (0)
Categories: Banks, Cheap/Frugal, Credit cards
        

The Heartland data breach resulted in credit card fraud for only a small number of consumers, according to the company --- though they won't say how small is small. But dozens of banks and credit unions had to alert their customers to the potential that they, too, could have been affected, in some cases issuing new credit and debit cards, just in case. Provident Bank sent out new cards and put transaction limits on debit cards and Sovereign Bank will send customers a new card at their request.

Tom Field of bankinfosecurity.com pointed out the largest examples of similar data breaches weren’t banks themselves. For example, hackers used malware to capture millions of card numbers from the Maine-based Hannaford Bros. supermarket chain last March. And just two weeks ago, T.J.Maxx and Marshalls offered a 15 percent off sale to apologize to customers for a similar hacker attack in 2007.

"None of these happened to a bank and yet the banks are left having to explain to their customers, and to bear the cost of replacing the cards."

Unlike banks, which must have federally mandated security systems, companies such as Heartland aren’t held to the same standards, even though they handle TONS of financial data, Field said.

So how can you protect yourself?

Continue reading "Data breaches and credit card fraud: protecting yourself" »

Posted by Liz Kay at 10:02 AM | Permalink | Comments (0)
Categories: Banks, Consumer protection, Credit cards, Identity theft, Naughty businesses/NBotW
        

Eileen's Sunday column highlights some of the financial lessons we've learned (or been forced to learn) in 2008.

The events of the year really reinforces why financial gurus advise maintaining an emergency fund for unexpected expenses, investing only long-term money in the stock market (nothing you'd need within five years) and to expect risk in all investments --- even real estate.

Some of these concepts might not have been as clear during the boom years, but 2008 definitely put things in perspective.

There are still some questions that remain unanswered in this week's Watchdog, however ...

Continue reading "Consumer Sundays: 2008's financial lessons and lights out at the Harbor Promenade" »

Posted by Liz Kay at 8:10 AM | Permalink | Comments (0)
Categories: Budgeting, Credit cards, Retirement, Watchdog
        

These days consumers have a lot more options than just paper and plastic when it comes to paying for online purchases.

We told you in yesterday's Sun that services such as eBillme, Bill Me Later, Billeo and PayPal let customers make online payments without using a credit card. Bill Me Later asks for your name and birthday and the last four digits of your Social Security number. Billeo saves your bank account information in a toolbar.

Just FYI: Consumer Reports points out ...

Continue reading "Alternate forms of payment catching on online" »

Posted by Liz Kay at 4:09 PM | Permalink | Comments (0)
Categories: Budgeting, Credit cards, Holiday shopping, Shopping
        

Finally! Consumers will see a little relief from onerous credit card practices ...

Credit card companies will no longer be able to charge you higher interest rates for existing balances, to hike rates during the first year after opening a credit account and to charge interest twice on purchases already repaid, a practice known as double-cycle billing. They would also require banks give customers a minimum of 21 days to pay their bills.

"These new regulations are great news for most consumers," wrote Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook, in an e-mail. "Consumers have complained for years about many of these practices that are being eliminated with today's reforms.

But, he adds that it's a shame that the new rules won't go into effect until 2010. So watch your bills carefully before that time --- and after as well. 

Continue reading "New credit card rules --- two years from now" »

Posted by Liz Kay at 10:57 AM | Permalink | Comments (0)
Categories: Credit cards
        

If you’ve been counting on transferring your credit card balances to another card with friendly terms, Bill Hardekopf has some bad news.

Hardekopf is CEO of LowCards.com which tracks credit card deals.

Remember the days when you could transfer balances without a fee to a card with zero interest rate for 12 months? Those deals pretty much went away a few years ago when card issuers started adding a 3 percent transfer fee, not to exceed $50 or $75, Hardekopf says.

But in the past year, he says, the ceiling has come off. If you transfer $5,000, you’ll pay a $150 transfer fee, he says. Ouch!

It gets worse. Hardekopf says favorable interest rates on transfers don’t necessarily last a year anymore. Depending on your credit score, a favorable rate might only last three months.

It gets worse. Instead of 0 percent introductory interest rate, the temporary rate may be 2.99 to 3.99 percent until it kicks up to the standard rate, Hardekopf says.

It gets worse. Some issuers limit how much you can transfer.

There are still issuers that offer good deals, but you must shop around.

Hardekopf says Capital One Platinum Prestige offers zero interest on balance transfers through October of next year; Discover More offers a zero rate for 12 months.

Posted by Eileen Ambrose at 1:04 PM | Permalink | Comments (0)
Categories: Credit cards
        

C'mon. How can we choose any other business but Citigroup for this week's Naughty Business?

Blaming a difficult economic environment, Citigroup is laying off thousands of employees and announced last Friday that it will start raising interest rates on card holders after executive pledged in 2007 to Congress that it would not raise rates at any time for any reason on customers until an account expired.

So much for promises.

We understand that companies are hurting under the credit crunch, but hey, so are consumers, OK? How does raising anyone's interest rate make it easier for cardholders to continue using their cards to spend or pay back what they owe?

Continue reading "Citigroup Raises Interest Rates on Card Holders" »

Posted by Dan Thanh Dang at 7:12 AM | Permalink | Comments (13)
Categories: Credit cards, Economy, Naughty businesses/NBotW
        

Happy Monday, everyone. I don't know about you, but I'm sick of candy already. I was visiting my Mom's and they had all of 9 trick or treaters so they were letting the kids grab handfuls from the candy bowl.

(ahem) I might have snuck a couple Junior Mints and M&Ms into my purse.

Anyhow, so did anyone going to the Waverly Farmer's Market notice how long that light is at Barclay Street? Well, thanks to Liz, the Department of Transportation has a fix set for the end of this month that will make those long car lines leaving the market go away faster. I feel like I need to go around the city and write down all the traffic signals that make me crazy because they're either way too long or way too short. 

There's one near Hopkins Hospital that is an accident waiting to happen since people run the left turn signal ALL the time. 

But I'm going to save my traffic light rant for another time. I don't want to start our Monday ranting... unless you feel like ranting?

Besides, I can't get to uppity since I have a confession to make about Social Security Number requests. I have to tell you that as much as I rail against companies that demand your SSN during a transactiion, I caved recently when I tried to renew my Verizon Wireless contract. The guy at Best Buy said he couldn't sign me up without it and I was pressed for time so instead of standing my ground and saying, "NO," I asked him if I could type it in myself... I hang my head in shame. 

Continue reading "Consumer Sundays: Green says go, Social Security Numbers and Open Enrollment" »

Posted by Dan Thanh Dang at 7:08 AM | Permalink | Comments (0)
Categories: Complaints, Credit cards, Healthcare, Identity theft, Personal finance, Watchdog
        

Just a taste of what you'll have to look forward to this weekend....

Find out which traffic signal in town was driving people nuts at a local farmer's market in Liz's Watchdog column.

Find out in my Consuming Interests column how American Express drove me nuts when I called them to help with a customer's complaint about a request for his Social Security Number.

Find out what Eileen says you can expect in open enrollment this month so healthcare surprises don't drive you nuts this year.

Tune in Sundays!

 (www.freefoto.com)

Posted by Dan Thanh Dang at 1:00 PM | Permalink | Comments (0)
Categories: Complaints, Credit cards, Healthcare, Personal finance, Watchdog
        

Continue reading "Will the Fed Rate Cut Help Consumers?" »

Posted by Dan Thanh Dang at 1:30 PM | Permalink | Comments (0)
Categories: Credit cards, Debt, Economy
        

Happy Monday dear readers.

How many of you out there realized there is a difference between using your credit card and debit card at gas stations, hotels and car rental agencies?

Better yet, do you think I was too tough on the Zulichs? Every parent wants to help their children, though, right? Do you think Elizabeth could have eventually resolved this on her own or do you think it was only resolved because of Dad?

Are you like me? Worried that too many people aren't financially literate?

With today's financial crisis and move toward tightening credit policies, being financially illiterate could really hurt you.  As Eileen told you in her Sunday column, the current credit crunch isn't just affecting auto loans and mortgages, it's also affecting credit cards now, too.

Continue reading "Consumer Sundays: credit cards and abandoned cars" »

Posted by Dan Thanh Dang at 7:08 AM | Permalink | Comments (1)
Categories: Cars, Complaints, Credit cards, Personal finance, Watchdog
        

The House of Reps passed the Credit Cardholders' Bill of Rights today by a vote of 312-112.

We've told you about efforts to rein in bad credit card practices before, here, and here .

The White House agrees that there are abusive credit card practices, but opposes the cardholders' rights bill for fear that it could further discourage lending.

The American Bankers Association agrees. Edward L. Yingling, ABA president and CEO, said:

“The American Bankers Association is very disappointed by the action today of the House of Representatives. The so-called “Credit Cardholders’ Bill of Rights” (H.R. 5244), while well-intentioned, will increase the cost of credit for consumers and small businesses across the country, result in less access to credit for consumers and businesses alike, and may further roil the securities markets – all at a time when our economy can least afford it.

Continue reading "House of Reps passes Credit Cardholders' Bill of Rights" »

Posted by Dan Thanh Dang at 4:43 PM | Permalink | Comments (2)
Categories: Complaints, Consumer protection, Credit cards, Debt, Economy
        

Don’t make a major purchase on your credit card without checking your line of credit first, warns Consumer Action.

An online survey by the consumer group found that nearly 18 percent of people had their credit limit cut without them asking for it. If that happened to you, you could easily end up going over the limit and be slapped by a hefty fee.

But that’s not the only change the consumer group uncovered. Nearly half of the 1,083 people surveyed said the interest rate on their card had been raised.

During this credit crunch, card issuers have been reviewing customer accounts. Consumer Action says that customer service representatives at American Express, First Command, HSBC, US Bank, Washington Mutual and Wells Fargo have said that credit limits would be lowered if it appeared that a customer seemed riskier. That could be because of the customer’s credit score, late payments and balances approaching the credit limit.

Consumer Action also found that consumers were tightening their belts because of the weak economy. About four out of 10 said they reduced their use of credit. But more than a quarter were using more of their credit, and more than one-third had been charged an over the limit fee.

Posted by Eileen Ambrose at 11:28 AM | Permalink | Comments (0)
Categories: Credit cards
        

Following yesterday's posts on reforming credit card rules, we thought it would be appropriate to choose LowCards.com, which helps you compare credit card offers, as our Consumer Web Site of the Week.

With all the tricks and traps, rates, and reward programs out there, you need all the help you can get to make sure you're getting the best deal. LowCards.com can help you shop for the best offers.

The Web site offers two great resources: a list of the top cards in each of the credit card categories along with an unbiased opinion on every card; and the Complete Credit Card Index where you will find the current rates of all 1300-plus credit cards available in the United States.

Best yet, both are free.

Posted by Dan Thanh Dang at 7:06 AM | Permalink | Comments (0)
Categories: Consumer Web Site of the Week, Credit cards
        

So last week, a bill that would abolish unpopular credit card industry practices passed a key U.S. House committee test late Thursday, moving it toward a vote by the full House.

According to this creditcards.com story, the bill:

targets credit card companies and seeks to ban practices such as retroactive interest rate increases, except under certain conditions, and limits "double-cycle" billing, which increases the ability of card issuers to impose interest charges.

Under the proposed legislation, consumers would get a minimum of 45 days' notice of any interest rate increases and have at least 25 days between the date of the monthly statement and the due date to pay their bills. Last-minute amendments to the bill added provisions to block credit cards issued to people under 18 years of age and ban over-the-limit fees caused by "holds" placed on the credit card account.

But while that should be good news, Chuck Jaffee of MarketWatch warns that it could spell hard times for all cardholders since:

Continue reading "An end to credit card tricks and traps?" »

Posted by Dan Thanh Dang at 2:34 PM | Permalink | Comments (0)
Categories: Complaints, Consumer protection, Credit cards
        

So here are some of the nasty tricks and traps that credit card companies use to increase the likelihood that you'll end up paying fees and penalties, according to Americans for Fairness in Lending.

Fees and More Fees – On any given month, you might pay a late payment fee, overlimit fee, cash advance fee, balance transfer fee, foreign exchange fee, bill payment fee, Western Union fee, and whatever else your lender can devise. Not to mention monthly and annual fees.

Tricks to Make You Pay Late – These come in many varieties. If you’re late you’ll pay a hefty fee and your interest rate may go up. Check each statement carefully and pay your bill as soon as it arrives.

Changing Due Dates – Your bill will not be due on the same day every month.

Early Due Dates – Bills may be due just a few days after you receive them.

Weekend Due Dates – If your due date is on the weekend and your payment arrives on the date, it won’t be processed until Monday and you’ll be considered late.

Morning Due Times –Your payment may be due at 9am on the due date, not 5pm.

Approved Overlimit Charges – If a purchase puts you over your limit, your credit card company will approve the charge then hit you with an overlimit fee and maybe even raise your interest rate. Keep careful track of your balance and know that even approved charges may put you overlimit.

Universal Default – Pay Card A on time but pay late to Card B (or anything else monitored by your credit score) and your interest rate on Card A may jump!

Continue reading "Credit Card tricks and traps" »

Posted by Dan Thanh Dang at 11:30 AM | Permalink | Comments (0)
Categories: Credit cards, Debt, Naughty businesses/NBotW
        

With airlines getting stingier with their frequent flier programs, does it make sense any more to have a credit card that rewards you with miles?

“For the average American consumer who typically flies domestically in coach, collecting miles doesn’t make sense,” says George Hobica, founder of Airfarewatchdog.com.

In fact, we would be better off with a credit card that gives us cash back as a reward instead of miles, he says.

Consider: Credit cards that reward you with air miles typically carry a higher annual fee from $50 to $100, Horbica says. It takes about $25,000 worth of credit card purchases to rack up 25,000 miles. And 25,000 miles get you a domestic ticket worth about $200. “It really costs you $250,” if you count the annual fee, he says.

Plus, now that airlines are starting to charge a fee to use your frequent flier miles, that ticket might cost you $275.

Say instead you charged $25,000 a year on the American Express Blue Cash or Chase Freedom card. Neither has an annual fee.

Hobica calculates that you would get $712 in cash back from American Express and $444 on the Chase Card. Those cash rebates are higher than the value of the domestic ticket.

It’s still worth hoarding frequent flier miles if you fly business class or internationally or like to upgrade your seat, Hobica adds. “Those are high-value transactions that make sense,” he says.

Posted by Eileen Ambrose at 11:35 AM | Permalink | Comments (1)
Categories: Credit cards
        

You might know your credit score, but do you know what it means?

An annual survey by the Consumer Federation of America found that while our understanding of credit scores has gone up in the past year, our know-how is still substantially lacking.

Less than one-third, for instance, knew that a credit score indicates the likelihood of you not repaying a loan and not how smart you are about credit. Twenty-eight percent knew that 700 is about the lowest credit score you can have to still qualify for a low rate mortgage. Nearly three-quarters mistakenly believed income influenced credit scores while 40 percent erroneously thought age was a factor. And 59 percent didn’t know that maxing out a credit card would lower their score.

Washington Mutual Bank, which conducted the survey with the consumer group, says that you can reduce your finance charges on credit cards by $105 a year if you can rise your credit score by 30 points. If every consumer did that, the total annual savings would be about $28 billion.

How can you raise your score? The groups say:

Pay your bills on time each month.

Don’t max out your credit cards, or even get close to maxing them out.

Pay off debt, don’t just move it from one card to another.

Posted by Eileen Ambrose at 2:51 PM | Permalink | Comments (0)
Categories: Credit cards
        

How many out there know that Montgomery Ward went out of business in 2001? Now, how many know that a catalog company bought the Wards name brand out of bankruptcy in 2004? If you did, I'm awarding quality points to you. Bravo.

Now here's the bad news for anyone doing business with Wards.com and six other affiliated sites that includes three Sears brands (SearsHomeCenter.com, SearsShowplace.com and SearsRoomforKids.com). At least 51,000 records were breached at the parent company of those brands, Direct Marketing Services Inc.

Someone hacked into and stole consumer credit card information, according to DMSI, which informed its payment processor and Visa and MasterCard, and filed a report to the U.S. Secret Service.

Continue reading "Direct Marketing Services doesn't tell consumers about data breach" »

Posted by Dan Thanh Dang at 7:10 AM | Permalink | Comments (0)
Categories: Complaints, Consumer protection, Credit cards, Naughty businesses/NBotW, Shopping
        

The high price of gas might make you stop paying at the pump.

Some gas station owners have banned credit-card transactions entirely. Others are charging more for the privilege of paying with plastic.

I have heard of stations locally --- on Falls Road in Hampden, on York Road in Timonium and near Taylor Avenue in Towson --- that have set two different prices per gallon of gas: one for those paying with cash and another for credit cards.

The difference can be as much as 10 or 12 cents a gallon. One of my friends, faced with the prospect of paying nine cents more per gallon, said she got back in her car and drove to another station.

She wisely did not pay the extra fees to use the ATM at the station, which would have charged her a fee --- along with her bank.

Why the difference?

Continue reading "Gas more expensive when paying with credit cards?" »

Posted by Liz Kay at 6:05 AM | Permalink | Comments (4)
Categories: Cars, Cheap/Frugal, Credit cards, Gas prices
        

Two regulators are accusing credit card marketer CompuCredit Corp. of deceptive practices in the selling of credit cards to subprime consumers.

Yesterday, the Federal Deposit Insurance Corp. said it wants the Atlanta-based credit card marketer along with two banks to pay restitution of more than $200 million to consumers.

The FDIC also seeks civil penalties of $6.2 million from CompuCredit and a total of $431,000 from the company’s two banking partners – First Bank of Delaware in Wilimington and First Bank & Trust in Brookings, S.D.

On top of that, the Federal Trade Commission also yesterday announced it is suing CompuCredit and its debt-collection subsidiary, Jefferson Capital Systems, for deceptive practices.

The FDIC and FTC conducted a joint investigation on CompuCredit.

Regulators object to the marketing of three types of cards, offered under such names as Aspire, FreedomCard, Tribute, Majestic and Advantage. Basically, regulators say CompuCredit failed to adequately disclose terms and consumers ended up with

For example, a cared marketed to consumers with low credit scores promised a $300 line of credit. But regulators say once fees were factored in, the line of credit was as low as $115.

CompuCredit denied the allegations in a statement, saying: “The claims asserted by the FTC and FDIC regarding CompuCredit’s past credit card marketing practices are untrue and without merit. The credit card programs at issue complied with applicable laws and regulations and have exemplified best practices in credit card marketing.”

First Bank of Delaware "believes that the FDIC’s claims are unfounded and unfair," Harry Madonna, the lender’s chairman and chief executive officer told Bloomberg News. "The bank will vigorously defend its programs through the administrative hearings process afforded to banks by federal law."

David Waligoske, executive vice president at First Bank & Trust, declined to comment on the charges, Bloomberg reported.

A third CompuCredit partner – Columbus Bank and Trust in Georgia – settled with the FDIC. It paid a $2.4 million penalty and agreed to set aside $7.5 million for restitution.

Posted by Eileen Ambrose at 10:42 AM | Permalink | Comments (0)
Categories: Credit cards
        

Have you had a car loan, credit card, mortgage or student loan in the past 10 years? If so, you may be eligible for free credit monitoring for up to nine months from TransUnion.

It’s all part of a class action suit filed years ago and recently settled for at least $75 million.

Plaintiffs claimed that TransUnion sold lists “containing personal and financial consumer information to third parties for marketing purposes,” says a summary notice of the settlement. TransUnion denies it did anything wrong, and the settlement does not mean the company violated any laws, the notice says.

You can find information on the class action settlement online or by calling toll-free at 866-416-3470.

The settlement applies to consumers who had an open credit account or line of credit — credit card, mortgage loan, student loans and car loans — from a U.S. financial institution between Jan. 1, 1987, and May 28, 2008, the settlement notice says.

The total settlement is worth $75 million. That includes the cost of credit monitoring, a $150,000 donation to nonprofits, any court-ordered payments to consumers who sue the company on their own and lawyers’ fees. Any money remaining, will be distributed to consumers who sign up for payments.

You have several options. Among them: Take six months’ worth of credit monitoring — worth about $60 — plus unlimited daily access to your TransUnion credit report and credit score. You also can sign up to get a possible payment if there is a cash distribution.

Or, take nine months of credit monitoring — worth about $115 – which also entitles you to the same daily access to your report and score. You won’t, though, get any payment from the settlement and can’t file your own lawsuit.

To get free credit monitoring, you must register online by Sept. 24. It will take about six months after that before the credit monitoring service will kick in.

TransUnion says the case arose out of a business that the company discontinued in 2001.

In a press release on its Web site, company spokeswoman Colleen Ryan says, “We understand that many consumers are concerned about privacy and hope that this settlement demonstrates our commitment to empowering consumers to better understand, manage and protect their credit information.”

Posted by Eileen Ambrose at 1:45 PM | Permalink | Comments (0)
Categories: Credit cards
        

What's in your wallet, as you leave the country this summer? 

If you travel overseas frequently for work and/or play, you should know how much you're paying to get cash as well as to use a credit card to pay for things.

According to the folks at lowcards.com, debit cards are a good way to get a bank exchange rate on foreign currency. To avoid fees levied by using an out-of-network ATM, check to see if your bank has an agreement with a financial institution in the country you're visiting.

Also, both Visa and MasterCard charge at least 1 percent fees on international purchases, and many card issuers tack on additional fees of about 3 percent.

I was surprised to learn that two credit card companies charge no fees:

Continue reading "Credit cards for the jet-set crowd" »

Posted by Liz Kay at 2:09 PM | Permalink | Comments (0)
Categories: Credit cards, Travel
        

Everyone's looking to save money these days, right? With the economy tanking and the prices for the essentials you need going in the opposite direction, many people are looking to reward programs for some relief while shopping at supermarkets, drugstores, bookstore chains, warehouses and other such retailers.

Continue reading "Reward Programs not so Rewarding: How to find the best card for you" »

Posted by Dan Thanh Dang at 8:00 AM | Permalink | Comments (0)
Categories: Credit cards
        

The hunt for the best credit card for you is getting even easier.

LowCards.com just launched a free Credit Card Index that compares the terms of more than 1,300 credit cards. This eliminates a lot of the legwork when looking for a card, but you’ll still want to read the fine print before signing up for credit.

The new site allows you to sort through cards alphabetically, by interest rate, grace period, annual fee or other terms. For instance, you can also search for the best reward programs or the best plastic for those with bad credit or none at all.

The index will be updated daily to reflect any interest-rate changes or to add new cards, Bill Hardekopf, chief executive of LowCards.com, says in an e-mail.

Of course, this isn’t the first plastic search site.

Credit.com also allows you to search for cards, plus it has other tools, too, like the credit score estimator. You plug in the number of credit cards, balances, lines of credit, late payments and other details. You get a credit score estimate plus suggestions on the best card, auto loan or other product based on your score.

CardRatings.com says it offers 20,000 reviews and reports on cards. It ranks cards using a star system. Five stars for superior rating; one for poor.

Check out the sites and let us know what you think.

Posted by Eileen Ambrose at 12:54 PM | Permalink | Comments (1)
Categories: Credit cards
        

If you're interested in finding out more about credit card reform, Ed Mierzwinski over at his U.S. Pirg blog compiled a bunch of links where you can listen to consumer testimony at a hearing last week on the Credit Cardholders Bill of Rights.

You can also listen to the panel of bankers, regulators and consumer advocates testify on the bill. And, you can find out if your representative is one of the 100 co-sponsors on the bill. If your Congressman isn't a co-sponsor and you want to know why not, now might be a good time to write your elected official a letter about your position on the bill.

Posted by Dan Thanh Dang at 11:56 AM | Permalink | Comments (0)
Categories: Credit cards
        

Did you catch my column yesterday on the credit card industry and how Congress is trying to rein in abusive practices? Here's some of the issues that the Credit Cardholders Bill of Rights would deal with:

•Universal Cross Default Clauses: If you are declared in default by any other creditor, be it your landord, utility company or a library fine, then that automatically represents a default on your credit card. You can be charged penalty interest rates even if you have been making payments on-time to the card issuer.

•Arbitrary Interest Rate Changes: Carry a balance too close to your credit limit and wham, your interest rate goes up. Open up another credit card and wham, your rate goes up. Pay late once and wham, your rate goes up. Sneeze and your rate goes up. Why? Because your contract includes a clause that says, “Any term can be changed at any time for any reason, including no reason.”

Continue reading "Credit Card Reform" »

Posted by Dan Thanh Dang at 7:38 AM | Permalink | Comments (0)
Categories: Complaints, Consumer protection, Credit cards, Debt, Naughty businesses/NBotW
        

So the first thing I did after I got back from Spain was to sit down and start paying all the bills that were about to come due while I was gone. One by one, I wrote the amount due on each check, filled out who the payment was owed to and then signed my name with a flourish.

Yes. You read that right. I still pay my bills by writing checks and then mailing them. Almost everyone I know pays their bills online. What can I say? I'm old-school about it. Every once in awhile, I pay my credit card bill on-line, but it's infrequently.

I'm just not hip to the electronic payment system yet. Didn't I tell you that I'm not an early adopter of any kind of technology? I just worry that someone somehow in some way will steal my information on-line. Sure, I know they can steal my mail, too. But I've irrationally convinced myself that my mail is safer. Plus, I can't tell you how many people write or call into the Consuming Interests hotline (410.332.6151) to complain about some nightmare scenario where Company XYZ has taken two electronic payments from their checking account in one month or screwed up billing somehow.

I don't like that sense of losing control over my own bank account so I don't sign up for automatic bill payments. I know I can still do electronic payments every month, but I haven't convinced myself to make that leap yet. And yet, I may have to soon.

Continue reading "Kiss those checks goodbye?" »

Posted by Dan Thanh Dang at 8:05 AM | Permalink | Comments (3)
Categories: Credit cards
        

College students want limits on credit card companies pitching plastic on campus.

That’s what most of the 1,500 students at 40 colleges — including the University of Maryland, College Park — said in a survey by U.S. Public Interest Research Group.

Among the findings:

 — More than two-thirds of students had one card or more. About one-third of these students said their parents paid their bills. Another third carried balances from month to month.

 — Among all those surveyed, one-quarter paid a late fee at least once,15 percent paid an over-the-limit fee, and 6 percent said their card was canceled for not paying their bill.

 — More than two-thirds of students opposed sharing student lists with card issuers. The lists contain dorm addresses, e-mail addresses and cell phone numbers.

— Three quarters of students stopped at tables on campus to consider card offers. Card issuers typically pitched cards while offering students T-shirts, blankets, sandwiches, pizza or iPod shuffle.

Card issuers target college students because consumers tend to be loyal to their first credit card. Plus, they know that parents will bail out a child who gets overwhelmed by debt.

So, when a card issuer offers you a "free" slice of pizza to sign up for a card, you can count on card companies are getting the better end of the deal.

Posted by Eileen Ambrose at 9:25 AM | Permalink | Comments (1)
Categories: Credit cards
        

Anyone catch "The Secret History of Credit Cards" on Maryland Public Television last night?

It's all about how credit card use took off in the U.S.

If you haven't seen it, you should check it out. Really fascinating stuff about fees, interest rates and why credit card companies moved to certain states. If you missed it, here are some really interesting points from the piece, written by Robin Stein, that you should know:

Even if you make your credit card payments on time, the credit card bank can raise your interest rate automatically if you're late on payments elsewhere -- such as on another credit card or on a phone, car, or house payment -- or simply because the bank feels you have taken on too much debt.

This practice is called the "universal default" clause and increasingly is becoming a standard clause in credit card agreements. According to credit card executives, the logic behind universal default is that the bank is not being unreasonable in raising rates when it has reason to believe that the risk of being repaid by the customer has increased. [Note: Credit card banks can now easily track your everyday financial activities and monitor your credit score.]

Your credit score -- known as a FICO score -- has become a vital statistic for many Americans and can be widely shared. It is used to determine how much you can borrow, how much you pay for life insurance, if you can rent a home, and, as already noted, it can be a factor in determining the interest rate you pay on a credit card.

Most Americans don't know what their credit score is, nor how it's computed and with whom it's shared. Your credit score is usually determined by five factors, with the most important being the amount you currently owe and your payment history on large debts.

Continue reading "The secret life of credit cards" »

Posted by Dan Thanh Dang at 8:18 AM | Permalink | Comments (0)
Categories: Credit cards, Debt
        

Here's some feedback I got from that column I wrote about merchants requesting ID for credit card use. In case you didn't catch it, merchants are violating credit card company rules when they ask to see your ID when you pay with a credit card. According to their merchant agreements, they're supposed to accept your credit card, no questions asked, unless the card is not signed or if they have reason to believe the signature is fishy. They may also ask for your ID if you're making a down payment on your purchase, if they need to deliver the item to you or if you're buying something that needs ID (like alcohol or cigarettes).

Those may be the rules, but it certainly doesn't sit well with some merchants and consumers I heard from yesterday.

Tom Mahoney, founder and director of Merchant911, a group made up of over 3,600 merchants united to protect themselves said:

Continue reading "Carded for credit card use, part II" »

Posted by Dan Thanh Dang at 12:00 PM | Permalink | Comments (22)
Categories: Credit cards
        

Dan Thanh's column debunking the myth that merchants can ask for identification when you use a credit card drew e-mails from retailers and consumers alike.

Both preferred the minor inconvenience of asking for or showing their driver's license at the point of sale to the major hassle of dealing with fraud after the fact.

It might have stopped whoever stole my credit card number last fall and went on a shopping rampage, spending thousands at Wal-Mart, PetSmart and Red Lobster in Hartford, Conn. That person was swiping a card that had been pressed with my number, and I assume it must have been signed.

But the agreements the merchants hold with the credit card companies don't allow store clerks to  ask for ID (unless you're buying something that requires additional verification, like alcohol). And after all, there's no failsafe way to verify identity during an online purchase.

So what can you do?

Continue reading "Carded when using a credit card?" »

Posted by Liz Kay at 7:02 AM | Permalink | Comments (1)
Categories: Consumer protection, Credit cards
        

Like the classic question "paper or plastic?," "credit or debit?" has entered our cultural lexicon, occupying a space at the end of every transaction that is powered by a card. But the folks at Consumer Reports suggest you think hard before you answer. 

According to this research, more people prefer debit when shopping at the grocery store --- especially when  entering a PIN, as opposed to signing a receipt. 

That's good, even though banks want you to choose debit, specifically the signature option. CR says some banks charge their customers for paying with a debit card and entering a PIN. Others offer incentives for signatures, such as frequent flyer miles and other benefits similar to credit cards.

That's because banks bill retailers more for the transaction when you sign rather than punch in the number, in exchange for the electronic magic that goes on behind the scenes.

Debit helps banks make money in other ways as well.

Continue reading "Debit costs you more than credit" »

Posted by Liz Kay at 10:47 PM | Permalink | Comments (1)
        

Have you ever wanted to hire a financial advisor to give you tips on saving and investing money? How much would you pay someone for valuable tips on buying and keeping a home? Would you pay money to listen to someone give you advice on how to start your own business?

Saturday's your lucky day, my friends. The Baltimore CASH Campaign -- which is working with Congressman Elijah Cummings and other community and financial institution partners -- is holding its 3rd Annual Money Power Day on Feb. 16 at the Baltimore Polytechnic Institute, 1400 W. Coldspring Lane, Baltimore, MD. from 10 a.m. to 3 p.m.

This year's theme is "Road Map to Financial Success." The event will feature an exhibit area with over 40 organizations providing information to working families who need help obtaining and understanding a credit report, legal advice on taxes and information about grants to help people purchase homes in the city. There will also be workshops and services on a range of financial topics from credit counseling to tax preparation assistance.

Continue reading "Get Money Smart" »

Posted by Dan Thanh Dang at 8:06 AM | Permalink | Comments (0)
Categories: Budgeting, College/Financial aid, Credit cards, Credit reports, Debt, Personal finance
        

Every day here at Consuming Interests, I take calls from frustrated consumers who have been abused, misused, fooled, or disappointed in some way by some business out there. Oftentimes, a simple phone call to the business can clear up the matter. Sometimes, it takes weeks of back and forth phone calls. There there are problems where consumers just want to vent and the only words of comfort I can provide are: It happens to all of us.

If you don't believe me, my wonderful colleague and airline industry reporter Laura McCandlish wants you to know she was victimized just recently:

Continue reading "No Passport to Fun" »

Posted by Dan Thanh Dang at 2:47 PM | Permalink | Comments (47)
Categories: Computers, Consumer protection, Credit cards, Shopping
        

If you haven't already read Eileen's very helpful story on how the Fed's three-quarters of a percentage point cut affects you, check it out here.

If you're too lazy to read it, I'll sum up for you.

Credit Cards: Don't count on seeing a lower interest rate.

Home Equity Lines: Expect to see a decrease as early as next month.

Mortgages: No change for fixed-rate mortgages, but maybe for adjustable rate mortgages.

Continue reading "How the Fed interest rate cut affects you" »

Posted by Dan Thanh Dang at 1:30 PM | Permalink | Comments (0)
Categories: Credit cards, Debt, Home/Real Estate, Investments, Loans, Personal finance
        

Remember when I told you that you can now request a credit freeze in the state of Maryland? Remember when I said that by putting a security freeze on your credit reports, you can help stop thieves from opening fraudulent new accounts in your name?

Remember how I told you it would only cost $5 at each of the credit agencies to put the freeze into effect? And that it would be free to those who have been a victim of identity theft?

Well, now I'm wondering how many of you have tried it?  Anyone request a credit freeze yet and want to share it with us? Was it easy? Difficult? Would you rather have a tooth pulled without novocaine than try it again? Do you feel protected or has it caused any problems for you? Let us know.

Apparently, the Federal Trade Commission is also wondering how it's working out for you. The Commission is inviting interested parties to submit written comments on the impact and effectiveness of state credit freeze laws, as well as the credit freeze options offered by nationwide consumer reporting agencies.

There are about 24 questions the feds want you to answer about your experience, but don't feel like you have to answer them all. But do try to voice your opinion so they don't think it's a non-issue. You have until Feb. 25 to let the feds know whether you love or hate the freeze.

(AP Photo)

Posted by Dan Thanh Dang at 8:04 AM | Permalink | Comments (0)
Categories: Credit cards, Credit reports
        

By now, you must know I'm a pessimist. I figure if I'm always expecting the worst, then maybe, just maybe, if something good comes out of it then I'll consider myself superlucky.  

That's my way of asking you to forgive me for inundating everyone with bad news on a frequent basis. Just remember, I do it only because I'm hoping that by scaring the crud out of you, it will help everyone be extra vigilant about avoiding such pitfalls.

This latest bit of misery comes from an AP story that says Americans are falling behind on credit card payments at an alarming rate.

Experts say this could partly be "a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy."

As the story says, many economist expect deliquencies and defaults to rise more after the holiday shopping season.

Mark Zandi, chief economist and co-founder of Moody's Economy.com Inc., blamed mounting mortgage problems that started after the subprime financial shock, and a weakening job market in the Midwest, South and parts of the West, where real-estate markets have been particularly hard hit, the AP says.  

"Credit card quality will continue to erode throughout next year," Zandi said.

Continue reading "Unpaid credit card bills rising!" »

Posted by Dan Thanh Dang at 4:26 PM | Permalink | Comments (0)
Categories: Credit cards, Debt
        

They also say decisions to suddenly change your interest rate without warning also makes sense. Oh, and it's also completely fair of them to change the interest rate on past debt.

Get a load of what they told Congress here.

This is in no way defending consumers who spend beyond their means, but let's examine how ridiculous this concept is in the story.

Janet Hard, of Freeland, Mich., for example, told senators that the rate on her Discover card rose from 18 percent to 24 percent in February. She said a Discover representative explained to her that the company did a spontaneous credit report and determined she was at risk of default.

Continue reading "Credit card companies say high interest rates make sense" »

Posted by Dan Thanh Dang at 11:25 AM | Permalink | Comments (1)
Categories: Credit cards
        

If you read my Sunday story, you know that expert Avivah Litan from Gartner Inc. says credit cards are the safest bet.

But reader Spence had a question:

I have may PayPal linked to my checking account; however am also able to have PayPal purchases charged to my Visa instead. Does the latter procedure afford any better protection? I note that most PayPal purchases would be from another state; would be from over 100 miles away from my home --- yet can Visa give me any more protection than PayPal alone? At least by PayPal, the merchant doesn't obtain my Visa number even if my PayPal purchase is made via that Visa account;and wouldn't this be no small level of protection from the real sharks? Yet, if I can pay the purchase via Visa (instead of my linked bank account) might I be getting multiple protects through that route --- or am I fooling myself?

Here's the answer courtesy of Litan:

Continue reading "The safer way to pay: PayPal or Credit Cards" »

Posted by Dan Thanh Dang at 1:30 PM | Permalink | Comments (0)
Categories: Consumer safety, Credit cards
        

It's not often consumer advocates - or a personal finance columnist for that matter - cheer a move by a credit card company. But kudos go out to Chase Card Services.

The giant card issuer said today it would stop a common industry practice: raising the interest rate on a card if a customer's credit score drops. The change takes effect in March.

It can't happen soon enough. This is one of those industry practices that generates lots of complaints. Credit guru Gerri Detweiler says many times people don't even know why their score fell, yet suddenly they're paying a rate of 22 or 25 percent on their plastic. Even more unfair, the dip in the credit score might be only a temporary blip.

Continue reading "Finally, a break on credit cards" »

Posted by Eileen Ambrose at 5:00 PM | Permalink | Comments (0)
Categories: Credit cards