Discover says credit card use rose in 2Q

Posted by administrator | 01/07/12 | Tagged Credit Card

Discover says credit card use rose in 2Q
News from msnbc.com:

Despite concerns about the economy, Discover’s customers are using their cards more often and paying their bills on time at record rates.

The company’s profit fell 10 percent in its March-May quarter, as the credit card issuer freed up less money from reserves set aside to cover customers’ unpaid bills than a year earlier as its loans increased.

But credit conditions are improving. Late payment rates and customers’ loan defaults dropped sharply, reaching historic lows. Discover’s management expects that charge-offs, or loans written off as unpaid, will modestly increase over the next 12 months as the company widens its pool of borrowers.

The economic shakeout of the last few years has left credit cards in the hands of more affluent consumers who are better able to pay their bills in full each month, while those with lower credit scores and presumably less ability to pay are now less likely to use credit. Tighter underwriting standards also have pushed loss rates lower.

Discover Financial Services said sales volume on its namesake cards rose 5 percent during the March-to-May period to $ 26.1 billion, reflecting more card use by customers, as total retail sales rose…………… continues on msnbc.com

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Dh258 credit card fee that led to debt of Dh60,000
News from The National:

ABU DHABI // When KB Muralee was offered his credit card, he was told it would be free for life.

Seven years after using it once, he had an accumulated debt of Dh60,000.

“I used the Standard Chartered credit card for some purchases in India amounting to Dh12,000. Of that, I paid back Dh10,000 on time and later deposited the remaining Dh2,000. My card’s credit limit was Dh15,000.”

A Dh288 late fee for the outstanding amount of Dh2,000 was combined with annual fees, insurance and interest charges to create the mammoth debt.

“I didn’t even want the card, but they insisted that it was free and then said I had to purchase insurance on it,” said Mr Muralee, who is the honorary president of Kerala Social Centre in Abu Dhabi.

After The National approached the bank for comment, Mr Muralee said he was contacted almost immediately with a settlement deal.

“They called and said, ‘OK, pay Dh2,000 and end the matter’.”

In another call, he was asked to pay just Dh500.

In an official statement, Standard Chartered explained: “Upon receiving the complaint, Standard Chartered’s customer care unit contacted the customer and launched an investigation.

“Apparently, the customer had made a purchase on his card in 2005 and has not settled his outstanding balance since then.

“Despite the bank sending him his statement on a re…………… continues on The National

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When loan isn’t an option, work on cutting card debt

Posted by administrator | 01/07/12 | Tagged Credit Card Debt

When loan isn’t an option, work on cutting card debt
News from Los Angeles Times:

Dear Liz: In your book “Your Credit Score,” you note that one of the best ways to improve your credit score and lighten your credit card load is to get a personal loan with a credit union and pay it off in installments.

I have two high-interest credit card balances that are hovering right near my credit limits (a little over $ 15,000 total) that comprise the vast majority of my debt. I’d love to get an installment loan to pay them off, but I’ve applied several times and several places for personal loans — including my credit union — and have either been denied or not given a sufficient loan to cover the total amount. I also don’t have $ 15,000 in cash sitting around in a savings account to secure a loan of that size.

In this situation, what would you recommend? The minimum payments on these two cards are roughly $ 190 and $ 160 each, and I’d love to be able to combine them and maybe even save a few bucks too.

Answer: What you seem to be talking about is a secured personal loan, rather than one that’s unsecured. Secured personal loans typically require that you have an equivalent amount in a bank account or certificate of deposit as collateral for the loan. If you have the cash, though, you wouldn’t need the loan — you could use the money to pay off your debt.

Unsecured personal loans don’t…………… continues on Los Angeles Times

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What happens to credit card debt when you die?
News from Boston.com:

However, if the account was opened as a joint account, the other account holder will be liable for the debt but this is only the case when the other person is a part of the credit card contract. If the other person using the card is merely an authorized user (but not a joint credit applicant) then they are not responsible for the debt. Along those lines, if you are an authorized user of a card and the account holder dies, the account will be closed and you will have no further access to the credit line. This may seem pretty straightforward but many people think that they can simply transfer the account to their own name. Instead, that person will have to apply (and qualify) for credit based on their own circumstances.

…………… continues on Boston.com
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