Why Credit-Card Firms Are Sweet on You Again

Posted by administrator | 31/08/12 | Tagged Credit Card Debt

Why Credit-Card Firms Are Sweet on You Again
News from Businessweek:

Banks are returning to a practice they abandoned after the financial crisis: taking Americans’ credit-card debt, slicing and dicing it, and selling it off as bonds.

Believe it or not, that’s a good thing.

So far this year, banks and other companies that issue credit cards have sold $ 21 billion in bonds backed by those accounts’ debt, Bloomberg News reported on Aug. 29—up from $ 4.8 billion in the same period the year prior. Broadly, it’s a bet that consumers have their finances in order and will continue to be able to pay their monthly bills on time.

Bonds thrive when there’s predictability, and the credit-card business has become more stable since the crisis. The number of accounts 30 days past due peaked in March 2009 and again in November 2009, and has been declining ever since. Spenders are reining in their charging habits. Card issuers have cut off their least creditworthy customers, and reforms such as the CARD Act have forced them to be more careful about the riskiness of new customers. While all of this has put a crimp in credit-card companies’ growth, it has made for fat, steady revenue streams. In 2012, that’s not a bad position to be in.

“You may have to go back to the 1980s to see credit losses and delinquencies as low as they are right now,” says Bob Napoli, an analyst with William Blair. “It’s a sign that consume…………… continues on Businessweek

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Resurgence of credit card bond sales
News from gulfnews.com:

New York: Lenders from JPMorgan Chase & Co to General Electric Co’s finance unit are leading a resurgence of bond sales tied to credit card payments as relative funding costs drop to the lowest in five years.

Card issuers have sold $ 21 billion (Dh97.2 billion) of the bonds this year through August, the most in two years and up from $ 4.8 billion during the same period in 2011, according to data compiled by Bloomberg. JPMorgan, the largest US bank by assets, has offered $ 5.35 billion of the debt in 2012, triple the amount the New York-based lender sold in all of 2011, the data show.

Lenders are taking advantage of demand from investors betting on US assets as a haven from Europe’s fiscal crisis, speculating the economy is growing enough to keep consumers current on their bills even with unemployment above eight per cent for a 42nd month. Yields on top-ranked, five-year credit-card securities have narrowed to 18 basis points more than the one- month London interbank offered rate, the tightest level since 10 basis points in August 2007, Wells Fargo & Co data show.

“The revival is a rather opportunistic play on the part of card issuers able to refinance and, in some cases, extend the maturity of existing debt,” said Christ…………… continues on gulfnews.com

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7 credit card pitfalls to avoid

Posted by administrator | 31/08/12 | Tagged Credit Card

7 credit card pitfalls to avoid
News from KFMB News 8:

By Andrew Housser

Credit cards can be convenient, relatively secure, easy to use, and some even pay you back with rewards. But sometimes, those small rectangular pieces of plastic can spell trouble. Most consumers already know it is important to use credit cards wisely. Yet a misstep can result in unneeded, unwanted debt. Watch out for these common pitfalls as you use your credit card.

1. Cashing credit card checks.

It might seem like a good idea to use a check issued by your credit card company to pay off debt or make a big purchase you’ve been putting off. Here’s the catch: Credit card companies consider these checks to be the same as taking out a cash advance. Most creditors charge higher interest rates and special fees on cash advances. The best thing to do with these checks when they arrive in your mailbox is simply to shred them.

2. Making new charges on a card you opened for a balance transfer.

Transferring debt from a high-interest credit card to one with lower or no interest can be a smart move in many cases. It then can be tempting to use this new, lower or zero-interest card to make new purchases. But if you do not pay off the full amount when your promotional deal ends, you’ll be paying a high interest on the balance transfer plus the new purchases. In…………… continues on KFMB News 8

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Argentine Tax Agents to Track All Credit Card…
News from ABC News:

Argentina just made it more expensive for its people to use credit cards outside the country, and more dangerous for cardholders who aren’t paying all the taxes they should.

One measure published in Friday’s official bulletin adds a 15 percent tax every time people make a purchase outside the country using a card issued by an Argentine bank. Another requires the banks to report every credit card purchase — home or abroad — to the tax agency.

The moves target Argentines who have discovered that by using credit cards outside the country, they can get around increasingly tight currency controls and shelter their money from soaring inflation. Purchases outside Argentina using peso-denominated cards soared 48 percent in June compared to the year before, obligating the central bank to send $ 289 million out of the country in just one month. Overall capital flight soared to $ 23 billion in 2011.

AFIP chief Ricardo Etchegaray, the government’s top tax collector, presented the moves as populist measures that would only affect the wealthiest Argentines, and mainly when they travel outside the country — a reduced group of 168,000 taxpayers who charged $ 1.5 billion in the last 18 months.

But a closer look shows the measures go much farther, giving the government powerful new tools to combat widespread tax evasion.

Tax and customs…………… continues on ABC News

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Parents Are Using Rewards Credit Cards To Bump Up College Funds
News from Business Insider:

Flickr / josemanuelerre

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CreditCards.com Weekly Credit Card Rate Report: Credit card interest rates …
News from Sacramento Bee:

/PRNewswire/ — Interest rates on new credit card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report.

(Logo: http://photos.prnewswire.com/prnh/20090210/CCLOGO)

The average is comprised of 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers and representing every card category. Introductory (teaser) rates are not included in the calculation.

Rates for card categories tracked by CreditCards.com are listed below:

Credit Card Averages

Avg. APR Last week 6 months ago
National Average 14.98% 14.98% 14.87%
Low Interest 10.40% 10.40% 10.40%
Balance Transfer 12.62% 12.62% 12.50%
B…………… continues on Sacramento Bee

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Jail for ‘silly’ use of stolen credit card

Posted by administrator | 29/08/12 | Tagged Credit Card

Jail for ‘silly’ use of stolen credit card
News from Maui News:

WAILUKU – A man who tried to use a stolen credit card to buy drinks at a Kihei bar was sentenced Friday to a six-month jail term for theft and other charges.

Thomas McGinnis, 57, was ordered to pay $ 370 in restitution as part of five years’ probation.

“It’s a round of drinks for a bar on a stolen credit card,” said Deputy Public Defender Jim Rouse. “It’s unlawful, but it’s very silly.”

McGinnis, who gave no local address, claimed he was going to get married when he bought the drinks March 26 at Life’s a Beach, said Deputy Prosecutor Justine Hura. She said the credit card he tried to use was from a woman’s purse, which had been left in a bathroom.

“But for his criminal history, this would be a relatively strange and not tremendously well thought out incident,” Hura said.

The prosecution and defense recommended no additional jail for McGinnis, who has been incarcerated for nearly five months.

Second Circuit Judge Richard Bissen ordered the longer jail term, saying McGinnis was seen as being at high risk to commit another offense.

In addition to trying to use the stolen credit card, McGinnis had someone else’s driver’s license and Costco, library and insurance cards when he was arrested, Bissen said.

He said McGinnis has 56 prior arrests and 20 prior convictions, including 10 for felony offenses.

<…………… continues on Maui News

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Do investment cards really add up for college?
News from NASDAQ:

Here’s a smart thing to do: Use your credit card rewards to save for your child’s college education.

You can earn 2 percent on your purchases with the Fidelity Investments Rewards American Express credit card and the Fidelity Investments 529 College Rewards American Express credit card.

Upromise World Mastercard issued by Barclay’s Bank (formerly Bank of America) offers rewards of up to 8 percent on different categories.

You can earn up to 8 percent when you use your Upromise Mastercard at participating restaurants. You can earn up to 5 percent on retail purchases you make with through Upromise.com, up to 3 percent back on gas, 2 percent cash back at movie theaters, and 1 percent back on all other purchases.

Once you’ve accumulated at least $ 25 in rewards, they can be swept into a 529 college savings account where your money grows for education expenses tax-free.

‘Every little bit helps’

Granted, even at 5 percent rewards you’d have to buy an awful lot on your investment credit cards to make a dent in college tuition.

Charges for in-state students at public four-year colleges, including tuition, fees,…………… continues on NASDAQ

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Student credit card consolidation – Close the doors on your credit card debt
News from The City Wire:

If your revolving credit card debt is keeping you awake at night, you may be thinking about getting professional debt help. While credit card consolidation can be a beneficial tool to expedite your debt repayment procedure, it can even backfire terribly if you do not watch your steps. Being a student, you have to be extra watchful about your personal finances as your credit score will be checked by your employers in the near future. You must be aware that debts can have a drastic effect on your credit score and therefore, you need to make sure that no wrong steps on your behalf will push you further towards the debt hole. Here are some benefits of credit card consolidation that you may reap.

  • Revised interest rates: The main reason for the increasingly large number of credit card defaults among the students is the outrageously high interest rates. The double-digit unemployment rate is also barring the students from getting jobs that can supply them with money with which they can pay off their credit card obligations. Debt consolidation can easily lower the interest rates on all your debt accounts and therefore you can make affordable repayments, thereby freeing yourself of debt.
  • Revised monthly payments: You can extend the repaymen…………… continues on The City Wire

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New York Fed Says Household Debt Fell 0.5% in Second Quarter
News from Bloomberg:

Household debt in the U.S. declined 0.5 percent in the second quarter, led by a drop in debt tied to real estate, according to the Federal Reserve Bank of New York.

Consumer indebtedness shrank by $ 53 billion from the first quarter to $ 11.38 trillion as of the end of June, according to the quarterly report on household debt and credit released today by the district bank. Delinquency rates for mortgages, credit cards and car loans declined, while rates for student loans and home equity lines of credit rose, the report said.

“The continuing decrease in delinquency rates suggests that consumers are managing their debts better,” Wilbert van Der Klaauw, a vice president and economist at the New York Fed, said in a statement today. “As they continue to pay down debt and take advantage of low interest rates, Americans are moving forward with…………… continues on Bloomberg

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Chinese credit card usage growing quickly, study finds

Posted by administrator | 29/08/12 | Tagged Credit Card

Chinese credit card usage growing quickly, study finds
News from Phys.Org:

(Phys.org)—In the past two decades, the Chinese economy has undergone many drastic reforms in an effort to compete more effectively on the international market. These reforms included allowing foreign banks to offer credit cards to Chinese citizens. Now, researchers at the University of Missouri have found about 30 percent of Chinese urban households now own at least one credit card and the growth rate of credit card adoption has been an average of 40 percent per year between 2004 and 2009.

Rui Yao, an assistant professor of personal financial planning in the College of Human Environmental Sciences at MU, says that this large growth in such a small amount of time has positive and negative implications for the Chinese economy.

“With more and more people taking advantage of credit in China, it certainly increases potential consumer buying power,” Yao said. “However, we found that more than 90 percent of non-credit card users were unaware of safety issues inherent in credit card use and more than 60 percent had little knowledge of the consequences of credit card default. This lack of knowledge could create problems as credit card ownership is expected to grow at a rate of 11 percent a year.”

Yao studied data from the 2…………… continues on Phys.Org

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Why should I have a credit card at all? What if I never want to use one?
News from NASDAQ:

Years ago, banking executives complained loudly about consumers who carried their credit cards without running up a monthly balance. Then, personal lending flipped itself upside down. Today, many credit card product managers believe they’ll make as much money from transaction charges as they will from late fees and interest payments. That’s changed the dynamic for rewards credit cards and cash back credit cards , designed to entice consumers to float their purchases for 20 or 30 days.

Here’s why I think you should carry at least one rewards credit card :

  • Purchase protection. Cash, checks, and most debit cards won’t help you get your money back when your flight gets cancelled or your new gadget busts. Federal laws and bank policies favor credit card holders in most disputes. Even during a charge-back investigation, it’s the bank’s money on the line, not yours.
  • Credit report impact. Contrary to popular belief, credit scores don’t measure how much debt you’re in. They report how well you manage your accounts. If you don’t have a credit card to maintain, there’s nothing to score. That can cause problems when em…………… continues on NASDAQ

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Why Should I Have A Credit Card At All? What If I Never Want To Use One?
News from TheStreet.com:

Years ago, banking executives complained loudly about consumers who carried their credit cards without running up a monthly balance. Then, personal lending flipped itself upside down. Today, many credit card product managers believe they’ll make as much money from transaction charges as they will from late fees and interest payments. That’s changed the dynamic for rewards credit cards and cash back credit cards, designed to entice consumers to float their purchases for 20 or 30 days.

Here’s why I think you should carry at least one rewards credit card:

  • Purchase protection. Cash, checks, and most debit cards won’t help you get your money back when your flight gets cancelled or your new gadget busts. Federal laws and bank policies favor credit card holders in most disputes. Even during a charge-back investigation, it’s the bank’s money on the line, not yours.
  • Credit report impact. Contrary to popular belief, credit scores don’t measure how much debt you’re in. They report how well you manage your accounts. If you don’t have a credit card to maintain, there’s nothing to score. T…………… continues on TheStreet.com

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Struggling With Debt

Posted by administrator | 27/08/12 | Tagged Credit Card Debt

Struggling With Debt
News from New York Times:

Connect With Us on Twitter

For Op-Ed, follow @nytopinion and to hear from the editorial page editor, Andrew Rosenthal, follow @andyrNYT.

“Problems Riddle Moves to Collect Credit Card Debt” (front page, Aug. 13) overlooks a larger problem.

Many of the people being sued over a credit card debt need to file for bankruptcy.

Once the credit card companies have cleaned up their collection practices, or even if they don’t, the fact remains that people have credit card debts they could never afford to settle or pay off.

I am a consumer bankruptcy attorney who has represented hundreds of individuals filing for bankruptcy. Every day, clients come into my office concerned about lawsuits over credit card balances.

When I dig deeper, they have more serious financial problems like large revolving credit card balances, medical debts and home foreclosures that they are unable to get over without the fresh start that bankruptcy provides.

A problem with erroneous lawsuits…………… continues on New York Times

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Negotiate and Settle Your Debts
Considering debt settlement? Use this extremely inexpensive way to do your own negotiating and settling of your credit card debt. …
The Complete Idiot’s Guide to Getting Out of Debt
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Why should I have a credit card at all? What if I never want to use one?
News from Fox Business:

Years ago, banking executives complained loudly about consumers who carried their credit cards without running up a monthly balance. Then, personal lending flipped itself upside down. Today, many credit card product managers believe they’ll make as much money from transaction charges as they will from late fees and interest payments. That’s changed the dynamic for rewards credit cards and cash back credit cards, designed to entice consumers to float their purchases for 20 or 30 days.

Here’s why I think you should carry at least one rewards credit card:

  • Purchase protection. Cash, checks, and most debit cards won’t help you get your money back when your flight gets cancelled or your new gadget busts. Federal laws and bank policies favor credit card holders in most disputes. Even during a charge-back investigation, it’s the bank’s money on the line, not yours.
  • Credit report impact. Contrary to popular belief, credit scores don’t measure how much debt you’re in. They report how well you manage your accounts. If you don’t have a credit card to maintain, there’s nothing to score. Tha…………… continues on Fox Business

… Read the full article
.

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American Express: Number One Credit Card
News from Seeking Alpha:

A recently released survey investigated customer satisfaction of credit card issuers. In this article we’ll examine American Express (AXP). We’ll primarily use the survey to assess the company’s product and potential demand for that product. We’ll cover the industry and we’ll briefly discuss the financials.

Survey

American Express is number one in customer satisfaction, according to a survey conducted by J.D. Power and Associates. The survey included nearly 14,000 customers.

The survey asked customers about their experience with the issuer’s terms, billing and payment process, rewards program, benefits and services, ability to resolve problems and accessibility.

Consumers said American Express did the best job in each of the categories. According to customers, American Express really outperformed other issuers in the areas of communicating with customers and offering attractive rewards.

If consumers are happy with the product they are likely to keep using it. Further, they are likely to recommend it to their friends. The demand prospects for American Express’ service remain so…………… continues on Seeking Alpha

… Read the full article


Policies on credit cards, travel vary widely in region

Posted by administrator | 26/08/12 | Tagged Credit Card

Policies on credit cards, travel vary widely in region
News from Nashua Telegraph:

EDITOR’S NOTE: This is the first in a two-day series of stories examining school districts’ credit card spending.

Depending on which local school official you’re talking to, credit cards are either an efficient purchasing tool or a temptation for financial troubles.

After a routine audit turned up a pattern of wanton spending on the Wilton-Lyndeborough Cooperative School District credit card, which resulted in the resignation of Superintendent Trevor Ebel, The Telegraph questioned area school districts to find out who is watching their plastic charges.

The results showed that opinions on the use of credit cards varied wildly among districts.

Some try to eliminate temptation by having employees use their own credit cards, others approve purchases ahead of time, while still others keep credit cards in the pockets of key school officials who are trusted to follow a loose set of guidelines.

Further, limits on how much can be charged were hard to find, and supervision by state officials who hand out grants to school districts for professional development was all but absent.

At Wilton-Lyndeborough, credit card statements from the last two years…………… continues on Nashua Telegraph

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Credit cards could easily sting college students, too
News from The Journal News | LoHud.com:

10:21 PM, Aug 25, 2012   |  

More In Lifestyle & Leisure

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