Tips for Successful Personal Finances
The New Credit Card Act of 2009 takes effect on February 22, 2010 To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Six
How do you handle your credit card payments? Do you pay the balance very month, or do you only pay the minimum?
Your bill will now include a section that tells you how many months it will take to pay off your credit card balance if you make only minimum payments. That will be an eye opener for some of us.
The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Five
Have you ever received a credit card bill with a Sunday due date? Were you charged a late fee if they didn’t process the payment until Monday? That’s changing with the new Credit card Act of 2009. Your payment won’t be marked as late if it’s due on a weekend or holiday, but posted by the next business day.
The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Four
If you had trouble getting a new credit card before, it may be harder now. With the new Credit Card Act of 2009, you will have to disclose your income and your ability to repay the balance up to your credit limit.
The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Three
In the past, you wouldn’t know if a purchase put you over your credit limit until you received a big fee on credit card statement.
But that’s changed. Now, if a purchase will put you over your climit, your purchase will be declined. With the new Credit Card Act of 2009, only pre-authorized purchases will be approved.
(Remember, this doesn’t apply to your debit card. You’ll receive no warnings if a purchase will overdraw your checking account. )
The New Credit Card Act of 2009 takes effect on February 22, 2010 To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Two
Have you ever gone out of town and arrived back home to find out that you have a credit card payment due tomorrow? Like most people, you probably got on the phone, or online, to make the payment because you wanted to pay right away You also probably got charged a nice little fee for not sending a check through the postal service like a good little credit card owner.
With the new Credit Card Act of 2009, you will not be charged a fee to pay your credit card, unless you specifically ask to have your payment expedited (which means that you asked to have it rushed through).
There was a time when our mailboxes were full of credit card offers. Now the offers have been replaced with policy change notices.
Credit card companies are racing to make changes before the new regulations hit in February 2010. They’ve have had a bad couple years. It used to be easy to make money in the credit card business, but things have changed.
The first issue is defaults. Because of unemployment, more people are defaulting on their debts. So, credit card companies have been lowering everyone’s credit limits to help reduce the risk. Their reasoning is sound. The less debt you have, the less debt they will have to cover. Expect your credit card limits to fall even if you have a good payment history.
The second issue is pay offs. More people are paying off their credit card debt because they’re anticipating layoffs. This means that the creditors are earning less from interest payments. They need risk-free revenue, so they’re looking at annual fees. Expect your credit card company to either add an annual fee or increase the fee you already pay.
Right now, under the old regulations, they can still make changes to your account with minimal notice. If you get an unpleasant policy change in the mail, you should definitely call the credit card company and try to get them to revert back to the original terms. If that doesn’t work you can always close the account.
Which saves you more money: a debit card or a credit card? Most people believe debit cards are cheaper because there’s no interest rate or annual fee. But what about overdraft fees?
Debit card overdrafts are now the biggest source of revenue for banks. The danger with debit cards is twofold: One, the transactions hit your account instantly and two, very few people keep track of their debit card transactions in a check register.
Debit cards are convenient and fast. We use them for everything from buying $200 worth of groceries to $1.50 take-out coffee. The problem is that we aren’t notified at check-out if our account is overdrawn like we would be if we had maxed out a credit card. And overdraft fees are expensive – approximately $30 per transaction. Some people have found themselves with $60 – $1,00 in overdraft fees in a single day because they continued to use their debit card while their account was overdrawn.
Please, take a moment to record your debit card purchases. Remember, too, that debit cards hit your account instantly but deposits don’t. If you deposit a check and use your debit card on the same day, the debit card transactions will hit your account before your deposit clears.
If you share a credit card account with someone else, you are either an authorized user or a joint credit card user. Knowing the difference can help protect your credit score.
If you’re an authorized user, it means you can use the credit card account, but you’re NOT responsible for the payments. You have a card with your name on it, but you’re not the “card-holder.” The account won’t appear on your credit report, so it won’t help, or hurt, your credit score.
In the past, parents could add a child as an authorized user. This helped the child start his credit history, making it easier to get that first car loan or student loan. Because of some abuse, credit reporting agencies stopped monitoring authorized users. It’s now more difficult for children to begin building their credit history, but not impossible.
If you’re a joint credit card user, you and the other person were considered equally when you applied for the account. You are both responsible for the payments and the account will show up on both your credit reports. Joint card-holders should make a habit of reviewing bills and payments together to help protect you both from mistakes or fraud.
Have you heard about the new credit card rules? Credit card companies must give you more time to review statements and rate changes, which helps you make better decisions when dealing with debt.
Statements must now be mailed at least 21 days before the due date. Credit card companies make a good profit from late fees and rate increases. To increase the amount of late payments, they began billing closer to the payment due date, sometimes forcing you to pay within a week. This allowed them to add fees and raise rates based on payment history. The new rule allows you a standard billing cycle to review your statement and remit payment.
Second, creditors must now notify you within 45 days of a rate change. This is better than the previous 15 days notice. The rule change gives you a chance to accept or decline the offer, and gives you time to shop for a new credit card company.
The rest of the Credit Card Act will go into effect next year, hopefully with more consumer protections. Remember: if you owe creditors a balance that can’t be paid in full each month, you give them power over your financial health.
