Suze Orman has some fresh ideas on credit cards, credit card debt, and personal finance that are customized to today's troubled economy. She encourages adopting a new strategy, while the credit industry is currently taking action to reduce many open credit lines and close some open accounts all together. Where would you be without credit if you were to lose your job? Suze Orman says that at this point, instead of paying off your balances as fast as you are able to, it is wise to pay the bare minimum on credit accounts, and throw everything you can into savings, for a rainy day.
Suze Orman's new approach on credit card debt is quite different than her original advice, which was to “cut up credit cards” in a state of troubling debt, and pay them off as soon as possible, starting with the card that accumulates the most interest. However, Orman still believes that a credit score is important and keeping card balances down will help your score. She just recognizes that few people are in a condition to dump everything they have into debt repayment at this time, unless there is an abundant emergency fund to fall back on during a crisis. “Getting out of debt isn't always the most important thing,” she says. Then, goes on to explain that the credit card companies are taking action to protect themselves with no regards to anyone else's needs.
As a well known financial advising expert, Suze Orman has written several books, been on the news, radio, and talk shows. Plus, Orman even has her own TV show on CNBC. While some critics complain that Orman's advice is too general, and does not include step-by-step instructions for personal financial matters, many others will likely take heed to her recent instructions and change their course of action. In general, she now follows the timeless approach of “preparing for the worst, while hoping for the best.”
Thursday, February 4, 2010
Thursday, January 28, 2010
Small Business Credit Cards
Credit cards account for the largest single source of financing being used by small businesses today. However, when credit card companies are reducing their limits and and changing their terms, it leaves people wondering how these businesses will be affected. A 2009 survey by the NSBA shows that as many as thirty three percent of small business card owners have recently had their credit lines decrease. Plus, while congress has spent a great deal of time working on credit card reform, small business credit cards have been neglected.
Some small business owners are having to do substantial research in order to find a card issuer who can provide the kind of lending that they need. Many people turn to online companies such as 100best-credit-cards or others who provide helpful reviews on small business credit card offers. These review companies give quick comparisons on features such as cash back reward programs, interest rates, annual fees, security, and interest rates. However, it can be difficult to know which card issuer will provide the largest lines of credit. Only 16% of small business owner state that their largest credit limit is more than 50,000, while the majority of card owners have limits between 10,000-29,000.
According to NSBA's most recent survey results, 79% of small business card holders have notices that the terms on their accounts have gotten worse. 63% of them report that their interest rates have increased, while 23% say that they have been switched from a fixed rate to a variable interest rate. Only 40% of business owners are paying off their credit card each month, while the rest are carrying a balance, some at a steep price. Meanwhile, there is little being done to protect them. When shopping for a small business card, be sure to do your research and read the fine print of all offers. Also, it is important to acknowledge any notices you receive regarding changes to the terms of your existing accounts.
Some small business owners are having to do substantial research in order to find a card issuer who can provide the kind of lending that they need. Many people turn to online companies such as 100best-credit-cards or others who provide helpful reviews on small business credit card offers. These review companies give quick comparisons on features such as cash back reward programs, interest rates, annual fees, security, and interest rates. However, it can be difficult to know which card issuer will provide the largest lines of credit. Only 16% of small business owner state that their largest credit limit is more than 50,000, while the majority of card owners have limits between 10,000-29,000.
According to NSBA's most recent survey results, 79% of small business card holders have notices that the terms on their accounts have gotten worse. 63% of them report that their interest rates have increased, while 23% say that they have been switched from a fixed rate to a variable interest rate. Only 40% of business owners are paying off their credit card each month, while the rest are carrying a balance, some at a steep price. Meanwhile, there is little being done to protect them. When shopping for a small business card, be sure to do your research and read the fine print of all offers. Also, it is important to acknowledge any notices you receive regarding changes to the terms of your existing accounts.
Friday, January 22, 2010
How Foreclosure Affects Your Credit Cards
In todays troubled economy, home and business foreclosures have become common topics for discussion. Many are left with questions about how foreclosure might affect their credit and future spending abilities. The majority of people realize that a history of a foreclosure will make it difficult to get another home loan, purchase and automobile, or open any type of new credit line. However, some don't realize that a foreclosure may affect the credit cards that they already have.
Foreclosure will instantaneously affect your credit score. Many banks who issue credit cards periodically check your credit scores even after your credit line has already been approved. When the banks see that your score has been affected by a foreclosure, they become nervous about the credit line they have extended to you. The terms and agreements that you signed for with each credit card will often give you an idea of what you can expect at this time.
There are several things that may happen to your credit cards following a foreclosure. One possibility is that the bank who issued your credit card may cancel the line of credit all together. Even if your credit cards are in good standing and have been for years, the card issuer may be well within their rights to revoke all charging privileges. Another possibility is that your creditor may drastically reduce your line of credit, seeing you as a high risk for non-repayment. In addition, you should know that you are at risk for having your interest rates increase, particularly if you have been late on any of your credit card payments during your financial strain. All of these actions may cause your credit score to further decline. Unfortunately, there is little you can do about any of it, once the foreclosure has taken place.
Foreclosure will instantaneously affect your credit score. Many banks who issue credit cards periodically check your credit scores even after your credit line has already been approved. When the banks see that your score has been affected by a foreclosure, they become nervous about the credit line they have extended to you. The terms and agreements that you signed for with each credit card will often give you an idea of what you can expect at this time.
There are several things that may happen to your credit cards following a foreclosure. One possibility is that the bank who issued your credit card may cancel the line of credit all together. Even if your credit cards are in good standing and have been for years, the card issuer may be well within their rights to revoke all charging privileges. Another possibility is that your creditor may drastically reduce your line of credit, seeing you as a high risk for non-repayment. In addition, you should know that you are at risk for having your interest rates increase, particularly if you have been late on any of your credit card payments during your financial strain. All of these actions may cause your credit score to further decline. Unfortunately, there is little you can do about any of it, once the foreclosure has taken place.
Monday, January 4, 2010
Equal Credit Opportunities
Equal credit opportunity means that lenders and creditors are required to make credit equally available to consumers, without discrimination based on race, color, religion, national origin, sex, marital status, age, or because you receive public assistance. The equal Credit Opportunity Act was established in 1974, protecting consumers from being treated unfairly. It is a United States law that applies to anyone in the lending industry who regularly accepts applications and makes credit decisions, including banks, credit unions, retailers, and other finance companies. It is important to know your rights when it comes to equal credit opportunity and report any creditor who is not in compliance with this act.
If you are applying for a line of credit, there are several things you should be aware of. The Equal Credit Opportunity Act goes beyond simply telling lenders not to discriminate and enforces policies about what information the creditor is allowed to ask you.
A credit application should never ask if you are widowed or divorced. The only appropriate terms they can use are married, unmarried, or separated.
If you are applying for a separate, unsecured account, the creditor cannot ask about your marital status unless you are applying for a loan in a common property state.*
Creditors are not permitted to request information about your spouse unless:
-He/She will be on the loan or able to use the account.
-Your reported income is base on receiving alimony or child support.
-You live in a common property state.*
Creditors should not ask you about any future plans to have children. However, they can ask about expenses related to dependents.
Creditors are not permitted to inquire about child support or alimony, without first telling you that the information is not required. However, they are entitled to know if you pay the expense of alimony or child support.
If your lender has violated any of these regulations, or you feel as though you have been denied a fair lending opportunity based on your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance, take action. Any discrimination should be reported to the appropriate government agency and you retain the right to sue the lender in the federal court.
* Common property states include Arizona, Idaho, Louisiana, New Mexico, Texas, Washington, and Wisconsin.
If you are applying for a line of credit, there are several things you should be aware of. The Equal Credit Opportunity Act goes beyond simply telling lenders not to discriminate and enforces policies about what information the creditor is allowed to ask you.
A credit application should never ask if you are widowed or divorced. The only appropriate terms they can use are married, unmarried, or separated.
If you are applying for a separate, unsecured account, the creditor cannot ask about your marital status unless you are applying for a loan in a common property state.*
Creditors are not permitted to request information about your spouse unless:
-He/She will be on the loan or able to use the account.
-Your reported income is base on receiving alimony or child support.
-You live in a common property state.*
Creditors should not ask you about any future plans to have children. However, they can ask about expenses related to dependents.
Creditors are not permitted to inquire about child support or alimony, without first telling you that the information is not required. However, they are entitled to know if you pay the expense of alimony or child support.
If your lender has violated any of these regulations, or you feel as though you have been denied a fair lending opportunity based on your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance, take action. Any discrimination should be reported to the appropriate government agency and you retain the right to sue the lender in the federal court.
* Common property states include Arizona, Idaho, Louisiana, New Mexico, Texas, Washington, and Wisconsin.
Wednesday, December 23, 2009
Fair Debt Collection Practices
If you are behind on you bills, you may have debt collectors hounding you by phone, mail, and even at work. This can be stressful, embarrassing, and could cost you your job. Like most people, you would probably pay the bills, and get out of debt, if you could just get caught up. Fortunately, the nation's consumer protection agency enforces some regulations that define when bill collectors can call, what they can say to you, and how long they can pursue recovery of a bad debt.
When you owe money, you may be contacted by a debt collector who works for the lending company, a collection agency that works on behalf of the company, an attorney who regularly collects debts, or even a company that buys delinquent debts and then collects on them. However, it is illegal for more than one of these representatives to attempt to collect from you at the same time. The Fair Debt Collection Practices Act forbids bill collectors to use abusive, deceptive, or unfair practices to collect a bad debt. However, this act refers mostly to personal debts such as a mortgage, auto loan, credit cards, or medical bills. It does not offer the same protection for debts that were incurred to run a business.
It is always best to try to resolve debt problems responsibly, but that does not mean you have to put up with bill collectors harrassing you. There are also limitations to the time periods during which a bill collector can contact you. Anytime before 8 o'clock in the morning or after 9 o'clock at night are considered to be times of inconvenience. Bill collectors are not permitted to call during times of inconvenience unless you have expressed approval for them to reach you during that period. Also, once you have told them either orally or on paper that your work does not allow for you to receive calls, they are prohibited from contacting you there again. For information regarding the limit of time they are allowed to make collection attempts, check with your individual state.
If you feel that you have been the victim of unfair debt collecting, you have one year from the time of the violation that you can sue the company is either state or federal court. To report unfair credit practices, contact your state's Attorney General's office. If it is an out of state collection company, you may report the problem to the Federal Trade Commission.
When you owe money, you may be contacted by a debt collector who works for the lending company, a collection agency that works on behalf of the company, an attorney who regularly collects debts, or even a company that buys delinquent debts and then collects on them. However, it is illegal for more than one of these representatives to attempt to collect from you at the same time. The Fair Debt Collection Practices Act forbids bill collectors to use abusive, deceptive, or unfair practices to collect a bad debt. However, this act refers mostly to personal debts such as a mortgage, auto loan, credit cards, or medical bills. It does not offer the same protection for debts that were incurred to run a business.
It is always best to try to resolve debt problems responsibly, but that does not mean you have to put up with bill collectors harrassing you. There are also limitations to the time periods during which a bill collector can contact you. Anytime before 8 o'clock in the morning or after 9 o'clock at night are considered to be times of inconvenience. Bill collectors are not permitted to call during times of inconvenience unless you have expressed approval for them to reach you during that period. Also, once you have told them either orally or on paper that your work does not allow for you to receive calls, they are prohibited from contacting you there again. For information regarding the limit of time they are allowed to make collection attempts, check with your individual state.
If you feel that you have been the victim of unfair debt collecting, you have one year from the time of the violation that you can sue the company is either state or federal court. To report unfair credit practices, contact your state's Attorney General's office. If it is an out of state collection company, you may report the problem to the Federal Trade Commission.
Tuesday, December 15, 2009
Visa Card vs. Discover Cards
In this review of both Visa Card and Discover Cards we will take a look at some specifics and history of each company as well as some basic things to look for anytime you are considering applying for a new credit or debit card.
Discover card was first started in 1985 by Sears. Discover card made a strong appearance into the financial market with higher credit limits, excellent reward programs, and Discover was one of the only card issuers to have no annual fee. Early on Discover was seen as a US credit card and for a long time had limited acceptance because merchants felt they were helping the competition, Sears, when they accepted Discover cards. However, in 2007 Discover Financial Services became its own company. Discover is now nearly as widely accepted as Visa, MasterCard, and American Express in the Americas but still lags behind in the global markets.
Visa card has an advantage because it was the first major credit card and gained huge popularity early on. Because it is so well known and widely accepted, many people choose to use Visa because they feel like it is a stable, secure choice. They know that it will be accepted virtually anywhere and are pretty familiar with what to expect from the company. If you want a card with no worries about where it will be accepted, Visa is a top choice.
Ultimately, when choosing a credit or debit card you will have to look at the individual offers that are available to you and see what will best meet your needs. Some things to compare and contrast with any card includes:
Discover card was first started in 1985 by Sears. Discover card made a strong appearance into the financial market with higher credit limits, excellent reward programs, and Discover was one of the only card issuers to have no annual fee. Early on Discover was seen as a US credit card and for a long time had limited acceptance because merchants felt they were helping the competition, Sears, when they accepted Discover cards. However, in 2007 Discover Financial Services became its own company. Discover is now nearly as widely accepted as Visa, MasterCard, and American Express in the Americas but still lags behind in the global markets.
Visa card has an advantage because it was the first major credit card and gained huge popularity early on. Because it is so well known and widely accepted, many people choose to use Visa because they feel like it is a stable, secure choice. They know that it will be accepted virtually anywhere and are pretty familiar with what to expect from the company. If you want a card with no worries about where it will be accepted, Visa is a top choice.
Ultimately, when choosing a credit or debit card you will have to look at the individual offers that are available to you and see what will best meet your needs. Some things to compare and contrast with any card includes:
- Interest Rate
- Credit Line
- Usability
- Annual Fees
- Other Frees
- Reward Programs
Look for the card that is going to be accepted where you shop, that has the kind of rewards program you will benefit from, offers you the best interest rate (low APR), and will provide you with a credit line that will meet your needs.
Friday, December 4, 2009
Secured Credit Cards
If you have bankruptcy on your credit report or a low credit score, you may find it nearly impossible to get anyone to lend you money. However, credit cards are a convenient way to make purchases and almost necessary for renting a car, buying a plane ticket, sending flowers, or shopping online. Plus, in order to qualify for a home loan or a low interest auto loan, it is important to have good credit. So, if you have struggled to get a line of credit or would like to rebuild your credit, you may want to obtain a secured credit card.
Secured credit cards are just as they sound, a line of credit secured by a deposit. Usually you will pay an upfront amount, somewhere in the range of $300 or $500 for a credit line in a similar amount. In addition, there is almost always an annual fee and may even be an application fee. Some people have gotten secured credit cards and found that their entire credit limit has been consumed in fees before they have even used the card. Plus, secured credit cards are known for having high interest rates.
On the other hand, if you shop around, there are some secured or prepaid credit cards that are better than others. Also, these credit lines work to rebuild your credit by giving you the opportunity to prove that you can be a trusted to pay back a loan. It is recommended that you do not carry credit, but pay your full balance each month in a timely manner. After a period of time, the secured card’s issuing bank will often increase your credit line or allow you to spend a percentage above the deposited amount. Your credit report will reflect your responsible use of the new account and soon unsecured,or “regular” credit offers will become available. Although expensive, secured credit cards can be a valuable asset if they are used correctly.
Secured credit cards are just as they sound, a line of credit secured by a deposit. Usually you will pay an upfront amount, somewhere in the range of $300 or $500 for a credit line in a similar amount. In addition, there is almost always an annual fee and may even be an application fee. Some people have gotten secured credit cards and found that their entire credit limit has been consumed in fees before they have even used the card. Plus, secured credit cards are known for having high interest rates.
On the other hand, if you shop around, there are some secured or prepaid credit cards that are better than others. Also, these credit lines work to rebuild your credit by giving you the opportunity to prove that you can be a trusted to pay back a loan. It is recommended that you do not carry credit, but pay your full balance each month in a timely manner. After a period of time, the secured card’s issuing bank will often increase your credit line or allow you to spend a percentage above the deposited amount. Your credit report will reflect your responsible use of the new account and soon unsecured,or “regular” credit offers will become available. Although expensive, secured credit cards can be a valuable asset if they are used correctly.
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