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Jill Russo Foster

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You are here: Home / Archives for Manage Your Credit & Identity / Get Great Credit

Stricter Credit Card Applications

February 8, 2010 By Jill Russo Foster

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.

Filed Under: Credit Card Act of 2009

Over Your Credit Limit? Purchase not approved

February 5, 2010 By Jill Russo Foster

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. )

Filed Under: Credit Card Act of 2009 Tagged With: credit card act, Credit Cards, Credit Management, Credit Report

No More Credit Card Payment Fees

February 3, 2010 By Jill Russo Foster

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).

Filed Under: Credit Card Act of 2009

New Minimum Age for Credit Cards

February 1, 2010 By Jill Russo Foster


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 One

Twenty-one is the new minimum age to apply for a credit card according to the Credit Card Act of 2009.

Filed Under: Credit Card Act of 2009

What’s up with credit card companies lately?

January 14, 2010 By Jill Russo Foster

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.

Filed Under: Credit Cards, Credit Management Tagged With: Controlling Expenses, credit card act, Credit Card Fees, Credit Management, Interest Rates

Which saves you more money: a debit card or a credit card?

November 19, 2009 By Jill Russo Foster

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.

Filed Under: Credit Cards Tagged With: Credit Cards, Debit Cards, Overdraft Fees, Saving Money

Do You Share the Credit Card Equally?

October 15, 2009 By Jill Russo Foster

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.

Filed Under: Credit Cards Tagged With: authorized user, card-holder, Credit Cards, Credit Report, joint account

New Credit Card Rules

October 8, 2009 By Jill Russo Foster

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.

Filed Under: Credit Card Act of 2009 Tagged With: consumer protections, credit card act, credit card rules, Credit Management, late payments, rate increases

What Is A Credit Inquiry Doing On My Credit Report?

October 13, 2008 By Jill Russo Foster

A credit inquiry is when a potential creditor accesses your credit report. This can occur when you apply for credit.

For example, when you sign up for cell phone service, the provider checks your credit before they decide if they’ll work with you. If your credit is good, they’ll give you service. If not, they may refuse to work with you, or ask you to pay up front with a security deposit.

Your credit score is reduced every time someone makes an inquiry because each inquiry means a potential new account. As you’re wandering through the mall, allowing the check-out clerks to see if you’re eligible for a store credit card, you’re lowering your credit score. Please consider your priorities before allowing just anyone to check your credit. It’s not unusual to get declined for a reason of too many inquires.

Some types of major loan inquires will only count as one inquiry, as long as you don’t wait too long between. For example – if you are applying for a mortgage and are checking out several different lenders, then this is one inquiry as long as you’re doing it within a short period of time. Long periods will mean separate inquires. Note, that this is not true for student loans – each inquiry is separate and will reduce your credit score.

Filed Under: Credit Management Tagged With: Credit Inquiry

Why It Isn’t Enough to Pay the Minimum

October 3, 2008 By Jill Russo Foster

“Can you tell me how long it will take to pay a $2,000 credit card balance? I’m paying the minimum every month and the balance doesn’t seem to be going down.”

You could be right about the balance. First thing that you should know is that credit card minimum payments are only about 1.5% and 2.5% of the balance. So for a $2,000 balance, that would be between $30 and $50 per month. Included in that minimum payment is the finance charges (that’s how the bank makes its income – from the fees). To let you know how long it would take to pay off, I would need your interest rate (which I don’t have), but here are two examples:

$2000 Credit Card Balance at 6% Interest

Rate Minimum Pmt Pay Off Time
6% $30 80 months or 6 years
6% $50 45 months or 3 years

$2000 Credit Card Balance at 12% Interest

Rate Minimum Pmt Pay Off Time
12% $30 108 months or 9 years
12% $50 51 months or 4 years

You can see that little of your payment is actually going towards reducing the $2,000 balance. The estimate above also assumes that you aren’t using the credit card to make more purchases.

You do have a couple options for a quicker payoff.

Option 1: Pay more than the minimum amount. Paying as little as $10 more per month will help you see some progress. You’re saying you don’t have an extra $10 to spend on your payment? Take a look at your spending habits and see where you can come up with that money. Bring your lunch to work, borrow books and movies instead of buying, and get your hair cut every 7 weeks instead of every 6 weeks. Little things add up. The great thing about this, is that it’s temporary. Once your debt is paid off, you can breathe a sigh of relief, and go back to the 6 week haircut or treat yourself to a rental. Or, you may find you have new habits that will allow you to start saving money.

Option 2: Lower the interest rate. You can do this by transferring the balance to another card that’s offering a zero percent rate or a low rate. These are limited time offers. If you don’t pay it off on time, you’ll get charged interest again. Make every effort to pay off the balance before the special offer is up. This way you can make sure that most or all of your payment is going toward the balance and not toward fees.

Filed Under: Credit Cards Tagged With: Interest Rates, Minimum Payments

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