tag:blogger.com,1999:blog-91332040736436940282023-11-16T02:55:09.381-08:00Car - Laptop - Mobile - MoneyCanhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comBlogger371125tag:blogger.com,1999:blog-9133204073643694028.post-14054590961906696892010-01-02T19:32:00.000-08:002010-01-02T19:33:40.115-08:00Don't hide debt problems from collectors, friends or family<h3>Building a support system can help you get through </h3><h4>By Sally Herigstad</h4> <p> </p><table align="right" width="180"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> To Her Credit </div> </td> </tr> <tr> <td> <div align="center"> <img alt="To Her Credit, Sally Herigstad" src="http://www.creditcards.com/credit-card-news/images/expert-herigstad.jpg" border="0" width="150" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table align="center" width="155"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a>.</strong> </p> <p><strong><a href="http://www.creditcards.com/credit-card-news/to-her-credit-stories.php" target="_self">To Her Credit archive</a></strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" align="left" width="50" height="50" hspace="10" /> <p> <strong>Dear To Her Credit,</strong><br />I am having financial trouble because my alimony payments have just ended and my home business has failed. I was never making much from my home business in network marketing anyway. </p> <p> I am seeking employment, but I can't make credit card payments at this time. I've missed one month of payments, and for the past week, I have been receiving phone calls throughout the day from two banks that I owe. Out of fear, I have yet to speak to these banks. I see the bank names on caller ID, and I don't answer the phone. </p> <p> When these banks find I'm in the process of seeking employment and want to pay my debts but cannot pay at this time, what will their actions be? Can they send someone out to my home, or are they only allowed to contact me by phone and mail? Thank you for your help. -- <em>Charlee</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" align="left" width="50" height="50" hspace="10" /> <p> <strong>Dear Charlee,</strong><br />Being unemployed and unable to pay your bills is very distressing, as anyone who has been there knows. However, it sounds like right now you are more fearful than you need to be. If you understand what is likely to happen and you know your rights, you can lay the worst of your fears to rest. </p> <p> The bank generally won't know you are unemployed unless you tell them. Andy Jolls, CEO of VideoCreditScore.com, says, "There's nothing in your credit file that shows you are unemployed. Your employment situation and how much you make are not factors in your credit score." </p> <p> You may want to go ahead and tell the bank you are between jobs. In fact, you may qualify for a forbearance program if you are unemployed for long and have no other income. (To learn more, read "<a href="http://www.creditcards.com/credit-card-news/credit-card-forbearance-programs.php" target="_self">Credit card forbearance programs offer reprieve from debt</a>.") </p> <p> If 10 percent of the population is unemployed, probably at least 10 percent of the bank's customers are in the same situation you are. Jolls says, "I haven't heard of anybody telling the credit card companies, 'Hey, I'm unemployed,' and the credit card companies raising their rates or closing down their accounts. My sense is that would be discriminatory." </p> <p> If your worst fear is that someone from the bank or a collection company may come to your home, you can stop worrying about that. Creditors are not allowed to come to your home or place of business, nor are they allowed to talk to your employer, neighbors or anyone else about your debts. </p> <p> Creditors can call you on the phone -- but only until you tell them to stop. Next time the phone rings and it's one of your credit card companies, answer the phone but don't discuss your account with them. Tell them to contact you by mail only. <a href="http://www.creditcards.com/credit-card-news/fair-debt-collection-practices-act-5125.php" target="_self">They must comply</a>. </p> <p> When they do contact you by mail, be sure to respond. Keep a copy of all correspondence for your files. </p> <p> As soon as you're not worried about creditors showing up on your doorstep or you've stopped them from calling you several times a day, it's time to make a plan for paying off your debts. </p> <p> To make a real difference in your financial situation, you must become very honest with yourself and with the people who care about you. "If she has this level of secrecy around not wanting to share with the banks, her family members probably don't know either," says Jolls. </p> <p> When a home business fails, people's friends often don't even know. If your friends don't know you're short of money, they're going to ask you to go out to dinner and do other things to spend money. "If they know," says Jolls, "they're going to say, 'Can we get together and make pasta?'" </p> <p> If you level with your parents, <a href="http://www.creditcards.com/credit-card-news/poll-parents-pay-off-childrens-debts-1276.php" target="_self">they may be able to help</a>. Many parents are willing to help their grown children go back to school or to even let them live at home if they need to. </p> <p> You may even want to talk to a counselor from a nonprofit credit counseling agency about your situation. They have helped many people like you. You may be surprised how much their experience and perspective can help. You can find accredited counselors through the <a href="http://www.nfcc.org/" target="_blank">National Foundation for Credit Counselors</a> or the <a href="http://www.aiccca.org/" target="_blank">Association of Independent Consumer Credit Counseling Agencies</a>. </p> <p> I understand your hesitation to discuss debt. Being secretive about your financial troubles only makes them worse. Being more open and building your support system can help you get through even tough times like these. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-20338078157662455402009-12-31T17:39:00.001-08:002009-12-31T17:39:28.703-08:00How to create New Year's resolutions that actually work<h3>Most of us resolve to improve; heeding the '3 Rs' help you keep them</h3><h4>By Marcia Frellick</h4> <p> Millions of recession-weary Americans are making New Year's resolutions to spend less, save more and be more responsible with credit. But without a plan, experts say you're likely doomed to fail. <img alt="9 expert tips to help you keep your New Year's resolution" src="http://www.creditcards.com/credit-card-news/images/resolutions.jpg" vspace="10" width="250" align="right" height="283" hspace="10" /> </p> <p> The good news is that with careful and realistic planning, you just might be able to keep that resolution and move closer to your dreams of greater financial stability. </p> <p> Resolutions are becoming more and more popular amid today's double-digit unemployment and general economic uncertainty. Three in four Americans will make at least one financial-related New Year's resolution in 2010, according to a <a href="http://research.tdameritrade.com/public/markets/news/story.asp?docKey=100-323b0886-1&clauses=" target="_blank">survey</a> from Omaha-based brokerage TD Ameritrade and the Opinion Research Corp of Princeton, N.J. That's up from 71 percent in 2008. And despite the popular belief that resolutions don't often work, the survey found 60 percent of those who made financial resolutions last year reported they were still "going strong" -- though it is possible that more people <em>say </em>they keep their resolutions than actually keep them. </p> <p> With that in mind, we spoke with personal finance experts to get their thoughts on what actually works. </p> <p> <strong>The '3 Rs' of resolutions<br /></strong>To start with, they say resolutions that work follow "the three Rs." </p> <p> They should be: </p> <blockquote> <p> <strong>1. Reasonable.<br /> 2. Realistic.<br /> 3. Rewarding. </strong> </p> </blockquote> <p> That means that goals shouldn't be so lofty that they're unattainable, and planning for them should include ways to both hold yourself accountable and to pat yourself on the back for a job well done. </p> <p> Here's more of what these experts had to say. </p> <img alt="kathleen gurney" src="http://www.creditcards.com/credit-card-news/images/gurney.jpg" vspace="10" align="left" border="0" hspace="10" /> <p> <strong>Kathleen Gurney, CEO<br />Financial Psychology Corp.<br /></strong>Resolutions are incredibly emotional things. Gurney, a psychologist based in Sarasota, Fla., says you can't forget the emotional component of cutting back. If you do, you're making an already challenging endeavor just that much more difficult. </p> <p> "When you say you will cut out all family splurges for the next three months, can you emotionally afford that?" Gurney says. "By about February, you may become really resentful that you don't have that time to de-stress with your family." </p> <p> To keep the emotional impact to a minimum, Gurney offers the following suggestions: </p> <ul class="unIndentedList"><li><strong>Remove as many willpower decisions as possible.</strong> If your resolution is to spend less and your favorite activity with a friend is shopping, find another way to be together, and let the friend know why. If you are prone to spending what you make, sign up for monthly automated savings. </li><li><strong>Keep track daily.</strong> Gurney suggests keeping a daily journal and writing down three things you did well toward keeping your resolutions and three things you need to do to improve. This is a way to reward yourself daily and reinforce the behavior changes you're making.</li></ul> <img alt="leigh ann fraley" src="http://www.creditcards.com/credit-card-news/images/fraley.jpg" vspace="10" align="left" border="0" hspace="10" /> <p> <strong>Leigh Ann Fraley, blogger<br />"Save Leigh Ann -- The Daily Rantings of a Bulimic Shopper"</strong><br />Recording daily progress on her spending goals and writing about her <a href="http://www.creditcards.com/credit-card-news/help/8-steps-cut-credit-card-debt-6000.php" target="_self">debt</a> in a public way made all the difference for Fraley, who racked up $19,947 in credit card debt before she began blogging about her financial struggles in 2005. She maxed out cards despite the fact she was a financial educator at a bank in California and lectured groups on how to manage their finances. Through her blog, she was accountable to herself and her readers. </p> <p> She wiped out her debt in a year with the moral support of readers who clicked into<em> </em>her blog, which she still maintains. Last year, she was laid off and took on more <a href="http://www.creditcards.com/balance-transfer.php" target="_self">credit card</a> debt for COBRA insurance payments. But now Fraley, who just turned 40, has been rehired by the bank and has a four-month plan for becoming debt-free again. </p> <p> She offers this advice on making resolutions: </p> <ul class="unIndentedList"><li><strong>Get an accurate picture of what you owe</strong>. Stop the denial. Open up the bills and get the real picture, she says. "People usually think they are worse off than they are, and they think there's nothing they can do." </li><li><strong>Don't just vow to give up the lattes. Invest the latte money.</strong> "Take that $2.50 and move it over every day into a savings account with online banking. Then you can see it add up."</li><li><strong>Cut up your credit cards if you don't trust yourself. </strong>Fraley cut hers up and now keeps the pieces in a transparent box as a warning. (<strong>See video:</strong> <img src="http://www.creditcards.com/credit-card-news/images/icon-video.gif" border="0" /> <a href="http://www.creditcards.com/credit-card-news/video-cutting-up-a-credit-card-1457.php" target="_self">How to cut up a credit card</a>)</li></ul> <img alt="nicole mladic" src="http://www.creditcards.com/credit-card-news/images/mladic.jpg" vspace="10" align="left" border="0" hspace="10" /> <p> <strong>Nicole Mladic, blogger</strong><strong><br />"The Budgeting Babe"</strong><br />Mladic of Oak Park, Ill., 30, had $25,000 in <a href="http://www.creditcards.com/credit-card-news/sandberg-student-loan-default-correct-1377.php" target="_self">student loans</a> by the time she moved out of her parents' house. She then quickly realized her reserve was rapidly draining and she had to act. She says setting small, achievable goals and getting educated about finances help maintain resolutions. </p> <p> Many people her age are struggling with debt. In the TD Ameritrade survey, more than half of Americans between the ages of 18 and 34 said they are more likely to make a financial-related resolution in 2010 than they were in 2009. Mladic offers these suggestions: </p> <ul type="disc"><li><strong>Start small</strong>. For instance, open a savings account and vow to save $25 a month instead of saying you will save for a down payment. Also, you can resolve to increase your 401(k) contribution 1 percent at a time. She says she started with 2 percent and is now at 10 percent plus her company's match. </li><li><strong>Get educated</strong>. She felt she didn't know nearly enough about finances to reverse her situation and neither did many of the young women she knew. She started a blog called <em>The Budgeting Babe</em> in 2004 and continued it until late summer 2009. Months later, she made her last student loan payment.</li></ul> <img alt="kit yarrow" src="http://www.creditcards.com/credit-card-news/images/yarrow.jpg" vspace="10" align="left" border="0" hspace="10" /> <p> <strong>Kit Yarrow, consumer psychologist, author</strong><strong><br />"Gen BuY: How Tweens, Teens and Twenty-Somethings are Revolutionizing Retail"</strong><br />Yarrow, a psychology and marketing professor at San Francisco's Golden Gate University, says the new year often follows a bloated feeling of overspending, which is a motivator for change. </p> <p> It's also when people find more support for their resolutions, and that's an important part of maintaining them. Stop-smoking, weight-loss and financial-help programs commonly roll out after the new year. Even if you don't join a group, Yarrow recommends giving a verbal commitment to at least a few people when you make your resolutions. </p> <p> "It's funny. People will cheat on themselves before they'll cheat on someone else," she says. </p> <p> She also recommends these tips for keeping resolutions: </p> <ul class="unIndentedList"><li><strong>Post tangible reminders.</strong> "Visual cues are very important, especially for young people raised on the Internet. Tape up a picture of the thing you are working toward as a constant reminder."</li><li><strong>Emphasize positive action.</strong> When making a resolution, she says, focus on what you should <em>do </em>rather than what you should <em>not do</em>. Instead of focusing on not shopping or not having, find something proactive to do, such as budgeting or writing down expenses. In some ways, that will help replace the loss, she says.</li><li><strong>Celebrate a milestone.</strong> Acknowledge a month of good budgeting or three months of reducing debt. But don't reach for the wrong reward -- like a spending binge, she says. </li></ul> But none of this matters if you don't take the first step, and it doesn't have to be January 1 for you to start living in a more financially responsible way. "The reason New Year's resolutions often fail is because if you're motivated enough to change your life you don't need an arbitrary date to do it. ... Changes in behavior come when you seize the moment," Yarrow says.Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-66744086037377934372009-12-31T17:38:00.002-08:002009-12-31T17:39:05.879-08:00How to read FICO's explanations of what's hurting your credit score<h3>Don't take the credit critique personally, especially if your score is high</h3><h4>By Erica Sandberg</h4> <table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> Opening Credits </div> </td> </tr> <tr> <td> <div align="center"> <img alt="Columnist Erica Sandberg" src="http://www.creditcards.com/credit-card-news/images/expert-sandberg.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a>.</strong> </p> <p> <strong><a href="http://www.creditcards.com/credit-card-news/opening-credits-stories.php" target="_self">'Opening Credits' stories</a></strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Opening Credits,<br /></strong>My credit score is good -- mid-700s. I've heard that there are things that you can do to hurt your score that don't make sense to me. I got my credit report earlier in the year and was shocked to see several comments. I don't recall the exact statements, but this is my understanding of what they meant: </p> <ul><li><strong>Too many revolving accounts with balances.</strong> I have three credit cards I use regularly. At the time, the total balance was around $1,000. I pay the entire balance off each month. </li><li><strong>Available credit too high</strong>. Over the years, several of my cards have gotten updated limits. Discover had me at $21,000. So, I called and had the limits lowered. How much is a reasonable limit to have? </li><li><strong>Too many revolving accounts.</strong> I had a few credit cards that I'd never used. So, I closed the accounts. Since then I've heard a few people say this is a bad thing to do. The only debt at the time was our home mortgage. Paid off my car loan a few years ago. Were my actions in error? <em>-- Donita</em></li></ul> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Donita,</strong><br />Actions in error? Have some confidence, Donita! You have a terrific credit score. Anything in the 750 range is more than acceptable, which means that even if you weren't trying, you've been doing a lot of things right. </p> <p> In fact, it looks like you've satisfied the two weightiest factors in a FICO score: payment history (accounts for 35 percent of your <a href="http://www.creditcards.com/credit-card-news/help/10-things-you-must-know-about-credit-reports-credit-scores-1270.php" target="_self">credit score</a>) and the amount of debt you have in relation to your credit limit (30 percent). By paying your bills on time and keeping what you owe well below the amount you can actually charge, you've achieved a credit score most lenders would be thrilled with. Check out the box on this page for more information about what goes into your credit score. </p> <p> Now, what's up with the confusing credit report "explanations"? With such a good score, the statements don't make much sense. Here's why: Many of the comments you are reading are nothing more than stock responses and shouldn't be taken so literally. They aren't actually personalized to your exact situation, but are general suggestions as to why your score isn't at the "perfect" 850. </p> <p> For further clarification, I turned to Jose Rivas, a financial educator for Consumer Credit Counseling Services of San Francisco (my old haunt). He reviews countless consumer credit reports for this nonprofit organization each year. </p> <table width="300" align="left"> <tbody> <tr> <td> <object classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" width="300" height="500"> <param name="width" value="300"> <param name="height" value="500"> <param name="src" value="/credit-card-news/assets/fico-breakdown-300.swf"> <embed type="application/x-shockwave-flash" src="http://www.creditcards.com/credit-card-news/assets/fico-breakdown-300.swf" width="300" height="500"></embed> </object> <br /> </td> </tr> </tbody> </table> <p> "The comments listed seem like the generic suggestions that are written into the mathematical code of the FICO scoring model," says Rivas. "When a credit file is processed by the <a href="http://www.creditcards.com/glossary/term-fico-score.php" target="_self">FICO</a> scoring model, the process will yield a three-digit score, unless you have no credit history, and four recommendations for improving the score. As a person's score gets closer to 850, there is less and less for the FICO model to recommend for improvement, but the process is designed to still yield the four recommendations." </p> <p> In other words, for individuals like you who have scores in those upper numbers, the explanations about why it's not perfect are kind of meaningless. Why? Because FICO only publishes general information about how a score is determined -- a skeleton, basically, of why your score may go up or down. The meat and bones of the mathematical model they use is proprietary. (They pulled back the curtain a bit in November 2009 when they released some details of how late payments, foreclosures and other <a href="http://www.creditcards.com/credit-card-news/fico-credit-score-points-mistakes-1270.php" target="_self">mistakes impact your score</a>, but by and large, the scoring remains a mystery.) </p> <p> Rivas does question the point about your available credit too being too high, saying, "there is no known drawback to having 'too much' available credit. This is usually a lender's feedback, but not likely to be FICO score-related." And because you don't carry over a balance from month to month, I don't see how lowering your credit line with <a href="http://www.creditcards.com/Discover.php" target="_self">Discover</a> did any significant damage. </p> <p> In general, it is best to keep older, well-managed credit accounts open. Doing so helps with the "length of <a href="http://www.creditcards.com/glossary/term-credit-history.php" target="_self">credit history</a>" section of a FICO score. Though a relatively minor factor in calculating your score (15 percent), having a long, traceable record of using credit positively works in your favor. However, your excellent score confirms that the effect of <a href="http://www.creditcards.com/credit-card-news/help/cancel-credit-card-6000.php" target="_self">closing them</a> has been negligible. </p> <p> As for having too many revolving accounts with balances, I believe the number of credit cards you have is fine. Having three active credit accounts is generally perceived as ideal. It's balanced: You are not a one trick pony with a single card, and you don't have so many that your reports are overrun with random accounts. </p> <p> In the end, try to not put too much stock in what random people tell you about credit reports and scores. If you have a question about anything financial, whether it's credit reports or investing, go straight to the source. I'm not suggesting that your best friend, sister-in-law or coworker is incorrect or isn't knowledgeable, but it's always best to get information on such important subjects from professionals who are actually in the business. </p> <p> Just keep doing what you're doing, Donita. Your credit intuition is on the mark. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-30347135091713399902009-12-31T17:38:00.001-08:002009-12-31T17:38:28.399-08:00Chrome Bags Soyuz Laptop Backpack Review<small><span class="light">BY:</span> <a href="http://forum.notebookreview.com/search.php?do=process&showposts=0&starteronly=1&exactname=1&searchuser=Jerry%20Jackson" title="see other articles by this author" style="text-decoration: none;">Jerry Jackson</a>, <i> NotebookReview.com Editor</i> </small><br /><small><span class="light">PUBLISHED:</span> 12/28/2009</small><br /><br /> <span style="font-size: 12px; line-height: 20px;" class="width490"> <span name="intelliTxt" id="intelliTxt"><p>If you're looking for the perfect laptop bag for your new notebook then you may be in luck. Chrome Bags promises the Soyuz laptop backpack is the ultimate solution for road warriors who are constantly running between the office and the gym ... or maybe need to join a conference call from the beach. Is this $180 laptop backpack worth your holiday cash? Keep reading to find out.</p><p><b>Soyuz Specifcations:</b></p> <ul><li>Dimensions: 21 x 14 x 6 inches (L x W x H)</li><li>1000 Denier Cordura Body</li><li>Airmesh Strap Construction</li><li>Waterproof RF Welded Urethane Roll-top Main Chamber</li><li>Ergonomic EVA Compression Molded Back Panel</li><li>PVC Coated Weatherproof YKK Zippers</li><li>Full Shoulder Strap Accessory Attachment Belts</li><li>Industrial Metal Cam Locks Under Arm Compression Buckles</li><li>11" x 17" File Pocket With Organization Pockets</li><li>Five Additional Weatherproof Cargo Pockets</li><li>MSRP: $180.00 (available at <a target="_blank" href="http://www.chromebagsstore.com/bags/laptop-bags/soyuz.html#">www.chromebags.com</a>)</li></ul> <p><b> <table align="left" border="0"> <tbody> <tr> <td><a href="http://www.notebookreview.com/shared/picture.asp?f=48797" target="_blank"><img src="http://www.notebookreview.com/assets/48798.jpg" width="250" border="0" height="171" /></a></td> </tr> </tbody> </table> Build and Design</b><br />The designers at Chrome Bags are obviously aware that modern road warriors don't haul the "traditional" mobile office anymore. Today your average mobile professional brings a notebook PC, a smartphone, and a variety of personal items ranging from a day's worth of clothes for an overnight business meeting or an outfit for the afternoon workout.</p> <p><br />The Soyuz laptop backpack meets these needs and more thanks to dual primary compartments, multiple weatherproof pockets, and a sleek design that easily fits inside the overhead compartment on a flight or under the seat in front of you. The main roll-top backpack compartment is fully waterproof with a seam-sealed main chamber that will keep sweaty workout clothes away from delicate electronics or keep your beach clothes separate from your laptop. The side-access laptop compartment features a moderately padded section for your notebook and a divider for paper files or hard copies of your next business presentation. Another compact waterproof compartment on the front of the bag is the perfect place to store USB flash drives or any other small items you want to keep dry.</p> <p> </p><table border="0"> <tbody> <tr> <td><a href="http://www.notebookreview.com/shared/picture.asp?f=48805" target="_blank"><img src="http://www.notebookreview.com/assets/48806.jpg" width="250" border="0" height="162" /></a></td> <td><a href="http://www.notebookreview.com/shared/picture.asp?f=48801" target="_blank"><img src="http://www.notebookreview.com/assets/48802.jpg" width="250" border="0" height="162" /></a></td> </tr> <tr> <td><a href="http://www.notebookreview.com/shared/picture.asp?f=48817" target="_blank"><img src="http://www.notebookreview.com/assets/48818.jpg" width="250" border="0" height="187" /></a></td> <td> <p><a href="http://www.notebookreview.com/shared/picture.asp?f=48815" target="_blank"><img src="http://www.notebookreview.com/assets/48816.jpg" width="250" border="0" height="187" /></a></p> </td> </tr> </tbody> </table> <p><b>User Comfort<br /></b>Of course, all of the waterproof storage in the world won't help a backpack that isn't comfortable on your shoulders and your back. Thankfully, the Soyuz is exceptionally comfortable thanks to shoulder straps that have airmesh padding and a back panel with ergonomic pads. While the surface of the shoulder straps that faces your shoulders has great breathable padding it's the front of the shoulder straps that I found particularly impressive. The front of the shoulder straps features seatbelt-quality reinforcement straps for added durability and metal compression buckles to keep the shoulder straps set to the right length. Shoulder straps are usually the first thing to fail on most of my laptop backpacks because I haul multiple notebooks and netbooks when traveling (I review these things for a living, after all). The straps on the Soyuz feel so rugged that I suspect they can handle any abuse I inflict upon them. If you prefer to carry your backpackl one handed using the top handle then you'll be pleased to know that the top handle feels nice and strong ... but the roll-top enclosure at the top of the bag does get in the way of the handle sometimes.</p> <p> </p><table border="0"> <tbody> <tr> <td><a href="http://www.notebookreview.com/shared/picture.asp?f=48803" target="_blank"><img src="http://www.notebookreview.com/assets/48804.jpg" width="250" border="0" height="162" /></a></td> <td><a href="http://www.notebookreview.com/shared/picture.asp?f=48807" target="_blank"><img src="http://www.notebookreview.com/assets/48808.jpg" width="250" border="0" height="162" /></a></td> </tr> </tbody> </table> <p><b>Usability Issues</b><br />The Soyuz proved itself to be a fantastic travel companion during my month-long test of the backpack. I used the Soyuz as my daily work bag and as my only carry-on bag for several business flights. Not only was the slim profile of the Soyuz easy to squeeze into overhead compartments and under seats, but the rugged construction held up to scrapes, drops, and more than a few rain showers without damaging the contents of the bag.</p> <p> </p><table align="right" border="0"> <tbody> <tr> <td><a href="http://www.notebookreview.com/shared/picture.asp?f=48799" target="_blank"><img src="http://www.notebookreview.com/assets/48800.jpg" width="250" border="0" height="162" /></a></td> </tr> </tbody> </table> That said, I often found myself wondering if the Soyuz had enough padding around the main laptop compartment. None of the notebooks or netbooks I used during the review period were damaged in any way, but the padding on this bag "looks" thinner than what I see in most of the bags that arrive in our office. As mentoned before, the top handle on the bag is often obstructed by the roll-top enclosure, so if you don't roll the top as tight as possible before closing the Velcro then you might not be able to get a good grip on the top handle. Other than these issues I can't say there were any major usability problems with the Soyuz. As long as you don't attempt to overstuff the bag with multiple laptops, a change of clothes, paperwork, and your lunch then this bag has all the room you're likely to need for a work day or an overnight business trip. <p> </p><p><b>Conclusion</b><br />The Russian word "Soyuz" means "Union" in English, and I think it's fair to say that the Soyuz laptop backpack from Chrome Bags is the perfect union of form and function. The Soyuz is the ideal companion for urban road warriors who need to jump between the office and an active lifestyle. The interior of this backpack offers enough storage to get you through a day's worth of work and play and it's rugged enough to last as long (or longer) than you do.</p> <p>If I have any criticism about this backpack it's that the roll-top enclosure sometimes gets in the way of the top handle, the laptop compartment could use a little more padding, and the waterproof Urethane elements might look a little unappealing to some business professionals (though I think it looks great). Still, the Soyuz is a fantastic premium backpack at the $180 price point and might be the perfect choice for someone looking for a new laptop bag.</p> <p><b>Pros:</b></p> <ul><li>Attractive industrial design</li><li>Weatherproof and rugged</li><li>Abundant compartments</li></ul> <p><b>Cons:</b></p> <ul><li>Limited laptop compartment padding</li><li>Industrial design might look unprofessional </li></ul></span></span>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-66244502042933362132009-12-31T17:37:00.000-08:002009-12-31T17:38:07.231-08:00<span style="font-size: 12px; line-height: 20px;" class="width490"><span name="intelliTxt" id="intelliTxt"><p><span style="font-size: 12px; line-height: 20px;" class="width490"><span name="intelliTxt" id="intelliTxt"><p><i>By Greg Ross</i></p> <p><a href="http://www.notebookreview.com/price/product.asp?pid=259032">Symantec pcAnywhere 12.5</a> is a remote control application that allows users to operate a computer from any other computer in the world -- include PCs running a different operating system. Is pcAnywhere really the ultimate cross-platform remote desktop tool? We put it to the test in this review.</p></span></span>Symantec pcAnywhere 12.5 can connect almost any two computers, regardless of what OS either is running. However, as with any non-Web-based remote desktop program, pcAnywhere users need to know the exact IP address of the target computer (which never works well in my experience). Moreover, to connect via the Internet, pcAnywhere requires a third-party VPN.</p> <p><b>Program Interface</b></p> <p><a href="http://www.notebookreview.com/shared/picture.asp?f=48635" target="_blank"><img style="border: 0pt none ; margin: 5px 10px; float: left;" src="http://www.notebookreview.com/assets/48636.jpg" alt="Symantec pcAnywhere 12.5 interface" width="200" height="116" /></a>The basic view for pcAnywhere 12.5 is very self-explanatory and resembles XP's play-toy interface. From here, you can access wizards to start using the most important features of the program. Clicking Remote Control starts up a wizard to connect to a computer at a known location, File Transfer starts up an FTP session wizard with a known pcAnywhere host, and Host launches the program necessary for the local computer to be remotely controlled. Quick Connect pulls up a window that is a little more advanced as it automatically scans for pcAnywhere hosts on the local network (good for home networks with DHCP enabled), and allows the user to invoke encryption protection during the remote session.</p> <p><a href="http://www.notebookreview.com/shared/picture.asp?f=48637" target="_blank"><img style="border: 0pt none ; margin: 5px 10px; float: right;" src="http://www.notebookreview.com/assets/48638.jpg" alt="Symantec pcAnywhere 12.5 home screen" width="200" height="116" /></a>Remote Operation provides quick access to settings that largely impact the quality of the remote session experience. High-quality remote session streaming is useful when plenty of network bandwidth is available, while low-quality streaming is best for bridging two computers over the Internet. You can also set up a remote printer that can be accessed during the remote session.</p> <p>The most important feature found in the Settings tab is the ability to configure pcAnywhere 12.5 to boot automatically with the computer, which I think should be mandatory in any remote access software. <i>Callers</i> are client computers that connect to the host, and a wide range of authentication options are available (including support for Windows user logins). One can never have enough security options in remote access software and pcAnywhere 12.5 certainly excels here.</p> <p><a href="http://www.notebookreview.com/shared/picture.asp?f=48639" target="_blank"><img style="border: 0pt none ; margin: 5px 10px; float: left;" src="http://www.notebookreview.com/assets/48640.jpg" alt="Symantec pcAnywhere 12.5 settings web client" width="200" height="133" /></a></p> <p>While the overall user experience with pcAnywhere 12.5 was good, the various layouts and wizards were not exactly user-friendly a times.</p> <p>When a remote session is running, the target computer's screen is front and center within the same interface.</p> <p>The web browser version of pcAnywhere 12.5 is not as refined as the main program, but then again the Java web client is meant to be carried around on a USB memory key or used on a computer where the main client program cannot be installed.</p> <p><b>Performance</b></p> <p>During the evaluation period, the target computer was connected to the internet via a 6Mbit DSL connection. The computer used to access the target was connected to the same DSL connection for a high-speed test, or connected to the internet using a public Wi-Fi hotspot in the same city.</p> <p>In each test, I never had any issues with input lag or slow refresh rates while I was running office applications. The only time pcAnywhere 12.5 ever had a problem was when I ran my video tests at too high a quality given the network connections I was using. When running on the public Wi-Fi network, pcAnywhere 12.5 defaulted to using low-quality mode with 256 colors. At those settings, I had no issues with input latencies or full screen changes like scrolling and window maximizations.</p> <p>Performance only got better when pcAnywhere 12.5 was using my 6Mbit connection. Full-screen window changes refreshed in less time and scrolling through long documents was not as stuttered as with some of the competition. Where pcAnywhere 12.5 starts to show off is in successfully streaming video content with decent visual quality. Unfortunately, pcAnywhere 12.5 does not support audio transmissions so the experience was a little bittersweet. Nonetheless pcAnywhere 12.5 provides the best video streaming experience of any remote desktop app I've reviewed.</p> <p>Connecting to the host using the client's web browser Java application was an interesting experience. Controlling the computer was almost as easy as from the main program, except that I could never get the scrolling wheel to actually work during these sessions. Scrolling was stuttered, but otherwise performance was acceptable given its intent.</p><p><span style="font-size: 12px; line-height: 20px;" class="width490"><span name="intelliTxt" id="intelliTxt"><p><b>Conclusion</b></p> <p>In the end, pcAnywhere 12.5 certainly shines. The user interface is not as polished as I would prefer for a consumer application, but there is a wide array of powerful configuration options that are available. Performance was in line with the competition but, under the right circumstances, pcAnywhere 12.5 downright impressed us. It has incredible cross-platform support that should meet just about anyone's demands, and it even has a web interface that operates just like its web-based competitors.</p> <p>In the end, the adage that 'you get what you pay for' is definitely true when pcAnywhere 12.5 is concerned. At $200 retail, it is certainly an expensive product. However there are no monthly fees and you can use it as long as you wish. Keep this product on the short-list, and look out for rebates.</p> <p><b>Pros</b></p> <ul type="disc"><li>Works with Windows, Linux, and Mac</li><li>Excellent performance, especially with video</li><li>File transfer and multi-monitor support</li></ul> <p><b>Cons</b></p> <ul type="disc"><li>No audio streaming support</li><li>Web access requires third-party VPN</li><li>High up-front cost</li></ul></span></span></p></span></span>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-40366942441475888642009-12-31T17:36:00.001-08:002009-12-31T17:36:58.588-08:00IBM Lotus Symphony 1.3 Review<span style="font-size: 12px; line-height: 20px;" class="width490"> <span name="intelliTxt" id="intelliTxt"><p><i>By Jay Garmon</i></p> <p><a href="http://symphony.lotus.com/" target="_blank">IBM Lotus Symphony</a> is Big Blue's free alternative to MS Office. Can Symphony win a battle of the bands with Microsoft's productivity heavyweight, or does it ring hollow? We sound it out in this review.</p><p>Symphony is a forward-thinking and relatively full-featured productivity suite, but it lacks polish in some key areas. It's solid, but I wouldn't pay for it; luckily, it's free. This clunkiness starts with the download process, which involves over a half-dozen screens, requires the creation of an IBM ID, tries to opt you into affiliate e-mail newsletters, and insists the user actively decide between using IBM's Java-based downloader or a regular browser HTTP download. It's that needless lack of user-friendliness that mars an otherwise great app suite.</p> <p>IBM Lotus Symphony gets high marks for supporting multiple operating systems, including Windows, Mac OS X, and multiple flavors of Linux. It loses marks for its format support, in that it can open multiple file types but can really only save to to handful - notably excluding MS Office 2007 file save options.</p> <p><b>Interface and Usability</b></p> <p>Symphony shares some ancestry with <a href="http://www.notebookreview.com/default.asp?newsID=5249&review=openoffice+3.1+review">OpenOffice</a> -- it's based on OpenOffice 1.1.4 source code -- but the two products diverged several iterations ago. Like most office suites, Symphony includes a word processor, spreadsheet and presentation program, but it integrates them in a somewhat unusual fashion. Lotus Symphony 1.3 looks and feels like a recent generation Web browser - in fact, it has a somewhat feature-crippled Web browser built in - in that it employs a tabbed interface for its applications.</p> <p><a href="http://www.notebookreview.com/shared/picture.asp?f=48623" target="_blank"><img style="border: 0pt none ; margin: 5px 10px; float: left;" src="http://www.notebookreview.com/assets/48624.jpg" alt="IBM Lotus Symphony 1.3 start screen" width="200" height="144" /></a>Essentially, Symphony lets you open a new spreadsheet, presentation, or document just like you'd open a new tab in Google Chrome or Firefox. Each of these tabs shares a standard menu layout, which means commands don't move around like they do in the current MS Office ribbon interface. When you open a specific tool set, it often generates a sidebar or menu-bar that stays onscreen until you close it. This is handy, but opening too many sidebars can crowd out the actual document.</p> <p>The tab system also has the advantage of letting you toggle between multiple docs and sheets easily, though I recommend not doing the same with the extremely poor built-in browser. Web connectivity is nonetheless quite essential to Symphony, even though it's conventional software and not a Web app. An online user wiki is your best source of help information, and you can link directly to document templates, plug-ins and widgets from the Symphony Web site.</p> <p>Widgets are somewhat like Google Gadgets crossed with MS Office Macros, in that they can analyze data in your documents and process them in the sidebar. For example, you could write a widget that reformatted addresses on the fly. They're a good idea in principle, but I had trouble finding a practical application for them.</p> <p><b>Lotus Symphony Documents</b></p> <p><a href="http://www.notebookreview.com/shared/picture.asp?f=48625" target="_blank"><img style="border: 0pt none ; margin: 5px 10px; float: right;" src="http://www.notebookreview.com/assets/48626.jpg" alt="IBM Lotus Symphony 1.3 documents interface" width="200" height="144" /></a>Lotus Symphony presents a document interface very similar to a MS Word 2003, though there are just enough quirks to give Word power users pause. For example, Symphony has a very solid spellchecker but no grammar-checker or thesaurus. Robust functions that aren't found in most Web-based apps - like mail merge - are present and usable, though not spectacular.</p> <p>My personal acid test for word processors is the ability to use the find/replace function to making formatting changes. Like OpenOffice, Symphony honors a list of regular expressions that let you create complex find/replace command strings. While I could accomplish most of the same power-tricks that I regularly use in Word, Symphony made me jump through more arcane hoops to get there. Symphony passed my personal hurdle, but it didn't exactly leap over it.</p> <p><b>Lotus Symphony Spreadsheets</b></p> <p><a href="http://www.notebookreview.com/shared/picture.asp?f=48627" target="_blank"><img style="border: 0pt none ; margin: 5px 10px; float: left;" src="http://www.notebookreview.com/assets/48628.jpg" alt="IBM Lotus Symphony 1.3 spreadsheet interface" width="200" height="144" /></a>As I do with every new spreadsheet, I threw the most complicate, graphics-laden, macro-and-formula-infested file I could find at it to see how it held up. Despite warning of conversion errors, Symphony handled the Dungeons & Dragons 4<sup>th</sup> Edition multipage autocompleting character sheet with ease. No obvious function breakdowns or layout problems occurred.</p> <p>When we used Symphony to create basic spreadsheets, all the standard formulary functions were present, and in fact the sidebar system proved useful in dealing with multiple commands at once. What isn't present are the SQL database hook-ins and pivot tables that MS Excel power users may depend on for heavy data-crunching. Symphony is a solid spreadsheet handler, but don't expect it to displace Excel for your custom uses.</p> <p><b>Lotus Symphony Presentations</b></p> <p><a href="http://www.notebookreview.com/shared/picture.asp?f=48629" target="_blank"><img style="border: 0pt none ; margin: 5px 10px; float: right;" src="http://www.notebookreview.com/assets/48630.jpg" alt="IBM Lotus Symphony 1.3 presentation interface" width="200" height="144" /></a></p> <p>Symphony was decidedly schizophrenic when it came to presentations. It failed to properly convert our sample PowerPoint 2007 document, breaking some layers and graphs. That said, Symphony offered almost too many customization options when it came to building spreadsheets. A hefty clip-art library, multiple transitions, and 3D object generators were almost dizzying in their possibilities. For once, I think MS Office power users will; be comfortable with an alternate app, as there was little that PowerPoint can do (aside from Sharepoint hook-ins) that Symphony couldn't Except, of course, competently handle PowerPoint 2007 slideshows.</p><p><b>Conclusion</b></p> <p>IBM Lotus Symphony is the ignored stepbrother of OpenOffice, in that both are free, traditional software alternatives to MS Office, but that OpenOffice is the one that has been embraced by the open source community. As such, it is OpenOffice that has the final shine and polish -- and template and extension support -- that Symphony lacks. Using Symphony is hardly a bad choice -- especially given the price tag -- but there's nothing Symphony does that OpenOffice doesn't do better. In the end, that's the worst criticism I can offer.</p> <p><b>Pros</b></p> <ul class="unIndentedList"><li> Free</li><li> Runs on Linux, Mac or Windows</li><li> Feature-rich</li></ul> <p><b>Cons</b></p> <ul class="unIndentedList"><li> Lacks polish</li><li> Limited file format support</li><li> Poor third-party suppor</li></ul></span></span>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-3069522085807657922009-12-29T08:07:00.004-08:002009-12-29T08:08:07.983-08:00How fast does your credit score recover from your goofs?<h3>Time heals credit wounds, but how soon and how well remain a mystery</h3><h4>By Jeremy M. Simon</h4> <table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> Credit Score Report </div> </td> </tr> <tr> <td> <div align="center"> <img alt="Reporter Jeremy M. Simon" src="http://www.creditcards.com/credit-card-news/images/jeremy-simon-150.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> Jeremy M. Simon covers credit scoring and other issues as a staff reporter for CreditCards.com. <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a>.</strong> </p> <!--p> <strong><a href="/credit-card-news/opening-credits-stories.php" target="_self">'Credit Score Report' stories</a></strong></p--> <p> <strong><a href="http://www.creditcards.com/credit-card-news/credit-score-report-stories.php">'Credit Score Report' stories</a></strong></p> <a href="http://www.creditcards.com/credit-card-news/credit-score-report-stories.php"> </a></div> <a href="http://www.creditcards.com/credit-card-news/credit-score-report-stories.php"> </a></td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Credit Score Report,</strong><br />I know if I have even one 30-day late payment, my credit score drops. Question: How long is the penalty? When can I expect to see my score increase again? <em>-- Mike </em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Hey Mike,</strong><br />Experts say you can expect a late payment to hurt your credit score for seven years, with your score gradually recovering over that time frame as you make smart borrowing decisions<strong> -- </strong>though exactly how much and how fast your score recovers isn't entirely clear. </p> <p> The federal <a href="http://www.creditcards.com/glossary/term-fair-credit-reporting-act.php" target="_self">Fair Credit Reporting Act</a> says that negative items can only appear on your <a href="http://www.creditcards.com/glossary/term-credit-report.php" target="_self">credit report</a> for seven years, but it doesn't say how the credit industry should treat the impact of those items after they happen. That vagueness, combined with the secrecy and complexity involved in credit scoring, mean that it's tough to say exactly how a borrower's <a href="http://www.creditcards.com/glossary/term-credit-score.php" target="_self">credit score</a> will recover from a late payment. Still, provided the borrower makes smart decisions following a slip-up, time will heal those credit wounds. </p> <p> "Every consumer's situation is different, but generally speaking, the impact from a negative item, such as a late payment, will lessen as that item ages" says Steve Katz, spokesman for <a href="http://www.creditcards.com/glossary/term-credit-bureau.php" target="_self">credit bureau</a> TransUnion.<s> </s> </p> <p> While <a href="http://www.creditcards.com/glossary/term-fair-isaac.php" target="_self">FICO</a>, creator of the most-widely used scoring model, largely keeps the details of its scoring model a secret, we do know the approximate damage a late payment will cause. FICO pulled the curtain back a bit on its scoring model recently when it acknowledged just how much certain credit mistakes can hurt a borrower's credit score. For example, in the case of two hypothetical consumers, FICO said that a 30-day late payment would reduce a FICO score of 680 by 60 to 80 points, while an identical late payment would reduce a FICO score of 780 by 90 to 110 points. (For more on this topic, see our story on <a href="http://www.creditcards.com/credit-card-news/fico-credit-score-points-mistakes-1270.php" target="_self">FICO's damage points</a>.) You can run <a href="http://www.myfico.com/Products/FICOOne/Sample/Sample_ScoreSimulator.aspx" target="_blank">FICO's credit score simulator</a> to get an idea of how much damage various mistakes, including a late payment, may cause to your own credit score. </p> <p> But when it comes to the recovery process, it's still largely a mystery. FICO spokesman Craig Watts says your score will recover over time because the scoring model factors in when you made your errors, how bad they were -- for example, was your payment late by 30 days or by 90 days? -- and how often you made them. However, FICO's mathematical formula can't predict exactly how fast your score will improve. Watts says there are simply too many changes that can happen over time in a consumer's credit report, both due to the cardholder's own actions and changes that are beyond the consumer's control. For example, you wouldn't have any control over the continual aging of your existing accounts. </p> <p> Still, <a href="http://www.myfico.com/" target="_blank">FICO's Web site</a> gives some clues as to how a credit recovery might play out. FICO says that for <a href="http://www.myfico.com/crediteducation/questions/Negative-Items-On-Credit-Report.aspx" target="_blank">negative items</a> on a credit report, "a collection that is 5 years old will hurt much less than a collection that is 5 months old." Please note the use of the phrase "much less" to signal that five years out from your late payment, its impact will be seriously lessened. </p> <p> In discussing a <a href="http://www.myfico.com/crediteducation/questions/Foreclosure-FICO-Score-Affect.aspx" target="_blank">foreclosure's impact</a>, FICO says "it's a common misconception that it will ruin your score for a very long time. In fact, if you keep all of your other credit obligations in good standing, your FICO score can begin to rebound in as little as two years." Based on the fact that a foreclosure is much more damaging to a credit score than a late payment, it would make sense that in your case, your FICO score would also begin to recover within two years of your late payment. </p> <p> Although FICO leaves it somewhat unclear what a recovery from score damage looks like, the steps you need to take to recover from that mistake are clear: "The best way to minimize the impact is to catch up on the payment and then continue to make all of your payments on time," says Rod Griffin, director of public education with credit bureau Experian. </p> <p> By always making on-time payments from now on, as well as keeping debt levels low and only taking on additional <a href="http://www.creditcards.com/glossary/term-credit-line.php" target="_self">lines of credit</a> when necessary, that late payment will become just a minor slip-up on the road to an improved credit score. </p> <p> Good luck! </p> <p> -- Jeremy </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-45578581730324844122009-12-29T08:07:00.003-08:002009-12-29T08:07:49.145-08:00Instant in-store credit card offers in danger of extinction<h3>New credit card law requires retailers to ask customers for income, other data</h3><h4>By Connie Prater</h4> <p> Instant in-store credit card offers -- you know, the ones pitched by perky sales clerks offering 15 percent off your purchase if you sign up now for a store credit card -- may disappear in malls and retail outlets across the country come February. </p> <table class="editorial" width="250" align="right"> <tbody> <tr> <td><img alt="Instant in-store credit card offers may dissappear in malls and retail outlets" src="http://www.creditcards.com/credit-card-news/images/catching-credit-card.jpg" width="250" height="280" /></td> </tr> <tr> <th>RETAILERS SAY INSTANT, IN-STORE<br /> CREDIT CARD OFFERS MAY VANISH </th> </tr> <tr> <td> <p> <strong>WHAT'S HAPPENING:</strong> The Federal Reserve has proposed rules requiring credit card issuers, including retail stores that offer instant in-store credit, to assess customers' ability to pay card loans before issuing them credit cards. </p> <p> <strong>WHY IT'S IMPORTANT:</strong> Retailers say instant credit card offers won't be possible if consumers have to provide paycheck stubs or other income information at the cash register. </p> <p> <strong>WHAT'S NEXT:</strong> The Fed must issue final rules sometime before the Feb. 22 startup of the Credit CARD Act. The Fed won't say whether it will revise the rules to address retailers' concerns. </p> </td> </tr> </tbody> </table> <p> That's because a provision in the new <a href="http://www.creditcards.com/credit-card-news/credit-card-law-interactive-1282.php" target="_self">credit card reform law</a> says that starting Feb. 22, 2010, credit card issuers must consider an applicant's ability to repay the card loan before issuing a new card or increasing the credit limit on an existing account. </p> <p> The measure has thrown a speed bump into the instant credit approval process and has the retail world in an uproar. Some of the biggest names in retail -- Saks Fifth Avenue, Macy's, Best Buy and Lord & Taylor -- are objecting to new <a href="http://edocket.access.gpo.gov/2009/pdf/E9-23733.pdf" target="_blank">guidelines</a> proposed by the Federal Reserve Board. If given final approval, they say, it could kill the retailers' lucrative in-store instant credit card plans. </p> <p> <strong>A speed bump to instant credit?<br /></strong>"We think it's pretty serious," says Mallory Duncan, senior vice president and general counsel for the <a href="http://www.federalreserve.gov/SECRS/2009/December/20091202/R-1370/R-1370_112009_25208_551885106305_1.pdf" target="_blank">National Retail Federation</a> trade group. The Fed wants to require lenders to review income or asset information -- such as paycheck stubs or investment statements -- of people applying for new credit cards. The problem: Instant credit won't be so instant if consumers must fork over paycheck stubs at the cash register (known in the industry as the point of sale). </p> <p> "My guess is most people don't walk around with either a pay stub or financial information in their purse," Duncan says. "In an effort to achieve one goal, the Federal Reserve Board may be inadvertently issuing consumer unfriendly regulation." </p> <p> Macy's and other stores claim the restrictions could impact consumer spending at a time when the country is trying to pull itself out of a recession. Retailers have other reasons for concern. Data compiled by The Nilson Report, a payment card industry newsletter, show store credit cards were declining long before the new credit law. Outstanding balances on <a href="http://www.creditcards.com/credit-card-news/retail-credit-cards-rates-rewards-1280.php" target="_self">retail store cards</a> -- known in the industry as <a href="http://www.creditcards.com/glossary/term-private-label-credit-card.php" target="_self">private label credit cards</a> -- have been falling as a percentage of total credit card balances for nearly two decades -- from nearly 24 percent in the early 1990s to about 11 percent in 2008, according to Nilson. </p> <p> Some shoppers are shunning store cards -- which typically limit customers to spending at a single store chain -- and opting instead for general purpose credit cards that carry the <a href="http://www.creditcards.com/Visa.php" target="_self">Visa</a> or <a href="http://www.creditcards.com/Mastercard.php" target="_self">MasterCard</a> logos and can be used anywhere those brands are accepted. Store cards have historically had higher default rates and cardholders with lower credit scores than general purpose cards. </p> <table width="270" align="left"> <tbody> <tr> <td> <div class="quoteleft"> <p> My guess is that most people don't walk around with either a pay stub or financial information in their purse. </p> </div> </td> </tr> <tr> <td style="font-size: 9px; line-height: 10px; font-style: italic;" align="right">-- Mallory Duncan <br /> National Retail Federation </td> </tr> </tbody> </table> <p> <strong>How instant credit works<br /></strong>Currently, many stores require sales clerks to ask if shoppers have store credit cards. If they don't, the smiling clerk makes a pitch to sign customers up for cards -- sometimes with the inducement of getting 10 to 15 percent off that day's purchase, or, if online, getting free shipping or a gift card. If the customer agrees to get the card, they may be given an application form to fill out. Some stores have computer terminals set up to allow customers to input personal data: name, address, date of birth and Social Security number. In other stores, customers may be asked to fill out paper application forms, which are used by store personnel to input data into a computer. </p> <p> With the click of a button, the application is electronically sent to the credit card bank used by the retailer or directly to a <a href="http://www.creditcards.com/glossary/term-credit-reporting-agency-cra.php" target="_self">credit reporting agency</a> (Experian, Equifax or TransUnion). Within seconds, a <a href="http://www.creditcards.com/glossary/term-credit-report.php" target="_self">credit report</a> and credit score is generated for the customer, and the bank sends an approval or denial of the application to the store. If approved, the customer's purchase goes through as the first charge on the new credit card account. The actual card is mailed a few days later, along with the credit card agreement outlining the terms and conditions of using the account. If there's a problem on the credit report, such as a history of paying bills late, bankruptcy, charge-offs or debt collection activity, the application is denied and the customer may be asked to provide additional information, such as bank account numbers or proof of income. </p> <table width="270" align="right"> <tbody> <tr> <td> <div class="quoteright"> <p> There's no huge benefit of instant credit for consumers. </p> </div> </td> </tr> <tr> <td style="font-size: 9px; line-height: 10px; font-style: italic;" align="right">-- Gail Hillebrand<br /> Consumers Union </td> </tr> </tbody> </table> <p> Under the Fed's new "ability-to-pay" rule, there could be an additional step that would take the instant out of instant credit. "A card issuer has not complied with this provision if, for example, a card issuer does not review any information about a consumer's income, assets, or current obligations, or issues a credit card to a consumer who does not have any income or assets," according to the Fed. </p> <p> That could mean customers may have to hand in a pay stub or some other proof of income or assets along with the initial credit card application. Stores would have to figure out how to scan this information into their computer systems and how to evaluate the customer's ability to pay based on that documentation. </p> <p> <strong>Liar loans?<br /></strong>Another potential problem: Customers who deliberately lie about their incomes, either because they are embarrassed to reveal it to store clerks, want privacy or want to overstate their income in hopes of improving their chances of getting a credit card. Currently, annual household income is a standard question on credit card applications. This amount is self-reported and not verified. </p> <p> Duncan from the retail federation argues past <a href="http://www.creditcards.com/glossary/term-credit-history.php" target="_self">credit history</a> is a better predictor than income of how customers will repay credit card loans. Income becomes more important for big ticket items such as homes and cars, he says. </p> <p> "An applicant's credit history demonstrates a consumer's commitment to meeting their financial obligations," Steven Franks, Macy's senior counsel wrote in the comments filed with the Fed. "Their ability to properly budget for monthly expenses is indicative of their ability to make at least their minimum payments. This type of evaluation is more revealing to a credit card lender than asking an applicant for an unverified income amount." </p> <p> The proposed rules may also create new roadblocks for stores hoping to increase credit limits on existing accounts. Duncan gives the example of a customer with an $800 credit limit on a Saks credit card who wants to buy two suits that cost a total of $900. The store can run a credit check, look at the customer's past payment history with the store and instantly approve bumping the credit limit up to $1,000 to accommodate the sale. Under the proposed Fed rules, the clerk would have to ask the customer for income information. </p> <p> "Most consumers would find that conversation, if not intrusive, then distasteful while standing in line," Duncan says. </p> <p> He adds: "We're not in the position that we want to alienate good customers ... Very few merchants are going to want to have that conversation. You want to have as few negative conversations with your customers at the point of sale." </p> <table class="editorial" width="250" align="right"> <tbody> <tr> <th>RETAILERS SOUND OFF ABOUT PROPOSED CREDIT CARD RULE ON ABILITY TO PAY </th> </tr> <tr> <td> <p> Some of the nation's top retailers filed comments with the Federal Reserve objecting to proposed rules on assessing applicants' ability to repay credit card debts. </p> <p> Click the links to read their comments. </p> <p> "We are worried that this new requirement will have a chilling effect on the willingness of our customers to apply for credit and the willingness of our store associates to offer credit."<br /> -- <a href="http://www.federalreserve.gov/SECRS/2009/December/20091202/R-1370/R-1370_112409_25265_478172110607_1.pdf" target="_blank">Belk Inc.</a> </p> <p> "There is concern that consumers will<br /> hesitate to provide such sensitive and personal documentation (like pay stubs) to retail associates."<br /> -- <a href="http://www.federalreserve.gov/SECRS/2009/December/20091201/R-1370/R-1370_112009_25184_587057051113_1.pdf" target="_blank">Best Buy Inc.</a> </p> <p> "Consumers seeking credit should not be required to make information about their<br /> income or assets public in order to apply for credit in a retail store."<br /> -- <a href="http://www.federalreserve.gov/SECRS/2009/November/20091116/R-1370/R-1370_111309_24972_582842006212_1.pdf">Charming Shoppes Inc.</a> (Lane Bryant, Catherines Plus, Petite Sophisticate, Fashion Bug) </p> <p> "Consumer credit is crucial to our retail business and we do not wish to create unnecessary hurdles for our customers."<br /> -- <a href="http://www.federalreserve.gov/SECRS/2009/December/20091208/R-1370/R-1370_120209_25387_585816080294_1.pdf" target="_blank">Lord & Taylor</a> </p> <p> "Both the store associate and the applicant are placed in an uncomfortable<br /> position when discussing sensitive information with other customers standing in close proximity."<br /> -- <a href="http://www.federalreserve.gov/SECRS/2009/December/20091201/R-1370/R-1370_112009_25196_551850887336_1.pdf" target="_blank">Macy's Inc.</a> (Macy's and Bloomingdale's) </p> <p> "Very few people carry income information (such as a pay stub) that would be necessary to satisfy the proposed language nor would customers (and those waiting in line behind them) be inclined to wait in line for it to be evaluated."<br /> -- <a href="http://www.federalreserve.gov/SECRS/2009/November/20091120/R-1370/R-1370_111909_25126_589392707046_1.pdf" target="_blank">The Talbots Inc.</a> </p> <p> "We believe that the proposed rule will restrict commerce."<br /> -- <a href="http://www.federalreserve.gov/SECRS/2009/November/20091130/R-1370/R-1370_112009_25224_551978544403_1.pdf" target="_blank">Saks Fifth Avenue</a> </p> </td> </tr> </tbody> </table> <p> <strong>Consumer group: Instant credit fuels impulse buying<br /></strong>Consumer advocates and credit counselors who coach people out of mountains of debt say making it harder for people to get credit cards while shopping is a good thing. It may cut down the number of people who get into trouble with compulsive buying. </p> <p> "The risk of instant credit is impulse borrowing," says Gail Hillebrand, financial services campaign manager for Consumers Union, the nonprofit owner of Consumer Reports Magazine. "Instant credit is generally not a good idea for consumers. Other people can get it pretending to be you, which creates a mess for you." </p> <p> Hillebrand says consumers with decent credit scores likely have the ability to pay. "If can you afford to make the payment, you probably already have credit available to you. In that case, you can use another credit card. There's no huge benefit of instant credit for consumers. It's retailers that need instant credit -- not consumers." </p> <p> Duncan from the retail federation acknowledged that retailers will lose out if instant credit is curtailed. "These customers are typically more loyal to the stores," Duncan says, adding, "There are advantages to both the retailers and the consumers in this." </p> Signing up for a store credit card is about more than just getting a credit card. The retailer builds a database of loyal customers that can be mined for years with marketing and promotional programs. Store cardholders who are offered special deals and services (earlybird specials, discounts, coupons, etc.) help move merchandise and contribute to a store's bottom line. <p> At Lord & Taylor, the high-end retail store, 40 percent of its $1.1 billion in customer sales is conducted with a Lord & Taylor credit card, according to comments filed by Christopher Sim, the company's senior vice president and CFO. Similarly, Belk, a department store chain that operates in 16 states, predicted a sales hit. </p> <p> "The ability of customers to purchase on credit is critical to our retail sales," wrote James. A Ward, Belk's vice president of credit. "In these tough economic times, we simply cannot afford for credit to become less attractive or more cumbersome to obtain, and we expect this income requirement to have a direct impact on our sales." </p> <p> As an alternative, several retailers have suggested that the Fed modify the rules so that opening credit card accounts with small credit limits -- perhaps $3,000 or less -- would be exempt from income review requirements. </p> <p> Hillebrand from the consumer group agrees a low credit limit account may not warrant a review of income data. "They certainly could start you off with a very low credit limit," she says. "If you want more, fill out the form and tell us all this other information." </p> <p> <strong>Credit bureaus offer solution<br /></strong>Experian and Equifax -- two of the three major <a href="http://www.creditcards.com/glossary/term-credit-reporting-agency-cra.php" target="_self">credit reporting agencies</a> (TransUnion is the third) -- have launched services in recent weeks they say will help retailers and other lenders assess borrowers' ability to pay in the same amount of time it currently takes to pull a credit report. Called income-estimation modeling, the programs rely on statistical analysis of databases of financial data to estimate a credit card applicant's income and assess their ability to pay loans. </p> <p> Experian's Income Insight tool uses verified financial information from the IRS and other sources and links it to the credit bureau's database of millions of consumers, says Brannan Johnston, Experian's vice president of income and deposits. He says the model assesses the likelihood that applicants can pay based on verified income from the databases and on outstanding credit balances, available lines of credit, how long they have had credit, the sizes of their mortgages and whether they've ever missed a payment. </p> <p> "For those lenders that ask income on an application, Income Insight can be used for income verification," Johnston says, noting that because the program is a statistical model, it is not used as the sole basis for declining an applicant. People who are deemed unable to make payments by virtue of the model would be asked to submit pay stubs or other proof of income before they could get loans. </p> <p> Equifax announced on Dec. 8, 2009, it was expanding its ability-to-pay services to include tools that use IRS, employer and other databases to estimate personal income. "By combining the predictive power of modeled financial measures, such as income, with the accuracy of bureau data and verified income, credit issuers have additional options to minimize risk and assess consumer ability and willingness to pay," according to an Equifax statement. </p> <p> Representatives from Experian met with Fed officials in November to brief them on how the income estimation tools may help lenders meet the ability to pay requirements. </p> <p> The Fed is reviewing the comments submitted on the guidelines and must issue final rules before the Feb. 22 effective date of the credit card law. A Fed representative would not comment on whether the ability-to-pay rules will be revised based on the retailers' concerns or if the income estimation modeling tools would satisfy the Fed's requirement for assessing ability to pay credit card loans. </p> <p> <strong>What will retailers do?<br /></strong>Duncan from the retail group says if the Fed doesn't revise its rules, some retailers may be forced to back away from instant credit offers. </p> <p> "Some will try, in some of their stores, asking for financial information at point of sale," Duncan says. "If the reaction is negative, it will go away. In the short term, it will dry up a lot of very good deals for consumers." </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-4794279557686554402009-12-29T08:07:00.001-08:002009-12-29T08:07:19.772-08:00Tough choice: credit card debt vs. down payment on a car loan<h3>Consider your credit score, amount of debt and size of loan</h3><h4>By Todd Ossenfort</h4> <table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> The Credit Guy </div> </td> </tr> <tr> <td> <div align="center"> <img alt="'The Credit Guy,' columnist Todd Ossenfort" src="http://www.creditcards.com/credit-card-news/images/expert-ossenfort.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> The Credit Guy, Todd Ossenfort, is a credit expert and answers readers' questions about credit, counseling and debt issues. <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a></strong> </p> <p><strong> <a href="http://www.creditcards.com/credit-card-news/the-credit-guy-stories.php" target="_self">'The Credit Guy' archives</a> </strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Credit Guy,</strong><br />I have two credit cards. One balance is $2,645 with a credit limit of $2,800. The other balance is $5,143.86 with a credit limit of $5,500. I have $1,800 that I was going to pay on these or pay down on a car. My credit score is 680. I pay my bills on time all the time and always more than the minimum. I was looking to buy a car within the next 30-45 days. I am wondering whether I should pay this money on one or both of my credit cards, and how much? (Which will help my credit score the best?) After making these payments to my credit card or cards, how long does it take for your credit score change to show up? I really would like to get the best interest rate when I go to buy my car. -- <em>Sharon</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Sharon,</strong><br />I believe you would be better off in the long run using your $1,800 as a down payment on your car purchase. My rationale is that if for some reason you needed to sell your car, particularly early on in your loan term (reasons you may need to sell might include getting laid off from your job, a decrease in salary or some other interruption in your income) without a down payment, it is likely you would be upside down in your car loan. Upside down means you owe more on your loan than the car is worth. In a must-sell situation, you would then be in a bad financial situation, either having to continue to pay on a car loan when you no longer own the car or face repossession because you can no longer afford the loan payments -- both of which could be very expensive. </p> <p> With a credit score of 680, you would qualify for a national average 48-month term loan on a new vehicle at 9.5 percent interest. If you increased your <a href="http://www.creditcards.com/glossary/term-credit-score.php" target="_self">credit score</a> to the next level or 690-719 range, the national average for a 48-month loan would be 7.5 percent. The lower rate would save you $906.46 in interest charges on a $20,000 loan over the life of the loan. I know you don't want to pay any more for your car loan than you need to, but I would rather you plan for the unexpected. </p> <p> If you disagree with my advice and would rather use the money to pay down your credit card balances, you could pay $1,245 on your card with the balance of $2,645 and the remaining $555 on the card with the $5,143 balance. Paying the majority of the $1,800 on the lower balance card will bring what you owe down to 50 percent of your credit limit and should boost your credit score. One of the elements considered for your FICO credit score is the ratio between the <a href="http://www.creditcards.com/glossary/term-credit-utilization-ratio.php" target="_self">credit available</a> to you and the credit you are currently using. The goal is to owe less than half of the credit available to you. You would still be over that limit on the higher balance card, but you would be bringing one of the accounts down to that magical 50 percent acceptable level. </p> <p> Take care of your credit! </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-48889315541875009802009-12-20T20:42:00.000-08:002009-12-20T20:44:22.294-08:00Adult son racks up $20,000 on mom's cards<h3>What's a mom to do? Sell his stuff... fast</h3><h4>By Sally Herigstad</h4> <p> </p><table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> To Her Credit </div> </td> </tr> <tr> <td> <div align="center"> <img alt="To Her Credit, Sally Herigstad" src="http://www.creditcards.com/credit-card-news/images/expert-herigstad.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a>.</strong> </p> <p><strong><a href="http://www.creditcards.com/credit-card-news/to-her-credit-stories.php" target="_self">To Her Credit archive</a></strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear To Her Credit,</strong><br />When my son (49) had bad, <a href="http://www.creditcards.com/bad-credit.php" target="_self">bad credit</a>, I authorized him to use two accounts of mine -- a <a href="http://www.creditcards.com/Visa.php" target="_self">Visa</a> and a business American Express card. I had the AmEx account because I was going to start a cookie business and the rates seemed good. I never used or signed either card. I told him he could use the cards for a couple of months, and I assumed he wouldn't spend more than a few hundred dollars. </p> <p> His signature is on all of those bills. I didn't know he was still using them, in fact I thought I had closed the <a href="http://www.creditcards.com/American-Express.php" target="_self">American Express</a>. Now I find out that he called them and had all the bills sent to him. He has run up balances of over $20,000. </p> <p> What can I do other than seeking legal help and ruining his life? I cannot pay those bills nor do I want to hurt my credit score as I pay the minimum or more each month, but the companies have been calling me. </p> <p> I know I should not have been so generous, but he is my only son. -- <em>Lenore</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Lenore,</strong><br />You have a worse problem than a $20,000 debt right now. You have a son who, way past the age when he should know better, is treating you disrespectfully. </p> <p> I know you had the best of intentions. We parents all want to help our kids and to have good relationships with them. In the short term, it seemed like handing over your cards to him would accomplish both of those things. In the long term, it has accomplished neither. Giving a card to someone who cannot handle money is like opening a tab for an alcoholic. And unpaid debts between parents and children only cause more stress in relationships. </p> <p> If you <a href="http://www.creditcards.com/glossary/term-authorized-user.php" target="_self">authorized</a> him to use the cards, he didn't break any laws doing so. I don't know if he had the statements sent to him because he intended to make the payments himself or to hide them from you. Either way, sorry to say, the bills are in your name. </p> <p> <a href="http://www.creditcards.com/credit-card-news/herigstad-avoid-bankruptcy-take-control-1294.php" target="_self">Bankruptcy</a> is not a good option. That amount of money is not worth going bankrupt over as it would cost you another $5,000 in fees by the time it's over, plus repercussions to your finances for the foreseeable future. It's not your answer. </p> <p> People ask a lot about negotiating <a href="http://www.creditcards.com/credit-card-news/debt-settlement-choose-credit-score-1265.php" target="_self">debt settlements</a> with the credit card companies. However, despite what you've heard in some advertisements, nobody can snap their fingers and cut your debt in half or make it go away. Banks typically settle with debtors only in extreme hardship cases, such as catastrophic illness or unemployment. Loaning out your credit cards to your son probably won't qualify. </p> <p> The first thing you should do is close every account your son has access to. Check your credit report and make sure he hasn't bought anything else in your name. </p> <p> Next, level with your son and tell him you cannot afford these bills. Kids often assume their parents have unlimited money (although a 49-year-old kid should know better). Tell him he is going to have to pay you back and give him suggestions on how he can do so. </p> <p> He must have bought things with the $20,000. Is any of it returnable? People who go on spending sprees often have clothes with the tags still on or electronics still in the box, for instance. They can go back to the store. Used items can be sold on eBay or Craigslist. If he's enjoying the latest sound systems and video games while you get stuck with the bills, the party's over. I don't care if it's installed in his car -- tell him he has to pay for it or sell it. </p> <p> You can even offer to take items of value in lieu of cash. Does he have a motorcycle, a fishing boat or guns? He may laugh when you tell him to hand over his toys, but this level of debt is no joke. You are perfectly capable of turning it into cash to start paying down this debt. If he can't part with his stuff, maybe he will suddenly find cash. </p> <p> Don't let him reduce what he owes you by claiming inflated values of what he owns. People tend to overestimate what their things are worth -- often by two or three times. Check out the wholesale values yourself, or agree to only reduce the amount he owes you by the cash you get out of them. </p> <p> I'm assuming that if your son is 49 years old, you must be retired. Earning enough money to pay off $20,000 would be daunting. Your son, however, is in his prime earning years. He spent the money -- he can pay it off. </p> <p> If he's already working full-time, your son might have to take an additional part-time job to pay off the debt. If there are no jobs where he lives, he may have to start a service business of his own that doesn't require an investment. Depending on his skills, he can do odd jobs such as driveway resurfacing, roof cleaning, after-school tutoring or Web site design. Essential services are the best bet because even in a slow economy, people still pay for them. </p> <p> The bottom line is this: Your son owes you $20,000 and he has to pay it back. It's the best thing for him, for you and for your relationship with him. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-13793879406869207012009-12-17T22:31:00.001-08:002009-12-17T22:31:45.203-08:00Federal Reserve again leaves interest rates unchanged<h3>Experts say rates won't increase until unemployment rate falls</h3><h4>By Jeremy M. Simon</h4> <p><img alt="Federal Reserve" src="http://www.creditcards.com/credit-card-news/images/federal-reserve-article.jpg" vspace="10" align="right" hspace="10" /> </p><p> The Federal Reserve left its lending rates unchanged again on Wednesday, and experts say it's likely to continue that plan until sizable numbers of unemployed Americans begin finding work. </p> <p> That central bank decision came at the conclusion of a two-day meeting, with Fed officials voting unanimously to leave its <a href="http://www.creditcards.com/glossary/term-federal-funds-rate.php" target="_self">federal funds rate</a> at a range of 0 percent to 0.25 percent, keeping the prime rate at 3.25. <a href="http://www.creditcards.com/glossary/term-variable-interest-rate.php" target="_self">Variable rate</a> credit cards -- which account for the majority of plastic -- have annual percentage rates that are set using the <a href="http://www.creditcards.com/glossary/term-prime-rate-or-prime-interest-rate.php" target="_self">prime rate</a>. That means when the central bank eventually raises the fed funds rate, which it last did in December 2008, most cardholders in the United States can expect to pay higher rates on their credit cards. </p> <p> However, that decision may be months away. With unemployment currently at 10 percent, economists weren't surprised by the Fed's latest decision to hold off on hiking interest rates. "They're not going to do it before they have positive employment numbers," likely around the second quarter of 2010, says John Silvia, chief economist with Wells Fargo. </p> <p> <strong>Fed points to job losses</strong><br />The Fed highlighted the unemployment problem in the first sentence of the <a href="http://www.federalreserve.gov/newsevents/press/monetary/20091216a.htm" target="_blank">statement</a> accompanying its decision. "Information received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating," the Fed said. </p> <p> Still, despite that note of optimism, the Fed says that joblessness remains a challenge.<strong> </strong>"Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit," the statement said. </p> <p> Amid other key portions of the Fed's statement, its language didn't change at all from earlier statements -- for example, when saying that the strength of the economic growth isn't enough to warrant interest rate hikes. The Fed said it continues to expect the health of the economy to require "exceptionally low levels of the federal funds rate for an extended period." </p> <p> <strong>Unemployment continues to influence lending rates</strong><br />Analysts agree the Fed is waiting on the labor market's recovery. Although the U.S. economy has shown signs of life, the unemployment rate remains in the double digits. In October, unemployment reached 10.2 percent, before dipping slightly to 10 percent in November. </p> <p> "The Fed typically waits for the unemployment rate to fall notably for a number of months before it is willing to raise rates, and we believe this should prove especially true with the unemployment rate at a 10.0 percent level," Barclays Capital's economics team said in <a href="http://www.barcap.com/About+Barclays+Capital/Press+Office/News+releases/News%2C1512%2CBarclays+Capital+publishes+latest+quarterly+research%2C+Global+Outlook%3A+Beyond+the+Recovery+Trade" target="_blank">its weekly report</a> on Dec. 11. </p> <p> That means, for the time being, any changes to annual percentage rates will come from the card issuers themselves rather than the Fed. </p> <p> <strong>Banks making moves</strong><br />Banks <a href="http://money.cnn.com/news/newsfeeds/articles/djf500/200912151158DOWJONESDJONLINE000379_FORTUNE5.htm" target="_blank">continue to suffer losses</a> as unemployed workers struggle to repay their loans. On Tuesday, <a href="http://www.creditcards.com/Capital-One.php" target="_self">Capital One</a> said its U.S. credit card charge-offs -- or the amount of loans the bank has given up on collecting -- rose to 9.6 percent in November, <a href="http://www.creditcards.com/Discover.php" target="_self">Discover</a> reported that its credit card charge-offs increased to 8.98 percent and <a href="http://www.creditcards.com/Chase.php" target="_self">Chase</a> said its write-offs advanced to 8.81. <a href="http://www.creditcards.com/Bank-of-America.php" target="_self">Bank of America</a>, meanwhile, posted a 13 percent write-off rate in November, down from the previous months' rates, but still the highest rate among those banks that have so far reported their results. </p> <p> To offset these losses, banks have made borrowing more <a href="http://www.creditcards.com/credit-card-news/2009-q3-senior-loan-officers-survey-lending-standards-tighten.php" target="_self">costly and difficult</a> for cardholders. For card issuers, "you tighten the standards in a recession and loosen the standards as the recovery proceeds," Silvia says. Banks have also blamed their tighter lending standards on <a href="http://www.creditcards.com/credit-card-news/credit-card-law-interactive-1282.php" target="_self">increasing regulation</a>, which lenders say makes doing business more expensive. </p> <p> For now, banks are more focused on the current recession than a pending recovery. As of last week, interest rates on new credit card offers reached 12.75 percent, according to the CreditCards.com <a href="http://www.creditcards.com/credit-card-news/credit-card-rate-report-bofa-raises-interest-1276.php" target="_self">Weekly Credit Card Rate Report</a>. That's the eighth increase in the past 12 weeks, and it represents an increase of more than three-quarters of a point from June and a point and a half since summer of 2008. Cardholders may also find themselves paying <a href="http://www.creditcards.com/credit-card-news/creative-new-fees-card-act-1267.php" target="_self">higher fees</a> for late payments, balance transfers and cash advances, as well as inactivity fees. </p> <p> However, Silvia says that card issuers have likely already implemented the bulk of their interest rate increases. "I have to believe most of the change occurs in availability rather than the rate itself," he says, with consumers still finding it difficult to get their existing credit lines extended or get approved for new credit cards. </p> <p> As for interest rates, Silvia says credit card APRs could start to come down after the Fed begins to adjust its monetary policy next summer. (The prime rate is just one of the factors that influences credit card APRs, so banks still have significant control over many of the others.) "I think the banks are going to lag whatever the Fed does, so it won't be until the end of next year before anything gets done" by card issuers, he says. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-89216160198598597282009-12-17T22:30:00.004-08:002009-12-17T22:31:07.307-08:00'No payment, no interest' credit card deal? No way<h3>Make no mistake: If there's a balance, you owe a minimum monthly payment</h3><h4>By Erica Sandberg</h4> <table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> Opening Credits </div> </td> </tr> <tr> <td> <div align="center"> <img alt="Columnist Erica Sandberg" src="http://www.creditcards.com/credit-card-news/images/expert-sandberg.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a>.</strong> </p> <p> <strong><a href="http://www.creditcards.com/credit-card-news/opening-credits-stories.php" target="_self">'Opening Credits' stories</a></strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Opening Credits,</strong><br />I did a balance transfer to a Chase card. I did not realize, nor was I told when the card was issued, that it had monthly minimum payments. I have usually done payment transfers where if the balance is not paid off by a certain date, the interest is retroactive. I would pay on the balance when I could. I did the same with the Chase card, not realizing the balance. I made two payments, missed two months, then paid it off. Now, five months have gone by, and they finally called me to tell me I have a balance in excess of $300, and a payment of $180 will bring the account current. I explained my situation, and they are unwilling to listen/help. Do I have any recourse? Is there anywhere I can go to get help? I offered to pay a portion, but they won't budge. <em>-- Shelley</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Shelley,<br /></strong>I must say that I'm mystified that you weren't aware that <a href="http://www.creditcards.com/glossary/term-minimum-payment.php" target="_self">minimum required payments</a> are an intrinsic aspect of <a href="http://www.creditcards.com/glossary/term-revolving-line-of-credit.php" target="_self">revolving credit cards</a>. Did you <em>really</em> think that you could add a balance to a new credit account and not be expected to send them some money each month? </p> <p> The only rationale I can imagine is that you mistook a "zero <a href="http://www.creditcards.com/glossary/term-annual-percentage-rate-apr.php" target="_self">APR</a> on <a href="http://www.creditcards.com/balance-transfer.php" target="_self">balance transfers</a> for X months" offer from <a href="http://www.creditcards.com/Chase.php" target="_self">Chase</a> for the financing arrangements that some retailers offer for furniture or major appliances. Typically, in those cases, as long as you pay 100 percent of the sales price within a certain time frame, you won't have to make any payments and won't be charged a penny in interest. </p> <p> However, what you got is a standard credit card, and all companies that issue such products require monthly payments on what you owe whether you actively made purchases with that account or have transferred the balance from another card. To be sure you got that information, though, I asked Gail Hurdis, Chase Card Service's communication & public affairs vice president about your situation. "There is a section in the customer agreement that calls for a minimum payment," says Hurdis, who goes on to say that it also explains in detail how the payment and interest is calculated. </p> <p> Apparently you managed this account fine in the beginning, as you submitted two consecutive payments. Then, for whatever reason, you skipped a couple of cycles before sending in what you thought was the remaining balance. Your troubles began when you missed the payments, as it caused finance charges and other fees to be added to the account. The end result: that unanticipated bill of about $300. </p> <p> This leads me to my first piece of advice, which is to make sure you open all of your mail. You say you first heard of this surprise debt when Chase called you, but it is standard protocol for issuers to send letters alerting customers that their account is delinquent before making collection calls. Because you weren't expecting a bill, you may not have been as diligent about checking the correspondence from the bank. </p> <p> Now, I understand that you don't want to pay the debt and have attempted to have it purged. Chase won't budge and, frankly, I don't see why it should. You were under an obligation to pay at least the monthly minimum (the "payment due" printed on your statements was further indisputable proof that remittance was expected), which, at least for a couple of months, you did not do. Because of that, Chase is fully within its rights to add on the charges. </p> <p> So what should you do? This leads to my second and most pressing piece of advice: Pay it. Now. You legitimately owe the money. It's been five months since Chase has received any cash from you. Though the amount due is not large, chances are it's being reported on your <a href="http://www.creditcards.com/glossary/term-credit-report.php" target="_self">credit report</a> and doing some major damage. I'm willing to bet that it won't be long before Chase charges the debt off and sends it to a <a href="http://www.creditcards.com/credit-card-news/help/11-tips-dealing-with-debt-collection-collectors-6000.php" target="_self">collection agency</a>. When that happens, troubles will only increase. Your credit report will take another bad hit, and you'll be dealing with collectors, who are not typically a joy to work with. </p> <p> Do not miss this opportunity to get back on track, Shelley. For a mere $180, you can offset the problems that will surely happen if you don't. And next time you enter into a contract with a credit card company, read the application and agreement carefully before accepting the offer. The terms will be spelled out -- from how much you are expected to pay each month to the <a href="http://www.creditcards.com/glossary/term-grace-period.php" target="_self">grace period</a> and fees. For now, consider this a valuable life lesson in the real world of credit. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-39842938658454158612009-12-17T22:30:00.003-08:002009-12-17T22:30:44.678-08:00Creative new fees escape CARD Act rules, surprise consumers<h3>New report highlights ways issuers have gotten around new law</h3><h4>By Tamara E. Holmes</h4> <p> While the <a href="http://www.creditcards.com/credit-card-news/credit-card-law-interactive-1282.php" target="_self">Credit CARD Act of 2009</a> puts an end to abusive tactics card issuers have long used to boost their profits, consumers need only to look at their card statements to know there's no reason to celebrate. </p> <img alt="New credit card traps" src="http://www.creditcards.com/credit-card-news/images/blown-away.jpg" width="250" align="right" height="283" /> <p> In the past year, card issuers have rolled out or expanded their use of other ways to collect millions more in fees each year, many of which are hidden to consumers, according to the Durham, N.C.-based Center for Responsible Lending's Dec. 10 report, "<a href="http://www.responsiblelending.org/credit-cards/research-analysis/crl-dodging-reform-report-12-10-09.pdf" target="_blank">Dodging Reform: As Some Credit Card Abuses Are Outlawed, New Ones Proliferate</a>." </p> <p> "Credit card issuers are going to more than ever try to find ways to make extra profits," says Joshua M. Frank, a senior researcher with the Center and author of the report. New charges and changes to the way fees are calculated are adding to the balances of a growing number of cardholders. While some of the practices were instituted after the Credit CARD Act was approved in May, others were quietly being put in place earlier as a result of the recession. The one thing they have in common, says Frank, is that "none of them are explicitly prohibited by the Credit CARD Act." </p> <p> <strong>Hidden rate changes<br /></strong>Consumers with <a href="http://www.creditcards.com/credit-card-news/variable-rates-replace-fixed-rate-credit-cards-1267.php" target="_self">fixed rate</a> credit cards won't have to worry about interest rate changes to current balances if they pay on time, under the Credit CARD Act. The vast majority of cardholders, however, carry <a href="http://www.creditcards.com/glossary/term-variable-interest-rate.php" target="_self">variable rate cards</a>, in which the interest rate is determined by adding a fixed percentage to the rate of an index such as the <a href="http://www.creditcards.com/glossary/term-prime-rate-or-prime-interest-rate.php" target="_self">prime rate</a>. For them, things get a little murkier. </p> <p> In the past, issuers would generally use the highest prime rate in a cardholder's current billing cycle as the starting point for determining a credit card's rate for the month. However, a number of issuers have amended their terms this year so that they now can select the highest prime rate in the previous 90-day cycle, a move that costs consumers $720 million a year, the Center for Responsible Lending estimates. As a result, the interest rate paid by cardholders may not go down in a given month even if the prime rate goes down. "It's so hidden and obscure that it can't be interpreted as anything other than a way to extract money from people in ways they don't understand," says Frank. </p> <table width="270" align="right"> <tbody> <tr> <td> <div class="quoteright"> <p> Credit card issuers are going to more than ever try to find ways to make extra profits. </p> </div> </td> </tr> <tr> <td style="font-size: 9px; line-height: 10px; font-style: italic;" align="right">-- Joshua Franks<br /> Center for Responsible Lending</td> </tr> </tbody> </table> <p> Variable rate cardholders are also impacted by another pricing strategy, as many issuers have begun setting "<a href="http://www.creditcards.com/glossary/term-floor.php" target="_self">floors</a>" -- limits to how low a cardholder's variable rate can go. While the rate will rise with the prime rate, it won't go any lower than the flooreven if the prime rate goes beneath that point. As of December 2009, the prime rate is at the historically low level of <a href="http://www.wsjprimerate.us/">3.25 percent</a>. But "if you get a card in the future and the prime rate is, say 6 percent, then you wouldn't get the benefits of a decrease in the rate that would likely occur," Frank says. </p> <p> <strong>New and expanded fees</strong><br />Changes to interest rate calculations aren't the only ways issuers are mounting charges on consumers. A number of fees have become more prevalent this year, according to the center's study. </p> <ul><li><a href="http://www.creditcards.com/glossary/term-minimum-finance-charge.php" target="_self">Minimum finance charges</a> can be greater than the amount of interest owed. As a result, if a consumer owes only $0.50 in interest, he may have to pay $2 because that's the minimum interest fee. </li><li>Card issuers charge late fees that vary according to the card balance, so those who owe the most pay the highest fees. "But right now almost nine out of 10 people are in the top late fee category," says Frank. Though issuers often tout the lowest late fees, "the average fee that people pay has gotten higher and higher." </li><li>Cardholders who don't incur regular charges risk being hit with inactivity fees. This strategy is even applied to cardholders who've opted out of a change of terms to the account and can no longer charge new items. Although their inactivity is forced, they may end up paying an additional $36 per year. </li><li><a href="http://www.creditcards.com/credit-card-news/foreign-exchange-fees-going-up-1267.php" target="_self">Foreign transaction fees</a>, which cardholders pay when a currency exchange takes place, are nothing new. But this year, more card issuers redefined "foreign" more broadly to include any transaction that at any point touched a foreign bank, even if the exchange took place in U.S. dollars. Likewise, the fee has inched upward with a majority of issuers charging 3 percent in 2009, compared with 2 percent in 2004. </li><li>Card issuers are also cashing in on cardholders' use of <a href="http://www.creditcards.com/glossary/term-balance-transfer.php" target="_self">balance transfer</a> offers and <a href="http://www.creditcards.com/glossary/term-cash-advance.php" target="_self">cash advances</a>. Not only are the fees for these transactions rising, but many card issuers are implementing minimum charges and removing caps they once had in place to keep the costs from surpassing a certain level. For example, a card issuer may implement a 4 percent transaction fee on cash advances with a $20 minimum. If a cardholder borrows $100, the 4 percent transaction fee would be $4. However, because of the minimum rule, the cardholder would pay an additional $16. </li></ul> <strong>An exercise of choice</strong><br />Consumers have more control over some charges than others, such as the ability to use a card to avoid an inactivity fee, but they need to keep a close eye on credit card statements. "We are seeing a lot of changes in the agreements so it's something for people to be really aware of in the next three to six months," says Sarah Fouquart, a group manager with Troy, Mich.-based GreenPath Debt Solutions. Those who don't understand the changes should ask their issuers about them, Fouquart adds. <p> While many of the top <a href="http://www.creditcards.com/reward.php" target="_self">credit card</a> issuers are embracing these new fees, consumers might also look to smaller regional banks or credit unions to avoid paying some of these additional costs, suggests Frank. "Usually you'll find that these organizations care more about the relationship with the customer than making a quick profit on one product," Frank says. </p> <p> New fees and charges are unlikely to disappear anytime soon, but consumers still have options. "There's no harm in shopping around a little bit," says Fouquart. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-44642563690168810342009-12-17T22:30:00.001-08:002009-12-17T22:30:27.807-08:00Improving a great credit score comes down to timing<h4>By Jeremy M. Simon</h4> <table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> Credit Score Report </div> </td> </tr> <tr> <td> <div align="center"> <img alt="Reporter Jeremy M. Simon" src="http://www.creditcards.com/credit-card-news/images/jeremy-simon-150.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> Jeremy M. Simon covers credit scoring and other issues as a staff reporter for CreditCards.com. <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a>.</strong> </p> <!--p> <strong><a href="/credit-card-news/opening-credits-stories.php" target="_self">'Credit Score Report' stories</a></strong></p--> <p> <strong><a href="http://www.creditcards.com/credit-card-news/credit-score-report-stories.php">'Credit Score Report' stories</a></strong></p> <a href="http://www.creditcards.com/credit-card-news/credit-score-report-stories.php"> </a></div> <a href="http://www.creditcards.com/credit-card-news/credit-score-report-stories.php"> </a></td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Credit Score Report,</strong><strong><br /></strong>I have question about my FICO score (currently 768) and, in particular, how my "credit card utilization" is part of the score. My wife and I have three credit cards: a Chase Visa with a $45,000 limit, a Citibank MasterCard with a $10,000 limit and an American Express card. We use the MasterCard and American Express very little -- maybe $25-$50 per month combined. We use the Visa a lot,<strong> </strong>with charges of $7,000-$15,000 per month and highs of $30,000-$40,000 in a few months each year. The majority of charges are business-related and reimbursed immediately by my wife's company. We always pay the balance in full each month. I noticed on another Web site (CreditKarma.com) that my credit card utilization rate is graded as a "D," which I think, is bringing down my score. Please advise as to how to rectify this situation and bring my FICO score up. Thank you in advance. <em>-- Salomon</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Hey Salomon,</strong><br />Your credit score of 768 suggests you are doing a lot of things right, including regularly paying your credit card bills in full. However, when it comes to your <a href="http://www.creditcards.com/glossary/term-credit-utilization-ratio.php" target="_self">utilization ratio</a> -- the total amount of debt you carry compared to your total available credit -- you appear to be a victim of bad timing. </p> <p> Here's how: Credit card issuers send your account data to the <a href="http://www.creditcards.com/glossary/term-credit-bureau.php" target="_self">credit bureaus</a>, which in turn, apply credit scoring formulas to that data. When you request to see your <a href="http://www.creditcards.com/glossary/term-credit-score.php" target="_self">credit score</a>, the number you get reflects a snapshot of your credit report based on the most updated information in the credit bureau's records. That means the score that gets calculated is only as good as the most recent data that goes into it. Different credit card issuers report cardholder account information at different times -- some report each month, some once a quarter, others at other intervals. Therefore, depending on when you request it, your credit report might still include a $30,000 account balance, even if you have since paid that debt off. </p> <table width="270" align="left"> <tbody> <tr> <td> <div class="quoteleft"> <p> Paying off credit card balances in full every month is an excellent credit habit, but doesn't mean that one's lender will report a zero balance to the credit bureaus. </p> </div> </td> </tr> <tr> <td style="line-height: 10px; font-style: italic; font-size: 9px;" align="right">-- Craig Watts<br /> FICO spokesman </td> </tr> </tbody> </table> <p> "Paying off credit card balances in full every month is an excellent credit habit, but doesn't mean that one's lender will report a zero balance to the credit bureaus," says Craig Watts, spokesman for FICO, the company whose credit scoring model bears its name. </p> <p> That seems to be what's happening to you. According to Steve Katz, spokesman for credit bureau TransUnion, banks generally report a cardholder's account information to the bureaus about once every 30 days, but it can really vary. For example, <a href="http://www.creditcards.com/Chase.php" target="_self">Chase</a> says it reports the current card balance on the 13th or 14th of every month. <a href="http://www.creditcards.com/Citi.php" target="_self">Citi</a>, <a href="http://www.creditcards.com/American-Express.php" target="_self">American Express</a> and Wells Fargo each say it reports the account balances listed on cardholders' monthly statements. <a href="http://www.creditcards.com/Bank-of-America.php" target="_self">Bank of America</a> says it reports account balances 30 to 45 days after payment is received. </p> <p> These are self-imposed reporting deadlines for these issuers, and when the bureaus actually report can fluctuate for any number of reasons. Still, that timing can make a difference to your credit score. Here's an example of how this might work: </p> <ul class="unIndentedList"><li>Say you have a balance of $30,000 on your Chase card on Dec. 13 or 14. (You've had only tiny balances on your other two cards for the past few months.)</li><li>According to Chase policy, that balance is reported to the credit bureaus.</li><li>You pay it off in full on Dec. 16.</li><li>You apply for a loan on Dec. 22. </li><li>The credit report that the lender sees will likely not show your balance as paid in full because the most recent information about that account was pulled on Dec. 13 or 14, when your balance was huge. That leaves you with a high utilization ratio.</li></ul> <p> "A high utilization rate is an indicator of risk, so it can have a negative impact on credit scores," says Rod Griffin, director of public education for credit bureau Experian. And since lenders use credit scores to decide whether to let consumers borrow money -- and at what interest rate -- a higher ratio can cost you real money. </p> <p> How much money? That's hard to say, but a recent announcement from FICO said that a hypothetical person with a 780 credit score -- a bit higher than yours, but close enough -- could see their score plummet by 25 to 45 points for maxing out a credit card. A 45-point drop would still leave you with a very good score of 723, but it would leave you just one small mistake away from a credit score in the 600s. That drop could cost you hundreds each year the next time you apply for a car loan or a mortgage. It could even lead an issuer to reject your next credit card application. (For more details, check out our story about FICO's "<a href="http://www.creditcards.com/credit-card-news/fico-credit-score-points-mistakes-1270.php" target="_self">damage points.</a>") </p> <p> You mentioned that you have a 768 FICO score. But you should know that Credit Karma provides TransUnion TransRisk scores. Those scores are generated using a different scoring model than the FICO score, which is better known and much more widely used by lenders than TransUnion's model. (They do share some similarities, however, including a scoring range of 300 to 850.) With your FICO score of 768, you should already qualify for the best rates from lenders. While that's obviously a good thing, it does mean that it'll be harder to raise your credit score since it's already very high. In Credit Karma's grading system, you probably had excellent scores in other categories, even though you had a poor grade for credit utilization. </p> <p> But if you are still concerned about improving your credit utilization and FICO score, consider the following steps: </p> <ul class="unIndentedList"><li><strong>Make credit card payments more than once a month. </strong>By making card payments two or more times during a <a href="http://www.creditcards.com/glossary/term-billing-cycle.php" target="_self">billing cycle</a>, rather than just at month's end, you can keep your average balances lower and improve your utilization ratio. Credit Karma's chief executive and founder Ken Lin says that because a sudden change in payment behavior could raise fraud concerns at your bank, you should alert them ahead of time about your plans. </li><li><strong>Spread your spending among several cards. </strong>While there may<strong> </strong>be a good reason for primarily using one of your credit cards -- such as keeping <a href="http://www.creditcards.com/business.php" target="_self">business</a> expenses separate, earning <a href="http://www.creditcards.com/reward.php" target="_self">rewards</a> or <a href="http://www.creditcards.com/airline-miles.php" target="_self">airline miles</a>, etc. -- consider spreading your charges across all your plastic. That way, if one account's terms get worse or the account suddenly gets closed, you will still have open and active accounts and lines of credit to use.<strong> </strong></li><li><strong>Request a higher credit limit. </strong>Consider calling your bank and asking them to<strong> </strong>increase your credit limit. But be warned: With lots of banks cutting limits and closing accounts, it's a tough time to get more credit. Some experts discourage consumers from contacting their bank right now unless absolutely necessary, since it can trigger an account review and leave you with <a href="http://www.creditcards.com/credit-card-news/2009-q3-senior-loan-officers-survey-lending-standards-tighten.php" target="_self">worse terms</a>.<strong> </strong></li></ul> <p> If you follow these tips --<strong> </strong>and continue paying your debt on time and in full every month, as you have been -- you'll continue to have a high credit score. </p> <p> Good luck! </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-86610777590193167502009-12-17T22:29:00.000-08:002009-12-17T22:30:04.139-08:008 tricks to not rack up card debt during the holidays<h4>By Sally Herigstad</h4> <p> </p><table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> To Her Credit </div> </td> </tr> <tr> <td> <div align="center"> <img alt="To Her Credit, Sally Herigstad" src="http://www.creditcards.com/credit-card-news/images/expert-herigstad.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a>.</strong> </p> <p><strong><a href="http://www.creditcards.com/credit-card-news/to-her-credit-stories.php" target="_self">To Her Credit archive</a></strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear To Her Credit,</strong><br />I've been trying hard this year to work down my credit card debt, and I'm proud of the progress I've made. If I keep this up, I'll be debt free by next summer. </p> <p> I'm worried about the holidays coming up, though. Every year, my list of people to buy for gets longer. If we exchange gifts one year, we have to the next -- and it can never be something noticeably cheaper than last year's gift. I even buy gifts just to stash in the closet, just so I have something to pull out when people drop by with surprise presents. </p> <p> How can I keep from maxing out my credit cards this year without feeling like a Scrooge? -- <em>Tiana</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Tiana,</strong><br />Oh, the ever-expanding Christmas gift list! I know how that goes -- a fun little gift one year given with the best of intentions leads to decades of gift exchanging that turns into anything but fun. It's madness. </p> <p> I got the most delightful e-mail from a friend this year. She said, "Let's not exchange gifts this year." She noted that our kids are older (at ages 28 and 30, they won't cry if I don't send a toy), and we both have new daughters-in-law to shop for. </p> <p> So we've called a truce. I won't send to her and her kids, and she won't send to mine. </p> <p> The gift list isn't the only thing that expands year after year, however. Christmas card lists get longer and longer. Once you're in a card database, you'll probably get their cheery missive from now until you die -- or after. (I've been guilty of addressing a card to the long-deceased before. Fortunately my husband caught it before it was mailed.) </p> <p> Here are some ways you can enjoy the season without racking up a lot of credit card debt: </p> <ol><li>Try my friend's tactic of calling a truce. If that's too formal, casually mention to friends that you're cutting back this year so nobody has to feel guilty about not buying so much.</li><li>Watch out for personal spending. Malls are dangerous, especially with all those sales going on. Am I the only person who comes home from "Christmas shopping" with things I happened to find for me?</li><li>Shop online. It's easier to compare prices, and you'll be less tempted by store displays of things you don't need. And the shipping will probably be offset by the gas you don't use.</li><li>Scale back the card list and save on printing and postage. Do you even know everyone on your list? It's OK to delete a few names every year. If you have more than 50 or 60 addresses on your list, you can probably cut back.</li><li>Make a few homemade gifts. Food is always a hit, and you don't have to worry about it gathering dust!</li><li>Shop locally. Get to know your local craftspeople. They probably have online sites, too. It's nice to give something your relatives across the country can't buy at their chain store.</li><li>Get the most from your holiday lights and decorations. More isn't better. Stringing a few lights won't make a noticeable difference on your electric bill, but lights you can see from space will. Estimate your holiday lighting bill with this <a href="http://www.christmaslightsanddecorations.com/energy-cost-calculator.aspx" target="_blank">Energy Cost Calculator</a>. </li><li>Celebrate locally. The community production of "The Nutcracker" is not only cheaper, but it's more personal and you can actually see the actors. The parking will probably be free, and you might even know someone in the cast.</li></ol> <p> I'll still get plenty of shopping in for the most important people on my list. I actually enjoy gift shopping, which I think is done best with a friend and plenty of latte stops. It's the most fun before the crowds get too big or panic sets in, while you can still take time to admire the decorations and critique the Christmas music together. </p> <p> Enjoy your friends and family this season -- preferably in front of a fire with a cup of homemade hot chocolate. Sometimes agreeing not to give so many gifts is the best gift of all. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-88969301294450563952009-12-14T03:38:00.001-08:002009-12-14T03:38:34.447-08:008 ways to stay debt-free during the holidays<h4>By Erica Sandberg</h4> <p> You've budgeted fanatically, spent judiciously, whittled down debt, and now the holidays are here. If you're holding credit cards with unused credit lines, this can be a dangerous time. </p> <p> Stores are stocked with enticing items, the kids are clamoring for gifts and even your spouse is hinting at something special. A voice whispers to you, "Loosen up. It's the season for giving. The cards are right there in your wallet. Just use them!"<img alt="8 ways to stay debt-free during the holidays" src="http://www.creditcards.com/credit-card-news/images/holiday-thrifty%281%29.jpg" width="250" align="right" height="194" /> </p> <p> Hold up, Santa. Random charging is never a good idea, but in this economy, it's particularly foolish. Here's how you can hold the reins and ring in the New Year on a financially sound note. </p> <ol start="1" type="1"><li><strong>Set your limits</strong>. Even if you've already begun shopping, take stock of your remaining funds and determine a total and a per-person spending allotment. "I've capped gifts at $50 to each of my kids and my nephew," says Naomi Derner from Portland, Ore. She also conferred with friends. "I've asked them if we can limit the gift cost to $15 -- so token gifts or homemade only." Such communication takes the pressure to overdo out of the equation. Cutting back on nonfamily presents also works for Jeanne Sager, a consumer and family reporter from Callicoon Center, N.Y. "We've told people in advance there would be no gifts, and we don't expect anything in return. It sounds grinchy, but I've found a lot of people are relieved not to get another stupid candle!"</li></ol> <ol start="2" type="1"><li><strong>Goal-ify your card. </strong>Sure, the holidays seem terribly important right now, but they'll be just a memory before you know it. Racking up high debt this month can impact what is really crucial -- your long-term objectives. Think about where you want to be financially by the end of 2010. Then, write those goals down on small Post-its and attach them to your <a href="http://www.creditcards.com/balance-transfer.php" target="_self">credit cards</a>. Each time you reach for the cards, the notes will serve as reminders of what you really want to do with your money. </li></ol> <ol start="3" type="1"><li><strong>Stash the plastic</strong>. Before hitting the stores, you just may want to rid your wallet of credit cards entirely and take your <a href="http://www.creditcards.com/credit-card-news/visa-debit-card-transactions-overtake-credit-cards-1276.php" target="_self">debit card</a> instead. This way, you can only spend up to the amount in your checking account and avoid the temptation to charge more. You won't be the only one adopting this technique: A <a href="http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=829" target="_blank">survey</a> conducted by the National Retail Federation found that one-fourth of this year's holiday shoppers said they'll be using only cash, and 43 percent will use debit cards. </li></ol> <ol start="4" type="1"><li><strong>Shop with points. </strong>Have a credit card that has allowed you to earn points for travel and other goodies while you charge? If so, and you've accumulated a fair number, now may be the perfect time to cash them in. Most <a href="http://www.creditcards.com/reward.php" target="_self">rewards programs</a> provide cardholders with an amazing catalog of gift items. Browse through their offerings and shop for the holidays without dropping a dime of your "real" money. </li></ol> <ol start="5" type="1"><li><strong>Lower the line</strong>. If your balance is zero, yet you have the ability to charge $10,000, spending a grand of that can seem pretty reasonable -- even if you can't pay it off until 2011. However, if your credit line is $1,000, charging the maximum doesn't feel quite as right. Though drastic, you can ensure you don't overdo it by asking your credit card company to reduce your <a href="http://www.creditcards.com/credit-card-news/credit-score-formulas-dont-change-as-credit-limits-cut-1270.php" target="_self">credit limit</a>. After all, you can't charge what you aren't allowed to charge without incurring expensive <a href="http://www.creditcards.com/glossary/term-overlimit-fee.php" target="_self">over-limit fees</a>. There are some drawbacks to this method though: It could affect your credit score, and if you want that big line back, it may not be available. </li></ol> <ol start="6" type="1"><li><strong>Plan with your partner. </strong>It's all well and good for you to keep charging in check, but is your partner doing the same? A new <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=70667&p=irol-newsArticle&ID=1358471&highlight=" target="_blank">survey</a> from Capital One Financial Corporation examining the financial habits of couples found that 55 percent of those surveyed have not yet discussed their holiday shopping budget with each other. Carve out time for a couple's discussion, says Shelley Solheim, <a href="http://www.creditcards.com/Capital-One.php" target="_self">Capital One</a>'s director of financial education. "Make sure you are on the same page with your partner about spending limitations," says Solheim. Setting goals together during this season can prevent added stress or disagreements -- and unnecessary liabilities. </li></ol> <ol start="7" type="1"><li><strong>Prep your kids</strong>. If you tend to overshop because you don't want to disappoint your kids on the big day, hold a family meeting to discuss what the holidays really mean, as well as your financial boundaries. Bob Brooks, host of "The Prudent Money Show" radio program and author of "Deceptive Money," says parents often make wrong assumptions about what kids value. Younger children usually just like ripping open wrapping paper, so inexpensive gifts can suffice. For older kids wanting costly items, consider this a teaching moment. "Let them know what you have to spend, and ask them if they think it makes sense to get into debt for what they want," says Brooks, and give them the option of one big gift or several smaller ones. </li></ol> <ol start="8" type="1"><li><strong>Stuff the stocking stuffers</strong>. Some of the sneakiest budget killers are the last minute, quick-pick-up items you buy on a whim or out of guilt. These include fillers for stockings and gifts for those who aren't on your list but who surprise you with a present. It's easy to get caught up in impulse shopping, so think hard about each purchase, however small. Little things add up quickly and can cause unplanned-for debt. </li></ol> <p> The calendar will soon turn to 2010, and December's bills will be in the mail. Project how you'll feel when they arrive: Will you be in a panic because the balances have ballooned, or relieved that you maintained a healthy relationship with your credit cards? </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-53582693929592219482009-12-14T03:36:00.000-08:002009-12-14T03:38:07.577-08:00The mystery of multiple opt outs explained<h3>Sometimes you have to opt out of a rate increase more than once</h3><h4>By Todd Ossenfort</h4> <table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> The Credit Guy </div> </td> </tr> <tr> <td> <div align="center"> <img alt="'The Credit Guy,' columnist Todd Ossenfort" src="http://www.creditcards.com/credit-card-news/images/expert-ossenfort.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> The Credit Guy, Todd Ossenfort, is a credit expert and answers readers' questions about credit, counseling and debt issues. <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a></strong> </p> <p><strong> <a href="http://www.creditcards.com/credit-card-news/the-credit-guy-stories.php" target="_self">'The Credit Guy' archives</a> </strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Credit Guy,</strong><br />I had a major bank credit card, the interest rate was increased but I opted out of the increase with 8.99 percent and my account was closed in 2007. I am continuing to pay off my credit card, but recently I noticed my rate increased from 8.99 to 12.24 percent. When I called about the increase, they said a notification was sent to me about the rate increase and I had not opted out again. So, my rate is increased. Is this legal? I thought it was the law that if you opt out you can pay off your balance with the current rate, but it seems even after you opt out, the rate can continue to increase and you have to do multiple opt outs during the entire pay off process. . -- <em>Mohammed</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Mohammed,</strong><br />It is difficult to answer your question regarding the legality of increasing the interest rate on an account where you have previously opted out of a rate increase without reviewing the original cardholder agreement. However, the large bank that issued you the card is likely to have a team of legal representation, so it is very unlikely they would proceed with an illegal action. In most cases, when you <a href="http://www.creditcards.com/credit-card-news/opt-out-credit-card-rate-increase-1292.php" target="_self">opt out of changes</a> to your cardholder agreement, the account is "closed" and you can no longer make purchases with the card. Given that fact, many people would make the assumption that it would not be possible for the card issuer to make changes to a "closed" account. </p> <p> I asked a consumer attorney, Richard M. Alderman, and his response was, "The account may not be really 'closed,' but is just inactive and no longer allows any future spending. Until it is paid in full it is still 'open.' If that is the case, the card issuer may still propose changes to the terms and the consumer would have to reject them." </p> <p> Should you have access to your original cardholder agreement, you might want to take a look at it and see if you can determine what happens to your account once you have opted out to proposed changes to your agreement the first time. Even if you can find it, you may not be able to wade through the fine print and legal terminology to come to a definitive conclusion. </p> <p> My recommendation is that you open and review all correspondence from your card issuer and continue to opt out of any proposed changes to your cardholder agreement. Be sure to send a certified letter stating you are opting out with a return receipt request. </p> <p> This practice of requiring consumers to opt out multiple times to changes in a cardholder agreement is new. It is likely these actions are a direct result of the fact that the remainder of the provisions of the Credit Card Accountability and Responsibility Disclosure Act of 2009 (Credit CARD Act) go into effect in February 2010. The good news is that the <a href="http://www.creditcards.com/credit-card-news/credit-card-law-interactive-1282.php" target="_self">Credit CARD Act </a> will prevent card issuers from these types of actions moving forward. Specifically, your card issuer will no longer be allowed to raise your interest rate due to universal default and can only raise your rate for being 60 days late. </p> <p> One other important provision of the Credit CARD Act will require card issuers to post their cardholder agreements on their Web sites, thus eliminating the guesswork in what is allowed and what is not. Then you won't have to search for a document years down the road; it will be available at the click of a mouse. </p> <p> Take care of your credit! </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-42562737246765695802009-12-11T02:24:00.001-08:002009-12-11T02:24:50.288-08:00Consumer credit card balances fall again, Fed says<h4>By Jeremy M. Simon</h4> <p> <strong>See updated story:</strong> <a href="http://www.creditcards.com/credit-card-news/federal-reserve-g19-consumer-credit-september-09.php" target="_self">Consumer credit card debt falls for 13th straight month, Fed says</a> </p> <p> Credit card balances fell again in October, according to Federal Reserve data, leaving the average card-carrying American household with nearly $1,000 less in credit card debt than it had a year ago. </p> <p> According to the latest Federal Reserve data released Monday, credit card balances tumbled by $6.9 billion in October, marking a record 13th straight month of decline. The data, contained in the <a href="http://www.federalreserve.gov/releases/g19/" target="_blank">Fed's monthly G.19 report</a>, looks at various components of consumer debt, including revolving credit -- a loan category comprised almost entirely of credit card debt -- as well as nonrevolving debt, which includes such debt as auto loans, student loans and loans for mobile homes, boats and trailers. Overall, revolving debt fell to $888.1 billion from a revised total of $895 billion in September. </p> <p>Americans' credit card debt stood at $975.2 billion in September 2008. The 13 monthly declines since then have seen U.S. cardholders eliminate $87.1 billion in credit card debt. That means the average U.S. household with at least one credit card -- of which there are 91.1 million, according to payment-card industry newsletter the Nilson Report -- has eliminated roughly $956 in credit card debt during that period. That's a relief in a time of high unemployment rates and overall economic uncertainty for many families around the nation, though there's some debate as to exactly what it means. </p> <p> <strong>Frugality or something else?<br /></strong> Taken as a whole, consumer debt fell nearly $3.5 billion to $2.483 trillion in October -- a record ninth straight monthly drop, dating back to February. While some experts say that the dropping debt levels are a sign of newfound American frugality, others say consumer psychology hasn't been fundamentally altered. Gregory Miller, chief economist with SunTrust Bank in Atlanta, says consumers are spending and will continue to do so. <strike>"As far as existing accounts are concerned, I doubt the household sector -- or the business sector -- will change their credit card spending," says Miller.</strike> He said external factors, such as lower gasoline prices over the past year, have allowed consumers to get more for their money and keep their card balances down. </p> <p> Federal Reserve Chairman Ben Bernanke said in a <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20091207a.htm">speech</a> Monday that "consumer spending also has been rising since midyear. Part of this increase reflected a temporary surge in auto purchases that resulted from the 'cash for clunkers' program, but spending in categories other than motor vehicles has increased as well," Bernanke said. </p> <p> Those numbers would seem to be good news for an economy that's so heavily dependent on consumer spending. However, not all data is positive. Recent data shows the amount of unpaid credit card accounts fell in the third quarter. Also, a survey from the <a href="http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=841" target="_blank">National Retail Federation</a> showed the number of consumers who shopped during the Thanksgiving weekend increased from 2008, but the amount of money spent per consumer fell 8 percent </p> <strong>Banks play a role</strong><br />Rubin says that rather than attribute the ongoing drop in card balances entirely to thrifty consumers, banks are also keeping card balances under pressure. "Are people not spending on credit cards because they don't want to, or are people not spending on credit cards because they can't?" he asks. <p> Evidence suggests that, at least in part, consumers may not have a choice when it comes to their card spending. Card issuers have been tightening credit standards, closing existing accounts and writing off bad debt they have been unable to collect. Some of banks' efforts to protect themselves from losses appear to have worked. TransUnion says that late card payments fell to 1.1 percent in the third quarter from 1.17 percent on the second quarter. TransUnion also reported that the average balance on outstanding bank cards fell to $5,612 from $5,710 one year earlier. </p> <p> Rubin notes that even making a small minimum payment can keep accounts current and out of delinquency. That's why he is hesitant to cheer the lower delinquency figures. </p> <p> However, when consumers are seriously delinquent, lenders may give up on ever collecting those unpaid balances. Often, Rubin says, it may be cardholders with the most substantial balances who find themselves unable to make payments when times get tough. "I would strongly suspect that those having the write-offs have the biggest use of credit," he says. </p> <p> After a write-off at one bank, these consumers may no longer be able to qualify for credit from another lender. That means they might not be able to find the credit to spend, even if they wanted to spend it. </p> <p> "It means there's not as much a change in psyche as there is a change in availability" of credit, Rubin says. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-5394352237037841982009-12-11T02:23:00.001-08:002009-12-11T02:23:31.497-08:00Consumer credit card balances fall again in October, Fed says<h4>By Jeremy M. Simon</h4> <p>Credit card balances fell again in October, according to Federal Reserve data, leaving the average card-carrying American household with nearly $1,000 less in credit card debt than it had a year ago. </p><table class="editorial" width="250" align="right"> <tbody> <tr> <th>AMERICANS' CREDIT CARD BALANCES<br /> KEEP FALLING</th> </tr> <tr> <td> <p> Americans' credit card debt has fallen $87.1 billion from its September 2008 total of $975.2 billion. The chart below shows how steadily consumers have pecked away at that debt during a record run of 13 straight monthly declines in credit card balances. That's an average of $956 per credit cardholding household. </p> <p> Note: Decrease shown in billions. </p> <img src="http://www.creditcards.com/credit-card-news/images/g19-120709rev.jpg" border="0" /></td> </tr> </tbody> </table> <p> According to the latest Federal Reserve data released Monday, credit card balances tumbled by $6.9 billion in October, marking a record 13th straight month of decline. The data, contained in the <a href="http://www.federalreserve.gov/releases/g19/" target="_blank">Fed's monthly G.19 report</a>, looks at various components of consumer debt, including revolving credit -- a loan category comprised almost entirely of credit card debt -- as well as nonrevolving debt, which includes such debt as auto loans, student loans and loans for mobile homes, boats and trailers. Overall, revolving debt fell to $888.1 billion from a revised total of $895 billion in September. </p> <p> Americans' credit card debt stood at $975.2 billion in September 2008. The 13 monthly declines since then have seen U.S. cardholders eliminate $87.1 billion in credit card debt. That means the average U.S. household with at least one credit card -- of which there are 91.1 million, according to payment-card industry newsletter the Nilson Report -- has eliminated roughly $956 in credit card debt during that period. That's a relief in a time of high unemployment rates and overall economic uncertainty for many families around the nation, though there's some debate as to exactly what it means. </p> <p> <strong>Frugality or something else?<br /></strong>Taken as a whole, consumer debt fell nearly $3.5 billion to $2.483 trillion in October -- a record ninth straight monthly drop, dating back to February. While some experts say that the dropping debt levels are a sign of newfound American frugality, others say consumer psychology hasn't been fundamentally altered. Gregory Miller, chief economist with SunTrust Bank in Atlanta, says consumers are spending and will continue to do so. He said external factors, such as lower gasoline prices over the past year, have allowed consumers to get more for their money and keep their card balances down. </p> <p> Federal Reserve Chairman Ben Bernanke said in a <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20091207a.htm">speech</a> Monday that "consumer spending also has been rising since midyear. Part of this increase reflected a temporary surge in auto purchases that resulted from the 'cash for clunkers' program, but spending in categories other than motor vehicles has increased as well." </p> <p> Those numbers would seem to be good news for an economy that's so heavily dependent on consumer spending. However, not all data is positive. A survey from the <a href="http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=841" target="_blank">National Retail Federation</a> showed the number of consumers who shopped during the Thanksgiving weekend increased from 2008, but the amount of money spent per consumer fell 8 percent. </p> <table class="editorial" width="250" align="left"> <tbody> <tr> <th>CONSUMERS CONTINUE TO SHED DEBT</th> </tr> <tr> <td> <p> In October, Americans' credit card debt fell 9.3 percent, continuing recent trends. The below chart shows the percentage change in credit card debt since the third quarter of 2008 -- the last time credit card debt increased in a quarter. </p> <img src="http://www.creditcards.com/credit-card-news/images/g19-120709-percent.jpg" border="0" /> </td> </tr> </tbody> </table> <strong>Banks play a role</strong><br />Michael Rubin, author of "Beyond Paycheck to Paycheck," says that rather than attribute the ongoing drop in card balances entirely to thrifty consumers, banks are also keeping card balances under pressure. "Are people not spending on credit cards because they don't want to, or are people not spending on credit cards because they can't?" he asks. <p> Evidence suggests that, at least in part, consumers may not have a choice when it comes to their card spending. Card issuers have been <a href="http://www.creditcards.com/credit-card-news/2009-q3-senior-loan-officers-survey-lending-standards-tighten.php" target="_self">tightening credit standards</a>, closing existing accounts and writing off bad debt they have been unable to collect. (In fact, a Fed representative confirmed that part of the decline in outstanding credit card debt is due to banks writing off bad debt.) </p> <p> Some of banks' efforts to protect themselves from losses appear to have worked. National credit reporting agency TransUnion says that late card payments fell to 1.1 percent in the third quarter from 1.17 percent on the second quarter. TransUnion also reported that the average balance on outstanding bank cards fell to $5,612 from $5,710 one year earlier. </p> <p> Rubin notes that even making a small minimum payment can keep accounts current and out of delinquency. That's why he is hesitant to cheer the lower delinquency figures. </p> <p> However, when consumers are seriously delinquent, lenders may give up on ever collecting those unpaid balances. Often, Rubin says, it may be cardholders with the most substantial balances who find themselves unable to make payments when times get tough. "I would strongly suspect that those having the write-offs have the biggest use of credit," he says. </p> <p> After a write-off at one bank, these consumers may no longer be able to qualify for credit from another lender. That means they might not be able to find the credit to spend, even if they wanted to spend it. </p> <p> "It means there's not as much a change in psyche as there is a change in availability" of credit, Rubin says. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-44694682960403199802009-12-11T02:22:00.001-08:002009-12-11T02:22:40.245-08:00A desperate debtor's option: hardship programs<h4>By Todd Ossenfort</h4> <table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> The Credit Guy </div> </td> </tr> <tr> <td> <div align="center"> <img alt="'The Credit Guy,' columnist Todd Ossenfort" src="http://www.creditcards.com/credit-card-news/images/expert-ossenfort.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> The Credit Guy, Todd Ossenfort, is a credit expert and answers readers' questions about credit, counseling and debt issues. <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a></strong> </p> <p><strong> <a href="http://www.creditcards.com/credit-card-news/the-credit-guy-stories.php" target="_self">'The Credit Guy' archives</a> </strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Credit Guy,</strong><br />I've talked recently to two different credit card consolidators and explained that my husband's second job has taken more than a $10,000 cut this year. I am not able to work. Slowly, we have gotten ourselves in a jam and are unable to pay our credit cards. The consolidator said that she would recommend a hardship program. How exactly do I go about this? I need to do something soon. -- <em>Barbara</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Barbara,</strong><br />You are absolutely correct that you need to act quickly. Before you do anything, however, you need to know exactly what you can afford to pay each month toward your credit card accounts. It would be counterproductive to ask for and qualify for a repayment program that you ultimately cannot afford. Once you determine a realistic monthly amount you can pay on your credit card accounts, you will then need to keep in mind that the amount must cover all accounts you currently owe. For example, if you have four credit card accounts and $400 per month to cover those accounts, you will need to be sure the repayment programs you agree to (for example, $75 per month to creditor A, $85 per month to creditor B, $140 per month to creditor C and $100 per month to creditor D) do not exceed a total of $400. </p> <p> I am assuming that the <a href="http://www.creditcards.com/balance-transfer.php" target="_self">credit card</a> consolidators you talked to did a full counseling session with a full budget analysis. If they did, you called the right agency. If they didn't, call someone else. I recommend you only speak to a qualified nonprofit credit counseling agency for assistance. You can find help from a trusted agency by visiting a local office of the <a href="http://www.aiccca.org/" target="_blank">Association of Independent Consumer Credit Counseling Agencies</a> or the <a href="http://www.nfcc.org/" target="_blank">National Foundation for Credit Counseling</a>. A certified credit counselor will review your current financial situation and make recommendations based on your income and expenses. If it makes sense for you to enter into a <a href="http://www.creditcards.com/glossary/term-debt-management-plan-dmp.php" target="_self">debt management plan</a> (DMP), your counselor will explain how the plan works and let you know any fees associated with the plan. On a DMP, you will make one payment to the credit counseling agency. The agency will then disperse the money to your card issuers. Most DMPs will have your creditors paid in full in five years or less. </p> <p> Many card issuers are now more willing to work with consumers than they have been in the past. Most have what is considered a "hardship program" offered through the nonprofit credit counseling agency that allows you to pay what you owe with a lower monthly payment than your current minimum payment. Each card issuer will have varying requirements you will have to meet in order to qualify for the program. Keep in mind that you will not be able to add to the balances of any card accounts that are placed in a hardship program with your card issuer. </p> <p> While coming to an agreement with all of your card issuers, you will need to pay what you can on time and as agreed. Rather than paying nothing on any of your accounts, make minimum payments in full on as many accounts as you can, and pay nothing on the others until you quickly find a lasting resolution. </p> <p> Take care of your credit! </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-69428135241226281052009-12-06T19:43:00.001-08:002009-12-06T19:43:47.700-08:00Can debt collectors garnish Social Security?<h3>Typically, no, but take steps to protect those funds anyway</h3><h4>By Sally Herigstad</h4> <p> </p><table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> To Her Credit </div> </td> </tr> <tr> <td> <div align="center"> <img alt="To Her Credit, Sally Herigstad" src="http://www.creditcards.com/credit-card-news/images/expert-herigstad.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a>.</strong> </p> <p><strong><a href="http://www.creditcards.com/credit-card-news/to-her-credit-stories.php" target="_self">To Her Credit archive</a></strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear To Her Credit,</strong><br />I got a call from a credit card debt collector today who said he could get a garnishment on my Social Security benefits. He says he can take 25 percent of my monthly check. I can barely get by on my benefits as it is. They are my only source of income. </p> <p> What can I do? -- <em>Margaret</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Margaret,</strong><br />He can't take your Social Security check or any part of it. Nor can he keep calling you and ruining your day -- if you know your rights. </p> <p> Social Security benefits are generally exempt from <a href="http://www.creditcards.com/credit-card-news/herigstad-wage-garnishment-advice-1294.php" target="_self">garnishment</a>, except in cases of unpaid taxes and child support. This debt collector is hoping you don't know that and that you will fork over the money. </p> <p> There is another way he could get your benefits, however. If a creditor goes to court and gets a court order to have the bank freeze your checking account, the effect will be much the same as garnishment. If your Social Security checks are deposited directly into your account and the bank freezes your account, you won't be able to pay your bills. Plus, it could take weeks or even months to get it all straightened out. </p> <p> Some states have recognized this problem and have tried to pass laws prohibiting banks from freezing accounts that contain exempt funds, such as Social Security benefits. In other states, banks have more discretion in deciding how much effort to make in determining if most or all of your money is from exempt sources. </p> <p> For example, Jay Spruill, general counsel of the Virginia Bankers Association, says, "In Virginia, you would be able to claim the Social Security benefits as exempt property through the court. The garnishment form that is served on the bank and the customer, advises the customer how to go about claiming the exemption, so the customer does have the ability to get the funds 'unfrozen' or returned if they have already been delivered to the court." </p> <p> Banks would rather not have to decide which of your funds are exempt; in fact, they have resisted being put in the position of having to make that decision. Spruill says, "The problem for a bank that tries to make this determination is that a bank account may contain both exempt and nonexempt funds. As a practical matter, the bank would have to do research to determine the source of the funds, which would create significant challenges. For example, how far would the bank have to look back to determine whether the account had any nonexempt funds?" </p> <p> "That is why the court should make the determination as to whether funds in an account are exempt," Spruill says. </p> <p> Here's what you can do: </p> <ul><li>Check with your bank and ask them about their policies. If it seems embarrassing to go to your local bank and ask about garnishment policies, call by phone or go to another branch. You can also seek free or low-cost legal advice about the laws in your state and how you can avoid having your account frozen.</li><li>If you're worried about your account being frozen and you get your benefits by direct deposit, consider going back to paper checks. Call (800) 772-1213 or go to the <a href="https://secure.ssa.gov/acu/ACU_PPA/main.jsp?URL=/apps6z/DD/main.jsp&LVL=5" target="_blank">Social Security Online Services</a>. Then, if your account is ever frozen, at least you will be able to cash the next check that comes, instead of having it land in a frozen account.</li><li>The next time this collector calls, tell him not to contact you by phone anymore. Ask him for an address where you can write to him. Then download a cease-and-desist <a href="http://www.creditcards.com/credit-card-news/help/debt-collection-sample-letters-6000.php" target="_self">sample letter</a>, fill in the blanks and send by certified mail.</li><li>Look for long-term solutions to your financial problems. If you need outside help, contact the <a href="http://www.aiccca.org/" target="_blank">Association of Independent Consumer Credit Counseling Agencies</a> or the <a href="http://www.nfcc.org/" target="_blank">National Foundation for Credit Counseling</a>.</li></ul> <p> A word of caution: Do not call shady debt elimination operations or other companies that do not adhere to professional standards. These companies can leave you in worse shape than before. </p> <p> If you wait until your account is frozen, you'll have to go to greater lengths to undo bank fees and to get your benefits back. Take steps to protect your benefits now. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-20694833124390889082009-12-06T19:42:00.000-08:002009-12-06T19:43:17.051-08:00Sending money to friends, family abroad? Options abound<h3>From traditional agents to high-tech Web sites, you've got more choices than ever</h3><h4>By Karen Kroll</h4> <p> <img alt="Sending money to friends, family: Technology, society causing changes" src="http://www.creditcards.com/credit-card-news/images/travel-dollar.jpg" vspace="10" width="300" align="right" height="179" hspace="10" /> Say you'd like to get a few bucks to your college-age son who's studying abroad, or you need to send money to relatives on another continent. You have a growing number of options -- ranging from the old-school to the high-tech -- for doing just that. </p> <p> Prefer the personal touch? You can work with an agent to handle the transaction. Just want it done <em>now</em>? Transfer the money using your computer. Soon, a few up-and-coming services will even let recipients of money transfers get funds via their mobile phones. In all, the worldwide market for remittances -- a formal name for payments from individuals in one part of the world to those in other parts -- hit $443 billion in 2008, the World Bank estimates, and no one sends out more than the United States. </p> <p> <strong>Remittances are big, big business<br /></strong>An estimated $47 billion in remittances were sent from America in 2008, according to the World Bank, more than twice that of any other nation except Russia ($26 billion).<strong> </strong>More than half of those American remittances ($25 billion) went to Mexico alone -- often from an expatriate family member who is sending much-needed money to his struggling family back home -- but people in virtually every corner of the world have received some sort of remittance payment from the United States. </p> <p> The global economic recession is taking its toll on remittances, however. The World Bank currently projects that total worldwide remittances received will reach $420 billion in 2009, a $23 billion drop from the previous year. But even with the decrease, there remains a tremendous amount of demand for remittance services. </p> <p> There's also a wide -- and ever-expanding -- variety of options available for making the payments, so you can choose the way that suits you best. </p> <p> <strong>Keeping it personal</strong><br />Each way of transferring money has its pros and cons, but for many, the old way -- a face-to-face meeting with an agent -- is still the best. For example, if you want to fund the transfer with cash, rather than a credit or <a href="http://www.creditcards.com/glossary/term-debit-card.php" target="_self">debit card</a> or bank account, it's probably your only choice. But perhaps the most common reason for conducting the transaction this way is also the simplest: Many people simply like to work with a human when they're moving money to faraway places, says Saul Wolf, remittances manager with the World Council of Credit Unions. </p> <table class="editorial" width="250" align="right" border="0"> <tbody> <tr> <th colspan="2">Comparing costs of<br /> wiring $200 to Mexico</th> </tr> <tr> <td><strong>Type</strong></td> <td><strong>Cost</strong></td> </tr> <tr> <td>Using an agent</td> <td>Ranges from $7.99 to $14.99</td> </tr> <tr> <td>Using a computer</td> <td>Ranges from $4.99 to $12. Additional charges (up to $25) may apply for the initial transaction.</td> </tr> <tr> <td>Using a cell phone</td> <td>Not yet available in the U.S.</td> </tr> </tbody> </table> <p> "It can be daunting to send money overseas," Wolf says. "You want a person in front of you, who you can come back to if there's a problem." </p> <p> It can also be comforting to know that the person to whom you're sending the money will have to deal with a real person as well -- to guarantee that the person who is supposed to get it actually does. Both MoneyGram and Western Union, giants in the money-transfer business, have taken steps to help ensure that. For instance, both firms generate a distinct number for each transaction that the sender passes to the recipient. Also, in many countries, the recipient has to present photo identification in order to pick up the money. </p> <p> The downside? Using an agent isn't as convenient as sending funds either online or via the phone. You have to physically visit an agent, and your recipients would have to do the same at their locations. That can be challenging if the recipient lives in a remote part of the world, far from post offices, airports, financial institutions and other such places where money transfer firms are typically located. With that in mind, be sure to visit the money transfer firm's Web site for a list of agent locations -- and their hours -- before completing your transaction. </p> <p> Find out all you can about fees as well, as remittance costs can add up quickly. The fees vary depending on the amount you're sending, where it's going and how fast you'd like it to get there. For instance, using Western Union to send $200 from Chicago to Mexico for arrival within three days will set you back $7.99. It's $14.99 to get it there in minutes. </p> <p> <strong>Sending money online<br /></strong>Don't want to bother with visiting a brick-and-mortar store or dealing with an agent in person? MoneyGram, Western Union and a growing number of other firms let you handle money transfers via your computer. The primary advantage: convenience. You can send money from the comfort of your home whenever you like. </p> <p> What you can't do, however, is pay with cash. You'll need to fund the transaction with a bank account or <a href="http://www.creditcards.com/balance-transfer.php" target="_self">credit card</a>. </p> <p> iKobo, based in Maitland, Fla., is one company that offers online transfers. Here's how it works: </p> <ul type="disc"><li>To start, create an account with the site, provide information such as your name, street address, phone number and e-mail address. You'll also have to provide answers to security questions, such as your mother's maiden name. You'll then receive an e-mail confirmation with a link back to the site. </li><li>After signing in, provide the name and contact information for the recipient along with the amount you'd like to send. </li><li>Next, provide your credit card or bank account information. </li><li>Once you've identified who is to receive the money and the amount, iKobo mails the person a reloadable debit card. You can send between $10 and $1,000 per transaction and from the United States; you can send funds to up to four cards at once.</li><li>The recipient then activates it by logging onto a computer and verifying the card number and personal identification number. </li><li>At that point, the money you've sent is loaded onto the card, which the recipient can use at stores and ATMs that accept Visa, says Craig Taylor, chief marketing officer with M2 Global, iKobo's parent company. In some countries, card recipients can activate their accounts through their phones.</li><li>After the first transaction, any additional funds sent to the card are available immediately. </li></ul> <p> For your first transaction with iKobo, you can expect to pay two fees. The first is to send the Visa card to the recipient, and this ranges from $2.99 for cards mailed within the U.S. to $24.99 for cards sent internationally via Federal Express. On every transaction, including your first, iKobo also charges a money-transfer fee. Sending $200 from the U.S. to Mexico will run $8 when funded from a bank account, and $11.50 when funded through a credit card. Add in the cost of sending the actual card, and your total can jump to more than $36. </p> <p> Xoom.com, based in San Francisco, lets you electronically send money from your bank account, credit or debit card or PayPal account. The recipient can pick up the money at a partner bank or retailer; in China, the person can get it at a branch of the national postal system. The money can also be deposited in the recipient's bank account. In several countries, the funds can be delivered to the recipient's home. </p> <table width="270" align="left"> <tbody> <tr> <td> <div class="quoteleft"> <p> It can be daunting to send money overseas. You want a person in front of you, who you can come back to if there's a problem. </p> </div> </td> </tr> <tr> <td style="font-size: 9px; line-height: 10px; font-style: italic;" align="right">-- Saul Wolf <br /> Remittances manager, World Council of Credit Unions </td> </tr> </tbody> </table> <p> As with other services, fees vary. Sending $200 from a U.S. bank account to Mexico will cost $4.99. Doing the same transaction with a credit card or PayPal account runs $9.99 </p> <p> But is it safe to send money online? Mark Beccue, a senior analyst of mobile money services with Oyster Bay, N.Y.-based ABI Research, says that the firms offering these services take a number of steps to ensure the security of the transactions. Xoom.com, for instance, encrypts all personal information, says Julian King, senior vice president of marketing and corporate development. Its computers reside behind a firewall and aren't directly connected to the Internet. In addition, all employees must pass criminal and financial background checks before they're hired. </p> <p> <strong>Coming soon: sending money to a cell phone</strong> <strong><br /></strong>In many developing parts of the world, people are more likely to have access to mobile phones than to banks or the Internet. With that in mind, a few companies and organizations have announced plans to develop money transfer services that will let recipients receive money via their phones. For instance, in August 2009, MoneyGram announced plans to enable recipients of money transfers in some parts of the world to use their mobile phones to collect the funds. At this point, the company hasn't released any information on pricing or availability. </p> <p> One obstacle when it comes to using cell phones to transfer money is the lack of clear regulation, Wolf says. "There are questions about how the telecommunications regulations overlay with money laundering regulations." As a result, while mobile money transfers are a long-term solution, movement to date has been slow, he adds. </p> <p> That said, some industry experts expect these obstacles to be overcome and mobile phone use to grow. Juniper Research Associates predicts that more than 500 million people worldwide will use mobile devices to transfer money by 2014. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-5288485004868109892009-12-03T05:51:00.001-08:002009-12-03T05:51:52.255-08:00Poll: Two out of five parents giving adult children bailouts<h3>Credit counselors advise parents, children to seek budget help</h3><h4>By Connie Prater</h4> <p> It's not just big banks that are getting bailouts these days. Two out of five people with adult children say they have paid off debts for their offspring -- most notably, car loans and medical bills, according to a new CreditCards.com scientific poll. <img alt="Giving a hand or handout" src="http://www.creditcards.com/credit-card-news/images/kid-bailout.jpg" vspace="10" width="250" align="right" height="211" hspace="10" /> </p> <p> The survey follows up on a similar <a href="http://www.creditcards.com/credit-card-news/dads-repay-childrens-debt-poll-1276.php" target="_self">poll</a> conducted in late August 2009 that measured intentions, not acts. It found men were more willing than women to pay off large debts for their children -- with or without an expectation of ever being repaid. The latest poll took the issue out of the hypothetical realm and asked if anyone had ever actually repaid their children's debts. The survey finds that 42 percent of people with adult children said they have paid off a debt for their children at some point. </p> <p> The poll bears witness to what credit counselors say they're seeing more and more in debt management sessions as an increasing number of their clients are parents drowning in -- their children's debt. </p> <p> "We have a lot of parents who call us and say, 'Hey my kids are in trouble. What do I do?'" says Michael McAuliffe, president of Family Credit Management, a Chicago nonprofit credit counseling agency. </p> <p> Look to the economy, record job losses and home foreclosures for reasons why children are tapping their parents for money. McAuliffe cites another potential reason: "It used to be that kids would be embarrassed to ask for help. Not anymore." </p> <p> <strong>Giving a hand or a handout<br /></strong>The stigma has been reduced, he says, perhaps by a generation used to having their parents take care of virtually everything for them and a culture where financial failure is becoming more commonplace. "Thirty years ago, to file <a href="http://www.creditcards.com/credit-card-news/bankruptcy-filings-q3-2009.php" target="_self">bankruptcy</a>, that would be considered a terrible thing," McAuliffe says. "But the stigma has been reduced. More are asking for help." </p> <p> The poll was conducted Nov. 20-22, 2009, by GfK Roper, which surveyed 1,004 adults 18 or older, via random digit telephone dialing. The poll was commissioned by CreditCards.com. The margin of error for the full sample is +/- 3 percentage points. (See <a href="http://www.creditcards.com/credit-card-news/poll-parents-pay-off-childrens-debts-1276.php#methodology">poll methodology</a>.) </p> <p> About 45 percent of the respondents had children over the age of 18. They were asked if they had ever paid off a debt for an adult child and, if so, what kind of debts they had paid off. </p> <p> <img alt="Most commonly repaid debts" src="http://www.creditcards.com/credit-card-news/images/paid-kids-debt.jpg" width="280" align="right" height="307" />The most commonly repaid debts were: </p> <ul type="disc"><li>Auto loans (40 percent).</li><li>Medical debt (37 percent).</li><li>Utilities (31 percent).</li><li>Credit cards (30 percent).</li><li>Student loans (29 percent).</li><li>Mortgage (11 percent)</li><li>Other transportation-related bills, such as car repair, gas or tickets (5 percent).</li><li>Personal loans (4 percent).</li><li>Other kinds of loans (6 percent).</li></ul> <p> Respondents were also offered "gambling" debt as a choice; no one said they paid off a son or daughter's gambling bill. </p> <p> Women were slightly more likely to pay off their adult child's credit card debts than men (33 percent versus 26 percent). Parents from the Northeast were least likely to say they paid off a child's debt (34 percent), while people living in the Midwest were more likely to do so (52 percent). </p> <p> <strong>What's a parent to do?</strong><br />McAuliffe says parents should not be guided by guilt or feelings of obligation when hit up for loans or to pay off debts. </p> <table class="editorial" width="250" align="right"> <tbody> <tr> <th><strong>A PARENT'S GUIDE TO PAYING OFF CHILDREN'S DEBTS:</strong> </th> </tr> <tr> <td> <ul><li>Establish up front if you're providing a gift or a loan. </li><li>Determine if you can, in fact, afford to pay off your child's debt. If you don't have a retirement plan of your own, you may not be able to help. </li><li>Ask for help. Get advice from a <a href="http://www.creditcards.com/credit-card-news/credit-guy-credit-counselors-1292.php" target="_self">certified credit counselor</a> about both your child's and your own financial situation. </li><li>Consider referring your child to a <a href="http://www.creditcards.com/credit-card-news/consolidate-credit-card-debt-social-lending-1266.php" target="_self">social lending Web site</a> for a loan. </li><li>Ask your son or daughter if they're making sacrifices. You may feel resentment if you pay off their loans and they continue to rack up debt or spend beyond their means. </li><li>Don't be afraid to say no to the request. </li><li>Consider alternative ways to help your offspring, including letting them move in with you, providing child care or offering references for jobs. </li></ul> </td> </tr> </tbody> </table> "There are several things you have to ask yourself. The most important thing is can you afford it? We're seeing people coming in with their own financial problems, sometimes as a result of trying to help their kids," he says. <p> Parents are advised not to pay off their children's debts if they don't have sound retirement plans in place for themselves. </p> <p> "If you don't have your retirement on track, then to me, that's the end of the discussion," he says. "What are the cold, hard facts? Retirement pensions aren't there like they used to be. Social Security is not going to provide the same kind of income that previous generations had. There's not going to be anyone there to help you. No matter what, you cannot afford to help your children." </p> <p> <strong>Throwing good money after bad</strong><br />The old saying about not throwing good money after bad money definitely applies to these situations, McAuliffe says. Just paying one month's mortgage for a struggling child is short-sighted and won't likely solve the problem if lack of income is the cause. If parents do decide to pay off their children's debts, they should do so with a big-picture plan in mind. </p> <p> Key questions to ask their children: "Is the house up for sale? Is there equity in it? Is work down to part-time? Are you looking for employment and are you going to be able to get it in a reasonable time frame?" McAuliffe says. </p> <p> Another key question: Is this a gift or a loan? The August 2009 CreditCards.com poll found people with children were more willing to pay off debts of $1,000 or more if they expected to be repaid than if they were giving the money with no strings attached. </p> <p> If lending the money, McAuliffe suggests parents consider using <a href="http://www.creditcards.com/credit-card-news/consolidate-credit-card-debt-social-lending-1266.php" target="_self">social lending Web sites</a> such as Prosper.com, which allow users to borrow money from friends, relatives or strangers and repay it over time. The advantage for parents is they aren't calling an adult child asking about a late payment -- another potentially awkward family moment. </p> <table width="270" align="left"> <tbody> <tr> <td> <div class="quoteleft"> <p> If you're paying off the credit card, make sure that they are closing those credit cards and cutting them up. </p> </div> </td> </tr> <tr> <td style="font-size: 9px; line-height: 10px; font-style: italic;" align="right">-- Michael McAuliffe <br /> Family credit counselor </td> </tr> </tbody> </table> <p> <strong>Changing habits<br /></strong>Adult children facing hard times should be prepared to make sacrifices. "If I'm loaning a significant amount of money and my kid is paying off their debt, if they are still going out to eat regularly, if they are still paying money for cable TV and multiple cell phones, that needs to be looked at." </p> <p> McAuliffe acknowledges that parents may be reluctant to tell their children to rein in their spending. "That's hard for a parent to say, but you can say, 'Hey, I want you to go talk to a credit counselor and have them evaluate your budget.' If you're paying off the credit card, make sure that they are closing those credit cards and cutting them up," he says. </p> <p> To adult children, McAuliffe advises: "If you're borrowing money from your parents, make sure that you've made sacrifices yourself. Too often they are still going out to eat, still having their cable TV and still not modifying their spending habits at all." </p> <p> <strong>Cash alternatives</strong><br />Instead of paying off debts, parents can offer to help their children in other ways. </p> <p> "Maybe babysit for them or do other nonfinancial assistance," McAuliffe says. "If they can't afford their home and you can't afford to make their mortgage payment for them, let them move in with you. There are nonfinancial kinds of assistance that you can provide that can help them financially." </p> <p> A new <a href="http://pewresearch.org/pubs/1423/home-for-the-holidays-boomeranged-parents" target="_blank">study</a> released by the Pew Research Center found 13 percent of parents with adult children report at least one son or daughter has moved back home in the past year. One in 10 18- to 34-year-olds in the Pew poll say the bad economy forced them to do so. Social scientists have coined a new name for these return-to-nesters: "boomerangers." </p> <p> Parents who pay off their children's debt should be aware of the message they are sending and children should know this, McAuliffe says: </p> <p> "If you get into a jam, there's not always going to be someone there to bail you out." </p> <p> <a name="methodology" title="methodology"></a><strong>Poll methodology:<br /></strong>The survey was conducted from Nov. 20-22, 2009, by GfK Roper Public Affairs & Media on behalf of CreditCards.com. Random digit dialing phone interviews were completed with 1,004 adults, all 18 years of age or older. The raw data were then weighted by a custom designed computer program that automatically developed a weighting factor for each respondent, employing five variables: age, sex, education, race and geographic region. The margin of error was plus or minus 3 percentage points for the full sample. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-46963419158368117502009-11-30T20:30:00.001-08:002009-11-30T20:30:53.236-08:00When your credit's still married and you're not<h3>Make sure all your financial ties have been severed</h3><h4>By Todd Ossenfort</h4> <table width="180" align="right"> <tbody> <tr> <td> <div style="font-weight: bold; color: rgb(0, 51, 102);" align="center"> The Credit Guy </div> </td> </tr> <tr> <td> <div align="center"> <img alt="'The Credit Guy,' columnist Todd Ossenfort" src="http://www.creditcards.com/credit-card-news/images/expert-ossenfort.jpg" width="150" border="0" height="150" /> </div> </td> </tr> <tr> <td style="font-size: 10px; color: rgb(0, 51, 102);"> <table width="155" align="center"> <tbody> <tr> <td> <div style="font-size: xx-small; color: rgb(0, 51, 102); line-height: 12px;" align="justify"> The Credit Guy, Todd Ossenfort, is a credit expert and answers readers' questions about credit, counseling and debt issues. <p> <strong><a href="http://www.creditcards.com/expert-corner-form.php" target="_self">Ask a question</a></strong> </p> <p><strong> <a href="http://www.creditcards.com/credit-card-news/the-credit-guy-stories.php" target="_self">'The Credit Guy' archives</a> </strong></p> </div> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <img alt="Question for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-Q.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Credit Guy,</strong><br />Help! I just reviewed my credit report. I was divorced in 1999 and just found out my ex has a credit card bill of almost $30,000. This was charged AFTER the divorce. On my credit report, it states that the account owner is the authorized user. Can I be liable for this debt? Who is the authorized user, myself or my ex? I'm scared to death! -- <em>Rick</em> </p> <img alt="Answer for the CreditCards.com expert" src="http://www.creditcards.com/credit-card-news/images/expert-A.jpg" width="50" align="left" height="50" hspace="10" /> <p> <strong>Dear Rick,</strong><br />Don't panic. The first thing you need to do is determine what is going on with this account. Is it an account that you had when you were married that you forgot about, a new account opened after you divorced or something else? </p> <p> Without seeing your credit report, it is difficult to say, but if you are the <a href="http://www.creditcards.com/glossary/term-authorized-user.php" target="_self">authorized user</a> on the account, you would not be responsible for the debt. However, you need to be sure. The account listing on your credit report should include contact information for the card issuer. Call the issuer and ask if you are an authorized user on the account or if you are the primary account holder. If the issuer says you are an authorized user, they cannot discuss the account with you further because you are not the cardholder. </p> <p> If you are the authorized user, you need to have your name removed from the account. The main reason being that the account could negatively affect your credit if mishandled by your ex. Unfortunately, a divorce does not separate credit accounts shared jointly by two spouses. The only way to be relieved of responsibility on a credit contract that you jointly signed as a married couple is to close the account, alter the terms of the loan or, in the case of an authorized user account, have the authorized user's name removed from the account. </p> <p> To have your authorized user status <a href="http://www.creditcards.com/credit-card-news/piggybacking-authorized-credit-card-users-1279.php" target="_self">removed</a>, contact the card issuer and request that your name be removed from the account. You will need to have the security information for the account to request the change. The security information for many card issuers is the cardholder's account number, billing address and the last four digits of the cardholder's Social Security number. If you cannot provide this information, you will need to have the primary cardholder, your ex-spouse, make the request. </p> <p> Should you learn from the card issuer that you are the person responsible for the account and your ex-spouse is the authorized user, ask the issuer to send you verification that you are indeed the primary account holder. Because you were not aware of the account and the charges were made after the divorce, she may have opened a new account in your name and named herself the authorized user. If that is the case, your ex-spouse stole your identity, and you could report the account as such. Doing so would legally implicate your ex-spouse in a crime. </p> <p> Before you take such drastic steps, however, you might let her know that you are aware that she opened an account in your name without your permission and that if she moves the balance to a card in her own name and closes the account, you will not report the identity theft. Keep in mind that until the balance is moved to an account in her name or you report the account as identity theft, you are financially responsible for the balance on the account. </p> <p> One last thing: To avoid unpleasant surprises like this one, it is an excellent idea to check your credit reports once each year. You can do so for free at <a href="http://www.annualcreditreport.com/" target="_blank">www.annualcreditreport.com</a>. </p> <p> Take care of your credit! </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.comtag:blogger.com,1999:blog-9133204073643694028.post-28467695343428930542009-11-30T20:29:00.000-08:002009-11-30T20:30:21.935-08:00Enforcement delayed on Internet gambling ban<h3>Credit card-wielding gamblers, regulators have 6 more months</h3><h4>By Martin Merzer</h4> <p>With a regulatory deadline hanging over their heads, credit-card issuers and others in the banking industry have been granted a reprieve -- an additional six months to comply with new rules intended to ban online gambling. </p><p> The Federal Reserve and the Treasury Department <a href="http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20091127a1.pdf" target="_blank">announced</a> Friday that the controversial and somewhat ambiguous new rules, which had been scheduled to take effect on Dec. 1, won't be enforced until June 1. </p> <p> <img alt="Regulators delay Internet gambling law ban" src="http://www.creditcards.com/credit-card-news/images/internet-gambling-law.jpg" vspace="6" width="250" align="right" height="166" hspace="6" />And maybe not even then. </p> <p> Rep. Barney Frank, D-Mass., a leading critic of the new rules, said the delay would permit legislators to press ahead with new legislation that would largely overturn the widely criticized Unlawful Internet Gambling Enforcement Act, passed in 2006. </p> <p> That law, which rode to passage with little discussion when tacked onto another bill, essentially banned U.S.-based firms from conducting or assisting online gambling operations. In practice, credit card accounts are the financial vehicles used most often by gamblers to place their bets, pay their losses and collect their winnings. </p> <p> The bill generally prohibited transfers of money from U.S. financial institutions to gambling sites, but it required banks and credit card networks to navigate a thicket of confusing and often contradictory definitions and rules. Among other things, it never got around to defining the term "illegal Internet gambling." </p> <p> <strong>'Midnight regulations' criticized</strong><br />"The Department of the Treasury and the Federal Reserve Board of Governors deserve a great deal of credit for suspending these midnight regulations promulgated by the Bush administration, which would curtail the freedom of Americans to use the internet as they choose and which would pose unrealistic burdens on the entire financial community," Frank said in response to Friday's action. </p> <p> "This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law," he said. </p> <p> Frank's bill, called the Internet Gambling Regulation, Consumer Protection and Enforcement Act, would establish a federal framework under which Internet gambling operators could obtain licenses to accept bets from residents of the United States. </p> <p> His bill mandates thorough investigations of potential licensees and it requires technological barriers to deter underage gambling, fraud, money laundering and tax avoidance. </p> <p> Quite a lot of money is at stake. Even amid all the controversy, Internet gambling remains a $10 billion-$12 billion per year industry in the United States, according to Congressional testimony and various industry experts. </p> <p> <strong>Banks also seek delay<br /></strong>In announcing the delay Friday, the federal agencies said they were acting in response to requests from Frank, as well as from Wells Fargo, the American Bankers Association, the Credit Union National Association and a wide range of groups associated with the gambling industry. </p> <p> "The agencies acknowledge some of the challenges regulated entities are experiencing with the act's definition of 'unlawful Internet gambling," the Federal Reserve and the Treasury Department said in a joint statement. "Moreover ..., several members of Congress have indicated interest in revising the Act. </p> <p> "The agencies are thus persuaded that a limited extension of the compliance date for regulated entities is appropriate," the statement said. </p> <p> The action was cheered by a variety of gambling interests, including the Poker Players Alliance, a group that claims more than 1 million members and has lobbied hard to overturn the Unlawful Internet Gambling Enforcement Act. </p> <p> "This is a great victory for poker, but an even greater victory for advocates of good and fair public policy," said Alfonse D'Amato, the group's president and a former U.S. senator from New York in a <a href="http://www.scribd.com/doc/23251617/Press-Release-Fed-Treasury-Accept-PPA-Request-to-Delay-UIGEA-11-27-09" target="_blank">release</a>. "These additional months are critical to provide legislators time to clarify UIGEA and pass legislation to license and regulate poker early next year. It is our hope that another extension would be granted should the [June 1] deadline approach before these pieces of legislation can be passed." </p> <table width="270" align="right"> <tbody> <tr> <td> <div class="quoteright"> <p> Simply delaying the compliance date serves no interest except that of the Internet gambling enterprises that have long evaded American gambling laws ... </p> </div> </td> </tr> <tr> <td style="font-size: 9px; line-height: 10px; font-style: italic;" align="right">-- Rep. Spencer Bachus, Sen. Jon Kyl<br /> Proponents of Internet gambling ban</td> </tr> </tbody> </table> <p> Some Republican lawmakers, however, were less pleased. They sponsored the 2006 law and have consistently defended it. </p> <p> "Simply delaying the compliance date serves no interest except that of the Internet gambling enterprises that have long evaded American gambling laws and will continue to do so until effective enforcement is in place," Rep. Spencer Bachus, R-Ala., and Sen. Jon Kyl, R-Ariz., said earlier this month in a letter to Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke. </p>Canhhttp://www.blogger.com/profile/13795932879300882863noreply@blogger.com