Tame Your Credit Card Interest With Transfers

Paying down debt is one of the best steps consumers can take to get through a recession.

What's on your credit card is one of the most important types of debt to rein in. One way to get control over multiple cards with varying balances and interest rates is to transfer your balances to a new card with a lower rate. In fact, many cards advertise balance transfer rates as low as 0% for a set period, which is an appealing alternative to the annual interest rates of 15% or more.

But as is often the case with credit cards, the devil is in the details. If you are planning on a balance transfer to solve your revolving debt issues, here are a few things to consider.

Teaser rates don't last: Thanks to the Federal Truth in Lending Act, credit card companies are required to outline the card's fees and rates in a table called the Schumer Box. While the information has to be present in the table, it can be confusing, given the myriad of rates and percentages included in the summary. When you locate the table (often found under the "Pricing and Terms" section of the card's introductory materials), find the section that describes the balance transfer APR (annual percentage rate). There will be a number of rates listed, one of which is the 0% APR (or other low rate) that first caught your eye. That rate is the teaser rate, and it can last for just a few months or more than a year. After that introductory period, your rate will automatically switch to the card's higher regular rate.

source : http://www.thestreet.com

Credit Card Defaults Rising, Banks Say

NEW YORK, NY — (OfficialWire) — 10/16/08 — Credit card defaults are rising among U.S. consumers in an already tightening credit environment, various banks said.

J.P. Morgan Chase OTCPK:JPMZP said credit card account defaults rose 45 percent in the third quarter compared with the same period a year ago. The bank predicted 7 percent of their credit card loans would be in default in 2009, The Washington Post reported Thursday.

Capital One, also expects credit card defaults to reach 7 percent next year. In September, 6.34 percent of their credit cards accounts went into default, up from 5.96 percent in August.

The data points to a national spending habit that has U.S. credit card holders living beyond their means.

"Given that the savings rate has been minuscule, there are no reserves in the tank for the consumer to tap his savings to support his spending," Scott Valentin, a financial services analyst at Friedman Billings Ramsey told the Post.

Credit card debt has risen 75 percent in the past 10 years, while U.S. wages and savings rates have stayed flat, the Post reported.

source : http://www.officialwire.com

Toyota to Offer Rewards Credit Card With Points Redeemable at Toyota Dealers

Following years of American tradition, Toyota Financial Services is rolling out its own credit card, the Toyota Rewards Visa, which gives cardholders points they can use towards repairing their current Toyota or buying or leasing a new one.

For every dollar charged to your Toyota Rewards Visa card, you'll get one point. For every dollar you charge on the card at a Toyota dealership, you'll get five points. Toyota doesn't mention in any of its ads how much a point is worth, so we went to www.toyotarewardsvisa.com and used the online points calculator to find out. According to the calculator (and Toyota's Terms and Agreements), 100 points is worth $1 at a participating dealership. That means you'll have to spend $25 at a dealership or $100 elsewhere in order to save $1 on your next Toyota-related purchase, making the dealership points worth 25 cents and regular points worth one cent.

While that's not much, if you use your card a lot and your Toyota only ever needs to go to the dealer for routine maintenance, you could get some real savings out of the card. If Toyota allows you to collect points by charging maintenance on your Toyota car or truck to the card, you may be able to earn a large number of points towards your next visit, but we're not sure if that's the case, nor are we sure if the points can be combined with other offers. Regardless of how you earn the points, they can be used towards maintenance and repairs, Toyota accessories, buying or leasing a new Toyota or buying a used Toyota.

The card also comes with several standard incentives, such as a 0% introductory APR for the first six months. After that, Signature cardholders will pay 11.75% per month while Platinum cardholders will pay 11.75% to 16.99% per month. Your APR will be determined by your credit history. You get 2500 bonus points ($25 at the dealership) on your first purchase, and there is no annual fee and no limit to the number of points you can earn. Points cannot be turned into cash, so you have to use them with Toyota and they expire after December 31st on the sixth year from when they were earned.

source : http://wot.motortrend.com

Credit cards, credit crunch: consumers feel pinch as issuers `go on the defense'

Consumers are not just having a tougher time obtaining auto loans and mortgages. The credit crunch and weak economy also are taking a toll on credit cards.

Perhaps you have noticed that you're receiving fewer offers for credit cards in the mail. If you have iffy credit, you might find it difficult to qualify for a card now. Or you may be able to obtain one only at a high interest rate.

Even if you're not shopping for a new card, you might not be immune from the changes. Your card company might reduce your credit limit or cancel a card you don't use.

"When the economy is contracting, when unemployment and default rates are on the rise, card issuers--as well as other lenders--go on the defense," said Greg McBride, senior financial analyst with Bankrate.com
"Cardholders are on a shorter leash."

Credit card companies have been tightening their standards for more than a year as the economy soured and the chance rose that customers wouldn't be able to keep up with payments. Issuers are unlikely to loosen up until the economy significantly improves.

That might be some time. If you are having trouble getting a card, or one with favorable terms, you should start taking the financial steps that over time will make you appear less of a risk to card companies.

Customers with stellar credit, of course, will still receive a bump up in credit lines and favorable interest rates--even in this environment. But which customers are considered desirable has been evolving during the past year and a half.

It used to be if you had a FICO credit score of at least 700, among other factors, you had no trouble obtaining a card, said John Ulzheimer, president of consumer education for Credit.com. Now, you need a score of 720 or higher, which more than half of American consumers do, he said.

"We have seen some situations where 780 is the target score," Ulzheimer says. Only 17 percent of U.S. consumers score that high or greater, he said.

Credit card issuers say they have always monitored accounts but acknowledge they've stepped up their efforts.

At Bank of America, more card applications are undergoing an extra review by credit specialists, said spokeswoman Betty Riess. The bank also is taking a more aggressive look at existing accounts and will lower a credit limit if a customer has become a higher risk, she said.

Card experts say other issuers also have closed unused accounts that cost them money to keep open.

Reductions in credit limits can be sharp, said Curtis Arnold, founder of CardRatings.com. Some card issuers have cut credit limits near the level of the customer's balance, putting the customer at risk of going over their limit and getting hit with a fee as high as $39, he said.

Arnold says he also has noticed that card issuers in the past few months have become more tightfisted in other ways.

source : http://www.newsday.com

Trio accused of using credit card stolen from hospital room

Two men and a woman were charged with burglary and three counts of identity theft Thursday for allegedly sneaking into the hospital room of new parents and stealing the father's backpack, then using the credit cards they found to charge items at various places in Madison.

Scheduled to appear in court later this month are Jawan L. Clash, 26, of Fitchburg, Arlena R. Lee, 19, of Madison, and Davarius L. McDonald, 23, of Madison. Because Clash and Lee have been previously convicted of crimes, they face a grand total of 51 years of prison and extended supervision if convicted, while McDonald faces a maximum of 33 years.

According to the criminal complaint filed Thursday, the trio went into Meriter Hospital through an emergency room entrance shortly before 1 a.m. on Sept. 20. Security video footage shows them checking out several rooms as they went floor to floor, finally stopping outside a fourth-floor room.

Clash went into the room, which was occupied by a woman who had given birth on Sept. 19, her newborn daughter, and her husband, all of whom were asleep at the time.

With McDonald and Lee acting as lookouts, the complaint says, Clash came out of the room and handed something to Lee, then went back in. Both McDonald and Lee were looking into the room, but also looking back toward a security camera, the complaint says.

Clash is then seen coming out of the room with a dark backpack over his shoulder, and all three leave the hospital quickly, the complaint says, with Clash still toting the backpack.

A Madison police officer who had arrested all three for retail theft in July recognized them on the hospital video, and they turned out to appear again on security video from Sept. 20 at The Buckle at West Towne, where they used the dad's credit card to buy $430 worth of merchandise.

They also used the credit card and cash found in the backpack at three places early Sept. 20, including two charges at a Mobile station and a charge at 2:32 a.m. at Selective Video, a porn shop on the Beltline.

Starting at about 10:30 a.m. that same day, they used the card at several other stores and convenience stores, with the major purchases being at Journeys Shoes at West Towne for $253 and at the Buckle.

News Source : http://www.madison.com/