Posts Tagged ‘credit card regulation’

Everyone is familiar with the credit card advertisements people receive in the mail, but direct mail marketing has declined in response to the struggling economic climate.

However, according to DM News, credit card issuers have ramped-up their direct mail marketing efforts recently. They are now sending out more advertisements to consumers, raising awareness about new cards and renewing interest in their popular cards.

The total amount of direct marketing sent out by all banks rose 47 percent between the third and fourth quarters of 2009, which is a significant change in only a few months. Chase led the pack by increasing its efforts by 87 percent.

Banks are becoming more optimistic about the future of the U.S. economy, and are once again encouraging consumers to take advantage of credit card offers. DM News reports that banks sent out far more direct mail before the recession hit, but a steady climb could bode well for the credit card industry.

Of course, credit card offers sent through direct mail might not be as enticing as they once were. Annual fees, shorter grace periods and higher interest rates are still common among current terms. It is important for consumers to pay attention and to make smart decisions about which credit cards they decide to obtain.

New changes to the CARD Act of 2009 will take effect in February, which might have an impact on direct mail marketing by credit card issuers. Banks will be keeping tabs on delinquencies and monitoring consumer activity to determine where they should take their efforts from here.

Staying abreast of credit card news and paying attention to direct mail advertisements will help you make effective decisions about your finances. If this trend continues, it could mean that card terms will steadily become more favorable as well.

Steve Thompson

Have you ever tried to read a piece of legislation only to ask yourself, “What the heck did that even mean?” Official decrees from Washington are notoriously verbose at the best of times. The latest credit card bill, the Credit CARD Act of 2009, is no different. Fortunately, the kind folks at CreditCards.com have created a far more user-friendly guide to understanding just what the credit card bill is all about.

The Credit CARD Act of 2009 multimedia guide breaks down each title, section and legislative reference into digestible chunks just about anyone can understand. The guide also allows credit card holders to find the sections that apply to them directly through an easily navigable list of subtopics.

A multimedia breakdown of the Credit CARD Act of 2009 is ideal for this credit card bill because, let’s face it, the same text pasted into a PDF document would be almost as difficult to wade through as the legislation itself. By designing the guide with clickable links and breaking down the text into terms, quotes from politicians and even links to related stories, the site ensures that consumers will not be overwhelmed by impenetrable text. Even better, CreditCards.com has also included the original text of the Credit CARD Act of 2009, so those who believe in thorough research will be able to relate the simplified information to the transcript of the law.

Credit CARD Act of 2009 Multimedia Guide: A Closer Look

The major sections of the credit card bill are broken down into five simple headings:

• Rates, terms and fees
• Youth and credit
• Disclosure
• Studies
• Other

Each of these is further divided into numerous subheadings to help you navigate the text.

Many are unfamiliar with the jargon of the credit card industry — from double-cycle billing to grace periods — terms that the Credit CARD Act of 2009 understandably references frequently throughout its text. Naturally this means many consumers are unable to understand the credit card bill even if they can manage to wade through the wordy transcript. Fortunately, the multimedia breakdown of the Credit CARD Act of 2009 defines all of these terms as you roll your mouse arrow over each one.

This type of legislation affects everyone differently, depending upon spending practices and credit history. This handy tool can help consumers understand the Credit CARD Act of 2009 and, more importantly, comprehend what the credit card bill means for them.

Now, if only someone would do this for every other piece of national and local legislation, perhaps there would be a better understanding of our government throughout our great land.

Steve Thompson

Going to college is the first step towards independence for many young adults. Many attend colleges in their home state, living on their own in dorms or apartments. During these college years a student’s main concern should be on studies and how to pursue a career upon graduation. Unfortunately, rising debt lurks in the shadows for many of these students and when they graduate, the harsh reality of this debt brings puts a tether hold on some of their plans and goals.

College Debt

It used to be that credit card debt was the big culprit for the debt college students had upon graduation. However, with the Credit Card Act of 2009, that debt won’t be a factor. But the debt of college students will still be as high as before and some instances higher. In recent years college students have been borrowing more money than they ever have in the pursuit of higher education. So many students’ borrowing has increased to keep up with the costs of rising tuition.

Tuition Hikes the Main Culprit

There used to be a time when a person entering college fresh out of high school only needed to take out a college loan for a couple of thousand dollars each semester. However, with the cost of tuition rising significantly each year, students are borrowing twice as much just to pay for an education. In fact, college tuition hikes have passed the rate of inflation. According to the College Board, between the years of 1999 to 2000 and 2009 to 2010, college tuition has increased at an average annual rate of 4.9 percent over the general rate of inflation.

Life-Altering Effects of Increased Student Borrowing

Federal Direct and Stafford loans typically give graduates a six-month grace period before they have to begin repaying their loan. However, with the current economic situation and unemployment still high, finding good paying jobs is becoming difficult for some. Even when a decent-paying job comes along, plans such as getting married and purchasing a home are put on the back burner, as graduates find themselves living paycheck to paycheck.

There may not be a way to avoid borrowing for college tuition. However, if college students are made knowledgeable about how student loans affect their lives after college, they can be better prepared to handle the debt. Financial education on debt and borrowing can benefit students a great deal and help them develop a plan to handle the debt college tuition helped them to accrue.

ShawnTe Pierce

The U.S. Census Bureau claims there are roughly 1.5 billion credit cards in use across the nation, which translates to an average of eight credit cards per American adult. At the same time, a company that advises the credit card industry, R.K. Hammer, reports that Americans annually pay more than $20 billion in credit card fees. Perhaps it is no wonder that 41 percent of U.S. adults told the National Foundation for Credit Counseling that they grade their knowledge of personal finance at “C,” “D” or “F.”

Knowledge is power. Here, then, are 10 credit card industry facts that may help you better deal with the world of credit cards.

1. Beware of the “universal default clause”

Just one late payment on any credit card can prompt the entire credit card industry to raise your interest rates on all of your cards.

2. Identity theft

A plague upon the credit card industry and personal finance in general, identity theft is described by federal authorities as America’s fastest-growing source of crime. Monthly reviews of credit card statements and credit reports are the best ways to combat identity theft.

3. Credit card offers can lead to identity theft

A typical household receives several credit card offers per year. The trouble is that if the household doesn’t shred these offers, identity theft criminals can obtain vital personal information and open credit card accounts in your name.

4. Maintain that credit score

The magic number for your credit score is above 600. Go below that and you likely will face severe credit limits and high interest rates.

5. Make some noise

The fact that you may receive multiple pitches from the credit card industry, even if your credit score is below 600, reflects the fierce competition between companies. Call the credit card companies and ask to speak to supervisors for the lowest interest rates, and even negotiate for consolidation of credit card debt. The same determination on the phone can help if you believe an unwarranted late fee or penalty has been assessed.

6. Watch those gas stations

Folks seem to run into all sorts of problems when they use credit cards at gasoline pumps. First, if you don’t have a minimum of $50 remaining on your limit, your purchase attempt may be rejected. Gasoline stations may also be slow to record your transaction. Sometimes it’s best to simply pay with cash.

7. Keep an eye on payment time frames

If a few days are shaved from a payment time frame, such as 25 days instead of 30 days, credit card holders may falsely assume that they’re paying on time, only to run into a costly late fee and all of the accompanying troubles.

8. Minimum monthly payments will cost you dearly

Minimum monthly payments often consist of little more than interest on the lump sum. The laptop you purchased for $300 could end up costing $1,000 or more if you’re paying the minimum monthly payment. In this sense, credit card purchases can cost even more than rent-to-own arrangements.

9. Shop locally

If you restrict your purchases to within your home state or within 100 miles of your billing address, you will have an easier time disputing charges for unsatisfactory goods or services. Federal law gives credit card companies more rights for purchases made out of state or beyond the 100-mile radius.

10. Sometimes, “big government” actually can work for you

When looking for advice, keep in mind that the Federal Trade Commission monitors trade within the 50 states. There’s even a U.S. Financial Literacy and Education Commission, and local nonprofit credit counseling agencies are abundant.

Michael Thompson