Posts Tagged ‘credit cards’

If you’re into social gaming, there’s a new form of payment for the variety of virtual goods available in many online games: Kwedit.

The Concept

Here’s how it works. Gamers create a Kwedit account, complete with a Kwedit score. Just as in real life, the score enables them to take on debt. However, in this case it is virtual debt, established by purchasing “items” online such as enhanced abilities for their characters. Upon purchase, the user agrees to pay a certain amount of real money within a few days. Money can be paid through the mail, or users can print out a bar code that can be scanned and paid for at 7-Eleven convenience stores. If a user is unable to make a Kwedit payment, they can opt for the “pass the duck” option, where the user asks a friend or family member to make the payment on their behalf.

With more completed purchases, the user’s Kwedit score goes up. Conversely, if a user simply looks at this as a great opportunity for stealing virtual products and doesn’t make good on their Kwedit promise, that user’s Kwedit score goes down. In that case, the user will find it harder and harder (just as in real life) to take on debt in the online gaming world.

So, what’s in it for game designers looking for a payout? Kwedit does actually encourage gamers to keep up a high Kwedit score if they want to continue using the system. It is also a payment system for users (especially young users) who may not have a credit card or other online payment system available to them. And if those users end up not paying? Likely not a big deal, since the goods purchased were virtual anyway, so no money is actually lost in that instance.

The Kwitic

Kwedit was recently skewered on the Colbert Report. To defend themselves, the company removed its duck mascot Kwedie and the CEO posted a response on the site’s blog.

Will Kwedit become the new PayPal? Probably not. For one, it deals strictly with the virtual world, hence the ability to easily buy now but pay later (or skip payment altogether). Because of this, it doesn’t scale well to a real world application. But for younger computer users looking to experience what earning an actual credit rating is like, and the effects of poor credit management, it may indeed be a popular choice. However on March 3rd, 2010, Kwedit received $3.3 million in a second round of financing led by Maveron.

Currently, games powered by Social Gold accept Kwedit payments, including FooPets, Puzzle Pirates, Greenpatch, Tetris Friends, Island Paradise and hundreds more.

Eric Fleming

If you are trying to reduce your credit card debt, you may be tempted to start cutting up your credit cards. However, this is not the best option for properly closing a credit card account. To begin with, there may be unaccounted for charges on your credit card. Left unpaid, these can result in late fees and even collection agency notices. Such oversights are not only costly but may also negatively impact your credit score.

How, then, do you properly close a credit card account? Here are 10 simple steps to ensure the smoothest account closing possible.

1. Assess the costs and benefits of your current credit cards. Which cards have the highest APRs, fees and other costs? Do any cards offer benefits such as cash back or airline miles? Close those credit cards that are the least beneficial or the most expensive to maintain.

2. Pay off your balance in full. Do not continue using that credit card just because it is now “clean.”

3. Wait at least one billing cycle after you pay off your credit card before you close it. When the next billing cycle starts, check your credit card statement to make sure that the balance is indeed zero. Sometimes there may be leftover charges, interest and fees that still need to be paid off.

4. Obtain the customer service phone number and mailing address of the credit card issuer. This information is usually printed on your billing statement.

5. Make the call. Most credit card companies require that you call them to cancel a credit card. Set aside at least 20 minutes to properly cancel your credit card.

6. Maintain your resolve. The credit card customer service representative may try to dissuade you from closing your account. You may be offered a lower interest rate, additional rewards, etc. If the only reason you are closing your credit card is because of its high interest rate, you could use this occasion to negotiate better terms.

7. Obtain written confirmation. Request that the credit card issuer send you written (or e-mailed) notification of your cancellation. Also obtain the name of the agent you spoke with and a cancellation number.

8. Define the reason for the cancellation. Request that your credit report state that the credit card account was “closed at the consumer’s request.” Some agents may not input the correct reason for your credit card’s cancellation, resulting in your credit report stating that a credit card was closed at the issuer’s request.

9. Check your credit report. Once a month has passed, obtain a copy of your credit report. Look over the portion of the credit report that mentions your closed credit card. Make sure all information regarding this credit card is correct, and that the card has indeed been canceled.

10. Keep records. Maintain a file with the contact information of the credit card issuer, a copy of the final payment made on the balance, and the cancellation notice from the credit card issuer. Such information will be vital in case of future discrepancies.

If you feel that you’ve done everything necessary, yet the account remains open, the Federal Reserve can help mediate your particular situation.

Hally Z.

Did you know that you can pay your tax bill with a credit card? Here are some benefits to doing so.

Convenience. Imagine this: It’s April 15, 3 p.m. There’s no way you can make it to the post office in time. You don’t get paid until April 25 and you don’t have enough money in your account to cover your payment. What do you do? Don’t write the government a bad check — that’s illegal. Instead, pay your taxes online with a credit card.

Safe and secure. Worried that Uncle Sam will wipe out your credit card? Don’t sweat it. The IRS uses third-party service providers that store your credit card information on secure servers. The IRS never finds out your account numbers, so you can rest easy.

Earn rewards. Paying your tax bill is a great way to earn rewards. Whether you have a cash-back credit card, a credit card that pays down your mortgage or earns airline miles, you can rack up the benefits and pay a critical bill at the same time.

Confirmation number. When you pay your taxes with a credit card, you will be given a confirmation number. This confirmation number will allow you to show that you did indeed pay your tax bill should a dispute arise. This is extremely useful.

Paying taxes isn’t the highlight of anyone’s year. However, paying your tax bill with a credit card is an easy way to make sure that your debt to Uncle Sam is paid on time. In addition, you will have a confirmation number to show that you did pay your bill and you will even earn rewards through your credit card company.

Meg G.

You already share your mood status and your thoughts on current events on sites such as Twitter and Facebook, so why not share your latest credit card purchases, too? That’s what Blippy.com is helping people do. The service offers a real-time snapshot of what people are buying, where they’re buying from, and how much they’re spending.

Shoppers can now link their credit and debit card accounts to their Blippy.com account. The site automatically updates each time a purchase is made from online merchants including Blockbuster, Netflix, Amazon.com and the iTunes store. Blippy.com has tracked more than $4.5 million dollars in transactions to date and reports that the average purchase amount of its 5,000 users is just over $40 per purchase.

Blippy describes itself as a “fun and easy way to see and discuss the things people are buying.” There are currently 16 stores listed on the site but users are encouraged to recommend a store they don’t see on the list.

Yet why would people want to share what they’re buying at any given moment? One benefit of joining Blippy is that the public time line of posts will give friends and followers a chance to see what the current price is for certain products from their favorite merchants. Blippy users can essentially compare purchasing notes with the world, and perhaps make more informed decisions about their next purchase.

People can also connect with other savvy shoppers with similar interests. Users sign into the service using their Facebook or Twitter accounts and handles, can leave comments on other users’ purchases, and they can indicate whether they “like” a certain buyer’s activity. Blippy is a live, interactive display of buyer habits across some of the most popular Web merchants, and ultimately creates an online shopping community with very specific price information.

Blippy assures users that all consumer credit card information and identifying information is confidential and takes security measures to make sure account information doesn’t enter the community in any way. As the site moves out of beta testing, more people will be able to participate in this emerging community to post their thoughts about friends’ purchases and send out updates about their own.

Sabah Karimi

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

If you are drowning in credit card debt, or have collection agencies calling you at work and at home, it’s understandable if you feel overwhelmed right now. However, you can get your credit card debt under control, eliminate it, and show the credit card companies that you can handle credit responsibly. Here are some useful tips for getting out of credit card debt for good.

Work with the credit card issuer

If you sense that you won’t be able to make next month’s credit card payment, proactively contact the credit card issuer yourself. Explain your situation to the company and ask for a lower monthly payment, a lower interest rate, or both. Most credit card companies are reluctant to resort to a collection agency to collect on their debts, since this results in your debt being sold to an outside agency for pennies on the dollar.

Pay more than the minimum

If you ever hope to reduce and eventually eliminate your credit card debt, you must pay more than the credit card’s minimum monthly payment. Even if the additional amount is only $100, every little bit of extra cash helps you on your journey to getting out of debt.

Transfer your balances

Many banks and companies offer zero or low annual percentage rate (APR) balance transfer credit cards to new credit card holders as a promotional incentive. Usually, balances from other credit cards can be transferred to these new cards. If you are able to obtain such a card, transfer as much of your high-interest credit card debt to it as you can. Then, try to pay off this debt before the promotional period ends.

Use only cash

Once you start paying off your credit cards, it is easy to fall back into the routine of using them to make purchases. If you do this, you will never be able to reduce your credit card debt. The solution is to use only cash when you make purchases. Using cash also makes you more aware of how much money you are actually spending on various items.

Once a credit card is paid off, destroy it

It is very tempting to go back to using credit cards that are no longer “maxed out,” especially if the cards have a very high spending limit. Once a credit card is fully paid off, destroy it. This will prevent you from sabotaging your own efforts to stay out of debt.

Keep one or two credit cards

Credit cards do make certain purchases easier (e.g., hotel reservations); however, there is no reason why you should keep five or more credit cards. One or two low-interest credit cards should be sufficient; the rest should be destroyed or made unavailable (e.g., placed in a safe deposit box) for use only in an emergency.

File for bankruptcy

If you simply cannot reduce your credit card debt by cutting back on purchases and even taking on an extra job, the best resort may be to file for bankruptcy. Granted, your credit will be ruined for seven years, but you’ll be able to start fresh. This may be your best option if you see no other way to pay off your credit card debt, or your credit card issuers refuse to consider a mutually beneficial debt payment plan.

Hally Z.

There are many ways you can get a credit card, even if you have bad credit.

Open checking and savings accounts. When you’re starting on the long road to obtaining credit cards, you will want to begin in a very obvious place: your local bank. Open a checking account and keep it in good standing. Add a savings account at the same bank, even if you only keep $10 or $20 in it.

Place utilities in your name. When possible, transfer some household utilities to your name including the cable and electric bills. Having a phone in your name is also beneficial for your credit score and report.

Comparison shop. Shop around for the best interest rate and terms before applying for a credit card. Do not cast a wide net and apply for multiple credit cards at once in hopes that one will bite. Instead, compare each credit card’s annual percentage rate (APR), up-front fees, rewards programs or cash back bonuses, as well as convenience of payment methods. Also be aware of:

• APRs: The U.S. Federal Reserve Board advises consumers to pay attention to the different APR terms of each credit card, as credit cards sometimes offer an introductory APR that will increase after a designated length of time.
• Low credit limits: Look for a card with a low credit limit or one that is within your monthly budget. You want to be able to pay off the entire balance each month before the due date. When you have bad credit, you may not be offered a high credit limit in the beginning anyway.

Gas cards. Set achievable credit card goals when you have bad credit; apply for a gas station credit card with the Visa or MasterCard logo. Gas credit card limits are typically set low in the beginning and they come with some sweet cash-back reward deals.

Department store credit cards. Department store credit cards may be easier to get when you have both bad credit and steady employment. Apply for a department store credit card when it has a special such as a 10 percent discount on your first purchase made with the card. Spend no more than you can afford to pay off when the credit card bill comes.

Bank credit cards. After you’ve shown financial responsibility by paying off your gas card or department store card bills on time, apply for a bank credit card such as a Visa, Discover, American Express or MasterCard. Be aware that with bad credit, the initial interest rate may be high, but you should be paying off the balance monthly and avoiding the interest rate anyway. If you have no luck with a bank credit card, consider a secured credit card, or have a family member co-sign the credit card application.

Pam Gaulin

Identity theft has become so widespread, the Federal Trade Commission estimates that up to 9 million people in the United States have their identities stolen each year.

Here are 10 facts about identity theft that may help prevent you from falling victim to this widespread crime.

1. You should frequently review your credit reports and credit card statements

Identity theft can go far beyond somebody getting your credit card number and running up purchases at the mall. A perpetrator may rent an apartment in a victim’s name or establish a telephone account. Checking your own financial information is a good way to spot this behavior.

2. Identity theft can have widespread consequences

Identity theft sometimes is quickly resolved, but many victims must spend hundreds of dollars and invest hundreds of hours to restore their good names and their good credit records. Victims have missed out on job prospects, school loans and mortgages.

3. Perpetrators of identity theft use various strategies

Individuals can protect themselves by shredding all personal documents including credit card applications that come through the mail. Also keep a close eye on store employees as they process your purchases. Law enforcement statistics indicate that nearly half of all identity theft is undertaken by somebody who is acquainted with the victim.

4. Even when somebody employs maximum precautions, identity theft still may occur

Some identity theft perpetrators open credit cards with a change of address, which adds to the time before the victim discovers that identity theft has taken place.

5. Government document fraud also is widespread

An identity theft criminal may obtain a driver’s license or official I.D. card with the victim’s name but with their own photo, or use a Social Security number to obtain government benefits, or even file a fraudulent tax return with the victim’s information.

6. If victimized, take the appropriate steps right away

File a police report and retain a copy, notify creditors and dispute any transactions that you did not authorize. The Federal Trade Commission’s identity theft Web site allows you to file a complaint online.

7. Contact the three major credit reporting agencies if you are victimized

These are:

• TransUnion - www.transunion.com
• Equifax - www.equifax.com
• Experian - www.experian.com

8. Place an extended fraud alert on your credit reports

This step not only discourages further fraud, but also may help authorities identify the criminal. You only need to contact one of the three major credit reporting agencies, which then are required by law to inform the other two. Each agency also is required to send you a copy of your credit report.

9. Close all accounts that have been raided or opened by fraud

Be sure to create new passwords and PINs. These new numbers and passwords should be original. For example, it’s not a good idea to use the final four digits of a Social Security number as a PIN.

10. Keep the FTC’s identity theft hotline number with you

Call the FTC toll free at (877) ID-THEFT (438-4338).

Michael Thompson

Most people know that credit history is important for obtaining loans, finding a job and applying for a credit card, but do you know why your credit report is important? This single aspect of your life can have an enormous impact on your finances, so it is essential to understand how to build a better credit report.

Why Should I Build a Better Credit Report?

When you build a better credit report, you will likely save money and enjoy a more secure financial future. Each time you apply for a credit card or a loan, the lender will access your credit history to determine what kind of risk you pose as a borrower. A better credit report will result in better terms for your loan or line of credit.

This means lower interest rates, fewer fees, better chances for approval and improved terms. A better credit report often results in your ability to take advantage of lender promotions such as zero-percent financing for a specified term.

What is the Fair Credit Reporting Act?

One of the most important things you need to know when building a better credit report is how the Fair Credit Reporting Act affects your financial life.

The FCRA determines your rights as a consumer and the requirements of credit reporting agencies. Under the FCRA, you have the right to access your credit report and to know when lenders, employers and other entities have used information in your report against you (denying your loan application, for example). You also have the right to dispute any information you believe is inaccurate and to choose who has access to your report, and when. Knowing your rights and the requirements of the credit reporting agencies can help you build a better credit report faster.

How can I Improve my Credit Report?

The only way to build a better credit report is to practice positive financial habits. This means paying bills on time, carrying as little debt as possible, maintaining good relationships with creditors and living within your means. Just because you have access to credit does not mean you should use it.

Having a credit card (or several), for example, can help your credit report, but carrying a hefty balance on all the cards in your wallet can hurt it. This is why many consumers choose to pay off their balances each month, which also saves you from paying interest and fees on the money you borrow.

Too many inquiries on your credit report can be detrimental, so you don’t want to apply for 10 credit cards at once. Keep your applications to a minimum and spread them out so they don’t all hit your report simultaneously. Similarly, avoid applying for multiple loans at the same time.

You will also notice that building a better credit report is easier as you get older. One of the factors that impacts your credit score is the longevity of your credit history; the presiding wisdom dictates that mature consumers are less likely to act irresponsibly with credit.

Finally, dispute any inaccurate statements on your credit history immediately. Building a better credit report is impossible if you don’t know what the report contains, so take advantage of the annual free report that the agencies — Experian, Equifax and TransUnion — provide. If something seems inaccurate, file a written dispute so it can be investigated.

How Long Will it Take to Build a Better Credit Report?

The length of time required to build a better credit report depends on your situation. For example, it might take less time for a young consumer to develop a credit history from scratch than for an older consumer to repair negative accounts on a credit history.

Most negative information on your credit report will be there for about seven years, though some delinquencies and defaults can remain for much longer. However, increasing your positive payment history can reduce the impact of a bankruptcy or defaulted credit card, so don’t give up.

Steve Thompson

Twitter creator Jack Dorsey may have just revolutionized the credit card industry with a piece of plastic the size of a sugar cube. Called Square, the little device will soon allow anyone — not just businesses — to accept credit card payments on their Apple iPhone or other mobile device.

How it Works

Square works by plugging into your mobile device’s audio-in jack. Run a customer’s credit card through Square’s card reader and it uploads the credit card information to a central database for approval. Receipts can be emailed to customers instantly.

Currently there are only 100 or so Squares in existence, as the company is running a pilot program for the service in Los Angeles, San Francisco, St. Louis and New York. But as Square (the company) starts to ramp up operations, these little plastic devices may soon become ubiquitous, as the limits on accepting credit cards quickly fall away. Most paradigm changing of all: Merchant accounts are completely unnecessary with Square.

Why it Matters

There are certain advantages Square has over the traditional credit card swipe machines and the very infrastructure of credit card administration today.

1. Square is simple to use. All you need at the moment is an iPhone, though soon the Square will work on several mobile communication devices. To use Square to accept a credit card payment, all the merchant or private citizen needs to do is swipe the card and input the dollar amount. The software does the rest, sending the information to the secure Square Web site, which processes the transaction.

2. Square is secure. No information is ever stored on the iPhone, and all data that is transmitted from the iPhone to the Square Web site is heavily encrypted.

3. Square is inexpensive. Even factoring in the cost of the iPhone, vendors will still come out ahead when compared with the cost of credit card swipe machines and credit card merchant accounts. With Square, the device itself is free, while the software may have a minimal cost of around $1. Square — the company — makes its business profitable by taking a small percentage of each transaction.

4. Square is for everyone, not just merchants. Dorsey envisions not only retail outlets, but also individuals using the Square for payments. Owe a friend money? Just enter the information into Square, and the money is on its way. It is also perfect for mobile vendors such as roadside stall keepers, farmers markets and other businesses where a wireless credit card terminal would be too much of an added expense and a traditional credit card terminal impractical.

Square makes everyone capable of accepting credit card payments, and makes it fast, simple, secure and inexpensive while it’s at it.

Eric Fleming