How to avoid major pitfalls with your business credit card

All type of business credit cards are widely accepted worldwide. It is easier to borrow money using a credit card than it is to go borrow from a bank. Cardholders all of a sudden are given large amounts of credit that not every individual can handle. The number one rule to follow is: don’t mix business purchases with personal purchases. Also, be sure to pay your bill on time every month. According to American Express Gold, they collect $2.9 billion dollars a year in late fines. Late fines cost money and they can increase your interest rates as well.

A very important, and often overlooked rule is to “know your own money limits”. Try to purchase things cash instead of using your credit card. If you do use your credit card, be sure to pay it off at the end of the month. Don’t get caught up in huge debt that you know you will not be able to afford. Do not risk your credit and get caught up a viscous “interest paying “ cycle.

Also never forget to be careful with introductory offers. Many card companies offer interest free periods just to bait you. Once that period is over, rates can exceed 17%. Cash advances are also sometimes very expensive. Before you take out cash from the ATM using your American Express Starwood Preferred Card check to see how much the interest rate for cash advances is going to be. Cash advance interest rates can be more expensive than rates charged for regular purchases.

Remember, try to make the most of your credit card. If you can obtain a low interest rewards card that promises cash back at the gasoline station, why not use it. Small businesses can save a lot of money buy using their rewards correctly. A small construction company can charge materials at the local hardware store and reap the reward benefits at the same time.

Lastly, always use your business credit cards responsibly. Don’t fall into the traps that many people often do. Use your best judgement when deciding whether or not to charge your next purchase on your card. If the items that you are purchasing are not necessities, than pay them with cash or go without. It is very easy to forget that every time you swipe that card, you will actually be incurring debt. Once that debt gets beyond control it becomes a beast to maintain. If you use your card wisely than you are in control, as opposed to the card issuer being in control.

Labels: Amex Starwood Preferred Credit Card, Business Credit Card, business credit cards

How Can a Pre Paid Credit Card Teach Your Teenager Responsibility?

Pre paid credit card are becoming much more popular as society transforms itself completely cashless. The popularity of credit cards and debit cards has influenced our society greatly. Furthermore, advancements in technology make credit card or pre paid cards more practical than ever before. Parents, especially, can take advantage of the many pros that some sort of plastic can offer. Pre paid credit cards are a great way for parents to give their children allowance and monitor behavior at the same time.

As a teenager, I remember the days of going to the mall with my allowance and spending on anything I wanted. Even though my parents told me not to be spending my money on video games, I did anyway. In those days (back in the 1980s) there was really no way of my parents knowing how I am spending my allowance. I could basically do anything I wanted with the money that they gave me. If I was told to do one thing, I would do the complete opposite. Today, parents can monitor their child’s spending habits with ease.

The advent of the internet and computers now make it possible for parents to monitor their children’s behavior. For example, your child tells you he or she is going to the movies and instead goes somewhere else. In the old days when your parents gave you cash, it was possible to take that money and spend it somewhere you were not supposed to. In addition, it was very unlikely that our parents would ever ask for some sort of receipt. However, if your child has a pre paid credit card, you can see exactly where expenditures are coming from and the dates they were made. This makes it much more difficult for a child to lie to about their whereabouts.

In addition, pre paid credit cards will show your child how he or she is spending their allowance. Hardly anyone kept spending detail when I was a teenager. By Friday I had already forgotten how much money I spent at lunch on Monday. Had I been able to access my account online and see where and how my money was being spent, I might have been a better money manager today. Pre paid credit cards will also give your child a sense of responsibility. No longer can your child tell you he or she forgot how they spent their allowance. Online account access will give you an exact detail as to how money is being spent. The ability to monitor your child’s spending will give you peace of mind as well as instill good spending habits in your children.

A pre paid credit card could also get your child out of any sort of money emergency. Your pre paid credit card will allow you to send cash almost in an instant should your teenager be away and need money for an emergency. Pre paid credit cards can be loaded with new funds either online with another credit card or at a participating retailer. Certain pre paid cards will even allow you to go to participating retailers where you can re load the card with cash very easily.

A teenager is much better off using a pre paid credit card as apposed to cash. A pre paid credit card can offer parents peace of mind as well. No longer can your teenager lie about how he or she spent their allowance. Just log into the card issuers online account and get up to date spending stats. This will tell you if your child went to the movies or did something that they were not supposed to do. A pre paid credit card can also help your child in an emergency. Money can be easily transferred into your child’s pre paid credit card account very quickly. No need to go to Western Union or any other money wire courier. Money deposited into a pre paid credit card account is accessible much easier and with less expense. Lastly, a pre paid credit card can help teach your teenager to become a more responsible adult.

Labels: credit card, credit cards, debit cards, pre paid credit card, pre paid credit cards

Payday Loans Defined

A payday loan, sometimes also called a paycheck or payday advance, is a short term emergency loan until your next pay check. Payday loans are sometimes even called cash advances. Cash advance through a payday loan is very different from a credit card. Credit card companies issue a line of credit that allows you to withdraw a pre approved amount of cash at your convenience. Payday loans issuers need to approve your cash advance every time you withdraw. The other major difference between s payday loan issuer and credit card issuers is the amount of interest that is charged. Payday loan issuers charge you based on how much you borrow. This amount is usually somewhere between $10 and $20 per every hundred dollars borrowed. Payday loans are very helpful, however, borrowers must use them responsibly.

Payday loans are used for a wide variety of purposes. Payday loans are great for those who do not have a credit card or whose credit cards are maxed out. They can be used to handle minor emergencies such as sudden car repairs or medical bills. For example, if your car breaks down and you need to $500 to fix it, a payday loan might be the only form of credit available to you. Many people need their vehicles to get back and forth between work, especially, in areas where there is limited sources of public transportation. A payday loan might be the only source of funding available to repair your car. This quick emergency loan may provide you the means to fix your car, get to work, and continue to earn money.

Payday loans may be as financially dangerous as they are useful. The amount of interest charged on a payday loan is extremely high. No bank or credit card company will charge as much interest as payday loan issuers. A $15 charge on a $100 2-week payday loan is equivalent to a 390% annual interest rate. There are 26 pay periods in a year. The $15 charge you are paying on $100 is equivalent to 15%. Multiply 26 by 15 and you end up with 390%. That is an exorbitant amount of interest charged. Charges, like interest, will begin to add up quickly if payments are missed. Should you fail to pay your loan in the 2-week allotted time period, your principal will rise. Charges will add up even faster if you miss any payments in between or fail to pay your principal. Therefore, it is very possible for your $100 loan to end up costing $300.

Payday loans are regulated from state to state due to the controversy surrounding the amount of interest lenders charge. In total, there are more than 35 states who regulate payday lending. Essentially, payday loans are regulated in states that limit how much interest can be charged in very small, or micro loans. Payday lenders are permitted to charge unlimited rates in states that do not cap interest charges on small loans.

Payday loans, allow people who otherwise can not borrow through traditional means, such as banks or credit cards, the ability to borrow money. It is very easy to obtain a payday loan. All that is required is a job and a checking account. However, these loans are only intended for a very short period of time only. Payday loans should always be paid on your next payday. Borrowers run the risk of paying very high interest rates should they fail to pay the loan timely. Payday lending is regulated from state to state. Should you wish to inquire about payday lending laws within your specific state, you may refer to online resources such as www.PaydayLoanInfo.org. Lastly, be sure and use payday loans responsibly and sparingly or face the possibility of paying the loan for a long time.

Labels: apply for a payday loan, credit card, credit card issuers, credit cards, payday loan lenders, payday loans

Should Madoff Victims be Bailed Out?

Another sad day on Wall Street today, when 65 year old hedge fund manager Thierry Magon de la Villehuchet was found dead in his Manhattan office of an apart suicide. It is said that Magon de la Villehuchet lost $1.4 billion of investor’s money. This is the extreme example of the type of destruction that Madoff has unleashed upon innocent people. The damages that Madoff has inflicted on his victims will be felt worldwide. As more victims come out, lawsuits are beginning to fly. Everyone wants to blame the SEC and the government for not having done the proper due diligence it should have done to stop Madoff years ago. However, should taxpayer’s be responsible for bailing out the victims of Madoff?

The sad fact of the matter is that many people who had money invested with Madoff were not just the ultra rich. His victims include regular everyday people that had entrusted their nest egg with Madoff. After all, his fund showed returns of 8% to 12% year after year. Madoff’s fund even during the dot com bust of early 2000 showed profits. These types of returns should have raised red flags among savvy investors. The sad fact of the matter was that very few raised questions. People continued to give Madoff more and more money up to the point that they had their entire nest egg with Madoff. These people, although victims, took huge risks when they entrusted their entire life to one individual. However, the lure of constant returns and this man’s supposed stellar reputation, kept investors coming back for more.

Those who invested are also their own victims of greed and complacency. One of the oldest adages known to us is not to keep all of our eggs in one basket. There is a reason for this saying being very true. People entrusted this one individual whose fund was not even registered with the Securities and Exchange Commission. Investors were used to a constant stream of income and adjusted their lifestyles accordingly. The fact of the matter is that no one ever questioned Madoff’s investment practices. More people should have demanded to see what this guy doing with their money.

I heard a very good quote on one of the financial networks today that made a lot sense. People want to be capitalists on the way up and socialists on the way down. This is a very true statement. No one wants government intervention when the economy is thriving. However, as soon as things collapse, everyone starts running to the government. In cases like this, the government can only bare some of the burden. Unfortunately, those who invested with Madoff did so with knowledge and without force. Thousands of people were duped by their own greed and lack of responsibility as well. Taxpayers should not have to bail out individuals who entrusted all of their money with Madoff. If we did than we would have to compensate other victims of fraud; like those who suffered huge losses from the now infamous Enron or World Com. Let the lessons learned from Bernard L. Madoff serve as an example to future investors. If it seams too good to be true, then it probably is.

Labels: Bernard L. Madoff, Madoff scam, Madoff Victims

Credit Card Users Plan to Charge Less in 2009

According to a study by GfK Roper Public Affairs & Media, 32 percent of 1004 people polled responded that they would be using their credit cards less. On the other hand, 50 percent said that they would not change their usage habits. 15 percent said that they would not use their credit cards at all. The remaining 1 percent revealed that they would be using their cards more. The independent poll was conducted December 5 through December 7 of 2008. The following other facts were uncovered during the survey:

1) 72 percent of those polled disagree with the fact that credit card companie should have the right to raise rates and/or change terms for any reason.

2) 71 percent polled believe that credit card companies should be further regulated by the Federal Reserve.

3) 67 percent of individuals do not agree that bail out funds should be used to help people who can not pay off their credit cards.

4) 40 percent of poll participants credit card users find that paying by credit card is far more convenient than paying by cash

5) 19 percent of participants use their credit cards for emergency expenses.

50 percent responded that they would continue to use their credit cards as before. The United States is a credit based society as opposed to other emerging economies like Russia who use cash. The creation of modern credit systems has fueled economic growth in our country for many years. The lack of credit available in this current economic environment has caused significant problems for certain industries. The automakers have suffered deeply due to the current credit crisis. Consumers without funding can not make large purchases like cars. Suffering carmakers like General Motors and Chrysler are finding it very difficult to survive in this environment. The same principles apply to retailers as credit card limits are slashed. Ultimately, it will consumer spending that will get us out of this financial mess.

Those 15 percent who do not plan to use their credit cards reflect a portion of consumers who are suffering from financial problems. These people have perhaps suffered some sort of job loss, loss of savings or plan to save money. Unfortunately, this does not help our economy. It will be up to our next Presidential Administration to create jobs and instill a renewed confidence in the American buyer.

The other portion of the poll suggests that consumers are not happy with the way credit card issuers conduct their business. This should not come as a surprise since over 60,000 people left comments on the Federal Reserve website complaining. Credit card customers are complaining about hair-trigger interest rate hikes. Some customers have seen rates double and even triple. Others have seen their credit limits reduced substantially as well. Credit card issuers will comment on any specific cases, but maintain that this additional revenue is needed to make up for mounting delinquencies.

In all, I believe that most Americans will resume their old spending patterns once the economy recovers. Card issuers will also see defaults decrease once Americans are working again. Current unemployment is at an all time high of almost 7%. An estimated 24,500,000 Americans are without work. This is also a negative factor affecting the credit markets. Regulation of the credit card industry is not by favored by industry insiders at this point. However, more stringent regulations on the credit card industry could prevent what has happened to our fledgling mortgage markets.

Labels: credit card, credit card regulation, credit cards

Choosing the Right Credit Card

Choosing the right credit card in today’s environment can prove to be a challenging task for many consumers. There are literally too many offers to choose from without the right guidelines. Consumers can choose from all types of credit card offers these days. Card issuers are marketing all sorts of credit cards for every occasion. There are all sorts of rewards credit cards, bad credit card offers, business credit cards, low interest credit cards, balance transfer cards and even student credit cards to choose from. Follow these guidelines and you will be sure to find the perfect card to suit your needs.

You credit rating is first thing any potential credit card applicant needs to assess before applying for a credit card. Knowing your credit score will give you insight into what credit card offers you will be able to qualify for. There are many ways to find out your current score. You can purchase credit monitoring software that will notify you on a regular basis your credit score. They will even notify you when your score is downgraded. This is very good information to know in this era of identity theft in which we currently live. You can also contact any one of the three credit bureaus; Equifax, TransUnion and Experian. Their phone numbers are listed on the “Credit Report” section of this website. Knowing your credit rating will give you a realistic idea as to what credit card you should be applying for. If you have bad credit, then you will more than likely qualify for a bad credit card offer then a credit card the requires good credit.

Once you have determined your credit score, you can decide what category of credit card you are looking for. If you are a student, then a credit card geared towards students would best suit your needs. These cards offer college students the ability to build credit history. College students can take advantage of the many card offers available to them. Those who show accountability will be granted larger credit limits as responsible spending habits are demonstrated. Should you have bad credit, you might consider obtaining a secured credit card. Secured credit cards require a deposit in case of cardholder default. As with student credit cards, those responsible card holders will be granted additional privileges as good credit is established.

Narrow down your card choice once you have determined which category of credit card suits you best. Compare the features of about three to five different card offers. Obviously, you want to find one that is going to help you save money. Any credit card can help you save money. It is just a matter of using your credit cards responsibly. Always be on the lookout for interest rates and introductory offers. If you have good credit you will more than likely qualify for a lower interest rate card. However, many credit card companies offer very low interest rates as teaser offers. Once the introductory period is gone, interest rates are increased. Introductory periods usually last only 6 months to a year. These rates can be used to your advantage should you make a large purchase or transfer a balance from another card. Pay the balance within the introductory period and you might even get away with paying 0 interest. Many credit card offers also offer a rewards program based on how much you spend. Choose which credit card offers the best rewards program that suits your lifestyle. Frequent travelers have a variety of cards to choose from that reward spending with airline miles. Use these miles on your next vacation and save money.

In all, choosing the right credit card can be a tough decision without the proper resources. Card issuers bombard us with credit card offers claiming to be the best card. Cardholders can compare credit card features among different cards by using an online resource center such as CreditCardsMadeSimpe.com. Be sure to choose a card category that suits you best. If you are enrolled in a community college with little credit history do not apply for a business credit card. Chances are, you will not get approved. There are student cards available for people just like you. In all, be sure to choose a credit card that will suit your credit rating and lifestyle the best.

Labels: apply for a credit card, bad credit card offers, bad credit credit card, Business Credit Card, business credit cards, choose the right credit card, student credit card, student credit cards

Check out this 30 minute video of Madoff where he tells everyone how difficult it is to to fool regulators.


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Labels: Bernad Madoff, Bernad Madoff Video, Bernard L. Madoff

"Madeoff" Victims are Numerous

The Madoff scandal has affected more people than had originally been anticipated. It was originally thought that 12 to 25 people were going to be affected by the largest Ponzi scheme in modern history. However, a lot more people are being affected than had originally been anticipated. It is said now that the Bernard Madoff scandal has devastated at least 5000 people

Madoff befriended many people and basically made off with all of their money. He is considered to be the most hated individual in New York City. This does not come as a surprise when so many people where involved with this individual. The list of victims is very large. Not all of Madoff’s victims were ultra rich. The Madoff scandal is affecting many people who entrusted their nest eggs with this individual. A stock analyst from Florida has reportedly lost 95% of his $11,000,000 fortune to Bernard L. Madoff. Other institutional investment corporations have also lost billions to the Madoff scandal. Tremont Group Holdings, a hedge fund group, is said to have lost an estimated $7.5 billion. Even large banking entities such as Banco Santader of Spain and the worldwide banking conglomerate HSBC lost an estimated $2.87 billion and $1 billion respectively.

Other victims of the Madoff scandal include many Jewish charities who once gave millions of dollars to worthy causes worldwide. The Carl and Ruth Shapiro Family Foundation is also said to have lost $145,000,000 to Madoff. Carl Shapiro is a 95 year old textile magnate had also invested $400 million of his family fortune with Madoff. He is also said to be one of Madoff’s first investors and the largest. No one was safe from Bernie Madoff. The Fairfield Connecticut town pension fund which protected over 900 workers has also lost $41.9 million invested with Madoff. Too many people trusted Madoff with too much money.

Several charitable foundations that had money invested with Madoff will be forced to shut their doors. The Picower Foundation which supports medical research at universities including The Massachusetts Institute of Technology will be forced to shut its doors. The foundation had assets in excess of $1 billion with Bernard Madoff. Foundation President Barbara Picower stated on Friday that “this act of fraud has had a devastating impact on tens of thousands of lives as well as numerous philanthropic and nonprofit organizations”.

Like many con artists, Bernard Madoff operated completely undetected for years. He was a well trusted individual who had contributed millions of dollars to the same charitable foundations which he ultimately stole from. He has calm demeanor about him that exudes confidence and charisma. However, Mr. Madoff chose to use his natural talents for less than ethical business practices which he used to steel from thousands of people.

The SEC is said to have past up several tips dating back to 1999 that indicated Madoff was running a large Ponzi scheme. He was very friendly with many SEC officers and was called upon to help develop regulations. His niece is also married to an SEC attorney. There are many who wonder what involvement the SEC has had with Madoff. How did so many years of un detection went by without any sort of major formal inquiry into this man’s financial practices. Instead the SEC is out busting Mark Cuban, the owner of the Dallas Mavericks, for supposedly being involved in an insider trading scam where he saved himself $700,000.

Bernard L. Madoff has unfortunately negatively impacted the lives of so many innocent people. He has wiped out many fortunes and put many people in the non profit and philanthropic sectors out of work. Tens of thousands of beneficiaries will also go without the funding that enabled them to operate. Important medical research will loose years of advancement if funding is unavailable. It is unfortunate that individuals such as Bernard Madoff exist in society. Perhaps, society will learn a great lesson from this scandal. The days of wild, wild west financial investments are coming to a screeching halt!

Labels: Bernad Madoff, Madeoff, Madoff Ponzi Scheme, Madoff Victims, Ponzi scheme

Beware of Credit Card Skimming

Credit card skimming is type of financial con that involves someone copying your credit card information from the magnetic strip. Essentially what is happing is that someone is actually cloning your credit card. A skimming device is used to scan your information. The con artist than takes your credit card details and transfers it to another card that has a magnetic strip. For example, someone working as a waiter for a restaurant gets your card to charge your meal. Once the con artist has your card in had they swipe through the skimming device and you have just been robbed. It is also not hard to obtain a card with a magnetic strip. Any swipe card used to gain access to a hotel room or office building will work. Thieves can become very creative when looking for ways to make money.

Should you become a victim of credit card skimming contact your credit card provider immediately. You can call the loss and theft department which is usually open 24 hours a day, 7 days a week. Your credit card company will than take appropriate action. Fortunately, most credit card issuers will not hold the cardholder responsible for unauthorized charges. However, all credit card holders are paying for fraud. Fraud losses are usually anticipated and already figured into your interest rates. In other words, honest people have to cover the costs of dishonest people. This may not be fair for everyone, but unfortunately credit card fraud is fact of modern life.

In all, fraud is very costly for society in general. As consumers we are paying additional fees for all types of fraud. Automobile insurance, health insurance, the mortgage industry and credit cards are examples of industries that are very susceptible to fraud. More often then not, honest citizens are usually the victims of fraud. Should you suspect that you have become a victim of credit card fraud; report it to the authorities right away. Perhaps one day, technology will be able to protect consumers more than it does today.

Labels: credit card, credit card skimming, credit cards, fraud

Discover Financial Services Applies to become Bank Holding Company


The fourth largest U.S. credit card company, Discover Financial Services posted fourth-quarter profits due to a $535 million after tax litigation settlement from Visa and Mastercard. In addition, Discover is applying to become a bank holding company in order to access TARP (Troubled Asset Relief Program) funds.

Credit card companies are taking heavy losses due to current economic conditions. Unemployment is at an all time 15 year high. The rise in unemployment has caused many people to become past due on their credit card bills. In hard times, people tend to give more priority to utility bills and groceries than credit cards.

Despite the profits created from a lawsuit windfall, Discover is faced with heavy losses from bad debt right offs. In 2007 bad debt right offs were at 3.85% and have risen to 5.48% in 2008. In addition, Discover is also experiencing a significant rise in 30-day delinquencies. In 2007 30-day delinquencies were at 3.58% and have gone up to 4.56%.

Discover stock has also taken a beating like most of the financial sector. The 52 week high this year for Discover Financial Services was $19.87. Today DFS stock is trading right under $10. That is a 50% loss in stock value for this year.

Discover was originally the brain child of what was once Sears Financial Networks. During the 1987 stock market crash, Sears Financial Networks was forced to sell off its divisions, including its Discover Card division.

Labels: credit card, credit cards, Discover credit card, Discover Financial Services

The Fed Lowers Interest Rates to Historical Lows

On December 16, 2008 the Federal Reserve announced another major rate cut to the prime interest rate that will significantly lower borrowing costs. The idea is to stimulate the housing market so that the economy will start to churn again. The major force driving our economy into this recession has been the decline in housing prices. Housing prices have not fallen like this since 1932. The most valuable asset that American consumers boast is their house. The decline in the housing industry has created one of the worst economic recessions since The Great Depression.

The deregulation of the mortgage industry created an over inflated housing market that started this recession. Mortgage companies marketed exotic interest only loans, adjustable rate loans and other similar offers to consumers who otherwise would not be able to afford the house they were buying. Home purchases began skyrocketing since mortgages were being almost given away. This created a bubble market and thus housing prices were perceived to be higher due to the increased demand. In addition, more and more people began borrowing against their home equity. The increased home values also loosened up other credit markets like auto loans and credit cards. Consumers began spending based on easy credit and over inflated home values.

The idea behind interest rate cuts is to stimulate the housing market once again. In order to stabilize credit it is going to be imperative to keep home prices from continuing to fall. However, before home prices start to stabilize, home purchases need to increase. The idea is to get consumers to start buying houses once again. First time home buyers can possibly purchase from home owners who are looking to upgrade their living space. This will start a cycle again of people buying homes. The increase in home purchases will stabilize prices and instill confidence in the economy once again.

The other idea behind the rate cut is to allow people to refinance their homes and save money on their monthly payments. A $250,000 mortgage financed at 7% for 30 years will cost approximately $1663 in monthly payments Financed at 4.5% that same $250,000 mortgage will now cost approximately $1266 in monthly payments. That is a savings of almost $400 per month. That is a significant amount, considering $400 a month can buy a new car. Even if you do not need a new car, the savings will give consumers additional disposable income. A more empowered consumer will definitely help improve the economy. The extra $400 a month can also be used to buy clothes, go to the movies, and even take badly needed vacations. As it is, consumers are not spending money and the economy is retracting. The continued retraction of the economy will only hurt the job market more than it already has. In turn, this additional disposable income will begin to start creating jobs again. Businesses will begin to hire again as sales start to increase again, thus causing the economy to recover.

In all, the Federal Reserve is trying to everything it can to stabilize the economy. I agree with CNBC’s Mad Money Jim Cramer that the Fed is finally taking action to help our economy recover. In order for credit markets to start to recoup again home prices need to stabilize. The most valuable asset the most Americans lay claim to is their home. The stabilization of the housing market will bring about confidence in the economy once again. Lastly, the United States has survived the Great Depression, two world wars, Vietnam and even the terrorist attacks of September 11, 2001. With that said, I am quite certain that we will survive the Credit Crisis of 2008.

Labels: credit card, credit cards, economic recesion, interest rates, prime interst rate

Additional Credit Card Regulations Coming Soon

Amidst an economy in turmoil, credit card companies are being forced to face additional regulations that will change the way they do business. Regulators are getting ready to revamp the way credit card companies are able to do operate in the near future. This move comes after thousands of people have complained about unfair lending practices by the credit card industry. These new rules will require the approval of the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration. They are all expected to vote on Thursday. This move will certainly help consumers alleviate some of the financial burdens that they are forced to deal with. Credit card issuers, on the other hand, say this will hurt their ability to lend money.

Many credit card issuers have raised interest rates and/or slashed credit lines due to recent economic conditions. Citigroup recently raised its interest rates on many cardholders after having said earlier that they were not going to do so. They claim that the increase in credit card default has caused them to have to suddenly raise rates. However, credit card companies are being criticized for raising rates unfairly as well. Some issuers will even raise your interest rate if you are late on other bills. For example, card issuers are increasing rates on people who have been late on car payments and even utility bills. This comes at a time when people are losing jobs by no fault of their own and falling behind on payments. Some consumers have even seen their rates rise from 14% to 28%. That is a 100% increase. These increased rates make it much more difficult for people to pay down debt. Many of these people are having a hard time making monthly payments and are consequently becoming even more indebted to the card issuers.

The regulation of the credit card industry will defiantly have a positive impact on consumers. Consumers spending less on credit card fees will be able to make other payments a lot easier. It is not right that card issuers raise rates on people for being one day late or even worse, being late on other bills that are not related. Consumers should be allowed at least 30 days to make the payment before any action is taken against their account. For many people a raise in interest rates means the difference between having food on the table and making a credit card payment. The regulation of interest will lower payments and free additional cash flow for the middle class consumer.

Credit card issuers on the other spectrum argue that further regulation will prevent them from be able to lend additional monies. Some analysts have even speculated that further regulation could cause banks to rescind an additional $2 trillion in credit lines. Card issuers will argue that 30 days is too long to allow before raising rates. Issuers also claim that the increased rates are needed to generate additional revenues to make up for borrowers who have defaulted.

In all, I think the consumer and ultimately card issuers will benefit from some of the regulations the Federal Reserve wants to pass. Hair trigger interest rate increases only prevent consumers from being able to pay off their credit card debt. Credit card companies will soon have access to TARP funds. This will help relieve their balance sheet of bad debt and enable them to continue to lend money.

For years card issuers have profited from unregulated lending practices. The further regulation of credit card issuers could ultimately prevent the credit card industry from the same turmoil that the mortgage industry has gone through. The prevention of another financial calamity in the credit card industry will keep our country from further financial ruin.

Labels: credit card, credit card regulation, credit cards

The Advantages of the Amex Starwood Preferred Rewards Credit Card

As a small business owner, I know really well the importance of cash flow. There are many sources of obtaining credit when you need it. Banks, SBA loans or outside investors are among the many sources of finding cash to fund your business. However, credit cards can also be used to help you out when you need it. A credit card can be used for just about anything you can think of. Use your credit card to purchase business supplies, make payroll and take advantage of great rewards programs that can benefit you.

The Amex Starwood Preferred Guest Credit Card is an excellent choice for any small business owner that wants to take advantage of a great rewards program with low interest rates. Earn one point for every dollar that you spend on your Amex card. Use it at any of the Starwood hotels, such as the Sheraton, the Westin or W Hotels and earn two points for every dollar spent. Another great advantage of the Starwood Preferred Guest Credit Card is that you can save up to 25% on purchases from approved retailers. If you need to send a package overnight you can save 25% at Federal Express. Not bad if you need to send original documents when you are submitting an invoice. You can also take advantage of great discounts at Hertz rent a car. Another great advantage of using your Amex Starwood card for travel is that you get up to $100,000 dollars of travel insurance. If you purchase your airline tickets with your card and they loose your luggage, you can claim it back to American Express. Lastly, the Starwood Preferred Guest Business Credit Card from American Express comes with great interest rates. For 6 months you can enjoy 2.9% interest on purchases and balance transfers (balance transfers must be made within 3 months to qualify for low rate). After the 6 months are up you get a 9.9% interest rate. Interest rates for cash advances are 19.9%. The annual fee for this card is $45, but it is waived your first year as a card holder.

The Amex Starwood Preferred Guest credit card is an excellent credit card choice for the businesses traveler. Take advantage of the low introductory rate for all your business needs. Use your Amex Starwood Preferred card at many major retailers across the United States. Also take advantage of the excellent rewards program. You can also use your Starwood credit card at participating Starwood resorts in 95 different countries. Use your rewards points to take your next business trip or vacation. Your points are also transferable at over 30 airlines. Sign up for the Starwood Preferred credit card and earn up to 25,000 points which can be redeemed for up to 6 nights at certain Starwood hotels.

In all, the Amex Starwood Preferred Guest credit card is an excellent rewards card for anyone. You do not have to be a small business owner to take advantage of this great rewards credit card from Amex. Anyone can use this rewards card and earn points towards their next vacation. Apply online today and after about 60 seconds you will find out if you are approved.

Labels: Amex Starwood Preferred Credit Card, Business Credit Card, business credit cards, Rewards Credit Card, Rewards Credit Cards

Applying for a Credit Card after Bankruptcy

According to the website uscourts.gov, there have been 967,831 bankruptcy filings in the United States since June 30, 2008. As times continue to get tougher it is almost certain that more people will be forced to file for bankruptcy as well. The good thing is that tough times do not last; tough people do. There is light at the end of the tunnel for those who have been forced to file for bankruptcy. The following guidelines are a good way for consumers to obtain a credit card after having filed for insolvency.

Many people are often forced to file for bankruptcy due to medical bills and the loss of a job. The other major reason for people filing for bankruptcy is overspending. If you are one of those individuals forced into bankruptcy due to poor spending habits, you might want to avoid credit cards or keep your credit cards under lock and key. The first thing you want to make sure is whether or not you are financially able to handle another credit card Be sure that you have a sustainable income that can cover all your basic expenses like mortgage payment, utility bills, car payments, food and other basic necessities that you require to live. Also be sure to have at least 6 months of living expenses saved up in case of another emergency.

Once you have determined that you are capable of paying your credit card again, you need to find the right card to get your credit back on track. The best option is to apply for a secured credit card with a limited limit such as $300. A good example is the Bank of America Secured Visa card. This card allows is customers to obtain a line of credit from $300 to $10,000. The card is secured with a deposit equaling the amount of credit you are trying to secure. This ensures credit card issuers will recoup their money should the card holder default. Once you have obtained your secured credit card; be sure and manage it correctly. Only charge what you are planning to pay in full. Pay your bill on time every month. Your credit score will begin to rise should you handle your credit cards correctly. In addition, after some time, it is very possible that your secured card will turn into an unsecured credit card. In all, managing your credit card correctly will help your overall credit and save you money on other loans with lower interest rates.

Another way to obtain a credit card after bankruptcy is to use someone else’s credit to improve your own. In other words, you can try to find a suitable co signor with good credit. This could be in the form of a friend or family member. Another way to obtain your own credit card is to become an additional card holder on someone else’s account. Make the payments on your own to the card issuer in order to show that it is you who is actually paying the bill. Also, be sure and pay the bill on time and in full every month as well. This will show that you are capable of being credit worthy. In the future you will be able to obtain a credit card on your own from the same card issuer because they have already established a good working relationship with you.

Bankruptcy should be an option taken only for very desperate measures. However, should you be forced to file for bankruptcy due to unforeseen circumstances, it is not a financial death sentence. It is possible to obtain credit for cars, homes as well as credit cards. A secured credit card is a great way to get off to a new start. If you are fortunate enough to have the help from friend or family members, a co signor can also help you obtain credit again. Be sure to pay the card yourself and on time should you become an additional card holder on someone else’s account. Most importantly, be sure that you have enough disposable income to pay your credit card balance in full every month. Following these guidelines will certainly help your ability to obtain additional credit after bankruptcy.

Labels: apply for a credit card, applying for a credit card after bankruptcy, credit card, credit card issuers, credit cards

Bernard L. Madoff Made Off with Everyone’s Money

On November 11, 2008 famed hedge fund manager Bernard L. Madoff was arrested by the FBI for what seems to be the biggest fraud in the history of Wall Street. Madoff is accused of running a Ponzi scheme to the tune of $50 billion. On Wednesday, November 10, 2008 Madoff called his two top executive officers to his Manhattan apartment. In fact his it was his sons who were the two executives called to his apartment. At that time he confessed that his operation was based on a lie.

Madoff had been running a Ponzi scheme apparently for many years. A Ponzi scheme is an investment fraud where dividends are paid to older investors by money received from new investors. In other words, there is no actual pool of money being invested for the benefit of all. Madoff faked documents to show that he was generating returns from the money people were giving him to invest. However, he was not properly investing the money given to him. Madoff simply sought money from other investors to pay supposed dividends. The current financial problems on Wall Street and Main Street have made it impossible for Madoff to continue his scheme. It is said that he has lost $50 billion in investors’ money.

Madoff ran a very secretive operation. It is said that he only sought money from very wealthy families from Long Island to Palm Beach. He even was supposed to be investing and managing money for charitable foundations as well. Madoff continually cooked the books to make his fund look always profitable. For the last 18 years, the Madoff fund seamed to do no wrong. Year after year, with the exception of a few years in between, the Madoff fund always showed 8% to 12% gains, even in bad times. No one ever questioned the former NASDAQ chairman’s financial practices even though Madoff kept his acutal transactions under lock and key where only he had access.

Bernard L. Madoff, born in 1938 Brooklyn New York and rose from humble middle class beginnings to become one of Wall Streets most important figures. In 1960 he founded Bernard L. Madoff Investment Securities. Madoff started his firm with $5000 that he claimed he had made from working as a lifeguard and installing sprinkler systems. The Madoff family was also involved in many philanthropic organizations.

It was his sons who turned their father into the Securities Exchange Commission exposing the biggest fraud ever to hit Wall Street. Madoff did not resist any arrest and was very cordial when the FBI arrived.

How does such a prominent individual stoop to such a level, that he could steal from people? At one time, Madoff boasted on his website how his company was founded on honest and ethical principles. Perhaps, there was a time when Madoff acted as a responsible and ethical individual. However, greed propelled this once powerful Wall Street player into another Wall Street criminal. The most mind boggling fact remains that no one ever questioned Madoff’s investment practices. In regards to greed, the old saying says that pigs get fat while hogs get slaughtered. It must be Madoff’s turn at the slaughter house.

Labels: Bernad Madoff, Bernard L. Madoff, Ponzi scheme

Top 5 Responsible Credit Card Practices

Practice these five simple credit card rules and you are guaranteed to manage your account properly and increase your credit score.

1) Keep in mind, that your credit card is not a license to spend money. Many people take for granted that a credit card is like using actual money. People tend to spend differently with credit cards than with cash. You are more likely to spend less and keep track of your money if you have cash in your wallet. Your wallet can always be opened on a regular basis and you are able to physically count and feel how much money you have. On the other hand, with credit cards, people tend to forget how much they have spent. Keep track of your receipts and log online to view your bill on a regular basis. MOst importantly, do not spend on what you can afford to pay for in full.

2) Use your credit card for emergencies only. Do not get into the habit of using your credit cards for frivolous purchases. Spend what you can afford. Make yourself a monthly budget. Decide how much you can afford to spend with your credit card. If you can avoid it, do not use your credit cards at restaurants. Always pay your bills in cash when you go out to eat. Be careful when purchasing expensive items as well. You need to ask yourself if you are acting on needs or wants. If your purchase is based on a “want”, then you need to decide if you can really afford it. If you can, then go ahead and make your purchase. Do not buy what you can not afford. However, if your purchase is based on a particular need than your credit card can ease the gravity of your expenses.

3) Do not max out your credit cards. Often times, credit card issuers issue cards with large credit lines. It is very easy to over spend and max out your credit card. You will be fine if you can afford to pay the balance in full at the end of the month. However, if you can’t, you will quickly fall into a viscous interest paying cycle. Try to only spend between 10 to 20 percent of your credit cards limit. This will allow you to manage the debt easily and keep from getting in a debt trap. Your credit score will also go up if you are not always at the top your limit. Creditors will perceive irresponsible spending practices or financial difficulties. This can affect your interest rate or even cause you to be denied credit.

4) Leave your credit cards at home. There is a common saying that has a lot of truth to it. “Out of sight, out mind”. You will forget what you can not see. Keep your credit card at home and you will forget that you can use it. This is especially true, if you plan to have a night out on the town. It is very easy to go out, have a few drinks, and rack up a big bill. If you are armed with your credit card, chances are you will end up spending more than you had anticipated. If you leave your credit card at home and use cash, you will limit your chances of spending money you might regret later.

5) Do not ever give out the CVV code, or 3 digit code on the back of your credit card. Online retailers and payment gateways will always ask you for the code on the back of your card. If anyone finds out the information listed on both sides of the card, they will be able to use it almost anywhere online or over the phone. Identity theft is on the rise and these thieves are very creative. Be sure to always shred receipts with account numbers as well.

There are countless more ways to be a responsible credit card holder. Always keep in mind what you have just read and you will avoid debt and bad credit. However, most importantly, always use your common sense when using your credit cards.

Labels: Business Credit Card, business credit cards, credit card, credit cards, low interest credit card, low interest credit cards

Auto Industry Bailout on the Way


It looks like congress has approved the auto bailout plan for the big three US automakers. The House of Representatives is lacking their vote, but it is quite likely that the automakers will get part of the bailout that they are asking for. The auto bailout has been debated for weeks with many in favor and others opposed. The fact of the matter is the United States simply can not afford to loose any more jobs.

The month of November was a terrible month for the job market. More than 500,000 United States citizens lost their jobs due to the uneasy economy during the month of November. The loss or failure of any of Detroit’s automakers will cause further job loss to the tune of 2,000,000 workers many speculate. The repercussions will be felt all over America should this come to happen.

As citizens, I think we should support our last manufacturing industry that still exists in our country. The automakers also need to rethink the way they sell cars. Too much emphasis has been placed on manufacturing gas guzzling trucks and sport utility vehicles otherwise known as SUVs. Foreign manufacturers have been focusing on making more economic vehicles like the Toyota Prius. The very popular Toyota Prius is a gas/electric hybrid car which gets almost 50 mpg according to Toyota. Toyota’s Lexus brand was among the first to sell a hybrid sport utility vehicle. The Lexus 400h hybrid was introduced to the market in 2004. General Motors and Chrysler have been late to jump on the hybrid bandwagon.

During the recession of 2001, K-Mart was on the verge of bankruptcy. Badly beaten by Wal-Mart, K-Mart was forced to restructure its business. After joining forces with Sears, K-Mart was eventually able to come out of a major hole. Their stock that had once plummeted to $1 per share was at one time trading up to $100 per share. If General Motors and Chrysler could follow the same path as K-Mart, the American economy will be a much stronger one.

Labels: auto industry bailout, Chrysler, general motors

A Business Credit Card for Business Owners with Good Credit


The Capital One Business Platinum Preferred credit card is a good business credit card for those well established or new business owners with good or excellent credit. This Capital One credit card also has a great rewards program. Capital One is a proven leader in the credit card industry. Despite recent financial turmoil, Capital One has been able to weather this storm unlike some of its competitors. Any business owner can take advantage of the great rewards programs that this Capital One Business Platinum credit card has to offer.

A 0% introductory rate on balance transfers and purchases until 2010 is one of its best features. This will allow business owners to use their credit card to make purchases at major retailers, restaurants and even suppliers without having to pay any interest. This gives business owners the peace of mind that they have some time to pay off their credit card interest free within a relatively long time frame. As a business owner, I know that a credit card can be very handy during hard times. A Capital One Visa credit card can be used almost everywhere. If you are in the construction business, you can purchase cement and other supplies at Home Depot or Lowes and pay no interest on those purchases for up to a year. The other great advantage is the Capital One Platinum Preferred business credit card is their rewards programs. Earn rewards from purchases at major hardware stores anywhere in the United States. Use these rewards benefits to your advantage and spend less in the long run.

Business travelers will especially be able to take advantage of earning 3 miles per dollar spent based on your primary business category type. That mean you can choose from several categories like “Travel and Lodging”, “Gas and Services”, “Building and Hardware”, “Computer and Electronics”, “Office Supplies and Furniture and even “Advertising and Shipping”. For example, should you choose “Building and Hardware”, you will earn 3 miles for every dollar you spend at Home Depot or other hardware supply stores. You will also earn 1 mile per dollar spent on your secondary category choice. Choose from the same categories and earn additional benefits. However you choose to prioritize your categories, the Capital One Platinum Preferred No Hassle Miles credit card will help you save money where you spend the most.

There are many business credit cards available to choose from, however, Capital One has proven itself a leader in the industry. The 0% interest until 2010 introductory offer on balance transfers and purchases can help save you money. If you are an avid traveler that enjoys home improvement projects, you will be especially happy with this card. You will be earning mileage points towards your next vacation destination as you shop for home improvement items at your local hardware store. Earn enough points and you could possibly even take a trip to Hawaii.

Labels: Business Credit Card, business credit cards, reward credit cardCapital One Business Platinum Preferred No Hassle Miles credit card, Rewards Credit Card

A Rewards Card for the Single Professional


Everybody’s working for the weekend. Wait a minute. Wasn’t that a song from the 80s? It sure was, but HSBC has a great credit card that is perfect for the weekend shopper. The majority of consumers do most of their shopping on the weekend. During the week, most people are at work and do not have time to go to the stores and spend money. The HSBC Weekend rewards credit card is an excellent option forthe single professional and/or those who do most of their shopping on the weekends.

The best part about this rewards credit card is that it gives its users 2% cash back on all purchases made on Saturday and Sunday. Purchases made Monday thru Friday receive a 1% cash back reward. The single professional will benefit greatly from a rewards credit card such as this. Being a single professional myself, I do not have time to go shopping during the week. I do most of my shopping on the weekend when my work schedule is not so hectic. The HSBC Weekend Credit Card is perfect for the millions of single professionals who shop mostly over the weekend.

Unlike other rewards credit cards the HSBC Weekend credit card gives you an option to apply for an unlimited cash back rewards. This virtually gives you a 2% discount every time that you go shopping on Saturday or Sunday, or a 1% discount during the week. Go shopping at any weekend sale and add 2% to the total amount you would receive off your purchases. That $75 item with a 20% discount will receive a 22% discount instead. That adds up to an additional $1.50 in savings. Look at the savings on a monthly basis and you will notice a significant amount saved. Total the amount over a year and you can earn enough money to buy that latest digital camera you have been eyeing.

The HSBC Weekend credit card also offers protection for purchases made on your card. This guarantees your money back on any purchases that turn out to be defective. They also give you rental car insurance. This is an additional savings for any one that does business traveling and needs to rent a car. Be sure and decline the rental insurance when the rental company offers it, since you are already covered

HSBC is also offering a great introductory period for all purchases and balance transfers. The introductory period allows you to pay no interest for up to 12 months. This can be very advantageous to someone who is paying a higher interest rate on another credit card. Simply transfer your balance over to the HSBC Weekend credit card and pay it off in a year with no interest.

In all, the HSBC Weekend credit card is an excellent choice for those who prefer to do their shopping on the weekends. Since many single professionals do not have time to run around shopping during the week, this rewards card will empower them.

Labels: credit card, credit cards, HSBC Weekend Card, HSBC Weekend Credit Card, Rewards Credit Card, Rewards Credit Cards

Credit Card Regulation Could Adversely Affect Consumer Spending

Congress is working at passing new legislation that will restrict credit card companies lending practices. This comes after thousands of people have complained to the Federal Reserve’s website that credit card companies are not abiding to lending rules that are fair to consumers. There are arguments from both sides of the spectrum that seem justifiable. However, it will be up to Congress to come up with a solution that is viable for everyone.

The consumer argument is that credit card companies are being extremely unfair in their lending practices. For example, credit card companies are quick to raise your interest rates when you are delinquent with your payments. Many card issuers will even raise your rates if you are one day late. In addition, credit card companies are also raising interest rates on people with outstanding balances. This makes it harder for people to pay off their debt. The major complaint is that credit card companies are too quick to raise rates and very unforgiving of their clients.

The credit card issuers argue that restricting their ability to raise rates undermines their ability to manage risk. The further regulation of credit card issuers could also affect consumers adversely as well. Should card issuers be required to adhere to much stricter guidelines, they may get even stricter and contract credit even more. It is already rumored that credit card issuers may cut up to $2 trillion in existing consumer lines of credit. This would greatly affect the American consumers’ liquidity. Credit cards are the consumer’s second largest source of spending power next to their paychecks. The reduction of credit card lines of credit will further hurt the economy. Every sector of the economy will be affected should consumers loose $2 trillion in spending power.

Credit card issuers are urging Congress not to take any action until this recession is over. However, consumers want the government to take action quickly to keep unfair credit card practices from further unraveling. Consumers want card issuers to give them at least 30 days to make a late payment, however, card issuers claim this is too much time. The problem is that there are too many households with excessive credit card debt. Many people abuse their credit cards and often times do not have any intentions of paying their bill responsibly. This adversely affects the large majorities that pays their bills on time and does not spend more than what they are capable. Many times people will even defraud credit card companies. This also affects responsible consumers.

In all, Congress should be careful as too how they regulate credit card issuers. The country can not afford to loose any more consumer liquidity. Consumer spending has sharply fallen this year. There are many economists who argue that the only way to get out of this recession is for people to spend money. The lack of consumer spending in our economy will only cause more companies to fail. The country has already lost somewhere in the neighborhood of 300,000 to 400,000 jobs in the month of November. Further job loss will very likely occur should consumer spending continue to be curtailed. The loss of $2 trillion in credit card liquidity will certainly affect spending in a very negative way.

Labels: consumer spending, credit card, credit card issuers, credit card lines of credit, credit cards

The Obama Deal

Presidential elect Barrack Obama has announced his intentions to create a giant public works projects that will help stimulate the economy. These projects he says will be bigger than the highway expansion project created by past President Dwight D. Eisenhower in the 1950s. Obama and his administration plan to create jobs by instituting new programs that will promote greener energy technologies, repair roads and bridges, invest in internet broadband and perhaps even create a new mass transit system.

The Obama administration plans to help curtail our dependence on foreign oil and make our government infrastructure more energy efficient as well. There are many plans being thought out including the use of solar energy. Solar power is good example of a renewable source of energy. The sun’s powerful rays can be used to create energy that can heat our homes, cook our food, or even power future vehicles. Solar energy is harnessed by solar panels and converted into usable energy. Instead of burning coal or oil to heat or cool our buildings, solar panels can be installed and reduce electrical costs drastically. In addition to creating jobs by finding new sources of energy, the Obama administration also plans to make government building more energy efficient. Government offices are in desperate needs of more efficient air conditioners, water heaters, computers and even light bulbs. These improvements Obama says will produce jobs and save the government money in the long run.

Our next presidential administration also plans to revamp our country’s internet infrastructure. According to future President Barrack Obama, our country which created the internet is far behind other countries in respect to broadband access. Broadband access should be available to all citizens of the United States much like television. Furthermore, our schools children need access to broadband internet so they can enhance their learning abilities. School children can learn about other cultures as well as communicate with other children of similar age in other parts of the world. Broadband will also help empower all our communities both large and small. The ability to connect to the internet easily allows people in remote areas to sell products worldwide. The internet is closing the communication gaps in the world. Broadband internet access allows people who would otherwise not be able to see each other; see each other. To be on the cutting edge of internet technology will make our country more competitive in a worldwide market.

The construction of a mass transit system is also another possible public works project on the Obama agenda. We should look to our European and Japanese neighbors who have implemented high speed railways which can transport people from city to city very efficiently. The building of such a railway system in the United States would spark new jobs and businesses. Furthermore, these electrically or magnetically charged trains are extremely fuel efficient and environmentally friendly. Imagine a very fast railway system with trains traveling over 100 mph. The bullet train in Japan is said to travel an amazing 150 mph. This would make traveling by train much more efficient than traveling by vehicle. This would give us the ability to travel from city to city in no time at all. The commute from Los Angeles to San Diego and vice versa could be become a one hour journey. This commute can sometimes take several hours or more depending on traffic. Texas would greatly benefit as well since many cities are several hundred miles away from each other. Train travel is not only efficient; it is also much more environmentally friendly.

There are many people who criticize the Obama administration for these proposed expenditures which may cost the taxpayers $300 to $700 billion. Critics are concerned that our national deficit will reach $1 trillion. This they say will be a big burden to future generations. However, if we do not do something about our current economic situation, the cost of a depression could be much greater.

Labels: Barrack Obama, broadband internet, bullet train, Obama administration, renewable energy, solar power

Cheaper Fuel means Stronger Consumers

Oil prices continue to fall as economic conditions worsen across the globe. Oil which once topped out at $147 per barrel is now trading at $40 per barrel. Analysts are even predicting that oil will fall all the way to $25 per barrel. This means that gasoline, which was once at $4.00 per gallon will go below $1.00 per gallon.

Low gas prices are great for consumers but in reality are signs of a crippled world economy. Commodities prices, like oil prices, are based on supply and demand principles. Essentially what is happening is that less oil is being consumed on world wide basis. This means that people are not traveling as much as before and basically not consuming as much product as normal. The reality is that very low oil prices are the reflection of a sick economy.

Emerging markets like China are seeing their economy take a big toll because of the United States economy. Therefore, China and other large consumer countries like India are not using as much oil either. These countries rely heavily on exports to the United States. If the United States consumer is not making many purchases then these countries suffer as well. Therefore, less worldwide consumption of oil will continue to drive the price of gasoline lower.

Lower gas prices will actually help the economy recover. People filling their vehicles with gasoline will no longer spend as much money at the pump. Even SUV owners will see the cost of operating their vehicles drop drastically. What once cost $100 to fill with gasoline will cost about $25.00 with $1.00 fuel prices. People will now have more money to pay their bills. Credit cards will be easier to pay as well as home mortgages. Furthermore, the additional monies saved on fuel will also be spent on other items, like clothing and electronics.

However, as the economy recovers, oil prices will go back up. Emerging economies like China and India will start to consume more oil as well as people need to move around more, etc. As the United States consumer starts making more purchases, factories in the United States and other countries will start employing more people and thus consuming more energy. This chain of events will eventually cause fuel prices to rise again with the demand.

Perhaps it is going to be up to the new administration to push for new energy technologies to be developed. Honda has introduced a new car that runs on hydrogen fuel called the FCX Clarity. BMW is also going to be introducing a new hydrogen vehicle as well. Hydrogen fuel should be much cheaper than gasoline. Cheaper fuel will empower consumers to be able to make other purchases. Furthermore, cheaper fuel will also ease the burden that monthly bills create.

As the economy worsens oil prices will go down. As economic conditions begin to improve, oil prices will go back up. The cycle will definitely help the economy recover. However, there is a desperate need for cheaper alternative fuels like hydrogen. The development of new energy technologies will fuel our economy much the way the internet has. The new infrastructure that will be required to service these new fuels will also spark growth in our economy. Lastly, if we spend less money at the pump going back and forth to work, etc, then we will have more money to spend on other things as well.

Labels: alternative fuels, cheaper oil, credit cards

Detroit Faces Congress

The big issue today in Congress is the future of the big three Detroit automakers. On the verge of bankruptcy, General Motors and Chrysler packed up their green vehicles and took the 10 hour drive to Washington. Both automakers are asking Congress to loan them money so that they can survive. GM CEO Wagoner has made it very clear to Congress that they could shut their doors if they don’t get badly needed funds before the end of the year.

The multi-billion dollar question is whether or not to lend GM and Chrysler the money. Each one is seeking billions of dollars in loans to keep their companies going. Chrysler is seeking $8 billion in loans while General Motors is seeking $18 billion in federal aid. However, without this aid the Detroit automakers will be forced to shut down and the United States faces another potential 3 million jobs being lost. Economists have even gone so far as saying that the failure of any one of the big three automakers could cause the United States to go from a recession to a depression.

The failure of any of these three companies would send the economy into a long term downward out of control spiral. The effect would be felt all the way across North America all the way from Mexico to Canada. The Mexican economy, which imports billions of dollars worth of American made products, would be faced with the loss of thousands of jobs. Mexico is a major producer of automotive parts and boasts many plants belonging to both General Motors and Chrysler. On the northern end of the spectrum, our Canadian neighbors would also loose thousands of jobs. Our economy here in the United States would loose jobs as well. Transportation companies will no longer be moving parts and cars back and forth between Mexico, United States and Canada. Retirees’ will go without their pensions. American suppliers who have provided parts will be forced to go unpaid. There is no doubt that the financial repercussions would be felt all over.

Although Congress has not laid out a specific plan, it is widely anticipated that they will find common ground. This time the auto execs left their private airplanes back in Detroit and opted to drive instead. Furthermore, execs have agreed to reduce their expenditures drastically and even reduce their annual salaries to $1. This is quite a reduction to Wagoner’s lavish $20 million dollar annual salary. It is no wonder the companies are broke. Executive pay should directly reflect the performance of the company. Hedge fund managers have been criticized for the large salaries that they were paid on Wall Street. However, these managers made a percentage of the hedge fund’s profits. If the hedge fund was not profitable, then managers do not make any money. Unfortunately this is not the case every where else, both on Wall Street and other American corporations.

This economic crisis has affected every American one way or another. As a citizen of this great country, I hope that our leaders will do the right thing. The automakers have all agreed to have made mistakes and are willing to completely overhaul their operations. More efficient assembly lines and fuel efficient cards will help Detroit become profitable again. The fact of the matter is, that the failure of such large financial empires like General Motors and Chrysler will further deteriorate our economy and perhaps even plunge our company into another depression.

Labels: Chrysler, Congress, general motors

Save Money on Interest with 0% Credit Card Offers, Rewards Cards and Prepaid Cards this Christmas.



The Holiday shopping season is now upon us. In these tough times we need to look for creative ways to save money. A 0% introductory rate credit card is a very good way to finance you shopping season this year. You might not be able to afford to pay for all your gifts at once; however, if you have good credit, there is a great chance that you will qualify for a 0% Credit Card. Many credit card companies offer great introductory rates such as 0% to entice customers. A creative, responsible individual can use this money to purchase gifts and pay them back during the introductory rate.

The Capital One Platinum card is a great example of many 0% credit card offers that [Capital One] offers. This great {credit card offer} allows you 6 months with no interest on all purchases. Spend $500 on gifts and break up your payments however you want over those six months and get away with paying no interest on your Holiday shopping purchases. Be sure to plan your payment schedule well. If you are expecting your year end bonus in January of 2009 make sure you contribute as much as possible to your {credit card} debt. If you are not expecting a bonus, break up your payments into 6 monthly payments and pay off your debt. Should you make your payment religiously, you will be free and clear of any interest charges. This card is meant for those with average or better credit.

The Capital One Platinum also comes with other perks that you will enjoy as well. Take advantage of their rewards program and enjoy up to 40% off purchases made on Yahoo Shopping. The non-introduction interest rate is very good as well. They are currently charging 8.9% on all purchases made after the introductory period. Be very careful with late payments. Late payment may affect your interest rates. For balances more than $250, the late fees are $39.

A prepaid credit card can also save you money if you know how to use it. You can use your prepaid credit card to make online purchases. Shopping online saves time and gas as well in addition to finding great buys. No more waiting in lines at the checkout counter or even fighting traffic and looking for a parking space should you shop online. The All Access Visa Prepaid Credit Card} is a great card to use for your online purchases. You will not have to pay any interest using your prepaid cards either. If you opt to pay the monthly fee of $9.95, Visa will not charge you the $.50 per transaction fee. You can even take advantage of using their free savings account which is paying a very decent 5% rate. Your prepaid card will also help you stay within your budget. Your remaining balance will determine how much you have spent this Holiday season should you use your {prepaid credit card}.

Also be sure and take advantage of your rewards credit card as well. Doing all of your holiday shopping using your JetBlue Card from American Express by American Express can also come in handy when you use it to rack up frequent flyer miles. You can earn one point for every dollar that you spend. Use your card at your local restaurant, pub, or movie theatre and earn two points for every dollar that you spend. Before you know it, you have earned enough points to take a trip to Las Vegas or better yet, Hawaii. Take the value of the airline tickets and subtract it from what you have spent on holiday shopping and you will come up with your true net total spent on gifts.

You can use your credit card to save money whether you use a 0% Credit Card, a rewards credit card or even a prepaid card. Be creative with your shopping and use your credit cards in places where it suites you best. If you earn double rewards points by eating at restaurants then give Chili’s gift cards to your loved ones this season. Use the double points towards your next vacation. Avoid spending time and gas looking for a parking space at the mall by shopping online with your {prepaid card}. No matter how you look at it, there are many ways to save money this season using your plastic!

Labels: 0% credit card, prepaid credit card, prepaid credit cards, Rewards Credit Card, Rewards Credit Cards

Consumers may face the loss of $2 trillion of credit card liquidity as card issuers raise interest rates and reduce lines of credit over the next 18 months. Home values continue to decline as well making it harder for consumers to access home equity lines of credit as well. Consumers are now spending less and less money at retailers due to liquidity loss. The automotive industry has seen drastic declines in sales as dealers find it harder to acquire loans for their customers.

The United States has been over extending themselves with credit cards, auto loans and extravagant mortgages for many years. The effects we are now feeling on the economy is much like the effect we feel after drinking to much alcohol or even just over eating. Americans have over spent themselves sick.

As consumers we need to learn how to use our credit responsibly. Credit cards need to be used with prudence with making purchases. Consumers need to budget their money and not overextend their credit card debt. Set a limit for yourself that you will charge on a monthly basis and be sure to pay the balance in full every month. For large purchases where you plan to spread you payments, be sure to make a set plant as to how much you will pay each month to pay off your expensive item in a reasonable amount of time. Purchase less on your credit at once, pay your debt and then you can purchase something else again.

China and Japan will not see the consumer credit problems that we have seen in the Untied States and in Europe. The Asian culture is much more conservative and has strong beliefs about credit. Chinese and Japanese will save for large purchases as opposed to buying on credit. According to Federal Reserve figures, the American consumer has accumulated almost $14 trillion in debt. On the other hand, the Japanese have accumulated a total of $16 trillion in savings.

American consumers should learn from their Asian counterparts. Spending on credit has exceeded what we can afford. Unfortunately, creditors have not put many requirements on consumers either. There was a recent blog called “I am being foreclosed” or something to that affect, about a very novice real estate investor who over extended himself. At a very young 20 something years of age, this individual purchased seven houses that he was going to “flip”. He bought one, got excited and kept buying six more, even before selling his first “flip’. In order to secure financing, this individual used a mortgage application intended for the self employed. On this application, he was able to make up his income while lenders did not bother to verify what he was stating. This is what I would call downright lying. Furthermore, this individual is now (or was) facing Federal charges. This type of irresponsible lending on the parts of both consumers and lenders has come to a screeching halt.

Luckily I was able to learn this lesson at a relatively young age. There was a time that I had a business generating my partner and me a substantial amount of money. Furthermore, our source of income was from one client. We both made many unnecessary purchases and spent a lot more than we should have. Inevitably, when we lost the client, we lost the money. All of a sudden we had overspent and found ourselves without a major source of income. This taught me quite a good lesson. Consumers and lenders are now finding themselves having learned new lessons as well. We must all learn from the lessons of the past and march forward towards the future.

Labels: consumer debt, credit cards

The Year of the Bailout

2008 will go down in history as the year of the Great American Bailout. Congress this year has already granted $700 billion dollars in relief funds to bailout our ailing banking system. 2009 looks like it is going to be another bailout year as our new government works hard at preparing a second bailout package that will go before congress next year.

This economic disease created by our leaders past and present has infected the economy at every level and at every spectrum. In order to breathe more life into the economy the next presidential administration is expecting to spend another $300 to $700 billion in additional funds. This money is supposed to be used to create an additional 2.5 million jobs. The government is looking to spend money on re building the nations deteriorating infrastructure. Highways and bridges need to be fixed. Government buildings need to be modernized with energy efficient upgrades being one of the top priorities.

Many argue that spending money will not necessarily improve the economy. However, there are many who argue otherwise. The government needs to spend money in times of recession in order to keep the economy moving. Rebuilding our infrastructure will replace 2.5 million jobs that have been lost during this terrific downturn. In addition Obama plans to create new jobs in new energy projects that are aimed at reducing our dependence on both foreign and domestic oil.

The next bailout on the agenda is going to be our mighty troubled automakers. After executives arrived to Washington in their private Gulfstream jests, Congress rejected any talks about bailing out the big three automakers. However the big three will soon face Congress again with a new plan. The automakers need to modernize their plants so that multiple models can be made on the same assembly lines without any major modifications. Foreign automakers have been doing this for years. For example, Toyota may manufacture the Corolla and the Camry on the same assembly line without new configurations to line. There is also talks about the automakers getting rid of brands that end up competing with each other. It does make sense for General Motors to market both Buick models and GMC models. The Buick Enclave is basically the same thing as the GMC Acadia.

This downturn has also affected consumer credit so significantly that the government has had to allocate funds to unfreeze these credit markets. Citigroup has had to seek relief funds from the government to the tune of $25 billion. American Express has also had to restructure itself into a bank holding company in order to access TARP funds as well. Credit card companies continue to slash credit limits and raise interest rates. This has affected the American consumer deeply. Retailers are experiencing fewer sales as the economy continues to spiral downwards.

Our country continues to make history. Should Obama obtain approval for these new bailout funds, it will be the biggest public spending initiative since former President Franklin D. Roosevelt’s “Big Deal” public works project of the Great Depression. This will certainly alter history forever. As a nation, we must be optimistic that we will crawl out of this giant economic hole that we have dug.

Lastly, there are not many people who will not agree that something drastic needs to be done for our economy. The release of recent economic data shows that our economy has been in a recession since December of 2007. This recession has been among the worst in history. However, there is hope that our economy will start to recover possibly by spring of 2009. In the past, we have always recovered from recessionary markets within at least 16 months. Should the trend prove to be correct we have about 4 months left of this bad economy. As a nation, we must stay strong and stand together during these tough times. Fortunately, we are a much tougher nation that will withstand tough times.

Labels: 700 Billion Dollar Bailout, Barrack Obama, credit cards, economic recesion