American Express Offers $300 to Cardholders to Close Accounts

American Express has found a polite way to close cardholder’s accounts. American Express is offering select customers $300 to pay off their balances and close the account. This move does not surprise me as credit card issuers continue to look for ways to limit their exposure. Since the collapse of Lehman Brothers in September of 2008 credit card issuers have slashed credit limits, limited marketing efforts and increasing interest rates and fees. These select cardholders have until February to decide if they want to participate in the offer. Furthermore, they are allowing those who choose the offer until March or April to close their accounts. American Express is supposed to then give you a $300 pre paid American Express debit card.

American Express stock has lost almost one-third of its value since last year. Recent unemployment has caused credit card delinquencies to rise more than forecasted. In order to expand its business, American Express has drifted away from catering to mostly affluent clientele. They have broadened their credit card portfolio to include loans to riskier individuals. This strategy has backfired for American Express due to the current economic downturn. American Express is looking for ways to save money and limit their risk exposure.

Every card issuer from J.P. Morgan/Chase to Citigroup has slashed credit card limits. This in turn has hurt our economy very much. Consumers with have had less money to make purchases from everything cars to television sets to video game consoles. The TALF (troubled asset loan facility) program is supposed to boost consumer credit. This bailout plan is supposed to give investors $1 trillion to purchase consumer asset backed securities. Since the collapse of Lehman Brother’s investments in asset backed securities have almost disappeared. The TALF plan is supposed to give investors confidences to once again invest in these types of securities.

In my opinion, American Express is looking for polite ways to cancel their less desired customer’s credit cards. These people might be less creditworthy and more susceptible to becoming delinquent with their bills. A $300 credit voucher certainly gives someone an incentive to close out his or her account. This is certainly a “nicer” way to cut someone’s credit. Instead of involuntary closing accounts like other credit card issuers have, American Express is giving certain cardholders a big incentive to closes out their account. This will certainly help out American Express’s public relations.

The last thing the country really needs is more slashed credit limits. The credit crisis has caused all kinds of havoc throughout our economy. As consumers, we need credit to continue to make purchases as we did. Businesses need this money to pay employees, who in turn spend money. The bottom line is less credit means less purchases. As purchases decrease, jobs will continue to disappear. This starts a viscous cycle that without government intervention will continue to spiral.

Labels: american express, credit card issuers, credit cards, TALF

Escapre Card by Discover

Discover has recently launched a new credit card called the Escape by DiscoverEscape by Discover
You can also redeem your points for gifts should you not want to use your points for travel. Discover allows you to buy gift cards from over 90 of its established rewards partners. These partners include but are not limited to companies such as Borders Books, Amazon.com, AMC Theaters, Brooks Brothers, L.L. Bean, Eddie Bauer, Outback Steakhouse, Red Lobster and scores of other major retailers and popular restaurant chains. You can also use your miles to pay towards your monthly statement. The exchange rate is figured at $25 for every 5000 miles. I would definitely use the reward miles for restaurants or travel. You can figure that for every mile you earn one half of one cent or .005 would go towards your balance.

You can also use transfer your balance from another credit card and pay 0% interest for up to 1 year. 0% interest also applies to purchases 6 months. This is a great way to make large purchases such as televisions, jewelry or to pay for an emergency car repair. Instead of paying regular interest rates you wont have to pay anything. A $600 brand new television could be easily paid off at $100 per month for 6 months.

The only real drawback to the Escape by Discover
It is good to see credit card issuers coming out with new products. Our economy is in shambles and any new available credit source is welcomed. The 25,000 sign up bonus points and the excellent rewards program make this card very tempting. All in all, the this new offer by Discover is an excellent credit card offer that I would definitely recommend to anyone

Labels: credit card issuers, credit cards, Discover credit card, Escape Card by Discover

Why the Government Should Invest in Credit Card Bonds


The credit card industry has taken a significant toll since the onset of the credit crisis. Direct mail credit card marketing has seen a significant drop in the amount of mail being sent. Credit card issuers have pulled cards away from the affiliate marketing channel as well. The problem is that card issuers are having a hard time securitizing credit card debt. By that I mean, that credit card issuers are having less success bundling credit card debt and selling it off as an investment in Wall Street in the form of credit card bonds. The sale of credit card bonds is down 50%, thus so are approvals. The credit card industry needs to be able to be able to sell their receivables in order to generate new customers. As part of the economic stimulus package I think the Obama Administration should start buying up credit card bonds. This way consumer credit is unfrozen and people can go out and spend once again. Credit Card liquidity is needed in the economy in order to keep people shopping. The Obama administration needs to invest in credit card bonds and thus increase the spending power of the American consumer. Consumer spending via credit cards creates jobs in every sector of the economy from retail to logistics.

Retail spending has seen a significant drop off because of the credit crisis. More Americans these days putting their money back in the cookie jar. Even though some people have money they are not spending it. Job uncertainty is at an all time high these days. No one wants to spend money if they fear that job loss is possible. However, part of the reason for all these job losses is that no one is spending money. It is almost like a viscous cycle as well. Spending decreases as people continue to hoard money. Jobs suffer and continued losses occur because people are not spending. The reality is that economic growth happens because of consumer spending; not saving. The credit card industry has made it possible for consumers to spend money. The retail and service industry without credit cards is like the housing market without mortgages.

The Obama administration needs to stabilize the credit card industry as well. Card issuers have seen significant losses due to the credit crisis. The collapse of the mortgage industry has caused significant job loss in the United States. Those who are now unemployed are having a harder time making their credit card payments. In response, the credit card industry has had to reduce spending limits and increase interest rates in order to make up for the losses. This reduction in consumer credit has adversely affected spending. As I stated previously also, the reduction of spending has destroyed the job market as well. The government should invest in credit card bonds and as a condition require that card issuers lend more money to consumers. In order to save the economy we need to re establish consumer confidence and resume lending.

Credit cards have empowered consumer spending for many years. This spending has been the number one factor causing economic expansion. People with credit are able to go to restaurants and stores to spend money. Malls and shopping centers are built in order to facilitate the consumers every desire. Stores are forced to shut down when spending decreases. Circuit City has become the most recent victim to fall because of the credit crisis. 30,000 more jobs have been lost. Circuit City blames its failure on reduced consumer spending and its lack of ability to secure loans. The Obama administration needs to address this problem very soon. Once credit begins to flow again spending will increase, jobs will be created, and our economy will be back on track.

Labels: Circuit City, credit card, credit card bonds, credit card issuers, credit cards

How to Stay Out of Credit Card Troubles

Credit cards have essentially replaced the use of cash in our society. They are used everywhere these days. You can use your credit card to go to the movies, dinner, shopping, club hopping, traveling and just about anywhere that you can imagine. The lure to use your credit card has grown more and more over the years. Credit cards can be a great tool if used properly. However, when abused credit cards can get you in a lot of financial trouble. Staying out of trouble with your debit card is as easy as following a few basic guidelines.

Do not spend more than you can afford. This is the very most basic guideline to follow if you want to be a responsible credit card user. There are many people who apply for credit cards and use them recklessly. Reckless spending patterns are very easy to get into with a credit card. Most of are used to spending physical cash from our pockets. The day starts and you have $35 in your pocket. You spend $12 at lunch and put $20 of gas in your car. This leaves you with $3. At the end of the day your realize that you have spent $32 since you physically started out with $35 and are left with $3. With a credit card it is very easy to keep on spending. People a lot of times do not realize how much they have spent on their credit cards until the bill comes. I know because this has happened to me before as well. If you have a $10,000 limit and $4000 monthly income before you know it you will have racked up a bill if you are not careful. Since you are not actually physically seeing your money disappear it becomes very easy to start spending. However, if you have a plan and stick with you will be all right. A person with a $4000 monthly income should only spend what they plan on repaying at the end of the month.

Another good way to avoid getting into credit card hot water is too leave your credit cards at home. The old saying “out of sight out mind” is so very true in many situations. If you leave your credit card at home and not take with you too the mall with your friend, chances are you will not end up spending any money on things that you do not need or can not afford. Spend cash if you plan to have a night on the town. How many times have you gone to a club, had a few drinks and ended up spending more than you planned on your credit card? I know it has happened to me before. Alcohol lets free on inhibitions and many times the credit card spending will start. If you leave your credit card at home and spend cash, you will be limited to spending a certain amount. In the morning when you wake up you will certainly be thanking yourself for following my advice.

Log on to your online account frequently. As I mentioned previously, it is very easy to forget how much you have spent on your credit card. Most, if not all, credit card issuers have an online account for you to log on and check your statement on a regular basis. Most online sites will even track your spending in real time. In other words, if you spend $8 on lunch at the Chinese restaurant and then go log on to your account an hour later the charge will show up. Pay pal has a service that will send you an email or text message when a charge is made to your Pay Pal issued credit card. This is a very good way of keeping track of your spending. Other credit card issuers should also offer customers the same feature. Come home to your computer, go through your emails and see exactly how much you have spent.

Credit cards used responsibly will benefit anyone. There are often emergencies that come about where a credit card comes in handy. Sudden car repairs, doctor’s expenses and home repairs can easily and quickly cause you to end up in a financial fix. If you have a credit card and have used responsibly you can get yourself out of that bind quickly. However, if you have overspent your credit limit you might continue in a financial bind should you not have any other way of obtaining emergency money. Do not spend more than you can afford. Leave your credit card at home. Go online frequently to check your account. Stick with these guidelines and you will definitely keep out of financial trouble with your credit card.

Labels: credit card, credit card advice, credit card issuers, credit cards

Capital One No Hassle Rewards Student Credit Card

In 1988 Nigel Morris and Richard Fairbank founded Capital One. The core focus of Capital One was to provide consumer loans such as credit cards, home loans, auto loans as well as banking and savings products. In addition, Capital one was one of the first mass marketers of credit cards. They began this mass marketing in the early 1990s. The Capital One No Hassle Rewards student credit card is an excellent choice for students those with limited credit history.

Capital One has established itself as a significant player in the credit card market. Students will be happy to take advantage of the many features that this credit card has to offer. 0% interest until June will give cardholders a chance to save money on purchases they make with their credit card. Charge your books on your Capital One No Hassle Rewards student credit card and avoid paying any interest until June. This 6 month no interest policy applies to all purchases made during the introductory period.

The Capital One No Hassle Rewards credit card also has an excellent rewards program. Cardholders can earn 1% cash back for all charges made on their Capital One credit card. This is a great way to save money as well. Use your credit card where you spend the most money like at grocery stores or gasoline stations. Should you spend $5000 throughout the year on your credit card, you will earn $50 back in rewards cash. Furthermore, there is no limit to the amount of cash back rewards that you can earn. In addition, you will earn a 25% bonus based on your previous years cash back earnings. Furthermore, there is no limit to the amount of cash back that you can earn. There is also no time limit to redeem your rewards nor is there a limit that you must meet before you can withdraw that rewards cash. Also trade you rewards points for gift cards as well.

Another major advantage to this Capital One student credit card is that it protects its customers against liability relating to fraud. You will have $0 liability should your credit card be stolen from you and used before you are able to report it. By law credit card issuers can hold their customers up to $50 responsible for fraud. Capital One goes the extra mile and does not put any responsibility on the cardholder.

Students also pay a 3% fee for all cash advances they make on their Capital One Rewards No Hassle student credit card. The only disadvantage to your cash withdrawal is that the minimum fee will be $10. Therefore should you withdraw a small amount of cash like $30 you will be billed $10 for that transaction. Should you withdraw a larger amount like $400 your fee will be 3% of the withdrawal which equals $12. It makes more sense to use the cash advance only when you need to withdraw a relatively large amount of money.

Students should also be aware of additional fees that Capital One charges for late payments and for going over your limit. The late fee is usually calculated on the amount of your outstanding balance. The fee is $15 for outstanding balances between $0 and $99.99. A fee of $29 is applied to all outstanding balances that are between $100 and $249.99. For outstanding balances of $250 or more, a $39 late fee is applied. Over the limit fees are also based on your credit limit. A fee of $19 is charged for going over your limit should that amount fall between $0 and $499.99. Should your credit limit be within the $500 to $999.99 range then your over the limit charge will be $29. For credit limits of $1000 or more it will cost you $39 to go over the limit.

The Capital One No Hassle Rewards student credit card is an excellent credit card to build your credit history. Cardholders will be very pleased with the rewards programs offered as well as the 0% 6 month introductory fee. Students who are approved for the Capital One credit card will ultimately benefit from using this credit card.

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

How to Negotiate Credit Card Companies

1. Save credit card offers sent in the mail.

How many times have you gone to the mailbox and found credit card offers from every issuer you can think of? You can use these offers to your advantage when negotiating interest rates with your credit card company. If another company should offer you a better offer in the mail, show this offer to your current card issuer. This is proof that you are a good customer. Furthermore, this shows that other credit card companies also desire your business. Be sure to have the ability to prove to your current card issuer that other companies are really after your business. This can be easily done with a scanner and/or fax machine. Make copies of the card offer so that you can easily fax proof of the other offers.

2. Always read the fine print.

Be sure you are aware of both major and minor details that are written in fine print. Credit card companies are famous for making enticing offers without giving all the true details. Many times card issuers offering a 0% interest rate are only doing it for a specified amount. This is known as an introductory offer that will usually not last for more than 6 months to a year. Furthermore, the more knowledgeable you are, the better prepared you will be to negotiate.

3. Always try to speak to a supervisor when calling customer service.

Many credit card companies have dedicated call centers that handle the hoards of questions and issues that customers have on a day to day basis. These jobs are usually low paying and have a high turn over. Many times, you will speak with an individual who does not know 100% how to handle customer’s issues. This person, out of ignorance, may tell you that something what you are requesting is not possible. However, we all know that in negotiating anything is possible. A supervisor is more than likely much more knowledgeable and has had experience dealing with different types of issues. Most company policies will require a supervisor to come to the phone when requested. Simply ask the customer service rep to speak with a supervisor. Sometimes they might be able to help you, however, more often then not you will get better results when speaking with a supervisor.

4. Be ready to sell yourself.

Once you have the supervisor on the line, you need to convince that person why you are valued customer. If you are seeking a better interest rate, explain to the supervisor that other credit card companies are offering you a better rate. Also, if you have always made payments on time, be sure to remind them. Furthermore, if you pay your balance every month, be sure to remind them as well. As I mentioned in step 1, be sure and have proof ready to send the supervisor. The more informed you are the better chance you will have of a successful negotiation.

5. Call another card issuer if the one you are talking to you does not make the offer you are looking for.

Always remember that there are other fish in the sea. If one company does not want to negotiate with you then simply hang up and call someone else. If one door closes, another one will open. Talk to multiple companies. Another card issuer might find your requests reasonable and be willing to work with you.


6. Lastly, be ready to transfer your balance to a new card if needed.

Card issuers prefer for you to have a balance with them, then no balance. Cardholders who maintain very low balances do not get charged a lot of interest. This goes against a card issuer’s business model. They make money of off interest charged to you that is based on your balance.

There are many ways to negotiate with any company, including credit card issuers as well. Knowledge is the key to a successful negotiation with anyone. The more informed you are with information, the more ammunition you will have when pleading your case. In addition, always, try to speak with someone that what is going on, such as a supervisor. A rookie customer service rep might not know all the rules that apply to his or her company yet. Lastly, be willing to transfer your balance from one card to another in order to secure a better deal.

Labels: credit card, credit card issuers, credit cards, how to negotiate with credit card companies

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

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

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