Way For Choose The Right Credit Card Debt Consolidation Services

We will help you to choose the correct Credit Card debt consolidation program for yourself Credit Card debt consolidation is gaining increasing popularity since everyone is choosing this option to get rid of their debts. But before deciding on the Credit Card debt consolidation services to settle your debts, you must find out how this process works so that you can choose the perfect program for yourself. This will help you to avoid the commonly occurring drawbacks associated with this process. There are various types of Credit Card debt consolidation services and educating yourself about the correct Credit Card debt consolidation services for your pocket can save you a considerable amount of money as well as the mental stress that one wrong decision could cause in the long run. You can get all your queries solved at our website [ http://www.debtconsolidation123.net ] . We will help you to choose the correct Credit Card debt consolidation program for yourself.
Have you chosen the right plan! Follow the tips listed below to eliminate any kind of loop holes in your Credit Card debt consolidation process: 1. Don’t trust suggestions and advices given to you, which are trying to make extra money from you. Ensure that you take good suggestion from impartial sources. A Credit Card debt consolidation company, which takes fees from you for application and signing up process, might not actually want to help you. It might just want your money.

2. There are many illegitimate companies online, and it is difficult to find out which are the good ones. Though you might find a very good Credit Card debt consolidation services online, there are chances that you end up signing off the wrong one just because your financial situation is not so great. However you can avail services which help you sort out your credit status.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, October 4-6, 2010. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, October 4-6, 2010. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, October 4-6, 2010. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, October 4-6, 2010. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, October 4-6, 2010. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, October 4-6, 2010. Los Angeles, CA.

3. A very smart way of Credit Card debt consolidation method is to avail a Credit Card debt consolidation loan. It is a loan in which you borrow money to repay you debts, and then pay off the loan, generally at a very low rate of interest. Also you need not repay your credits separately. All your dues are combined in to one single payment which is lower than the actual total of your credits. Isn’t that awesome! This method is very successful since you can simply get Credit Card debt consolidation without any of your creditors knowing that you are repaying your credits without paying any late fees and high interest rates.

4. If you do not have enough credit to get a loan, you can choose to balance transfer credit card. This is a type of Credit Card debt consolidation services. Here you transfer all the outstanding balance of your cards on a new credit card and then make payments from your new card. Usually this is done on an introductory rate, or on a very low rate of interest than before. Likewise you can remove the credit cards with high interests. But you must make sure that the company doesn’t charge you any balance transfer fees.

Keep in mind that many times the Credit Card debt consolidation companies use harsh methods to get your creditors to lower the debt. Because of this it might happen that your creditors report to your bureau files that you are taking help from a debt settlement company. This can add negative remarks to your history and might hamper the debt you avail in future. Also consider that these companies may charge consolidation fees, hence they should be your last choice. Hence research more to get the best deal.For future information visit [ http://www.debtconsolidation123.net/ ]

American Credit Card Debt Consolidation Loan Program - A Debt Consolidation Service Enables You to be Debt Free Faster

American Credit Card Debt Consolidation Loan Program, There are many ways to consolidate credit cards for a borrower to overcome his credit imbalances.

In case you have got yourself into significant unsecured credit card debt consolidation, it is imperative for you to consolidate credit cards and pay off the credit dues. This is inevitable considering the mental strain and harassment caused by creditors or their recovery agents as well as late payment penalties that each creditor is likely to impose. Furthermore, if you are unable to do so on your own, you should explore other alternatives to become debt free. One of the best ways to approach your credit card debts is to seek assistance from a reputed online debt consolidation service provider like ACreditConsultant. The utility of such services could be better understood from the benefits that they offer.
Service providers have various approaches of dealing with your debt situation. These include debt negotiations, non profit credit counseling services, debt settlement plans and debt management programs to name a few. Irrespective of the method deployed, a debt consolidation service takes away the worries caused by your creditors.

Once you are enrolled for debt relief program, qualified legal counselors negotiate with each of your creditors to either waive or reduce late payment charges and lower rates of interest. Negotiators have experience as well as skills and tactics in dealing with credit card companies. Since, service providers have many traditional and private finance crediting companies as their partners in the money lending business it is easier to secure a credit card debt consolidation loan from a lender who offers lower rates of interest as well as favorable loan terms. You could repay each of your creditors every month through an escrow account formed by the debt consolidation company as part of the debt settlement plan. This helps in saving considerable amount of money and time in the long run.
Non profit credit counseling services provided by a debt consolidation service could be useful in enabling borrowers to formulate a workable budget as also in avoiding unwarranted use of credit cards. This could be highly useful in managing your finances much better and prevent you from getting into such kind of financial circumstances again.

Looking to the above benefits, it is quite obvious that you could really get rid of your credit card debts more quickly and at much lower costs than you could do on your own, by using a debt consolidation service. Hence, it is recommended to utilize the professional services offered by reputed online service providers like ACreditConsultant, whose expertise could be critical to make you debt-free in a stipulated time frame.

APPLY NOW - http://www.acreditconsultant.com/apply-now.php
 

Prepaid credit cards 'can help avoid debt'

Those worried about falling into debt on credit cards and store cards could find that prepaid credit cards are ideal.
Speaking about prepaid cards, managing director of the Debt Advice Foundation David Roger said that such financial vehicles can help people "avoid the accumulation of credit card debt" as people can only spend up to a certain amount.
"Basically the customer gets all of the advantages of using a credit card, for example being able to pay for goods over the telephone or not needing to carry cash but without the risk or temptation of spending more money than they have," he went on to explain.
Figures from Unbiased.co.uk show that debt on credit cards in the UK has risen to £54 billion over the past year.
Collectively, everyone in the UK will work the first 50 days of the year just to pay off their debt interest.
While credit cards could spell bad news for some, those who regularly pay off the amount on their card could enjoy a good credit rating and find it easier to get loans and other finance in the future.

Five Differences Between Debt Reduction and Credit Counseling

More and more consumers today find themselves in the uncomfortable situation of only being able to afford the minimum payments on their credit cards, or even worse, not being able to afford even the minimum payments. In today’s world, it is often easy to get in over your head and find yourself spending more than you make. It seems that everything is going up but wages, and it is all too easy to fall behind.

Many desperate consumers find themselves contemplating a bankruptcy filing, but bankruptcy can carry a legacy you will have to live with for years into the future. A bankruptcy filing will stay on your record for a minimum of seven years, and you may find it difficult or impossible to obtain necessary credit in the interim.

Fortunately, there are alternatives to filing bankruptcy, even for consumers who owe thousands or even tens of thousands of dollars to various banks, credit cards, and other creditors. Many people ask whether it is best to go with a debt reduction program or enroll in a credit counseling program. While there are some similarities between these two types of programs, there are some important differences to consider as well.

Let us consider the five most important differences between debt reduction and credit counseling:

Requirements: Did you know that most credit counseling programs will require that you close all of your credit accounts? The few exceptions to this requirement include accounts that are required for business needs and accounts with very small balances.

Length of Time: Credit counseling services typically take longer to complete than debt reduction services. The average length of time to liquidate debt through a credit counseling service is five years. Unlike credit counseling, debt reduction programs can often allow consumers to retire their debts in less than a year.

Cost Savings: Cost savings in the form of reduced payments is another important advantage of debt reduction programs. While credit counseling programs typically require that the entire amount of the debt be repaid, debt reduction programs can be negotiated to allow the consumer to repay only a portion of what is owed.

Most creditors are willing to work with consumers enrolled in debt reduction programs and that includes accepting a lower repayment amount. Settlement amounts can range anywhere from 20 percent to 60 percent of the amount owed, with the industry average being around 50 percent.

Credit Score: Your credit score is also affected in different ways by credit counseling programs versus debt reduction programs. Generally, credit-reporting agencies will re-age the accounts of consumers enrolled in credit counseling services after three payments have been made.

With a debt reduction settlement, the status of the account does not change. If the account is current, it will remain current. If it is past due, it will remain so. It is also good to remember that with a debt reduction agreement, the creditor will report that the account has been “settled in full,” or similar wording, at the conclusion of the debt reduction program.

Bargaining Power: The final difference between debt reduction programs and credit counseling is the bargaining power enjoyed by the consumer. Credit counseling programs rely on the submission of a debt repayment proposal, which the creditors are free to accept or reject as they see fit. With a debt reduction program, however, all creditors are contacted immediately to inform them of the hardship situation and the desire to resolve it through a negotiated debt reduction agreement.

Consolidate credit card debt with home equity loans

Most people with credit card debt find that it is very difficult to pay off the amount that they owe. The primary reason for this is the high interest rates that are charged by credit companies. It is almost a certainty that your cards have the highest interest rates of any loan that you have.
It makes financial sense to pay off your cards before you worry about paying off your other debts. In fact in most cases it makes sense to take out another loan at a lower interest rate to pay off your debt.
One of the best loans that is available to pay this debt is a home equity loan.
If you own a home that you have equity in it is very easy to get a loan against this equity that you can use to pay off your credit cards. The reason that this is a good idea is that a home equity loan has much lower interest rates than credit cards do, generally the interest rate is about a third that of credit cards. This will not only substantially reduce the total amount that you owe, it should also reduce your monthly payments making it easier to pay off your debts.
There is another huge advantage to using a home equity loan to pay off your credit card debts and that is for most people a home equity loan is tax deductible. Since you can deduct the interest that you are paying on your loan as an expense on your income taxes you have effectively lowered the interest rate by about twenty five percent, although this will vary depending on your tax bracket. This deduction effectively makes a home equity loan the lowest interest loan that you are likely to find.
If  you do choose to use a home equity loan to pay off your debt, you need to make sure that you don’t run up more credit. Unfortunately a lot of people use their loan to pay off their debt and then go out an max out their cards again. If you do this you now have both the new debt and the home equity loan to pay off and you are in worse trouble than before. You have to make sure that you pay off the home equity loan before you start to rack up more debt.
A home equity loan can be an excellent way to pay off your high interest debt and save a lot of money. There is probably no loan available to you that has a lower interest rate which makes it the ideal loan. Just remember that once you have paid off your debt you need to resist the temptation to go out and use them again until after you have paid off your home equity loan.

Tennessee No. 2 in credit card debt

The good news is that Tennesseans owe a little less on their credit cards. But that's about the only good news according to TransUnion's quarterly analysis of credit card trends.

Tennesseans carry the second-largest credit card debt load in the country — an average of $6,823. But that's down from $7,029 that TransUnion reported in November. Only Alaskans carry more card debt ($7,328). The lowest average credit card debt was found in Iowa ($4,139), followed by North Dakota ($4,318) and West Virginia ($4,448).

The report looks at the ratio of bankcard borrowers who are 90 days or more delinquent on one or more of their credit cards. Nationwide, the rate increased to 1.21 percent in the fourth quarter of 2009, up from 1.1 percent in the previous quarter.

In Tennessee, the delinquency rate was 1.24 percent. Nevada came in first for credit card delinquency with 2 percent, followed by Florida at 1.75 percent and Arizona at 1.52 percent.

The Awful Truth About Credit Card Payments

Credit card bills arriving in consumers' mailboxes this month will have a little something extra – extra information, that is. Thanks to the new federal rules that took effect Monday, card companies must now clearly show consumers how long it will take for them to pay off their balances if they make only the minimum payments. Card statements must also show how much a consumer would have to pay each month to zero their total balance within three years.But at least one major bank has let its customers -- at least those who diligently searched its Web site -- in on the importance of making more than your minimum credit card payment long before Congress approved the new rules last year. A page on the Web site for North Carolina-based BB&T, which the bank says has been up since late 2008, includes an article dedicated to encouraging consumers to make more than their minimum monthly card payments along with examples of balances and payment schedules.

Credit card companies, the article notes, make minimum payments "low enough to … seem attractive" and adds that "[p]aying more than the monthly minimum will eliminate the balance much faster, save you considerable interest charges, and provide some peace of mind knowing you are taking a prudent action."

Coming from a bank, that sort of advice is "more than unusual," said credit card expert Curtis Arnold. "It's unheard of."
To understand why this is remarkable, remember that banks and credit card companies derive much of their revenue from charging interest rates on revolving balances – that is, balances that consumers carry over from month to month instead of paying in full. The longer a consumer takes to pay off a balance, the more interest they pay. It's why card companies have famously labeled those who pay their balances in full each month as "deadbeats" – they may be among card companies' least profitable customers.

New Credit Card Rules Crunch College Students

I'll never forget when I was nine years old. My parents had recently
separated and my mom just moved into a new apartment. One of the first
nights, before the boxes were unpacked, I remember my mom talking in her
sleep. "You have to have good credit, you need good credit."
At the time I didn't know what credit was -- but it sounded scary. That's
why years later, I was terrified to get a credit card.
When I moved out to go to college, my mother told me not to sign up for any
credit cards offers unless I talked to her first. I was shocked when in my
first semester I went to my bank for a direct deposit sheet and the teller
told me I was pre-approved for a credit card.
I quickly refused. Unfortunately many of my peers fall for this trap.
We college students charge credit cards like stampedes. But who wouldn't
want a seemingly endless supply of money their parents have no control over?
Well that's not an option anymore.
The Credit CARD Act effective this week changes everything for the under 21
set. You don't have an income? You don't have a credit card. Your parent
refuses to co-sign? You still don't have a credit card. No more credit card
companies at college fairs, pre-approved cards, freebies and more. I think
it's a good idea. And lets add some financial literacy courses before you
start to charge this or that.
As scared as I am of credit cards, I see how they are really necessary for
other people. I have friends who depend on credit cards for groceries,
textbooks or plane tickets to go back home for breaks. Budget cuts are just
making college more expensive and private loans are hard to come by.
Speaking of -- what ever happened to legislation making more student loans
available directly from the government? Last I heard, the lobbyists for
major private student lenders were stalling that one.
The Credit CARD act will help a lot of my peers because it saves them from
themselves. Still, it doesn't answer the challenges of responsible, broke
students trying to make it through the recession.
So I'm worried. This could be a band aid fix to a super glue problem.

VISA Becomes Second Credit Card to Block Online Casino Payments

Just two short weeks after MasterCard announced its block on American online casino deposits, another major credit card company has decided to follow its lead. Now, VISA will be pulling out of the online gambling market, prohibiting American players from depositing money using their credit cards. There is no word yet on whether or not the block will affect Canadian players.
Although neither company has stated a particular reason behind their decisions, onlookers believe that VISA and MasterCard are preparing for the implementation of the Unlawful Internet Gambling Enforcement Act. If the UIGEA is enforced, online gambling will become illegal in the United States, a possibility that has many international companies preemptively removing themselves from the country’s market. If the act is overturned, however, MasterCard, VISA and every other company that has pulled out of America’s online casinos may regret their decisions – the market’s worth is estimated at $12 billion.

Now that the two biggest credit card companies are no longer an option, potentially thousands of players are going to be left without a way to fund their accounts. Luckily, players have many other options to choose from, many of which do not require players to divulge any personal banking information to their online casino. For example, e-wallets like NeTeller and Moneybookers, operate on the same premise as PayPal, as players can transfer money from their bank account through a third-party system.

Obama heralds U.S. credit card rules

***Rules restrict retroactive rate increases***

The Obama administration heralded new rules protecting U.S. credit card holders from certain fees and rate increases on Monday, even as Connecticut's Attorney General criticized the Federal Reserve for not using the rules to reverse earlier card rate hikes.
The implementation of rules from the U.S. credit card act, signed into law in May, will help cardholders understand how much their credit cards cost to use, President Barack Obama and U.S. Treasury Secretary Timothy Geithner said in statements.
The rules restrict credit-card issuers such as Bank of America Corp (BAC.N) and JPMorgan Chase & Co (JPM.N) from raising rates on borrowers who are late with their payments. They also prevent card companies from charging over-limit fees, unless customers have previously given the companies permission to process transactions that would take their accounts over the limit.
"For too long, credit card companies have had free rein to employ deceptive, unfair tactics that hit responsible consumers with unreasonable costs," the president said in a statement.
"But today, we are shifting the balance of power back to the consumer and we are holding the credit card companies accountable," he added.
Americans pay around $15 billion a year in penalty fees, according to the White House.
Connecticut Attorney General Richard Blumenthal said under the rules, the U.S. Federal Reserves can review and reverse certain credit card interest rate and fee increases since January 2009. Blumenthal, in a statement on Monday afternoon, criticized the Fed for not yet determining what rate and fee increases can be reversed.
Treasury Secretary Geithner said more protections are needed for consumers. The Obama administration is still fighting for a single, independent consumer financial protection agency, he said. [ID:nN22184171]
Separately, in a report on Monday, credit rating agency Moody's Investors Service said that while the rules will cut interest income and fees for U.S. card issuers, they should have only a small impact on these companies' profitability.
Citigroup Inc (C.N), American Express (AXP.N), Capital One Financial Corp (COF.N) and Discover Financial Services (DFS.N), along with JPMorgan and Bank of America, are the six largest U.S. card issuers.
Shares in the major banks were up in afternoon trading. The broad KBW Banks Index .BKX was up 2 percent. Shares in card companies Visa (V.N) and MasterCard (MA.N) were up 0.4 percent and 1.2 percent at $87.17 and $225.24 respectively. Shares in American Express, however, were down 9 cents or 0.23 percent at $38.97.

Banks nervously await new credit card law

Banks and other credit card issuers are nervously awaiting the new credit card law set to go into effect on Monday. Many are anxious to determine just how big of a profit hit they stand to suffer as a result of the CARD Act.
Judging by early estimates, it could be quite costly.

Late last year, JPMorgan Chase (JPM, Fortune 500), the nation's largest credit card issuer, warned it expected its credit card business to lose as much as $750 million this year as a result of the new legislation.
Executives at rival Citigroup (C, Fortune 500), which issues cards to consumers from Maine to Mexico, warned last month the revenue lost by its domestic business could tumble anywhere between $400 million and $600 million.
All told, the new law is expected to cost the industry as much as $5.5 billion in lost revenue this year and more than $50 billion through 2015, according to the credit card advisory firm R.K. Hammer.
Much of that decline, experts said, is due to the fact that issuers are severely restricted by how and when they can raise a cardholder's annual percentage rate.
Under the new law, lenders are not only prevented from raising rates on a customer's existing balance, they are also required to wait 60 days before raising rates on delinquent customers.
Hoping to compensate for some of the lost revenue, credit card companies have introduced a dizzying number of new fees and raised existing ones since the bill was signed into law last May.

Regional banking giant Fifth Third (FITB, Fortune 500), for example, announced last June it would begin charging a $19 fee on accounts that were dormant for 12 months.
Such efforts may help the banks. This year, the industry is expected to generate $86.4 billion in fee revenue from consumers, according to R.K. Hammer, nearly $7.5 billion more than it earned during 2009.
"In general, card issuers have been very good about finding ways to get paid for their services," said David Long, an analyst at Chicago-based investment firm William Blair & Co.
But card issuers could also get a boost from another unlikely source: the economy.
Massive job cuts have lifted banks' credit card-related losses to historic levels in recent months as out-of-work Americans struggled to stay current on their payments.
There have been recent signs of improvement in the U.S. job market though. Just last month, the national unemployment rate fell to 9.7%, dipping below 10% for the first time in three months.
Should unemployment levels continue to decline, banks would get a much-needed break on losses they have endured for more than a year now. There are already indications this may be taking place.
Early-stage delinquency rates, a commonly relied upon indicator of future loan losses, declined or held steady at Bank of America (BAC, Fortune 500), Capital One (COF, Fortune 500) and nearly every other single major credit card issuer last month, according to monthly credit trend figures released earlier this week.
"The fact that delinquencies are coming down is a positive sign," said Scott Valentin, managing director at FBR Capital Markets.
Loan losses however are only one piece in a much larger puzzle that credit card companies have to solve as they try to reconcile the CARD Act with their current business model.
Issuers will continue to experiment with new methods aimed at reviving the profits they once enjoyed. But much of their time will also be spent assessing what consumers really want in a credit card, including whether recently instituted practices like annual fees will ultimately be palatable to cardholders.
"They are trying to customize products under the new rules," said Valentin. "It will take time."

When even the minimum payment is too much

Q:  What if we can't pay the minimum due and after contacting the credit card company and making the request, they won't work with us to reduce monthly payment and interest rate? Can we just pay them what we can? Will they sue us or garnish our wages? We actually had one credit card company reduce our rate to 0 percent, less $100 per month and a $16,000 balance will be paid off in five years, and we have it in writing, while the other company won't even talk to us, they just give us a debt consolidation organization.

A : Let me start by saying some credit card companies are more willing to work with consumers than others. It is good news that you have worked out a plan with one of your creditors. Be sure you stick to the plan and don't miss any payments or they might become uncooperative.
As for your other creditor, let me first explain what will happen if you do as you suggest and "just pay them what we can." Your cardholder agreement most likely includes a clause for what the card issuer can do if they receive payments in amounts less than the minimum amount due. Most consider it a late payment because the payment is not the full amount due and you will be charged a late payment fee -- these days, a late fee averages about $29. The payment will be processed, but with your interest rate charges and the late fee, it is likely the payment will be less than the charges added for the month. As a result, your balance will begin to increase each month rather than decrease.  If that isn't bad enough, and you are close to reaching your credit limit, your increasing balance each month may push you over the limit and you could then be charged an over-the-limit fee of approximately $39.
To illustrate my point, let's do a little math. With a balance of $10,000 at a 29 percent interest rate, your minimum payment would be approximately $350. The interest charged for the month would be $241.67. So, if you were to make a payment of $200, the $41.67 in interest charges that was not covered by your payment and a $29 late fee would be added to your balance. OUCH! You can begin to see how quickly your balance would get out of hand if you do not pay at least the minimum amount due. Use the CreditCards.com minimum payment calculator to see how your numbers add up.
Should you make payments that are less than the minimum due or not make any payments at all for several months, your creditor may or may not take action to collect what is owed them. If you owe a large amount -- such as our example above of $10,000 -- it is likely that the creditor will make attempts to collect, including suing you in court. A good rule of thumb to follow here is if you ever receive a summons to appear in court from a creditor, by all means appear. Without your presence, your side of the story is not told and the court will likely side with the creditor who could then be issued a judgment in the amount of the debt. A judgment can be used to garnish wages.
Ironically, some creditors are more willing to lower interest rates and monthly payment amounts after you have missed several payments rather than when you were current with payments. Rather than risk damaging your credit history and the stress of missing or making less than minimum payments, I'd recommend you contact a reputable nonprofit credit counseling agency.
The vast majority of credit card companies will work with nonprofit credit counseling agencies to lower interest rates and monthly payments for consumers when they are contacted by the agency on behalf of a consumer in your situation. You can find help at a member agency of the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.  
Take care of your credit!

New Credit Card Rules May Not Curb All Lenders' Abuse

City resident Marina Danilina considers herself a model credit card holder.
"First of all, we never miss any payments. Second, we always pay over minimum, like 10 times over the minimum," she says.
Given her impeccable credit past, Danilina is used to getting letters from her lenders announcing they have increased her credit line or offering her low rates on balance transfers. Yet that changed over the past few months.
"Recently we start receiving strange letters, 'Your interest rate is up.' And it started again with American Express when I started seeing 15.74 [percent interest rate]," she says. "I said, 'Are you kidding me, 15.74 [percent]? We've been such good customers."
What is happening is that credit card companies are facing big changes in the way they do business. The Credit Card Accountability, Responsibility and Disclosure Act was passed last May, but many of the key components were delayed, giving lenders a chance to make all the moves that will soon be restricted.
"They've been dragged, kicking and screaming, into this change. We've seen months and months of rates being raised, fees being raised, accounts being closed, limits being cut," says Credit.com co-founder Adam Levin.
Those things can still happen after the bill takes full effect on February 22, but only under a specific set of circumstances. For instance, interest rates can still be raised, but not as quickly and not without reason.
"In the past, if you were even a day behind on your bill, they could actually increase the rates to the default rates, which are typically 30 percent and higher," says GreenPath certified consumer credit counselor Chris Dlugozima. "Now you have to be more than 60 days behind before that can happen."
However, experts warn that while this new grace period will be helpful, it is not a silver bullet. Interest rates may not go up for 60 days, but other consequences can kick in a lot sooner.
"They could charge you a late fee and they could report you to the credit reporting agencies, which would impact your credit score," says Levin. "[That would] ultimately would give them the ability, if they wanted to -- even if they didn't raise the rate on an existing balance -- they sure could raise the rate on future purchases as long as you have your card for one year."
One silver lining is even if credit card holders fall behind and see interest rates spike, the rates can still get back on track by making sure all payments are on time for the next six months. At that point, the lender will have to lower rates as a reward for good borrower behavior.

Minimum Payments May Rise As Credit Card Companies Become Accountable

When you opened your latest credit card statement, you might have noticed it had a little chart listing the amount of time it will take to pay off your balance with minimum payments. This eye-opening announcement can be compared to the calorie counts on fast food menus.
"The intention of the law is to prompt more people to action if they are making the minimum payments," says GreenPath credit counselor Chris Dlugozima. "I mean, the math hasn't changed. It's just forcing the creditors to put a disclosure out there, kind of like the surgeon general's warning for credit cards."
While the change may motivate consumers to pay off larger amounts each month, it may also motivate lenders to require larger minimum payments.
"Wouldn't that make them look bad if all their statements say it will take you 27 years to pay it off?" says Dlugozima. "If they increase the payments, then it will take less time and they won't have to disclose this ridiculous length of time it will take for you to pay it off."
The change is part of last year's Credit Card Accountability, Responsibility and Disclosure Act, sections of which will officially kick in next week. In addition to prohibiting lenders from raising your interest rate suddenly and arbitrarily, the CARD Act also prevents companies from charging an over-limit fees, unless they are given permission from cardholders to do so.
"You have to opt in to their ability to let you go over the limit and if you do, they would charge the fee," says Dlugozima. "But really, for most consumers, why would they want to do something like that?"
Credit card companies will also be limited in the way they market to young people, who have long been a target audience, especially on college campuses.
"People under the age of 21 would have to either show an independent ability to pay or have a co-signer. And it moves marketing off-campus now, as opposed to somewhere between your dorm room and your classroom," says Adam Levin, the co-founder of Credit.com.
The CARD Act's provisions of meant to protect consumers, but experts say it is as important as ever to keep a watchful eye on one's finances, because the new law is hardly a bulletproof vest.
"2010 is the year of accountability. It's the year of accountability for the credit card companies and the banks when it comes to dealing with consumers, but it's also the year of accountability when it comes to consumers," says Levin. "We have to be aware, we have to read and we have to willing to assert ourselves, because if we're not willing to do that, then this law is not as relevant as it should be."

The Psychology of Spending Money

In a perfect world, we would all avoid too much credit card debt and would never have to deal with the desperation of being unable to meet our credit card payment obligations.
We'd never have creditors hounding us for payment.
We'd never know the frustration of not being able to afford what we really want because every extra cent has to go towards keeping up with the minimum payments on our credit cards.
But this isn't a perfect world, and unfortunately these distressing situations are the norm for many people.
If you find yourself in this position, or headed there, take control of your spending now. Don't wait until your situation is so dire that you have few options available to you.
An important aspect of debt that is not always addressed is why you got too deeply into debt in the first place. Why did you keep charging items you couldn't afford? Why did you feel the urge to use those little plastic cards for things that weren't necessary, even when you began to struggle to make the payments? What causes your compulsive shopping?
Facing the factors that give you the urge to splurge can be uncomfortable, but if you don't face them, you may never get control of your spending and your debt. If you're always trying to pay off yesterday's purchases, many of which have long since worn out or been forgotten, how will you acquire the things you truly want for tomorrow?
One negative aspect of using credit cards instead of cash is that you don't feel like you're spending real money. The pleasant feelings you experience when you purchase the item are disconnected from the unpleasant or painful feelings of making the payment when you get the credit card statement.
Studies show that most people are much less likely to buy, or less willing to spend as much, when paying with cash as opposed to credit cards. Try leaving your credit cards at home. Pay with cash, check, or a debit card.
To really get control of your spending and your credit card debt, you need to examine what money means to you. Make an effort to notice how you interact with money and what beliefs and attitudes you have about money. Studies also show that people with low self-esteem engage in more impulse spending and buying things they don't need.
Remind yourself daily that money or a lack of it doesn't determine who you are. Your worth as a person has nothing to do with how much money you have. Once you truly believe this, and money is no longer connected to your sense of self-worth, you open up the psychological barriers that were keeping you from wisely handling the money you do have and limiting your ability to make more.
Right now, your unconscious limiting beliefs may be keeping you from being financially successful, but as you begin to build up your feelings of self-worth and develop a positive attitude about yourself and about money, you'll attract positive things into your life. As you do so, you'll feel less of a need to generate positive feelings by purchasing things, and you'll find it easier to stop buying items you don't really need.
There are hundreds of books, magazine articles, and Internet web sites about getting rid of credit card debt. Some of them offer sound advice about the psychological aspects of money and spending that you'd do well to consider.
If psychological factors influence your spending, credit reduction programs are like using perfume to cover body odor: they will treat only the symptoms, not the root cause. Working on the psychological aspects while taking steps to reduce debt will greatly increase your chances of long-term success.

Help getting out of credit card debt fast without debt consolidation loan – Honest debt advice to become debt free

Are you one of the millions of Americans out there that are struggling in debt? Is your debt load so heavy that you are finding it difficult to pay your monthly installments on your credit cards?  Well you are not fighting this battle alone. Some credit card companies use a wide variety of tactics in order to keep you in debt for life.
Just because you are in debt now doesn’t mean that you have to stay there. There is a why out of the deep hole that you have dug yourself into. Now, it is understandable that sometimes we lose our income or a portion of our income and use debt to pay for our basic bills.  Here are the steps that you need to take in order to get out of debt fast.
1.   Stop spending money. Chances are that you may be a big spender and simply can’t resist an after the holiday sale of going out to eat every night. Cut all of your discretionary spending.
2.   Learn the difference between a need and a want. As Americans, many of us have developed an entitlement mentality and believe that we deserve everything. If its not necessary to support life then chances are it is a want.
3.   Downsize. Move into a smaller apartment. Sell your car and buy a cheap used one. Buy food for your fridge and make meals. Sell off all of your junk – Jet skis, motorcycles, electronics, etc.
4.   Start paying off your debt now. Now that you have plugged all of your financial leaks start paying off that debt. Start with the highest interest credit card and work your way down.
5.   Once you have your debt paid off maintain a modest lifestyle. Don’t go out and make the same mistake again. It is ok to spend money once and a while but don’t make it a habit.
These may seem like difficult steps to take but it is the reality of what it takes to pay off your heavy credit card debt load. If you are not willing to make sacrifices in your lifestyle you will be forever bogged down in credit card debt.

Shopping around for the best credit card rate

Over the last few weeks the headlines in the credit card industry have been fairly downbeat with the vast majority of credit card companies increasing their rates over the last few months. However, we are starting to see signs, albeit few and far between at the moment, of credit card companies trimming some of their rates for specific areas of the credit card market. While this is unlikely to turn into a short term collapse in credit card interest rates it does give hope for the future.

There is no doubt that credit card companies have been pushing their rates higher and higher over the last few months to try and protect their profit margins and reduce the impact of bad debts. However, as we have mentioned on numerous occasions, this has turned into something of a self fulfilling prophecy with higher rates putting more people under pressure and increasing bad debts. Thankfully it does look as though we have potentially reached the peak of the credit card interest rate cycle and hopefully we should see interest rates start to fall sooner rather than later.

Any reduction in minimum monthly payments will be appreciated by UK consumers who are struggling under a mountain of personal debt.

New credit card rules: What you need to know about the changes

New restrictions that will require banks and credit card companies to be clearer about their policies take effect next week. The rules apply to rate hikes, billing practices and hidden fees.
In May, Congress passed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, which is meant to protect consumers from predatory practices by banks and credit card companies.
These new rules that go into full effect Feb. 22 are supposed to make it easier for consumers to understand these terms better and have more time to pay their monthly bills.
A rule that already went into effect in August requires banks and credit card companies to send a notice 45 days before making any significant changes on certain fees.
“Credit cards companies are trying to make the most with the time that they have and unfortunately there is a few months lapse before this Feb. 22 provision went into effect and they are absolutely taking consumers to task,” said Maria Audas of the S.C. Consumer Affairs Department in Columbia.
“Consumers are going to want to be especially careful after Feb. 22 of any notices coming in the mail that may say, ‘hey do you want to agree to the over the limit programs or fees?’ Make sure you know what you’re agreeing to or signing.”
Audas said consumers must make sure not to throw away inserts that may look like junk mail. For example, over-the-limit fees account for close to a third of the credit card industry’s income, so these rules are going to be a huge hit for them. That means banks will fill your mailbox with these notices that may confuse a consumer and try to get card holders on board with them immediately.
“Once you get that written notice, you make the decision, ‘OK, do I accept this interest rate increase or do I close out my account?’” Audas said. “Now if you close out the account, you still have to pay the balance and there might be a slight effect to your credit score just for closing out the account. But then again, you won’t have to deal with the interest rate.”
With these new rules next week, credit card issuers will be banned from offering credit cards to those under 21 unless they have adult co-signers on the accounts or can show proof they have enough income to repay the card debt.
”I feel like the rules and regulations will definitely clarify things for people who don’t exactly understand what is on their credit statement,” said Taylor Anthony, a senior at Coastal Carolina University. “I know that with a lot of college students, they don’t exactly know what they are reading or what they are understanding, so maybe it’s a great way for them to understand it better.”
Anthony said he’s never had to deal with credit card debt since he pays his balance off every month.
“I have the ‘go paperless’ option, so it’s all online, so I haven’t seen any of those notices from my bank,” he said. “I would definitely say that on a everyday mailing basis when I grab the mail, I see an offer from a credit card company extending me an offer to apply, to have a credit card with them. Typically it’s like Capital One, Master Card or Chase Bank will send me one, and I don’t even bank with them.”
Anthony said he’s noticed credit companies coming to his campus and setting up shop in places like the cafeteria. He said some representatives will have their Personal Digital Assistants with them and will get students to sign up for a credit card online just to get rewarded by a free pizza.
“I feel like little scams like that can drag people into a hole, because they really don’t know what they are getting into and then eventually they forget to cancel their card and kinda hurts them from there,” Anthony said.
The new rules will force credit card companies and banks to explain their applications, statements and other notices about the credit card in plain language such as using clear wording and readable type, rather than the traditional fine print to explain the terms.
These companies also won’t be allowed to charge an over-the-limit fee with out letting the consumer know in advance and offering the option to stay with the policy or opt out.
“They have to get the consumer’s express written consent,” Audas said. “If they don’t get the consumer’s consent, they cannot charge them. You can say no, they cannot charge you if you say no. Now obviously with that there’s going to be the inability if you go over the limit to continue purchases. Your card will not be accepted.”
Anthony said he thinks ignorance leads most college students into credit card trouble.
“I think their upbringing has a lot to do with it, where parents either are sheltering them or spoiling them where they don’t have to worry about these kinds of things. I fortunately was not either of the two,” he said. “Once I got my own credit card, I learned the ins and outs of it myself. I have a better understanding of how the system works because I got dropped into it early.”

Shoppers splash out $21bn on their credit cards

CHRISTMAS shoppers pulled out their plastic, spending a record $21 billion using their credit cards in December.They are also paying their cards off faster than before.

Credit card spending was 5.6 per cent higher than a year previously, which is stronger growth than the 2.1 per cent increase in retail sales overall.

However, the government's $10.4bn cash handout last year meant that many people paid off their credit cards.

Consumers are still cautious about the debt they build up on credit cards. An analysis by card operator Mastercard shows that only 70.8 per cent of the total $46.9bn in credit card debt is accruing interest, which is the lowest level in a year.

The level of credit card debt accruing interest is only 2.9 per cent higher than a year ago, less than the rise in inflation.

Consumers are becoming more reluctant to use their credit cards for cash advances. The value of cash advances in December was 13 per cent lower than a year earlier.

Mastercard said that the growth in credit card limits had also been falling sharply since early 2007, rising by only 3.5 per cent in the year to December.

This compares with annual growth rates averaging in excess of 12 per cent in the previous five years.

The full value of credit card transactions over 2009 was 2.5 per cent above the level of 2008.

Although consumer confidence has risen strongly over the past six months and is above its long-term trend, the Reserve Bank's three interest rate rises late last year have taken their toll and contributed to relatively weak Christmas sales.

Economists expect rising employment and the recovery in housing construction will bring improved consumer spending in the year ahead.

Credit card spending hits record high

The total value of credit and charge card transactions, including advances, rose by 10.03 per cent in December.
Australians spent $22.02 billion on credit and charge cards in the month, up from $20.012 billion in November, Reserve Bank of Australia figures show.
The average credit card account balance was $3251 in December, compared with $3196 in November, and $3145 in December 2008.
That marks the highest ever plastic spend by Australians - and comes despite international economic worries that have prompted a fall in spending elsewhere.
“The severe tightening of belts that consumers were supposedly doing world-wide doesn’t necessarily seem to be witnessed here in Australia,” said Matt Robinson of Moody’s Economy.com.
“You look at statistics like this and it’s always a cause for concern,” he said.
At the same time, the growth in balances did not appear to be hugely different from seasonal pattern and long-term growth, he said.
Mr Robinson said the numbers suggest consumers have capably digested the RBA's recent rate rises without any reaction.

"Coupled with strong employment growth in January, recent data suggests the RBA can be increasingly confident it can press ahead with its monetary tightening agenda without derailing the recovery in domestic activity."
The growth in credit card account balances over the year was 3.37 per cent, the RBA data show.
Repayments on credit cards rose 10.25 per cent in December to $21.532 billion, according to the figures released today.
Total credit and charge card balances outstanding rose to $46.912 billion from $46.048 billion.
Balances accruing interest rose to $33.237 billion in December, from $33.07 billion the previous month.
By value, credit and charge card purchases excluding advances increased 10.57 per cent to $21.072 billion in December, from $19.058 billion in November.
The value of cash advances on credit and charge cards fell by 0.06 per cent to $948 million in December from $954 million in November.
The number of cash advances on credit and charge cards fell by 0.3 per cent in the month to 2.411 million.
The number of credit and charge accounts increased 0.02 per cent in December and by 1.5 per cent over the year to 14.432 million.
Total credit card repayments rose by 0.3 per cent by value over the year.
Meanwhile, total EFTPOS purchases, including cashouts, rose to $14.037 billion, from $11.898 billion in the previous month, an increase of 18.0 per cent.
The value of EFTPOS purchases was up 6.8 per cent in the 12 months to December.
The RBA figures are not seasonally adjusted.

JPMorgan faces lawsuit from credit card holder

Suit says Chase raised rates on closed account balances
Suit says rates increased from 11.99 pct to 17.99 pct
NEW YORK, Feb 12 (Reuters) - A former JPMorgan Chase & Co (JPM.N) credit card customer has sued the nation's second-largest bank, accusing it of raising the interest rate on his outstanding balance even after he closed the account.
In a lawsuit seeking class-action status and filed in the U.S. District Court in Chicago, Barry Woldman alleged that Chase told customers they could "opt out" of rate hikes by closing their accounts, but nevertheless boosted the rate he owed even after he exercised that right.
In some cases, including Woldman's, Chase boosted rates on outstanding balances of closed accounts from 11.99 percent in October to 17.99 percent in November, according to the lawsuit.
Woldman holds an outstanding account balance of about $16,000, the lawsuit said.
Chase raised rates ahead of legislation that stops creditors from raising rates on existing balances unless borrowers are more than 60 days late with payments, according to the lawsuit. The legislation, known as the Credit Card Holder's Bill of Rights, came into effect this year.
The lawsuit seeks compensatory damages, a declaration forcing Chase to honor opt-out agreements, and other remedies.
A JPMorgan spokesman declined to comment. A hearing in the case has been set for April 9, court records show.
The case is Woldman v. Chase Bank USA NA, U.S. District Court, Northern District of Illinois, No. 10-00865

Think your kid is ready for a credit card? Think again

The piano in the middle of the chorus room was the center of attention. What this group of high school seniors was about to hear wasn’t exactly music to their ears, though.
For the fifth-consecutive year, Credit.com expert John Ulzheimer addressed students at The Westminster Schools in Atlanta. The 17- and 18-year-old young men are all high achievers academically and, as is typical in youth, eager to embrace the future awaiting them on college campuses.
What they didn’t expect was such a strong dose of reality — like learning their stellar SAT scores and impressive grade point averages will hardly matter five or six years from now when they leave college and enter the workforce. The more important number will be the one attached to their credit score.
“It’s a bit of shock therapy,” Ulzheimer concedes.
The Credit CARD Act rolls out in full on Feb. 22. While three of the students in this classroom already have credit cards in their own name, the others will no longer be able to secure one independent of their parents. The questions the students posed brought home why the change isn’t necessarily a bad one.
They sounded like this:
“Are there exceptions to the perfect 850 credit score? If you’re Donald Trump and a billionaire, can you have a better score than 850?”
And:
“How does a debit card affect your credit score?”
That they asked such innocent questions are a clear reflection of their youth and inexperience, and not a sign of an intellectual shortfall. Exposing them to the facts about credit and money management is critical, according to guidance counselor Alicia Davis.
“They will need to learn about financial responsibility and managing their money,” Davis said. “This is an important piece of health and wellness.”
Bustling with laughter, a hush fell when a slide showed the difference in car payments for people with varying credit scores. Even more stunning was the fact that potential employers could make a hiring decision based in part on your credit report. They learned the differences between debit cards, charge cards and credit cards. In a game of role play, students represented credit reporting agencies, collections agencies, banks, consumers and even automobile repossession men.
“The senior year is the perfect time to talk to young people,” Ulzheimer said. “If they were eighth graders, this would have been foreign to them, but at this age, they get it and it’s relevant to them. They all understand the obligation you have to pay your bills on time, but they don’t know the downside to not doing it.”
Now they do.

Consolidation of Credit Card Debt Must Be Done Correctly To Be of Value

While the consolidation of credit card debt can be a wise move financially, it is important to do it correctly with a clear understanding of whether it will truly benefit someone or get them deeper in debt.  Care must be taken to check the various rates of interest on each of the credit cards because the intention is to get a lower rate and a lower payment after the process of consolidation.  There are some key steps to take to ensure that such debt consolidation will work for your financial situation.
Start by Assessing Your Current Credit Card Debt: To ensure that debt consolidation is a good financial move for you, collect your credit card statements and do a bit of homework.  Add all of your outstanding credit balances to get a total of combined credit card debt.  Next, calculate how much you would pay each month for all of the cards if all you did was pay the required monthly minimum (hopefully, you’re not just paying the minimum on each card). This will permit ease of comparison.
Check What Various Companies Offer for Card Consolidation: Many card companies clamor for your business via countless advertisements that tout the benefits of debt consolidation.  Doing more homework can help in determining whether selected companies are legitimate or if they appear on a scam list or a complaint list such as those listed with the Better Business Bureau.  However, their offers are what will help you to check what they have to offer with respect to interest rates and various terms of their card agreements.
Compare Your Current Credit Cards To Favorable Offers: If the credit card being offered bears higher interest rates over time (beyond a short term introductory rate), or if the minimum required payment is higher than what you make on all your other cards combined, it may not be the best choice.  Here is where you need to be smart and determine whether the consolidation of several cards into one will save you money.  Some people don’t save much in monthly payments, but decide to have one payment as opposed to several due to the convenience factor.
Make A Decision That Includes Making Your Payments: Credit is extended by a lender based upon trust that the money provided will be repaid according to the terms of the agreement.  When you are late or don’t make payments, your credit record will suffer and your score will decline.  It is hard to repair a damaged credit rating because it is hard to rebuild trust.  Determine to make the regular monthly payments.

How to Read a Free Annual Credit Report from the Government

The Fair Credit Reporting Act (FCRA) entitles citizens of the United States access to a free annual credit report from the government.  It is important to understand how credit scores work and their importance to you.  The number on a credit score tells a potential lender how reliable you are to pay on the loan and not to default.  The higher the number is, the better the score. Rather than thumbing through your entire credit report, lenders have access to a score that is calculated from the payment history of your past loans.  The complicated formula, based on the loan amount and if there were any delinquent or missed payments, is converted to a number that can tell how good of a risk you are.
Credit scores range between 350 to 850, with the most borrowing options for consumers ranging between 700 to 800.  A poor score may prevent you from purchasing major items such as a car on credit or obtaining a mortgage at a good interest rate.  You should carefully review your free annual credit report from the government to be sure there are no errors and that it is current and accurate.  To do this, knowing how credit scores are calculated will be a major advantage.
Credit scores are calculated by your payment history, amounts you owe, length of your credit history, types of credit used, and new credit. The software created by Fair Isaac Corporation is called FICO. The FICO score looks at the number of accounts paid as agreed, negative collections, and delinquent payments.  The FICO looks at how much you owe on accounts, types of accounts (credit lines, credit cards, and revolving credit), installment loans such as a car that shows a steady decrease in outstanding balance, and how many zero balance accounts you have.
Your free annual credit report from the government is an important document to keep track of and to understand since your credit score is based on the history of your credit contained therein.  By understanding the way that credit scores are calculated, you can make adjustments to your spending style and improve your credit score.  So when that major purchase such as a house or car needs to be done, you can have a great credit score to enable you to achieve your dream.  You are entitled to one free credit report every year according to federal law.

PAYware Mobile lets merchants take credit card payments on iPhone

PAYWare Mobile sounds like a cool idea.

It consists of two parts: an iPhone app and a reader, which is a piece of hardware.

The reader is a sleeve into which you slip your iPhone. During the course of a transaction, the merchant launches the app, enters a PIN and can then accept payments from customers by swiping credit cards through the reader. There is a stylus for customers to sign on the iPhone screen.

For the Best Credit Card, Bank or Credit Union?

Q: How would I even begin to get a credit card from a credit union?
A: The first step is finding a credit union you can join. Each of the country's 8,000 or so credit unions cater to a specific group, such as a company, university or geographic region.
Chances are you're eligible to join at least one, but it may not have the services you want. For example, only about half of credit unions offer credit cards. So if that's your main reason for joining, make sure the credit union you're considering offers a card with terms you like.
You still have to apply for a credit card too; you don't automatically qualify just because you're a member. As with banks, your credit history is a factor in determining whether you're approved.
Q: Will the service and rewards be comparable to a bank-issued credit card?
A: Most credit cards offered by credit unions don't come with rewards programs. So if your main reason for using a credit card is to earn points, you might be better off with a bank. If you're considering a credit card from a credit union, however, chances are that your main concerns are fees and rates.
As for customer service, you may find it more personal at credit unions since they tend to be smaller. But that could also mean the hours of operation are limited.
Q: How much lower can I expect interest rates to be at a credit union?
A: Federally chartered credit unions, which make up about 60 percent of the industry, can't charge more than 15 percent. But that limit can be raised under certain conditions. For instance, the cap is 18 percent right now because of the economic climate.
The remainder of credit unions abide by rate caps set by the states they're chartered in. That's usually below 18 percent, if not less, according to the Credit Union National Association.
To get a sense of how that plays out in the marketplace, consider a recent snapshot of rates.
Median interest rates on cards from credit unions were between 9.9 percent and 13.8 percent last summer, according to a study by The Pew Charitable Trusts. At banks, they were between 12.2 percent and 17.9 percent.
Of course, rates won't always be lower at credit unions. It could be that the particular credit union you're considering doesn't offer rates as competitive as your current card. And the specific rate you're offered from either banks or credit unions can vary from the advertised rate depending on your credit profile.
Q: How do other rates and fees compare?
A: Rates and fees across the board tend to be cheaper at credit unions.
The median late and over-the-limit fees with bank-issued credit cards was $39, for example, compared to $20 for credit union cards. Most banks also charge balance transfer fees, while only a quarter of credit union cards do so, according to the Pew study.
The median interest rate banks charged for a cash advance was 20.2 percent to 21.2 percent. At credit unions, it was 10.2 percent to 13.8 percent.
Whether the lower fees and rates make it worth switching over to a credit union depends on your habits. If you regularly carry a balance, the difference in financing charges may add up quickly.
Q: What other costs should I consider?
A: You need to buy a share in the credit union to join. The typical share value is $5 to $20, according to the Credit Union National Association. Some smaller credit unions also charge a one-time joining fee. The median fee is just $1, but it could be as high as $50.

Your Mortgage News Source Instant Approval Credit Cards – Debt to Income Ratios Hurting Interest Rates

Many Americans will seek instant approval credit cards in 2010. Unfortunately a large percentage of these Americans will have bad debt to income ratios which will hurt their overall interest rate. You may not realize that your debt to income ratio is drastically increasing interest rates on your credit cards.
If you have a significant amount of debt and you are making very little money your debt to income ratio is likely to be bad. Credit card companies clearly see that you have a significant amount of debt while you are making very little money which causes them to increase the overall interest rates on your credit cards.
Credit card companies may not have direct access to your income or your total amount of debt but they can clearly see by the pattern of your payments how much money you are likely to be making. Unfortunately, when you are making the minimum payments they realized that you need a credit card more than they need you.
If you have seen your credit card interest rate increase over the last several months you might want to work hard to the decrease your debt to income ratio. If this ratio is above 50% then you need to take the necessary steps to reduce it to below this level.

New Credit Card Rules About To Take Effect

The Credit Card Act of 2009, which began its roll out last August, moves into phase two this month, bringing a number of changes for borrowers. Among the new rules is a restriction on creditors from raising interest rates on cards within the first 12 months that an account has been open. So-called double-cycle billing, in which interest is charged on debt already paid off, will also be outlawed.

"In the past, a credit card uses a balance from a previous billing cycle to calculate interest, and now going forward they're only going to be allowed to use balances on the current billing cycle," said Michole Mustard with Credit Karma, a San Francisco-based financial information company.
Mustard says these and several other provisions are great for consumers, but they also tend to handcuff lenders.
"The banks have lost that flexibility and in doing so, they've lost the ability to grant credit to consumers who are on the margin," said Mustard, who believes that in general, the changes will make accessing credit more difficult for consumers.
Phase two of the Credit Card Act becomes effective February 22.

Credit cards dropping balances as people continue to work on paying off revolving debt

A report regarding consumer credit in December showed that people are making further strides regarding trying to pay off their credit cards in an attempt at debt management.

According to the Federal Reserve Board, revolving consumer credit fell at an annual rate of 11.7 percent during December. Overall, revolving credit - which is mostly credit card debt - declined from $874.5 billion in November to $866 billion in the last month of the year.

The drop in revolving consumer credit may come as a surprise to some, especially since the numbers reflected the time of the holiday shopping season, where people may bust out their credit cards to make purchases. Along with the decline in December, November saw an 18.6 percent drop in revolving consumer credit.

However, given financial constraints, many consumers may have shied away from using credit in order to make purchases. Rather, they could have relied on debit cards and cash. That or they may have cut back on their spending over all during the holiday season.

Total consumer credit dropped at an annual rate of 0.8 percent after falling 10.6 percent in November. On the whole, consumer credit declined $1.8 billion from November to December.

Though overall consumer credit has seen consistent drops for many months, one reason it did not fall by such a large percentage in December is because nonrevolving consumer credit actually increased in the month. Nonrevolving credit was up 5.2 percent, increasing from $1.58 billion to $159 billion. This marks the first increase in nonrevolving credit since October of last year.

Nonrevolving credit includes things like loans for automobiles and mobile homes.

What do the new credit card rules mean for me?

Later this month, the much-ballyhooed Credit Card Accountability Responsibility and Disclosure Act of 2009 (also known as the Credit CARD Act; get it?) goes into full effect. While many consumer advocates are hailing the new rules as groundbreaking, there are some downsides, loopholes and caveats you need to know about. Here is a rundown of some of the key provisions and what to watch out for:
Rate increases
Credit card companies will not be able to increase your rate on a new account for the first 12 months. Also, any rate increase will not apply to your existing balance — only new purchases will be charged the higher rate.
The bad news: After 12 months, a credit card company can raise your rate at any time for any reason. If you have a variable rate, your rate can, well, vary. Also, credit card issuers have been upping rates and fees as well as switching customers to variable rates over the last year in anticipation of the new rules.
Know this:
• Here’s a nonsensical loophole: Your credit card company has to notify you 45 days before it increases your rate, but it can start charging you the higher rate 14 days after it issues the notification, says Lauren Bowne, an attorney with Consumers Union.
Remember, it’s not 14 days after you receive the letter — it’s 14 days after the company issues the notification. Bowne’s recommendation is to find the date at the top of the letter and stop using the card within 14 days of that date if you don’t want to be charged the higher rate.
• If you are 60 days late on your payment, a credit card company can raise your rate even if it’s a new account. However, if you make on-time payments for six consecutive months, then your rate must go back down to its original level. If you miss any payment — even the first month — your rate will go back up.
• If your rate does go up, you should call your credit card company and see if it will drop it back down. If you don’t get satisfaction from the first person you talk to, ask to speak to a supervisor and keep asking until you’ve exhausted your options. If you can’t get back the lower rate, then you might want to shop around for a better deal.
Bowne recommends waiting to sign up with a new credit card company until after Feb. 22, the date the new rules go into effect, because then your rate will be the same for the next 12 months. Avoid promotions because they often expire after a few months and are exempt from the rate rules for new accounts.
Over-the-limit fees
Credit card companies can’t charge over-the-limit fees unless you agree to allow those types of transactions. Bill Hardekopf, CEO of lowcards.com, which allows you to compare credit card offers, says this rule will prevent people from getting tagged for multiple and costly fees.
Bad news: If you are always close to your limit, there is a greater chance of an embarrassing “Your credit card has been declined” moment.
Know this: Some companies have been calling their customers trying to get them to opt-in to over-the-limit transactions. Bowne’s emphatic advice is to just say no.
Statements
Your bill will have to tell you how long it would take you to pay off your credit debt if you made only the minimum payment. It also needs to show you how much you need to pay each month to eliminate your entire current balance within three years.
Bad news: While enlightening, it could be pretty depressing, too.
Due dates
Right now, most bill payment deadlines fluctuate by a couple of days. One month your payment could be due on the 5th and the next month it could be due on the 9th. With the new laws, your payment will be due on the same day every month, and the cutoff time for payment will be 5 p.m.
Bad news: There’s no wiggle room.
Know this: According to Bowne, the 5 p.m. deadline isn’t based on where you live. Instead it’s based on where the bill is due. Call your credit card company to figure out what your cutoff time is. Or better yet — don’t leave it to the last minute.
Age limits
Companies can no longer offer free gifts to those under 21 to sign up for a credit card. Also, applicants under 21 have to either prove that they can make the payments on their own or provide a co-signer. Hel-lo, Mom and Dad.
Bad news: For the fiscally responsible young adult — we’re sure they’re out there — it will be harder to get a card as well as build up a credit score.

Know this: If you do co-sign with your child, you are essentially signing up for a new credit card, and there could be impacts to your credit rating — especially if your adorable offspring is less than careful with a high-limit card. Bowne says the best thing to do is keep the limit low so any damage will be minimal.