Credit Cards ABC Credit Card Reviews

So you just opened an envelope that contained a shiny piece of plastic with your name on it. Awesome a bank or financial institution just gave you a line of credit! Before you start joyously swiping it on just about any cash register, take the time to read this article to understand the credit card interest rates.

A credit card is an authority to spend the money of the company that issued it, in return for a promise that you will repay them in the future, called payment-due date. This date is written on your cards monthly billing statement together with the total cost of the items you purchased for that month (outstanding balance). Smart credit card users pay for the total outstanding balance on the payment due date. However, there maybe instances that you will not be able to. During these times, the card company lets you borrow the money longer, until the next months payment-due date, for a fee. This fee is calculated based on the credit cards interest rate.

Usually, credit card companies quote the APR (Annual Percentage Rate) as the interest rate for using their card. But, this is not entirely true. When you do not pay the total outstanding balance, interest is applied to it, called the monthly periodic rate (equals APR12). This is added on to the unpaid amount and becomes next months outstanding balance. Every month, the periodic rate is applied to whatever outstanding balance is unpaid. This process is called compounding interest. So, the total of the compounding interest is the Effective Annual Rate (EAR), which is in-fact bigger than the APR. This is the TRUE interest rate of the credit card. Consult http:www.abcguides.comcreditcardscci_faq.htm#interest for an illustrated example of the discussion above.

An introductory rate is an interest rate that is offered by a card company for a limited period (say 1st year of using the card). This is usually very low, sometimes 0% to attract you to apply. After the limited time, the EAR will be the on-going interest rate. Be sure to check this before signing up.

Also, ask whether your rate is fixed or variable. Fixed interest rate does not change from month to month. A variable interest rate changes monthly, based on some industry rate (for example, Fed Rate or Prime Rate) from which your rate is calculated (your rate is 5%+ Fed Rate). It may be smarter in the long run to choose a fixed-rate card.

Now that you have a better understanding on credit card interest rates, it is still wise to settle the total outstanding balance monthly. Else, pay only for what you can afford, as if you did not have the credit card.

As you are most likely already aware that credit card interest rates can be very high with rates of 30% annually, depending on your credit history and credit card issuers are getting more and more diligent watching for late payments and over limits and may raise your interest rates and lower your credit limit because of it.

The annual percentage rate (APR) is the interest rate you will pay if you carry over your balance from month to month, take out a cash advance, or transfer balances from another credit card. If your like most who sometimes may carry over a balance each month, you should be more interested in a credit card that carries a lower interest rate, but the lower interest rate means you need a good credit score. Credit card companies may charge a yearly fee in addition to the interest rate. Many card issuers, including most of the largest credit card issuers, have started lowering interest rates to below the 18 to 19 percent levels that were common through most of the 1980s and early 1990s.

If you have unpaid balances from previous months, there may not be a grace period for your new purchases. The grace period can help you avoid finance charges by paying your balance in-full before the due-date. There is usually one annual percentage rate (APR) for purchases and another for cash advances (usually the highest), and yet another for balance transfers.

The Federal Reserve System surveys credit card companies every six months andhas a easy to understand explanation of commonly used credit card terminology, and a survey of major credit card companies which is updated twice a year. The Federal Reserve plans to require credit card companies to give consumers at least a 45 day notice before they can raise interest rates and to provide clearer info on the fees. The Federal Trade Commissionalso explains credit card terminology but also has information on where and how to file a complaint.

If you are concerned about the credit card interest rates you are being offered, or any other terms or conditions that you feel are unfair or less favourable than those to which you are entitled to, you may wish to familiarise yourself with the Fair Credit Reporting Act or FCRA as it is abbreviated. This law is primarily aimed at ensuring that peoples credit reports are kept accurate and up to date, as well as protecting your privacy in financial matters such as these. It is governed and enforced by the Federal Trade Commission, which, takes on the role of protecting consumers at a federal level.

Therefore if you feel that you are being cheated or there is something afoul with the credit card interest rates you are being offered, you may wish to get into contact with the Federal Trade Commission to see what exactly your rights are in this regard. You should always make a point of understanding and being up to date with these rights whenever you are negotiating for new credit, or an improvement in the terms of your existing credit, since such knowledge and information will improve your bargaining position and will help ensure that you are not taken advantage of by the big credit providers and banks that you will be dealing with.

With regard to your credit report, there is a free disclosure rule in the Accurate Credit Transactions Act that gives you a right to view your credit report for free. This right applies to the credit reports compiled by each of the three nation wide consumer credit reporting companies that operate on a national basis. There is a web site and phone number that you can use to get access to all three reports at the same time.

www.annualcreditreport.com is the website
1-877-322-8228 is the phone number.
You may mail a request to Annual Credit Report Request Service, PO Box 105281, Atlanta, GA, 30348-5281.

The companies must provide you with a copy of your report, free of charge, at least every 12 months and you can then ensure that all of the information contained in it is accurate and up to date. You may then be able to use this information to protect your right to receive the best possible credit card interest rate offers that you are entitled to. Simply ensuring that your credit report is accurate and being aware of your rights can significantly improve your access to the best credit card interest rates on the market so make sure you keep on top of these issues if you are considering applying for new credit in the near future.

Most major credit card issuers now offer their members a variety of different free insurance programs. It is highly recommended that you review the insurance terms of your credit card agreement as in certain circumstances the credit card insurance offered by your card issuer may cover situation beyond those you may originally have thought.

The major credit card insurance programs offered include:

Purchase protection

If you purchase a product on your credit card that is later damaged, lost or stolen, you should be able to reclaim all or part of the purchase price cost from the insurance policy. Not only is this a useful protection to have if you purchase expensive or fragile products, but can also be a very good additional insurance to any home contents insurance policy you have.

Fraud protection

Policy covers you should you be the victim of fraudulent use of your card. With the rise of identity theft, and the ever increasing Internet fraud taking place, this policy not only covers the traditional fraud methods but should also cover you for any Internet or telephone fraud.

Stolen card protection

Provided you report your card stolen at the first opportunity you have once you have become aware of your cards theft, this policy should reimburse you for any transactions processed on your card following your last genuine transaction.

Price protection

Not offered by all card providers, basically this policy will reimburse you the difference between the price you paid for a product and the cheaper price of the same product you later found elsewhere.

Travel insurance

If you purchase your holiday on your credit card there are two useful beneficial insurances you should check to see if you have. The first is a cancellation policy, which covers you in the event that you need to cancel your holiday between the period of purchasing the holiday and the date of travel.

The second is holiday accident insurance, which should cover you in the event that you have an accident including emergency accident evacuation – or are killed on holiday. Both of these are very useful to have as they can be a considerable extra on your holiday travel expenses if purchased independently.

Obviously all of the above credit card insurance schemes are subject to time and monetary limitations, so make sure you check these out. Additionally, you should also make sure that any purchases or use of your credit cards outside of the country of issue are also covered by the policy as, in some cases, they are not.

Credit card companies want your business. After all, lending money to people is profitable. Besides the interest fees that you’ll be charged, the credit card company also collects a fee from merchants who accept their credit cards. In order to get your business, most credit card companies are willing to offer you some great incentives – not only to apply for one of their cards, but to use it for everything from car rentals to weekly groceries.Among the incentives that you might be offered for using a particular credit card are frequent flyer miles, phone call minutes, rebates and cash-back on purchases, insurance on your purchases and more. Here’s a list of some of the most popular incentives. Check around to find a card that offers incentives that make sense for the way you use your card. Rebates One of the most common incentives for using your credit card is a cash-back or rebate offer. Generally, you’ll get 1-5% back on various purchases. Depending on the credit card, you may get 1% back on most purchases, and 5% back on purchases made at convenience stores, gas stations, grocery stores and ‘member merchants’. The rebate may be in the form of a credit on your bill, a gift card for 10, 20 or more pounds when you reach that amount in cash rebates, or a check sent from the credit card company.

Frequent flier milesAnother common credit card incentive is frequent flier miles that can be used on a number of airlines for personal andor business travel. Check the individual cards’ terms and conditions to find out exactly how to redeem your frequent flier miles.Phone MinutesA new incentive being offered by several credit card companies is phone minutes to use with your cell phone account. Redemption is generally via a phone card sent when the amount of the reward minutes reaches a certain denomination, but your credit card company may have different rules and policies.

Additional warranty coverage for the items you purchaseA few credit card companies offer extra warranty time or coverage on items that you purchase using their card. The additional coverage is only available on particular cards, generally the Premium cards. If any item that you purchase using cards that are lost, stolen or breaks within the stated warranty period, the credit card company will replace it at their cost.Car rental insurance, Travel accident insurance or travel-related discountsIf you travel often and use rental cars, then it may make sense for you to have a card that offers insurance on you when you’re driving a rental car – at no extra charge. Likewise travel insurance and travel discounts that may be available only to holders of that particular credit card, or is available at reduced rates to them.

Credit card registrationSome credit card companies offer to register all of your credit cards so that if your purse or wallet is lost or stolen, you only need to make one call to alert all of your credit card companies. It’s a handy perk to have, especially since it’s easy to forget a card you don’t use often in the heat of the moment. Taking advantage of a credit card registry is one way to be sure that all of your creditors are notified that your cards are lost.

Owning a credit card is fast becoming a better deal for consumers as the credit card industry (banks and other credit card issuers) starts changing their practices and implementing what can only be construed as more lenient practices, under the pressure exerted by Congress. This article offers the whole story.

In economic figures released by the Commerce Department at the end of May 2007, the U.S. first-quarter gross domestic product (GDP) grew by 0.6 percent. This was the weakest quarterly expansion since the fourth quarter of 2002 and was well under the 0.8 percent growth rate projected by Wall Street economists.

Housing continued to be a drag on the economy and was though likely to remain so in the coming months. However, there were positive signs as well, which could signal a healthier rate of growth towards the end of the year. One of these good signs was personal consumption spending which powers two-thirds of the economy increased by about 4.4 percent versus the 3.8 percent figure in April.

In a related report, the Labor Department reported on June 6 that U.S. worker productivity had also increased at a much slower rate than originally estimated. This report raised fears about possible inflationary pressures as labor costs go up.

Most of the performance figures had already been anticipated.

What came as a surprise was that borrowing by U.S. households had expanded by less than half (2.6 billion) of forecast (6 billion) as credit card use actually fell for the first time in 13 months. This increase in consumer credit was the smallest monthly increment in seven months, since October.

It seems consumers are pulling back from taking on more debt. Revolving credit, which includes credit cards, declined 403 million in April, the first monthly decline in the 13 months since March 2006. Consumers may be cautious about contracting more debt while housing remains in a slump and economic growth has been so weak. The decline in revolving credit has been interpreted as a sign that consumers are paying off more of their credit card debt.

In the middle of these mixed signals from the various sectors of the economy, legislators have expressed their dismay over practices being followed in the credit card industry. The House Financial Services subcommittee hearings last Thursday, June 7, called for stronger action by the Federal Reserve to control what lawmakers called the deceptive and predatory practices of credit card companies. Lawmakers subjected executives of major credit card issuing banks to intense questioning during the hearing.

Saying that the average American household carries 13,000 in credit card debt and overall credit card debt runs in the hundreds of billions of pounds, the panel chairwoman Rep. Carolyn Maloney, D-N.Y., was reported to have expressed fears that we will see a perfect storm in consumer credit as these pressures converge on Americans, and that the ripple effect will be felt throughout our whole economy. Maloney cited the success of credit cards in providing for the credit needs of the American consumer but also emphasized that with great success came great responsibility.

Lawmakers think the Fed needs to do more to protect credit card users, and propose to give other bank regulators the authority to curb industry abuses, including policies that confuse consumers and push them into more debt. The Fed is requiring credit card companies to extend to 45 days the notification period to consumers before they implement any changes in the terms of an account. The present practice is that when banks want to make any changes, for instance, to increase interest rates or to impose a higher penalty rate for missed or late payments, they will give only 15 days notice.

The Feds proposed full disclosure requirements would, among other things, allow consumers a longer time to look for another credit card. But legislators feel this is not enough and want regulators to impose an outright ban on abusive practices. They do not want to create new laws, but prefer to see regulators act on the problems.

Legislators are targeting other practices like charging interest on portions of debt that is paid on time during a grace period, and raising interest rates because a customer is late on payments to other creditors (not the credit card issuer) which is termed universal default in the industry. Legislation is being proposed that would make some of these practices illegal.

These are serious concerns being raised by our lawmakers. Other regulators appear to agree with the lawmakers. The Federal Deposit Insurance Corporation chairman is not fully convinced that problems regarding credit card industry practices will be resolved by full disclosure alone. Other federal regulators who were also called to testify expressed support for legislation that would give their offices the authority to curtail practices that are deemed to be deceptive or unfair.

Because of the close scrutiny by Congress, several major banks have started to temper or remove some of their most criticized practices. Banks may need to do more to allay consumer fears, suspicion, and eventually, resentment.

How banks will respond remains to be seen.

Already one of the major credit card issuers, Chase, has begun to articulate its response. The bank has issued a June 12 statement saying that in their view the complex credit card system that exists today will be able to sustain its success if the two principal parties in the relationship the credit card issuers (banks) and the credit card holders (individual consumers) acknowledge that theirs is a shared responsibility. The credit card holder must use the card in a responsible manner; the bank must strive to meet the credit card holders needs.

Overall, the bank says the credit card has broadened access to credit to all consumers. It insists that average interest rates have gone down from close to 20 percent to only 12 percent approximately, and in many cases issuers no longer charge annual fees.

The bank has defined what responsibility should mean for the credit card holder: pay on time; keep within your credit limit; and maintain your creditworthiness. By following this simple equation, the credit card holder gets an interest-free loan for a certain period when they pay off whole balances every month, fraud and loss protection, and other benefits, plus instant and constant availability of credit.

The bank also delineates what it sees as its responsibility: make sure customers understand the terms of their credit card account; show them how to manage their credit cards; give them tools that help them pay promptly time and stay within their credit limits; spot those in trouble and point to avenues for financial solutions; and evaluate more carefully the credit applicants capability to manage debt prior to credit card issuance.

The bank has implemented a set of initiatives to promote greater customer understanding of the terms of their credit card account and to provide tools for managing accounts. This program is channeled mainly through the companys special website, which it says details everything in clear and simple terms. Some of these initiatives involve:

Putting detailed instructions and calculations that clarify the implications of paying only the minimum amounts instead of paying more on the balance, if not paying it off entirely; Outlining procedures that allow customers in the military to keep their credit card accounts current when deployed overseas; Allowing all customers to choose their preferred due date for payments; Providing instructional materials for students and first-time credit card users to guide them in making prompt payments and keeping within credit limits; Installing a system of communications where customers can sign up for timely alerts sent via phone, e-mail and text messages to remind them of payment due dates; Providing for a system of automatic credit card payments; and, Creating an outreach program to reach those who may be having financial difficulties and to determine what assistance and financial programs can best help them.

Individual credit card holders like you have made your opinions heard, to both the legislators and the credit card issuers. By heeding your opinions, and altering the criticized practices, holding a credit card is becoming even better than before.

Would you like to do something worthwhile with those cash back and reward points that you’re earning on your rebate credit cards? Many major non-profit organizations would be delighted to help you do that. By making an affinity credit card your major credit card, you can donate hundreds of pounds to your favorite charity – just by using your credit card the way that you normally would.

Affinity credit cards have been around since the 1980s, but they’ve really taken off in the last four to five years. Among the non-profit organizations that have teamed up with major credit card issuers to offer affinity cards are the American Red Cross, the Humane Society of the United States and the Cancer Society. Add in the National Audubon Society and a wide variety of local police organizations, alumni associations, homeless shelters and labor unions.

Affinity cards, like co-branded cards, have both the credit card logo and the emblem of the charity that benefits when you use it on the front. Most affinity cards, however, don’t offer special perks to the user, unless you count the knowledge that you’re supporting a worthy cause that’s important to you – and it’s costing you nothing.

Just how much good do affinity credit cards do?

According to MBNA, about 35,000 people use a Humane Society of the United States affinity credit card. Over the last ten years, contributions through the affinity credit card have been ‘well into six figures’ annually. That’s a lot of puppies and kittens being saved through people’s credit spending.

That’s just the tip of the iceberg. The World Wildlife Federation started issuing an affinity credit card in 1995. In the past ten years they’ve earned over 8 million in affinity credit card contributions.

Affinity cards work on the same principle as Earned Rewards cards. Whenever a holder of an affinity credit card makes a purchase using that card, they’re credited with 1-1.5% back. The difference is that instead of receiving that reward themselves, it’s contributed to the company that places its emblem on the card. It’s a painless way to contribute to your favorite charity and let your spending habits do some good.

But how many people actually use affinity credit cards?

According to the Nilson Report, affinity credit cards make up almost 29% of all credit cards in use. That’s nearly 13 of all active credit cards. That’s a lot of charity going around for a country that supposedly has a heart of stone.

Should your non-profit agency consider issuing an affinity credit card? According to the experts, the standard rule of thumb is ‘can you generate 50,000 credit card users in two years?’

What can you expect if you do decide to market an affinity card in conjunction with a credit card company?

Most companies – and they include local police unions, sports groups and philanthropic groups – get at least 1 per user that signs up for your affinity card, and a percentage of whatever is charged on those cards. Whether you’re looking into applying for an affinity credit card or finding a bank that might be interested in sponsorship from your organization, be sure to shop carefully.

The better the deal you get on your affinity card, the more you’ll be helping the people that are important to you.

Credit cards are really useful and handy. You need not to worry about theft, burglary or carrying large sums of money. On the other hand, shopping can also be rewarding. Most of the credit card companies offer rewards in the form of gift vouchers; discount shopping, air miles etc, for every pound you spend. Some of the points earned can be accumulated and later the reward is transferred to income generating account. This will help you to have savings along with the credit card.

Usage And Rewards

The selection of the credit card should be on the basis of value for money. Majority of the credit card companies offer rewards but it is up to you to select the one, which is best, suited for you. The credit card usage should be such that the income and expenses should be in balance. Select the credit card, which is best, suited for your purpose. Make sure that the reward offered by the credit card company should include your choice or your purpose. If you are a frequent traveler, it is better to opt for a card, which offers free air miles. You can also use your credit card to pay up your grocery bills, monthly bills and even medical bills.

Credit Limit And Options

The credit card limit should be maintained low, since credit limit will be higher than reimbursement. Select a credit card, which is having greater choice and option. The reward generated from the credit card can also be used to pay for the annual fee of credit card. The credit card holder should frequently check the accounts so that one can effectively use the credit card. To get your value for the money, it is essential to use the credit card wisely. If you use your credit card with much caution and prompt in clearing the bills, usage of credit card is a rewarding experience.

Globally credit card fraud costs card issuers billions of pounds a year in fraudulent use of their cards. Some of this loss is passed back to retailers who failed to comply with the normal processing method for the card. Another part of the loss is insured. Nonetheless, as a cardholder you are potentially liable for any fraudulent use of your credit card. It is, therefore, imperative that you make yourself aware of what the current fraud scams are and how you can help to in the battle of credit card fraud prevention.

To this end, the following are some fraud prevention methods you can adopt:

* when using your card, never card out of your sight
* if you use the card in an old carbon-copy paper machine, keep the carbon-copy and destroy it later
* never use your credit card on an unsecured website
* never use your credit card to withdraw money in an ATM

Aside from the above, ensuring that you use certain technological advances with your credit card should also help in any credit card fraud prevention. In this regard, the following are currently popular with card issuers:

* identification photos: where your picture is shown on the front of the card
* fingerprinting: where a facsimile of your fingerprint is shown on the reverse of your card;
* chip and Pin systems: where the card has an encrypted chip containing details about the card and a PIN that ensures the card is a genuine issue. Essentially the chip contains the same information that used to be contained in the magnetic strip on the reverse of the card, but in chip format it is believed to be harder to copy.

Although each of these systems is no foolproof credit card fraud prevention method, with credit card fraud costing more and more each year, you can bet that issuers are going to be tackling this issue head-on: so stay aware of the latest credit card fraud preventions methods and help combat this growing problem.

Are you worried about your credit card or debt card being stolen? Youre not alone, its estimated that 51% of people in the UK are concerned about their credit and debt cards being stolen. Credit card fraud is a consent worry, and with more people using there cards as there main source of paying for services and goods. It gives the criminals many more chances too get our information from our cards.

Credit card fraud is not new, the companies seem to be getting a head on how to stop the criminals, and then they come up with a new way its a never-ending problem. Credit card skimming is just one of the problems, that is where they take the information from the magnetic strip and transfer it on to another card. The companies are trying hard to fight back, they have hit back with the chip & pin card, which seems to be reducing fraud but give it time no doubt the criminals will find a way around that.

There are ways to help yourself with credit and debt card fraud, below are some useful tips in keeping the criminals at bay.

Never let your credit or debt card out of your sight
Never keep your Pin number with your card
Dont give your Pin number out to anyone
When withdrawing money from an ATM machine make sure no one can see your Pin number
Check bank statements very carefully any problems contact bank immediately
Paying for goods with your card double check the amount before entering Pin
Keep chequebook and cards separate at all times
Report your lost or stolen cards immediately
Make sure you destroy statements and old cards properly, leaving no account numbers visible

The tips above will help you to fight credit or debt card fraud but we have to be vigilant at all times. As I said earlier with more people paying for goods and services with there cards, it gives the criminals more opportunities to get our information so its up to us to do what we can. With online shopping becoming very popular a lot of us worry about paying for goods over the net, credit card companies are trying to put our minds at rest. With most of them giving you extra fraud cover most give this cover free, but some do charge you so just check with your credit card company.

Credit and debt cards are here to stay so lets hope in the near future that the credit card companies, can rid us of credit card fraud but I am afraid its big business costing us millions every year.