New legislation can protect you from overdraft fees…

Overdraft penalty fees were, until recently, were automatic when a zealous consumer went on a shopping spree that put their credit card account over the limit. Overdraft fees could be upwards of $34 and imposed for simply going over by $1. But with new legislation recently enacted by Congress, written to protect consumers from unreasonable charges and fees, banks can no longer charge those fees without the account holder giving authorization. Many consumers may be confused when they receive official looking notification requesting that they provide authorization for overdraft protection. The request is often written in a tone to instill fear or to imply that it is in the customer’s best interest. But is it? (More…)

A credit card might be the right choice for your business…

It is generally a smart idea for small businesses to have a credit card account. Many business owners make the mistake of using a personal credit card for their business needs, which can spell disaster to their personal finances, if the business fails. By using a card specifically opened to handle business expenses, personal finances will be protected. The two most obvious reasons why a small business may want to consider a business credit card are the ability to conveniently make large purchases and to effectively manage and oversee expenses. In addition, the reward incentives that are offered with most business cards are sweeter than those offered by personal credit cards. (More…)

The CARD Act has been effective but some new problems arise…

A study by the Pew Report, “Two Steps Forward: After the Credit CARD Act, Cards are Safer and More Transparent - But Challenges Remain” finds that the Credit CARD Act, enacted last year, has stopped many of the credit card practices deemed unfair or deceptive by the Federal Reserve. The study examined credit cards from the top largest banks and credit unions in the nation, with combined control of 90% of the nation’s outstanding credit card debt. Data was collected in March on approximately 450 credit cards to measure the current landscape of consumer credit cards since the passage of the Credit CARD Act. (More…)

Americans struggle with credit following recession…

According to a report provided by FICO Inc., over 43 million Americans (25.4%) have a poor credit score of 599 or lower (based on consumer credit profiles). This is an increase of 70% compared to figures compiled before the recession. The analysis by Fair Issac is based on consumer credit reports as of April 2010 and represent an increase in the last two years of nearly 2.4 million people in the lowest credit score categories. The report also shows that fewer consumers fall within the moderate range of 650 and 699 (11.9%). Bankruptcy filings continue to be at record highs, as well. (More…)

Senators want to give states the right to impose rate caps…

Lawmakers on Capital Hill continue to look for ways to lower credit card interest rates and fees for consumers. Hundreds of proposals that would restrict credit card companies have been offered that will appeal to consumers, especially when finances are tight. Coming almost exclusively from liberal Democrats and so soon after the enactment of the CARD Act less than a year ago, the prospect of passing new legislation is questionable. (More…)

Credit card delinquency rates continue to decline…

According to a recent report published by Fitch, delinquency rates for credit card payments (60 or more days overdue) has declined for the fifth consecutive month. Along with the lowest rate in 17 months of 4.01% (from 4.33% a year ago) and more consumers working to pay down their credit card debt, the drop is good news to banks and credit card issuers who consider delinquency rates when predicting future losses. In addition, there has been a three month decline in the rate for payments 30 days or more overdue, falling to 5.27%. (More…)

New rules will limit the amount you pay in penalties…

In response to congressional and public outcry, new Federal Reserve rules go into effect on August 22 that will reduce fees that credit card companies charge their customers for breaking any of the terms and conditions of the card agreement. Currently, fees are as high as $39; the new rules will cap penalty fees at $35. First time infractions will be limited to no more than $25; subsequent late payments may be charged up to the maximum allowable $35 if the company can demonstrate that the cost incurred from a late payment justifies a higher fee. (More…)

Secure Chip-and-PIN technology still not available in U.S…

Americans traveling or living abroad are finding it increasingly difficult to use credit and debit cards overseas. Europe, Australia, Latin America and a large percentage of Asia, India, China, Mexico and Canada have accepted and implimented the more secure Chip-and-PIN system. While the U.S. continues to use less secure magstripe cards, credit cards using Chip-and-PIN will have a encrypted computer chip embedded in the card that contains the consumer’s personal identification information. When making a purchase, the cardholder is confirmed by entering their PIN number. (More…)

Wal-Mart is taking the first step to bring Smartcards to U.S…

Wal-Mart, the largest retailer in the world, will be the first American retailer to offer smartcard-based techonology at all payment terminals in its domestic stores, according to a recent report released at a smartcard conference. The signature-free credit card terminals use Chip and Pin technology and are used worldwide but not commonly found in the United States. Most smartcards in use today incorporate the Europay MasterCard Visa (EMV) smartcard standard from the major credit card companies. (More…)

U.S. Senate proposing a new financial package…

In an attempt to thwart a repeat of the financial crisis, the U.S. Senate is working on a new package of financial rules. The latest measure would force credit card companies to charge less for debit card purchases than for credit card transactions and allow merchants to offer their customers discounts based on their method of payment. Merchants would be prohibited from placing minimum purchase requirements for the use of a debit card and banks with assets of less than $10 billion will be exempt from the fee requirement altogether. The new regulation would affect 65% of all credit and debit card transactions in the U.S. (More…)