you in a position of being unable to meet your obligations. If so, you’re not alone.
Thousands of others are in the boat with you.
Even if you’ve always paid your bills on time, the current economic situation may have
Unfortunately, when you fall behind on credit card bills, debt collectors will begin to call.
The calls from your actual creditor will probably be fairly friendly. They’ll offer to help you set up a repayment plan, and may even offer to settle the debt for a lesser amount if you can pay it off in a lump sum.
You have to wonder how they think you can come up with a lump sum if you couldn’t manage a monthly payment, but it’s their job to ask.
Most of the time your original creditor won’t take legal action against you. They’ll either sell your account to a third party, or turn it over to a collection agency or an attorney. And this is the group that’s likely to become abusive.
They’ll begin with phone calls and threats of legal action – and could proceed to get a judgment against you. Depending upon your State laws they can garnish your wages, drain your bank accounts, or place a lien on your property.
Note that they are not allowed to touch a bank account if all the funds in the account come from Social Security Retirement or Disability, or Veteran’s Disability.
Although there are strict regulations, such as rules preventing them from calling you at work, talking to your neighbors about your situation, or calling you between the hours of 9 p.m. and 8 a.m., some of them will do it.
Some have been known to threaten bodily harm, jail time, deportation, or loss of child custody. These threats are false and illegal, as is the use of profanity.
If you are subjected to such calls, you can and should take action against them by reporting them to the Federal Trade Commission or the State Attorney General. Act quickly to get their names and contact information, because fraud and harassment are criminal offenses.
Even worse is when these practices are employed by bogus debt collectors. They use them to try to extract money that you don’t even owe. These could be debts that were discharged in bankruptcy or debts that have passed the statute of limitations in your state. But they search public records to find them, in hopes that they can scare you into paying.
Some debt collectors will even attempt to collect monies owed by deceased relatives – either by preying on your sense of loyalty to the deceased or by falsely claiming that you “inherited” the debt.
Do report them.
The YAP™ MasterCard Prepaid Card was designed with mobile phone users in mind.
With YAP you can do everything you could do at home with your PC while you’re on the go. Of course, you’ll also get a card to use for in-store purchases.
You can load your YAP card for free with direct deposit – designate all or part of your paycheck to automatically be added to your YAP debit card each pay period. You can also add money for free via phone or PC transfer from other YAP members. They send the funds and you get a text message telling you it’s been done.
You can also transfer money from your bank account. Just log in to your bank account, choose “transfer” and enter your YAP account number (not your card number). Some banks will charge a fee for this service.
When you need to covert your physical cash to electronic cash, you can purchase a Green Dot® MoneyPak® from thousands of retailers nationwide, including Walmart, Walgreens, and Kroger.
When you apply today and load your YAP™ MasterCard Prepaid Card via a bank transfer, you’ll get an Instant Virtual Card – so you can shop online today!
You’ll pay no monthly fee when you load at least $500 per month into your YAP account. Otherwise, it’s only $5 per month. There is no activation fee, and the first month is FREE, even if you load less than $500.
Account management is free, too – over the phone, online, with iPhone Yapplet, WAP site, or text messages.
The YAP® Mastercard Prepaid Card is FDIC insured and adheres to Federal Regulations requiring us to obtain, verify and record information that identifies customers before they register a new card.
Everyone likes to give advice, but some of it will do you more harm than good. And, some advice is good or bad depending upon whether you are trying to eliminate debt or build your credit scores.
Consolidating your debt:
Some advisors will tell you to move all your credit card debt to a card that has a low interest rate “Until paid in full.”
That’s good advice, but only if you can move all your debt to that card without exceeding 50% of the card’s credit limit. Otherwise, its’ bad advice because it will harm your credit scores.
This is true even if it leaves you with a few other credit cards with zero balances. I know, that doesn’t make sense… you still have the same amount of credit available and still owe the same amount, but that’s the way scores are calculated. No one card should have over 50% of it’s limit in use – and staying under 30% is better.
However, if you know you won’t be needing new credit in the near future and moving your debt to a low interest credit card will allow you to get rid of your debt faster, then it’s good advice.
Closing accounts:
Another advisor might tell you to close accounts that you aren’t using, or close accounts with high interest. But that’s bad advice, unless you lack self-control and would feel that you had to use that available credit to put yourself farther in debt.
When it comes to building high credit scores, the more credit you have that is available but unused the better. And the older your accounts, the better. Your history of credit use is a large portion of your score. So keep those old cards and use them just often enough to prevent the card issuer from closing them for non-use. Pay the bill in full when it arrives and the high interest rate won’t be a factor.
Paying down balances:
If your debt is spread among many cards, most advisors will tell you to pay down the high interest balances first. But that’s only true if you’ve used about the same amount of your available credit on each card. If you’re working for better credit scores, pay down the highest balances first.
Checking your credit report:
When you’re shopping for a car or furniture, any credit advisor will tell you to wait until you’ve made a firm buying decision before allowing the merchant to check your credit. And don’t just tell them not to check – refuse to give them the opportunity by refusing to disclose your Social Security number until you’re ready.
This is because multiple inquiries on your credit report will lower your scores.
But there are 2 exceptions: Mortgage loans and checking your own credit.
When you shop for a mortgage loan the lender needs to know your scores in order to determine the mortgage interest rate they’ll offer you. And, since different loan companies offer different products, shopping for that loan is a smart move.
Those who compile credit scores realize this fact, so as long as your inquiries are grouped within a short period of time, multiple inquiries will count as only one.
Finally, checking your own scores not only does not damage your scores, it’s the smartest way to manage your credit.
By checking often you’ll be better equipped to make necessary changes, and you’ll be alerted quickly to errors on your report and/or signs of identity theft.
The Green Dot® Gold Prepaid Visa Card can give you all the benefits of credit card use, without the worry of a bill to pay.
Use it just like any other Visa card – for on-line purchases, on-line bill pay, self-serve gasoline, and even booking airline flights. Plus, the Green Dot® Gold Prepaid Visa Card comes without the hefty fees charged by many pre-paid credit card issuers.
When you purchase a Green Dot® Gold Prepaid Visa Card at a retailer, you’ll pay up to $4.95 – but when you activate your card online, the fee will be waived. Your card will arrive with a zero balance and can then be loaded at any of 50,000 participating retail stores.
Or… you can opt for direct deposit and receive a $10 credit the first time a deposit of $250 or more is sent from an employer or government agency. Direct deposit is a free service – and if you need cash out you can withdraw it at no charge at over 15,000 participating ATMs.
The monthly fee for this card is $5.95 – but that fee will be waived for any month during which you load at least $1,000 or make 30 purchases with your card.
The bottom line – if you choose direct deposit of $1,000 or more per month, and if you use only network ATMs for your cash advances, you can use the Green Dot® Gold Prepaid Visa Card for free.
To qualify for the card, you must be 18 years of age or older and must provide your name, address, date of birth, Social Security Number and other information. This is in keeping with Federal law that requires us to obtain, verify and record information that identifies customers before they register a new card.
You’ve probably received plenty of offers from your credit card issuer – urging you to use one of the “handy checks enclosed” to fund a vacation, buy new furniture, or splurge on a new wardrobe.
Sometimes they even fill in the amount on one of the checks – encouraging you to borrow an additional $1,000, $2,000 or even $5,000. Sometimes those checks come with an initial low interest period, just to sweeten the offer and encourage you to take advantage of the offer.
If you actually need to borrow money at that time, the offer can be a welcome relief. (But please don’t fall for the “splurge” enticement – it will come back to haunt you!)
You CAN use these credit card cash advances to help your financial situation, but only if you use them carefully.
Let’s take a look at the situation:
If you have a credit card balance on another card and the interest has suddenly increased from 5.9% to 25.9%, then using a cash advance check to pay off the other balance can be a wise decision. But… first look at the fee charged for the cash advance. Then look at the term. Will the cash advance check at a low rate keep that low rate long enough for you to pay off the balance, or will it revert to a high interest rate in just a few short months?
I’ve seen credit card offers charging a fee of 3% for the cash advance at 1.9% interest – and switching to 19.9% after only 60 days!
Read the fine print – all of it.
New regulations signed into law this summer will require banks to keep promotional interest rates in effect for 6 months – but will even that be long enough for you to pay off the balance? And what interest rate will you pay if you still have an outstanding balance after those 6 months?
Next, look at the interest rate you pay on purchases. Your credit card issuer may be offering you a low rate on that cash advance, but a high rate on purchases. And under current terms, your payments will apply to the balance with the lowest interest rate until it is paid in full – then will apply to high interest balances. Under the terms of some cards, your entire payment applies to the lowest rate balance and its interest. Interest on the higher rate balance continues to accrue, adding to that high interest rate balance every month.
This will change under the new regulations, but they won’t take effect until next year, so be careful.
If you use a card for a cash advance, you’re probably better off not using that card for anything else.
The Discover® Mix Tape Student Card is more than just a cool design. It also offers you cash back on all your purchases – so you save money.
You earn .25% on all purchases from your very first one. Then, when annual spending reaches $3,000 (excluding warehouse and select discount store purchase) you’ll earn 1% on all but selected warehouse and discount purchases, which remain at .25%.
But it gets even better. By enrolling in our category purchase bonus programs, you can earn up to 5% cash back. The category changes each quarter. January through March 2010 was travel. April through June pays 5% back on purchases of home and fashion items. In July, the program switches to gas, hotels, and movies – just in time for vacation travel and fun.
Then, as the holiday season approaches in October, Discover® will pay you 5% cash back on purchases in the restaurant and fashion categories through the end of December.
You’ll not only save money on holiday parties, but on all those fashion gifts you choose for family and friends (and yourself).
In addition, you’ll earn a 5% to 20% Cashback Bonus® when you buy through our exclusive online shopping site.
When you pay your balance in full each month within 25 days of your billing date, you’ll pay no interest at all. Otherwise, interest is computed on your average daily balance, including new purchases.
The annual percentage rate is 0% for the first 6 months from the date of opening your account. Then it will switch to a variable rate, which is currently between 15.99% and 20.99%. Cash advances carry an APR of 23.99%.
Applicants must be at least 18 years of age to receive the Discover® Mix Tape Student Card.
Credit card issuers are working hard to ensure that they’ll still be making profits after the new Credit Cardholder’s Bill of Rights comes into full effect in Feburary 2010. Thus, they’re making changes now.
You may have already experienced a cut in your credit line and an increase in your interest rate. After February, they’ll only be able to increase the interest rate on future purchases, not on existing balances.
They’ll also be banned from raising your rate because you’re having trouble paying a card from a different issuer. They will be able to raise the rate on your existing balance if you’re 60 days late with a payment – but bumping you up because you were an hour late will be a thing of the past.
That is, they won’t be able to raise the rate on existing balances unless you’ve chosen a variable rate credit card.
As of a July report in Bankrate.com, about 70% of all credit cards are already at a variable rate. Most believe that ratio will rise.
While the variable rate card doesn’t allow credit card companies to raise rates arbitrarily, it does give them some safeguard against offering low rates to consumers after their own “cost of money” has risen. This is because variable rates are tied to the U.S. Prime Rate.
Using the variable rate exempts the card issuer from a provision in the new law that says interest rates to individual consumers may not be raised during the first year. It could, in fact, change during the first month.
Your variable rate credit card will be a set percentage above prime – so when prime moves up or down it will change accordingly. The good news for you is that prime doesn’t usually rise as dramatically as credit card rates have in the past. It’s very unlikely that you’d see your rate jump from 10.99% to 28.99% overnight.
Interestingly, the new law does not prohibit your card issuer from switching your variable rate card to a fixed rate card without your permission.
Financial experts are predicting that when interest rates peak, more fixed rate cards will return. Then, as rates decline, issuers may either switch your variable rate card to a fixed rate or institute a “floor” on your interest rate. This is a minimum interest rate that you’ll pay even if your original agreement would have called for a lower percentage.
The new law has holes – it doesn’t prohibit switches such as these
The Baby Phat Prepaid Visa® RushCard is a “pay-as-you go” prepaid Visa® card – accepted everywhere that Visa® is accepted world-wide.
Once you’ve paid the $19.95 activation fee there are no monthly fees and no fees to add money to the card via direct deposit, anticipation loans, and paychecks. Transaction fees of $1 each are capped at $10 per month.
Cardholders enjoy free live customer service 24/7, free text alerts and phone balance inquiries, and free online money management tools. These money management tools will help you create and stick to a budget, with instant alerts any time you exceed a set budget amount. They’ll also let you see where your money is going with easy to read charts and graphs. And at the end of the month, you’ll get a statement to file away for record-keeping.
Unlike most prepaid cards, your prepaid Visa® RushCard can help you build your credit. When you enroll in our FREE RushPath to Credit, we report your deposits and recurring payments to LexisNexis® and PRBC®, a national credit reporting agency.
Even if you’ve had credit problems in the past, you can start rebuilding a positive credit file simply by paying your bills on time using your prepaid Visa® RushCard.
The FREE prescription drug card is an added bonus to carrying the Visa® RushCard. This Discount Card entitles you to discounts of 10% to 85% on name brand and generic prescription drugs. It’s accepted by 56,000 pharmacies nationwide – including national chains offering access to consumers across the country.
Two telephone scams designed to play on your fears and assure you of credit card safety are making the rounds again.
The first is an unvarnished “phishing” scheme. You’ll get a call from someone who identifies himself (or herself) as calling from the Security and Fraud department at your credit card issuer’s headquarters.
He’ll proceed to say that they’ve noticed unusual activity on your card and just want to confirm that you are the one who has been making large purchases. Of course you’ll say no, since the purchases are fake.
The caller will assure you that your money will be refunded and they’ll send verification. Often, they’ll already have your mailing address. For security purposes and to verify that you have the card in your possession, they’ll ask for the 3-digit security code from the back of the card, or possibly for the expiration date. When you give it to them they’ll say something like “Yes, that matches our records.”
Then they’ll tell you that they’re opening an investigation and if you have questions, you should call the 800 number on your card and give them a control number that they’ll provide.
Obviously, since the scam goes on, most people never make that call. If they did, they’d learn that this call did not come from the card issuer.
The second scam may be an attempt at phishing, or merely an attempt to sell you something you don’t need: Credit card loss protection.
The caller will say that due to new credit card laws, you will now be held accountable for all charges made on your card – even if they were fraudulent. Then they’ll offer to sell you protection from that liability.
Of course, this isn’t true. If your account is used without your authorization, and if you report it to your credit card issuer, you’ll be held responsible for only the first $50. If you find bogus charges on your credit card statement, you need only to call the card issuer to dispute the charge. You will also have to file a report with your local law enforcement.
Remember, this is but one very real reason why you should open and read your credit card statements on the day they arrive. The sooner you discover identity theft, the easier it will be to stop the thief, get charges reversed, and change account numbers.
These telemarketers are very skilled at sounding legitimate. They will cite phony new laws about your liability, then tell you all the ways that your card could be compromised.
And that part is true. Your card could be compromised, but what they’re selling is fake, and you don’t need it.
Easy on-line bill pay is just one of the features of the READYdebit™Card.
This card offers the flexibility of loading $20 or up to $2,500 per day. Direct deposit is free, and you may load a total of $10,000 to your card – giving you fast access to funds for any kind of expense. Your deposits are fully FDIC insured – so you know they’re in a safe place, waiting for you when you need them.
You can deposit cash at over 50,000 retail locations, and transfers between two READY debit cards is always free.
Because this is a debit card, not a credit card, approval is guaranteed. You won’t be subject to a credit or a Chexsystems™ check before your card is issued.
This card comes with an activation fee of $9.95 and a monthly fee of $4.95. ATM withdrawals are $2.25
The READYdebit™Card is accepted anywhere you can use a Visa™ or MasterCard™, making it an easy and convenient way to shop on line, rent a car, or fill up the tank at midnight when the stations are closed.
