Beware of Credit Card Interest Rate Reduction Scams
Soaring credit card interest rates have made it more difficult for consumers to pay their credit card bills and created an opportunity for new scams. Credit card interest rate reduction scammers have swindled numerous consumers out of thousands of dollars.
The scammers offered to lower a cardholder's credit card interest rate, for a fee between $495 and $1,495. The service included a money-back guarantee if the cardholder didn't get at least $2,500 in savings. Cardholders didn't get a lower interest rate or a refund.
The FTC has filed a lawsuit against three groups of these "robocallers", not because they promised to lower interest rates when they really didn't intend to, but because the scammers made automated calls to consumers, using a recording to prompt cardholders to press "1" to speak to a representative. The scammers also called people who were listed on the National Do Not Call Registry and people who'd asked not to be called. They either masked their caller ID or didn't transmit caller ID information, which is also against the law. Hopefully, this doesn't mean the scammers would gotten away with the scheme if they'd only followed the rules.
See the full press release from the FTC.
More credit card news: Read more...
8 Tips To Avoid Holiday Debt
'Tis the season when many people shop 'til they drop for gifts for their family and friends. There are those who max their credit cards on holiday shopping and end up repaying the debt well into the next year. Imagine having to skip next summer's vacation because you're still paying off this year's holiday debt. What's more, the people who received the gifts financed by your debt have probably forgotten all about the gifts by the time you pay off the debt. So is the debt really worth it?
The advice is not to skip out on gift giving this season. Instead, it's to make smart decisions about how much you spend, especially how much you spend using credit cards.
More Ways To Spend Less This Holiday Season:
- 5 Ways To Keep Your Holiday Spending In Check, Guide To Single Parents
- 7 Tips For Holiday Shopping Online, Family Internet
- How to Cut Down on Holiday Spending, Frugal Living
Use Your iPhone to Swipe Credit Cards
The founder of Twitter has a new startup - a new iPhone app and external device that will allow anyone to accept credit card payments. The technology, called Squares, is a handheld device that plugs into the headphone jack of an iPhone or iPod touch. A person could swipe their credit card through the device and using an iPhone app, also named Squares, pay you money.
I wouldn't buy it or let anyone swipe my credit card through it, despite the report that no credit card information is stored on the iPhone. It's too close to credit card skimming. Would you use it? -LA Times
This week's credit and debt news:
- After declining for a few months, credit card delinquencies increased in October. -Associated Press
Why It's Better to Use Cash for Holiday Gifts
In most cases, it's better to use cash to shop with rather than credit cards. This is especially true during the holidays when you're more likely to overspend buying gifts for your loved ones.
If for no other reason, you should avoid using your credit card during the holidays to avoid extra credit card debt. But, if that's not reason enough for you, get six more reasons in 7 Reasons to Avoid Using Your Credit Card for Holiday Shopping.
How do you avoid holiday credit card debt? Share your tips with other readers.
Bank of America Explains Their Credit Card Terms
According to Washington Post, Bank of America is sending cardholders letters detailing their credit card terms. The letter will explain some of the most costly aspects of the credit card like the interest rates and fees. Not all aspects of the credit card agreements are included in the letter.
This letter is not a requirement from the Federal government. Bank of America is doing it on their own. Your other credit card issuers may not follow suit. If you're curious about your credit card terms on your non-BoA credit card, you check out your credit card agreement. (Unfortunately, credit card agreements are sometimes difficult to understand and may not make your credit card terms any clearer.) A recent copy of your billing statement will also contain some (but not all) information about your credit card terms.
Starting next February, all credit card issuers will be required to disclose important information in your monthly billing statement. When the Credit CARD Act goes into effect, billing statements must include detailed warnings of making minimum only payments and late payment penalties.
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Poll: When Did You Last Check Your Credit Report?
If you're over 18, or under 18 and using credit, you should check your credit report at least once a year. Since you're able to get one free copy of your credit report from each of the credit bureaus each year, there's no reason you shouldn't check your report annually.
Other than annual financial maintenance, there are some other key times you should check your credit report, like before you apply for a mortgage. Checking your credit report at these crucial times can help save you from the embarrassment of being turned down for credit.
More on Credit Reports
Safe Black Friday and Cyber Monday Shopping Tips
They're here! The biggest shopping days of the season have finally come. Retailers aren't the only ones looking forward to all the credit cards coming out during this time of year. Credit card thieves are also on the prowl, waiting for the opportunity to swipe your credit cards or just your credit card information.
This time of year, it's especially important to practice safe credit card habits to prevent credit card theft and credit card fraud. Here are some articles to help you:
- How to Avoid Credit Card Fraud
- Online Credit Card Shopping Tips
- What To Do About a Lost or Stolen Credit Card
This Week's Credit & Debt News:
Read more...Minimum Payments, Maximum Cost
Your creditor knows you have a lot of financial obligations, so it gives you the luxury of making minimum payments, an amount that's only between 1-3% of your balance and is sometimes less than your finance charge. Isn't it nice of them to give you that courtesy?
Have you ever heard of a creditor doing something nice for its customers? Of course not! The courtesy you think is allowing you to have more room in your budget is actually costing you. Minimum payments take a little money over a long period of time so you may never realize just how much money you're unnecessarily spending unless you look at the big picture.
Are you brave enough to see how much your minimum payments are costing you?
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American Express Adds New Credit Card Fee
American Express cobranded hotel or airline credit card will be charged a fee to reinstate rewards lost because of a late payment. American Express recently announced that late payments would cause cardholders to lose any rewards accumulated during that month.
If you want to get your rewards back, you'll have to pay a $29 reinstatement fee, according to ABC News. Of course, you'll still have to pay a late payment fee of up to $38. Your interest rate could increase too, because of the late payment. Starting February 22, 2010, you can only be charged the penalty rate when you're more than 60 days late on your credit card payment.
Weekly Credit and Debt News Roundup:
- Salvation Army bell ringers in North Carolina will be accepted credit card donations. I suspect that bell ringers all over the nation will be taking credit cards. MyFox8.com Read more...
10 Ways to Avoid Credit Card Debt
Some extremists would tell you to avoid credit card debt by avoiding credit cards completely. Of course, credit cards can be good for you, helping to build your credit score when you use them the right way. So counting out credit cards completely isn't the best solution for avoiding credit card debt. Instead, there are some other things you can do to avoid the debt trap. For example, paying your balance in full every month will keep your credit card debt at $0. Here are 10 Ways You Can Avoid Credit Card Debt.
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