Express-credit-cards.com | Common sense and law about credit cards

Before a college students make decision to apply for student credit card, they better know the basic information about credit and how credit card system works. Credit should be taken very seriously and not applied because somebody at college campus is offering Frisbee or T-shirt after you apply for credit card. Read more...

Avoid Too Many Cards

Most experts advise that two credit cards are enough. When under stress, access to too much credit can be like a drug. When choosing credit cards, select only the ones that best meet your own needs.

Beware of Solicitations

Receiving numerous credit card solicitations in the mail each month does not mean that you can actually afford more credit. Many of these applications are sent by lenders looking for customers who will run up big balances, as big spenders pay more interest. Contrary to the pitch on the offers you receive, you may not have been singled out because of your excellent credit rating, but because the lender thinks, due to your past spending habits, it can make more money off you. Indeed, many lenders solicit credit card applications based not on your income or your credit record, but instead on marketing profiles, such as whether you have succumbed to the video home shopping craze, what stores you shop at, what magazines you subscribe to, or even your zip code.

Using your credit card for purchasing new clothes or latest DVDs - these products are yours to keep. You can use it for years to come and pay for them over a few months if you wish. But using your credit card for taking cash advance to pay for daily purchases like food and gasoline you will pay much more for that after. And you better give it all back as soon as possible. Read more...

Consider the Credit Terms Carefully

The interest rate is important and you should always try to keep that as low as possible, but it is not the only consideration. Lenders can easily change the rate on your cards, with or without a reason. If you pay off your balance regularly at the end of the each month, other credit terms that add to the cost of the card may actually be more important than the rate, such as annual fees, late charges, membership fees, or ways of calculating the balance.

Read the Entire Solicitation

Most credit card solicitations contain both a "sales pitch" and, usually on the back of one of the pages of the sales pitch and in small print, a disclosure of the actual terms of the credit card. Don't be embarrassed if when reading these terms you can't understand them. If you don't understand the terms, call the lender and get an explanation before you accept the card. If you don't like the explanation, don't take the card.

Buy it now but pay later. It became the American way. Without any hesitations we can say that a credit card is very useful and powerful tool. However, with the rising amount of American people using credit card or even cards, too much of a good thing can lead to big trouble. Read more...

Reject "Teaser" Rates

Many lenders offer artificially low "teaser" rates that last only for a few months, after which the rate can greatly increase. The "teaser" rate may look good, but the real question is often what happens when that "teaser" rate expires.

Be Careful of Variable Rates

Variable interest rates are difficult even for accountants and attorneys to understand and project, let alone the average consumer. If you don't understand the variable rate language, it may be advisable to avoid that card. In addition to being confusing, some variable rate formulae conceal significant and not always obvious disadvantages.

It happens quite often that you don`t know you have a credit problem until you are denied credit - such as a credit card - because of some records in your credit history. Credit history contains all information about your credits and how you managed it. Mainly it is information reported by your creditors sent to credit bureaus. Credit bureaus legally report poor payment information for 7 years and for bankruptcies - 10 years. A recent study shows that one third of all credit reports contains sufficient mistakes and 70% of all credit reports contain different kinds of errors. Read more...

Watch Out for Late Payment Charges and Penalty Rates

Even a card with an excellent rate of interest can turn into a nightmare when you miss a payment. Late charges can be significant. Even more significant than late charges is the fact that many lenders reserve the right to dramatically raise your rate of interest if you miss even a single payment. If you are having financial problems, these terms can have a significant effect on your ability to work your way out of debt.

Do You Have a Grace Period?

Some credit cards have a grace period, usually 25 days, running from the date of the monthly billing statement, during which you can pay off the balance in full and avoid further finance charges. Not all cards have grace periods, and not all cards have the same grace period. Also, keep in mind that just because you mail in your credit card payment today, does not mean it will be received and credited tomorrow.

Practically all victims of identity theft don`t reveal this kind of crime for a year or even more. That may happen only after something goes really wrong, because smart thieves used to shield their actions by giving different address when they apply for credit card in a victim`s name. Typically, federal laws cover all losses to consumers, but even in common cases, it takes more than two years to clear victim`s names. Read more...

Make More Than Minimum Payments

Consumers, sometimes as a result of lack of income, sometimes because of neglect and inadvertence, frequently make only the minimum payments. Because of the relatively high rate on credit cards, this only compounds their financial problems. One thing many customers do not realize is that minimum payments may increase. Indeed, lenders frequently retain the unilateral option to increase minimum payments and frequently do so when the customer's finances looks shaky.

Beware of Ancillary Solicitations

Once you receive your card, the lender or its affiliates are likely to send you all manner of solicitations for extra services, such as life and disability insurance, credit card protection, travel clubs, and similar offers. They are almost always bad deals.
Take card protection for example. Federal law limits your liability for unauthorized use of card to $50. Do you really need to spend $40 to $60 a year for protection already afforded by law? Life and disability insurance can be purchased from mainstream insurers, often at a better price. Unless you are a truly ardent globetrotter, travel clubs will not save you much, if any, money.

What criminals do to perform fraudulent transactions? They steal credit card information from different bills, report new addresses, and request additional credit cards. They obtain personal data through Internet information brokers who steal it from voter registration rolls, tax records, public filings, etc. Criminals may also hack business sites to steal credit card information or restore it from discarded computer hard drives. Read more...

Keep Priorities Straight

If you are having financial problems, decide what payments come first. A good rule of thumb is that you should pay for necessities, such as food, clothing and shelter, first. Your home is more important than your credit card. Beware of credit cards in which the lender reserves a security interest in the equity of your home. A home is the single most valuable asset most people will ever obtain, and, as a general rule, it should be the very last thing you pledge as security for a debt, no matter how desperate you are.

Avoid Jumping From Card to Card for Teaser Rates

Many people are under the impression that they can save money by simply skipping from card to card to take advantage of teaser rates. However, if your timing is off, you can wind up buried in financial mud. Remember, lenders don't make their money on teaser rates, they make their money when the borrower loses track of rate changes, lets the teaser rate expire, and gets locked into a higher rate.

According to some prognosis - up to the year 2018, five billion smart cards will be issued by financial institutions in over 100 countries of the world covering up to 90 % of it`s population. The first generation of credit cards were cards with a magnetic stripe on it. That allowed to reduce processing costs and increased the security level. Adding a computer chip to the credit card making it a smart card was the next step in the credit cards security system progress. Right now smart cards are used mainly for telephones, transportation, healthcare, movies, fast food outlets, Internet and banking programs. Read more...

Consider Cancellation

There is no law that says you have to keep using a card that you don't like. You may cancel a credit card at any time (although you are still liable for the unpaid balance of the card). Perhaps if more people canceled cards with terms they didn't like, those terms would disappear? It is not unknown for lenders to lower rates or remove onerous terms to compete with competitors or retain customers.

Keep Your Lifestyle Affordable

Don't use credit cards to pay for a lifestyle you can't afford - no one can live forever on borrowed money. Avoid using credit cards to get out of financial problems; it seldom works. Be suspicious of unsolicited offers to increase your credit limit. Make more than the minimum payments. Interest-only-payments will cause your debt to skyrocket.

All credit card experts will tell you that 2 credit cards are more than enough. Being under a stress off some kind, access to too much of financial resources may turn to be a drug. While choosing your credit cards, apply only for ones that better meet your own needs. Read more...

Know Your Rights In A Dispute

The Federal Truth-In-Lending Act provides a mechanism for disputing incorrect credit card bills. Instructions usually appear on the back of each monthly billing statement. Failure by the lender to comply with these procedures may result in stiff penalties. Upon receipt of your notice of dispute, the lender must investigate the charge and report back to you. If the merchant cannot or does not substantiate the claim, it will be removed from your bill, along with associated interest.
During the pendency of the investigation, you usually cannot be required to pay the disputed bill or the interest accruing thereon; however, you must pay that portion of the bill which is not in dispute. Also, you may not be reported as delinquent during the pendency of the dispute.
These tips can help turn credit cards into a benefit, not a detriment, for you and your family.

All creditors look for an ability to pay the debt and a willingness in doing it and sometimes for some more security in protection of their loans. They say there are the 3 `C` of all credits: capacity, character, and collateral. Read more...