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Weekly Credit Links: Is the Credit Reporting System Broken?

Dan — Fri, 18 May 2012 18:50:32 +0000

Is the Credit Reporting System Broken? (Mint Life Blog)
Last week, the Columbus Dispatch published the findings of a yearlong investigation into the credit reporting system. The findings, as you can imagine, didn’t paint a flattering picture of the credit reporting system or the credit reporting agencies. And while consumer advocates and credit industry representatives will probably never agree on whether or not the system is broken, both sides do have valid points

Credit Scores and Fannie Mae–What You Need to Know (Dough Roller)
But there is a second problem that has persisted for several years–low credit scores. According to Fair Isaac, the creator of the FICO credit score, more than 25 percent of consumers who have active credit files (about 43 million people) have FICO scores of 599 and below. Here’s a chart from FICO Banking Analytics Blog showing the shift over time:

4 Transactions You Should Complete with a Credit Card (Financial Highway)
Even though it can be easy to fall into the debt trap when you use a credit card, the truth is that sometimes it’s best to use a credit card. It’s true that you can use a debit card in much the same way as a credit card, but there are some things a debit card is missing. Many banks tell you that you can have similar protections with a debit card branded with a major credit card company logo, but there are different requirements in effect to receive that protection.

Save Money On Interest Payments With A Balance Transfer (How I Save Money)
If you do have to pay a transfer fee it is a good idea to calculate which of the options may be the best for you. Most transfer fees are either a set amount or a percentage of the amount that you want to transfer. It is wise to take the time to calculate the total cost of each option in order to select the one that will make the most financial sense in your situation.

The Smart Way to Use a Credit Card for Bad Credit (Credit.com)
The simplest answer is that there’s no overarching right answer. Each person is different, but consumers who want to open such an account need to exercise caution. Credit cards for consumers with bad credit typically carry higher rates and fees than many borrowers may have been accustomed to when they still had a healthy credit rating, meaning the cost of keeping an account will likely be quite high, especially if they carry a balance from one month to the next.

Say Hello to More Money with HelloWallet

Dan — Wed, 16 May 2012 13:16:35 +0000

It’s the only app endorsed by Bill Clinton and the only app the city of Los Angeles has partnered with to offer personal finance counseling to its workforce. Is HelloWallet all hype or does it live up to users’ expectations? Here’s an in-depth review.

No-ads Money Management App

HelloWallet works like Mint or Quicken but without the annoying affiliate ads. The catch is, you have to pay $4 monthly. But, considering HelloWallet’s mission to democratize financial guidance through a fully-loaded money app and its independence on any bank or financial institution, the price tag seems reasonable enough for lower-to-middle class Americans who can’t afford an expensive private financial counselor. This makes it a little bit hard to convince users to move from free platforms like Mint to HelloWallet. Is being ad-free and independent of any financial institution makes it worth its affordable price? You’re lucky if you’re in San Francisco. The city decided offer it to residents at a subsidized price. For the rest of us, read on and see if the app is worth subscribing to.

Simplify How You Decide Financially

The idea is to bring professional financial counseling to 80% who can’t afford to talk to financial advisors in private. The app pulls data from your credit cards, 401ks, bank and checking accounts and student loans. It does excellent job and is a sure hit to those who love keeping track of their finances. There’s a tab that let’s you see just how much money you have left for each budget category. And there’s a cool button that says “Help Me Spend Now!” Click on it and the app determines your location, pull a list of nearby establishments and asks “Where do you want to spend money?” Simply click on a shop and the app will tell you how much money remains in that budget category.

There’s a promise of financial independence while using the app. A company revealed that an average employee was able to save $300 within their first 4 weeks of using HelloWallet. If so, this fully justifies the four-dollar price tag each month.

An App Jam-packed with Personal Finance Goodies

One of HelloWallet’s edge over its rivals is its comprehensive bank of information of more than 50,000 financial products including savings and checking accounts, money market funds, and more. And just like a dedicated financial advisor, HelloWallet offers 24/7 financial management and monitoring, specially tailored financial plans, and often overlooked opportunities for saving. Premium service that’s affiliate-free and ad-free is what sets HelloWallet apart from its competitors. The core philosophy it follows deserves praise, what with the glut of apps that work for companies and affiliates on the market. It’s definitely worth more than just a try.

Bank Smart and Get Rid of Student Loan Debt

Dan — Mon, 14 May 2012 09:33:15 +0000

Want relief from exorbitant fees and pay off your student loan debt fast? A start-up online bank designed its services just for that. SmarterBank, aptly called since its simple banking services are tailored to student-loan-paying clients, provides free SmarterBank Visa® Debit Card on which cardholders can earn SmarterBucks rewards. It’s from the same smart guys who run SimpleTuition, a company that offers financial tools and insights on dealing with higher education costs such as student loan debt.

More than Just an Online Bank

SmarterBank lets you manage your account including bill payments and money transfers online. It may sound like a conventional bank offering online access but SmarterBank offers more. As an online-only bank, it partnered with The Bancorp Bank and operates without a network of physical branch so that savings earned from its lack of physical overhead costs are passed to customers in the form of lower fees and SmarterBucks rewards.

The site uses RSA public-key cryptography so you can entrust SmarterBank with your data without worrying about online banking security. It also allows seamless integration with financial software providers such as Mint and Quicken and balance alerts via text message or email. Just go to Manage Contact Information under the Account Services tab and click Manage Alerts.

Setting up automated bill payments is even quick and easy. Account holders can sign up for the e-bill program Bill Pay to electronically pay just about anyone who accepts a check, except government-related payments.

Most companies would be happy to send you bill payments electronically. It’s a widely growing practice adopted to get rid of tons of paper. Just ask the company you want to receive bills from by visiting its website.

Less Charges, More Rewards

Surging interest rates made debt payment even more unbearable for people who work just to pay off student loan interest. With SmarterBank, you’ll get no-fuss, no-interest checking accounts. Pay no monthly fees as long as you use your account each month. It can be a single ATM transaction, a debit transaction, or an online bill payment. Account inactivity, which is less likely to happen, can cost you $4.95 a month.

SmarterBank lets you reap your rewards for banking smarter through SmarterBucks. Your rewards balance will go to pay off your student loans. Rewards are earned through daily purchases, contributions from friends and great deals and offers. The program works great for recent grads, students, professionals, and even parents who want to help pay their child’s debt.

Weekly Credit Links: My First Credit Card Advice

Dan — Fri, 11 May 2012 14:55:53 +0000

My First Credit Card Advice: 10 Tips I Learned Along The Way (Credit Card Forum)
I remember when I got my first credit card. I was 18 and still a senior in high school. Rather than shopping around for the best credit card offer, I simply filled out an application at the same bank my checking and savings accounts were located, KeyBank (sidenote: I stopped banking with them long ago).

To call my first card “basic” would be an understatement. This thing had no rewards and a measly credit limit of $500, which wasn’t even enough to cover my monthly purchases. I always paid my statement balance in full so I never incurred interest or had any debt on it – but still – it was a bad choice (I will explain why in a moment).

Things To Know If You Are Sued By A Credit Card Company (Gary Harvey)
In most cases, when a consumer is being sued by a credit card company, it is because the creditor feels that legal action is the best way to get money out of the consumer. Understanding this can be of great value to you when trying to avoid lawsuits in the future. One of the few creditors that do not follow this logic is Citibank. Citibank sues almost anyone who stops making his or her monthly credit card payments.

If you are not dealing with a creditor like Citibank, you will stand a much higher chance of avoiding a lawsuit. A terrible mistake that I see made all the time by consumers is that of sending cease and desist letters. This is one of the worst things that you can do when trying to avoid a lawsuit!

British Airways Visa Signature Card from Chase Review (Consumer Commentary)
If you’ve ever flown British Airways long-haul from the U.S. to London, you’ve probably lingered when walking past those sleeper seats in the “Club World” section. They don’t just recline, they lay fully flat. You won’t run the risk of a small child kicking the back of your chair for hours before you endure the endless escalator rides at Heathrow. Thanks to this spring’s special offer from Chase’s British Airways Visa Signature Card, you can treat yourself to this luxury for about the same price as a standard coach class ticket.

Payment Security, Ease of Use and Google Wallet (UniBul Credit Card Blog)
The payment landscape is changing before our eyes. Mobile payments are the new big thing and everyone who is someone in the payment card industry, and even more newcomers, are battling one another for the early lead. However, mobile payments come in many shapes and forms and some of them have been quicker to win over consumers than others. Phone-based credit card acceptance, for example, spread like wild fire once Square made it possible less than two years ago. Carrier billing, the type of thing companies like BOKU are doing, has also been quite successful, as has been Facebook’s Credit platform. NFC-based payments, on the other hand, have been slower to catch on, even though Google has made a strong push in the field with its digital wallet.

4 Dangerous Places to Swipe Your Debit Card (Give Me Back My Credit)
With credit cards, users victimized by theft simply dispute the charges on their account and their credit card company will investigate the fraudulent charges. In most cases, the credit card company forgives the charges and writes off the theft as a loss. Debit card users are not always as successful when it comes to disputing identity theft and fraud on their accounts. Since debit cards withdraw money directly from your checking account, rather than from an intermediary, once that money is gone, it is gone; and it usually takes weeks or even longer to see reimbursement for stolen funds.

Walmart MoneyCard Review

Dan — Wed, 09 May 2012 11:21:25 +0000

Walmart MoneyCard is one of Walmart’s card offerings along with Walmart Discover and a standard charge account credit card. Each type of account targets unique set of group. MoneyCard, for instance, is ideal for consumers looking for a Visa card without credit check. As one of the lowest priced prepaid cards in the market, it’s also touted as a cheaper alternative to a secured credit card.

Besides the no credit check requirement, the card comes with a standard rewards program, a simple and low fee structure, an online bill payment feature and a couple of free services such as direct deposit and reload.

The Walmart MoneyCard is also one of the cheapest card to get, for free if you get it online and for $3 if you sign up at a Walmart branch. It’s a good deal considering tons of other prepaid cards that cost as much as $10 to activate. The $3 monthly fee $2 ATM fee are also reasonable compared to other cards.

MoneyCard comes with a standard cash back rewards program. You can redeem up to one percent of your gasoline purchases from Walmart stations and get rewards credited directly to your account. The prepaid Visa card is issued by GreenDot and can be reloaded for up to $3,000 daily at any Walmart store. And since it’s a reloadable prepaid card, you’ll be required to present an ID bearing your name, address, date of birth or some sort of identification.

You can easily obtain this card with its no credit check requirement but it’s not going to help you build your credit history. If you have a thin file and are aiming to beef it up, a secured credit card is a better option.

Walmart Discover Credit Card Review

Dan — Mon, 07 May 2012 01:22:43 +0000

Walmart currently offers three different flavors of card for its customers: a Visa or MasterCard reloadable prepaid card, a standard charge account card, and a full-fledged Discover credit card. We’ll cover each of them in a series of post starting with the widely popular Walmart Discover.

A cash-back rewards card for Walmart shoppers

If you’re curious what’s a Walmart Discover credit card in a sentence, the subheading says it all. Shoppers would appreciate its low reward redemption level of $10, up to 1% cash back on spending and three cents off per gallon on Walmart gasoline purchases. There’s an additional $20 bonus for shoppers who spend at least $100 on their first purchase.

How much you earn depends on how much you spend

Your Walmart Discover card’s reward percentage is based on how much you spend with it in a calendar year. The default rate is only .25%, which is pretty low compared with other cash back cards. You’ll start earning a bit more, at .50%, after passing the $1,500 per year requirement. You’ll get the full 1% once you’ve spent at least $3,000.

Judging from the figures, the Walmart Discover is a cash back reward card ideal only for shoppers who are willing to hit the $3,000 target in a calendar year. Otherwise, it can hardly satisfy cardholders who aim for more bonus points.

The upside to Walmart Discover credit card is the substantial savings it offers those who frequently buy gas at Walmart stations. Five cents off per gallon of gas each year can add up to a few hundred dollars. However, if you’re gassing up in several gas stations besides Walmart’s, you might want to check other gas rewards cards that offer similar perks.

Another credit-building card

While you can certainly get one from a credit union, the Walmart Discover card is another bad-credit-friendly card comparable to Orchard Bank MasterCard. It has no annual fee, which makes it an ideal credit-building tool for those who have thin credit history and are yet responsibly paying off their balance each month. The APR, depending on your credit history, varies between 13.9% to 22.9%.

Limited Discover payment network

Discover Bank pioneered credit card cash rewards with its Cashback Bonus program. While it remains popular and is accepted everywhere that honors Discover cards, there are still plenty of establishments that only accept Visa, MasterCard and AmEx. This is an important factor to consider if you’re frequently traveling or don’t have extra cards to use.

Weekly Credit Links: How Credit Card Inactivity Impacts Your Credit Scores

Dan — Sat, 05 May 2012 10:42:31 +0000

How Credit Card Inactivity Impacts Your Credit Scores (Mint Life)

Credit reporting is very flat, meaning your credit reports only show you a snapshot in time of what your credit history looks like. There is no chronology of balances, which means it’s hard to determine from a credit report if an account is active or inactive.

For example, if you have a credit card with a $0 balance on a current copy of your credit report, it appears that the account is inactive. The problem is that balance is from last month’s statement and the card may have been used since the last month’s statement was cut, thus the account is now “active.”

9 Pros And Cons Of Canceling Vs Cutting Up Your Credit Cards (Girls Just Wanna Have Funds)
Credit cards can be both the angel and the devil on your shoulder; simultaneously a force of good and evil! Further, what’s the difference between canceling a card and just cutting it up? Depending on who you talk to, people will try to convince of all of the above. Should you cut them up, or cancel them? Sounds confusing, but the truth is that there are pros and cons to each option.

U.S. Credit Card Delinquencies, Charge-offs Fall to New Record-Lows (Unibul Credit Card Blog)
The news from the six biggest U.S. issuers was mostly positive in March as well. All of them reported lower delinquencies on a month-to-month basis and half of them recorded lower charge-off levels (Chase and Capital One had slight increases and American Express saw no change). Let’s go over the data in a bit more detail.

Home Depot Credit Card Review (Charge Responsibly Blog)
The Home Depot Consumer Credit Card has no annual fee and offers 0% interest on purchases of $299 or more for six months. After six months the rate reverts to your standard APR which will run from 17.99% – 26.99% variable. By the way, the small print states that the majority of people who apply get a rate of at least 25.99% APR. Interest will be charged to your account from the purchase date if the purchase balance (including premiums for optional credit insurance) is not paid in full within 6 months or if you make a late payment.

Visit Your Local Credit Union (The Simple Dollar)
What if you’re wanting to consolidate or reduce debts, but you don’t really have any sort of collateral? You don’t own a home or a car, but you do have some debts you’d like to manage and potentially reduce. What do you do?

I found myself in this situation several years ago, even before my financial turnaround. At that time, I took the advice of a friend and visited my local credit union.

DIY Guide to ID Theft Prevention

Dan — Thu, 03 May 2012 12:59:48 +0000

Are identity theft products and services worth their price tag? Scare tactics effectively propagate fear of identity theft, which in turn boost profits of the credit-protection industry. Consumers are expected to pay at least $10 each month for services that promise ID theft prevention. It doesn’t seem much but if you can do it yourself why pay?

Do-it-yourself steps for identity-theft protection has been around for more than four years. When ID theft cases started to rise and big companies began pitching expensive credit monitoring and ID protection consumer advocates such as Private Rights Clearinghouse responded by educating consumers on issues regarding privacy rights, identity theft and more. Their site offers an assortment of downloadable resources on identity theft and data breaches, from fact sheets to consumer alerts.

Privacy Rights Clearinghouse also noted that identity-theft protection services don’t monitor certain types of identity theft and thus make recovery more difficult. Some of these types include Social Security number fraud, medical fraud, criminal identity fraud, and debit/check card fraud. That’s why Paul Stephens, director of policy and advocacy at Privacy Rights Clearinghouse, “don’t feel that credit-monitoring services are worth it.”

And what about taking matters into your own hands? It’s definitely doable. Here’s a low-cost DIY way of protecting your identity.

Check Your Credit Report Regularly

Visit AnnualCreditReport.com and request a copy of your credit report every year. Since you can get reports from each major bureau for free, you can save a lot more money by spreading your requests over a year. That’s one credit report free every four months.

AnnualCreditReport.com gives you three request options: through its online portal, by mail or by phone. The reports are immediately available once you’ve verified your identity.

Once obtained, scan your credit report for any suspicious lines of credit opened up in your name. If there’s one, dispute the item and let the credit bureau know it’s identity theft.

Reduce the Number of Mails Your Receive

If your mailbox is packed with credit card offers and all types of junk mail, you’re prone to identity theft through stolen mails. Take extra caution when you apply for pre-approved credit card offers, or better yet visit OptOutPrescreen.com and sign up.

The site serves as a centralized electronic service that processes requests of opt-in and opt-out of credit and insurance offers. It’s a joint project by the Consumer Credit Reporting Companies.

If you can’t avoid receiving tons of important mails, using a Post Office Box is your safest bet. For as low as $5 a month, a PO Box from a secured mailbox facility such as USPS can effectively prevent thieves from stealing your mail.

Monitor Your Score for Free

If credit reports can be obtained for free, credit scores can also be had without charge, unless it’s a FICO score. You can get your TransUnion credit score for free each month from Credit Karma. Any changes that appear on your TransUnion credit score could mean a change on your corresponding TransUnion credit report.

You can also avail of free credit scores from trial products and services. Just make sure to cancel your account before the trial period ends.

Set Up Fraud Alerts On Your Account

This one sounds like a daunting task when in reality it’s the easiest ID prevention measure to complete. Consumers simply have to ask each of the credit bureaus to place a fraud alert on their accounts. Account alerts are granted for free but they expire after 90 days so make sure to schedule another request.

Want to take it a notch or two higher? Consider freezing on your account although this costs about $10, varying slightly from state to state. Freezing won’t totally bar access to your report. There are certain circumstances when an existing creditor can request for your report.

Want more ID theft protection? Stay vigilant all the time. Visit Privacy Rights Clearinghouse’s Identity Theft and Data Breaches section.

Barclaycard US Now Accepts Applicants for the Barclaycard Ring® Card

Dan — Mon, 30 Apr 2012 04:12:25 +0000

Ready for Barclaycard’s Ring card? It’s the first “social” credit card with a pricing model that would likely disrupt the credit industry. Consumers rave about its revolutionary features, especially its extremely low-cost structure. It’s a rarity and many are enthusiastically waiting for it.

Now the wait is over. Barclaycard US just opened up applications for the Ring card. Once approved, Ring cardholders will have the opportunity to design their ideal credit card. They can, for instance, vote on how to handle the program’s profits. They can even choose to donate profits to charity or keep the “Giveback” rewards to yourself.

So what’s the catch? There isn’t. Transparency is part of the Ring card’s appeal. It does away with the usual 7,200-plus words in credit card agreements and has instead a two-page credit card agreement composed of only 1,038 words. Paul Wilmore, managing director of consumer markets at Barclaycard US, said the idea came from Barclaycard’s cardholder community.

Interested? Here’s a quick preview of Barclaycard’s Ring card.

In the alpha test conducted by Barclaycard, 80 percent of respondents said a card’s interest rate is the most important consideration. That’s why the Ring card doesn’t have an annual fee and balance transfer fee. It wants to reach out to those looking for a low-interest card to help manage their debt. And it’s lack of balance-transfer fee is perfect for the job.

Not only is the Ring card a great tool for those wanting to pay off debt, it also complements existing rewards and cash back credit cards that usually carry high APRs. If you can transfer the balances from these expensive cards to the Ring card, you’ll get the rewards and cash back without paying more than 8 percent APR. This is how the Ring card can render interest rates on other credit cards irrelevant.

Unlike the card’s interest rate, the card’s free balance transfer was not a result of the Ring card community vote. Barclaycard US said it doesn’t want to treat cardholders the way other banks treat theirs, that is, offering an introductory 0% APR then taking cardholders by surprise when the introductory period expires.

Ring cardholders can connect their accounts to other credit cards so that they could get notified when balances are due. By doing so, they can choose to do a balance transfer, up to 30 days grace period.

It’s interesting what other notable features the Ring card would offer to cardholders in the future. For now, “Giveback” rewards and extremely low fees are already compelling reasons to sign up for an account.

Weekly Credit Links: Will Paying Off Debt Instantly Improve My Credit?

Dan — Sat, 28 Apr 2012 07:25:38 +0000

Will Paying Off Debt Instantly Improve My Credit? (Quizzle Wire)
Many folks with a less than stellar credit scores suffer from too much debt, resulting in poor payment history or high credit utilization. However, simply paying off any old debt might not boost your credit score. And in all cases it will take a little time for your credit score to adjust.

Four of the Best Hotel Credit Cards (Smart Balance Transfers)
Credit card users that enjoy rewards for their spending often choose airline affiliated credit cards or products that offer cash back. Nevertheless, travelers should always consider a card that offers hotel rewards. These products generally offer valuable rewards that are easy to redeem. In addition, many of the top hotel reward cards grant users elite status in the hotel’s loyalty program.

Citi Forward Card for College Students Review (Charge Responsibly Blog)
It is said that reward yields better performance. If that is true, then the Citi Forward Card for College Students puts that to the test. Not only does the Citi Forward Card for College Students give you cash back rewards for purchases, they also give those who are on time with their payments the greatest gift a credit card user could ask for; a lower interest rate.

PayPal’s Mobile Payments Services Attract Consumers, Retailers (UniBul Credit Card Blog)
PayPal has been very aggressive in its pursuit of opportunities in the quickly expanding and diverse field of mobile payments. Moreover, the processor has the resources to compete in several different sub-sectors of the fledgling industry at once and has not been afraid to use them. At least one of PayPal’s mobile initiatives – the Square-like PayPal Here – which was launched just over a month ago, is already showing all signs of a huge success and for good reason. But this is just one element of the processor’s multi-prong m-payment strategy, which is designed to appeal to both consumers and retailers. And it is already bearing fruit.

The gendering of credit cards (Bankrate)
A higher percentage of women paid just the minimum, incurred late and over-the-limit fees and took out cash advances from their credit cards than men, the study found. More men paid their balances in full or compared credit cards before applying than the ladies.

The difference between the sexes in each category was relatively modest — anywhere from a percentage point to 6 — but it added up and not in a woman’s favor.

What evened out the odds, though, was financial literacy, the study said. Twenty-four percent of women with good financial understanding engaged in two or more costly credit card behaviors, the same percentage as men with high financial literacy.