So I spent yesterday morning hollering at my credit card company Chase for changing my grace period from 25 days to 20 days. That made my due date change, which made me miss my due date, and caused them to tack on a late fee. After about 20 minutes of yelling they reversed it but it made me think about which cards I use to make purchases on. The only reason I keep that card is because of how long I had the card. So isn’t it interesting that as I was browsing the web yesterday that I pull up an article from CNN Money that shows 6 good credit cards out there. They either have a great rate, good terms, or good benefits. I thought I would share it with you in case you are mad at your credit card company.
July 21, 2009
July 10, 2009
Credit Card Reform – The Details
I know I have spoken about the credit card legislation that went through Congress earlier this year. Officially labeled ”The Credit Card Accountability, Responsibility and Disclosure Act”, parts of the act go into place in August, with most of the other parts in place starting February of 2010 (which from now on will be called 20-10 – Thanks Patrick). I’ve mentioned a few new rules in the past, but CNN Money had a great compilation posted in an article today. Here is the list:
As of August 2009
1. Statements must be mailed 21 days before bill is due (up from the current 14).
2. Issuers have to give 45 days’ notice (vs. 15) before increasing interest rates and fees.
As of February 2010
3. Issuers can no longer raise rates on an existing balance, unless payment is more than 60 days late or a teaser rate expires.
4. Teaser rates must be in effect for at least six months.
5. Except for expiring teasers, the rate on new purchases can’t be hiked in the first year.
6. Payments in excess of the minimum owed must first be applied to the balance with the highest interest rate, and then to other balances in descending order.
7. Over-limit fees can be applied only if a consumer opts in for approval on going over the credit limit.
8. Applicants under age 21 must have an adult co-sign, or show proof of income for approval.
9. Issuers can’t offer sign-up gifts on or near college campuses.
10. Issuers can no longer practice “universal default” – that is, raise your rates if they learn that you were late on another account.
11. Issuers must indicate in statements how long it will take to pay off a balance (and the total cost) if you make only minimum payments.
12. In calculating finance charges, issuers cannot average in daily balances from the previous billing cycle.
As of August 2010
13. Cardholders assessed a penalty APR for late payment can reclaim the lower rate if they pay on time for six consecutive months
If you’d like to read the whole article, plus get some additional tips on how to control your credit cards, click the link below:
May 26, 2009
Credit Card Reform Act To Become Law
Well look at that, Congress actually passed something that might help their constituents. The House agreed with the Senate version which has been sent on to the President to sign. In the law new credit card rules go into effect which will provide additional protection to the holders of the card. These new rules include:
- Prohibits increasing a card’s interest rate unless the holder is more than 60 days late
- If the rate is increased due to a late payment, if payments are made on time for the next 6 months, the old rate is restored
- You will have to ”opt in” to have the ability to go over your credit limit (the CC companies currently consider the ability to go over your limit a service which they charge heavily for, and don’t allow you to opt out of)
- Payments have to be applied to the debt which has the higher interest rate (if there are two rates on the card, such as a 0% teaser)
- The card issuer has to announce changes to rates at least 45 days in advanced
- A fee can only be applied to phone payments if you speak to a person and not an automated system
- People under 21 will need to show income independence, or have a parent co-sign (interesting idea)
- You must receive your bill at least 21 days before it is due (no 3 day lead time anymore)
- Statements must clearly show how much you’ve paid in fees and interest, and show how long it will take to pay off the card only paying the minimum.
What the bill does not do (thanks mostly to the lobbyists):
- Cap card interest rates
- Prevent the card issuer from raising fees, or coming up with totally new ones
- This law does nothing for the next 9 months – so watch out for rate and rule changes on your card while the issuing company still can.
I applaud their effort, and am glad that they finally came up with something. I was hoping for a few more rules like not being able to use other cards or bill history to jack your rate, but that didn’t make it into the final bill. Remember that these rules don’t go into effect until February, so the credit card companies might do everything they can to get more money out of you in the mean time. If you use credit, just keep an eye on your statements.
April 30, 2009
How to Calculate A Lease Payment
I’ve leased a car a few times in my life, and have never understood how the car dealer came up with the monthly payment for a lease. The only thing truly know is that while on a lease you are paying for the depreciation of the vehicle, you are paying interest, and you are paying sales tax. The rest of it has been a lot of hocus pocus to me. If the payment seems reasonable, I usually am OK with it. Well next time I go to lease a car, I can now figure out if I am getting screwed or not. Edmunds.com has a great write up on how to determine your monthly lease payment. By asking for a few numbers from the dealer you can make sure you aren’t being taken to town, and not realizing it. Getting a 299 month payment might sound great, but what if you could do better? Many people do not realize that the cost of the car means a lot in the lease calculation. The dealer could be packing on 1000’s of dollars in profit because they they start with a high price on the car (sometimes higher than MSRP), but since the payment looks good you don’t notice. Click on the link below to learn what makes up a lease payment, and how with a little knowledge, you can get a better deal next time.
April 14, 2009
Up Till Yesterday You Were Working For The Man
Yesterday was what was called “Tax Freedom Day”. This day represents the day you actually start making money instead of giving it to the government. Really what it means if you took your income over the entire year, until yesterday you’d be giving every earned penny to the government for taxes. The rest of the year it’s all yours. So for 103 out of 365.25 days of the year, you are doing nothing but working for the man. Coincidentally, April 13th was the shortest amount of time since 1967. This is because tax collections overall are down due to the recession, and the stimulus package that Obama passed put a few extra bucks in your pocket by temporary lowering your taxes. So rejoice…you are free from the man…until January 1st, 2010 
April 3, 2009
Not Looking To Get Audited This Tax Season? Follow These Tips
There are certain things people do that just scream to the IRS AUDIT ME! Sometimes people get picked at random, but many times its because of the things that people either try to get away with, or just don’t understand what they have put on their return. Smart Money has compiled 5 items to either avoid or make sure you do correcltly when completing your tax return to keep the IRS away:
- Failing to Show All of Your Income
- Failing to Pay Taxes on Forgiven Debt
- Filing a Small Business Loss
- Claiming a Home-Office Deduction
- Misreporting Real Estate Gains and Losses
For #3 and #4, there is nothing wrong with doing these things, you just need to make sure to do it correctly since many people try and get one past the IRS with these. The best tip of all is that if you are unsure about something, look to a professional that can answer your question. And I mean a CPA firm, or a certified tax accountant, not H&R Block. For a link the article with more detail on each tip click the link below:
April 1, 2009
7 Credit Card Tips
I’ve started checking out a new blog (well new for me) called Bargineering (link). There was a decent article posted the other day listing out 7 Credit Card Secrets which some people might find helpful. With the days of credit being squeezed, it always good to have some helpful tips when dealing with your credit card company. The seven tips were:
- Just ask: Lower interest, reduce or eliminate fees – Not likely in the current market, but it cannot hurt to try.
- Roll credit limits of the same issuer onto fewer cards
- Request an increase to the credit limit without a credit pull
- Capital One & Discover don’t have a foreign transaction fee charge – Good if you ever buy something online from a company not in the U.S.
- Change your card to a different type or rewards program
- Most cards double manufacturer’s warranty - My AMEX card is great with this. Just make sure to keep all your original receipts.
- Most cards offer auto rental liability insurance
They have an explanation of each secret within the article, so if you would like to read more click the link below:
February 18, 2009
All The Bad People Are Getting Their Bailout…What About Me?
Many people that have been paying their bills on time, and got into a mortgage which they can pay, are asking “all these people that got into bad loans, or banks that got into bad loans are getting bailed out, but what about me?” Aside from a pat on the back and a thank you up until now, you haven’t gotten too much. That might be changing in the near future. Obama released his plan for a new foreclosure plan today, hoping that we can settle these bad mortgages once and for all. I know you are asking didn’t you just say, this post was about people that have kept up with their loans? Yes, I did. Part of the plan is to allow people to refinance their mortgage to a lower rate even though your house might not have the required amount of equity to make the banks happening. What is currently going on (and I know a person or two in this situation) is that people can afford their monthly mortgage payment, but could actually save money by refinancing their mortgage to a lower rate. The problem is that some folk’s home value has dropped, sometimes to under what is owed on the mortgage. This is called being upside down on your loan. Mortgage companies don’t want to refinance a loan that the owner has very little equity or has equity and has negative equity, because it typically doesn’t work out from them too well in the end. Well with this plan the administration is calling the Homeowner Affordability and Stability Plan, that should change. As long as your new loan and and refinancing costs don’t exceed 105% of your homes value that you should be able to partake in this plan. I could try and explain some of the other fine points, but CNN’s Anderson Cooper has done a good job, so I don’t have to. Click the link below for more information:
February 11, 2009
Get Your Forever Stamps Before May 11th – Stamp Prices Going Up
By providing consumers with the Forever Stamp (a stamps that works no matter the current stamp price), the government allowed the Postal Service to raise stamp prices on a yearly basis, as long as it didn’t rise faster than the U.S. Consumer Price Index. Well come May 11th, the stamp prices will rise to 44 cents a stamp (up two cents from the current price). So make sure to go out and stock up on your forever stamps before May 11th so you can save yourself a few cents until they run out.
What Does the Proposed Stimulus Bill Mean To Me
Though it hasn’t been finalized yet, some sort of stimulus package is assured to make it into law. Though there is Billions in spending attached to the bills, there are some tax breaks/new rules that will effect most Americans. Here is a break down from CNN:
- The bill provides a $500 credit per worker and a $1,000 credit per dual-earner couple. CNN states that this will either be added to your paychecks, or you can take the lump sum when doing your taxes. I would suggest taking it in your paycheck…no reason to allow the gov’t to hold on to your money for a year right? For those who are not working, such as seniors, you would get a 300 dollar credit under the current plan.
- The bill includes a one-year provision to protect middle- and upper-middle-income families from having to pay the Alternative Minimum Tax. Everyone knows the AMT sucks…but the government likes your money to the tune of 70 billion extra a year, so they have yet to banish this evil tax.
- The bill would let those who buy a car in 2009 deduct the interest they pay on their car loan as well as the sales tax charged in the purchase. This is on the bubble so to speak…there is word that this might get dropped from the final bill. I can see how this might push someone to purchase a new car, sales tax can be a significant cost in some states. In Virginia though, buyers need to consider that even though the sales tax would be reduced, their annual property tax bill for their car would increase due to most new cars are higher in value than your current car.
- The bill doubles the size of an existing temporary home buyer credit to $15,000. It also would allow all home buyers to claim it. On top of that, it would not have to be repaid like the current credit is. There would be restrictions as to how long you would have to keep your house before you sell it, but this might get people that are on the fence about buying a house to move on it. There is certainly plenty of inventory out there.
- The bill introduces the American Opportunity Tax Credit, a $2,500 credit for higher education expenses. This would certainly help those trying to get their education. Additionally, the bill increases the maximum Pell Grant by $281 in the 2009-10 academic year and by $400 in the 2010-11 academic year.
- The bill increases eligibility for the child care tax credit by lowering the income threshold that must be met to $8,100. This doesn’t mean to go out and be making babies everyone!
- The earned income tax credit will be temporarily increased from 40% to 45% of qualifying earnings for low-income families with three or more children. It also includes a marriage penalty relief provision for couples who qualify for at least a portion of the credit. I am not sure what this means, but it looks like it would help a group of people.
You can get the full read here. Hopefully we’ll know in the next few days what will be happening….I really hope we are reaching the bottom of this mess. We can’t continue to be handing out 1 trillion dollars every few months…the mints will start to run out of ink!
