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Entries in Credit Card (15)

Thursday
Dec062012

Credit Card Debt Is Top Worry, Survey Finds

iStockphoto/Thinkstock(NEW YORK) -- Santa may be shimmying down the chimney in less than a month, but chances are he won’t be laden with as many gifts as in years past, and he probably won’t be charging the ones he is bringing.

That’s because credit card debt continues to be the biggest financial worry of the year, according to a November study conducted by myFICO, the consumer division of FICO, the company that invented the FICO score.  (The FICO score, lest you wonder, is the number that summarizes your credit risk.)

While half of the 2,400 consumers interviewed in the unscientific online survey said they will rely on credit cards for all their holiday purchases, a third said they would only use credit cards for more expensive gifts.

One-third of consumers said they’re cutting back on their holiday spending: Only 20 percent are thinking about opening new credit card accounts, and about 65 percent plan to charge less than $500 on the ones they have. A quarter of  respondents said they’ll need more than three months to pay off their 2012 holiday expenses, compared with 18 percent who responded to a similar survey in 2010.

Finally, 62 percent of respondents said they were worried about identity theft or fraud during the holidays. How to protect yourself?

“Regularly monitoring your bank statement and credit report for errors can be instrumental for identifying fraudulent charges and maintaining an accurate credit report,” myFICO spokesperson Anthony Sprauve told ABC News.

Copyright 2012 ABC News Radio

Monday
Aug132012

Centurion Denied Credit Card Because of Her Age

Comstock/Thinkstock(NEW YORK) -- When Madeleine Otto was offered the chance to open a credit card at Stein Mart, a department store in Tequesta, Fla., and save $10 on her purchases, she jumped at the chance. She handed the cashier her driver's license, and waited for approval.  Except it didn't happen.  Otto's credit application was denied.

"The casher said, 'I'm sorry, we can't give you a credit card because you're too old,'" said Otto, who turns 100 on Oct. 18.

Otto was dumbfounded. She had never heard of anyone being refused credit because of their advanced age.  It didn't make sense to her, and she felt bad.

So did the cashier.  "She came around and hugged me and said she was sorry," Otto recalled.  

Otto went out to her car, and cried.

"I was embarrassed, I felt bad about it," she said.  "I'm 100 years old -- I drive, I do everything myself, I shop.  I'm not like an ordinarily 100 year old."

So, what gives?  Can you be refused credit because of your age?

Absolutely not, said Gerri Detweiler, director of consumer education at Credit.com. The Equal Credit Opportunity Act prohibits creditors from discriminating against applicants based on age.

"An elderly consumer can be favored for age, but not discriminated against for that reason," she said, adding that 'elderly' is defined as 62 or older.

On the other hand, consumers can be turned down credit for being too young; the minimum age to obtain a credit card in the United States is 18.

And that's precisely what happened to Otto.

The issue wasn't that she was too old, it's that she was too young -- or so the computer thought.  The credit card check system required the last two digits of Otto's birth year, which was 1912.  The cashier input the year as "12" -- which the computer registered as 2012.  That would not only have made Otto under 18, but technically unborn -- and not eligible for credit.

"It was a date input error," said Stein Mart spokesperson Linda Tasseff.  

Otto was sent an apology from Stein Mart "explaining that the reason was because I was underage," said Otto.  "They also sent me a $50 gift certificate."

Otto said she doesn't mind, but Detweiler, of Credit.com, laughed when she heard about the computer glitch.

"Some programmer's going to get the lender into a lot of hot water by not thinking that through," she said.

Copyright 2012 ABC News Radio

Wednesday
May162012

TransUnion Reports Decrease in Credit Card Delinquency, Debt 

Getty(CHICAGO) -- More people now qualify for credit cards, even if they don’t have a stellar credit history.

TransUnion, the credit reporting firm, says banks are issuing more cards, and fewer people were 90 or more days late on their payments in the first quarter of this year.

"After two consecutive quarters of increases in both the delinquency rate and average debt, it is encouraging to see a return to declines in delinquency," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "This contributed positively to a general trend since the bottom of the recession, which saw delinquency rates remain at near-record lows."

The number of new cards sent out to consumers last year rose by more than 20 percent versus 2010.

Copyright 2012 ABC News Radio

Monday
Apr022012

1.5 Million Credit Card Numbers May Have Been Compromised

iStockphoto/Thinkstock(ATLANTA) -- You probably had a bigger chance of facing credit card security headaches than winning the Mega Millions lottery.

While there were just three jackpot winners, as many as 1.5 million credit card numbers may have been compromised by hackers. The latest breach came from Atlanta processing firm Global Payments, which announced on Friday unauthorized access into its processing system.

“We are making rapid progress toward bringing this issue to a close. Our nearly 4,000 employees around the world are focused on providing exceptional service. We are open for business and continue to process transactions for all of the card brands,” said Global Payments CEO Paul R. Garcia.

Visa has pulled Global Payments from a list of hundreds of firms considered to be “compliant service providers,” according to the Wall Street Journal. If you tried to pay with Visa on Sunday you may have been shut out for a while. Visa says a 45-minute outage was caused by a technical problem that’s apparently unrelated to the Global Payments breach.

Copyright 2012 ABC News Radio

Friday
Dec162011

It May Be Easier to Score a New Credit Card in 2012

George Doyle/Thinkstock(NEW YORK) -- If you’re in the market for a new credit card, now is your time. There is a good chance that banks will increase their pace of opening new accounts in 2012 because of reports that consumer defaults have dropped so dramatically.

This means that even those with moderate credit scores should have an easier time getting approved for new credit cards.

Some of the top card companies have reported that their November defaults and late payments have remained below the levels that were typical before the recession hit.

According to Moody's credit agency, this means that banks will be more willing to lend to customers who may have had trouble making their payments on time in the past.

Copyright 2011 ABC News Radio

Tuesday
Aug022011

Hidden Costs in Cell Phone and Digital Wallet Payment Services Can Cost You

Jupiterimages/ThinkstockYONKERS, NY -- While Americans are still using plenty of cash, checks, credit and debit cards to pay their bills, new electronic methods such as paying by cellphone or so-called digital wallets are emerging. Before jumping in, consumers should be aware of the disparity in loss liability and consumer protections they offer, according to Consumer Reports.

Consumer Reports’ latest investigation into these new payment options finds that banks and technology companies are jostling for a greater share of the $50 billion a year in fees generated by everyday transactions. Some services by PayPal, Obopay, Square, Zong, and FaceCash already allow you to pay for purchases with your cell phone, but digital wallet services are scheduled to hit the market soon.

Google said in May that it planned to launch its version this summer. At least three competing digital wallets are planned for launch later this year and in 2012: from Visa in partnership with more than a dozen banks; Isis, a joint venture of AT&T Mobility, T-Mobile, Verizon Wireless, and PayPal Mobile’s point-of-sale technology.

Despite all the hype, consumers don’t seem to be clamoring to pay with their phones yet.  According to a recent nationally representative survey by the Consumer Reports National Research Center, only 5 percent of survey respondents have used their cell phone to pay for day-to-day purchases in the previous month. Slightly more use other fairly new forms of payment, including billing to their home or cell phone account.

Most of the new electronic payment options are tied to credit and debit cards, so whatever costs consumers incur by using their plastic will transfer to the new methods. Paying by mobile phone won’t save them money, Consumer Reports warns: Google Wallet merchant transaction fees are the same as those charged on plastic payments, and the same is expected to be true for Visa’s digital wallet. Square and PayPal Mobile charge merchants even more than the average big bank fee, 2.75 and 2.9 percent of the transaction amount, respectively.

Prepaid debit cards can be especially costly, whether you use them by themselves or link them to an alternative payment method. Many prepaid debit cards charge fees for activating and maintaining the accounts, and for transactions, balance inquiries, and reloading.

Copyright 2011 ABC News Radio

Tuesday
Jun212011

Bank of America Raising Penalty Rate for Late Payments

ABC News(NEW YORK) -- It's never been more important to pay your credit card bills on time.

Being just one day late on your payments can be very expensive and now, it could even be costlier.  Bank of America is expected to raise its maximum penalty rate this week -- a move that is becoming part of a trend.

Explaining Bank of America's new policy, Adam Levin with Credit.com says, "If you're more than one day late on a payment they have the option, if they want to, to raise your rate to 29.99 percent as a penalty rate."

The hiked up penalty rate would apply to future purchases, not on what you already owe.

If you want to avoid paying more, switch your credit card account to another bank.

"You can also go to credit unions and smaller banks.  So it's not like you don't have options," Levin says.

Copyright 2011 ABC News Radio

Tuesday
May032011

Risk for Cyber Scams Up with Osama Bin Laden's Death

Jupiterimages/Thinkstock(WASHINGTON) -- The death of Osama bin Laden may not just mean an increased risk of terror attacks across the country, but the possibility of more cyber scams on the Web.

Following the news that bin Laden had been killed and buried at sea, computer researchers said cyber scammers were quick to set online traps for people searching for and sharing information about the terrorist leader.

In the day following the big news, Kurt Baumgartner, a senior security researcher for Kaspersky Labs, a security firm, said cybercriminals started using top search results related to bin Laden in Google Images to redirect people to pages filled with malware.

Baumgartner said if they searched for "Osama bin Laden" in Google Images, one of the highest results on the page could have taken them to a malicious website ready to infect their computers. Some poisonous pages try to convince users that their computer is already infected with a virus, and then prompt them to pay for and download fake anti-virus software.

Facebook users looking to share links and "like" stories and video face a different kind of risk.

Ads on the social network may promote offers celebrating bin Laden's death -- such as those for free tickets or free sandwiches -- but by clicking on the ads, users are just redirected to scam-filled pages that prompt them to turn over personal information, Baumgartner said.

As they "like" the ads or click on the fake links, they give online criminals a way to reach their Facebook contacts and spread the scam to their friends. They also help the crooks collect email addresses or other valuable information.

Security researchers at Sophos Labs said a "death video" scam related to bin Laden was spreading virally on Facebook. Messages leading to the video link claim there is banned video of bin Laden's final hours. But by "liking" and sharing the link (which doesn't actually point to video at all) Facebook users give cyber criminals access to their contacts while helping them collect money (Sophos says they get paid per click).

"People should understand on Facebook that when there are these great offers, usually the offers are too good to be true," Baumgartner said. "And just because something has been posted on a friend's wall it doesn't mean it's from them." 

Copyright 2011 ABC News Radio

Wednesday
Mar022011

It's Best to Pay Off Credit Card Balances in Full

Photo Courtesy - Getty Images(NEW YORK) -- Borrowing money can be very expensive, and most personal finance experts agree that the number-one rule when using credit cards is to pay off the balance in full each month.

"If you don't have that money to pay off the balance at the end of the month you're going to carry that balance, you're going to continue to pay extra in terms of the interest on that balance," says Robert Long, managing editor of Kiplinger.com.  "It really is one of the worst debts you can have."

If you don't pay your bill in full, the interest you will have to pay can be over 20 percent.  But if you do pay your bill in full, using a credit card may be a money saver.

"That can be an interest free loan on purchases you make for a month.  I know lots of people who really prosper from the rewards they get from their credit cards," Long says.

Copyright 2011 ABC News Radio

Tuesday
Nov302010

Kardashians Pull Prepaid Debit Card Off the Market Amidst Criticism

Photo Courtesy - Getty Images(WASHINGTON) -- The Kardashian card is no more, and the reality TV stars behind the prepaid debit card debacle don't want to talk about it.

"We are not working with the bank anymore and that's all we're allowed to say," Kourtney Kardashian told ABC News on Tuesday.

On Monday, Dennis Roach, lawyer for Kim, 30, Khloe, 26, and Kourtney, 31, announced the Kardashian sisters were pulling their name off the Kardashian Prepaid MasterCard after being slammed for the card's hefty fees. The decision came in the wake of Connecticut Attorney General Richard Blumenthal's investigation into the card. He called the card's fees "predatory."

Last week, Blumenthal -- who is the state's U.S. Senator-elect -- warned consumers of the perils of credit cards marketed at young adults and revealed that he demanded University National Bank, which issued the Kardashian Kard, provide specific details about how the card is promoted and sold in Connecticut.

"Keeping up with the Kardashians is impossible using these cards -- laden with pernicious and predatory fees that swallow card value," Blumenthal said in a statement. "These cards are feckless financial tools designed to promptly diminish in value with virtually every transaction -- and even when consumers don't use the card at all."

In addition to Blumenthal, Consumers Union, the nonprofit publisher of Consumer Reports, chastised the Kardashians for promoting a fee-heavy card and cautioned other celebrities against blindly promoting products.

Copyright 2010 ABC News Radio







ABC News Radio