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Entries in Credit Cards (45)

Tuesday
Feb262013

Lemon Wallet Could Be Sweet Deal for Consumers

iStockphoto/Thinkstock(NEW YORK) -- If you've ever lost your wallet, you know the immediate dread that sets in when you have to contact the DMV, the bank, credit card companies and anything else that might compromise your personal security.

Perhaps the worst part is trying to remember all the items you had in your wallet in the first place.

Well, worry no more.  There's a new app called Lemon Wallet that lets people make a digital copy of a wallet's contents by storing all in the information in a cloud for free.

And for a few dollars extra a month, Lemon Wallet will handle the cancellation of credit and bank cards if your wallet is lost or stolen.

So what could possibly go wrong since everything is secured safely and password protected?  The problem, say privacy experts, is that there have been plenty of companies before Lemon Wallet who've made the same claim about protecting your information only to have it fall into the wrong hands anyway.

Copyright 2013 ABC News Radio

Wednesday
Feb202013

FTC Advises Consumers to Keep Eye Out for Unauthorized Credit Charges 

BananaStock/Thinkstock(WASHINGTON) -- The Federal Trade Commission is warning consumers of a new type of “cramming,” unauthorized fees that were once buried in phone bills but are now showing up on credit card statements.

According to an FTC complaint, Ideal Financial Solutions hit tens of thousands of Americans with fake fees mostly for vague financial services like Debt2Wealth — for close to $30 at a time.

In total, the complaint says the company billed consumers for more than $24 million without their consent.

“It’s smart to steal little amounts at a time because you are hoping consumers just don’t spot it,” said Mandy Walker, a Consumer Reports senior project editor.

The FTC says 20 million people a year fall victim to cramming, which until now had occurred mostly in phone bills.

In this most recent case, the FTC said that many of the consumers targeted had recently applied for a payday loan or cash advance.

When they reportedly spotted the bogus charges on their bills, they called the toll-free number next to fees to complain. The FTC said consumers then entered an infuriating maze of call centers around the world.

Walker suggested consumers inspect their bills line by line and dispute any questionable charges immediately with the credit card company.

 

Copyright 2013 ABC News Radio

Saturday
Jan262013

New Credit Card Fees Kick in Sunday

Rayes/Photodisc(NEW YORK) -- Starting Sunday, paying by credit card could get more expensive. Under the terms of a $7.2 billion settlement reached last summer between credit card companies and merchants, merchants will be free to impose a surcharge on customers paying by credit card.

How big a surcharge depends on how much the merchant pays in processing fees, but the amount legally permissible will be between 1.5 percent and 4 percent of your purchase price.

No one knows how many merchants will exercise this right, but Gerri Detweiler, director of consumer education at Credit.com, expects the number to be small, at least at first.

Smaller merchants, she says, typically feel gouged by processing fees and are more likely than big chains to pass the cost along to their customers. Service providers, she says—your accountant, your massage therapist—are the most likely to pass the charge along. Among big retailers, however, only gas stations have historically distinguished between cash and credit customers, offering a discount to customers paying cash or imposing a surcharge for those using credit cards.

Smaller merchants, says Detweiler, don't always know what they're paying in processing fees. "If you think your own credit card statement is confusing," she says, "take a look sometime at a merchant's credit card agreement with VISA or MasterCard." If she herself were a merchant, she says, she'd be hard pressed to figure out the right percentage to pass along to customers. "I wouldn't want to wade into those waters," she says.

By law, merchants intending to pass the cost along will have to post notices at check out informing consumers of the extra charge. Online merchants will have to post a similar notice to their home page.

Ten states prohibit credit card surcharges, so if you're making a purchase in any of the following, you won't have to worry about being penalized: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

You also don't need to worry if you're paying by debit card, since those are excluded from the settlement agreement. Nor do American Express customers need worry: AmEx's contract with retailers forbids them from levying a surcharge.

Detweiler offers this advice to affected consumers: "Always have a back up method of payment," she suggests, so you can avoid paying the new charge. "Have a debit card, or slip and extra $20 in your wallet."

And also, she suggests, tell your merchant if you object to the new charge. "If enough consumers complain, a merchant will fear losing business and won't choose to pass the charge along. I don't think people are going to like being penalized for paying the way they want to pay."

Copyright 2013 ABC News Radio

Thursday
Jan102013

Top Credit Card Deals of 2013

Justin Sullivan/Getty Images(NEW YORK) -- So you’ve made your financial resolutions – No more bank fees! No more credit card debt! – and you’re determined to stick to them.

Next step? Finding the best credit card deals, which can help you save hundreds of dollars with low interest rates, valuable rewards and credit-building capabilities.

CardHub, a credit card comparison website, released its Best Credit Cards for 2013, which were picked by comparing 1,000 card offers. And there’s something for everyone, not only people with amazing credit.

“Not only are ongoing terms extremely attractive, but issuers continue to offer rewards bonuses and low-interest introductory rates worth hundreds of dollars to new customers with a history of financial responsibility,” said CardHub CEO Odysseas Papadimitriou. This, he added, is especially good news for consumers, since the average household has over $6,700 in credit card debt.

Here are some of the top picks for the year.

If you have:

Excellent credit: The Chase Sapphire Preferred Card is great for people with a credit score of 720 or higher, especially since the 40,000 bonus points you get after spending $3,000 during the first three months can be redeemed for a $400 statement credit. “A lot of other cards might give you a free flight and hotel stays, but this card proves more valuable to more people,” CardHub senior analyst John Kiernan told ABC News. “If you move to ongoing rewards, you really want a card that complements your spending habits well.”

Good credit: Capital One Venture Card has long been one of the most popular and rewarding credit cards for travel enthusiasts. The first year is free; it’s $59 after the second year. As long as you redeem for travel-related expenses, the card will give you the equivalent of 2 percent cash back across all purchases. Spending $1,000 during the first three months will score you a $100 initial rewards bonus.

Bad credit: The Capital One Secured MasterCard charges a $29 annual fee, which makes it the cheapest partially-secured card on the market. With a partially-secured credit card, you may get a credit line that is in excess of your security deposit, giving you more available credit and expediting the credit-building process.

Limited/No credit:  The BankAmericard for Students is unique in that it offers comparable terms to the best credit cards for people with excellent credit.  What’s more, the zero percent intro term this card provides on new purchases lasts 15 months, just three months shorter than the longest zero percent period on the market.

And what about the idea of opening up a credit card simply to get the rewards and then never using them again? According to Kiernan, it’s good to have an array of open credit cards, even if you rarely use them.  In fact, it can actually help your credit rating. "Your credit card depends on the information in your credit report, and the more available credit you have and the longer your account is open and in good standing, it reflects positively on you and your responsibility as a consumer.”

Copyright 2013 ABC News Radio

Wednesday
Dec122012

New Citi Service Lets Cardholders Cash In on New Prices

(Martin Poole/Photodisc/Thinkstock)(NEW YORK) -- Citi credit card users will now be able to avoid a shopper’s greatest fear: bad timing.

“Price Rewind,” a new service by Citi, protects customers who buy an item just before its price drops -- by sending them a check to make up the difference.

If you buy $750 worth of holiday gifts -- the amount the National Retail Federation says the average shopper will spend this year -- and pay with your Citi card, you can register the purchases on Citi's Price Rewind site. After that, for 30 days, Citi will scour hundreds of websites looking for a lower price on your item. If it finds one, it will refund you the difference up to $250.

The giant credit card company is shrewdly kicking off this service during the hot-and-heavy holiday shopping season, but says it's here to stay and will be available year-round.

"We've found a lower price for one-out-of-four registered purchases over $100," said Ralph Andretta of Citi. "During the holiday season when the clock is ticking on getting popular gifts and toys, our customers can make their purchases...with more confidence."

Under the new plan, an item’s price must drop $25 to qualify for repayment.

Copyright 2012 ABC News Radio

Citi credit card users will now be able to avoid a shopper’s greatest fear: bad timing.

“Price Rewind,” a new service by Citi, protects customers who buy an item just before its price drops -- by sending them a check to make up the difference.

If you’re buying $750 worth of holiday gifts --the amount the National Retail Federation says we're all supposed to spend this year-- and pay with your Citi card, you can register the purchases on Citi's Price Rewind site. After that, for 30 days, Citi will scour hundreds of websites looking for a lower price on your item. If it finds one, it will refund you the difference up to $250.

The giant credit card company is shrewdly kicking off this service during the hot-and-heavy holiday shopping season, but says it's here to stay and will be available year-round.

"We've found a lower price for one-out-of-four registered purchases over $100," said Ralph Andretta of Citi. "During the holiday season when the clock is ticking on getting popular gifts and toys, our customers can make their purchases...with more confidence."

Under the new plan, an item’s price must drop $25 to qualify for repayment.

Monday
Nov192012

Americans Carrying More Credit Card Debt, Report Finds

Comstock/Thinkstock(NEW YORK) -- Americans are carrying more credit card debt and being less careful about making payments on time, according to a new report from TransUnion.

The credit reporting firm said the average credit card debt per borrower rose to $4,996 in the third quarter of 2012 -- a 4.91 percent increase from a year earlier.

Late credit card payments also went up between July and September.  The rate of borrowers who were at least 90 days overdue climbed to 0.75 percent from 0.71 percent in 2011.

[ CLICK HERE TO READ TRANSUNION'S FULL REPORT ]

"Credit card delinquencies are following a pattern similar to what we observed in 2011, with declines in the first two quarters of the year followed by an increase in the third," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.  "That seasonal consistency is encouraging."

"Credit card debt trends in 2012 also are mirroring 2011, with a decrease in the first quarter followed by two increases over the next six months.  With both delinquencies and debt levels remaining quite low relative to historical norms, we are confident in the continued stability of credit card usage patterns in the short term," Becker added.

Copyright 2012 ABC News Radio

Wednesday
Nov072012

Consumers Spending Less with Credit Cards, Says Fed

George Doyle/Thinkstock(WASHINGTON) -- More families may be putting their financial houses in order. The government reports that credit card spending is down, despite an increase in available consumer credit.    
 
The Federal Reserve reports Americans' credit card borrowing dropped nearly $3 billion from August to September -- the third drop in four months.
 
The Consumer Federation's Stephen Brobeck says though Americans are spending, they are just using pay-as-you-go debit cards and cash rather than credit.

Still, consumers are taking on more debt, according to the Fed report, released Wednesday. The agency says consumers took out more student and auto loans in September.

Copyright 2012 ABC News Radio

Thursday
Sep272012

Swipe Card Reform: Are Consumers Saving Money?

Comstock/Thinkstock(NEW YORK) -- As the one-year anniversary of credit and debit card swipe fee reform approaches, a debate about whether shoppers are saving at the register as a result rages on.

The National Retail Federation (NRF) estimates that U.S. retailers and customers save $18 million a day thanks to reform that reduced the swipe or interchange fee -- typically a 1.5 percent to 3 percent charge -- paid to banks for credit card transactions.

The Durbin amendment, which lowered the so-called “interchange fees,” went into effect on Oct. 1, 2011, in response to financial reform on Wall Street.

The alleged savings though can be a bit squishy to identify.

“Merchants haven’t necessarily labeled the savings from reform as a ‘debit discount’ but they have nonetheless found a variety of ways to pass the value along to their customers,” NRF President and CEO Matthew Shay said in a statement.  “Depending on the store, shoppers are paying lower prices, getting better service or avoiding prices hikes that otherwise would have come with inflation.”

“Retailers are simply too competitive not to share savings with consumers because customer value is one of the key ways they take market share away from their competitors,” Shay said.

According to Bankrate, swipe fees revenue doubled from $30 billion to $60 billion from 2005 to 2011, while checking fees rose from $11 to $14 on average during the same period.  After labor, according to the Wall Street Journal, interchange fees are the largest expense for retailers.

But, the Electronic Payments Coalition (EPC), a payment industry group for banks, says consumers are being hit in other ways.

“Giant retailers lobbied Congress so they could pay less to accept a debit card, with a wink and a nod that they would lower prices for their customers.  One year later, ask yourself -- do you feel that you’ve seen lower prices?  Have you seen a discount for using your debit card -- which would have been the easiest and most direct way to fulfill their promise to Congress,” Trish Wexler, a spokesperson for EPC wrote ABC News in a statement.

According to a report by financial research firm Javelin Strategy & Research, credit card swipe reform cost banks $6.6 billion a year in lost revenue.

”More likely, you’ve seen your free checking disappear and increased fees as card issuers had to make up for $8 billion in lost revenue that supported these debit card programs.  Let’s just call a spade a spade -- this was a political handout to big-box retailers, who are now scrambling to make excuses for why they couldn’t pass these savings along to customers,” Wexler continued.

Since the fourth quarter of 2009 through June of 2011, the number of big banks offering free checking accounts declined by 54 percent, according to research firm Moebs Services.

Ed Mierzwinski, consumer program director for the advocacy group U.S. PIRG, says small banks and credit unions continue to offer free checking accounts and there’s no proof consumers are not saving money.

“Small banks are benefiting from swipe reform.  The industry has no proof that merchants aren’t passing savings along but the bank industry is trying to gain support for a horrible settlement that will allow them to perpetuate their horrible practice and continue to raise swipe fees,” Mierzwinski told ABC News.

Mierzwinski said many unfair practices by the banks have been changed by good regulation, including swipe fee reform on debit cards, recent Consumer Financial Protection Bureau-imposed penalties on credit card deceptive marketing and the 2009 Credit Card act that curtailed credit card companies late fees and restricts exorbitant interest rate increases.

“The banks and VISA and Mastercard credit card networks are using a cartel to gouge merchants with unfair swipe fees that were non-negotiable and the result is cash customers at the store are paying higher prices because swipe fees were going towards creating rewards for more affluent credit card customers,” says Mierzwinski.

Copyright 2012 ABC News Radio

Wednesday
Sep052012

Zero APR Credit Cards Make Comeback

Comstock/Thinkstock(NEW YORK) -- Credit card issuers are again offering an incentive that had all but disappeared during the recession: Introductory interest rates as low as zero for new customers, with grace periods that run from six months to 18. And the incentives don't stop there.

Other sweeteners have recently included Titleist golf balls and discounted tickets to NFL games, according to recent surveys of the industry.

When market research company Ipsos examined lenders' direct-mail credit card solicitations, it found that while in 2009 only 40 percent teased customers with a reduced introductory rate, that figure had risen to 80 percent by the first quarter of 2012.

Zero-rates aren't being offered just to people blessed with perfect credit, says Ben Woolsey, director of marketing and consumer research for CreditCards.com, a site that helps consumers comparison-shop card rates, grace periods and incentives.

"The card industry has loosened their criteria," he says. "They were very conservative there for a while.  Now they're starting to explore people with less than perfect credit."

Is it a buyers' market now for credit cards?  Woolsey says yes.

"Consumers are more in the driver's seat now than at any time in several years," he says.

The reasons, he and other experts say, are various. They include issuers' improving financial health. Though loss rates on cards spiked during the recession, they now have declined to "historic lows." Thanks to the Fed's keeping interest rates near zero, issuers' borrowing costs, too, are at historic lows.  

Issuers, says Woolsey, feel confident about the near-term future.

"That's why you see these pretty aggressive campaigns," he says.

An August survey by CreditCards.com of 102 of the most widely held cards found 53 had a teaser rate of some sort. Of those, 49 had a rate of zero, says Woolsey.  Some cards apply the introductory rate only to balances transferred from other cards; others apply it only to new purchases.  But a lot of cards, says Woolsey, apply the rate to both.

During the recession, zero-rate promotions dried up.  Card companies, says Woolsey, suffered steep losses and had to pull back on marketing.  But since late 2010, "They have come roaring back. Now they're at the same levels as prior to the recession," he says.

The same holds true for the length of no-interest periods.  Before the recession, Woolsey says, they were generous -- some up to 24 months.  After the housing bubble burst, the period dropped to six months or disappeared altogether.  

Now, a full year is common, "and we're starting to see longer ones."  The lengthening periods, he says, "are a sign that issuers are feeling more confident about the future and about the credit risk of new account members."

Copyright 2012 ABC News Radio

Monday
Aug132012

Collectors Robo-Signing for Credit Card Debt Suits

BananaStock/Thinkstock(WASHINGTON) -- Reminiscent of the foreclosure crisis, a number of credit card companies that are suing to collect their debt are said to be “flawed” and point to “robo-signing” or “robo-testimony.”

“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” said Brooklyn civil court judge Noach Dear, according to the New York Times.

Companies like American Express have filed lawsuits that judges have dismissed because one employee who testified provided generic testimony about the company’s records, which the judge called “robo-testimony.”

American Express sued Felicia Tancreto last year, alleging she owed more than $16,000 on her credit card and had stopped making payments.

Sonya Conway, spokeswoman for American Express told ABC News that the company “strongly disagrees” with Judge Dear’s comments and “we feels consistency of testimony is a good practice.”

“To introduce business records into evidence, similar foundational questions are asked in each case in order to comply with the applicable rules of evidence,” Conway said. “The process of establishing a defaulted customer debt for evidentiary purposes should not change from one case to the next given that our processes are consistent for all customers. However, when this was done in the Tancreto case, Judge Dear characterized the questions and responses as ‘robo-testimony’.”

Adam Levin, co-founder of Credit.com and an ABCNews.com columnist, said “none of this surprises me,” and he recommends consumers speak with an attorney or their state consumer affairs agency if they are told they owe money on a debt that was not processed properly or is not theirs.

“[The credit card companies] are in a frenzy right now to make up for money they’re losing after the government restricted the insane fees these institutions were charging,” Levin said.

Some lawsuits include falsified credit card statements, the New York Times reports.

Tom Pahl, assistant director for the Federal Trade Commission’s division of financial practices told the Times, “Our concerns center on the fact that debt collection lawsuits are a pure volume business.”

Emily Collins, spokeswoman for Citigroup, said “we continually review the effectiveness of our controls and policies for credit card collections, and ensure that affidavits are validated for accuracy and signed by Citi employees with knowledge of the client’s account."

"Citi Cards has a range of programs to support our clients who may be facing financial difficulty, and we make every effort to work with our clients to prevent delinquency,” she continued.

Copyright 2012 ABC News Radio







ABC News Radio