Entries in Credit Cards (45)


Late Payments on Credit Cards Jump in September

George Doyle/Thinkstock(NEW YORK) -- Call it a sign of troubling economic times: for the first time in more than two-and-a-half years, more consumers are falling behind making credit card payments.

Five of the six largest credit card issuing firms say the number of payments late by 30 days or more rose in September.

The rate of increases were all very small, but late payments -- or delinquencies -- are considered an indicator of potential defaults by consumers.  Until last month, the rate had been falling.

The banking industry is still recovering from a big rise in defaults during the 2008 financial crisis.

Copyright 2011 ABC News Radio


Woman Uninsured After Paying with Credit Card

PRNewsFoto/Blue Cross and Blue Shield(LOS ANGELES) -- Health insurer Anthem Blue Cross, based in California, announced this year it no longer allows monthly automatic online bill payments, attracting complaints from longtime customers. And consumer finance watchers warn this may be one of the first of many cases of merchants reigning in credit card use.

Anthem Blue Cross initially announced it was charging a $15 convenience fee on credit card payments in the spring, much to the dismay of policyholders accustomed to auto-paying with credit cards.

A spokesman said at the end of May the company first notified customers by mail of the surcharge but waived that fee indefinitely within a week. He said customers were informed they could no longer make auto-payments via credit, and calls were made to policyholders who were still paying premiums by recurring credit card each month reminding them of the restriction.

He said the outbound calls reminded policyholders of the other payment options, including automatic checking deduction, online bill payment, payments by mail, and one-time payments, with no fee until further notice, through customer service. Anthem now offers for free an automated telephone payment option to make a one-time credit card payment, according to the spokesman.

Ed Mierzwinski, consumer program director of the Public Interest Research Group, or PIRG, said Anthem did a "terrible" job informing customers of the change though credit card companies are "part of the problem."

"The fees they impose on companies that collect credit cards is very high," he said, saying a credit card company can charge three percent.

Though Mierzwinski said no consumer group would advocate for a merchant to surcharge customers for using a credit card. The Federal Reserve capped debit card fees for merchants at 21 cents for each transaction, after initially proposing a cap of seven to 12 cents in December.

Lynda Gledhill, spokeswoman for the California attorney general's office, could not comment about Anthem but said California law prohibits private companies from requiring a credit card payment surcharge from customers, though they can offer discounts if paying with cash.

Beverly Harzog, credit card expert at, said consumers should be aware if merchants limit or no longer accept credit card payments to try to decrease the transaction fees.

"When I see something like this, it's not long before I see similar situations," she said. "Accepting credit card payments is a little more expensive. Given how the economy has been, my guess is other companies may try to trim expenses."

Copyright 2011 ABC News Radio


Late Payments on Credit Cards Fall to 17-Year Low

George Doyle/Thinkstock(CHICAGO, Ill.) -- Politicians in Washington may have a hard time figuring out how to handle the nation's debt, but it appears -- as individuals -- the nation is getting a grip on personal debt.

According to TransUnion, late payments on credit cards are down to the lowest level in 17 years, even though their use has increased. 

The credit reporting agency says the national credit card delinquency rate, which accounts for borrowers being 90 days or more past due, fell to 0.6 percent in the second quarter of this year.  That's the six straight quarter the rate has dropped.

While banks have tightened standards for approving credit cards, TransUnion says people are treating their debts more seriously and paying them off more quickly.

"National credit card delinquency rates have fallen to levels not seen since 1994 as consumers continue to tighten their spending," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.  "TransUnion believes that the recovering economy is only indirectly impacting delinquency rates.  More important and impactful to the decline in bank card delinquency are that consumers are using credit cards more responsibly; a large number of delinquent accounts have moved to charge-off status; and lenders remain conservative in their underwriting."

Copyright 2011 ABC News radio


3 Things You Should Never Carry in Your Wallet

Brand X Pictures/Thinkstock(NEW YORK) -- More than eight million Americans were the victims of identity theft last year. What the personal information thieves are looking for can often be found right in your wallet -- which is why it's so important to know what's in there. Mellody Hobson, president of Ariel Investments, talks about what you should and should not have in your wallet.

1. Your wallet can contain your life, which is not always a good thing. Let's start with what we should keep in our wallets. Credit cards? Yes, you should carry a credit card. But just one credit card. The good news is that most people now have two credit cards, which is down from three cards just a year ago. The more cards you carry, the more likely you are to over-extend yourself. Also remember even if you have a credit card in your wallet but never use it, it adds to your available credit, which affects your credit rating.

2. So you should carry some cash? It is important to carry some cash. Studies show that when people use plastic versus cash they spend 12-18 percent more. Also, you don't want to use your credit card or debit card to buy things like gum and other small purchases. If you're just paying your minimum balance, you could end up paying interest on those small purchases.

3. Should we save all our receipts, and is our wallet the right place to keep them? Receipts not only clutter your wallet, but they could contain information about you that identity thieves could use. So you should take any receipts out of your wallet every night. Either reconcile them at the end of the week online against your bank account or credit card website, or save them until the end of the month and reconcile them against your monthly statements. But don't store them in your wallet.

4. What else should you not have in your wallet? The number one thing you should not carry in your wallet is your social security card. If it gets into the wrong hands, it can be used for everything from buying a car to opening a credit card. You should also never carry your passport in your wallet. Even if you are traveling in a foreign country, leave your passport in your hotel and just carry a photocopy of the picture page. And of course do not keep a list of your PINs and passwords in your wallet. That would be a gold mine to a thief. Keep those passwords at home.

5. What else should we take out of our wallets? Don't keep anything in your wallet that has expired. This includes old credit cards or membership cards. Just because they've expired doesn't mean thieves will not try to use them. Also remember most of them have at least your name on it, and probably your address and other personal information. The more information you can keep out of the hands of others, the better. Many people carry old hotel key cards in their wallet. Although almost all U.S. hotels do not put personally identifiable information on their key cards, the cards can often be used to make purchases at the hotel spa or gift shop. My best advice is destroy them after you have checked out, you don't need to return them to the hotel.

Copyright 2011 ABC News Radio


Citigroup Hack Job Worse than Originally Reported

Jupiterimages/Thinkstock(NEW YORK) -- Hackers who cracked into Citigroup's credit card records last month did more damage than the bank initially reported.

The company announced late Wednesday that more than 360,000 credit card accounts were impacted when hackers broke into its database -- nearly double the number first believed. Citigroup, however, says that many of those accounts had already been closed or had their cards replaced for other reasons.

"The customers' account information (such as name, account number and contact information, including email address) was viewed," the company said in a press release. But what was not compromised were social security numbers, birth dates, credit card expiration dates, and card security codes -- "data that is critical to commit fraud," Citigroup said.

Only slightly more than 217,000 accounts were reissued cards because of the breech.

Copyright 2011 ABC News Radio


Debt Collectors Seek to 'Friend' Delinquents

Comstock/Thinkstock(WASHINGTON) -- Seeking to catch up with changing technology, the nation's debt collectors want the laws changed to allow them to reach out and touch delinquents by email, cellphone and text messages.

On Monday, the Association of Credit and Collections Professionals introduced a blueprint for modernizing debt collections. Their goal: to increase collections by finding more ways to contact their targets.

The trade group wants to change laws including the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act, which were written before the age of robo-dialers, texts, Facebook and wide use of cellphones. Collectors use these methods to contact consumers now, but they may open themselves up to fines and sanctions under current laws.

In 2010, the Federal Trade Commission saw complaints against collection agencies rise to more than 108,000, a sharp increase from the 69,000 consumer complaints.

Last year, 21 percent of complaints filed with the FTC claimed that debt collectors used third parties for location information. It's one tactic that has driven consumer complaints to a high.

"I don't believe harassment drives any more return on collections than treating a consumer respectfully," says Mark Schiffman, ACA, director of public affairs.

"Posting anything on someone's Facebook wall is a violation, and talking to someone [that is not the debtor] on Facebook violates the third-party disclosure,” Schiffman said. “Neither one is acceptable. It is unacceptable in any circumstance."

"Debt collectors can use social media just like they might use the yellow pages to find information about somebody," says Schiffman. "They can't do anything misleading. They can't friend people using fake identities. They can't post on your Facebook wall."

Copyright 2011 ABC News Radio


Senate Votes Down 'Swipe Fee' Delay Bill

Ryan McVay/Thinkstock(WASHINGTON) -- The amendment Wednesday on the processing fees that financial firms charge merchants every time a debit card is swiped -- which pitted retailers against bankers and some Democrats against fellow Democrats -- fell short in the Senate. The vote was six shy of the 60 needed for adoption.

Sen. Jon Tester's amendment, tweaked slightly Tuesday, would have delayed the implementation of the Dodd-Frank Wall Street reform law that banks charge retailers for debit card transactions.

Tester argued that small banks and credit unions will be less profitable, "penalized" and "wiped out" by this rule -- and if debit interchange fees are regulated, there first needs to be a better understanding of all the costs associated with transactions.

Tester said that the swipe fees amendment adopted last year will have unintended consequences for consumers -- who rely on small local banks and credit unions which are forced to make up for their losses by raising rates on checking accounts and charging higher fees for small businesses looking for loans.

The system is set to be implemented on July 21, without the changes Tester has called for.

Tester first proposed a two-year delay of the Fed's rules to allow adequate time to study the impact on small banks and rewrite the rules based on what is learned in the study. On Tuesday, the amendment was updated to a six-month study to see whether the rules can protect small banks, too -- looking at all the costs associated with debit card transactions.

Copyright 2011 ABC News Radio


Avoid Late Fees by Challenging Them

Comstock/Thinkstock(NEW YORK) -- If you forget to pay your credit card bill on time you could be hit with a stiff fee and have to pay higher interest rates on future purchases.

But it may be easier than you think to get those late charges reversed.

You can get hit with a late fee virtually anywhere: "At your bank, at your credit card, even random places like your gym -- basically anywhere where you are doing regular financial transactions," says personal financial advisor Ramit Sethi.

And if you do, politely challenge it, advises Sethi.

"If you're always incurring late fees you may have trouble negotiating it but if you're just a great customer and you have one or two time mistake you can easily get those fees waived," he says.

"Most people don't realize these companies want to keep you," Sethi adds. "They spend hundreds or even over a thousand dollars to acquire you as a customer."

Just make sure to call up as soon as you find out about the late charge.

Copyright 2011 ABC News Radio


Credit or Debit?: Banks Are Saying More Credit, Please

George Doyle/Thinkstock(NEW YORK) -- Banks wanting consumers to choose credit over debit more often when they shop are providing new incentives for many credit card customers.

Sandra Block of USA Today says cash back programs are becoming more generous -- so are some credit card frequent flier offers.

"What the banks want is for people who have good credit and are at a low risk of defaulting to use their credit cards a lot," Blocks says.

New federal rules coming this summer are expected to force banks to cut the fees they charge merchants for debit card transactions.  That's why they hope their best consumers will go back to using more credit cards.

Copyright 2011 ABC News Radio


Business Credit Cards Could Jeopardize Your Personal Credit Rating

Stockbyte/Thinkstock(WASHINGTON) -- Users of business credit cards are increasingly being subjected to potentially deceptive and harmful practices by card issuers, according to a study by the Pew Charitable Trusts.

"The high volume of offers that are going out to U.S. households is placing people at risk, whether you are an individual employee who is trying to track your work-related expenses or whether you're a small business owner who is taking out an account for yourself and your employees," said Pew's Nick Bourke, director of Pew's Safe Credit Cards Project, in a statement.  "You're going to be personally liable for those expenses if you get a business credit card."

The non-profit consumer organization took a look at credit card issuers' practice of direct mail solicitation for business credit cards, which may come labeled for corporate, small business, or professional use.

Offers for business credit cards have skyrocketed after new protections went into effect in 2009 to protect consumer credit card users.  The Credit Card Accountability Responsibility and Disclosure Act, CARD for short, mandated consumer protections to combat harmful, unfair, and deceptive practices.

Pew researchers say the CARD Act does not extend to business credit cards, leaving many households at risk.

Consumers targeted for business credit card may be unaware of a card issuers' ability to change account terms in the first year, charge penalty fees for existing balances, and hold an individual liable for money owed.

To help consumers understand their financial responsibilities, Bourke says "credit card protections should be extended whenever there is a personal liability."

Copyright 2011 ABC News Radio

ABC News Radio