Credit Card Pundit Credit Cards, Shopping and Personal Finance News Wed, 15 Apr 2009 15:37:36 +0000 en-US hourly 1 5 Practical Tips for Handling the Recession Wed, 15 Apr 2009 15:37:36 +0000

When times are tough, it’s time to examine the choices you make about the financial resources you have available to you. Here are 5 tips to help you ride out the recession a little easier.

1. Compare rates for everything.

In a recession, you need to examine where your money is going. Get out your bills for services that you are paying for, including phone, cable, electricity, gas, and car insurance, and contact other companies for quotes. See if you are getting the best possible rates from the companies you are currently dealing with.

You will also want to consider the features you are currently paying for from your phone and cable providers and whether these are things you really need. If you don’t really need Call Display and other “extras,” cancel them. Paying for premium cable channels only makes sense if you are watching them regularly, and these can also be considered “frills” that you can do without.

2. Take your lunch to work with you.

Going out to eat at lunch time adds up in a hurry. If you were to track how much you are spending in restaurants during the work day for a month, the figure may surprise you. Not only is brown bagging your lunch cheaper, it’s a healthier choice, since you can choose foods that are higher in fiber and lower in fat than restaurant offerings. Bringing your own lunch also lets you avoid the large portions that many eateries are famous for giving their patrons.

3. Approach your employer about telecommuting.

If your job involves duties that can be done off site, prepare a pitch to your employer to allow you to work from home, at least part of the time. Start off by pointing out the benefits the employer will get from the arrangement, such as lower operating costs and higher productivity due to fewer interruptions. Ask if you can start working from home one day a week on a trial basis for a few months to see if the arrangement is working out well for both parties. Working from home means less time spent commuting to and from work, as well as lower fuel costs.

4. Drive your vehicle less often.

Consider taking public transit to and from work to save on the price of gas, as well as wear and tear on your vehicle. Another option is to arrange a car pool with people who work with or near you. When you reduce the number of miles you put on your vehicle each year, you may qualify for a reduction in your car insurance rates. Check with your insurance company or agent to find out whether you can get a discount.

5. Look at upgrading your skills through continuing your education.

If you are concerned about your current job or your prospects for finding another one if you get laid off, consider taking courses to further your education. You may want to focus on something related to your current position or start preparing for your next career move. Not being able to physically go to a classroom doesn’t have to be a barrier to getting the education you want. Many schools offer online courses that you can complete on your own schedule.

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5 Ways to Save Money on Your Wedding Mon, 06 Apr 2009 12:55:47 +0000

Weddings are (hopefully) a once-in-a-lifetime experience and you want to do everything you can to make the day a memorable one. When the economy was racing along, spending on weddings got out of control.

The good news is that it is possible to have a wonderful day without breaking the bank.

Here are some suggestions to help you keep costs down:

1. Go Back to Basics

When you get down to it, all you really need for your wedding is your beloved and yourself, a couple of rings, someone to officiate at the ceremony, and two witnesses. Anything else is really just window dressing. Do you really need to have a full formal wedding with a large wedding party? Make a list of the things that you “must” have and be flexible about the parts of the day that would be “nice to have.”

2. Think Out of Season Dates

The prime wedding season runs from Easter to September. If you are prepared to be flexible about the date, you can make your wedding budget go further if you decide to get married in the fall or winter. (The slowest time for weddings is January, by the way, and holding the ceremony then is one way to get your New Year off to a great start.)

3. Keep the Guest List Small

If you haven’t seen or heard from someone in five years or more, then don’t think that you are obligated to invite them to your wedding. The same rule applies to your boss, your co-workers, and the bowling team. You get the idea here. Invite only your nearest and dearest to share your wedding day with you; it will help to keep costs down.

4. Rethink the Formal Reception Idea

While your dream wedding may include a reception at a hotel for a few hundred guests and a multi-course sit-down dinner, that may not be in your budget. No problem; you just need to be a bit creative. When you are looking at possible wedding reception locations, ask to see a range of options for the meal. A buffet may be less expensive than a sit-down dinner, or you may choose to have an evening wedding with a cocktail reception afterward.

You may want to re-think the idea of an open bar all evening, too. One option is to have an open bar before dinner and serve a wine of your choosing with the meal. You could choose to serve beer and wine only if the alcohol will be on your tab to keep costs reasonable.

A wedding reception doesn’t necessarily have to take place in the evening. You can also choose to have the ceremony earlier in the day with a brunch or luncheon following. Menu prices will be lower with this option.

5. Avoid the Words “Wedding Cake”

Here’s a way to save on the cost of the cake for your wedding. If you plan to serve the cake at the reception, buy a sheet cake instead of a formal “wedding cake.” Those two words tend to drive up the price. If you want a cake “for show” and will be serving a different dessert at the reception, then order a small one or ask about the cost of having one or more layers being “fake.”

There are many ways that you can save money but still have a lovely wedding. With a little creativity, you can have a wonderful celebration and keep some green in your pocket.

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5 Tips for Buying a Home During a Recession Fri, 03 Apr 2009 19:19:10 +0000


Current economic conditions have made life challenging, to say the least for many families. At the same time, the recession has created some interesting opportunities for people who are interested in getting into the housing market. Mortgage interest rates are low, and the federal government is offering tax credits for buyers. What do you need to consider before you decide to take the plunge?

Here are five tips you need to keep in mind:

1. Consider Housing Costs

With interest rates currently at historically low levels, it may be tempting to put in an offer on a home that is a bit of a financial stretch for you. Along with the mortgage payments, you will also need to budget for property taxes and utilities. There will also be expenses connected with maintaining the property, even if you are not planning on doing any renovations right away. Consider these costs carefully before you make an offer.

2. Making a Long-term Commitment to a Home

While right now may be a good time to consider buying a home, keep in mind that prices may drop further in the short term. If you know that you will be staying put for several years (at least five), then now is a good time to think about buying a home. On the other hand, if you see yourself moving in the next couple of years, you may want to hold off on committing to home ownership for the time being.

3. Think of Your Needs First

If you have checked your budget numbers and you decide that you can afford a home and you will be staying in one place for the foreseeable future, you can start figuring out what features are more important to you in a home. Some home buyers want to live in a certain area or close to shopping and recreational facilities. People with children will want to find out about day-care facilities, schools, parks, doctors’ offices, etc., in relation to the house they are considering. These kinds of the things are “must-haves” when you are looking for a home.

4. Your “Wants” Are Not Needs

Just about everyone has a list of things they would like to have in their “dream” home. As long as you are willing and have the means to pay for them, it’s not a problem. You may want to keep in mind that it’s perfectly all right to get into the housing market with a starter home, build up some equity, and then move up to the big honking house that you really want. You may “want” the home theatre, whirlpool tub, and granite counter tops, but do you really “need” them?

5. Shop Around for the Best Mortgage

There are many options available to home buyers who are looking for a mortgage. Not only are there many lenders offering financing, but there are different kinds of mortgages offered by the same lender. Consider the interest rate, payment options, and amortization period, and any required fees before you sign any mortgage documents.

The recession may translate into a buyer’s market, but you still need to be smart about it. Consider your budge, how secure your job is, and separate the things you must have from the stuff on your wish list to make the right choice for you.

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American Express Pays Customers $300 To Close Accounts Sat, 28 Feb 2009 20:55:49 +0000


This week American Express (AMEX) let the cat out of the bag on their strategy for dealing with the imminent spike in credit defaults: entice people to pay off their credit card balances BEFORE they lose their jobs.

Of course, American Express is not spinning it in quite those terms. Their PR firm decided it would sound best to say they are helping people “simplify” their finances.

According to the LA Times:

“American Express Co. is paying some cardholders $300 each to close accounts so the lender can reduce the risk of defaults as the recession deepens.”

“What AmEx is trying to do is move to the front of the line in terms of getting paid back” by customers who owe debts to multiple lenders, said Michael Taiano, an analyst at Sandler O’Neill & Partners.

In the meantime, the ability to get an American Express credit card seems as easy as ever with thousands of online credit card affiliate sites still featuring the Blue and Platinum cards.

Perhaps American Express strategy here is to replace the card holders who carry a balance with card holders who will actually use their card a lot and pay it off in full every month.

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Visa Black For The High End Fri, 13 Feb 2009 16:43:13 +0000

As the recession hits harder and harder, the banks are tightening up and issuing less and less credit cards to less and less people. Credit card companies are basically trying to increase the quality of their card holders, taking on less risk.

So while many middle-class people are finding it hard to find a good credit card, the new Visa Black card is the latest offering to the upper class. While only 1% of the population is eligible, Visa Black is now considered the most elite credit card on the planet, even more prestigious then the American Express Centurion.

Here’s what you get with a Visa Black card:

  • Limited Membership (1% of U.S. Residents)
  • 1% cash back on purchases or $1 = 1 points that can redeemed for travel anytime
  • 24-Hour Concierge Service
  • Exclusive Rewards Program
  • Luxury Gifts
  • Patent Pending Carbon Graphite
  • Annual Fee $495

The Visa Black looks like a great credit card to have.

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Using Cellphones as Credit Cards? Tue, 27 Jan 2009 00:37:09 +0000

In the future will our cell phones be our credit cards?

The New York Times recently featured an article asking us to imagine “a technology that lets you pay for products just by waving your cellphone over a reader”.

That’s not a new idea. It’s been around for a while. In fact, a while ago, the idea of using an iPhone as a credit card emerged out of a real world situation.

The benefits are obvious: why carry around lots of things when you could just carry around one thing – your cell phone?

But, the New York Times argues that there are too many separate entities with competing interests involved in the process required to turn cell phones into credit cards. Until there is a unified and concerted effort to make this happen, chances are we could be in the same position ten years from now. It’s going to take a leader. A pioneer.

Our bet is that if anyone does it, it will either be Apple or Google. Two companies that know how to make things happen.

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Proposed credit card legislation could help the card holders Mon, 01 Dec 2008 01:06:08 +0000

Changes being proposed by new legislation could force credit card companies to play fair with their customers. Though the credit card companies vehemently contend their practices are fair and necessary, their customers and, apparently, lawmakers disagree. Some of the more controversial practices of the credit card companies are under fire. Interest rate hikes, customer notification of changes, and billing cycles are being targeted by proposed legislation and may have to be adjusted if the changes are successfully passed.

Currently, if a credit card customer’s credit score is lowered, the company has a right to increase their interest rate. This is known as universal default. The cause of the lowered credit score doesn’t matter. So if a person is late on a mortgage payment and their credit score goes down, the interest rates on the individual’s credit cards are increased. Not only will your interest rate increase, but the increased rate is retroactively applied to the entire balance on the credit card. So purchases you made six months ago will now be subject to the higher interest rate charges.

Credit card customers are all too familiar with the notice of term change mailings the credit card companies send out. How many times have you received a perforated notice informing you of new credit card term changes? By the time you receive the notice, the changes are practically already in effect. The mailing you receive is covered in fine print that would require some time to review in order to even understand how the new terms differ from the old. Once you are notified, you don’t have much time to decide how you want to handle the changes.

The billing notices are another point of contention. Since your payments are due every month, it is important to have sufficient time to budget for them. Credit card payment amounts can vary every month. New purchases, added finance charges, increased interest rates, and of course new credit card terms can all have an impact on the minimum payment due. The current billing process provides only about two weeks notice to the customer. If the customer isn’t able to pay timely based on the two weeks billing notice, the credit cards interest rate is subject to increase and the account can be charged fees.

Law changes affecting current credit card practices could provide relief. A ban on retroactive interest assessment could help alleviate unmanageable debt. Limiting what the credit card company can assess the interest on will benefit credit card holders. Term change notices are usually sent extremely close to the date the new terms will go into affect. Proposed changes would increase the notification time to one month. The extra time would give the card holders time to read the terms and make decisions. Billing notices could be mandated to be sent at least 25 days in advance. The additional time could help prevent unwanted interest and fees.

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Had Your Credit Card Refused? Wed, 24 Sep 2008 15:13:51 +0000

One of the most embarrassing aspects of shopping, second only to being wrongly accused of theft, is having your card refused.

It’s bad enough when it is refused because you have no credit limit left (it happens), but when it happens for no reason it is more frustrating.

You feel like shouting out loud “My credit is good! I have money, see! It’s a technical glitch!” as if the rest of the queue are quietly judging you and tutting under their breath. Of course, the rest of the shoppers have likely had the same thing happen in their lives and know exactly what it is like.

One of the issues that crops up occasionally is shops asking for additional ID. Now, in the UK, some of us carry around drivers licenses, and I know in other countries it is sometimes common to have ID, but what do you do if you have nothing on you, or if the ID you have is not good enough for them?

It turns out the only time they can ask for ID is if your card is not signed!

In fact in some parts of the United States, it’s actually illegal to record the additional information (your drivers license or passport number for example) while processing a credit card transaction unless the details are required to complete the order (for example, your delivery address).

Mastercard has this to say:

A merchant must not refuse to complete a MasterCard card transaction solely because a cardholder who has complied with the conditions for presentment of a card at the POI  [point of interaction] refuses to provide additional identification information

So next time a store clerk pushes you for ID, you might still be embarrassed, but at least now you know your rights.

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Could Your Family Survive a Month of No Spending? Thu, 18 Sep 2008 11:53:47 +0000

How would your family react if you suggested no toys, no lattes, no gadgets, and no luxuries, for a whole month?

Personally, I prefer working to a budget rather than going cold-turkey, but if you have a serious case of materialism-addiction, perhaps a complete spending detox could be just the thing …

Check out this report where a family did just that, in A Month of No Spending

I realize many people live like this all the time, by necessity, not by choice, and I anticipate letters saying, “Boo hoo! You had to give up your decaf Frappuccino.” But this wasn’t an exercise in “playing poor.” Our month of no spending was a financial wake-up call, a chance to recalibrate our relationship with money at a time when everyone I know has money on the brain.

As I say in the introduction, this idea could be very very tough, especially on the younger members of your family if they are old enough to “I want I need” but too young to understand the value and cost of things. Having said that, most kids appreciate some quality parental attention more than the latest Hannah Montana gizmo, it could be a great tonic for family life.

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Have You Signed Your Credit Card? Thu, 11 Sep 2008 10:00:04 +0000

Many people when they received their credit cards in the post either forget or refuse to sign them. Only the other day, my nephew said he wasn’t going to sign his brand new plastic friend because of “security reasons”.

His rationale was if he signed it, whoever stole it would know how to sign it.

I know, work that out if you can.

Thing is, if you don’t sign your card, even if you use chip and pin, stores are quite within their rights to refuse it.

You can try to explain, but in fact, you probably are breaking the terms of use. Check the back of your card now, does it say “Not Valid Unless Signed”, or something along those lines?

I know some people are in the habit of writing “Ask for identification”, which might fly with some merchants, but they are still well within their rights to say “no”.

Here’s what VISA says should happen when you present an unsigned card:

According to VISA …

“Ask for ID” is not a valid substitute for a signature. The customer must sign the card in your presence

Now you know.

You can try it, and you will likely find few problems, but don’t be upset if eventually you get your card rejected!

Do you know anyone using “Ask for ID” or a blank signature box on their card?

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