By CCRB in Credit Cards on June 24 2009
When You Don’t Trust Yourself
There are times when it is OK not to trust yourself. Admitting that you can’t trust yourself in certain circumstances is an important step in fixing the problem. When it comes to finances, you really can’t afford not to be able to trust yourself with a credit card-unless you have a secured credit card from First Premier Bank.
First Premier Bank offers several quality secured credit cards. Secured credit cards are the perfect alternative for people who have less than perfect credit or those that just don’t quite trust themselves yet. Secured credit cards are even great for people who are just learning how to manage a credit card.
The credit limit for secured credit cards is based on the amount of collateral. For instance, when the applicant is considered for a secured credit card, his/her total amount of assets is taken into consideration. If he or she defaults on the loan in any way, the lender has the right to seize those assets that have been linked to the secured credit card. This way, both the lender and the consumer are kept safe financially without much risk involved in the transaction.
Let’s take a look at First Premier’s most popular secured credit cards.
First PREMIER Bank Secured MasterCard
-Specially designed for people who don’t have perfect credit yet
-Reporting each month to the four major credit bureaus
-A great way to build or rebuild credit
Centennial Secured MasterCard
-The perfect secured credit card for those wanting to have perfect credit
-Reports monthly to each of the four major credit bureaus
-Outstanding customer service 24 hours a day, 7 days a week
Just because you don’t have perfect credit yet doesn’t mean that you can’t have perfect credit in the near future. A secured credit card from First Premier Bank is a great way to help you get that perfect credit.
By CCRB in Prepaid on April 3 2009
The Pros (and Cons) of Prepaid Credit Cards
Prepaid credit cards are becoming increasingly popular. Many people are turning to prepaid credit cards instead of using traditional debit cards. Let’s take a closer look into the world of prepaid credit cards.
The Pros
Prepaid credit cards allow the cardholder to take control of his or her credit account. Each prepaid credit card comes with the added feature of allowing the cardholder to load the desired credit limit onto the card. Here’s how it works. Money can be transferred onto the credit card as often as desired. Once the money has been spent, the credit card is no longer usable until more money is transferred into the account. Thus, prepaid credit cards work similar to the way debit cards work.
You don’t have to have your credit checked in order to sign up for a prepaid credit card. Therefore, prepaid credit cards are perfect for teenagers, college students, or even established adults. Often times, the cardholder can get the activation fee and/or weekly fee waived when they sign up for Direct Deposit.
Prepaid credit cards are great, especially if you make online purchases often. There is no limit to the amount of purchase transactions you are allowed to make. Prepaid credit cards are also an easy way to pay utility bills, mortgage bills or other bills. You can also easily receive free text messages and emails alerting you to the status of your account.
More and more parents are choosing to sign up for prepaid credit cards for their teenagers because these credit cards are very controlled and there is a low-risk associated with them. Using a prepaid credit card teaches proper credit card habits and responsibility as well.
The Cons
Prepaid credit cards really don’t have very many cons. In fact, there is mainly one con associated with prepaid credit cards. This is the fact that prepaid credit cards don’t really help out your credit score or credit history (however, they don’t really hurt your credit history either). The status of a prepaid credit card account isn’t reported to the major credit bureaus. All in all, a prepaid credit card is a glorified debit card with a few more perks and incentives.
When it comes down to it, it is beneficial to use a prepaid credit card. You have access to more features with a prepaid credit card than you do with a traditional debit card. The only drawback to using a prepaid credit card is the fact that it doesn’t really boost your credit score or credit history. However, it does teach proper credit card use and instills responsibility into the cardholder.
By CCRB in debt on March 17 2009
Consumer Credit On The Rise
Consumer behavior is a shocking phenomenon. Since the recession began, consumers have been put on alert. During the months of October, November and December 2008, consumers drastically reduced their credit card debt. However, the story completely changed in January 2009.
The Federal Reserve recently reported that consumers increased their debt in January. We aren’t talking about by a small amount either. We are talking about consumer debt increasing by $1.76 billion. This new statistic completely goes against everything economists had predicted for the 2009 kick-off month.
This shocking increase in consumer debt was both due to an increase in use of non-revolving credit lines, as well as revolving credit lines. In January alone, credit card borrowing went up by 1.16 percent. That is approximately $926 million. Borrowing in terms of non-revolving loans went up by 0.62 percent. That equates to $830 million.
Revolving debt is debt that is acquired through a credit card or other means. Revolving debt is “revolves” because the general idea is to pay off the debt each month. Automobile loans, for example, falls under the category of non-revolving credit because payments are made to reduce the debt on the loan.
Here’s another shocking statistic for you. This large jump in consumer debt is the smallest jump since May 2006. Could that possibly be a sign? Could we be in this recession because consumers got too used to taking on too much debt? American consumers obviously fell into the bad and dangerous habit of taking on more and more debt, without worrying too much about paying off the debt.
Thus, the crash of the housing market. If every American was in a home that they could actually afford, the housing crisis would not have become this bad. The fact of the matter is that Americans were too irresponsible with their money for too long. Now, Americans (in general) are looking to the government to save them.
Should the government save consumers who were completely irresponsible with their finances?
By CCRB in Credit Cards on March 12 2009
Instead of Whipping Out the Plastic…
More and more consumers are saving. Instead of cashing in on the next big sale, consumers are starting to avoid shopping malls altogether. In the past few months, the country has been saving more and spending less.
This is definitely having an affect on retail stores. 2008’s holiday shopping season was supposed to be completely dismal. Sales ended up higher than expected. Although things have just gone downhill from there. Retail sales have been in a slump for several months. To make matters worse, poor retail sales are beginning to affect Wall Street in a drastic way.
The value of stocks have continued to decreased, in part to dismal retail sales. Consumers aren’t signing up for new credit card lines and they certainly aren’t using the ones they already have like they used to. Instead, more and more people are turning to alternative financial strategies. What sort of strategies? Saving.
Those who have steady and stable jobs (and even some who don’t) have begun to save, and save, and save. Hundreds of “pro-saving” organizations have been set up around the country. These organizations strongly encourage people to save and reward those who join the organization and save.
For instance, Utah residents have started a program called, “Utah Saves.” So far, Utah savers have already put aside hundreds of thousands of dollars. The citizens of Akron, OH were chosen to be a “Savings Community” by the United States Conference of Mayors and American Saves (America Saves is a nonprofit organization that strongly encourages citizens to save and sponsors state-by-state savings groups like Utah Saves).
When chosen to be a “Saving Community,” the citizens of Akron were challenged to collectively save $1 million dollars in six short months. Well, the six months is over and Akron has saved well over $1 million. Because of their efforts to save, Akron’s amount of debt has been drastically reduced and citizens there are in a more stable financial position than they were six months ago.
Stories like this are popping up all over the nation. Sadly, it took this major recession for people to stop spending outside of their means and start saving. Think about it…are you going to be a saver or are you going to continue to whip out your credit card?
By CCRB in Credit Cards on March 10 2009
Finally…some good news for the American consumer. Federal regulators have agreed and adopted a new set of rules for the entire credit card industry. These new rules will help protect consumers from interest rate increases, unfair due dates and more.
There is a downside though. The new rules won’t take effect until July 2010. However, there are only a certain things a credit card company can do until they. They can raise interest rates, though only on new credit cards. Similarly, they can raise the interest rate on future purchases or cash advances, instead of on current balances.
The rules are a monumental feat for consumers. They mark the largest “clampdown” on the entire credit card industry in decades. The Office of Thrift Supervision has already approved the regulations. The Federal Reserve and National Credit Union Administration already voted about this.
Federal Regulators hope that the new rules will “enhance public confidence in financial institutions and establish a level playing field for institutions that want to do business fairly without suffering competitive disadvantages.”
The new rules would completely prohibit:
-Making deceptive offers of credit
-Placing unfair time constraints on credit payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.
-Unfairly adding security deposits and fees for making credit available or issuing credit.
-Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.
-Unfairly computing balances in a computing tactic known as double-cycle billing.
Consumers will also have to be given 45 days notice before any changes can be made to the terms of the credit account. This includes increasing a penalty rate for missed or late payments. Current rules specify that a 15 day notice must be given to the customer before any changes can be made.
There is finally some good news in the forecast for American consumers. Credit card companies will no longer be able to take advantage of these consumers. The regulations are a bit of welcome news for millions of people around the country.
By CCRB in student credit cards on March 5 2009
Credit card companies seem to target college students. Why? They target college students because (most times) these students usually don’t know how to use these cards wisely.
Here are some fabulous tips that can help you use your student credit card wisely.
1. First things first…don’t go with the first credit card that is thrown your way. Taking the time to research different credit card offers will end up paying off. Credit cards that come from your local credit union are often better than other credit cards. They offer more benefits and lower interest rates.
2. Read the fine print. NEVER sign up for a credit card without reading the fine print first. Most people end up getting burned because they didn’t read the credit card contract (the stuff in the fine print). Especially in this economy, you can’t afford to not read the fine print. Make sure you know exactly what each term is to your credit card contract.
3. Make a budget and stick to it. Many college students find it “cool” to finally have their very own credit card. Often times, spending can get out of hand. Don’t let this happen to you. Sit down and create a realistic budget. More importantly, stick to that budget. If you have to review your budget every day, do it. Sticking to a budget will keep your far away from credit card debt.
4. Pay off your balance every month. The most important thing to remember when using your student credit card is to pay off the entire balance every month. It is not worth it to pay any interest when using a credit card. Don’t pay the credit card company a dime. Make sure you pay off the balance every month.
5. No fees. Don’t waste your time paying any fees. Pay your bill on time. In fact, get into the habit of paying your credit card bill early. Late fees are a classic way to flush your money down the toilet. However, many people do pay late fee after late fee. What a waste of money. Don’t ever pay any sort of credit card fee; it is a waste of money.
Using your student credit card can be a very beneficial time. Using it wisely will get you into smart credit card habits for the future and can go a long way in preparing you to stay out of credit card debt.
By CCRB in Forclosure on February 23 2009
2008 Foreclosure Statistics
You’ve probably heard that the housing market isn’t doing too well. Actually, that is quite an understatement isn’t it?
The housing market has hit rock bottom. American families are struggling to keep their homes and are doing everything in their power to do so. However, as the unemployment rate continues to increase, things aren’t looking so good for American homeowners.
In 2008 alone, the United States saw an increase in foreclosure filings. We aren’t talking a small increase. We are talking about an increase of 81 percent. Foreclosure filings have increased by 225% when compared to 2006’s numbers.
More than 861,664 families lost their homes to foreclosure in 2008. Similarly, there were more than 3.1 million foreclosure filings reported in 2008. What exactly does this mean? Well, approximately one in every 54 families received a foreclosure notice in 2008.
That is an alarming number. Think about all of the families that you know. You certainly know at least 54 families. Maybe double that number. Possibly triple that number. Now, think of how many of those families that you know personally are on the brink of foreclosure or bankruptcy.
James Saccacio, CEO of RealtyTrac said, “Clearly the foreclosure prevention programs implemented to date have not had any real success in slowing down this foreclosure tsunami.”
As stated, the government is working to stop the wide spread of foreclosures. However, it may not be working hard enough, because nothing is stopping the ‘outbreak.’ Foreclosures seem to be spreading like wild fire or some highly-contagious disease.
Saccacio continued, “The big jump in December foreclosure (December foreclosures were up 17 percent) activity was somewhat surprising given the moratoria enacted by both Freddie Mac and Fannie Mae, along with programs from some of the major lenders and loan servicers aimed at delaying foreclosure actions against distressed homeowners.”
Fannie Mae and Freddie Mac both suspended foreclosures from November 26, 2008 through January 31, 2009. However, this hasn’t seemed to do any good.
A RealtyTrac spokesman, Rick Sharga, said, “I don’t see how we can avoid three million foreclosures again in 2009.”
The number of foreclosure filing in 2008 is the highest ever recorded. Too many American families are losing their homes. Too many families are desperately searching for a way to feed their children. When will this ever end?
By CCRB in Credit Cards on February 20 2009
How High Have Credit Card Rates Gotten?
Have you gotten your yearly privacy notice from your credit card company yet this year? If you have, chances are good that you tossed it aside without reading it.
Let me tell you a secret that you simply can’t ignore…You need to read that pamphlet (although it may seem boring at first). Inside that tiny-print pamphlet, you will find critical information that could save your finances this year or ruin them.
Credit card companies have had to change certain policies and procedures this year to stay in business. These changes are extremely detrimental to the American consumer. They include:
-interest rates that have doubled
-monthly service fees as high as $25/month
-increased monthly payments
-credit limits that have been drastically reduced
-and more
In the past, people with poor credit sort of expected these circumstances. But, with the recent collapse of the American economy, credit card companies have begun to pass these changes on to all consumers…including people with good or excellent credit.
Some analysts say that these changes are all part of a sensitive business cycle. When the economy is going well, credit card companies lend to almost anyone. When the economy takes a turn for the worst, these same companies put up their defenses.
So, what does this all mean? Basically…it means that credit card companies were not responsible enough during the good times to treat the consumer the same during the bad times. Consumers are not being held responsible for the credit card companies’ poor lending habits.
What should you do? Lie low. If you have good credit and your interest rate goes up, contact your credit card company immediately. If your credit limit is decreased, contact them immediately. Make sure that you stand your ground and put up a fight with your credit card company. Don’t let them take advantage of you during these economically hard times.
By CCRB in Credit Cards on February 16 2009
The Number One Cause for Credit Card Delinquencies
Have economic times turned horribly bad for you? Do you find it harder and harder to make your monthly payments? Have you recently been laid-off or is your job on the rocks?
Unemployment rates affect the number of credit card delinquencies, of course. But, you might be surprised (or not) at the number one cause for credit card delinquencies. The culprit? The housing crisis.
As home prices continue to plummet across the nation, the number of credit card delinquencies have hit record highs. Let’s look at an extremely common situation that is plaguing American families…
Dad has been laid-off from his job and Mom is a stay-at-home mom who does not bring in any income. The family is working with the bank to keep their home, but the amount of unpaid mortgage payments keep piling up. The car payment is due without any way to pay it. How can the family keep food on the table? The credit card. However, the family doesn’t have any way to make the minimum credit card payment. So, what debt gets paid dead last?
Credit card debt. Statistics show that American families are less concerned with making credit card payments than they are with making mortgage payments or car payments. When Americans are forced to prioritize their bills (due to any unforeseen circumstance such as a layoff, change in employment status, disability, death, etc), the order in which they get paid are always as follows:
1. The Mortgage
2. The electricity bill
3. The grocery bill
4. The car payment(s)
How can a society that places so much emphasis on credit card living be so negligent to pay the credit card bill? The fact of the matter is that American families can still continue to survive if they don’t pay the credit card bill. They can’t survive for very long without a home. They can’t survive for very long without electricity. They certainly can’t survive without food.
The number of credit card payments that were more than sixty days late rose more than 3.75% during the month of December (2008). The number of charge offs during the same month rose to 7.5%. What exactly is a “charge-off?” It is the debt that a creditor deems completely uncollectable.
The crash of the housing market has prevented American families from paying their mortgages, their car payments, their electricity bill, the food bill…let alone the credit card payment. The housing market needs to be saved before the number of credit card delinquencies catches a break.
By CCRB in Economy on January 14 2009
A Quick Economic Recovery
Economists and other experts are predicting some wild ideas. Some economists from around the country have predicted a quick and strong economic recovery. What exactly is their reasoning? They figure that because the economy took such a dramatic downturn, it is bound to experience a fast and strong recovery.
It isn’t surprising to hear that the U.S. economy is in bad shape…really bad shape. 2.6 million Americans lost their job last year along. The majority of these people lost their job in the last four months of 2008. There has been a projected 5%-9% decrease in overall economic activity during the fourth quarter of 2008. If this is true, it would mark the biggest drop in economic activity in over 50 years.
Businesses have had to quickly decrease production and inventories. However, businesses are now working harder than ever to “ramp up production.” Businesses started slowing down production once the Lehman Brothers went bankrupt in September.
For instance, Joseph Carson, chief economist at AllianceBernstein, gives us an idea of how his company is faring. He said, “We were producing 2 million tons of steel a week prior to Lehman. Now we’re producing 880,000 a week. The economy has slowed, but it has not fallen by half in the last three months. This kind of significant inventory liquidation is exactly why recoveries take place.”
Many other people put their trust in the Federal Reserve and Congress. These people contribute and predict a fast recovery because of the many steps these organizations have taken to “fix” the economy. The government’s economic stimulus pack, along with low energy prices, could cause a dramatic increase in economic activity.
This kind of recovery is called V-shaped. Why? Because if someone were to map the state of the economy on a chart, it would look like the letter V. It would be characterized by a steep decline in economic activity, followed by a quick and strong recovery.
Lakshman Achuthan, the managing director of the Economic Cycle Research Institute, is one that is predicting a successful recovery. He said, “Generally the sharper the recession, the sharper the recovery.”
Hopefully, these economists are right instead of dreadfully wrong.
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