Some Facts About Credit Cards
June 27, 2008
1. Consumer debt is nearing 2 trillion dollars. How much can the American consumer handle?
2. Household debt grew 10.4 percent in 2003 while savings dropped 38 percent.
3. Even with interest rates at an all time low many credit card issuers still charge 18-29% interest. Although many accounts are set up at a low interest rate, one late payment can often trigger a drastic increase in the interest rate.
4. The amount of fees charges by credit card issuers has grown fourfold since 1996 from $1.7 billion dollars to 7.3 billion. Fees charged by credit card issuers include late fees, over limit fees, and balance transfer fees.
5. Credit card issuers mailed out over 3.2 billion credit card applications in 2003.
6. Personal bankruptcies are expected to hit 1.6 million in 2003, double what they were in 1990.
7. Personal bankruptcies are growing at the rate of 7% per year and at that rate a national crisis is inevitable.
8. Americans have an average of 13.5 credit cards per household with credit card debt per household exceeding $9,000. Many consumers, however, have credit card debt exceeding $50,000 and some as high as $250,000.
9. In a recent survey of 5,000 consumers conducted by Consolidated Credit counseling services 43 percent stated they had a debt-to-income ratio of 50 percent or more. Nearly two thirds (63%) said their debt load was making their life miserable.
10. Teenagers and college students are a prime target of credit card issuers even though they most often do not have a job or income.
11. Persons just coming out of bankruptcy are prime targets of credit card issuers as they have little debt and can’t file a chapter 7 bankruptcy again for six years.
12. Small businesses are increasingly lured into using credit cards and unsecured lines of credit to fund their businesses. Unfortunately, this type of quick and easy financing is expensive and may eventually overburden the small business.
13. The mini-storage business, where Americans store all these things they purchased on credit and really didn’t need, has increased fortyfold since 1960. There are now 30,000 of these facilities in the U.S. charging over 12 billion dollars in fees.
12 Amazing Facts about Credit Card Debt
June 27, 2008
Who says debt is a boring topic to read about? It shouldn’t be considering how many Americans are in debt. The growing trend in personal debt is staggering. So gathered below are 12 interesting facts and statistics about debt and credit that will make you think about your finances.
1. Late library fines and unpaid parking tickets can hurt your credit score.
2. In 2006, the credit card industry took in $55 billion in credit card fees and $90 billion in
finance charges. Makes you want to pay your credit card bills on time.
3. National debt of countries In order of debt:
a. United States 10 Trillion
b. United Kingdom 8 Trillion
c. Germany 4 Trillion
d. France 3 Trillion
e. Italy 2 Trillion
4. U.S. consumers racked up an estimated $51 billion worth of fast food on their personal
credit and debit cards. That is equal to 10.2 Billion Big Mac meals, 3 billion pounds of fries
and 1.7 billion gallons of coke.
5. At least one in 10 consumers has more than 10 credit cards in their wallets. That’s equal
to 304 tons of plastic or 61 Elephants.
6. 51 percent of the US population has at least two credit cards. That’s 305,000,000 plastic
cards which would span 16,223 miles, 65% around the world. You could create a wide
enough path to walk over the Atlantic Ocean.
7. It took the city of Montreal 30 years to pay off its Olympic debt of $2 billion, held in 1976!
8. A $1,000 charge on an average credit card will take almost 22 years to pay, and will cost
more than $2,300 in interest ($3,300 total) — if only 2 percent minimum payments are
made.
9. All though the first credit cards were merchant specific cards starting in 1900 with several
hotels, the first true credit card was invented in 1950 by Ralph Schneider and Frank X.
McNamara. The Diners Club charged participating restaurants 7% interest on each
purchase and charged a $3 fee a year to the card holder. This was the first card that
could be used at different locations. Chase and Bank of America (Visa) came out with
their first credit cards in 1958. They became most popular when the magnetic strip
became available in 1970.
10. U.S. Visa cardholders alone conduct more than $1 trillion in annual volume.
11. Closing a credit card account in full will have a negative affect on your credit score.
Length of history on an account is 15% of your FICO score.
12. Average Household Credit Card Debt is $8,400.00
Online Access
June 27, 2008
It is convenient to check transactions online. Most credit cards offer online access to its customers so that they can check their balance, know their available credit limit and other stuff.
When I used to have a credit card, I requested that my bills be sent to me via email. I didn’t want to wait for my bill via mail as it could take longer and sometimes it doesn’t arrive before my due date so there were times I would miss paying on time because of this. I was very busy then and would forget to check it.
Once I receive my statement of account via email, I would just need to log-in to their secure site and from there, I can view my account’s transactions. The session times out after five minutes if there was no activity detected and I guess this was one way of ensuring my security online.
In this day and age of technology, it’s good to know that we already have this option especially for people like me who spend most of their time online. Just be careful in giving our personal information and in responding to emails that requests for password or other pertinent info especially if it leads to another website that is not related to the specific website of your bank.
Credit Cards are Evils
June 25, 2008
Its been three years since the first time I got my first card. Actually I never wanted to have any cards since I knew even at first that it will only cause me a lot of problems. I even turn down all the invites that I got on phones and mails just to avoid getting a card.
My first credit card was a big surprise to me since I never got any application. I called the bank and they said it was a gift for being a loyal bank depositor. Since I still have the option I took the card but never had an intention to activate it.
The card was in my wallet and not used for three months. But seeing the card often I seem to hear voices in mind that tells me to use it. So I did. I limit my usage for just a thousand bucks per month and I succeeded. I maintained that for six months.
Another credit card was drop again to my mailbox. Again I called the company and they said I had an application. I even have a debate to the agent telling I never applied for anything. Even ask him to send a fax copy of the application form that had my signature. It was forged! So I tell him I won’t need the card and get the card right away.
Months past. Then again I need to buy something really important and I don’t have enough cash so the last result was to use the card. Oh not again! The process comes and continues. Purchase-Swipe-Pay-Swipe.
Before my debts ballooned to ten thousand bucks I decided to keep all the cards and put it on a place where I can’t see it. I did it because that’s the only thing I think possible to do. Everytime I saw the card I was always tempted to use it.
Now, I am about to finish paying all the debts in my credit cards and will no longer avail any of those.
Tips for Credit Card Holder
June 25, 2008
Here are some tips to avoid being in a mess with your credit card:
1) Stick to one credit card as much as possible.
2) Affix your signature on your card upon its release.
3) Keep track of your credit card expenses.
4) Avoid using your card for cash advances - unless it
is an emergency.
5) Don’t fall for paying only the minimum to avoid
interest.
6) Take advantage of the credit card company promo -
like the zero-interest.
7) Avoid late payment.
Keep away from impulse buying.
9) Keep record of your credit card details.
Having a Credit Card
June 24, 2008
A friend asked me one day if it’s worth it to get a credit card. A colleague approached her for a credit card application that will be approved in just a few days. My friend has always been thrifty so she is not sure if she will get one for herself.
She very well knew my experience with credit cards so I told her that we are two different persons. My experience will not necessarily be the same as hers especially since she’ll be the one whose going to use it.
I just gave her some tips in using her future credit card. One is that it is best if the credit card is used sparingly, only if she needs to buy something and she has no cash left. Even so, make sure that the payment for the balance will be paid in full on or before the due date. That means, the payment for the item must be included in the budget so that definitely the balance will be paid on time. This will help in avoiding to pay interest charges when there is a balance left or if only the minimum amount was paid.
I also advised her not to bring her credit card when she has no cash because she will be tempted to swipe it thinking that it will be paid in the next weeks anyway.
On the other hand, I also suggested that a credit card is okay to use for big-ticket items which usually have 0% interest for a period of time. If one has been planning to purchase appliances, gadgets, a credit card is convenient to use. One can save for the payment since it is done in installment and the good thing is it has no interest charges for a period of time.
In the end, my friend decided to give it a try. She’s excited to try it for herself. I just reminded her not to let her credit card rule over her.
On The Road To Being Debt-Free
June 17, 2008
When I was still single, I maintained two credit cards. It was easy then to pay for it and I was able to manage my finances. Later on, I have to admit that my credit cards ruled over me. It gave me a sense of power every time I swiped my card and bought things or ate out even if my paycheck was far from coming. Honestly, I thought of it before as as a well. One that is bottomless.
Here’s when the problem started. I transferred to another company and it was a struggle at first because we got paid by the hour and our hours were reduced resulting to a lower paycheck. I had bills and credit cards to pay and my salary wasn’t enough to cover for all. I decided to do convert my balance into installment with low interest rate. This worked at first but when accountables outnumber the receivables, it’s difficult to make ends meet.
I started paying just the minimum due which I knew would cause me problems in the future because the actual balance is just piling up along with the accumulated interest. There even came a time when I was not able to pay for months because I simply can’t accommodate it anymore in my budget and I had to make sacrifices.
The demand letters to pay came along with calls from collection agencies. I entered into a bargain and I told upfront how much I can only pay for in a month. It’s still a long way to go to eventually being credit card debt-free. It wil take years but I’m slowly getting there. I don’t have a single credit card now. When I don’t have money, I stay at home. If I need to buy something, I wait for the next paycheck and see if I can squeeze it in the budget. I learned my lesson. It was the hard way indeed but I’ll overcome this and hope that I will come out a wise spender.
Secure your future and protect your assets
June 16, 2008
Many of us fall into the debt trap because of poor financial planning. Spending so much for material things that sap the money out of us. I will share with you some tips you may undertake to escape falling into the debt trap:
1. Build a contingency or emergency fund of three to six months. Emergencies occur unexpected. While we still can save, stash away that money into a high-interest yielding account — a money market fund or a 30-day time deposit among others. When you need it for an emergency, you have money to take out instead of using your credit card or taking a loan.
2. Get life insurances. Get coverage for those earning money and cover their annual income for the next two years. It is up to you whether you would take term or whole-life insurance.
3. Insure your valuable assets. In this way, you can have the money to replace them. For instance, you house got burned down or your car was a total wreck, with these materials insured you will have enough money to buy a replacement. The same goes for jewelries, etc.
4. Build a retirement fund and an educational fund for your children. Invest in various tools to keep up with inflation, or better yet, to be ahead with inflation.
collection agents can sometimes be nasty
June 12, 2008
There are a lot of people who experience credit card debt. This may be due to some financial crisis in the family, or a sudden issue on your employment. Either way, you will have difficulty managing your monthly dues and this will lead to having your credit balance balloon drastically because of miscellaneous bank charges. So in effect, you tend to hide from the collection agents because they bug you and compel you with paying an amount which you can’t just pay at the moment. They have their right to call you endlessly, of course. But sometimes, there are just some who harass you like you personally owe them the money.
I personally have experienced this because I sometimes pick up calls for my officemates. There was this instance that a collector was looking for a specific colleague who was always out of town because of the projest he’s handling. I told her(the agent) that she might want to call my officemate on his mobile phone because it is a personal matter. The company is not liable for anything anyway, right? The agent then got mad and accused me of hiding my officemate, and even requested the call to be transferred to our HR manager. When our HR manager talked to her, she was still mad and still giving us false accusations. Out of anger, we asked for the agent’s full name and her supervisor’s. We filed a complaint directly to the bank’s head office and asked them not to call us again. We even told them how their agents lack customer service skills and that they should enhance their training. From then on, that particular bank never called our office again and looked for my officemate.
Credit cards can be an ally
June 12, 2008
When you use your credit cards properly, they can be an ally rather than a foe in building your wealth. I have three credit cards and all are paid in full each month. Here are a few reasons why:
1. When you pay in full your credit card balance every month, you get to take a 30 to 45 day “loan” at zero percent interest.
2. Using cash-back credit card with three percent rebate, I have rebates amounting to $235 over a 10-month period. That’s a discount over my bill and on-top of the discount given by the store where I purchase my items. I usually use this card for my groceries and personal restaurant bills.
3. Using a special credit card with five percent rebate for gasoline purchases, I am able to get discounts for my fuel expenses. In addition, this particular card gives me frequent flyer miles which I can claim for free travel tickets in the future.
4. Using a credit card with reward points, I am able to get free entertainment or event tickets, appliances or furniture that I choose from their catalogue. I usually use this card for group purchases or for group dining out, wherein my friends pay me in cash and I pay the merchant using my card. In this way, I am able to build up my reward points.
