Posted by Tom Wilkins on Fri 31st August 2007 at 06:00 AM, Filed in Credit News
Credit cards do offer a wide range of useful features. However, one complaint that often crops up is the cost of withdrawing cash.
It seems that many credit card companies see cash withdrawals as an easy meal ticket. I suppose they’ve got to make their money somewhere but the fees and interest on cash withdrawals is gradually becoming a problem.
Here’s why:
1. Card issuers begin charging you interest as soon as you withdraw the cash.
2. In contrast, many cards offer interest free periods on purchases if you pay off the balance in full.
3. Interest rates charged on cash withdrawals from credit cards is significantly higher than that charged on purchases. E.g American Express charges 20pc on cash withdrawals, compared with 18.9pc on purchases, according to a recent survey..
4. A fee of 1.5% is usually charged on any cash withdrawal.
5. Really watch out when you’re abroad. You might get a double whammy of cash charges and interest, plus currency conversion fees. Ouch. UK based Nationwide Credit Card is always best for use on holiday.
Posted by Tom Wilkins on Thu 30th August 2007 at 06:00 AM, Filed in Credit News
Bank of America has apparently signed up to a 3 year sponsorship deal with the National Football League.
This is an expansion on a previous agreement that incorporated NFL and team identified credit cards as well as a sports rewards program. It sounds similar to the rewards program set up by the UK’s Barclaycard Football Credit Card - 0% on All Season Tickets.
According to BizJournals:
“Under the new agreement, BofA has launched nationwide NFL Checking, a portfolio of team-specific products that includes debit cards and checks with logos from the Panthers, Dallas Cowboys, New England Patriots and Washington Redskins.
A suite of debit cards and credit cards bearing the NFL logo will be available in November. BofA (NYSE: BAC) will have the exclusive rights in banking services to use the NFL shield logo and other NFL-licensed marks, such as the Super Bowl, in marketing and advertising promotions through the 2009 season. Services include consumer checking and savings; credit, debit and ATM card issuance; wire and currency transfer services; currency-exchange services; and community-development banking. BofA also will have the rights to advertise during NFL games and on NFL-controlled media assets, such as NFL Network and NFL.com.”
Posted by Tom Wilkins on Wed 29th August 2007 at 06:00 AM, Filed in Credit News
In a sting operation backed by the People (a British newspaper), reporters from the paper caught various retailers selling pre paid credit cards without ID checks. Kids are known to use these cards for purchasing alcohol, weapons and gambling online.
From it’s research, the People established that that UK youngsters can obtain pre-payment cards for as little as £3 from shops and newsagents with negligible checks on age, name or address.
These cards can then be used by youngsters to buy adult goods and services online.
The teenager used by the paper to expose this story said:
“It was unbelievable how easy it was, Kids at school buy these cards so they can order stuff off the internet. Once you have one, you can get away with just about anything.”
UK law specifies that credit cards are only available to those over the age of 18 and even then the individual must go through rigorous credit checks and reference checks. Whether these checks are rigorous enough seems to be questionable.
I think there is a heck of alot of wisdom in advising your children to avoid credit cards up until the age of 20. It takes time to understand the worth of money, how to earn it and how to manage it. Youngsters given credit cards, miss out on these important principals.
However, there certainly is some sense in your offspring getting onto the credit ladder at some point and here’s why:
1. Building up a good credit history can be important for the future. Particularly when you come to obtaining a mortgage.
2. According to Javelin Strategy & Research, 8.4 million Americans became victims of identity fraud. Most cards now offer high levels of fraud protection - particularly important in light of increasing numbers of us shopping online.
3. If you follow the principal of taking on a card with no annual fee and low APR then credit can become a useful tool in your everyday life. Particularly, if you ensure that the balance is always paid off at the end of the month, or at least towards the end of a 0% introduction period.
Posted by Tom Wilkins on Tue 28th August 2007 at 06:00 AM, Filed in Credit News
The problem of spiralling interest rates on credit cards and student loans is starting to become a problem. This is different from the sub prime mortgage issue much publicised recently.
High credit rates are causing real problems for hard working Americans and their families who are in secure jobs.
The story below seems to be more common place nowadays:
“To my utter astonishment, I discovered that I was being charged between 22% and 29.5% on all of my balances. This included one card, Care Credit (owned by G.E. Money Bank - hey, why stop at war profiteering?), which is intended to help people stretch out payments for dental and other medical care. The Old Navy card I opened to buy school clothes for the kids was (quelle surprise!) also parented by G.E. Money Bank. Both cards (and others) were charging me nearly 30% interest. For children’s school clothes and family dental care!”
Quote from Alternet.
Rates of approaching 30% on loans is clearly excessive.
Does the US government need to take a closer look at regulations concerning credit interest charges?
