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?
Divorce can be a tortuous affair, at best. However, it appears that it might just have got a whole lot worse.
Recent research suggests that more and more ex spouses are seeking retribution by taking out joint credit cards, car hire and equipment leasing after divorce. By using the name of their ex spouse they can then indulge in reckless spending or cause untold damage to equipment that has been leased. It’s kind of like the financial equivalent of taking a pair scissors to a wardrobe of clothes!
Often, only the true extent of the damage can be ascertained from your credit reference - obtained from the likes of Transunion, Experian and Equifax.
Fortunately, the law can help expunge marks on your credit score.
David Rubinger, spokesman for Equifax says “if your ex-spouse used your name and Social Security number to take out credit without your knowledge, that person has stolen your identity.” It doesn’t matter to a credit agency whether you have been the victim of credit fraud by a criminal, friend or ex spouse.
The key to reclaiming your credit history back is to report the situation immediately to the credit company and the credit referencing agencies. They will require you to fill in a full report to the police on the matter.
However, if you have a joint account that was created with your ex spouse before the divorce, then the situation is a little different
Experian spokesman Rod Griffin says. “If you have a joint account, you’re considered fully responsible for that debt,” It is still possible to file a dispute with reporting agencies who have 30 days to investigate the situation.
The common sense approach to this is to shut all joint accounts down when you divorce and be vigilant for a vengeful spouse looking to smear your credit record!
(Via USnews)
An interesting article from WRAL.com asks the question:- “How rewarding are credit cards that promise rewards?”
It’s a very good question and in my experience the answer is that some are more rewarding than others.
This is backed up by Consumer Reports who have recently sized up credit-card reward programs and found some good ones. For example Blue Cash from American Express is thought to be among the best US based cash-back cards, although it’s patently not suited to everyone..
According to WRAL.com:
“Consumer Reports urges people to be aware that card companies offering 5 percent cash back on purchases usually have restrictions. The American Express Blue Cash card, for example, offers 5 percent back only after a cardholder has spent $6,500 at supermarkets, gas stations and other locations. Likewise, the Discover Open Road card gives 5 percent back on gas and car maintenance only for the first $1,200.”
Tobie Stanger of Consumer Reports advises that:
“It’s important to know the specifics of your card and keep an eye out for any changes in terms, also everybody must size up which card is best for them.
You have to understand the terms. The credit-card companies have become very creative, and the terms can be confusing.”
Tobie Stanger goes on to say:
“If you regularly carry a balance on your credit card, don’t even bother with these cards because the finance charges will eat up any rewards. But if you pay your balance every month, they can be great”.
The story is always the same. Pay your balance off at the end of the month…
