This is interesting…

Up until recently, when he donated most of his wealth to charity, Warren Buffett was the richest man on the face of the earth.  If you had a net worth of more than $60,000,000,000 you would think your credit score would be perfect. Not the case with good old Warren – his FICO score was only 718.  While this isn’t a bad score, it’s certainly around average.

Why would he only score 718? Simple. FICO is not based on income, but rather your credit history. If Warren never had a car payment or a mortgage, what is there to base it off of?

Gosh, if for no other reason, you would have thought such a penny-pinching wise man would have used reward credit cards for the cashback and airline miles if for no other reason. :p

Consumer Reports magazine ranked credit cards by issuer. The ratings were based on cardholders’ experiences they’ve had with fees, interest rates, and customer service.

There were 21 major credit card companies ranked and the major ones are displayed below…

A few of the company’s rankings are about where you would expect them, but a couple are a surprise. Not many people have heard of USAA – a credit union for the military and their families. The second highest was Naval Federal Credit Union. The nation’s highest ranked major creditor was American Express (who happens to be one of our advertising partners).

Among all issuers, the problems cardholders most complained about were customer service and excessive late fees.

The “mother of all bailouts” is what they’re calling it – the $700 billion bailout of the U.S. financial market. Under the current plan, the government will buy back distressed assets from private holders on Wall Street.

Now how much the cookie crumbles depends on what types of debts are included. Will it only be mortgage-backed securities? Or will they include credit card debt, which is packaged up and sold on Wall Street the same way mortgages are.

The plan was supposed to be only for “mortgage-related” assets, but a recent draft included “troubled assets” and of course with that sky is the limit – it could include virtually any type of troubled loan.  If this happens, the ultimate cost to the taxpayers may be far more – in the trillions.

Either way, roughly 87% of Federal tax revenue comes from individuals, so you will be the one paying 87% of the bill for these corporations.

Bear Stearns… Fannie Mae… Freddie Mac… AIG… Washington Mutual… and the list goes on.  With this unprecedented turmoil in the financial markets, little attention is given to what impact this has on credit cards.  Fortunately, credit cards are one of, if not the only, player in the financial sector that will emerge relatively unscathed from this meltdown. Here’s why:

Visa and MasterCard generate earnings from transaction fees – a small percentage of your purchase that merchants pay to accept their cards for payment.  Visa and MasterCard do not loan any money, they merely process the transactions. In fact, both of these companies are comfortably profitable without any debt. The only negative they have experienced were antitrust settlements in which they had to pay American Express several billion each. Other than that, these companies are safe as can be. In fact, they may be the safest companies out there because they “win” and get their fees whether the credit card issuer (who loans the money) wins or loses. American Express and Discover have allocated additional capital to cover future losses from an expected rise in defaults on credit card payments.

Between the shuffling on Wall Street, the mergers and acquisitions taking place, you will see changes in ownership of some financial institutions – mainly banking. Bank of America acquired Merrill Lynch, and therefore their credit cards too. Washington Mutual will most likely be bought out too. Although the companies of the bank-issued credit cards may change, the terms on these cards is expected to remain relatively unchanged for quite some time until after the dust settles. Again, you will mainly see this with bank-issued credit cards. For the credit cards issued solely by credit card companies, such as American Express, Discover, Capital One, and others – there’s no more reason now than any other time as these companies merging or being bought out by other companies. In fact, it is less likely they will be bought out as in the past since commercial funding is harder to come by.

The one change you may experience is tighter credit limits. This simply means that the generous credit limits of 10x or 100x your monthly spending may not always be available. For the large majority of Americans, this will have no impact since they never utilize close to their full credit lines anyway.

If you carry a balance, rates may fluctuate depending on your issuer. They are more likely to change if your credit card is issued by a bank for the reasons stated above. In addition, these banks which are experience losses in their other divisions may turn to their profitable credit card divisions in an attempt to make up the slack.  This is not set in stone, but rather an opinion that is predicted by some experts. If this were to happen, they may increase rates. If this is done, you should transfer your balance to any of the number of other credit cards out there.

Across the globe people are increasingly turning to the convenience and security of card payments instead of using cash or checks. Visa International is at the forefront of this explosive growth – generating $3 trillion in sales volume and is accepted in more than 150 countries. Visa’s general manager of the Middle East, Kamran Siddiqi, anticipates massive growth in the region.

Saudi Arabia is the most populated country in the Middle East. It already has the highest number of cards and the biggest potential right now. But in smaller countries such as the United Arab Emirates, 1 out of every 2 people has a Visa card already.

Prior to the collapse of Saddam in 2003, credit cards were not available in Iraq. Visa proved they really are “everywhere you want to be” when shortly after they became the first credit card company ever to process card transactions since economic sanctions were imposed on the country.

The cards are being issued by The Trade Bank of Iraq and as of last year there were over 15,000 issued. However credit cards are a new concept in much of the middle east – people there have never had them, nor have they had credit records. This poses a big problem when it comes to issuing a credit card to someone who has no formal credit score. In Iraq, customers are started off with pre-paid Visa cards and eventually the option of credit becomes available. The picture in this article is an actual photo of one of the Visa billboards which can be found in the streets of Baghdad.

Transitioning from cash to card payments is not only easier for the consumers here, but it also boosts bank deposits. This in turn increases the money they have available to loan out. Card payments leave a paper trail, resulting in increased transparency for financial transactions. Not only does this help fight crime, but its efficiency also supports stronger economic performance overall.