We’ve all seen those FreeCreditReport.com commercials, but are they really free? Nope. There’s strings attached. They auto-enroll you in a membership which you will be charged a monthly fee unless you cancel beforehand… and there’s nothing funny about paying for something you think is free! The Federal Trade Commission feels the same way, which is why they created their own parody of the Free Credit Report ad campaigns:
Pretty good, huh? But Who is the actor on the freecreditreport.com commercials? His name is Eric Violette – a French-Canadian actor. But did you know he is not even the one singing on the commercials? He is actually lip-syncing. His voice is dubbed over by someone else who doesn’t have an accent. So while you know what he looks like, you actually have never heard his voice before.
p.s. AnnualCreditReport.com is the only site which offers a truly free credit report (once per year).
Perhaps the biggest advocates of banking reform and consumer credit cards rights today is Rep. Carolyn Maloney (D) of New York. It wasn’t too long ago – the 90′s – when banks didn’t even have to disclose to you if their ATM was charging you to use it. In ’99 she created the law that requires all ATMs to warn if you if they are going to charge you fees. But it’s not just debit card protection Maloney has been fighting for during her career. She has been working dilegently for years to pass a credit card bill of rights.
As many of you know the Fed passed their own credit card bill of rights but unfortunately it doesn’t take effect until July 2010. However if Maloney has her way, a bill will be passed for those reforms to go into effect sooner (we’ll keep you posted on the latest developments on this). Meanwhile, even if she is not your representative, you may want to let her know you support her efforts.
However, many on Credit Card Forum are questioning whether or not this reform by congress will even go into effect before the Fed’s credit card bill of rights kick in. (here’s the discussion – What’s the point of this house bill on credit cards?!)
On Credit Card Forum there have been quite a few posts lately about employees abusing their company credit cards (including government credit card abuse). ABC News recently broke a story about a major credit card scam out of New York City for a prostitution ring that operated under the name Davis Investments. For liability reasons, we cannot list the companies and individuals mentioned in the video, but you can watch it yourself to see:
So not only do they have their outrageous perks and million dollar bonuses, but they even have corporate credit cards to pay for any indulgence… even prostitutes!
The economic meltdown is affecting every industry in the country. Amongst the worst hit is the credit industry and people across the country are losing their jobs and are unable to make their payments. The impact of the economic turmoil is seen and felt in the credit card industry as the number of charge-offs reach unprecedented levels. In fact, the credit card charge off rate in the month of February represent an all-time high in Moody’s Credit Card Index’s twenty year history.
What Are Credit Card Charge-Offs?
So, what are credit card charge-offs and why do you need to worry about them? Credit card companies charge-off accounts that have been late in their payments for over 6 months. Most people believe that the credit card charge-off is equivalent to canceling of the credit card balance. They believe that since the credit card company has charge-off their balance, they are not obligated to pay it anymore and that they can simply walk away from their debt.
The Truth About Credit Card Charge-Offs
The shocking truth is that credit card charge offs do not imply that your credit card debt goes away. In fact, it will come to haunt you for at least 7 seven years. Just because your credit card company has written of your balance as a loss or bad debt, does not mean that you are not obliged to pay it back. Every time a credit card company writes off outstanding payment as a bad debt, it reduces their overall profit margin and even reduces their tax liability. To reduce their losses, credit card companies then sell their outstanding debts to a debt collector for a fee. What this implies is that even if the credit card company is not interested in recovering its money from you, the debt collector is. And a debt collector may even sue you to recover the outstanding debt, adding to your financial woes.
It Gets Worse…
There are further implications to credit card charge-offs. Credit card charge-offs appear in your credit report and affect your credit ratings. According to the Fair Credit Reporting Act (FCRA), it stays on your credit report for a period of seven years. This can present huge problems when you are applying for a mortgage, car or a job. You will also need to pay higher charges for amenities like insurance and utilities just because you have a bad credit rating. This entry will continue to reflect in your account even if you clear your outstanding debt. In some cases, some credit card companies may be willing to remove the entry in return for the balance payment, but this option may not always be available.
How to Avoid Credit Card Charge Offs
Whether it is to avoid to manipulative tactics of the debt collector or to preserve your credit rating, it is important for you to avoid credit card charge-offs altogether. The only way to do it is to make sure that you make your minimum payment due every month. For this, it is important that you use your credit card responsibly and ensure that your debt is not unmanageable.
How To Fix Your Credit After a Charge Off
Once your credit card debt (or any debt for that matter) has been charged off, rebuilding credit will unfortunately be an uphill battle. However if you play the game right, it is possible to do, but please realize it won’t happen overnight. There are bad credit credit cards which are specifically created for rebuilding credit. Starting with one to re-establish a good payment history is usually the first step that I recommend to people in this situation.
Not only do thousands of consumers use Credit Card Forum every month, but so do many business owners whom are seeking advice regarding their point-of-sale management. This is no easy task – a business must keep track of customer payments made through cards, cash, checks, and e-checks, and how those transactions correlate to inventories. This can be a headache if your business doesn’t have the right POS system. This is further complicated if you have multiple locations and inventory to manage.
Fortunately, there are some great point of sale software solutions out there to help a business juggle inventory and payments, including credit card processing. This type of software basically operates like an electronic cash register and inventory management system.
IBM came out with the very first POS system; its limited functionality would be considered primitive by today’s standards.. Dillard’s department stores were one of the first major retailers to adapt this technology a year later. Like all technology, over the yeas these systems have greatly evolved. The biggest breakthrough came in ’95 when a company called Run It pioneered online a point of sale system which operated in real-time. Surprisingly, even though they are one of the biggest in the industry, they specifically cater to smaller businesses… independent specialty retailers, whether they have one location or one hundred stores. The best part of their system is it is entirely online based (no software to install) and allows for the merchant to keep track of credit card processing online.
Why is real-time POS tracking important?
With merchant credit card fraud on the rise, it’s important for businesses to track their inventory (including shipping) together with their payments in real-time. By doing so, retailers are far more likely to catch identity theft before the goods have been shipped. So whatever POS system your company uses, make sure to have one with real-time monitoring (preferably web-based) so you can protect yourself. If you use the search function on Credit Card Forum’s homepage, you can find a lot more useful information for business owners related to this.
For those that were around in the 50′s and 60′s, I’m sure you remember the Diner’s Club card – a charge card which was started for a network of restaurants and other travel related services in New York City. Eventually, Diner’s Club International expanded to nations all across the globe, including Diners Club Ecuador.
Diners Club in the United States eventually floundered after American Express, Visa, and MasterCard entered the credit card market. Citigroup eventually took over the company and piggybacked it onto their MasterCard payment network in the US instead of keeping it as a stand alone. However last year Discover Financial Services acquired Diners Club network for only $165 million – a low price in today’s world of multi-billion dollar mergers and acquisitions. You can still open a Diners Club in America, but currently there are no [public] plans to try and revamp the card as a major player here. One of the reasons for this is that the charge card is still flourishing overseas, like the Ecuador Diners Club.
Diner’s Club Ecuador is still a well-known and common card payment method in the country. Whether you are at Quito International Airport, a restaurant in Guayaquil, or a hotel in Manta, there’s a good chance that your Diners Club del Ecuador will be accepted.
1% or 5% cash back credit card? How about a 20% cash back card? While rumors have been buzzing for months about this card, today they were finally put to rest when the “Twenty from American Express” was revealed at a corporate press conference for the new credit card. The card will feature 20% cashback on the first $20,000 in annual purchases in a broad array of categories, including gas, groceries, travel, restaurants, mortgage payments, cosmetic surgery, and more. After that amount, the cashback will be 1%.
The Twenty from American Express will only be available to those very best credit scores (830 and above). The concept behind the card is that there is virtually zero chance that those individuals with that credit score will ever default, and in turn, Amex can afford to reward them with ultra generous awards. Furthermore, American Express stated they hope this card will be used as a stepping stone to recruit new customers for their new division – American Express Mortgage Network – where customers can finance and re-finance their mortgage at “ultra low” rates as low as 2.99%, with a 0% for 12 months introductory offer on new mortgages when cusotmers mention the coupon code “aprilfools” during the application process.
