Say Goodbye to Hidden Credit Card Fees

Direct Banc - The U.S. Senate is currently considering a bill which could possibly save consumers that use credit cards on a regular basis. The Bill, Credit Card Fair Fee Act, sponsored by U.S. Senator Dick Durbin (D-IL), contends that credit card issuers have an unfair advantage in the marketplace based on the fact that they control 40% of retail transactions across the country. The legislation is specifically aimed at the bank’s interchange fees that they charge on every credit card transaction.

These hidden fees charged by the banks are non-negotiable and force retailers to pass the charges along to the consumer. Under Durban’s bill, retailers would have the option to engage in collective negotiations (i.e., by forming buying unions) in an attempt to obtain lower interchange fees. Reportedly, but unconfirmed, Wal-Mart and other giant retailers have the power to negotiate lower interchange fees giving them an unfair advantage in the marketplace.

Interchange fees are charged directly to the retailer from the bank that issues the credit card, they’re usually around 2%. The issuing banks then kick up a portion of that fee to the brand name that is on the card, i.e. MasterCard or Visa. These fees are then deducted from the funds the retailer receives for the charges the consumer makes. All of these fees are hidden from the consumer, non-negotiable and have continued to rise in spite of a steady increase in credit card usage over the years.

Interchange fees were originally designed to offset the processing fees that banks incur from the extra work of “processing” the transactions. The portion that MasterCard or Visa receives was designed to cover marketing costs and a profit for the company. These fees now represent huge profit margins for the banks that issue the credit cards. All of these fees are eventually passed along to the consumer by the retailer who’s held hostage by the banks that charge the fees. If Mr. Durban has his way, these fees will become negotiable for smaller retailers and theoretically reduce credit card costs for consumers.

Opponents to the bill, Keith Nelson, the principal deputy assistant attorney general, feel that the bill, in its entirety, will actually stifle competition and result in even higher fees to the consumer. The portion of the bill that he is referring to is the clause that would set up a three person regulatory commission to arbitrate prices should retailers and the credit card companies reach an impasse in their negotiations. He contends that this would amount to government price fixing and ultimately result in higher fees for the consumer as a result of the arbitration.

Direct Banc, an online credit card authority,believes that both sides are right and wrong with their assessment of how to go about fixing this problem. Transparency in the marketplace is a fantastic idea; it gives consumers a clear picture of the real costs that is associated with using a credit card. Banks fear that too much transparency will curb the use of credit cards which will dramatically affect their bottom line. On the other hand, government arbitration will cause banks to negotiate artificially higher prices than the market dictates in expectation of market changes or increased processing expenses.

The way we see it, the answer is pretty simple. The bill should only allow the brand names i.e. Mastercard, Visa, and Discover, to charge an interchange fee and mandate that this fee be shown on the transaction receipt. Then, prohibit the card issuers (the banks) from charging any “processing fees” on the retail transaction. This will force the banks to pass along their processing costs and profits directly to the consumers in the form of a fee that is printed clearly on their statement. By doing this, consumers will see exactly what their credit card usage costs them. Once banks are forced to show the hidden fees, this will create competition between the banks which will help lower fees for credit card customers.

Author : Aubrey Clark is a writer and editor for Direct Banc, a directory of low interest rate credit cards that specializes in finding consumers great credit cards for fair credit. Mr. Clark lives in Atlanta, Georgia with his wife and four children

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Debt Consolidation Loan : Who Needs It?

A debt consolidation loan is, as its name suggests a loan that will consolidate all of your debts into one tidy package. The interest rate may be the same as the rates on the existing loans, or it may be somewhat less.

Defining the terms

Make certain that you have reviewed all the terms and clauses included in the debt consolidation loan before signing on the dotted line. For example, you should review the loan length, the interest rate, whether there is a prepayment penalty, and such terms as variable rate, fixed rate and balloon payment. If your consolidation loan applies to existing credit card debt, you should determine whether your cards must be surrendered to get the loan, and whether the balances are transferred to a new card, paid off, or whether you receive the cash and must do the payoffs yourself.

Benefits

The benefit for obtaining a debt consolidation loan is primarily to save money, but there are other advantages for those who reduce multiple debts to one payment monthly. You can probably save money on the interest rate, particularly if consolidating the debt means you can obtain a lower rate. Another advantage is the benefit of a single payment with a regular due date. You don't have to spend much time paying bills. Just set up an automatic payment and your bill paying is la minor part of your monthly duties. This type of regular prompt payment will make your credit report look better and better



Avoiding the pitfalls

For all the benefits that a debt consolidation loan can offer an individual, there are several drawbacks that you should be aware of before choosing to borrow additional money to solve your debt problems. If you are using this type of loan to bail you out from maxed out credit cards, you should certainly look at changing your spending habits in conjunction with the loan, or you can quickly end up in even more problems with larger debts. Consider getting rid of all your credit cards and switch to one debit card. Don't justify consistent overspending as an emergency. Create a budget and stick to it.

Find the best deal

It seems that finding the best deal would be logical, but many individuals looking for a debt consolidation loan take the first offer that they see and run with it. Often, had they looked further, they would have been able to obtain better terms, better interest rate and other accouterments of the loan. Take the time to review several loans and make certain to ask questions about each of the variables that affect the amount of your monthly payment. You won't want to keep applying and applying, as this can negatively affect your credit score, making the terms less desirable each time.

Reviewing interest rates

The main feature of your debt consolidation loan in most instances is the interest rate you will be charged during the duration of the loan period. Usually the rate of interest that the borrower is assessed depends on the credit report of the borrower. Credit scores higher than 700 make it easier to obtain the loan and generally means the terms of the loan are much more favorable to the buyer.

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Ready to Refinance Your Mortgage? Here Are a Few Tips.

The real estate market in many areas of the country is finally becoming less frothy and settling down. If you bought a home during that turbulent time you may not have gotten the best mortgage rates. Additionally home values have changed. Many areas are facing a down trending in home values meaning that their loan to equity ratio has changed for the worse.

It may be time to refinance that loan. Here are a few tips.

Be realistic as what can be accomplished and what can't. Most mortgage lenders require that the appraised value of the home be at least 20% higher than the mortgage. That gives them a cushion in case values drop. The appraisal is based on what comparable homes in your neighborhood have sold for. That's different than what homes are listed for sale at.

In most areas the selling price of a home and the square footage are public information. It may take a bit of digging to find homes that sold in your neighborhood but it will give you a better basis as to what you can expect. If you have a real estate agent for a friend they can easily provide the information for you.

While the appraisal is based mostly on square footage, an attractive, clean house with well maintained landscaping can't hurt. Get rid of clutter. And be aware of any peculiar odors.

Check your credit scores. Don't be unpleasantly surprised. If there are errors, such as a debt showing up that has been paid, get it cleared up before applying for a new mortgage. There is refinancing available for those with less than stellar credit but it's not at the low rates you might be expecting. You can check your credit scores online but you do have to sign up and provide some personal information. It's not instantaneous. Your identity has to be confirmed before you have access to your reports.

Don't wait until the last minute. Prepare the materials you think you'll need ahead of time. Most mortgage lenders want verification of income through tax returns, or paycheck stubs. They'll also want copies of bank and checking accounts, stocks, bonds, and other assets. If you're considering a major purchase put it off until you've refinanced your mortgage. Don't use your credit card or savings to finance that purchase.

Know what you want. There are so many alternatives from the standard 30 year mortgage. Don't let yourself be talked into terms which may sound good in the short term such as an interest only loan, but may turn out to be trouble in the long term. Refinance at a level that's comfortable for you. You may think that taking out a loan that is as high as possible is the best course of action, but remember you'll have a bigger monthly payment.

Shop around and compare mortgage lenders before you get mortgage quotes. Check the fees they require, time it takes, application procedures, points, and interest rates. It's amazing the variance you can find.

Author : Dee Power is the author of several nonfiction books. Want to know more about mortgage quotes? You'll get an idea of mortgage rates Learn more about mortgages and loans

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Credit Card Secrets.

The credit card industry is to hide behind many secrets that help to make one of the most profitable industries in this country today. Below are ten secrets all consumers must know before concluding an agreement with a credit society.

1. Advance of fresh money almost all the companies of credit costs transaction costs as well as financing costs for all the cash advances a client may receive. The transaction costs are known to be as high as 2,5% of the advance. Keep in mind that the interest is calculated from the day advance takes place.

2. Introduction Teaser rate monitor the introductory too common or teaser rate more credit card enterprises will offer you. While you can receive a complimentary offer with a low rate that is probably not in your interest. Reason being, once the low rate period of introduction ends, you may be subject to a much higher rate on articles bought to the original rate of launch. It is when creditors are beginning to reap the benefits of the low rate offers.

3. Interest Backdating this occurs when a creditor charges you interest of the day that you buy a point with their credit card. The problem with this scenario is the creditor is charging you interest when they have not even paid the seller in your name.

4. Right to offset or compensation most consumers do not realize that when they have a personal bank account and also a credit card with the same bank that they may be submitted to the compensation or compensation if they default on the credit card. In short, the bank may be able to deduct funds from your personal bank account and apply to the offender credit card. Read the fine print when your bank request you do you want also to apply for our credit card .

5. Shortened expiry dates of many banks have shortened the grace period of 25 days 20 days. It is usually for customers who pay their entire bill each month. If you are in this category request a 25 grace period.

6. Two billing Cycle if you have neglected to pay your monthly invoice in full and resort to carry a balance of the month to month you can be submitted to two billing cycle . With this type of calculation of interest to the creditor will charge you two months of value of interest for the first month that you did not fully paying your balance.

7. Toward the end and more-limit costs both late charges and more-limit costs have increased regularly during the last ten years. Late Charges are usually valued at $39 whenever you are past due to your credit card accounts. Some companies have promulgated cut times during the day for when the payment can be received without being charged, a late charges. This makes it easier for the society of credit to justify a late charges. As for the more costs limit it is usually set at $39 whenever your credit card goes above given the credit limit. Too often the consumers find their costs of delay has caused the account to go in the course of the credit limit. This is equal to $79, but do not forget that the creditor will also to impose a financial burden-which is set at their discretion.

8. Erroneous usury rate most consumers have no idea that credit card companies located in the two Delaware and South Dakota are free to make pay rates that they better convenience. It is because the various legislature in the two states eliminated the cap on the usurious interest rates in the 1980S. It is a no brainer why most credit societies are located in one of those states. Now, it should make sense why some consumers are evaluated as high as 40% APR and some even higher.

9. Benefits? I thought that I have had some. Buyer beware...at a time well known advantages offered by most credit card enterprises are cutting or are all together disappear from these so-called major credit card offers received by the post office.

10. Minimum Notice change the creditors have developed a method of including articles in their customers contracts that enable them to adjust your interest rate for any reason, and at any time. The only condition is that they must give to the client 15 days notice. If you make a purchase 5% interest that they may go back and change the rate. Can you imagine if other industries where authorized to engage in this fraudulent practice?

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Compare credit cards -- tips and tricks

When you choose credit card, it is necessary for you to see all the points that affects it. There are lots of credit cards available in the market right now and they all defer in fees, charges and features to be had. It is really important to choose the better card among a bunch of credit cards and that credit card should also be affordable. You have to pay for comparing credit cards if you don’t choose the best one. There may be more than one credit card that suit your requirements because all the credit cards company provide almost the same services to their customers. The things to look for when you compare credit cards will all be in the fine print of the terms and conditions and to compare credit cards effectively and fully you will need to visit a dedicated website.
All the credit cards charge you on off charges for late payments, going over your credit limit, returned payments. For example if your check bounces or a direct debit is declined for lack of funds, fees for cash withdrawals, Balance transfer fees, fees or commission on overseas transactions. Such charges are to be given when you use a credit card. Look for the credit card which charge you less and having less interest rate.
It is good for you to compare credit cards online. A well-disguised but no less heavy fee is in the payment allocation hierarchy. Be sure to compare credit card provider rates for what type of money you will be using. Cash withdrawals are generally most expensive and usually last to be repaid while balance transfers at zero percent are cheapest but always paid off first.
Work on your credit fitness then compare credit cards? A good credit score is vitally important if you are to successfully apply for a new credit card and not waste time in credit card comparison and application.
Late or missed repayments on any loan or credit are serious black eyes on the face of your credit score. Direct debits are the surest way to duck these blows to your credit score. Before you even start to compare credit cards you should address any outstanding credit score issues by getting your own credit reference check done. Here are some sensible precautions to take in order to avoid having your credit card application rejected.
Cancel any credit cards that you no longer use. Credit card providers are increasingly looking at the total credit available applicants rather than just focusing on outstanding debt. Ensure you are on the electoral register at your current address. Credit card companies like stability.

Compare credit cards in advance of application so you only apply for cards you are sure of getting. Each application for credit leaves a fingerprint on your credit file and this is another black eye.
When you come to compare credit cards it soon becomes apparent that there are as many deals as there are people looking for a credit card.

About Author : Max Info --> You can visit our web site for more information about how to Compare credit cards online

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Tips on Getting the Right Credit Card Offers

Because of the many credit card offers banks and issuers put on the table, it is quite easy for any consumer to be confused. More often than not, consumers are not so much into studying the terms and conditions of the contract they are signing. Before they know it, they are already in for credit card contract that would trap them for many years. Many have fallen in this pit and this is the major contributor to the credit card crunch that the whole US has been experiencing for years.

The Obama administration is already pulling the strings on banks and issuers to control the rising credit card problem
through the newly enacted Credit Card bill. The bill aims to protect consumers from so-called abuses cloaked in the terms and conditions that banking institutions have been implement for many years. With the bill ready to put a leash on the credit card industry in the US, positive changes that would benefit consumers are said to have been a long time coming.

On the other hand, the Credit Card reform bill will be futile if consumers would not practice informed and smart decisions regarding credit card offers. Using credit cards responsibly and making due payments on time are just some of the principal ways to maintain a good standing credit. But these are not enough. Consumers should also implement consistent proactive measures to keep a clean credit slate.

One of these proactive ways would be to proper budgeting. It is fact that in the past years, there has been an intensifying dependence on credit cards among Americans. It came to a point when cardholders are already using plastic in paying for even the smallest purchases. This practice should be altered if regaining good credit is a major objective. Through budgeting, consumers would know where their money goes. This would help them find out the best credit card offer that would meet their needs. Instead of making wrong decisions and be buried in debt in the end, it is best to think ahead of the game.

Another important way for consumers to protect themselves from possible credit card abuse is to study the terms and conditions of the contract carefully. Many have drowned in debt because they did not know the process and conditions by which banks increase interest rates and penalties. Most of these victims are also not aware on how to maximize their rewards.

Getting the right credit card offers is the solution to rise above the drowning economy. Know your needs and apply for the offer that suit your financial situations. Make sure to do your research about the benefits and disadvantages that signing up for a credit card would bring. Being informed about how you can get the upper hand and avoid the downsides of credit card offers sure serves as one of the greatest weapons you can have as a consumer.

About Author :

A Computer Engineering graduate and loves to travel. Reading current news in the internet is one of his past times. Taking pictures of the things around him fully satisfies him. He loves to play badminton and his favorite pets are cats. You may want to visit the Credit Card Offer website for more inquiries. This will really help you get great ideas which credit card you should choose.

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Credit Cards Shamed Into Cutting Charges

The Competition Commission one of the governments watchdogs, has at last moved to shame credit cards in to cutting their charges. The long overdue move comes after the Commission concluded that the credit card industry was overcharging customers between £55 and £100 million each year through excessive interest rates and other charges. And this has been going on for a least 3 years!

The main culprits by far are store cards where interest rates are as high as 30.9% - even though the Bank of England's base rate stands at just 4.5%. The worst culprits were TJ Hughes and the Faith Card followed by Owen & Owen. You can find them heading the Table of Shame shown below in this article.

The commission has also come down on high penalty charges for missed or late payments and Payment Protection Insurance. Average penalty charges are currently £15 per event – but the Commission is also right to argue that these charges are excessive.

As for Payment Protection Insurance, the Commission has joined the consumer body “Which”, the National Consumer Council and indeed the Financial Services Authority in concluding that whilst this insurance can be a good idea, credit card operators have abused it. The Commission has therefore decreed that Payment Protection Insurance must no longer be sold in a combined package with a credit card; it must always be purchased as a separate stand alone transaction. That'll be good news for the Internet where many of the cheapest Payment Protection Insurance deals can be found. With premium savings of up to 60% in comparison with credit card and loan packed arrangements, business on the Internet will flourish.

So what do the new rules from the Competition Commission say? The five main changes are:

• If a credit card charges more than 25% interest, it must carry a prominent warning that there are cheaper ways to borrow. This warnings must be displayed on every monthly statement.

• The interest rate and penalty charges must me clearly displayed on the front page of each monthly statement.

• The monthly statement must warn of the consequences in terms of higher interest charges, of just paying the minimum monthly repayment.

• Credit Cards must offer every customer the option of automatically clearing their monthly balance each month by direct debit. These direct debits would avoid any possibility of interest charges and late payment penalties.

• Credit Card operators must not sell Payment Protection Insurance in a combined package with credit cards. The insurance must be sold as a separate and optional transaction that enable purchasers to see the true cost.

These new rules seem destined to shame retailers into slashing their charges – that's not to say that 25% pa interest is a snip! Main line credit cards issued by banks are currently charging around 14% to 18% and we think that's too high!

Indeed, between 80% and 90% of store cards held by some 11.5 million customers charge more than 25%. But some retailers have jumped the gun realising that their sky-high charges couldn't last forever. Three store cards have already taken steps to trim back. Harvey Nichols has cut their interest from 28.5% to 21.9%, River Island has trimmed down from 29.9% to17.9% and Monsoon from 29.9% to 18.9%.

But who are the bad boys? Here is our Table of Shame:

TJ Hughes 30.9%
Faith Card 30.9%
Owen & Owen 30.7%
Burtons 29.9%
Dorothy Perkins 29.9%
East 29.9%
Evans 29.9%
HMV 29.9%
JD Sports 29.9%
Kwik Fit 29.9%
La Senza 29.9%
Laura Ashley 29.9%
Miss Selfridge 29.9%
Russell & Bromley 29.9%
Ted baker 29.9%
Topshop/Topmam 29.9%
Wallis 29.9%
Warehouse 29.9%
House of Frazer 29.3%
Bhs Gold Card 29.0%
Habitat 29.0%
Oasis 29.0%
Harrods 28.9%
Fenwicks 27.9%
Selfridges 27.6%
Bentalls 27.2%
Jaeger 27.1%
B&Q 26.8%
French Connection 26.8%
Argos 25.9%
Homebase 25.9%
New Look 25.9%

Note: Some of these cards do offer lower interest rates for payment by Direct Debits. Source: Competition Commission/Moneyfacts March 2006

These credit cards are operated by a number of large finance companies, the largest being GE Capital the American giant. The profits are shared between the card operator and the retailer who is often incentivised by being awarded a higher share of the profit if they hit certain key debt thresholds. This has encouraged stores to put immense pressure on shoppers to take cards out.

The Chairman of the House of Commons Treasury Committee, John McFall has accused retailers of putting profit before customers saying “If you buy a suit from one of the stores then you would expect the retailer to ensure that it was well made and reasonably priced. These principles do not seem to apply to their store cards”.

Lets all hope that the action taken by the Competition Committee does the trick!

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How to release your debt?

You can blame regardless of your financial situation. If your bills were consolidated and you're still making the payments, make sure not to add new accounts. The accumulation of new bills, the worst mistake you can do, because you can not progress. Always plan your budget and use the rest of the money to pay your bills.

After authorization of the payment of your credit cards to inform the concerned businesses to close your account you do not now. The key to your life and living a debt free person. Visit the credit card Counselors advice to prevent other bills in the future and the knowledge of how and when the use of credit cards.

Prepare a payment plan and organize how to clear the bill. Double your monthly payments are possible if you are able to invoices faster. Avoid luxury and instead of adding that the money from your savings. Reduce your spending and buy only what you need on a monthly basis. Have your own life and care not to imitate what others do, because they can be misleading.

Your monthly budget may never be higher than what you deserve is to prevent other financial problems. Do not forget the rest of the money or a better use that will lead to more revenue. Your income should be your guide for the budget to promote proper use of your finances. Live a simple life does not mean that your arm, thus leaving a life that you can afford at any time if you really want is a free person.

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Credit Card Tips

There are credit card tips, and then there are credit card secrets. These latter are little known tricks that credit card companies play on you, as well as tricks you can use to get rid of fees and pay off your debt sooner. Here are some of the best credit card tips, tricks and secrets.

1. You can get rid of annual fees. If you have good credit, just call and ask for fee to be removed. This worked on three out of four cards I called on, and I just dumped the other. Of course the threat to do the same with the others is what got the fees dropped.

2. Read the fine print, and pay on time. Be aware that under "universal default" rules, if you are late on one card, your interest rate can be increased on other cards as well. They love to get you with this one.

3. Watch for changing due dates. This is a trick used by some credit card companies to get you to pay late, so they can collect the late fees. They will also be able to raise your rate, and the rate on other cards you may have. Don't assume that your payment due date will always be the same.

4. Use promotional checks with care. Transferring balances to 0 interest promotions can be a good idea, but watch out for those that charge "balance transfer fees." Transferring a balance that you were going to pay off soon anyhow will just cost you more if there is a 3% transfer fee.

5. Try credit unions for cards. Their cards usually have lower rates. My credit union Visa rate hasn't been over 10% in years, and I have zero liability for unauthorized charges.

6. Ask to have the late fee waived. If you've never been late before, some credit card companies will waive a late fee - but only if you ask. Why not try it? All it takes is a phone call.

7. Pay in full every month. Credit cards are for convenience, not for hiding the true cost of things. Don't pay interest - just pay the balance every month.

8. Don't buy the credit card insurance. This typically stops your payments when you are injured or unemployed. It is one of the most over-priced insurances out there, and doesn't eliminate the debt, but just delays it.

9. Avoid credit card security insurance. It pays for unauthorized charges when your card is stolen, but you are only liable for the first $50 if you report the theft in any case, and many cards already have 0 liability.

10. Pay high-interest cards first to reduce credit card debt. If you have $200 monthly to apply to your credit card debt, pay only the minimums only on all cards but the card with the highest interest rate. Put all the rest of the money towards that one. Once that one is paid off, work on the next highest. This is the fastest way to get rid of your credit card debt, and the most important of these credit card tips.

Author: Steve Gillman

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