A large percentage of the population is currently struggling to keep up with their debt repayments. To err is human, though, and it is not uncommon for someone to make a simple mistake that ends up costing big bucks! You already know that making a payment a day or two late will result in a late fee – often one that is higher than the minimum amount owed on a credit card. If you make a late payment or skip a payment all together, chances are you will also experience an interest rate increase on that account – as well as any other credit card account you have (under the Universal Default clause).
Even when someone writes checks and makes their payments online before the due dates, the potential for an error is possible – and a simple mathematical error in a checking account can accumulate expensive overdraft fees. If you have ever made an error in your check register, you know how quickly overdraft fees can add up! It takes awhile to receive notification of your error from the bank – and in the meantime, if you do not realize the error has been made, you could continue to spend more money than you have available – particularly since each check or transaction that takes place once a checking account is “out of money” results in an additional overdraft fee ($20 to $40, depending on the bank’s policy).
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Wouldn’t it be wonderful if personal finance courses were a mandatory part of our children’s education? Then we could send them off to college knowing that they wouldn’t be sitting ducks for predatory lenders. As it is, your kids won’t learn much about credit cards or debt unless you teach them yourself. Here are some suggestions for getting your child to take an interest in credit card education.
Use Real Life Examples
The credit card process is mysterious to kids. Most children don’t realize that when you charge a purchase, you have to pay for it later – and then some. The next time you pay your credit card bill, sit down with your child and show them the charges, fees, and interest you have to pay. Show them how the price of the purchase increases when you don’t pay your balance in full every month.
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It seems like times keep getting harder. The cost of living has skyrocketed while wage increases remain sluggish. When it’s hard to make ends meet with paychecks alone, it might be tempting to charge little extras to our credit cards. But is this really such a good idea?
It’s been popularly believed that Americans have been doing just that in the tough financial times of late. But studies have suggested that credit card use is actually on the decline. Whichever theory you hold with, it can’t hurt to educate yourself about the reality of using credit cards to cover your daily expenses.
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In numerous cases, credit card companies issue cards to customers who may be deemed, risky. In many cases they do so at a higher interest rate. Some of these cards still have annual fee’s and additional charges. Now, granted, customers should avoid these cards. However, some customers who want a credit card, will do what they have to in order to get one. So begins the snowball effect.
A customer, who probably could not afford a credit card at those terms in the first place, proceeds to max out the card, get immediately behind on their payments, the fee’s begin to build, and that snowball continues to roll down the hill that did not have to be. Again, it is a shared responsibility. The credit card companies have to be aware of their risks and not issue credit cards for profit potential only. On the other hand, customers who take on credit cards, must accept the responsibility of owning up to their financial obligations.
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Living on credit is a way of life for most of us. When we want to make a purchase but don’t have the money to cover it, that little piece of plastic in our wallet can be all too tempting. Credit cards can make life so much easier – if we use them responsibly. Thoughtless, frivolous spending can lead to a mountain of debt that feels impossible to scale.
If you’ve received many offers of credit in the mail, you know how easy it is to be seduced by the easy terms and other marketing gimmicks on the envelopes. But the truth of these offers is on the inside of the letter, and often written in small print. There you will find hidden fees coupled with high interest rates and rules that can change at the creditor’s whim. Still, it’s hard to refuse a credit card when someone really wants to give you one.
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There has been a recent move to force credit card companies to review and rewrite some of their more controversial practices. Right now, consumers are complaining that they are at the mercy of the industry’s whims. Interest rates change frequently and, sometimes, without any good reason. The companies argue that their own circumstances – with rates of default and delinquency the highest they’ve been in years – make such practices necessary. But customers and their advocates aren’t buying it. The credit card industry takes in billions of dollars each year, critics say, and can afford to treat their customers better.
Some of the practices under review include: universal default, too-short customer notice of changes to terms and conditions, and the retroactive application of new interest rates to a customer’s entire existing balance.
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Credit cards can be your best friend or worst enemy; it all depends on how you use them. Getting the most out of your credit card is often counter-intuitive or requires you to be aware of features that aren’t regularly advertised. This list of credit card hacks will provide you with the info you need to make the most of your credit cards.
1. Price Protection is a Geeks Best Friend – Don’t you hate it when you drop $600 on an iPhone or your now obsolete HD DVD player and it drops in price by a couple hundred bucks a month or two after you buy it? Many credit cards offer a price protection program which will refund you the difference when you purchase an item with the card and you find a better price within 30-90 days.
2. Read the Terms and Conditions – They are not nearly as long as you may think and fairly easy to read. The card companies are not always forthcoming with the details in their advertising and this is where you’ll find the hidden fees and rate information.
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Credit freezes are often confused with fraud alerts, but they are really nothing similar. A fraud alert is when new creditors are alerted that you may have been the victim of fraud, and the creditor is required to take additional verification steps that prove they should be accessing your credit and opening an account for you before they can issue the credit. Fraud alerts also remove you from receiving prescreened offers for insurance and credit.
A credit freeze is something a consumer can place on his or her own credit report – depending on where in the country you live. Some states allow anyone to put a freeze on their credit; while others only allow the victims of identity theft to freeze their credit. Here are other tips that will help you understand the basics of a credit freeze:
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Love them or hate them, credit cards are a part of everyday life in the twenty-first century. But where did they come from? Who thought up the idea behind a little piece of plastic that could be used to make purchases?
Credit has been with us since time immemorial. In the old days, stores would keep open accounts, or “tabs”, for their customers. The customers would take the merchandise they needed, the store owner would mark their purchases in a ledger, and the tab would be paid at a later date.
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Chances are, when you apply for a credit card you will be asked if you want to enroll in additional life and disability insurance. If you don’t choose to enroll, rest assured the credit card company will call you a few months down the road and try to get you again.
You will be told that in case of death, critical illness or disability, your credit card payments will be taken care of, relieving you and your family of an additional burden. All you need to do is pay a certain percentage of your monthly balance as an insurance fee.
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