Most of us know someone with a credit card and someone who smokes. If you aren’t a smoker yourself, you may look at those people in disgust, point a finger and make some rude noise; like coughing extremely loud when you walk through a cigarette smoke cloud. It is less common to find someone who doesn’t have a credit card, and the commonalities between the two may seem like a stretch, but there are more than you think.

1) Both are known to cause heart failure: I heard a story once where a guy opened his credit card bill after his ex-wife went on a shopping spree and DIED. Ok, this was made up, but you get my point. And do I really need to add anything here about cigarettes?

2) They are made from the same chemicals: I just wanted to say that because it is true. But really it would be much better to roll your tobacco in a dollar bill than to smoke cigarettes, especially if you buy them with a credit card. It would be much cheaper and at least you would know where the money went.

3) They both fit conveniently in your pocket: Who ever thought of this was a genius or just messed up. Let’s make the two unhealthiest items in our culture mobile. *Shakes head*

4) Burn a hole in your pocket: It seems that once we actually have a credit card we feel like we have to use it. If you put a lit cigarette in your pocket, it would literally burn a hole. The simple fix to both of these questions is to not put them in your pocket in the first place.

5) You don’t really talk about either: No one really talks about how much debt they have nor do people talk about how much they actually smoke. In either case it would be a great idea to start this conversation. There is HELP, but you have to ask for it. The first step to getting help is admitting you have a problem.

6) Easier to get at bigger chains: The bigger the institution, the easier it is to get a credit card. The same goes for cigarettes. The cashier selling you the item doesn’t care how it affects your health or your life. Imagine if the person was allowed to have a conscious and could say, “Sir/Ma’am, I see you are in debt or have a tumor and I don’t think this the best option for you.”

7) They are learned habits: No one is born a smoker or a credit card abuser. They are typically introduced to the bad behaviors from parents, close relatives, or friends.

 8) Both are addicting: Once you start the habit, it is hard to stop. Credit card issues are much more difficult to stop. Try going cold turkey with a credit card company and you end up in jail. Go cold turkey with cigarettes and you have a huge headache for a few days. I prefer the headache over spending time in a jail cell.

9) Thrown out without much thought: People typically use their credit card as their primary source of money without thinking if they have the funds to back up the money they are spending. Likewise, people who smoke just throw out their butts without thinking. I mean honestly how do you take something that is already in your hand an intentionally throw it on the ground when the trash can is RIGHT THERE? I don’t get it.

10) There are warnings before use: Every time you swipe your credit card the little screen states “Do you want to purchase this with your credit card?” The answer should be no, but we do it anyway. And cigarettes have that really fun fact on every pack about how you will die or you will kill someone else, but that doesn’t stop people.

What amazes me the most about cigarettes and credit cards is that the information on not starting to use them is everywhere. You can’t listen to five songs on the radio without hearing a debt relief commercial or a stop smoking campaign, yet as a society we keep pumping money into both of these horrible systems.

These are only ten ways of how cigarettes and credit cards are similar and I would love to hear other ways you might see.

Tim is a writes about personal finance and small business start-up. He is also a marketer for cabledeals.org. If you enjoyed this article and want to see more follow him on Twitter @TimlCooley.

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It doesn’t matter how many credit cards you have or how responsible you try to be with them, chances are that along the way you’ll make a mistake. Knowing about common credit card mistakes before you make them can help you avoid pitfalls and use your credit cards more wisely. Here are three common credit card mistakes people make and how you can avoid them:

1. Carrying a High Balance

Carrying a high balance on any of your credit cards can spell major trouble, yet 14% of Americans, according to the Experian National Score Index Study from 2007, use more than 50% of their credit limit on their cards. This can be dangerous, since every percentage point closer to 100% of your credit limit puts you closer to maxing out your cards – and paying major fees to do it!

Also, carrying a high balance on your credit cards spells bad news for your credit score. Banks are seriously concerned with how much revolving debt you carry compared with how much you’re allowed to carry – your debt-to-credit ratio. The lower that ratio is, the better your credit score will be. This is a huge advantage for credit card users, since it can net them big interest rate savings on future card offers!

If you’re carrying close to or over a 50% balance on your credit cards, it’s an easy mistake to fix. Choose the card with the highest debt-to-credit ratio, and start paying it off as much as you can each month. In the meantime, stop using cards for a while if at all possible. Once you’ve gotten that card under 50%, work on the next one. Taking these balances down can lower monthly payments on many types of payment plans, so it can also leave you a bit more breathing room in your monthly budget!

2. Just Paying the Minimum Balance

It’s easy to look at your monthly credit card statement and think, “Good thing I don’t have to pay more than $X this month!” Write a check for your minimum payment, and you’re good to go – or so you think. Making the minimum payment is a growing problem among younger credit card users. Of those between 18 and 29, the FINRA Investor Education Foundation says that about 41% make only the minimum payment sometimes. While making the minimum payment one month when money is tight isn’t going to kill you, only paying the minimum as a habit is a really bad idea.

Here’s why.

Let’s say you get a great credit card deal with a 12.5% interest rate, which is actually pretty good when it comes to a card. You carry a balance of $3,000 – not a whole lot, but enough that you’re going to have to work hard to pay it off quickly. If you’re on the common interest plus 1% of balance payment plan, your minimum payment will be $60 per month. It will take you 208 months – 17.3 years! – to pay off that measly $3,000. Plus, you’ll pay $2,544.87 in interest. And that’s with a decent interest rate!

What happens when you add just $10 extra to your monthly payment? You’ll knock your pay-off time to 57 months – 4.75 years. You’ll still pay $936.93 in interest, adding almost a third to the total cost of purchases made on that credit card. Bump your monthly payments up to $80 – just an extra $20 a month – and you’ll pay off the card in four years even and pay $777.87 in interest.

As you can see, just a few dollars over your minimum a month can make a huge difference in the total interest you pay and the time it takes to pay off your credit cards. Check out online payment calculators to see what you should be paying per month to avoid outrageous interest charges and incredibly long payment times. Who can’t scrounge up an extra ten or twenty bucks a month, after all?

3. Using Credit Cards for Necessary Expenses and Failing to Pay Off the Balance

This is really two mistakes in one. Really, you shouldn’t be using your credit card to pay for everyday necessities like groceries, gas, and rent. Those things need to come out of your monthly budget, based on your actual income. Otherwise, you risk paying much, much more in the long run. As you saw in the example above, you can end up paying almost twice as much as the sticker price for items you put on a credit card if you aren’t careful! Also, failing to pay off the balance on your card when you can is a huge mistake, and it can cost you hundreds or thousands of dollars in the long run.

So, here’s our advice: First, if you can avoid it, don’t put basic monthly expenses on the credit card. If you’re keeping a credit card for an emergency, like a month when you don’t have enough work to pay the bills, you should save up a cash emergency fund and try to avoid tapping the credit for these problems. On the other hand, if you get really great benefits – like cash back or frequent flyer miles you know you’ll use – for using credit for everyday items, then use it. Just make sure that you’re actually following your budget so you’ll be able to pay off the credit card balance in full every month. Doing this means you shouldn’t rack up any charges at all, so it’s like paying cash – only with more benefits!

Being Smart with Your Cards

Being smart with your credit cards means using them when you need to, mainly for large or special items you need to finance. It means paying more than your minimums, carrying a low balance, and having a cash emergency fund instead of a credit card for emergencies. Avoiding these three mistakes can help you avoid a low credit score, loads of debt, and months of financial worry!

Debra Wilson is a social media advocate at CreditDonkey, where you can compare credit cards to avoid pitfalls and mistakes.
 

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Let’s be clear – when you use them properly, credit cards can be the cheapest way to borrow money. However, there are plenty of pitfalls. Make a few bad decisions or take your eye off the ball and their benefits can significantly lessen. Savvy management is the key when it comes to making a credit card work hard for you. Here’s some of the most common mistakes – and how to avoid them.

1. Using cards to supplement everyday spending

Credit cards can be useful for spreading the cost of big purchases, there are even cashback credit cards which reward you for paying by card. However, it’s easy to fall into the trap of using them to supplement your income, especially when household costs rise faster than your income. Spending more on your credit card than your monthly income is fine, as long as you’ve got a plan of how and when you’ll pay back what you owe.

2. Failing to hit the minimum monthly repayment

Always check this as soon as you take out a credit card and stick to it religiously. Failing to repay the minimum could end up wiping out any of the savings you’re making through 0% Balance Transfer deals on purchases or cashback offers.

3. Staying too loyal

Unlike other areas of life, loyalty is rarely rewarded in the credit card world. The best deals are usually available to new customers, regardless of whether you’ve been a model customer who has always paid on time and in full. So if you’ve taken out a card due to its generous 0% deal on purchases or balance transfers, circle the date in your diary when the introductory offer ends.

4. Choosing the wrong type of card

When the time comes to compare credit cards, think long and hard about what it is you want from the card. If you’re looking to carry out a balance transfer to reduce your spending on outstanding balances, make sure you go for the one with the longest 0% deal, rather than one that tempts you with rewards that you may not even end up using.

5. Don’t apply for too many at once

Be careful with your credit card applications and certainly don’t carry more than a couple at any one time, as this can affect your credit rating, especially if the hassle of managing more than one card means you end up missing your repayment date, incurring a charge and losing your 0% deal.

Last year people started getting a lot of credit card offers in the mail again. For some, I’m sure they thought that life was getting back to normal and that the economy was making its way back to where it had been before. Turns out not only is that not true, but the credit card companies are pretty sneaky in what they’re trying to do.

by The Consumerist

If you’ve paid any attention to most of the offers, it looks like you’re being offered a shot at getting a business credit card. This seems to be occurring whether you’re a business or not. Some people might not think it matters; after all, the initial interest rates are low, many cards say they’re waiving the first year’s fee, and they’re also still offering free interest balance transfers for six months or so.

What’s the problem then? The problem is that the credit card laws that were passed last year were for consumer credit cards. Business credit cards aren’t covered under the law, and there’s no specific wording on what constitutes a business credit card. Therefore, credit card vendors can market business credit cards to pretty much anyone.

What does this mean to you, the consumer? Just like before, you need to be cautious whenever you’re looking at credit card offers. Without the protection of the credit card act, your interest rates can go up at any time, your fees could go up at any time, and don’t even think about missing a payment. Remember, it’s not always wise to put in for every credit card offer you get.

Copyright secured by Digiprove © 2011 Mitch Mitchell

The last time I talked to my grandma, she started telling stories about raising eight kids on a factory worker’s income. With less than $20,000 a year, my grandparents traveled across the country, helped five kids through college and bought a vacation cottage. And they did it all without a credit card.

from “A History of Credit Cards”

Considering that she was raising a family during the 1950s and 60s, my grandma was in the minority when it came to credit card use at that time. The ease of using a single card to make all purchases led to the immense popularity of credit cards during this time.

The Decade of Rock & Roll, Social Revolution and Plastic

The idea of “paying with plastic” didn’t exist until the dawn of the 60s. Before 1959, the materials credit cards were made of ranged from metal to celluloid to cardboard. This evolution of materials also spawned the birth of modern consumer credit with the first revolving-credit card.

Bank of America introduced the first credit card that allowed you to make minimum payments in 1959. The card, which was originally introduced in California, became wildly popular and led to a number of other milestones in the credit card industry:

• 1965: Bank of America expanded the reach of its BankAmericard by using licensing agreements that allowed other banks to issue Bank of America credit cards.

• 1966: With the collaboration of 14 banks, the InterBank Card Association created a national credit card system to exchange information on credit card transactions.

• 1969: MasterCharge became an industry leader when it merged with another credit card, called the Everything Card.

By the end of the 1960s, three of today’s leading credit card providers had solidified their position in the industry. While American Express kept its name, MasterCharge eventually became MasterCard and BankAmericard became VISA.

50 Years Later…

The popularity of credit cards in the 1960s led to increased credit card spending every year in that decade. Unlike current credit cards, these had relatively high minimum payments, low credit limits and fairly low interest rates. This resulted in a simple system and few people with bad credit.

Today, very little about the credit card industry is simple. Cards range from the coveted Centurion Card (the black titanium American Express card) to starter credit cards for college students to credit cards for bad credit. Interest rates can be astonishingly high and hidden fees seem to catch even the most credit savvy off-guard.

Even though the popularity of credit cards took off in the 1960s, my grandma and grandpa didn’t get their first card until the 1980s when they started traveling internationally. By then, the novelty of minimum payments had worn off and the realities of debt had become more common.

By living within their means, however, my grandparents were able to avoid bad credit during a decade when credit cards seemed to hold all the answers in a rapidly growing material world.

Ellen S. is proficient in all things personal finance, and frequently writes about credit card offers and the road to financial freedom.

Copyright secured by Digiprove © 2011 Mitch Mitchell

College can be an extremely exciting time for most students. It’s their first time away from home, and they’re anxious to get to their new classes and discover everything that life has in store for them. Unfortunately, one of the most common things that life has in store for them are brand-new credit cards. A lot of people might be surprised, but credit card companies actually love college students. The reason why they love college students is because for one thing, college students are 18 years of age.

When a person applies for a credit card, they have to be 18, because then they can be responsible for a credit card contract. A new college student is not only 18, but they have no debt. By the same token, a college student has a ton of things that they need to buy, and that they need to buy right away. For example, they need to buy a books, pencils, pens, and computer supplies.

Then again, there are always those unexpected expenses such as parking fees and lab fees. Or sometimes they might find themselves short of money when they want to get something to eat, or when they need personal supplies or groceries. Guess what? All of these can be purchased on a bright shiny new credit card!

When one thinks about all of the expenses that are expected and unexpected for a college student, it’s no wonder that credit card companies absolutely salivate when they see a new college student.

The one thing that college students have going for them is that they have no credit history. The thing that they have working against them, however, is that they don’t have the life experience and know-how to manage credit card debt. As such, they see credit cards as free money. All they have to do is use the card wherever they want to go, and get whatever they want. They don’t have to pay for it right then and there like they would with cash.

Yes, the college student understands that these are debts that need to be paid for, but that’s not what’s in the front of their minds. The thing that is on their mind is get what I need now, or get what I want now, and I’ll pay for it later.

Unfortunately, later usually doesn’t come. College students aren’t the wealthiest people, and they will find that despite their good intentions, they simply don’t have the money to pay their bills. Meanwhile, credit card companies already know this about college students, yet they continue to offer them credit cards. Sadly, by the end of a college student’s first year, they can find themselves in trouble with credit card debt.

So, what is a college student to do that has two or three more years left of college, and yet finds themselves buried up to their eyeballs in credit card debt? How can they save money, or make the money that they have stretch so that they can meet their basic needs, and still manage their credit card debt? There are a variety of things that a college student can do to make sure that they are meeting their personal responsibilities.

One thing that they can do is look at any areas of spending that are unnecessary. For example, college students are notorious for eating out. This means pizza, restaurants, bars and pubs. If a college student finds that they can’t manage their credit card debt, then all of these outside expenses need to stop immediately.

This will be hard for them at first, because they want to hang out with their friends, or be able to buy whatever they want. However, if they put a stop to carousing, this teaches them a really great lesson about delayed gratification. The college student will have to learn to manage a food budget that gets spent in the cafeteria. Or they learn how to cook foods in their dorm rooms that will save them money. For example, it might not hurt the college student to eat sandwiches for lunch, and maybe something quick for breakfast that’s nutritious and inexpensive. When a college student stops eating out, they’ll save a ton of money.

Another way a college student can live frugally is to bring in more money. A college student will overcome their debt when they stop spending on the one hand, and start bringing in more money on the other. If they have time, they can take a part-time job that will help them manage the load of their debt and still manage to take on their personal responsibilities.

They can also do things such as keep their car parked for the most part. Buying gas costs money, and in order to live frugally, the college student can learn to walk when reasonable, or take a bike when walking is unreasonable. They can also start to rely upon public transportation, if there is a public transportation system in their town. These methods aren’t as convenient or comfortable as riding in a car, but they certainly save money.

If a college student finds that they have gotten in over their head with credit card debt, while they might feel overwhelmed by this, they should not let it get them down. The fact of the matter is that most college students are struggling financially, and this is part of the sacrifice of gaining a higher education. What keeps college students motivated and living for their goal is the fact that when they obtain their college degrees, they will be able to obtain a job that will sustain them well for the next part of their lives. For many students, it’s well worth it to live for their goal to obtain an education, and the career earning power that they will have when they graduate.

Author Bio: Hasic M loves to share his knowledge about credit cards, especially helping people attain credit card debt relief and make their lifes less stressful.

Anyone who’s ever grown up with a brother or sister has probably been taught the value of sharing at a very early age. I had a younger brother growing up, so I learned from a rather early age to hate the “S” word.

But while we all (well, most of us anyway) eventually learn that sharing is caring, there are a few things in life we tend to like to keep to ourselves, such as our credit card accounts. But for those who would rather share their credit accounts and financial responsibilities, there is a solution in the form of joint credit cards.

Joint credit cards are just what they sound like: A credit card that can be used by two people to charge purchases to, and appears on both of their credit reports. Both parties are responsible for the card’s payments, meaning if one person overcharges or misses a payment on the card, the issuer has two people it can go after to get paid, leaving the both of you needing credit repair fast.

With that said, let’s take a look at the pros and cons of having a joint credit account.

Pros

• Now two people can pay the bill! Say you’re both already living together, splitting the bills for rent, utilities, and other necessities. Why not share a credit card as well? Having only one credit card between the two of you can make paying the bill less of a hassle, as well as help you keep a handle on your debts.

• Turn that bad credit around! Does one of you have an unsightly blemish or two on your credit report? If the other person has a credit history that’s dressed to impress, piggybacking onto their card is the surest way to build your credit right back up without the need to consult credit repair companies. Of course, in order for that credit to stay good, the balance will need to be kept relatively low and paid on time.

Cons

• Now two people are responsible for the bill! Why shouldn’t you both get a card together? Because now you’re both legally responsible for all purchases made on said card, meaning if one of you ends up spending more than you can afford and come up woefully short on payday, it’ll fall to the other person to pick up the slack and pay the bill.

• It can be used against you! Shared credit cards can sometimes lead to problems in the relationship between the two card holders. Adding financial arguments to any couple’s troubles is never a good idea, especially if one person ever gets angry enough to overcharge the card on purpose and leave the other person with the bill and the wrecked credit.

So is it right for you?

I wouldn’t recommend it. Some things are best left separate, and your credit accounts aren’t an exception. Of course, everyone’s situation is different – only you can know for sure if you should share a credit card account with someone else. Just know they can potentially damage your relationship with the person on the other side of the card.

This is a guest post from John LeBlanc, a writer for My Credit Group, a website dedicated to helping consumers with managing their credit.

We’re slowly pulling ourselves out of one of the worst financial crises in history. True, unemployment is still high, but it’s stabilized, and in some states it’s actually come down. People are starting to spend more; that is, if the weather allows them to leave the house.

Credit card offers have started going out again. However, the bet is that you’re not getting as many offers as you were getting before. That plus interest rates are higher than they used to be. And sometimes, even if you’ve been offered a nice deal up front, you may end up with a worse deal than what you thought you were getting because the banks ended up being a little worried about either your credit score or income level.

Overall, interest rates are around the highest average that they’ve ever been, which is close to 15%. Fewer cards are offering 0% interest, and those that are will have interest rates as high as 19.8% once the introductory period of over. That’s pretty steep, and a far cry from just over 3 years ago when you’d get the same introductory deal turning into 4.99%; yes, I remember those days.

The one thing the credit card reform act didn’t touch was interest rates. You might remember our writing about a bank called First Premier that had a “deal” for people who had bad credit, giving them a card with a 79.9% interest rate. And the balance on that card was only $300, but at least you had credit. They’ve brought that rate down to 59.9% now; how nice of them.

This country was built on credit, and now credit is hard to come by. That’s to be expected, and it probably should have been harder for some people to get, at least at the amounts they were being approved for. If you want a mortgage, you can still get a killer deal at some banks of less than 4.5%; if you can afford it, you need to jump on that. But for credit cards, it’s probably best to start learning how to save for those specialty items you want.

After all, that’s how most of our parents did it.

It seems that Visa and Mastercard are lamenting the old days of being able to stick it to, well, us. That’s because a new law will eliminate many of the fees they’ve been adding to transactions for years, which have driven up prices, in essence saying they’re frivolous and not needed for the reason these companies said they were charging the fees in the first place.

What? You hadn’t noticed it? That’s because most of us have had no clue just how much these companies charge businesses we frequent for the luxury we all enjoy of using our debit cards as credit cards when we go to buy something. Right now, these two charge around 1% of whatever we purchase, which might not seem like a lot on the surface, but when you’re talking volumes it’s quite high.

As a for instance, you spend $100 at a store, they get paid a dollar. Sounds small? Well, these companies combined for more than $16 billion in fees last year; still sound small?

What’s going to happen now? The limit on fees is going from 1% to 12 cents; you read that correct, “cents”. Supposedly that’s how it works in other corners of the globe; only the U.S. has been taking it on the chin like this for awhile. Of course, there’s a major difference between 1% and 12 cents on $100. The amount starts getting close if you don’t spend that kind of money, which means if you go to your grocery store and only buy $6 worth of gum and candy, Visa and Mastercard will still benefit from your purchase.

As a matter of fact, anything less than $12 benefits Visa, Mastercard, and the banks, who got a large portion of those extra funds. That’s the part that may not be to our benefit with this legislation. If banks don’t think they’ll generate enough income from this process, they could decide not to put out those cards anymore, which then might mean any purchases we made would have to either be cash, check, or debit card, which everyone might not accept and would allow banks to charge us those debit fees that we hate. Talk about a double edged sword.

Where do you stand on this? Do you like the possibility of lower prices versus higher bank fees?

Did you know that the Department of Justice had sued Visa, Mastercard and American Express on our behalf, and is still battling American Express in court?

Yup, about two months ago the DOJ sued all 3 companies for basically trying to ice out any competitors, including store cards, from competing against them through some of their practices and rules. Almost immediately Visa and Mastercard caved and said they would offer incentives to help buyers; American Express has decided to fight it in court.

Of course this is a big money issue. What’s at stake is discounts that stores wanted to give to its customers, which of course would save us money. It seems that the credit card issuers were trying to force stores to pay what’s known as interchange fees on the original price and not the discounted price. Although the amount might seem small, as in between 2 or 3%, when you thrown in potentially thousands of transactions that ends up being a large amount of cash that stores get cheated out of, and of course consumers then get cheated because there’s no incentive to give any discounts at all.

Visa and Mastercard settled by saying they wouldn’t stop stores from offering either discounts, rebates, or special deals for using their own cards. Why American Express is fighting this one is beyond me, other than the possibility that they don’t see themselves as a traditional credit card, since almost their total product relies on its consumers paying the balance off every month. However, there are also so many stores that don’t accept American Express even now that one would hope they’d see this as a bad PR move and would acquiesce in some fashion.

Who says the federal government isn’t looking out for our interests?

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There are two young adults who I got to hold as babies, and since I don’t have any children I’ve kind of adopted both of them as my kids. They’re sisters as well and their father is one of my best and oldest friends, so it all works out just fine.

Since they’re older, what I’ll do is buy them gift cards so they can buy whatever they want to instead of my trying to figure out what they might like. That’s always seemed like a good idea to me, but I’ve started thinking that it might not be the best of ideas. And, in thinking about it in other ways, people could be getting seriously ripped off by both gift cards and prepaid cards.

Back in March I wrote a brief post on gift card fees and how those who sell them were going to have to spell out what the fees are come August. At the time, it looked like this regulation was going to be a major benefit to its customers. Instead, consumers haven’t been taken care of at all.

There’s still nothing saying how much fees will be, only that there will be fees for transactions. Most people couldn’t begin calculating how much of a fee there will be on a purchase, and that’s not good. I give someone a $50 gift card, and they’ll be lucky if they get $40 out of it, all of which probably should be spent at once instead of saving it up for something else. And I already paid a fee up front to buy the thing; isn’t this kind of a double, or triple dipping at times?

If that’s problematic, what about prepaid cards? Those are cards you put money on so you can use them as credit cards for things such as renting cars or hotels because they only accept credit cards as holds, and you might not have one. It sounds like a great idea, and a great way to build your credit up if you’ve got a bad history.

The problem once again is fees, and the dollar amounts change based on what it is you’re trying to do and where you’re using the cards. It’s been estimated that one could literally spend upwards of a thousand dollars a year on fees alone; heck, banks can’t charge you that much money.

Of course it’s still better than the 79.9% interest rate credit card, but at least with that card you know what you’re getting yourself into. I wouldn’t recommend you use any of these if you don’t have to. It’s just another way consumers are being ripped off. Gift cards, however… I don’t think the kids mind so much. It’s still better than anything I’d try to buy them outright.

Who’d have thunk it.

For most of the first decade of the 2000′s, people were spending money like there was no tomorrow. Even as the economy started to show signs of trouble, people kept buying. And why not; credit was easily attainable and credit card issuers couldn’t give cards away fast enough.

Then in early 2008 people started to notice the negative changes for the first time and they got scared. Unemployment became the big story, along with the housing and banking collapse. Banks stopped sending those weekly credit card offers and people started holding onto their money more. It was time to batten down the hatches to try to ride out the storm.

The storm isn’t quite over, but people have learned how to ride the wave like surfers do. Credit card issuers have started sending out offers once again, but suddenly they’re finding that fewer people are taking them up on their offers, and they’re getting scared. After all, a big part of their business is getting people to sign up for their cards and then live off the interest generated by transactions people do.

What could the problem be? Are you kidding? Let’s take a look at it all.

1. New bank fees. If you want to know what your future might be like look at your present. Banks reacted badly to governmental protections for consumers related to credit cards. They jacked up fees and interest rates, and in some cases yanked people’s credit cards away even when they were paying them on time and had never missed payments. The kicker was deciding to charge a fee to people who paid their balances off every month.

2. Changing how interest is charged. If the other wasn’t bad enough, telling consumers that interest starts the day you make a purchase instead of still getting those 25 or 30 days to pay something off is wrong as well. I had my own battle with my wife’s insurance company when I paid off the bill and she got another one for $3.50. It wasn’t the dollar amount, it was the point; they removed it.

3. Banks aren’t giving out loans. At least the big banks aren’t giving out many loans, and people remember that sort of thing.

4. You put in a request for a card at one limit and they give you one with a different limit. My wife got an offer for a card with a $5,000 limit, so she applied. She got approved for $400; she immediately canceled it. Those types of bait and switch tactics will irritate anyone.

5. Overall, we still don’t trust banks. I know I don’t, and I’m not talking about my local bank that, happily, weathered the bank closing storm very well indeed. The big banks have done a lot of sneaky stuff, haven’t shown consumers any respect, and for me, I don’t care how many funny Capital One commercials there are, they know what they did to me and my account last year, and I would never trust them again, even with all the things they keep sending me.

People are using their debit cards more and are making sure they keep an eye on their spending. That sounds fiscally responsible to me.

Finally a few more protections from the people who issued credit cards have gone into place. As of last Tuesday, laws were enacted that state if you make a late payment credit card companies can only hit you up for $25 late fee if it happens only once, and then no more than $35 if you happen to do it often within certain time limits. They also can’t hit you with a fee higher than the amount of any financial violations. In other words, if you happen to go over your limit by $18 accidentally, they can’t hit you with a 50 or $75 fee.

Something that many banks and said they were going to start doing was charging people who didn’t use their credit cards. The new regulations say that they can’t do that; that’s a good thing. It’s one of things I griped about what I talk about this concept of credit scores and outstanding credit. If you don’t have to spend credit you have available to you, you shouldn’t be penalized because you’re not buying things you don’t need. It was inherently unfair, I’m glad the federal government me that correction.

For once, the American Bankers Association is going along quietly with the new regulations as opposed to saying that it’s not fair to banks. Supposedly a representative was quoted as saying that the industry would work quickly and diligently in addressing these new regulations.

Here’s one more good thing. The new regulations state that banks cannot raise the interest rate on outstanding balances, with some banks had already put into place. At the same time, the new regulations are encouraging those banks that took advantage of the gap in time last year between when other credit card legislation was passed and then implemented to go back and rethink the interest rates that they raise during that time period. I’m not exactly sure how strong that encouragement is, but anything that works to the benefit of consumers is a good thing.

These rules will go into effect on August 22, which gives banks about 2 1/2 months to put everything into practice. Let’s hope they come down some of those interest rates as a sign of good faith.

By now, everyone knows that there’s been a credit card reform bill that was supposed to make a lot of positive changes for consumers. Truthfully, there have been some nice changes, especially if you’ve taken a look at your credit card bill and seen the little graph that shows how your balance will be paid off quicker if you make higher payments, and how long it will take you to pay off your balance if you only make the minimum payment.

Well, it seems there’s a dirty little secret that’s taking advantage of some of you, and may skew the figures somewhat. It seems that if you have a credit card where you’ve not only got a regular balance, but a cash advance balance, your payments are only being applied to your credit balance and not your cash advance if you have a balance in both areas.

Why is this a big deal? Two reasons. One, because most cash advance interest rates are much higher than the normal credit card interest rate. there could be as much as a 100% difference between using regular credit and getting a cash advance, such as 13% and 26%. Two, part of this was covered under the new law, but the caveat was that if you paid “more than the minimum” amount then the extra had to be applied to the highest interest amount on your account.

What this means is that the credit card issuers are doing the legal thing, if not quite the most fair thing. If you didn’t know before, now you know. By the way, you can’t request the payment to be applied to one or the other either, so the best thing you can do is find a way to pay even $10 more per month on your bill so that you can bring down the higher interest amount as well.

Every once in awhile I take a good look at my credit card statement. It’s something I didn’t used to check until one day, about 5 years ago, I noticed I was being charged for something that I couldn’t ever remember signing up for. It turned out I’d been being billed for something nearly 2 years that was kind of an add on to something else I’d purchased. I had it canceled, but knew I was never getting my money back and didn’t even try.

This weekend, Visa decided it will no longer allow sites to automatically sign people up for things they don’t know they’re signing up for. They will require that consumers must re-enter all of their credit card information anew before allowing any third-party charges. This means that if you visit any of those sites where you see all these other offers popping up and you happen to forget to uncheck the box, which is how many people get sucked into these ventures, you won’t be seeing things like this on your bill unless you follow through on the action in popping your information in.

That is, with Visa, since Mastercard had already ended the practice years ago. All of this comes on the heels of a report by Sen. Jay Rockefeller of West Virginia stating that this practice was earning as much as $1.4 billion a year in unauthorized charges on 30 million Americans’ credit card bills. The main sites guilty of this practice were Priceline.com, Hotwire.com and 1-800-Flowers. I say “were” because 1-800-Flowers has dropped that type of service.

If you use your credit cards often enough, you should be checking them to see what you’ve been charged for anyway. Many people will find that there’s this payment protection service they’re being charged for that was actually thrown on by the credit card companies themselves to protect “you” against losing your job and not being able to make payments, but you were never asked. If you have no worries about this, you should cancel the service, which is usually between $15 and $20 a month.

Be vigilant with your credit; never let anyone else assume to create debt for you.

When you are comparing credit cards, are you putting the right amount of emphasis on the credit card merchant? The card merchant is not always the bank issuing the credit card, and when you are comparing a Visa card to a MasterCard to an American Express card, you may not be clear about whether the merchant – Visa, MasterCard or American Express – is offering the services you are comparing, or whether they are the services offered by the issuing bank. Therefore, find out a little more about each card type, and how to choose the credit card which is right for you. It is also important to remember that many features are common to all credit card merchants, for example:

• Dispute resolution. If you make a payment on your credit card or have a payment debited from your card which you are unhappy with, you can contact your credit card issuer (your bank) and they will try and solve the disputed service, and if they find you have been unfairly charged for an unsatisfactory service, you can be refunded the amount of the purchase.

• Extended warranty. You may not realise, but if you make a purchase on your credit card, it can often add an extended warranty to that of the manufacturer’s warranty. An extended credit card warranty can sometimes be as much as two years longer than the manufacturer’s warranty.

• Purchase protection. If a purchase you make on your credit card is lost, damaged or stolen, you can often have it replaced within 90 days of the purchase thanks to the added protection of your credit card.

Visa is a merchant processing system, partnered with financial institutions around the world. It is the financial institutions who issue Visa credit cards who decide on the annual fee of the card, the late fees and the rewards programs, not Visa themselves. However, some of the benefits you can compare and attribute to Visa include:

• Wide acceptance. Visa has one of the widest worldwide acceptance rates of any credit card merchant, having been in operation since 1958, when it was called Bank Americard. As a result Visa is accepted in over 200 countries making it easy to spend safely whether you are spending around the corner or around the world.

• Verified by Visa. Visa is also aware of your awareness of credit card security and identity theft and so have recently added the Verified by Visa feature to their cards. When your bank issues you a Visa card, you can register with Verified by Visa and create a secondary password. Then, when you use your Visa credit or debit card with participating online retailers, they will ask for this second identification password, and will verify your password with Visa before processing the payment – someone using your card number fraudulently wouldn’t have this additional password, and the payment would not be authorized.

• Non-credit Visa card options. Visa also gives users the option to spend only their own funds, rather than accruing a balance which can then attract interest. Visa card users can choose to use a Visa debit card which looks and acts like a credit card, but accesses your own funds in your everyday account, rather than building up a balance you need to repay later. Visa also offer prepaid cards which can be charged with your own funds and given to teens as spending money for example, but once the prepaid amount is spent, the card stops working.

• Zero liability. If you notice a fraudulent purchase on your Visa card and you report it to your card issuer, Visa will credit you back the amount of the fraudulent transaction. Visa may also extend you extra credit to cover the cost of a fraudulent transaction which exceeded your limit.

MasterCard is also a merchant processing system which allows banks all over the world to issue credit to their customers. So rather than comparing the rewards points or the interest rates of a MasterCard, consider the features which are actually unique to a MasterCard, not the issuer:

• Almost equal acceptance to Visa cards. Beginning operations in the mid-1960s, MasterCard is slightly behind the game compared to Visa. However, it is still one of the most widely accepted credit cards in the world, and there are now few places which accept a Visa card, which don’t accept a MasterCard.

• MasterCard SecureCode. MasterCard also has a double layer security verification system for online purchases which allows you to set up a code you can use when making online purchases. You simply need to look for the SecureCode symbol at an online store and you can be sure your purchase will be protected with an added level of security.

• Spend your own money with MasterCard debit card. A debit card allows you to make fast and secure purchases online just as you would with a credit card, but instead you are accessing your own funds, so when you spend all your money for the week, you can’t go on living beyond your means, but you learn to curb your spending to what you can really afford.

• Protect your shopping. Eligible MasterCard holders can enjoy price matching services and purchase protection, as well as extended warranty on eligible purchases which often goes beyond the manufacturer’s warranty on the product.

American Express operates their credit cards in over 130 countries, but they are often seen as being far less accepted than MasterCard or Visa. This is often because American Express charges a higher merchant fee to the merchants who accept your payment on an American Express credit card and where a MasterCard or Visa card merchant fee is around 1% of the transaction cost, American Express can be as much as 4%. To understand how and why American Express credit cards appear to be more expensive to use, you need to know more about the American Express business and offers:

• American Express works hard on their brand, and it works. American Express has invested a lot of clever time and money into making their brand synonymous with prestige and affluence, using celebrities in their advertising and promoting not just a card, but a lifestyle. As a result, they have attracted a lot of prestigious and affluent credit card customers.

• American Express is offering their affluent customers to merchants. Since American Express are so confident in the affluence of their client base, they charge a higher merchant fee because they can – if a merchant refuses to pay the American Express merchant fee and not accept the cards, they are also turning away affluent customers, and no business wants to lose customers with a lot of money.

• American Express controls each level of credit card issuing and use. Where MasterCard and Visa are the merchants of their cards and they have banks around the world issue their cards, American Express are the merchants and the issuers of their card. This means they process the transaction, issue the card and act as the network link between your bank, and the bank of the person you have just made a payment to. This means that American Express is able to keep more of their merchant interchange fees, rather than paying a third party at each step in the process, and this means they can offer greater rewards with their credit cards.

• World famous rewards programs. American Express credit cards typically come with double points for every dollar spent rewards points schemes, and offer more attractive rewards once you have reached a certain points balance.

• Surcharges or refusals. Not all merchants are willing to absorb the costs to accept an American Express credit card just to attract affluent customers and some will refuse to accept American Express cards and others will charge you a surcharge. This can sometimes be as much as the full 3-4% merchant fee on top of your purchase.

• Expanding the reach of American Express. While American Express is typically the issuer of their credit cards, they have recently begun allowing other banks to issue their cards. This means you can have an American Express credit card linked to your ordinary MasterCard or Visa credit card as a companion card, to enjoy the rewards. American Express has done this to expand its reach where their cards are not yet widely used, however, this can mean that an American Express card issued by your own bank carries the same surcharges from some stores, and is not accepted at others.

Now you can decide whether a Visa card, a MasterCard or an American Express card will best suit you, you can compare the features of the individual credit card offers and negotiate with the issuer of the card on the features they can control.

Alban is a personal finance writer. He helps people to compare the best credit cards online.

We’ve all seen those gift cards that people can buy for others. Some mirror regular credit cards, while others are for specific retailers.

The problem with those cards is that they all come with fees of all sorts, and one never knows exactly what those fees are, and that’s just plain wrong. Some people end up paying big fees because they didn’t use all of the card in time, and find out that the card has burned itself up, even though there might not have been an expiration date on the card.

Thank goodness once again for the Federal Reserve. Although it won’t go into effect until August, they’ve taken on this issue about fees, which will at least balance the landscape a little bit and let consumers know what’s going on.

What’s coming? One, all gift cards are going to have to spell out what fees are and times for those fees so we know what they are. Two, inactivity fees will not be allowed to be charged until there’s been a year of inactivity, and even then, there will be a cap on how much those fees can be.

Of course, it’s still probably best to use those gift cards as soon as you can, but now you have a bit more protection; that’s a good thing.

The latest figures relating to the performance of credit card loans, from issuers including Capital One Financial Corp. (COF) and American Express Co. (AXP), suggest that consumers are still troubled, and losses branching from souring credit card loans remain high.

Analysts say that recent trends show the market is headed for a peak in delinquencies and charge-offs (loans that lenders do not expect to recover). Despite this, levels in February remained high, indicating a bumpy road to recovery for the U.S. economy.

The industry is continuing to battle against credit concerns as increasing unemployment adds pressure to consumers and balance sheets. Delinquencies and charge-offs assist when predicting potential losses to lenders and the amount that is likely to be required to cover them.

Credit card issuers are also contending with fees & rate increases, effectively lowering income. The Federal Reserve Board recently said it was asking issuers to reassess whether increased rates for some cardholders where actually necessary, before new federal regulations are implemented.

according to a filing with the U.S. Securities and Exchange Commission (SEC), Capital One said charge-offs dropped to 10.19% last month from 10.41% in January in its U.S. credit-card business and fell to 8.07% from 9.03% internationally. Auto-finance charge-offs declined to from 4.27% to just 2.50%.

At its U.S. credit card business, 30-day delinquencies were down at to 5.51% in February from 5.8% in the previous month, despite edging up from 6.66% to 6.68% internationally. The rate fell for auto loans from 9.61% to 7.99%.

According to a recent Goldman Sachs report, Capital One may be more vulnerable than some of its similar sized rivals, as more than 30% of its cardholders are made up of less-creditworthy borrowers, compared to the typical average of between 20% and 25%.

Another of main credit card providers – American Express, was previously reporting relatively healthier trends, but still posted figures that fell significantly lower than its peers. The credit card issuer said U.S. borrowers a month or more behind on payments were flat at 3.6% from January.

Craig Maurer, an analyst for Credit Agricole Securities, said in a note to clients that the figures seen from American Express “indicate the company’s portfolio continues to materially outperform competitors’.” Figures from last month give AMEX “no reason to doubt [the providers] ability to outperform” when reporting first-quarter earnings.

Sam Gooch is with Which 4U, a UK Price Comparison website which compares credit cards, savings accounts, fixed rate bonds, bank accounts, ISAs, loans, mortgages, insurance, and TV, broadband and gas/electric bills to find the best UK deals.

There’s something that’s been going on for at least the last 6 to 9 months that I hope no one has fallen for.

What happens is you get a call from someone telling you that there’s something wrong or getting ready to happen to your current credit card, and that you need to talk to them about lowering your interest rate.

If you get these phone calls and pick up the phone, don’t talk to these people. If you get a message asking you to call them back, don’t return the phone call. These are scams, with one of two intentions:

1. Get you to sign up for a new card

2. Get you to give them information you shouldn’t be giving out over the phone

The first is bad enough; the second is truly nothing but trouble. They have multiple ways of getting information out of you if you’re not savvy, such as having you press certain keys, or telling you that they’re from the fraud department of either Visa or Mastercard or something like that.

Here’s the thing, however. When they call, they never tell you which credit card it is that you might be having problems with. That should be your first clue. Some people will ask them which card and then start throwing out the names, in which case they’ve just handed the scammers all the information they need to continue the con. Some people are ready and willing to give out their passwords, pin numbers, and even their checking account numbers to these folks; don’t do it.

In a couple of instances people have been getting mail saying these same sort of things. Just because you’ve received something in the mail doesn’t mean it’s legitimate. Once again, most of the emails come without any information on them except a phone number or website address, which means it’s a scam because it didn’t come from your bank. You should know what the mailings from your bank or credit card look like; if you get something that doesn’t fit that, disregard it, or pull out your phone book (does anyone still use phone books? If not, look up the number on the internet) and call the bank directly, and you’ll probably find out 99% of the time that it was a scam.

If you’re contacted out of the blue by anyone who wants to talk about your credit cards or bank account, always be wary. If they can’t tell you some things without you telling them something, hang up and call your institution on your own. Better safe and rude than sorry and poor.

With the new credit card legislation came another new provision that effectively takes a lot of non-voluntary money away from banks.

Overdraft fees were a big thing for banks. At some point, they started charging fees to people while still paying bills if you happened to go over your limit. The same goes for credit cards, which allows people to go over their credit limit for a minimum period of time. Banks didn’t mind because they’d hit you with fees that generated more than $20 billion in revenue a year across the board.

Now that is gone. Banks have to get people to opt into the program. Some banks are being very aggressive with this, such as Chase, while others are either still working out the logistics or will probably be sending up some kind of notice in our next statements, which I’m betting the majority of people won’t even read unless it’s sent separately.

Let’s face the fact that all of us have missed this every once in awhile. A deposit didn’t clear as quickly as you thought it would and suddenly you’re hanging because the payment did clear on time. Or you bought gas after making a payment on your credit card that didn’t clear yet and suddenly you’ve gone over by a few dollars.

Do you want to accept these fees or not? The question depends on just how close to the vest you usually are with your money and whether or not you pay attention to what’s going on. If you never overdraw, or very rarely do, you shouldn’t sign up for this protection because you don’t need it. Sure, you may be shocked those couple of times if something does happen, such as being out trying to buy something and having your card decline because you don’t have enough money in the account, but that’s preferable, in my opinion, to getting hit with a big fee later on because you were never informed you didn’t have the money on your credit card to cover it.

If you overdraw all the time, or are always right next to the line, then continue paying banks for the overdraft protection. Sure, it can add up, but it’s less embarrassing than trying to pay for things and getting denied all the time.

Just make an informed decision, then live with it. but gauge how high those fees are, because banks will be raising them, as it’s just one way they can recover from all those other ways they’re cheating customers nowadays. You did know about the credit card with 79.9% interest, right?