As of July 1, credit card issuers were required to conform with new rules approved by the Federal Reserve Board to protect consumers from what many have seen as unfair (or at least unclear) practices by the card issuers.

The new statement does a lot of things right–it’s now abundantly clear, for example, just how long it’ll take you to pay off even a small balance if you just send in the minimum payment required (and how much interest you’ll rack up in the process). Closing one of the classic traps of card usage that have ensnared many, the new statements must tell cardholders up-front just how much their credit card rates will jump and how much the late fee will be if you’re late with your payment. And interest fees and fee charges of all types are now labeled clearly–you’ll be able to see at a glance whether that zero percent balance transfer transaction was correctly implemented.

FiveCentNickel.com has a nifty infographic with mouseover highlights of the new changes:

Source URL: New Credit Card Statement Format

Copyright Protected © 2010 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Of course, opening a balance transfer credit card on its own won’t make your debt evaporate overnight and shouldn’t be an excuse to spend more–but if you understand what the balance transfer credit card is for and stay disciplined in your debt payments, it can be a very useful tool.

Ten Steps to Debt Reduction Using Zero Balance Transfer Credit Cards

1. Make a list of all of your debts–and add them up. This gives you a clear idea of how much you owe, how much the interest rate is on each debt, and what you are currently paying in monthly interest and minimum payments. Awareness is the first step toward being debt-free.
2. Review the terms of your current debt. If you currently pay little or no interest on at least some of your debt, you may not even need to transfer that part. However, if your existing low interest rate is for an introductory period that is ending soon, you may want to consolidate that debt with the rest.
   
3. Find a low interest credit card that can be used to transfer balances. If you don’t already have one that will work, apply for a new balance transfer card. If possible, select one with at least a 6- to 12-month introductory period, during which the card issuer charges reduced or even zero interest. Apply for a credit limit sufficient for all the debt you want to consolidate at this time.
4. Learn the fees associated with any balance transfer. There are two typical balance transfer fees: an upfront fee at the time of transfer, plus an interest rate to be charged monthly until the balance is paid off. Try to obtain a zero balance transfer credit card, if possible, which may charge only one type of fee during your introductory period–or possibly no fee during the intro period.
5. Read the fine print about your balance transfer terms. Many low interest transfer credit cards will charge you a higher-than-promoted rate if you make any late payments or otherwise violate their terms, especially during the introductory period. This can potentially cost you even more than before you transferred your debt–so be forewarned, plan ahead, and figure out a way to commit to paying on time.
6. Transfer your target debt to the low interest credit card, then review and update your list of debts. Create an overall debt repayment plan based on your budget and income, and commit to pay it all off within your chosen timeframe. Avoid adding new debt and making unbudgeted purchases–and use any unexpected income (a raise, overtime, a side gig) to pay it down even faster.
7. Pay more than the minimum required total payment. As long as you can pay more than just interest on all your debt, you can pay down your debt and eliminate it over time. But it will take more than just the minimum payment to pay off credit card debt within a reasonable timeframe. The Federal Trade Commission’s credit card calculator shows you just how much time you can save by paying down more.
8. Pay down any remaining higher interest debt first. If you were unable to consolidate all debt on your low interest credit card, pay only the minimum monthly amount on your lower interest rate debt, and then put the difference from your planned monthly debt payoff amount toward paying off your highest interest debt faster.
9. Don’t assume you can transfer debt balances indefinitely. When the interest rate on your consolidated debt goes up after the introductory period, you may consider a second balance transfer. While this strategy has worked for some, this usually means you’ll need to obtain a new zero balance transfer credit card. Be aware that too many new accounts can negatively affect your credit score, and that credit card companies may simply stop approving you for the new offers. Ideally, you should just select a decent zero balance transfer credit card with a low ongoing interest rate to begin with to avoid getting caught again in the cycle of perpetual new accounts and transfers.
10. Do something nice to reward yourself. Eliminating the burden of debt is a reward in itself–but don’t forget to find little ways to reward yourself inexpensively along the way. This will help you stay motivated and continue to enjoy life as you should. Once you pay off your debt, do something nice for yourself and your family–and pay cash! It took a lot of effort, but you’ve made it.

Debt Payoff: Keep Your Eyes on the Goal

The purpose of consolidating debt is to make it easier and faster to pay it off–instead of putting it off until it becomes overwhelming. Make paying off your credit card debt the number one priority in your financial life, after meeting your family’s basic needs and commitments. You’ll be relieved to finally live a life without overwhelming debt obligations.

Source URL: 10 Steps to Pay Off Debt with a Zero Balance Transfer Credit Card

Copyright Protected © 2010 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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As a fan of balance transfers and zero percent credit cards, I’ve been feeling rather forlorn these past few months. With the recent enactment of new laws and regulations clamping down on how credit card issuers run their practices, it seems the era of 0% balance transfers and 0% APR deals has finally reached its apex and is now beginning its downward decent into the annals of credit card lore. Only a mere few years ago, one could effortlessly lighten the burden of high interest credit card debt with the assistance of balance transfer offers – lucrative deals that dangled everything from waived transfer fees to long term interest free durations that extended into perpetuity for the entire life of the loan. At its heyday, it was a common place to hear stories of those who were able to engage in balance transfer arbitrage and profit immensely from the 0% APR offers that credit card companies issued to attract new card members to the fold. Back then, the savvy and opportunistic card arbitrager could simply apply for a credit card, obtain a 0% balance transfer, pay no money up front, and immediately transfer the free funds into a remarkably high yielding (5.00 – 6.00% APY) online savings account – reaping what was essentially free interest profit.

Sadly for those of us who once depended on these types of offers for so long, those days are now sorely missed and all but gone, as such once abundant deals are edging ever closer to extinction. With the devastating credit crisis having made its presence keenly felt in all aspects of the U.S. economy, credit card issuers have pretty much pulled out their most lucrative balance transfer offers. Nowadays, balance transfer durations are getting shorter, the balance transfer fees are getting higher, and ordinary purchase interest rates at the conclusions of promotional periods are all witnessing substantial increases.

Compare These Factors When Reviewing Prospective Balance Transfer Cards

But while harder to find, balance transfer cards still exist, at least for the time being. For those who wish to take advantage of these limited time offers, it’s important to recognize the critical ways that today’s balance transfer offers have changed compared to years past. Here are the crucial balance transfer terms and conditions to always consider:

1) Length Of Time Of the Promotional Periods: Presently, zero percent balance transfer periods range from 6-12 months with only a few rare programs that offer terms beyond a year. Obviously, the longer the term the better, but even enjoying a 6 month promotion at 0% APR is less onerous of an interest penalty burden than enduring the same time period at a whopping 15-25% APR or more (which is what many credit card companies are gouging their customers with these days).

2) Balance Transfer Fees: While introductory 0% APR no balance transfer fee cards are still around, they are increasingly very difficult to find. Currently, the standard balance transfer fee for most cards is slated at 4% of the total amount transferred. While there are still a few offers out there that do offer the next best alternative – capped balance transfer fee charges at a maximum of $75.00 or so, those types of attractive offers are dwindling as well.

3) Credit Card Sign Up Bonuses: While 0% credit card promotions are dwindling, incentive rewards and sign up bonuses are still plentiful. It’s best to seek out cards that offer special sign up rewards whenever possible. There are actually quite a few offers out there that pay anywhere from $50 to $100 or more for new members. By taking advantage of these sign up rewards, one can greatly minimize the impact of the 4% balance transfer fee charges that many introductory balance transfer offers impose.

4) Annual Fees: Avoid credit card offers that levy annual membership fees if possible. There is simply no reason to pay such petty charges as there is a wide selection of no annual fee cards out there to choose from. The exception to the rule is if the card offers a special sign up bonus that pays for the annual fee altogether.

The Top Balance Transfers: 0% APR Credit Card Offers That I Use

While it’s presently no longer reasonably profitable to continue playing the credit card arbitrage game, balance transfer cards can still be a reliable method of debt reduction and a source of emergency funding for those drowning in debt or suffering from a bout of unemployment. While a host of alternatives to balance transfers have emerged, they still remain very effective and accessible solutions for individual and families looking to manage their debt.

If you’re looking for breathing space and extra time to pay down your existing credit card balances without the stifling pressures of the high interest gun pointed at your head, a balance transfer credit card that offers a 0% APR introductory rate may be right for you. But here’s a little warning. While 0% and low interest balance transfers are effective tools for reducing the burdens of existing credit card debt, if you aren’t diligent in ensuring that you follow the appropriate rules and conditions to the letter, you may unwittingly put yourself in a worse off position than before. When you obtain your balance transfer offer, you should never use your promotional credit card for additional purchases but instead focus exclusively on using the interest free grace period towards paying down existing high interest debt. Remember, you ought to engage in 0% balance transfers only if you’re serious about getting out of debt, not merely as a way to engage in delayed gratification by using the interest free funds to go on a self defeating shopping spree.

As I frequently get emails and requests from readers asking me for recommendations on what I believe are the best balance transfer offers available today for those looking to pay down debt, I’ve included a very short list below of my conclusions. The following is a list of what I would personally use for balance transfer purposes. Note that a few of the balance transfer cards below even offer zero percent rates on purchases along with the balance transfers to boot. A few even tout special sign up bonuses as well.

1) Discover More Card – No annual fee. Offers 0% APR on purchases for 6 months and 15 months on balance transfers, with a 4% balance transfer fee.  At the conclusion of the balance transfer period, the card reverts into a handy cashback rewards card of 5% and up.

2) Citi Platinum Select Mastercard – No annual fee. This very popular offer from Citibank offers 0% intro APR on balance transfers for 18 months and on purchases for 12 months. There is a balance transfer fee of 5%. As a non-rewards card, the Citi Platinum Select’s natural interest rate is also comparably lower than other reward based cards.

3) Citi Forward Card – No annual fee. This Citibank credit card offers 0% APR on purchases for 7 months and 12 months on balance transfers, with a 4% balance transfer fee. You can also earn up to 8,500 bonus points after you sign up for paperless statements and make $250 in purchases within the first 3 months of account opening.

4) Escape by Discover Card – “ This special Discover travel credit card promotion offers a 0% balance transfer and 0% purchase period for 6 months, with a 3% transfer charge. It also offers new card members the mile rewards– 25,000 Bonus Miles – 1,000 Bonus Miles each month you make a purchase for your first 25 months*.. The new bonus miles earned upon sign up can be exchanged for cash, gift cards, or other travel rewards.

5) Miles Card by Discover – No annual fee. Get a 0% APR offer on balance transfer and purchases for 6 months, with a 3% balance transfer fee. While there is no official cap on balance transfer fees with this offer, the Miles Card by Discover does offer a nice sign up bonus–12,000 Bonus Miles  - 1,000 Bonus Miles each month you make a purchase for your first year*– thus reducing your effective balance transfer fee burden.

6) Citi mtvU Platinum Select Card – No annual fee. 0% APR* on Purchases for 7 months, if you qualify, based on your application and credit history*.  The Citi mtvU card is one of the best, if not the best card for students looking to rack up lots of free money in the way of cash back rewards for purchases at the conclusion of the balance transfer period.

Source URL: List of Cards with 0% Balance Transfer Offers

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Credit scores are important because they are basically summary reflections of what’s found on your credit reports, and are one of the primary quick and easy short cut tools that lenders use to predict how likely you are to make your future credit payments on time. Thus the revealing nature of your numerical credit score has a direct impact on what type of mortgage loan rates, credit card offers, balance transfer deals, and auto insurance rates you can qualify for. Clearly, having a good credit score makes your financial life a lot easier and helps you save money in the form of lower interest charges whenever you need to apply for a loan or tap into credit based products.

The Definition Of A Good Credit Score Depends On What You Intend To Do With It

For starters, it’s important to understand that the importance of your credit score is relative and contingent on what you intend to with the score. Its utility also depends on which particular credit score you are talking about. While it’s always a great idea to monitor your routine credit score changes if you’re one of those like myself who occasionally depend on 0% balance transfer credit cards and balance transfer alternatives for emergency fund purposes, only if you’re planning on seeking credit or a loan within the next year would I recommend that you place so much immediate attention on your score. If you are not in the market at the present time for a mortgage or aren’t planning on applying for a P2P personal loan or credit card within the next 12 months, your credit score is certainly not something you ought to overly fuss over. While one’s credit score has far reaching effects beyond just loan applications and approvals (impacting prospects such as employment screenings and housing background checks), its primary purpose still revolves around its importance in helping you secure the very best interest rates and terms when you need access to immediate credit. If you’re thinking of getting a mortgage loan for example, knowing your credit score is important because it may let you know if you need to take immediate action to improve your score so that you can push yourself into a higher credit score tier and thereby increase your chances of qualifying for a lower interest rate on your loan application.

A Good Credit Score Also Depends On What Credit Scoring Formula and Range You’re Using

Other than the purpose of what you intend to use it for, another important factor of what constitutes a “good credit score” is also determined by what credit scoring methodology you are using. While all of the different credit scores out there are calculated by information contained in your credit reports, including payment history and ratio of actual credit usage to total available credit, the various scores out there differ in their numerical scoring ranges. Currently, the most popular and widely used scoring system is the FICO credit score formula (the myFICO.com score) developed by the Fair Isaac Corporation. Take a look at my article about FICO credit scores if you want a good background overview on how the scores are calculated and determined. FICO scores range from 300 to 850, with average FICO scores ranging between 680-700 depending on which of the 3 major credit bureaus’ data (Experian, Equifax, or TransUnion) you’re using. Presently in the United States, the median FICO credit score is 723.

While there is no current standardization on what exactly a good FICO credit score is, generally a good number is regarded as FICOs that are at least above average or above the median score (anything above 700). If your FICO score is at least 720 or higher, I would say that you are in pretty good shape as far as your credit rating goes in terms of your chances of securing top interest rates for your loan requests. In the past, most mortgage lenders and banks have traditionally lumped those with FICO credit scores of 720 or higher with those in the 800’s – deeming both groups to be very low default risk borrowers – equally qualified for the best interest rates.

Good Credit Score Standards Have Increased In Recent Years

However, one thing to bear in mind is that credit scoring standards have increased substantially during the last few years. Particularly as a result of the recent credit crisis and subprime mortgage debacle, lenders and creditors have grown more strict in what they demand out of borrowers for the lowest interest rate offers. The definition of what’s considered a good credit score has definitely gone up the last few years. Not too long ago in 2006 for example, a FICO credit score of around 620-650 would have been regarded as a “good credit score” and more than sufficient to qualify for the cheapest mortgage rates. Those days are long gone and lenders today now demand scores in excess of 750 or more for the top mortgage rates, along with high down payment percentages of 20% or more for home loans. While FICO credit scores of 720 or higher may still be regarded as the baseline standard of constitutes a good credit score, to truly snag the best interest rate offers, you’ll likely need premium FICO’s of 750 or higher.

The Effect Of Good FICO Credit Scores On Interest Rate Qualification

As noted above, the numerical range of what constitutes a good credit score is relative, and depends on what you want to do with it. Different types of lenders implement different credit scoring ranges in their categorization of prospective borrowers in terms of credit risk. Take a look at the two FICO score tables below (one for mortgages and the other for auto loans) to get an idea of how scoring ranges relate to the interest rates each range would generally command from lenders. As you’ll note, mortgage lenders tend to demand stricter FICO credit score standards than say – credit card issuers and even car loan lenders.

Example: 30 Year Fixed Mortgage Rates For A $300,000 Mortgage Loan

Looking at the above sample interest rates on a hypothetical $300,000 home mortgage application as provided by the myFICO.com website, it’s clear that the best interest rates on home loans are available to those with FICO scores in excess of 760 or greater. Of course, it’s also important to remember that such rates are rarely exclusively determined by FICO scores alone. Mortgage lenders also rely heavily on the applicant’s documentation of income sources and available assets when determining appropriate interest rates. Let’s look at auto loans:

Example: 36 Month Auto Loan Rates For A $25,000 Car Loan

As you’ll note from the table above, the best auto loan rates can generally be qualified by individuals with FICO credit scores in excess of 720 or greater. It’s an over simplification, but it sort of gives you a broad view of what constitutes a good credit score in terms of qualifying for the best rates.

If you don’t know where your official FICO credit score currently stands or what’s on your triple credit reports as compiled by the three major credit bureaus of Equifax, Experian, and TransUnion, I recommend finding out sooner than later. You might not need to tap into your credit rating at the present moment, but it’s always good to know where you roughly stand. Here are a few ways to get your FICO scores and credit reports for free.

• Free credit scores – via myFICO.com trial offers
• FICO discount codes – for credit score savings
• Free credit reports – obtained from the federal government’s official AnnualCreditReport.com website

Source URL: What Is A Good Credit Score?

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Unlike Citibank’s well known and popular Citi Thank You purchase incentive feature, which tends to focus on more tangible gift card and cash based rewards that you can accrue through daily card purchases, the Citi PrivatePass program is devoted almost exclusively to entertainment and experience based offers – providing its participants special access to free and cheap tickets to unique concerts, dining experiences, and popular sporting events. The Citi Private Pass program is not a separate card, but rather a rewards program already available to existing Citi Card customers.

Citi Private Pass Offers Free and Cheap Tickets For Special Live Events and Experiences

After reviewing the Citi Private Pass website and examining some of the promotional material, it’s clear the motivation behind the Citi Private Pass program is to help Citibank capture a greater segment of the entertainment generation, an emerging and outgoing demographic that’s willing to go out and spend money but still harbor the savvy mindset to locate the best online deals for discounts, limited time offers, and freebies. Presumably hoping to re-brand itself into some sort of entertainment conduit or facilitator for card carrying customers who are also experience seekers, the Citi Private Pass program offers Citi customers the opportunity to enjoy special VIP access to sought after events at deep discount prices that are much lower than that typically sold to the general public.

According to the folks at CitiCard, the Private Pass program offers card members a way to get access to limited pre sale tickets, obtain preferred seating reservations ahead of time, arrange meetings with their favorite musical artists, or even attend special limited opportunity movie screenings and cultural events. Reviewing the Private Pass terms and conditions and examining the entire selection of offers available to customers, I can see why the program has appeal on a diverse scale. Members can select from a very wide variety of trips and event categories – including golf, restaurants, nightclubs, shopping, sporting events, theater, and other popular activities.

The Citi Private Pass program breaks the program down into several broad experience categories, each with its own individual selections. Currently, Private Pass is touting several popular summer programs, and such seasonal programs are constantly being rolled out.

• Tickets To Music Concerts: Citibank and Live Nation are promoting discounted lawn concert tours for just $5 per ticket through the Summer of Savings event for the months of July and August 2009. Discounted concert tickets are available for a wide array of well known artists and bands such as Lil Wayne, Aerosmith, Creed, Kid Rock Depeche Mode, Nickleback, Blink-182, and even the Jonas Brothers (gag). Just go to www.citiprivatepass.com to get the special access code that allows you to take advantage of this offer.
• Tickets To Popular Sporting Events: Special exclusive discount savings for sporting experiences are available – everything from ordinary events like basketball and baseball games, to the more out of the norm – including fly fishing, river sailing, and rodeos.
• Access To Special Movie Viewings and Special Art Galleries: Many of the featured offers in this category are not available to the general public and are only available to CitiCard customers. A few of the more exclusive offers are only available to Citi Visa Signature cardholders.

If you are one who loves going out and spending money on experiences and memories rather than on mere materialistic objects that inevitably depreciate, then I think the Citi Private Pass offerings and special ticket discounts are something your lifestyle may demand. At the very least, the Citi Private Pass program is a rather interesting way to get to know what live events are happening out there if you’ve been wanting to participate in one. Simply visit the Citi Private Pass website directly and access the free and discounted selections from the entertainment category of your choice.

Remember, to participate in the free Citi Private Pass rewards program, you’ll need to be a current Citibank credit card or debit card customer. If you’re not yet a Citi cardmember and would like more information about becoming one, check out some of these popular Citi Card offers:

• Citi Platinum Select Master Card – 0 % APR on balance transfers and purchases for 6 months.
• Citi Forward Card – 5% purchase reward back for restaurants, books, movies, music, and 1% for everything else.
• Citi Premier Pass Elite Card – 2% reward points for all everyday purchases at gas stations, supermarkets, transportation lots, and parking facilities.
• Citi Forward Card for Students – 5% purchase reward back for student purchases like eating out, books, movies, and music.
• Citi mtvU Platinum Select Visa Card for Students – 5% rebate reward back for dining out, music, movies, and books, including purchases made at Amazon.com.

Source URL: Review of Citi Private Pass Rewards by Citi Card

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Currently, the most popular 0% balance transfer card offers that still remain in effect today include the following short list of active promotions. As always, before applying for a balance transfer card, it’s important to read the fine print carefully and be fully cognizant of the advertised 0% rate duration, the availability of any balance transfer fees, the regular interest rate after the end of the 0% period, and the availability of any underlying cash back or credit card reward offers.

• Discover More Card: 0% balance transfer for 15 months and 6 months on purchases, 4% transfer fee. Get cash back on up to 5% on select purchases and earn 1% back on everything else.
• Citi Platinum Select Master Card: 0% intro apr for 18 months on balance transfer and 12 months on purchases, 5% transfer fee.
• Miles by Discover Card: 0% balance transfer for 6 months, 3% transfer fee. Earn bonus airline mileage rewards with this travel credit card.
• Chase Slate Card With Blueprint : 0% balance transfers and 0% purchases for 12 months, with a one time transfer fee of 3%.

Disappearing Balance Transfer Credit Card Offers Due To Changing Times

In response to the market trend of vanishing balance transfer deals and low interest credit card offers, it certainly doesn’t help that we currently have an anti big business leader at the helm in President Barack Obama. With the passage and issuance of new credit card rules and more aggressive federal regulations designed to crack down on the more unethical credit card issuance practices, the new rules are now making the business practice of providing 0% APR durations extremely unprofitable for the major credit card issuers – and threatening to push the remaining 0% balance transfer offers to the brink of extinction.

During the glorious heydays of credit card arbitrage and App-O-Rama’s, it was easy for most Americans to count on the availability of 0% balance transfers for cheap personal loans and low interest debt consolidations. Only a mere few years ago, those saddled with a mountain of high interest credit card debt could simply leverage their good FICO credit scores and apply for new credit cards that offered 0% balance transfer promotions as a short term way to consolidate their oppressive debt into a zero percent account for 12 months or more while they slowly chipped away at the payment principle. If after the conclusion of the one year duration the consumer needed to extend the 0% balance transfer consolidation period, the cardholder could simply seek out another interest free credit card and transfer the unpaid balance over to the new zero percent account.

Now, those days are all but gone as credit card issuers have had to drastically cut back on their offerings to comport with economic realities and standards brought on by new, tougher governmental rules on lending practices. Back during my earlier student days, I was one of those individuals who actively used balance transfer credit cards to keep my personal budgets afloat. Now, if I were to ever encounter the same cash strapped conditions again, I would have to resort to using balance transfer consolidation terms that aren’t as favorable as they once were, or seek out alternatives to credit cards altogether. Major balance transfer issuers that once dangled lucrative free balance transfer promotions of 12-18 months, with no balance transfer fees or fees capped at $75 or $99, with some that even offered attractively cheap lifetime balance transfer terms – are now witnessing the complete pull back of these former offers. Today, while a handful of low interest 12 month 0% balance transfer promotions remain, most card issuers now require some upfront balance transfer fees, have shorted 0% credit card transfer rate durations to an average of 6 months, and have pretty much withdrawn most of the sign up incentives that used to exist just a few years ago.

Those like myself who have grown dependent on 0% balance transfers and low interest credit cards as sources of emergency funds need to start bracing ourselves and preparing for the slowdown effects of credit card consolidation loans (for those who have not already done so). With national unemployment rates almost certainly to exceed 10% and banks and lenders still fumbling with the credit crisis, it’s important to figure out contingency options in case of unexpected personal finance emergencies. Those who are currently relying on balance transfers to help pay down high interest credit card debt also need to know what other balance transfer alternatives are out there. You never know when you or your family may encounter a sudden reduction in income stemming from an out of the blue layoff or unexpected illness on the part of the head bread winner. We are currently in difficult times – it’s best to stay prepared.

As always, maintaining a good credit score is essential to keeping that dwindling balance transfer pipeline open. Securing a high FICO credit score is also highly relevant to the accessibility of the litany of balance transfer alternatives out there as well. If you make it a habit of making late payments or neglecting your existing debt account obligations, your credit report history will suffer – closing the door on the secondary loan consolidation options that may have been available to you.

List Of Credit Card Loan Consolidation and Balance Transfer Alternatives

If your attempt to take advantage of available 0% balance transfer offers or negotiate lower interest rate terms with your current credit card company have failed, you may wish to consider these plausible loan consolidation alternatives.

1) Introductory 0% Credit Card Balance Transfers: Obviously, before finding alternative loan solutions, the first step is to make sure and confirm that you’ve truly exhausted the list of available balance transfer offers to you. If used diligently with timely and proper adherence to minimum payment rules, zero percent credit cards are the easiest available method to consolidate high interest debt. Some of the issuers even provide balance transfer consolidation checks that can be used to directly pay off non credit card debt as well.

2) Lifetime Balance Transfer Credit Cards: In the old glory days of balance transfers, there were such things as lifetime 0% balance transfers. Obviously those days have past. Nowadays, the zero percent lifetime balance transfers have been replaced with low interest life-of-the-loan type deals. For card customers trying to pay off high interest credit card debt, these new lifetime low interest balance transfers may be substantially cheaper than the other personal loan alternatives out there. Some issuers like Discover Card have been recently offering lifetime balance transfer rates as low as 0.99% APR to 2.99% APR. Of course, while lifetime balance transfer credit card rates may be cheaper than other personal loan alternatives, they do require the card account holder to exercise super diligent repayment habits to continuously benefit from the perpetually low rates. Failure to do so will result in a figurative whack over the head by the issuer in the form of substantially higher rates and penalty fees.

3) Lending Club – And Other Popular Peer To Peer Online Personal Loans: For those with less than stellar FICO credit scores or credit reporting histories, online peer to peer lending services have emerged as viable balance transfer and personal loan alternatives to traditional banks. The leaders in this new and emerging industry are presently Lending Club.com (see my Lending Club review for more of my personal insight into the company’s operations) and Prosper.com. Peer to peer services like Lending Club (or P2P lending as it’s commonly known), offer a way for ordinary Americans to lend to their fellow man and woman by way of an online matching system – complete with personal profiles and blog messages written by prospective borrowers. By making use of credit scores, credit reports, debt usage ratios, and income & asset verification details, services like Lending Club allow prospective ordinary lenders like you and I to determine the risk level for the loans they extend and the appropriate interest rate compensation for that risk. Presently, Lending Club loan rates for prospective borrowers start as low as 7.88% for those with at least a qualifying FICO score of 660.

4) Secured Credit Card Debt Consolidation Via Home Equity Lines of Credit: In many state jurisdictions, those who own their own homes can open up a home equity line of credit (a HELOC loan) via a bank, and use the built up equity to pay off and consolidate their existing credit card debt. In almost all cases, a HELOC loan offers a much lower interest rate than most personal loans via banks or ordinary non-promotional credit card offers. However, this option is a very controversial alternative to credit card balance transfers as it basically entails the legal shifting of unsecured personal credit card debt – and turning it into a debt that is now secured by one’s home. This distinction is important, because ordinarily in the event of a failure to pay back the credit card loan (a credit card default), the card issuer can not immediately go after your home to satisfy the unpaid debt. But once the debt consolidation is made via a HELOC loan, this turns the unsecured credit card debt into one that is secured by a condominium or single family home, subjecting the home to possible seizure for non payment. Utilizing a home equity line of credit loan for short term credit card relief is rarely a good idea, but it’s an option and balance transfer alternative nonetheless.

5) Personal Loans Via Banks and Local Credit Unions: Those with good to excellent FICO credit scores may be able to apply and get approved for a personal loan from their local bank or community credit union. However, bear in mind that while these type of loans for credit card consolidation purposes are generally widely available to most borrowers, they frequently demand interest rates that are higher than available home equity line of credit solutions. Furthermore, oftentimes before banks or credit unions will extended such personal loans for existing credit card debt consolidation reasons, they frequently require the borrower to close out his or her existing credit card accounts to ensure that further debt is not accrued.

6) Debt Consolidation Counseling: If your credit score or credit report history is simply too damaged to utilize the available low interest credit card debt consolidation alternatives above, you may be able to seek out affordable credit counseling services from accredited non profit organizations to help you consolidate your existing debt in a manageable way via fee waivers and lifestyle changes. Many colleges, universities, military bases, veteran organizations, community credit unions, and even local government consumer protection authorities operate such non profit credit counseling programs. Of course, keep in mind – just because an organization touts itself as “non-profit”, there’s no clear cut guarantee that the services are free, affordable, or even legitimate.  Beware of hidden fees or suspiciously high up front charges by the so-called non profit credit and debt counseling services. Those looking for a list of credit counseling agencies provided by the U.S. Department of Justice for various state jurisdictions may want to check out this approved agency list. It’s a good starting point for those who need debt repayment help.

7) Payday Loans (Or Car Title Loans): This balance transfer alternative is the most controversial of all. I only offer it up here because it is a potential option for those seeking an alternative to credit cards, albeit an extremely costly one. Payday loans or cash advance loans provide people with a quick infusion of cash when all other immediate options have failed. Car title loans are simply payday loans that are secured by your car, subjecting your vehicle to possible seizure if you fail to pay back the loan. For those with poor or damaged credit scores, payday loans are frequently the only loan options available. With nothing more than a verified pay stub and a job, borrowers can secure a quick personal loan to pay off emergency bills such as home utility charges, car repair fees, or even credit card bills. Unfortunately, the easy accessibility of payday loans and the lack of any substantial credit history documentation needed to get approved also explains why they are so incredibly distasteful. Payday cash advance loans frequently charge the highest and most outrageous fees of any type of loan out there. I highly advise readers to stay away from high interest payday loans if possible. If you absolutely must play with fire, only borrow as much as you can afford and pay the loan back as soon as possible without delay.

Source URL: 0% Balance Transfer Credit Card Offers and Alternatives

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Welcome to my FICO coupon deals, promotional discounts, and exclusive myFICO.com web bargains page. Here you will find a regularly updated list of myFICO coupons and promo codes to help you save money on genuine FICO score products. To ensure that you get credit for the myFICO promotion offer that you seek, make sure to visit the desired link below and follow the appropriate coupon redemption instructions. Also, it would be of great help to myself and fellow readers if you’d post a comment below about any new myFICO.com coupon codes or special discount offers not already listed, as well as bring to our attention any myFICO promo codes mentioned below that may have already expired.

As we all know, credit scores are numerical representations of credit worthiness, and are one of the most determinative factors that mortgage lenders and major banks base their approval decisions on. While there are several credit score variations out there, the most popular and widely used is the FICO. As American consumers, we each have a total of 3 FICO credit scores – one from each of the three major credit bureaus (Experian, Equifax, TransUnion). While the three FICO scores are derived from the same proprietary formula, differences in credit reporting data often cause the individual scores to differ somewhat from each other. Routinely checking one’s credit score (whether via a credit monitoring program or via manual credit score pulls) is a recommended activity in this modern day and age. Regularly monitoring my FICO credit score is one of the ways I keep a close pulse on this very integral part of my personal financial life. Knowing where you stand in the eyes of potential lenders is particularly crucial when you are in the process of applying for credit-based products like home mortgages, car loans, or even balance transfer credit cards. It’s also a very effective and pro-active way to prevent identity theft and be informed of any unauthorized or fraudulent access to one’s credit accounts.

Save Money On MyFICO Credit Scores With FICO Promo Codes and Coupons

Current federal laws give all American consumers annual access to their free credit reports from each one of the 3 major credit bureaus of Experian, Equifax, and TransUnion. However, while personal credit reports are available free of charge, FICO credit scores derived from the credit data found on these reports are not. If you want your FICO score, you generally have to pay extra for it. Fortunately, there are currently a variety of ways for savvy consumers to enjoy up to 20-30% discount savings off of their FICO score purchases with the use of FICO promo codes. There are even a few arbitrage ways for resourceful consumers to snag free FICO scores by taking advantage of special trial offers.

Presently, authentic Experian, Equifax, and TransUnion FICO scores can only be obtained from the official myFICO.com website or via an authorized partner. While Equifax and TransUnion FICO’s are freely available for purchase, those looking to obtain their Experian FICO scores will note that they are no longer readily provided to consumers. Due to a major contractual dispute between myFICO and the Experian credit reporting agency, myFICO authorities have discontinued the sale of Experian FICO’s to consumers. For now at least, consumers will have to make do with what’s available. Most of us should be able to reasonably compensate by requesting the other two FICO’s via Equifax and TransUnion. Knowing your scores based on Equifax and TransUnion data ought to give you a fairly accurate approximation of where you likely stand with Experian as well, barring any significant credit report discrepancies or errors.

Special limited time discounts and exclusive FICO promo codes are frequently released by myFICO.com. A list of verified and updated codes and discount coupons have been provided in the table below. Please visit the desired coupon links to make your credit score product purchase. The myFICO promotional codes should appear automatically in your online shopping cart during the check out process. In the event the coupon has expired or has not been automatically inserted into your checkout page, please manually insert a working myFICO promo code into the correct box to ensure that you get credit for it.

List Of The Best myFICO Promotional Discount Deals (Expiration Varies)

In case you are are not entirely familiar with the different myFICO credit score packages mentioned above, here is a quick summary overview:

1. myFICO Score Watch – There is a free 30 day trial with the FICO Score Watch program. Simply sign up and cancel within 30 days, and you’ll walk away with a free FICO credit score. This is the online tool I use to continuously monitor my FICO credit score changes. I like how it charts my FICO profile changes over time and gives me continuous and unlimited access to my FICO on demand. With this offer, you also get 2 free credit reports a year from Equifax. For more information, check out myFICO review.
2. myFICO Score Standard – You get your choice of a single official FICO credit score and credit report from Equifax or TransUnion. This is probably the most popular option for those looking for a home or car loan right now and just need to know their FICO credit rating as it currently stands. Price is $15.95 – but can be easily reduced with one of the discount codes above.
3. Suze Orman’s FICO Kit Platinum – This is basically the former myFICO Credit Complete package but with extra commentary by popular financial guru Suze Orman. With the Suze Orman FICO kit, you get your FICO scores and credit reports from Equifax and TransUnion, along with extra media material to help you better plan out your credit-based life, with particular attention given towards home and car buying decisions, and extras on how to get out of credit card debt. Price is $49.95. Don’t forget to use one of the 10% to 30% codes to reduce the price.
4. myFICO Quarterly Monitoring – With the FICO Quarterly Monitoring package, myFICO will track your TransUnion FICO score and credit report for you (a useful anti-identity theft feature). You’ll also receive 4 FICO scores and 4 reports every year through TransUnion. Currently, the price is: $4.95 per month or $49.95 per year. Remember to use myFICO promo codes to maximize your discount savings.

As always, please let me know if there are any more myFICO savings deals or exclusive FICO promo codes out there!

Source URL: List Of MyFICO Promotion Codes and Discounts

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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As part of my ongoing hobby of applying for free credit card rewards and pocketing introductory bonuses that make themselves available, I recently applied for Citibank’s new Citi Forward Card. Simply for signing up, I earned sufficient credit card bonus points to swap for a free $100 gift reward card to the retailer of my choice (I picked Best Buy). Although I have not yet tried, I would imagine that if one were a college or graduate student, one could also simultaneously apply for the nearly identical Citi Forward Student card as well, and receive another free $100 gift card upon sign up – for a total windfall jackpot of $200.

The Citi Forward – Marketed As A Reward Credit Card That Promotes Responsible Credit Use

This new Citi Forward Visa credit card that Citibank is introducing is marketed as an enlightened approach to the promotion of responsible credit card use. Along with its offerings of a 0% balance transfer rate and credit card reward earning potential, the card also touts a litany of lower interest rate opportunities for card members who can demonstrate mature credit use with timely payments.

However, as always when it comes to new credit card offers, I urge interested individuals to tread carefully. Credit card companies aren’t being naturally generous or altruistic when they offer lucrative cash back credit card reward opportunities such as this. Just because they offer a card that features great cash back reward opportunities and no annual fees that highly favors savvy card users doesn’t mean the card issuers aren’t still motivated by ulterior motives. Remember, their driven purpose in the market is to profit from the credit card interest charges and late payment fees that they hope you will rack up. If you’re a shopaholic, compulsive addict, or an irresponsible credit abuser, my advice is to stay away from credit cards altogether. However, if you’re a responsible credit user with a high FICO credit score, you can most definitely beat them at their game and profit greatly from the generous sign up bonuses, introductory 0% APR periods, and free money opportunities that they dangle in front of you. If you can handle the card usage responsibilities and not succumb to late payments or maxed out balances, good credit score consumers will benefit greatly from the Citi Forward’s extra bonus features that reward smart credit use.

Citi Forward Credit Card’s Up to 8,500 Bonus Points

For credit card sign up reward seekers, the new Citi Forward card offers up to 8,500 bonus points after you sign up for paperless statements and make $250 in purchases within the first 3 months of account opening..

Upon card registration, new cardmembers receive 8,500 Citi ThankYou bonus points after making at least $250 in card purchases within three months of receiving the account and agreeing to forgo paper monthly statements in favor of electronic credit card billing statements within 3 months of account opening. The instant Citi ThankYou points you reap simply by signing up for the Citi Forward card can be exchanged promptly for a gift card or swapped for a much more versatile prepaid Visa Card (as good as cash).

Get 5% Rewards On Credit Card Purchases Via ThankYou Points

The Citi Forward card is a very high earning reward card with a 5x reward earning rate at special category vendors. With the Citi Forward, you earn 5 ThankYou points for every $1 you spend on restaurants and entertainment, and 1 reward point for every $1 you spend on other purchases. Big cashback reward card fans will notice that the reward structure is remarkably similar to the highly touted Citi mtvU, one of the best student credit cards out there. However, unlike the Citi mtvU card, the Citi Forward is available to all applicants, and not just college students. However, like the popular Citi mtvU student card, the Citi Forward, with its high reward rate for restaurant visits, dining out, and coffee shop purchases – the card is one of the best card offers out there at the present time for those who eat out often (as I frequently do).

Another very important aspect of the Citi Forward’s reward program is that the reward rate on books also includes popular online retailer Amazon.com (interestingly treated as a bookstore for Citi credit card reward purposes). Want to buy a simple personal finance book or even purchase something more expensive like a desktop computer via Amazon.com? You can earn 5 reward points per $1 spent by utilizing your Citi Forward Card. Frequent Amazon.com users like myself will benefit greatly from this high reward earning loophole.

Citi credit cards run their card rewards off of the Citi ThankYou network. Those of you who want to know more about the steps that I take to maximize my ThankYou network points to get the best point to cash, and point to gift card redemption rate should read my Citi ThankYou point article. While it’s not easy to get a perfect 1:1 conversion rate for reward redemption when it comes to gift cards and pre-paid debit offers, it is possible to get incredibly close to the mark via higher denominational value retail store gift certificates.

Get Extra Low Interest Rates For Paying Your Credit Card Bills On Time

One of the novel features of the Citi Forward card is its promotion of special bonuses for those who adopt good card usage behaviors. Designed to encourage good credit usage among consumers, the card offers a unique reduction of your purchase interest rate whenever you pay out your bills on time and responsibly stay within your maximum account spending limit. According to the specifics of the Citi Forward program for good credit behavior, you get an extra 100 bonus ThankYou points every billing period and a 0.25% interest rate reduction every time you manage to stay under your credit line and pay on time for 3 months in a row (for a maximum limit of 8 times, for a total 2% APR reduction). While it’s something that you ought be doing anyway regardless of reward incentives, it’s always nice to get a little something extra for your efforts.

Along with the responsible credit usage incentives, there is also an intro 0% APR offer on purchases for 7 months and a 0% balance transfer deal for up to 12 months – features that may interest the zero percent fee card seekers out there. As some have noted, while there is no annual fee for the card, there is a 3% charge for balance transfers however.

Source URL: Citi Forward Card Review: Credit Card Rewards

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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For those who work hard at monitoring their credit reports and credit scores, and take diligent steps to ensure the maintenance of perpetually high FICO’s, this news release exploded into our midst like a cruel bomb shell. So am I overreacting or is this move by Experian as significant as I’m seemingly making it out to be?

Lack Of Access To Experian FICO Credit Scores Ultimately Favors Lenders and Hurts Consumers

At a time when banks have grown extra stingy when it comes to lending money and it’s becoming even more important for consumers like you and I to monitor our credit reports and credit scores regularly, we are now losing yet another option of doing so. Experian is one of the three major credit reporting agencies that maintain massive historical databases of how individuals and businesses handle credit usage responsibilities. Fair Isaac Corporation is the company that developed the popular and widely used FICO credit score, which uses a complex formula to convert credit report data into three numerical digits representing credit worthiness. As one of the 3 major credit reporting bureaus, Experian’s decision to stop offering FICO scores derived from its credit reporting data to consumers is a major blow to credit transparency and the further advancement of fair lending practices.

Fortunately, the other two big credit bureaus, Equifax and TransUnion, remain solidly under contract to allow FICO credit scores, so they shouldn’t be disappearing anytime soon. However, by Experian unilaterally cutting off consumer access to Experian FICO credit scores, it essentially means that we now have access to 33 percent less important information than we did before in the past.

The inane aspect of this all is that while Experian has ended its agreement with Fair Isaac and MyFICO to sell Experian FICO credit scores to ordinary consumers, it has chosen to extend its contract to allow Experian FICO’s to be sold to lenders. So while lenders, banks, and businesses will continue to have access to FICO credit scores based on Experian credit report data, consumers will now be partially blind to the precise information that lenders have during lending negotiations. This definitely stacks the lending odds against consumers, who are now going to be in the dark about a key metric component of their financial portfolio.

Frankly, the move by Experian to sever its 6 year partnership with MyFICO, while surprising given the current state of the economy and financial markets, isn’t totally unexpected given the turbulent nature of the ongoing lawsuit between the two companies and the millions of dollars worth of FICO credit score revenue that Fair Isaac reaps each year from its monopolistic stranglehold over Experian. Unfortunately, consumers are still caught in the middle and will likely suffer by not having equal access to the entire array of credit scores and FICO data that Experian continues to offer the big lending banks.

Experian Credit Score Seekers Still Have Alternatives and Options (But Not Great Ones)

While access to our Experian, Equifax, and TransUnion credit reports remain unchanged, and we can still obtain our free credit reports annually courtesy of the federal government and various free online trial offers, Experian will no longer permit the developer of the FICO credit score to sell FICO products to consumers via the MyFICO website that utilize credit data from Experian credit reports. Unfortunately, current federal law under the Fair Credit Reporting Act only requires that the three major credit reporting agencies make our credit files available to us once a year, but there is no legal mandate that guarantees us access to our credit scores, FICO or otherwise, prior to applying for a loan.

However, while Experian will no longer make its credit data available to consumers for FICO credit score generation purposes, borrowers and consumers who desire to gain insight into their own Experian scores still have options. All indicators show that Experian is likely to continue peddling its own custom Experian PLUS Score and VantageScore variations to consumers. Unfortunately, while having them is better than nothing at all, these two credit score varieties are no where even close to the high adoption rates of FICO credit scores in terms of utilization by major lenders and banking institutions, and few lenders even acknowledge the use of the PLUS or Vantage Scores at this time. They are not even scored on the same numerical range or take into consideration the same proportional credit history factors – causing their current usefulness to be extremely suspect at best. Because these third party credit scores are not true FICO scores and are seldom used by the majority of lenders, they are frequently referred to as FAKO scores – mere distant seconds to the real thing.

Experian FICO Credit Scores Are Still Available, But In Very Limited Ways

So I guess the question remains – can you survive without the ability to get your official MyFICO credit score based on your Experian credit report information? Well, sure you can, but it may be somewhat more difficult to manage and improve your credit score over the long term. You can certainly still access your Experian Plus Fako score using Experian credit report data and get a general feel on where you stand in terms of your Experian credit data. The Experian Plus credit score, while not nearly the same as the FICO, uses a vaguely comparable (but not identical) scoring scale, similar to the FICO’s 300-850 point scale for credit scoring.

You can also still purchase your FICO credit scores from Equifax or TransUnion via MyFICO’s official website directly or through the credit agencies. While your Equifax and TransUnion produced FICO scores may be slightly different from your actual Experian FICO credit scores (due to data retention differences between the different credit reporting agencies), knowing these two other scores may give you a pretty accurate prediction of where you stand credit score-wise. Remember, you can still freely access your 3 annual credit reports and compare your Experian credit report data to that contained in your Equifax and TransUnion credit reports for rough comparison purposes.

Another way to project your Experian FICO score or your credit score in general is to utilize a free FICO credit score estimator such as the one being offered by MyFICO. The scoring accuracy of these simulators is debatable, but once again, it’s better than nothing. Until Experian one day returns to the FICO fold (hey – it could happen), we’ll simply have to make do and get by until a better alternative comes along. Aside from somehow being able to fake your identity and pose as a lender to get your hands on your actual Experian FICO credit score (I’ve tried), currently only lenders will continue to get direct access to Experian FICO credit scores.

However, another definitive way to get your genuine Experian FICO credit score is to simply apply for a major loan such as a mortgage for a home, and let the authorized lenders pull your scores for you. Consumers who apply for loans or mortgages can still get all 3 of their FICO credit scores through legitimate lenders. While many lenders usually only utilize the services of one credit reporting agency at a time, home mortgage lenders generally utilize all 3 for greater accuracy sake. When you apply for a home mortgage loan, more likely than not, your lending agent will submit a request for all 3 of your credit reports and all 3 of your FICO credit scores from the three credit agencies of Experian, Equifax, and TransUnion, when evaluating your claim request. Of course, while this is one sure fire way to get your Experian FICO credit score, it is important to realize that by authorizing the lender to pull your credit report and credit scores for lending purposes, you are consenting to a hard credit check that acts as an official credit score dinging inquiry. While personal look ups of one’s own credit report through sites like FreeCreditReport.com or AnnualCreditReport.com result in no impact against your credit score, when banks or lending institutions do it for you pursuant to a loan application, this triggers a hard credit pull that does harm your credit score, albeit usually just for the short term.

Other than taking the hard credit check hit on your FICO to get a peak at your actual Experian FICO credit score, certain consumers may still be eligible to get continued access to their Experian generated FICO scores. The current list of institutions is small, but the list may ultimately expand depending on what type of special future agreements Experian decides to sign.

Currently, customers of the Pennsylvania State Employees Credit Union (PSECU) continue to have access to their Experian FICO scores through the PSECU Free FICO Score Service, thanks to a deal the credit union previously inked with Experian. While other lenders such as HSBC via its Sears Solution MasterCard, and the bank formerly known as Washington Mutual via its WaMu credit cards, offer(ed) similar free FICO credit score programs with Equifax and TransUnion, none except PSECU currently has an active deal with Experian.

I have looked into the matter and it is my current understanding that the PSECU credit union continues to pull free credit reports and free FICO scores via Experian, posting new scores online each month via its online banking site. There is no charge for the generous perk, but to participate in the FICO score service, you must have a checking account with PSECU or an active PSECU Loan.

While I am not currently a Pennsylvania state resident, nor am I related to anyone living in the state, I still made an effort to swindle (I can’t help it, I’m an arbitrage seeker) my way into getting an account at PSECU bank – for the sake of satisfying my FICO mania and getting my hands on one of those monthly free Experian FICO scores. Unfortunately, not everyone is eligible to participate and join the credit union as their qualifications are rather strict, and as such I was quickly denied. Here are the basic eligibility qualifications. Sadly, other than moving there and becoming domiciled in Pennsylvania, that seems to be the only legitimate way to join. However, if you are a Pennsylvania resident, are currently a Pennsylvania state employee, or attended a participating small private college in Pennsylvania, you may be able to qualify for a bank account with the credit union.

Hopefully this cooperation agreement between Experian and the Pennsylvania State Employees Credit Union signifies the beginning of a trend to offer authentic FICO’s and free credit scores for consumers of other banks and credit unions as well. Has anyone out there successfully signed up for a new account with PSECU and successfully gotten access to their free monthly Experian FICO credit scores? Please share your experience!

Source URL: How To Get A Free Experian FICO Credit Score

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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You see the commercials on TV, and those supposed know-it-all financial commentators are always jabbering about them on blog commentaries and financial websites. But behind the media hype, much of the message is true – credit reports and credit scores are important indicators of financial health, and taking appropriate steps to ensure credit reporting accuracy is not something you ought to brush off as trivial or not essential. Pay too little attention, and a stray error or unauthorized credit transaction on your credit report can easily come back to bite you in the butt when you least expect it.

Even those who are not actively seeking a personal loan or on the verge of applying for a home mortgage loan ought to pay regular close attention to what’s continuously being added to or subtracted from their official credit reports. That’s because the financial data on your credit report is necessary for a huge variety of events in your life, much of it happening behind the scenes and without your active knowledge. Your credit report information is used to evaluate your applications for credit cards, real estate loans, personal loans, 0% balance transfers, cell phone wireless services, apartment rentals, car insurance, and even employment. Maintaining a good and clean credit report can have a dramatic impact on your financial stability. Likewise, ignoring what’s on your credit report may limit your financial options and close the door to lucrative low interest offers, cheaper mortgage rates, and improved housing rental possibilities.

Your credit report is so highly regarded and widely used by lenders because it is a definitive compilation of your entire history of active credit based accounts with archived information like when the accounts were opened, balance amounts, and whether payments have been made on time. Credit reports are maintained by the credit reporting agencies, frequently called credit bureaus. Currently, there are three major credit reporting agencies in the United States – Experian, Equifax, and TransUnion. As such, each individual generally has 3 credit reports to his or her name, based on the historically updated credit report data retained by each of the 3 credit bureaus.

Along with the three credit reports for every individual, creditors and lenders also evaluate potential borrowers for risk factors based on their credit score, which is a numerical snapshot of data gleaned from the credit reports from a single moment in time. Presuming you are utilizing the popular FICO credit score developed by the Fair Isaac Corporation, credit scores range from 300 to 850, where higher credit scores are better. Because, the information and data recorded in each credit report directly influences your FICO credit score on a real time basis, checking your credit reports and monitoring your credit scores habitually can help you spot and correct reporting errors and inaccuracies when they crop up, saving you a lot of money in interest rate payments and identity theft related hassles in the long time.

Prevent Identity Theft By Checking Your Free Credit Report Regularly

I think most of us are well aware that it’s important to check our credit card statements every month for unauthorized charges that we haven’t made, but realistically, that only catches identity thieves who steal and use an account that you already know you have. Oftentimes, the most damaging of identity theft cases arise from unauthorized activity on accounts you never knew you even had – credit accounts opened with your Social Security Number and name without your authorization whatsoever.

Your credit report contains valuable information about your personal identity such your name, your Social Security Number, where you live, how often you pay your bills, whether you have have ever filed for bankruptcy, and whether there are any legal judgments against you. The credit reporting agencies of Experian, Equifax, and Trans Union can guard against unauthorized hacking of their data servers, but without the aid of an extra credit monitoring service or routine credit report checking on your part, they can’t protect you from identity theft. Identity theft occurs when someone uses your personal identifying information like your name, your Social Security number, or your credit card number to commit fraud. A typical identity theft ploy is to use stolen confidential information to open a new credit card account in someone else’s name and run up large unpaid balances, stiffing the victim with the charges. Then when the identity thieves don’t pay the bills, the delinquent credit card account is reported on the victim’s credit report as a late payment – potentially ruining the hapless victim’s credit rating in the process if left unchecked.

I’ve been a victim of identity theft before so I know first hand that it can happen to anyone at anytime. Ever since that time some stranger swiped my identity and obtained an unauthorized credit card number in my name, I’ve been hyper vigilant ever since. So far, since I started checking my 3 credit reports and credit scores regularly with the aid of credit tracking programs, I’ve been identity theft and credit reporting-error free. Like a cancer, identity theft activity is something that you can generally detect early on. New accounts opened with your identity will appear on your credit report in a matter of days, revealing new transactions to you as they happen. Because your credit report information is updated frequently, checking your credit reports routinely is one of the best and easiest ways to not only spot clerical recording mistakes (which do happen on occasion), but to also raise the alarm on identity theft and halt unauthorized credit activity before they have the opportunity to hurt you in any substantial way.

Getting Your Free Credit Report From AnnualCreditReport.com

In 2003, the Fair and Accurate Credit Transaction Act (FACTA) added several important changes to the existing Fair Credit Reporting Act (FCRA) – most importantly, it gave all American consumers the right to view their credit reports from each one of the 3 major credit bureaus for free. In response to the growing prevalence of identity theft cases, the federal government now requires the three major credit reporting agencies to offer consumers free access to their credit reports to give them a better fighting chance at combating fraudulent occurrences.

At the present time, the only federal government-authorized site offering truly free credit reports is Annual Credit Report. AnnualCreditReport.com is the only official source for obtaining your free annual credit reports under federal law. However, the Fair Credit Reporting Act only guarantees access to a free credit report from each of the big 3 nationwide credit reporting agencies – every 12 months. Every year, consumers have the option of requesting all 3 free credit reports at once, or staggering them out throughout the year in 4 month intervals. While there is no catch whatsoever in terms of hidden fees or charges, please be mindful that you are only entitled to one credit report from each of the three participating credit reporting agencies, once a year. Once you have exceeded your quota for the year, you will have to wait 12 months more before qualifying for your next round of free government sponsored credit reports again. In addition, credit scores, FICO or otherwise, are extra and not included in the federal government program.

Here are the ways to request your free official credit report, courtesy of Uncle Sam:

1. Get Your Official Credit Report Online – The easiest way to view and print your free annual credit report quickly is to go online. Just visit the government’s official AnnualCreditReport.com website and follow the directions. The website’s designed to be user friendly and accessible.
2. Get Your Official Free Credit Report By Phone – Call 1-877-322-8228 to request your free credit reports by telephone. You will need to undergo a simple verification process over the phone and your reports will be mailed to you via postal service snail mail.
3. Get Your Official Free Credit Report By Mail – If you are truly in no rush and old fashioned, you can request your free credit reports via postal service by filling out the following online request form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

For those who have not requested or obtained their free credit reports for the year, AnnualCreditReport.com ought to be your first stop. However, those who have already used up their free annual credit report quota for the year through the government’s recommended channels still have free credit report options at their disposal. Read on!

Are Free Credit Report and Free Credit Score Trial Offers – Scams Or Legitimate Promotions?

Ever since the free annual credit report legal mandate was passed by the U.S. government, a variety of “free credit report” websites and credit offers have popped up all over the Internet to do business. While some indeed provide valid credit reporting services and feature an outlet for consumers to get a credit report for free after having already exhausted all free government provided free credit reports for the year, many of these supposedly “free offers” come with strings attached. For example, your “free credit report” may come with an automatic enrollment in a credit monitoring service that starts out as a free trial but quickly escalates into an automatic monthly charge on your credit card if you don’t cancel within the free trial period.

So how do you wade through the gunky, confusing morass of free credit report offers without getting ripped off or falling for a shady free credit report scam? Well, the worst thing you can do for starters is start clicking on one of those free credit report solicitations that sometimes lands in our email boxes – oftentimes they are nothing more than phishing scams, so definitely beware of those. The vast majority of people probably type in – “Free Credit Report” into Google or their preferred search engine hoping to strike gold. Unfortunately, the majority of the websites that populate the top search results, other than the one for the government’s Annual Credit Report website, only offer free credit reports with automatic enrollment into some type of free trial for a paid service. While these credit report and credit score monitoring services definitely have their positives and benefits in helping you maintain healthy credit scores and avoid identity theft, many consumers might regard the majority of these trial offers as bait and switch scams at first blush.

The most popular and the most heavily marketed one of these free credit report trial offers is FreeCreditReport.com, the one with the ubiquitous television commercials featuring the catchy jingle that “monitors your credit and sends you email alerts, so you don’t wind up selling fish to tourists in T-shirts.” Run by Experian, one of the big three credit reporting agencies, FreeCreditReport.com is the site that most people probably come across when blindly searching for their free credit reports online. TV Commercials for FreeCreditReport.com featuring the charming host with his guitar and rag tag band playing at seafood restaurants or in the back of some beat up car, have reached such an incredible saturation point in the mainstream media that it’s the number 1 site that first comes to mind when any one thinks of free credit report offers these days.

However, free credit reports via this particular site are only free via automatic enrollment into a trial program for a paid credit monitoring service. Cancel promptly or within the 7 day trial period, and you’ll walk away without paying a single cent, but fail to do so and you’ll wide up with monthly charges that you’ll have to jump through hoops to cancel. Some critics say it’s fundamentally dishonest and a shady business tactic, because an applicant who registers with the site only gets a free credit report after enrolling into a trial offer for a $14.95 per month credit tracking program. Others say the company is surreptitiously and even unfairly taking advantage of the public’s concerns over their credit worthiness during tough economic times. Even the Federal Trade Commission has deemed it necessary to take counter steps to help clear up the ongoing media confusion caused by the success of the FreeCreditReport.com commercials – releasing its own free credit report videos to the public that spoof the popular FreeCreditReport.com trademark gimmicks, while promoting the official AnnualCreditReport.com website.

On various message boards and anti-scam blogs across the web, you’ll probably come across consumers complaining about the recurring credit card charges after having ordered what they initially thought was a free credit report. Unfortunately, the vast majority of consumers who succumb to the free credit report trial offer traps fail to read the disclaimers and fine print before clicking the “I accept” or “submit” buttons.

The truth is that these so-called free credit report sites do indeed provide consumers legitimately issued free credit reports, but only after they have agreed to trial membership enrollment into a paid credit monitoring service (after having been offered the opportunity to examine the terms and conditions). The free trial offers may last as short as a week or even as long as a month, but in either case, if the consumer fails to cancel the trial membership in time, they get charged. Some call these free credit report sites scams or impostors, but at the end of the day, it’s just clever (albeit somewhat sneaky) marketing strategy. Perhaps consumers like you and I ought to exercise a bit more responsibility in reading everything carefully before we dive head first into anything.

The reality in this world is that nothing is ever truly free – there is always catch. Companies are willing to promote their products for free by dangling carrot-like trial periods to get you in the door, but yes, there is always a catch. However, in almost every single legitimate case, the catches can be beat with the aid of some common sense, careful due diligence, and adherence to the fine print. In the case of these free credit report trial period offers that exist out there, simply by canceling on time within the promotional time constraints allotted, you can indeed walk away with free credit reports and free credit services.

Review Of Free Credit Report and Credit Score Offers From Experian, Equifax, and TransUnion

AnnualCreditReport.com remains the only authorized source to get your free annual credit report under federal law today, however it’s usefulness only goes so far. The following free credit report offers are meant for those who have used up their free credit reports for the year from each of the 3 credit reporting agencies, courtesy of the federal government’s program. All of the free credit report trial offers below offer essentially the same service, merely repackaged by different credit reporting agencies. In exchange for your free credit reports or free credit scores from Experian, Equifax, or TransUnion, you agree to be automatically enrolled into a trial offer for a 24 hour credit report monitoring service. However, simply sign up for one of the free trials and cancel immediately or before the trial period ends, and pay nothing for the free credit report you get at the time of sign up. The free credit report offers listed below are indeed legitimately free, but you must cancel promptly within the trial period to avoid the extra credit monitoring service charges. Some of you may ultimately enjoy the benefits afforded by a paid credit report tracking service (I kept mine), but I’m assuming most people reading this are motivated primarily by credit report freebie offers and nothing else.

My Recommended Ways To Get Your Credit Reports For Free (Just Cancel During Free Trial Offer):

1) Free Credit Report.com – Free 7 Day Trial Period (Experian) – The most important catch to this offer is that you must cancel within the 7 day trial period to truly walk away with a free credit report from Experian. With FreeCreditReport.com, you can indeed get your free Experian credit report and Experian credit score upon sign up. Simply cancel immediately or within the 1 week trial period and you pay nothing. Trial enrollment into Experian’s credit monitoring service offers unlimited Experian credit reports and credit scores on demand. The complete credit watch program monitors all 3 major credit rating agencies and provides continuous updates and instant alerts to you regarding any notable changes to any one of your triple credit reports. This free trial offer is probably the most popular option for free credit report seekers.

2) Credit Check Total - Free 7 Day Trial Period (Experian) - Cancel within the promotional 7 day trial period after sign up, and your 3 credit reports and 3 credit scores from all three credit reporting agencies are completely free. The important catch is that you must remember to cancel immediately after sign up or within the one week trial period to avoid all charges. Those who stay on to take advantage of the credit monitoring service will receive free unlimited access to their 3 national credit reports from Experian, TransUnion, and Equifax, along with unlimited access to their regularly updated PLUS credit scores and credit reports, for $19.95 a month.

3) Privacy Matters 1-2-3 – Free 7 Day Trial Period (TransUnion) – With the Privacy Matters 123 offer, powered by TransUnion, consumers can get 3 free credit reports and 3 free credit scores from all three credit bureaus. As always the case with these types of offers, there is a mandatory 7 day trial membership enrollment into Privacy Matter’s credit monitoring service, which offers unlimited access to all of your 3 credit reports and credit scores from the agencies using TransUnion’s scoring system. Simply cancel immediately after sign up or within the one week trial period and get all of your three credit reports and scores for free. Else, it’s $19.95 per month. Don’t forget to cancel if you’re just interested in the free credit report and free credit score promotion.

4)  MyFICO Credit Score Watch – Free 30 Day Trial Period (Equifax) - Take advantage of the My FICO credit score watch 30 day trial period to get a free Equifax credit report and genuine FICO credit score from Equifax. Simply cancel immediately upon sign up or within the 30 day trial period and you’ll pay nothing. If you forget to cancel within the trial period, there is an annual charge of $89.95 for the continuous FICO credit score monitoring program. For those interested in purchasing the product long term as I did, there is even a MyFICO discount code or two available for additional extra savings at 20% off.

5) Equifax Credit Watch Gold with 3-in-1 Monitoring – Free 30 Day Trial Period (Equifax) – This deal from Equifax offers you the ability to get a free FICO credit score from Equifax along with a one time 3-in-1 consolidated credit report from all 3 of the major credit agencies – Equifax, Experian and TransUnion, with unlimited access to Equifax credit reports. The monthly cost is $14.95, but simply cancel after sign up or within the 30 day introductory trial period and your Equifax FICO credit score and 3 credit reports are completely free. Don’t forget to cancel!

Source URL: How To Get Your Free Credit Report and Avoid Fake Credit Offers

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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With the lowering of interest rates by the Federal Reserve in response to the current economic climate to the lowest levels we have seen in years, the interest rates offered by high yield savings accounts and high interest certificate of deposits are now simply not as attractive as they once were, only a few years ago. With the stock market still suffering from unstable price swings and massive volatility across all sectors, it makes present day sense to look towards alternative investment ideas to make some money.

While I have been a quiet Lending Club member for a few years now since the online company opens its doors to loan investors, I haven’t felt the need to review the program until now. Until recently, the top high yield savings account and best CD rates at most banking institutions offered a reliably consistent rate of return on deposits. But with market turmoil ever present and the specter of worsening bank failures looming, I’ve begun to turn my attention to other investment possibilities in an attempt to diversify my portfolio risk and seek a higher rate of return. The ability to earn a reasonably competitive interest income with the added ability to diversify risk via peer to peer lending networks like Lending Club and Prosper is becoming more and more attractive. At the very least, P2P lending programs offer potential profit seeking investors like myself the ability to play the role of the banker and help people out with their loan needs, while at the same time earning interest income that’s higher than what’s currently available in a regular savings account or bank CD.

What Is Lending Club and What’s P2P Lending and Borrowing All About?

Lending Club is a person to person, also known as a peer-to-peer, lending website that matches ordinary borrowers with ordinary local lenders (who are ordinary people themselves) through a pairing system that combines social networking, a computerized search algorithm, and manual credit worthiness checks. Essentially, Lending Club is a way to offer low interest loan rates to borrowers with good credit, while at the same time offering willing potential lenders like you and I the ability to earn a reasonably high interest rate of return with a relatively low risk of default on the loans that we extend to these borrowers. It’s an alternative way (that’s growing in popularity) for ordinary Americans to borrow money, get qualified, and get funded for loans expediently without the complex hassles of applying for traditional bank loans or having to deal with the riskier side of 0% balance transfer credit card offers or getting mired into the clutches of payday loans. On the whole, Lending Club offers borrowers better interest rates than can be obtained from any credit card offer, even those that purport to be low interest.

The whole business concept behind P2P lending networks like Lending Club is built on the premise that borrowers will be less likely to default to members of their own local communities. The Lending Club online system offers anonymous borrowers and local micro loan lenders a way to find each other and get matched up based on personal preferential demographic factors like geographic location, educational and professional background, and activity within a particular social network like Facebook (the social networking site where Lending Club had its upstart roots).

Still don’t believe Lending Club or peer to peer lending and borrowing programs are legit? Just take a look at a recent article from the Harvard Business Review, which notes the remarkable rise of peer to peer lending programs and documents the rise of such emerging programs as the next big wave of important financial innovations in the coming years, especially in light of the ongoing economic recession and the collapse of traditional lending institutions. It looks like P2P lending is here to stay, one way or another.

My Lending Club Experience – Investing In High Interest Bearing Loans

As a person who’s always up for trying out new financial products, I signed up for Lending Club when it first came out and have been using the online service ever since. So far, my Lending Club experience has been pretty positive, yielding fairly respectable returns in the process. Currently, my entire Lending Club participation has only been that of a lender and I have yet to participate as a borrower. However, while I can’t comment on Lending Club through my own personal experiences as a borrower, I have had numerous extended online conversations with actual people who have used the Lending Club service for their borrowing needs, primarily to help pay down existing high interest debt. Most of the Lending Club borrowers I’ve come into contact with have been pretty receptive to the user-friendliness of the Lending Club online platform and pleased with the convenient access to reasonably priced loans that the website affords, particularly when compared to last ditch lending alternatives like car title loans or payday cash advances.

One of the reasons why I slightly prefer Lending Club over other peer to peer lending networks – is its non-eBay auction-like nature. Having to engage in a convoluted bidding process for loan offers or loan investment prospects would inject too much complexity into an online loan matching process that’s trying to cater to the ordinary masses. Fortunately for investors in particular, Lending Club offers its loans on a take it or leave it store front basis. If you find a loan and the credit characteristics and interest rate of return strikes your fancy, you can buy it on the spot, or pass.

As primarily an experimental investor and cautious lender, I have mostly sought out high quality, lower risk of default type loans. As a relatively risk adverse lender with an infrequent appetite for riskier loans, I am not to keen on the prospect of any of my loan investments ever defaulting. However, at the same time, I understand that it’s a trade off – safer loans generally yield much lower interest rates of return, while riskier loans almost always yield much higher rates of return to compensate for the higher risk of default and nonpayment. The vast majority of my Lending Club loans as a lender have been A-grade, personally-chosen loan investments. Thus far, I have stayed away from using Lending Club’s computerized LendingMatch program to pair me with desired loans. I guess I have confidence in my own ability and prefer to retain control, rather than let some computer software do the leg work for me.

Currently, I have a little more than $800 invested into numerous micro loans with local borrowers. I’m always on the look out for high quality, attractive loan prospects but unfortunately, they are not always available. When they do become available, I try to snap them up quickly. These A-grade Lending Club loans have become quite a set of high yielding cash cows for me. Thus far, I’ve been very lucky and relatively fortunate as none of the Lending Club loans that I’ve extended have been significantly late or have entered default. Intriguingly, my Lending Club loans have earned me a steady interest rate of almost 8%, which is 2-3 times higher than what I earn with my best CD rates, best high yield savings, and even best money market accounts. As Lending Club continues to grow in popularity, its borrower base will inevitably grow larger in size, and the volume of attractive loan investments are bound to increase. If my default-free track record holds, I may decide to dabble in slightly riskier Lending Club loans in the near future to see if I can snag a higher rate of return but still maintain my default-free streak. Stay tuned!

For those wondering about the prospect of income taxes levied on the earnings off of Lending Club loans – yes, you are personally responsible for paying ordinary income taxes on all interest income that your Lending Club investing activities generate (you are issued a handy 1099 form at tax time).

Setting Up A New Lending Club Account Is Free and Quick

Opening an account with Lending Club is easy and efficient, and as expedient as opening a new online bank account. To open an account and start lending money through Lending Club, you simply submit your personal information, bank name and bank transfer account numbers, along with some optional background information. Thereafter, the account registration process wraps up with the obligatory bank test deposits to verify true bank account ownership

Opening a new Lending Club account for borrowing purposes on the other hand entails a stricter registration process that necessitates that the applicant provide a Social Security Number and other identifying information for a full credit report and  FICO credit score background check (try looking up your own free FICO credit score beforehand). Though Lending Club imposes a rather strict set of prime standards for borrowers, this attention to credit quality over mere quantity ultimately ensures a better experience and loan exchange for both lenders and borrowers in the long run.

Borrowing Money and Getting A Loan From Lending Club

For prospective qualified borrowers, Lending Club offers an attractive way to obtain a loan at comparatively affordable rates – offers that beat out most personal bank loans and credit card interest rates. However, do be forewarned that Lending Club’s qualification standards for borrowers are high grade and rather stringent. Lending Club pretty much only wants prime, or near prime borrowers with good to excellent credit. Those with very bad or subprime credit are probably out of luck when it comes to Lending Club, and will probably have to resort to less than advisable, bottom tier loan alternatives such as bad credit credit cards or payday loan borrowing.

The process of applying for a Lending Club loan is surprisingly straightforward. Approved Lending Club borrowers get a 3 year unsecured fixed interest rate loan, with repayment obligations managed by Lending Club. There is no haggling or negotiations to contend with as you simply submit an application for a loan, and based on your FICO credit score, credit report, and background check, you are offered a fixed interest rate loan to accept or reject. At Lending Club, you can borrow anywhere from $1,000 to $25,000 as an unsecured loan, to be used for just about any purpose, including but not limited to, high interest credit card repayment or small business financing.

To get started as a Lending Club borrower, simply open a new Lending Club account as a borrower, and submit a loan application. At the time of registration, Lending Club will obtain a credit report and FICO credit score check of the borrower in order to rate and assign a credit risk grade (ranging from A thru G) and determine the appropriate interest rate the borrower can solicit on the site. Once approved, the borrower is free to list his or her loan request on Lending Club for prospective lenders to review and examine. During the credit risk scoring process, particular attention is paid to the borrower’s credit rating history, the amount of the desired loan balance, and the borrower’s current debt to income ratio.

Lending Club’s standards for borrowers are high and the program only currently accepts members who can meet the followings status and credit history requirements:

• Must be a U.S. resident.
• Must have a FICO credit score of at least 660, with a debt to income ratio (excluding mortgage) below 25%.
• Credit history report must indicate that you are a responsible borrower.
• Have at least 1 year of credit history, showing no current delinquencies, recent bankruptcies (7 years), open tax liens, charge-offs or collection accounts in the past 12 months.
• Must have no more than 10 inquiries on your credit report in the last 6 months.
• Must have a revolving credit utilization of less than 100%.
• Must have more than 3 accounts in your credit report, of which more than 2 are currently open.

For their middle man loan matching services, LendingClub charges a processing fee (ranging from 0.75% to 3.50% based on Lending Club’s assessed credit risk grade), which is included in the annual percentage rate (APR) and is subtracted from the loan proceeds prior to disbursement to the borrower.

Lending Money and Earning A Comparatively High Interest Rate On Lending Club Loans

To qualify as a Lending Club loan investor, you must meet and satisfy certain preliminary state and financial suitability conditions – translation: you must belong to an approved state and/or pass certain income and net worth requirements. With exemptions for certain states such as California, you generally must have an annual gross income of $70,000 or a networth (including your home) of at least $250,000.

As for the state residency requirement, you must be a resident of one of the following states below. Your state not on the list? Fear not – Lending Club has submitted proposals to all states and new ones are being added as they are approved.

• California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Minnesota, Mississippi, Montana, New Hampshire, Nevada,New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming.

As a prospective Lending Club loan investor, you can start with as little or as much money as you’d like. Once you have opened a Lending  Club account and transferred in the appropriate funds for lending purposes, you will be asked to indicate your level of risk tolerance (credit risk ratings that range from A – G) and prompted to search for loans either manually, or get matched up with prospective loans with the aid of Lending Club’s computer algorithm based LendingMatch software. The Lending Match program generates a suggested loan portfolio based on your level of risk desired and your connections with the borrowers in your account. As mentioned above, I have chosen to stick with manual loan evaluations (with great success thus far) as I feel more comfortable with my own ability to assess loan prospects than entrust that duty to a random computer program.

Those who are new to peer to peer lending may wish to start with small incremental investments and tinker a bit with the seesaw effect of risk and interest rate of return, before diving into larger denominational investments. Those who get the hang of it may actually find the loan investment hunting and evaluation process rather interesting and personally rewarding (remember, you are potentially helping out someone who is in desperate need of a loan to get his or her life going again).

There are two loan components that will be of paramount importance to prospective Lending Club loan investors – the interest rate of return offered, and the rate of default risk. The current range of interest rates that Lending Club lenders and investors can potentially earn varies from 7.37% to 20.11% (depending on how risky the loan is in terms of risk of default, as determined by the automatically assigned Lending Club loan grade.

The worst case scenario for any Lending Club loan lender or investor is the dreaded loan default, which occurs when the borrower refuses or is unable to fulfill the obligations of his or her loan principle and interest rate repayment. Lending Club’s website indicates that the current overall default rate is less than 3%. However, and probably due to my personal strict and stingy loan evaluation tactics, I have yet to experience a loan default on my Lending Club loan investments. On the downside, I probably earn a much lower interest rate of return on my loan investments than I would be able to garner if I opted to invest in slightly more riskier B and C grade loans.

As a Lending Club loan investor, one of the general statistics and trends I track closely is the company’s continuously generated performance stats for all loans. As you can see from the current Lending Club loan stats, Lending Club does a pretty commendable and transparent job of providing updated statistics relating to all late and defaulted loans for all members to review and assess. As the updated loan default statistics demonstrate, rather surprisingly perhaps, the vast majority of loans (particularly the A graded ones) are current and not late or in default. The B and C loans are also not as horrendous in terms of late payments or defaults as one may have assumed. Those who are into mathematics and willing to play the odds of probability may find it worth the slight risk of partial loan default to capture the higher interest rate of return on their investments. As always, smart Lending Club investors ought to spread their loan investments around to minimize the chances that one unexpected loan default will torpedo their entire Lending Club portfolio.

Lending Club Loans Are Now More Liquid Than Ever And Can Be Traded Like Securities

As Lending Club has completed the SEC registration process, all Lending Club notes and loans issued on or after October 14, 2008 can now be purchased and sold as securities, as they now represent Lending Club security investments rather than direct loan obligations of the underlying Lending Club borrower.

Now instead of waiting for the 3 year locked in loan commitment notes to reach maturity, they can now be traded on the secondary market through Lending Club’s trading platform agreement with FOLIOfn Investments Inc, greatly enhancing their liquidity and versatility as investments. While only loans and notes issued after Lending Club’s October 14, 2008 SEC registration date may be traded, in due time, it is reasonable to expect the number of trade-able notes to balloon in the coming future.

For those concerned about the safety and security of their invested loan funds as a lender in the event of a Lending Club failure or bankruptcy, Lending Club actually addresses this issue on their webpage. According to Lending Club, in the event the company, for whatever reason goes out of business or is no longer able to continue servicing loans, in order to ensure continuity, Lending Club has a backup servicing and successor agreement with Portfolio Financial Servicing Corporation (www.pfsc.com) for PFSC to take over loan servicing.

While the Lending Club business entity itself is still burning through venture capital cash like it’s going out of style, particularly as it focuses on promoting the growth and adoption of peer to peer lending, I personally think the concept of P2P social network lending is here to stay. Whether companies like Prosper or Lending Club will be around forever, or whether they ultimately will be bought out by more traditional banks eager for a piece of the peer lending pie, remains to be seen.

Source URL: Lending Club Review – Social Network Peer Loans and Borrowing

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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As someone who believes the FICO credit score is the single most important number in any person’s financial life, I track my own credit score and FICO changes closely and religiously. While admittedly a rather mundane and financially nerdy task, the routine monitoring of one’s credit score has far reaching financial benefits beyond just ensuring one’s continuous ability to apply for cheap credit or qualify for a discount loan at great rates. A high FICO credit score has broad ramifications that affect everything from your ability to get the best home mortgage rates and the cheapest car insurance premiums, to your capability of stopping identity theft in its tracks. For those that share my appreciation of maintaining a perpetually high FICO score, the practice is made easier with convenient and user-friendly online tracking tools that provide periodic email updates on credit score changes with updated and archived graphs that trace credit score changes over time.

For my own personal credit score monitoring purposes, I use the Fair Isaac company’s MyFICO Score Watch program to keep continuous track of my credit score changes and updates. While there are numerous competing credit scoring products out there that purport to track your credit score, only the MyFICO.com lineup of FICO credit score products actually offer you a real FICO score, the only credit rating system that’s current universally adopted and used by the vast majority of lenders, creditors, and banks when evaluating your credit worthiness.

The FICO Credit Score Is Important Because It Determines Your Access To The Best Mortgage Rates, Car Loans, Credit Cards, and Jobs

The FICO credit score is the credit scoring methodology brought to you by the Fair Isaac Corporation, the current undisputed leader in the credit scoring market. It is based on the data contained in your personal credit history report and is therefore continuously and routinely updated as credit transactions are added to or removed from your credit files. Thus, as your credit card balances change or when you apply for new loans, your current FICO score is bound to fluctuate as any one score represents only a mere snapshot of your current credit risk at any particular point in time. The FICO score number is based on a numerical sliding scale ranging from 300 to 850 with the higher range representing the least credit risk and the most desirable rating to potential lenders.

While the Fair Isaac Corporation provides the secret but uniform mathematical formula that makes up the coveted FICO credit score, the scoring system is computed based on your credit report information as recorded and retained by the three major credit reporting agencies – Equifax, Experian, and TransUnion. Because your credit history may vary from one credit reporting agency to the next, your FICO credit scores as computed by each credit reporting agency may be different from one another. This is another reason why it’s often advisable for those who are imminently seeking a major credit based acquisition such as a major home mortgage loan, to request their 3 FICO credit scores as individually computed by the big three credit rating agencies.

So why should you know your FICO score and why should you care? That’s because credit lenders do, and so do a vast variety of organizations and groups such as mortgage brokers, credit card companies, insurance companies, and even landlords and potential employers. While the three digit number FICO represents only your past history of fulfilling debt obligations, the use of the number has been increasingly expanded by a variety of stakeholders to evaluate trustworthiness and financial risk beyond its original intended purpose of predicting future ability to pay back loans. Thus, those who wish to successfully engage in any form of commerce or any consumer activity such as getting their home mortgage loan refinanced, obtaining a 0% balance transfer credit card offer, or even passing an apartment rental background check, it’s important to periodically purchase a FICO score report and know where you stand in the eyes of prospective creditors.

Without a doubt (and this is not a mere sales pitch, but a fact), the most reliable way to obtain a genuine FICO score is always via the MyFICO.com website. I advise against obtaining the score through any other less reputable means (as I naively did early on), lest you wind up with one of those useless FAKO credit scores, like the Vantage Score or Plus Score being hawked by a variety of vendors including the credit rating agencies themselves. Remember, the FICO credit score is owned by MyFICO.com and is currently the only widely accepted credit scoring standard among the major U.S. banks and mortgage lenders. When you hear financial experts or random people discussing their credit scores, more likely than not, they are talking about their FICO score, rather than some of the other generic credit score variations.

In the past, it was possible to obtain all 3 of your FICO credit scores from each of the 3 major credit reporting agencies via the MyFICO Complete package, as all three – Experian, Equifax, and TransUnion had agreements with Fair Isaac to sell their respective credit report data and individually computed FICO credit scores via the MyFICO.com homepage. However, due to a recent contractual rift between Experian and MyFICO, the Experian FICO credit score is currently no longer available to ordinary consumers. Obviously this will make it substantially more difficult for ordinary consumers to track and manage their credit scores from one location as it eliminates direct consumer access to one of the three all important FICO scores. Although Experian has indicated that only its own Plus and Vantage Scores will now be directly available to consumers (essentially useless fake credit scores due to their spotty usage among lenders), genuine Experian FICO credit scores will still be available to banks and major lenders that request them. But consumers themselves will no longer be able to find out for themselves where they stand in terms of their Experian FICO scores. Despite the financial depravity and injustice of it all, for the time being at least, ordinary credit score customers will have to rely and make do with the FICO credit scores obtained from the remaining two participating rating agencies – Equifax and TransUnion. Experian should get a punch in the face for this one.

Credit Score Monitoring Can Help Prevent Identity Theft and Help You Improve Your Credit Score Rating

Along with the ability to request your individually computed FICO credit scores from the major credit reporting agencies (currently only Equifax and TransUnion), MyFICO also offers consumers a FICO credit score online monitoring product that helps you keep continuous track of your credit score changes as they occur. With the MyFICO ScoreWatch program, changes to your credit score are automatically plotted out for you by date, and over time, the up and down fluctuations can help you better understand and learn how your financial decisions and mistakes impact this very important number.

For example, as a user of the MyFICO ScoreWatch online product for many years, I witnessed my FICO credit score changes firsthand when I engaged in a festive round of 0% balance transfer arbitrage a few years ago. The sudden large spike in credit card balances caused my FICO score chart to plunge significantly due to my increased debt utilization ratio (a key component of the FICO score). However ScoreWatch showed a dramatically recovered FICO score a year later (by more than 50 points) after I paid back the 0% APR credit card loans in full and on time. Knowing where I stand at all times in the eyes of potential lenders via a continuously updated credit score chart helps to not only motivate me to continuously stay on top of my financial life, but it also encourages me to make regular and timely credit payments to stay as debt-free as possible.

The other primary benefit of using a credit score monitoring tool is to help prevent identity theft. Preventing identity theft is perhaps one of the biggest reasons why someone not otherwise on the verge of purchasing a new car or seeking a home mortgage loan would desire to keep a close watch of their credit score. Heaven forbid, but in the event that your social security number or identity is compromised, and a free-wheeling thief decides to open a  new credit card account in your name, your automated MyFICO ScoreWatch sentry is likely to be one of the first lines of defense against the unauthorized intrusion. The MyFICO ScoreWatch system tracks changes in credit balances and payment history, and thus sudden increases or appearances of new credit card accounts will quickly trigger an online alert and response. Such alerts can warn you to investigate and find out the cause, before any potential identity theft attempt can ever inflict major financial harm. Priced around the same as the monthly fees charged by identity theft prevention-only products like LifeLock, but with the added benefit of tracking your FICO credit score updates as well, the MyFICO ScoreWatch product offers a pretty attractive multi-service package to credit score addicts and casual personal finance junkies alike.

MyFICO Products Offer Free FICO Credit Scores With 30-Day Trial Periods

Unlike your official free credit reports, your official FICO credit scores cannot be obtained in the same way for free. However, that doesn’t mean there aren’t any discounted MyFICO deals out there that can provide you your genuine FICO credit score at 15-20% off, or even for free courtesy of a free trial period. Currently, MyFICO offers free product trial options to get your FICO score for free, albeit such methods usually require you to cancel within a pre-determined 30 day trial period to avoid any cost. While I have since moved on to paying for my single FICO’s and credit score monitoring services, when I was still a poor struggling student, I frequently relied on popularly available free FICO credit score trial periods via MyFICO to get my three digit numbers. For those who aren’t certain if a particular MyFICO product is suited for them, I recommend checking out the desired links below to watch the accompanying demonstration video clips to get a better overview of how each individual FICO product works.

Save 20% Off FICO Credit Score Products With MyFICO Discount Offers

Aside from the free FICO and free credit report trial periods mentioned above, MyFICO currently offers low cost and affordable ways to obtain your FICO credit score and credit report with the aid of FICO coupon codes. To save 20% off all MyFICO offers, simply submit the following discount code at checkout for 20% off the listed price -  CPPSAVINGS. Please write a comment if the code no longer works. If the 20% off FICO promo code worked for you or if you have any favorable or negative experiences worth sharing, please join the comment discussion below.

1) MyFICO Score Watch – Free FICO With 30 Day Trial Period (Equifax) - The popular MyFICO ScoreWatch online tool allows you to keep close watch of your genuine FICO credit score as it fluctuates up and down based on changes made to your personal credit reports by the credit reporting agencies. Best of all, your past FICO score changes are archived and saved in a very intuitive graphical chart for your review. Your credit report at Equifax is monitored on a daily basis while the associated FICO credit score is tracked and updated on a weekly basis. Anytime there is a credit report change that causes your FICO to suddenly rise or drop, such as a credit card balance change, late payment, or a new account, you are immediately notified online or via phone text message.

For those looking for extra identity theft protection, ScoreWatch alerts you whenever a new credit account has been opened in your name, offering you the warning necessary to investigate before the unauthorized access can destroy your credit irretrievably. A MyFICO ScoreWatch subscription also provides you Score Power reports that break down the details of your Equifax credit report to fully explain the reasons hurting or helping your credit score. These reports are invaluable to those trying to increase and boost their FICO credit scores in anticipation of a future loan or mortgage. There is also a 30-day free trial available. So long as you cancel in time, you can walk away with a free FICO credit score and credit report by Equifax.

2) MyFICO Standard Score and Report - One FICO and One Credit Report (Choice Of Equifax or TransUnion) – If you simply wish to know your FICO credit score and have run out of free FICO credit score trial offers, this MyFICO package is the one for you. With the MyFICO Standard Score and Report, you get to pick a genuine FICO formulated credit score and credit report from either one of Equifax or Trans Union. Each FICO credit report comes with a full explanation of how lenders view you, including a detailed listing of all of your credit card accounts, auto loans, student loans, pending debt collections activity, court judgments, bankruptcies, tax liens, and home mortgage loans in your name. The standard credit report with FICO package also comes with a customized recommendation as to the best course of action to boost your FICO score based on the specifics and particulars of your current situation.

3) MyFICO Quarterly Monitoring - $4.95 FICO Score With 30 Day Trial (TransUnion) – This offer allows you to get 4 genuine FICO credit scores and credit reports from the TransUnion credit reporting agency during a 12 month period. During the course of a year, MyFICO will automatically pull your credit report and FICO score quarterly (every 3 months) so you’ll be kept up to date as to what’s happening with your credit in regular periodic intervals. MyFICO Quarterly Monitoring also offers a weekly monitoring service for new information tied to your identity including changes in public information and new credit based activity. This package is geared towards those interested in arming themselves against identity theft. Interestingly, the Quarterly Monitoring subscription even comes with complimentary identity theft insurance up to $25,000 with extra assistance towards identity theft resolution in the event you ever become a victim.

Those who are just looking to get a cheap FICO credit score or one that is heavily discounted may wish to cancel after trying the service out for a month. You can cancel anytime after the first month and simply pay the single $4.95 monthly fee and walk away with an affordable FICO score provided by TransUnion. Otherwise, the upfront annual cost is $49.95.

4) Suze Orman’s MyFICO Platinum Kit - $49.95 (All 3 Credit Reports, and FICO Scores From Equifax and TransUnion) – This offer is for those who want to know their complete MyFICO credit score and credit report in a single snapshot form (nearly the same as the former MyFICO Credit Complete package). With the Suze Orman MyFICO Platinum Kit, you get all 3 of your credit reports from Equifax, Experian, and TransUnion, along with your Equifax and TransUnion generated FICO credit scores.

For those who don’t read her books, watch CNBC, and don’t know who she is – Suze Orman’s a pretty well known and popular financial expert, known for her in-your-face big sister-like financial quips. Some find her berating style a bit annoying, but I actually find her to be pretty enduring, albeit frequently a bit too blunt. However, her FICO Platinum package does a pretty decent job of walking you through the FICO score experience step by step and offers lots of useful tidbits to help you take control of your credit and harness the power of a high credit score. Because it’s a Suze Orman product, the package is especially suited for financial beginners and those focused on paying off mounds of debt.

Source URL: Review Of MyFICO and My FICO Credit Score Watch Discounts

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Currently, the economy is undergoing a major recession, with consumer spending tanking, and dire ramifications emerging for the future of our financial and banking systems. But if you examined the newly released promotional material and advertisement literature for the new Visa Black Card, you might have thought otherwise. With an eye popping annual fee and lavish credit card perks oozing to great  excess, this new credit card offer from the renown Barclays Bank definitely does not reflect the current mainstream economic sentiment.

The Original Black Card Craze

Years ago, the first card to emerge and promote itself through rumors and word of mouth marketing as the ultimate status symbol for high net worth spenders – was the American Express Centurion Black Card. With its extravagant spending perks and incredibly high credit limits, enough to buy a few palatial mansions and small estates with just a few card swipes, the Amex Black Centurion Card was considered to be the ultimate materialistic status symbol of its day, at least to those superficial few that actually cared about those types of things. Known as the first true “Black Card”, the Amex Centurion program’s strong reputation of exclusivity enabled it to attract the interest of a certain wealthy and high pedigree clientele – invite-only applicants, who were willing to spend more than $250,000 a year on their existing American Express credit cards and pay an annual fee of $2,500 to gain entrance into the exclusive program.

The New Visa Black Card – Another Card Designed For The Uber-Rich

Now, a new Black Card has emerged from the financial decadence of yesteryears, clad in black – this time from Barclays Bank Delaware – in the form of a more versatile and widely accepted Visa brand credit card. Now, for the low, low bottom basement price of just $495 a year (with absolutely no sarcasm intended of course), you can now get your grubby paws on and own your very own genuine Black Card courtesy of Visa. Fashioned from an admittedly attractive carbon graphite material (as opposed to the paltry plastic that adorns the credit cards of common peasant folk such as myself), and featuring a virtually unlimited credit limit with the ability to earn 1% cash back of all purchases, the new Black Visa Card appears to personify wealthy and power – or financial overkill – depending on how you look at it.

While seemingly totally out of place on a financial landscape littered with the dead and twitching bodies of former banking giants and credit lending organizations, the extravagant card features and exorbitant fees of the exclusive Visa Black Card from Barclays actually makes a lot of sense if you think about it. Rather than cater to the unpredictable credit card appetites and questionably untimely payment whims of ordinary consumers who may or may not be in the proper financial position at all times to pay back their credit card spending debts, why not peddle a product that targets the cream of the crop – the top percent of the American population with the vast financial means to afford their high spending lifestyle? Being not only able to rake in larger profit percentages from higher credit card merchant fees through the high rate spending habits of the financial elite, but also able to reduce the risk of dealing with ordinary Joe and Jane Plumbers struggling amidst a stagnant economy seems like the financial sure fire way to go in terms of profiting from credit card spending in an otherwise down economy.

Review Of The Visa Black Card’s Features and Offers

One of the Visa Black Card’s most aggressive promotional hitch is its unique exclusivity and selective membership. The card admittedly does state in its promotional tracts that the card is exclusive in nature and therefore not freely available to just anyone. While the Black Card’s exclusivity doesn’t stem from its availability to only just black people (as comedian Stephen Colbert comically lampoons in a Colbert Report TV skit), the card’s marketing material does state that the program will only be limited to the top 1% of U.S. residents – “to ensure the highest caliber of personal service is provided to every customer” as they put it. Whether this is indeed a fact or just an artificially generated gimmick to inspire awe and mythical reverence in the Black Card name remains to be seen.

For those with high credit scores who apply and are approved for the Visa Black Card, selected members get to enjoy the following supposedly exclusive privileges:

1. Limited Membership – Obviously a sought after feature for the high classy types who want to segregate themselves from the economic stimulus check-hungry masses.
2. 24-Hour Concierge Service – This privilege I do find very appealing – though I’m not sure what I’d use it for exactly.
3. Exclusive Rewards Program – Busy business travelers will definitely find the travel, airline, and hotel rewards very appealing, and the free upgrades worth the annual program cost of Black Card ownership.
4. Business Travel Insurance Protection – Road warriors may appreciate the worldwide travel insurance, baggage protection, and card purchase guarantees available to cardholders.
5. Luxury Gifts – Even rich people must appreciate expensive freebies.
6. Patent Pending Carbon Card – The card does look and feel pretty cool. It’s the ultimate buying tool – as the Black Card’s website wisely points out to those who may skeptically think otherwise.
7. Annual Fee Of $495 – *Gasp* Unless there’s a decimal point missing in that numerical figure, this is probably a deal breaker for non high net worth applicants. However, the pricey annual fee will probably not faze the Black Card loyalists out there.

Perhaps like all super credit card offers for the rich and famous, the greatest appeal of the Visa Black Card, aside from its apparent exclusivity, is its unique access to a free members-only concierge service that operates at your beck and call, 24 hours a day, 7 days a week via telephone and email. With the Visa Black Card’s concierge service, members get to enjoy personalized and complimentary assistance towards the fulfillment of their entertainment, travel, business, shopping, and lifestyle needs. For the ultra-rich clientele who is perfectly capable of affording anything they wish, oftentimes, it’s the ability to acquire a product or service on demand as soon as it’s desired that’s worth its weight in gold. The ability of the Visa Black Card to tap into a service whose sole purpose is to help you open doors and acquire access to difficult-to-find products, or acquire ticketing admittance to otherwise unobtainable sporting events or exclusive restaurants may appeal greatly to upper echelon card carrying customers.

So, Does It Make Sense To Apply For The New Visa Black Credit Card?

Obviously for those of you who couldn’t give a hoot, the Visa Black Card’s not meant for your financial tastes. But for the lot of you who do exhibit some interest, read on. While the Visa Black Card does indeed provide a measure of exclusivity and offer a myriad of attractive credit card benefits such as a 1% cash back reward rate on all card purchases and a frequently sought after introductory 0% APR balance transfer rate, many skeptics (myself included) may have a legitimate argument when we point out that the card doesn’t really offer anything that is genuinely exclusive or unavailable in other credit card programs. Many of the same high end perks of the Visa Black Card can be find in other high end card programs like the American Express Platinum, which offers virtually the same travel reward benefits and 24 hour concierge services, for the same comparable annual fee. One can even argue that the original “Black Card” – the American Express Black Centurion Card, stills promotes a greater sense of wealth and exclusive entitlement with its invitation-only application process. Unlike the Amex Centurion Card, the Visa Black Card can be directly applied for, while the Black Amex is by exclusive invitation only based on a pre-demonstration of the ability to record credit card charges at a very high rate for a certain period of time. It’s clear the Black Visa Card is going right after the Amex Black Centurion crowd, but I’m not certain the program sufficiently distinguishes itself other than by name only. Is simply slapping the Black Card label onto the credit card offer sufficient to give it mystique and appeal among the high end trendy crowd? I’m not sure.

For big time spenders and those who place value into such indicators of wealth and status, the Visa Black Card’s annual fee is easily paid for by the cash back offers, free gift rewards, and convenience of the 24 hour concierge services. But as an admittedly fairly frugal saver and spender, I’m not sure what type of status or self esteem boost I would gain from carrying around the carbon fiber credit card in my wallet. But then, I haven’t become a millionaire and reached wealthy status yet.

Source URL: The Visa Black Card – Cash Back Rewards With Concierge Service

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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These days, it seems like whenever there’s a good thing going or some attractive opportunity for pecuniary gain or profit, the masses ultimately swarm the offer like locusts until they’ve completely ruined it for everyone else. This is how I feel about credit cards and the credit card industry. Credit card rewards and interest free balance transfers were once the easiest ways to make some free money on the side, but now that the Feds have enacted the new credit card law, all of that’s about to change.

As a big proponent of credit card use and an eager partaker of reward credit cards, balance transfer deals, and credit card arbitrage, I’ve been taking advantage of all that they’ve had to offer for some time now. Over many years, I’ve applied for and been approved for more than 25 credit cards. I’ve owned, carried, and used most of the major credit cards from Capital One, Bank of America, Citibank, Advanta, Discover Card, to American Express. Throughout college and into adult hood, I’ve used my squadron of credit cards to earn more than $10,000 worth of cash back rewards, redeemed point rewards for countless free gift cards, and accrued more than $15,000 of interest profit from balance transfer arbitrage. At its peak, I was carrying more than $100,000 in total credit card balances at one time, taking advantage of 0% APR credit card funds deposited into a high yield savings account to earn free interest money.

However, despite my aggressive credit card usage history, I’ve never paid a single cent in credit card interest, forked over a single late fee, or suffered a major long term FICO credit score hit. Currently, my FICO credit score stands at a very healthy 802, thanks to my solid credit history and lack of any late payments. In fact, I don’t even know what any of my credit card interest rates are as I’ve never had to deal with them before. I have always paid my monthly card balances in full and on time. As a naturally frugal saver, I’ve always lived within my means and eschewed unnecessary material goods . Since I started using credit cards at the age of 18 and made paying off my regular credit card balances a priority in my life, I’ve never had to pay anything to the credit card companies, and instead have managed to profit immensely from them.

Because of all this, I had mixed feelings when the federal government finally issued the new credit card rules and announced its plan to crack down on allegations of unfair and deceptive credit card practices by the credit card industry. While the new rules have the potential to benefit American consumers and essentially protect them from their own spending stupidity and consumerism negligence, the new changes are likely to rain on my parade and spell the end to the credit card party I’ve been enjoying for the past few years. However, despite my personal misgivings and the potential loss of a key cog of my personal finance arsenal, I think the new credit card rules and regulations were probably long overdue. Like the mortgage industry, the credit card sector has been in serious need of a good shakeup for some time. Lax federal oversight and governmental complacency has allowed the industry to get a bit too lax on basic fairness standards, permitting abusive and egregious predatory credit card practices to go unchecked.

Despite the Current Recession, The New Credit Card Law Don’t Go Into Effect Until Summer Of 2010

As evidenced by the huge credit bubble that finally popped recently, America has had a love affair with debt and leverage for the last two decades. This abundance of credit in all forms caused many to become drunk with highly leveraged spending power, leading many down the path of out of control shopping, and encouraging the tapping of home equity to pay off credit card balances. The credit card industry’s practice of packaging and selling credit card debt to investors and hedge funds encouraged the growth of exorbitant risk penalties, over the credit limit fees, and all sorts of balance transfer and cash advance charges. Driven by the natural pursuit of profits, the credit card issuers eagerly raked in the ever increasing interest charges and late payment fees. Eventually the subprime mortgage crisis destroyed the housing market and in turn caused a chain reaction devastation that led many credit card consumers to no longer be able to handle their credit card payments, leading to a rise in defaults and ballooning non payment scenarios.

Wallowing in their own mismanagement mess and inability to control their spending habits, consumers ultimately turned to the federal government for bailout assistance. After bombarding the Fed with over 65,000 public comments (the highest number ever received by the federal government on any one issue offered up for comments), the Fed finally responded and issued an announcement of its approval of new credit card rules to combat what regulators labeled as unfair or deceptive credit card industry practices.

In its combined action and announcement, the Office of Thrift Supervision, the National Credit Union Administration, and the Federal Reserve Board approved the new credit card rules, sending a financial tsunami through the the banking and credit card industry. From here on, it is clear that these new rules will fundamentally rewrite the way future credit cards are packaged, marketed, and priced for consumers and small businesses. Despite the significant moves, some lingering critics remain displeased at the effective date of the new rules – July 1, 2010 – and argue that consumers need the new rules now to protect them from overbearing credit practices already in place in light of the current ongoing economic recession and not wait until mid-2010 when the recession may already be over. Of course, the industry has indicated that it needs the lengthy amount of time to adapt to these newly enacted regulations.

How Will The New Credit Card Rules and Regulations Affect You and Make Your Debt Reduction Life Easier?

1) No More Interest Rate Hikes On Existing Balances – Previously, as was the routine practice by the credit card issuers in recent years, credit card interest rates could be increased and jacked up on a whim with only a short notice to the customer in one of those fine print letters that nobody ever actually reads. With the new credit card regulations, interest rate hikes will not be permitted on existing balances and rate increases will only be allowed under limited circumstances such as on future purchases, new cash advances, when a promotional or introductory rate ends, or in response to an actual late payment in violation of pre-existing card agreements. This is one of the biggest changes and one that I wholeheartedly agree with. However, as one who has always paid off his card balances on time and has never paid late fees or credit card interest charges, my advice to all is to always pay off balances on time and in full to avoid having to even worry about credit card interest rates to begin with.

2) Interest Rates Cannot Be Raised Until A Payment Is Over 30 Days Late – Under the new credit card rules, interest rates for existing balances can only be increased if there is an outstanding payment that is over 30 days late. This change eliminates the old practice of allowing credit card companies to increase or double your current APR interest simply if you run up a large balance on your cards (to force you to pay those balances off quicker than you’d like). In addition under the new rules, card lenders must give cardholders at least 45 days of advance notice in the event of interest rate changes, including rate hikes due to 30 day late payments or non payment penalties. Previously, card issuers frequently gave notice of 15 days or less.

3) No More Universal Default – Credit card companies will not longer be permitted to raise current interest rates on cardholders simply because of their payment history or track record with other unrelated creditors such as landlords, utility companies, or even with different credit card issuers. Previously, universal default essentially allowed card issuers to raise rates arbitrarily by alleging cardholders had universally defaulted on all existing loans simply with a single violation against one unrelated debt account. While many card issuers like JP Morgan Chase have already discontinued this practice, this new rule compels the rest to follow.

4) No More Double Cycle Billing – While the immensely illogical practice of two cycle or double cycle billing is predominantly already a thing of the past with most card issuers having already abandoned this ridiculous practice, the new rules will officially end the loophole. Double cycle billing is the practice of calculating interest on daily card balances from more than just the previous 30 days. This billing practice hurts consumers who pay off their balances in full in one month but not in the next, because it irrationally averages multiple month balances to generate interest fees for credit card companies. Thus cardholders end up getting hit with finance charges and interest fees from the previous billing cycle even though they have paid the bill in full.

5) Card Payments Applied To Higher Interest Rate Balances First – One of the most significant new changes (and perhaps the most important), will help compel the practice of fair allocation of payments – a great future benefit to consumers, particularly those that engage in 0% balance transfer offers, cash advances, or ATM withdrawals that carry different interest rates. Any new payment above the credit card bill minimum must automatically now apply to the part of the balance with the highest interest first. For those who have multiple balances on the same account at different interest rates, this new rule will prohibit card lenders from applying payments towards lower interest balances first before applying them to the higher interest ones. This will stop the seemingly unfair industry wide practice of applying monthly payments to the cheaper credit card balances first, while letting more expensive balances accrue interest charges at higher rates.

6) Longer Payment Grace Periods Of At Least 21 Days – Credit card issuers will be required to offer consumers  a reasonable amount of time to make payments on monthly credit card bills – at least 21 days after bills are mailed or delivered. This will help protect consumers from shrinking payment periods and give them a reasonable amount of time to make payments before late charges and interest fees are applied. Personally, I don’t even know how long my credit card grace periods are as all my cards are set up with automatic bill payment that automatic pulls money from my linked checking account to ensure I never have a late payment. I highly encourage the use of automated debit payments. It makes life easier and much more hassle free.

7) No More Unreasonable Fees For Exceeding Credit Limit Because Of Hold On Account – This addresses a basic fairness problem some cardholders have been experiencing, particularly those who travel a lot. Oftentimes when consumers make reservations for rental cars or hotel rooms, merchants will place a hold for a certain credit limit amount on credit cards as a security deposit beyond the purchase amount. While the security deposit hold is in effect, the card’s credit limit is temporarily reduced, making it more likely for the cardholder to accidentally exceed his or her credit limit in the meantime with additional charges and thereby incurring an over the limit charge or fee. The new rules do away with excessive fees in such a scenario.

8) Limitations On Bad Credit Credit Card Fees - This new credit card rule change has the potential to reign in fees for subprime credit cards big time. Subprime credit cards that target people with bad credit will no longer be allowed to charge hefty upfront fees with the new limitations. What was happening was that these subprime credit cards (high interest cards for people with low credit scores with $500 credit limits) were charging applicants with upfront fees that totaled half the credit limit and demanding fee payment in less than a year. The new regulation will severely reign in these fees, but essentially eliminating the future of credit card offers for people with bad credit altogether.

9) Disclosure Of Foreign Currency Transaction Fees – While most people are not aware, international credit card users have had to pay extra fees for credit card transactions charged overseas in foreign currency denominations. While these extra foreign currency fee charges remain perfectly legitimate, the new rules require issuers to clearly list the fees and do a better job of publicizing then to the consumer so that it doesn’t come to them as a surprise.  The disclosure of all fees charged for purchasing goods or services in a foreign currency or for using the credit card outside of the United States will need to be made on a table on credit card applications and marketing solicitations, and not just in tiny fine print when the account is initially opened.

10) Better Overall Disclosure of Credit Card Terms and Conditions -  The new federal rules will require all credit card terms to be disclosed and marketed more clearly to consumers. Card issuers will need to clearly disclose and provide notice regarding important terms and conditions like payment due dates and times, as well as how interest rates and fees will be applied to those making only minimum payments each month. Some credit card issuers have been sneakily shifting around payment due dates and mandating arbitrary payment times, such as setting cut off times at 1:00 pm or on a weekend or holiday. These rules will prohibit such unreasonable and arbitrary practices. As mentioned above, any change to existing credit card terms will need to be expressly disclosed to the consumer at last 45 days before they take effect.

Goodbye Credit Card Rewards, Introductory Teaser Rates, and 0% Balance Transfer Credit Card Offers

The new credit card regulations issued by the federal government will have a significant negative impact on the credit card industry and the future of credit card use in the United States and elsewhere as issuers re-evaluate their existing business and risk pricing models. Because the new rules will severely restrict the ability of card issuers to modify pre-existing interest rates and card terms in response to changes they perceive as credit risk factors (known as interest rate pre-pricing), it is likely all new credit card interest rates will increase as a result, along with a severe reduction in credit availability. All existing rates in place prior to the effective date of July 1, 2010 will likely go up tremendously as well (even for those with excellent credit history scores). Because the new rules do not mandate a ceiling on how much credit card issuers can actually charge for interest fees or late payments, consumers are likely going to be slapped with even higher rates from hereon. With the credit card industry, it comes down to profitability and redistribution of costs. Because of the new rule changes, credit card issuers are likely going to lose a significant amount of money (more than $10 billion a year) in lost interest payments and fees. Instead of eating up the loss and taking their lumps, they are likely going to pass them onto consumers through stiffer interest rates and less favorable credit card reward terms.

The new regulations will have several unintended but perfectly foreseeable consequences as well, including a severe reduction or complete elimination of popular low interest deals, 0% APR balance transfers, and 0% purchase credit card offers, even for those with very high credit scores. The new rules greatly favor those who are irresponsible with credit card usage and those who were never meant to carry credit cards to begin with, and will punish the prime borrowers by eliminating the vast majority of all cash back credit card offers and interest free promotions. Only time will tell whether all such offers will be eliminated en masse, or whether the industry will be able to find a way to stay profitable and continue to offer purchase and usage incentives for consumers.

Despite the fairness benefits of the new credit card rules, here are some of the ways the changes will negatively affect credit worthy consumers:

• It will be much more difficult to qualify for credit cards as credit availability in compliance with the new rules will dry up.
• Substantially higher credit card interest rates overall, even for those with excellent credit scores – primarily to compensate the card issuers for their loss of income under the new rules.
• No more 12 month zero percent balance transfer offers with no balance transfer fees – likely to be replaced with high balance tranfer fees or low interest credit card offers instead.
• There will be a signficiant scaleback of credit card rewards, cash back incentives, and frequent flyer airline mile programs for responsible credit card use. Goodbye juicy credit card promotions.
• Severe reduction or total elimination of bad credit cards, forcing those with poor credit to seek higher credit and riskier options such as payday loans or pay day cash advance.

As always with life, it seems financially responsible individuals such as myself always seem to get the shaft. It’s always the bad home mortgage borrowers, bad credit card users, or the irresponsible spenders who ultimately get bailed out by the government – taking all the credit card goodies enjoyed by the responsible credit card consumers with them.

Source URL: New Credit Card Rules and Regulations – The Good and The Bad

Copyright Protected © 2008 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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What’s In Your Wallet? – So goes the motto and promotional tag line from those zany Capital One credit card ads we’re always seeing on TV. When it comes to Capital One, the credit card company’s message is clear -  it wants you to evaluate your choice of credit cards and make sure you are taking steps to maximize all cash back credit card rewards and low interest opportunities available to you.

Capital One is one of the major credit card issuers in the United States, having distinguished itself over the years with its wide reaching mass marketing efforts, particularly during the 1990’s when the company experienced tremendous growth and a phenomenal surge in market share. Through its aggressive marketing and promotional efforts, Capital One has situated itself as a major player in the credit card market with its huge and broad lineup of credit card products. Since its initial start into consumer lending, Capital One has joined the ranks of Citibank Citi Cards, Bank of America, JP Morgan Chase, Discover Card, and American Express as the dominant credit card lenders in the U.S. and Canada. Today, the company is actually one of the largest, if not the largest independent issuer of Mastercard and Visa credit cards. The company has since transformed itself into a giant bank holding company with a diverse brevy of financial services and products that include credit cards, auto loans, home mortgage loans, small business loans, and various interest-bearing high yield savings accounts and certificate of deposits.

Capital One’s Quest To Mass Market and Diversify Its Financial Services Beyond Just Credit Cards Offers Customers More Choices

Capital One made its name in the national credit card business by utilizing a mass mailer approach to appeal to a wide spectrum of credit card consumers, from subprime bad credit credit card applicants to high FICO score candidates. Since its decision to re-brand itself into a diversified national banking institution, the company has been steadily buying up regional banks and growing its base of consumer deposits. Most recently, Capital One bought Chevy Chase Bank, a major local regional bank with a huge network of banking branches in my neck of the woods of Maryland, Washington D.C., and Virginia. While Capital One’s continued quest to invest in regional banks across the United States has allowed it to stave off some of the devastating negative effects of the subprime mortgage crisis that has eliminated several other major banks like Washington Mutual and IndyMac, the overall economic downturn has not left the company completely unscathed. Due to the deteriorating economic climate, recessionary pressures, and unemployment effects, card consumers as a whole have been getting slower at paying off their credit card bills, contributing to the rise in credit defaults and delinquent loans.

While Capital One has significantly less direct exposure to toxic subprime mortgages than most of its peers, it has significant exposure to the problematic consumer and small business credit card market. However, due to its steady conversion and transition into a major bank holding company through local acquisitions, the company is likely to weather this current economic storm well and remain a financial leader in the credit market by taking key steps to stay competitive. In response to the economic malaise, Capital One has since pulled out its major subprime credit card offerings in favor of credit card reward and 0% balance transfer purchase programs that encourage more responsible credit card usage.

Apply For Capital One’s Pre-Established List Of Credit Card Rewards and Low Interest Deals, Or Build Your Own Offer With The Capital One Card Lab

One of the distinguishing factors of Capital One is its staunch focus and emphasis on program customization and providing a large array of choices for consumers and business owners. This strategy and approach is completely different from that promoted by Discover credit card or Advanta credit card, which rely on a small portfolio of highly targeted products. Instead, Capital One offers every credit card reward, 0% balance transfer offer, and airline miles credit card feature possible, all packaged into varying forms for those with differing credit worthiness scores. Currently, you can find a Capital One card offer for just about any interest rate or reward formula, at any credit rating or credit score level. In fact, the company even offers you the ability to build your own personalized Capital One credit card to suit your needs and purposes using the Capital One Card Lab, the centerpiece of its recent television and print advertising efforts.

With the Capital One Card Lab, you have the ability to create a customized credit card package by choosing your own APR interest rate, credit card rebate, airline travel rewards, cashback percentages, introductory deals such as 0% balance transfer or 0% purchases, or annual fee (if any). Of course, it’s a give and take as you can’t have everything Capital One gives you in one card and all of your choices will be balanced out in some way. For example, if you want to earn the highest cash back rewards, you may have to give in to a slightly higher interest rate or a shorter introductory balance transfer period. However, if you want low interest or 0% balance transfer and purchase offers, you may have to settle with fewer rewards. The choice is up to you when you decide to customize using the Capital One Card Lab instead of going with pre-existing Cap One offers.

The Best Credit Card Offers Are Reserved For Those With Excellent Credit Scores, But Average Credit Seekers Have Options Too

When it comes to its array of credit card products, Capital One card offers are issued based on the applicant’s credit score and credit report history. The credit levels of – excellent, good, average, or limited – will determine your card’s terms and conditions. Obviously those with higher FICO credit scores will get the best 0% APR teaser rates and enjoy the highest purchase rewards compared to their bad credit credit card counterparts. To determine your Capital One credit level, here is a quick guide to the qualification requirements and specifics. The dollar figures in parenthesis “(  )” are approximate credit limit ranges offered depending on your credit level type.

• Excellent Credit ($500-$20,000) – Must have had a loan or credit card for at least 5 years with credit limit above $5,000, and have not been more than 60 days late on any credit card, medical bill, or loan in the last year. Must never have declared bankruptcy.
• Good Credit – ($500-$15,000) – Have had a credit card for 3 years or more with credit limits above $5,000, and have not been more than 60 days late on any credit card, medical bill, or loan in the last year.
• Average Credit - ($300-$3,000) – Have had a loan or credit card before, with credit limits less than $5,000. May have been late on more than one credit card, bill, or payment in the last 6 months.
• Limited Credit -  ($300-$3,000) – Have never had a credit card or have limited usage of it. Have a limited credit history, for example due to status as a student, new to country, age, or having been an authorized user on someone else’s credit card. Needs to have a valid credit score from one of the major credit reporting companies.

List Of The Best Capital One Credit Cards:

The following are reviews of the best Capital One credit card offers. Instead of applying for existing offers, you are free to mix and match your own preferred card program with the Capital One Card Lab. If you are not inclined to build your own credit card from scratch, feel free to select from the following recommended offers depending on your credit level.

No Hassle Cash Rewards and Point Rewards

1. Capital One® No Hassle Cash(SM) Rewards -  (Good Credit) – Automatically earn 2% cash back on purchases at gas stations and grocery stores, and 1% cash back on all other purchases. There is no limit to the cash back rewards you can earn, and your cash rewards never expire. You can also save money with a 0% APR purchase rate until August 2010. There is no annual fee.
2. Capital One® No Hassle Cash(SM) Rewards – (Average Credit) – Earn unlimited 1% cash back on all purchases with this card, along with a 25% annual bonus on the cash rewards you earn during the year. There is a 0% APR offer for all purchases until May 2010, with no annual fee.
3. Capital One® No Hassle Points(SM) Rewards – (Excellent Credit) – Earn unlimited 2% back (2 points per dollar) in point rewards for purchases at gas stations, grocery stores, and drug stores, plus 1% back for all other purchases. Enjoy a 0% introductory interest rate on purchases until August 2010. There is no annual fee
4. Capital One® No Hassle Points(SM) Rewards – (Average Credit) – Earn unlimited 5% back (5 points per dollar) for purchases made at gas stations, major grocery stores, and drug stores, and get 1% back for every dollar spent on other purchases. Your reward points never expire for the life of your account, and the reward credit card also features an ongoing 0% APR offer on purchases until May 2010. There is no annual fee.

No Hassle Airline Mileage and Travel Rewards

1. Capital One® No Hassle Miles(SM) Rewards 1.25 Miles Rewards (Excellent Credit) – Earn unlimited 1.25 miles for each dollar spent on purchases (25% more than regular airline miles credit cards). Your reward miles can be used to redeem for cash, gift cards, or book travel with any airline, hotel, cruise line, or rental car provider with no blackout dates or seating restrictions. Purchases also enjoy 0% APR interest until August 2010. There is no annual fee. Those with only good credit, as opposed to excellent, should apply for the good credit version of this No Hassle Miles reward card.
2. Capital One® No Hassle Miles(SM) Ultra-For Professionals – Earn unlimited 2 miles per dollar spent on all purchases, redeemable for cash, gift cards, or travel rewards with no redemption blackout dates or seating restrictions. This reward card is a very high mileage earner, perfect for personal heavy airline travelers or small business owners.
3. Capital One® Orbitz® Visa Signature – Those with excellent credit can earn 3% back in rewards points for money spent on eligible Orbitz bookings, and 1% back on all other purchases. There is no point limit on rewards that are redeemable  for travel, cash back, and gift cards. There is no annual fee. Those with only good credit, as opposed to excellent, should apply for the lower credit limit good credit Orbitz Platinum Card, and those with only average credit should consider the average credit Orbitz Platinum Card instead.

Low Interest Rate, Balance Transfer Offers, and 0% APR Purchases

1. Capital One® Platinum Prestige – Mastercard - Those with excellent credit ratings can save money with this Capital One credit card’s 0% APR offer on both balance transfers and purchases until August 2010. Thereafter, you get a low interest rate with no annual fee.
2. Capital One® Platinum – (Good Credit) – Those with at least a good credit history can save money via a 0% introductory offer on balance transfers and purchases until August 2010. There is no annual fee pursuant to this 0% credit card offer.

Card Offers For Those New To Credit, Or Those With Limited Or Average Credit History

1. Capital One® Standard Platinum – (Average Credit) – Those with only average credit can qualify. Annual fee is $19.
2. Capital One® Platinum Max(SM) – Those with only average credit can qualify for a competitive fixed interest rate that won’t change for at least 3 years. The annual fee is a low $19.
3. Capital One® Classic Platinum MasterCard – With either the Classic Visa or Classic Mastercard version of this particular low interest Capital One offer, those with average credit can also enjoy 0% APR on all purchases until May 2010. The annual fee is $19.

Source URL: Reviews Of The Best Capital One Credit Cards and Offers

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