Archive for February, 2009

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What To Do When Your Credit Card Is Lost Or Stolen

Wednesday, February 11th, 2009

Losing wallets and purses is a common occurence. If they contain your credit cards, then you should take immediate action. There is no need to panic as all the major credit card companies have defined the guidelines that you should follow to protect yourself against the loss or theft.

If your credit card is stolen, immediately bring the matter to notice of the company. Most of the companies provide a toll-free number or an online service exclusively meant to deal with this issue.

The federal law states that you are responsible for only the first $50.00 of any fraudulent charges incurred on the card. But it is still essential that you report the lost or stolen card though you won’t have to face any financial loss. The other benefit of informing the company quickly before any fraudulent use is that they will waive the $50.00. But read the details on the credit card offer.

When you get the bill after the card is lost or stolen, scan every charge on the bill carefully. If something crops up that is not incurred by you, inform the company in writing immediately. Ensure the letter contains the date on which you informed the company about the misplaced card and dispatch the letter to the billing department. Send it separately from the payment as there is every chance that it will be misplaced.

Things work slightly different for the debit card. The amount of liability that you will incur depends on how soon you report it as lost or stolen. If you do it before it is used again, you do not have to bear any fraudulent charges. However a slight delay of even 2 working days means your liability may go till $500.00 of any fraudulent charges incurred on the card.

Check your bills regularly after the card is stolen. Inform your bank of any objectionable withdrawals from your account that happened at the time your card was lost or stolen. You can make a phone call, but pursuing with a certified letter that contains the day when you informed the company about your stolen or lost card. This will clear you of any liability.

Keeping track of the stolen or lost cards is an ideal method to prevent stolen or lost cards. Find out where they are located throughout and do not disclose the pin number to anyone. The pin number should be undecipherable and not something simple like the birth or anniversary date or phone number. The number should make sense only to you and not to anybody else.

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Credit Card With No Credit History

Wednesday, February 11th, 2009

While applying for a loan or a credit card, not only the fact that you have bad credit will work against you, but also absence of credit will hamper your attempts. You may not like it, but the business of consumer credit works in this fashion. Lenders avoid lending to people with no credit history because of the absence of the track record of payments.

That means, you cannot rent a car, stay in a hotel, or shop online without a credit card. However, there are a few things that you can do to rectify the problem.

Available Credit Options

If you do not have a credit history, most of the larger credit card companies will refuse to issue you a card. But you can try the smaller players like department stores. Apply for a card from a department store that is ready to issue you a card. A gas station card is also a good bet. What is crucial is that you pay your bills on time. Aim to build a good credit history and not simply to get a credit card.

Choose a credit card company that will consider your overall financial situation and not simply your credit history. Some lenders will consider your employment history, your housing condition and how frequently you have relocated. If all these details are good, they can approve your application. But it is imperative to use the card sensibly.

Credit Unions

If you are an existing member of a credit union or fulfill their membership criteria, find out their terms for issuing the card. Though they do not issue the cards blatantly, their terms for the members are more relaxed. There is no need for you to be employed by a particular company to be eligible to become a member of a credit union.

Secured Credit Cards

A credit card whose limit is equal to or slightly more than the cash deposit you have to give to the issuer as a security is called secured credit card. If you pay your bills on time consistently, the lender will usually increase your limit without asking you to pay further deposit. Once the lender becomes secure in the knowledge that you are a reliable customer, you can opt for the unsecured credit card.

Student Credit Cards

For a student, a student credit card is the best bet. Student credit cards are the excellent method of developing the credit history that is essential for availing further credit after graduation. But it is crucial that you utilize the opportunity sensibly. Many banks, especially those present in college or university cities and towns, will offer a credit card to the students.

Once you get a credit card, never forget that you are setting up a credit history. Prove that you are a safe financial bet by paying your bills on time. Do not overspend as it can drag you down into debt and worsen the situation.

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Various APR Features For Credit Cards

Wednesday, February 11th, 2009

There are different card products offered by various card companies, and their features vary greatly. Hence getting the right card that is suitable for your situation is a tricky process. Each credit card has its own set of unique features. But the fact is that most of the cards have the same features but with small degree of variation. Each card has its own APR and it is crucial that you understand what it means and how it works.

APR denotes “Annual Percentage Rate”. It is the interest charged to you for making purchases using credit and not paying off the full outstanding amount. It is shown in percentage.

The crucial APR

It is vital to consider the APR while applying for the credit card. It can dramatically affect your capacity to repay your card balance. The APR of the card differs not only amongst the various cards but also from the method and the type of purchase.

The APR for the cash advance on the card is the highest, followed by the APR for purchases. So if you are taking a cash advance of even $100.00, you attract an APR that can be a steep as 23%. For purchases, the APR can hover in the vicinity of 19%. Hence it makes sense to use the credit cards in case of emergencies or for purchases that you can pay off completely by the end of the month.

APRs also depend on the balance unpaid on the card. They are known as tired APR’s as the APR varies according to the balance tier in which you fall on the specific month. E.g. the balance of $0-$2,000 can have an APR of 14% while the balance exceeding $2,000 carries an APR of 18%. Hence it makes sense to carry lower balance on these cards.

Again, there is a penalty APR, which is applied if you make late payments frequently. This will increase the APR and consequently the total balance. Ensure you make timely payments.

0% interest credit cards

The very popular marketing technique used by the card companies is the introductory APR. You can transfer your existing higher interest card debt at this reduced interest rate on the new card. The purchases you make during the introductory period will also attract this lower interest rate. This allows you to reduce your balance substantially and you can repay more of debt during the introductory period.

But be careful of the future APR/ delayed APR that is effective once the duration of the lower rate is over. This rate may be far higher than the intro rate.

Hence it is important to look carefully at the APR and find out the actual rate for the card you are considering.

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