Leaving aside the fact that most people got this from no higher an authority than the credit card research company CardWeb.com, they need to understand that no one who trots this fact out actually understands what it means. And that even CardWeb doesn’t believe that most families owe $8000 on their credit cards. All they said was, that the average family owed $8000 across every kind of service – credit cards, bank loans, car loans, etc. And those families that owe that, happen to also own a credit card. And poorly informed pundits go about hollering that everyone owes that on their credit cards.  In reality, only 5% of all families in America owes that kind of credit card debt; most homes actually carry nothing higher than $2000 in credit card debt. And that’s according to the Federal Reserve. And the pundits also misunderstand what an “average” means. Let’s say that you make $10,000 a month, and your friend makes $1000 a month. To say that you make $11,000 between the two of you would be misleading. That’s what an average does. It tells you a lot about nothing.

The handful of people in America who owe that much  in credit card debt go and raise the average for everyone else. Get this – one in four Americans doesn’t even have a credit card, a bank card, a retail card or anything. How could it be fair to include those people in the “over $8000 in credit card debt” group?. Those who have credit cards are paying them off really well these days. And the designer of the FICO credit score agrees too.

But really, the whole concept of the credit card is tipped to win for the company, not you. There is a reason why credit card debt is so easy to get in over your head with. To begin with, almost anyone is eligible for a credit card, unless they have some terrible credit history to their name. Card companies fall over themselves to set you up with more credit than you could ever afford, and promise to raise it all the time too. If there was someone to `just give you a loan whenever you asked for it, wouldn’t it be easy for you to get in over your head? They are striving to do this to school kids now; and schoolkids are people who think that the minimum payment is all the bank expects instead of full payment.

What should tip you off that cards are meant to bury you in credit card debt is the fact that they expect so little as minimum payment each month. Sometimes when the law isn’t looking so hard, they lower your minimum payments so far down that it wouldn’t even cover interest for the month. It helps you get by without understanding what kind of a mountain of debt you’re running up, and it encourages you to slowly, dig yourself in a hole, an inch at a time. It is completely possible to end up in bankruptcy when all you do is spend $20 a day on your credit card without thinking about it.

So what is it that we are seeing here? Does the average household spend too much with credit cards or do they spend so little that it would be unfair to say they held $8000 worth of credit card debt? We are trying to say neither, actually. Credit cards like any other tool, can be useful and dangerous, depending on who uses it.

A post from: Great Articles

American credit card debt is at it highest level of all time even though interest rates have shot through usurious glass ceilings, leaving many cardholders desperate for relief. Although the laws have changed and credit card companies can’t just raise rates like they used to for no reason at all, the new laws still allow them to do just about whatever they want and get away with it. With American credit card debt saddling this nation’s consumers, our economy will continue to deteriorate and the top 1% will continue to get richer and richer.

The reason is simple: our Congress, sworn to protect our rights, has long ago abandoned their constituents and embraced corporations and their campaign contributions. Lobbyists for credit card companies basically took over the halls of House and the Senate for weeks and months prior to the voting on the new laws. Consumers really had no chance at all since they did not have a legitimate voice shouting for them against the lobbyists. Where is Ralph Nader when we need him most?

These very same credit card companies were the source of today’s impossibly massive American credit card debt. These numbers are so staggeringly large that it seems impossible to conceive of any way to eliminate the debt. In past years, when mortgages were easier to get, Americans saddled with high credit card debt would just refinance with enough cash-out to cover paying off their cards. With today’s home values much lower than in years past, most homeowners do not have the equity necessary to borrow money against their homes. American credit card debt seems destined to continue to grow as people get even more credit cards, take out cash and pay off old bills. “Borrowing from Peter to pay Paul” is the old saying and it fits very well in this scenario.

Until lending institutions stop charging late fees, over limit fees, and all those other ridiculous fees that they hit consumers with, American credit card debt will continue to skyrocket out of control. We have seen already what irresponsible practices like these have done to the mortgage industry. Although banks say they are “too big to fail”, what will they do when Americans just run out of money altogether? Isn’t America itself too big to fail?

A post from: Great Articles

It shouldn’t be news to anyone that most college students quickly sign up for their first credit card while  barely out of high school, and are quickly initiated into the sinking feeling of credit card debt. But these days, it starts sooner – while they’re still in high school. About one in three high school seniors these days have a card that is either completely in their own name, or is cosigned by a father or mother. That’s about three times the number from 10 years ago. High school seniors on average now walk about burdened with about $1500 in debt, tapping their friends for some credit card debt advice. Much of this could actually be illegal. No one under 18 is actually eligible under the law to hold a credit card on their own. Since it’s actually illegal, credit card monitoring services don’t exactly keep track of these.

It happens somewhat artfully; children living at home with their parents receive credit card solicitations addressed to both them and their parents together. And parents relent. Rarely though, parents who see this sometimes see that to give children a credit card to teach them responsibility is really unnecessary; they feel that the pressure children have to turn in homework assignments on time should be lesson enough in responsibility. Most teens are too young to really understand how credit works;  for instance, my responsible niece apparently thought for quite a while that when they asked for a minimum payment, she just had to pay that to be let off the hook. How could anyone reasonably expect young adults to learn about credit card debt when they are in college and walk with some five or six credit cards and about $1,500 in debt?

For parents and teens trying to avoid credit card debt, advice that makes the most sense would be to go get a debit card instead, or to get a prepaid card. The move to credit cards can’t be all that sudden. Children need to observe closely what you the parent will look for in a credit card bill, what each term used on a bill means, they need to understand what interest is and what reasonable interest is. They need to spend months seeing what it is you do when you get your credit card bill, and why you do it. You need to succeed in throwing a real scare into your child about what careless credit card usage can do. Give them nothing more than a $500 limit, and constantly repeat how dangerous anything higher than that can be. As unbelievable as it seems, young people just don’t get that you need to pay back credit card debt. Show your child how a credit card debt calculator works. Show them how if they have a $500 balance, if they pay nothing more than the minimum payment of $20 a month, at 12%, it could take them to years to  pay it back. And the ultimate in credit card debt advice would be to lead by example.

A post from: Great Articles

For fraudsters, credit card application theft is not even the main goal. This is just the entry point from where they can employ other types of fraud including account takeovers, money laundering and chargebacks. You need to expand your fraud detection capabilities by deploying effect solutions that work together with existing tools. Having a comprehensive and efficient solution for fighting identity theft and other fraud should be an ongoing endeavor for any industry that seeks to protect its online data.

According to the Federal Trade Commission (FTC), identity theft is growing at a staggering 20 percent each year and 50 percent of customers have complained of fraudulent credit cards issuance in their name. The internet is now commonly being used as a conduit for buying, selling and trading and thus, online credit application will continue to pose a high risk to issuing banks. Internet-savvy criminals are persistent individuals who work extremely fast to apply for credit with as many online merchants as possible once they get hold of stolen IDs. Minutes after credit card information is stolen can equate to thousands of dollars. If fraud is not detected early, credit issuers can also suffer financial setbacks and legal penalties that can significantly impact their bottom line.

For example, a fraud credit card application can cost issuing banks additional time-consuming fraud tools and validation checks that can drive up the average cost significantly to decision an application. High fraud rates may also force a bank to close entire channels significantly resulting in revenue loss due to lost business opportunities.

Unfortunately, in order to offer better protection against a fraud credit card application, credit issuers have been forced to deploy tools that rely on even more personal information. Ironically, this has left the issuing banks more susceptible to identity theft. Different techniques will definitely be needed to reduce the rate and impact of identity theft.

A post from: Great Articles

You don’t really need credit cards do you? Let us examine that proposal. If you don’t have credit cards then you can’t establish a credit history and you will not be able to purchase or lease a new or used vehicle. Without credit history and credit scores you can’t apply for most home loans, though there are some government programs like CALHFA for California first time homebuyers that will consider alternative credit sources. For the most part though you need to have credit and therefore you need to have at least one or two credit cards. The difference between having a credit card and abusing your privilege to have credit are two different things.

If you have a credit card with a $5000 limit and you are always at or near the high limit then your credit score will be negatively impacted. That minimum payment that you are making every month will not make a significant dent in the principal balance and it will seem like you will never be able to lower your balance. That is because most of the payment that you are making is going straight to paying interest, not principal. If you have several cards like this then you can easily imagine what a problem that would be for someone, especially if that someone has lost their job or had their hours reduced.

Eliminating credit card debt is one great solution but it will require you to call the card companies directly and negotiate a reduced payment. Most companies will do this if you have a hardship. They will transfer you to the workout department where one of the reps will ask you a bunch of questions relating to your income and monthly payments like utilities, food, cable, internet, car, etc. Once they have that information then they will calculate a lowered interest rate and monthly payment that is affordable within your budget. If you are approved for this the company will put you on a plan that will pay the debt off in five years at a greatly reduced interest rate and effectively eliminating credit card debt. You need to be aware that the credit card company will close your account and you will no longer be able to use the card, but at least you will be eliminating credit card debt from your life. Once the cards are down to zero you can re-establish credit a little at a time and with some planning and control.

A post from: Great Articles

How does this work, you ask? Simply put, the government had a chance to impose conditions when they gave all of the bailout money to the big banks like Chase, Citibank, and Bank of America. Since there were virtually no conditions, the banks continued their free spending habits and giving their corporate executives huge bonuses, all at the expense of us, the American taxpayers. Some other weak legislation was passed earlier this year intended to clamp down on credit card companies by limiting the amount of late fees and interest rate augmentations that they could impose on their credit holders. Unfortunately, these weak laws were easily subverted by the army of attorneys that the credit card companies employ and loopholes were found. The end result is that credit card holders are actually paying more in fees and higher interest rates than ever before.

The conclusion that many debtors now face is that they must get rid of credit card debt by any and all means possible. For many this will simply mean paying off their outstanding balances and closing their accounts and cutting their credit cards in two. For others who have accumulated too much debt, it may mean going to credit repair agencies who will negotiate settlements for them and help them get rid of credit card debt in that manner. For others it will mean either just walking away from the bad debt or filing for bankruptcy.

If you choose to get rid of credit card debt by walking away, you will be bombarded with calls from them, day and night and they will harass you to death until you give up. Eventually they will sue you and win in court and place a lien on your future earnings with a judgment. By getting rid of credit card debt using the bankruptcy method you will still need to pay some of the debt off, but a lot less. This will ruin your credit for a while but eventually you will be able to build it back up. Bankruptcy costs are usually around $500 to $2000, depending on the attorney and how complicated your case is and whether or not you own any real property such as a house or condo.

A post from: Great Articles