Credit Card ’s Talk

The average American household owes thousands of dollars on their credit cards. Given that the average interest rate on a credit card is currently in the 18% range, the monthly payments that card-issuing banks receive should generate pretty substantial profits. Those profits are substantial, especially when combined with the fees that merchants pay to accept the cards for purchases in the first place. The growth of the industry, and subsequently, growth of profits, has slowed somewhat since the Federal government mandated higher minimum monthly payments for credit card customers last year. Since the average minimum payment has doubled, to about 4% of the outstanding balance, many customers have started to pay down their balances. When balances go down, so do profits.

If the balances are going down, how can the credit card companies increase their profits? It?s easy; they just raise the interest rates that they charge their customers. Customers may find their interest rates increasing to as much as 30% per year for any of the following ?transgressions?:

How can you avoid having your interest rate increased to 30% per year? In some cases, it will be unavoidable, in which case you should consider applying for another card. Otherwise, you should be diligent about paying all of your bills on time and make sure that you remit at least the minimum amount due. If you have a card that has a high limit that you rarely use, you might consider asking the company to lower your limit. If you have a high balance, you might look into transferring some or all of that balance to another card. You might even consider taking out a loan to pay down the balance.

Credit card companies are becoming more and more eager to find reasons to raise interest rates. The last thing you want to do as a consumer is to make it easy for them to do.

?Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to affiliate marketing and informational Websites, including End-Your-Debt.com, a site about payday loans , debt consolidation, credit counseling, and personal bankruptcy.

The credit card industry is a competitive one; all you have to do to see that is open your mailbox. For many consumers, pre-approved credit card applications can be found every week in the mail, often accompanied by offers to let you transfer an existing balance from another credit card at a low interest rate. Sometimes these rates, known as teaser rates, can run as low as 0%, which can make applying for one of these cards rather tempting. Be careful, though. The fine print in the terms of agreement on those cards could hide some very expensive surprises.

Here are some things to watch out for in the fine print when you apply for a card with a low-interest introductory offer:

As long as you are aware of the terms, these teaser rates can be quite helpful. If you pay late or fail to read the fine print, you could find yourself paying a lot more in interest. Read the agreement before you apply for the card.

?Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation, personal bankruptcy, establishing credit and credit counseling and HomeEquityHelp.net, a site devoted to information regarding mortgages and home equity loans.

Many people may still not be aware of an amendment to the Fair Credit Reporting Act (FCRA) that Congress passed last year. This amendment allows U.S. citizens to receive a copy of their credit report, for free, once per year. The plan is being rolled out slowly in order to avoid swamping the system, but people living in the West and Midwest can receive their credit reports now, and everyone will be able to obtain a free credit report by September of this year. Those seeking a copy of their credit report should watch out, however, as not everyone who promises a ?free? credit report is actually delivering one.

These free credit reports may be obtained through the official Website: http://www.annualcreditreport.com. Additional information is available at the Federal Trade Commission Website at http://www.ftc.gov/credit. Obtaining a copy of your credit report through this site is easy, and only requires your name, Social Security number, date of birth, and address. That would seem fairly straightforward, but there are many companies, some legitimate and some not, that are interested in attracting the business of those who seek copies of their credit report, and scams are flourishing.

Some companies have established Websites with addresses that are very similar to the address of the official site. These sites promise a free credit report, but they are actually only interested in harvesting your personal information. In addition to stealing your name, Social Security number and address, these sites may also tell you that a credit card number is necessary to ?verify? your identification. With this information, the people operating these sites can steal your identity! There are many other Websites that promise ?free? credit reports, but few that actually provide them for free. One such site is currently under investigation for credit report fraud. The site promised a ?free? report, but required a credit card for ?identification? purposes. Customers filled out the form and received a copy of the credit report but also received a charge on their credit card for $79.

Other unscrupulous companies take a more direct approach by sending spam e-mail that promises to provide free credit reports. These spam messages are almost always ?phishing? expeditions that are designed only to obtain your personal information. If you are interested in obtaining a copy of your credit report, you should avoid responding to e-mail solicitations.

It is a rare occasion when you can obtain something for nothing. You can, however, receive a copy of your credit report, for free, once a year. Be aware, however, that not everyone who is promising you a free credit report intends to provide you with one.

?Copyright 2005 by Retro Marketing.

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and StructuredSettlementHelp.com, a site devoted to information regarding structured settlements.

Most Americans are aware that any time they try to borrow money, the lender consults with a credit report outlining the borrower?s credit history. These reports are prepared by the major credit bureaus ? Experian, Equifax and Trans Union, and the reports, along with the accompanying credit score, contain a distillation of the borrower?s entire financial history. Armed with that information, the lender can make a decision as to whether granting a loan or credit would be wise. What many Americans don?t know is that most credit reports contain errors. Worse, it can take months or even years to correct those problems. In the meantime, the errors may prevent the borrower from obtaining a loan or credit.

A recent study shows that nearly four out of five credit reports contain errors. Worse, roughly one in four contains an error that is serious enough to prevent the individual from obtaining credit or borrowing money. Most of these errors are minor; they may simply consist of an incorrect address, phone number or perhaps date of birth. Others can be more serious, such as listing a paid loan as being in default, or including information from another person?s credit history. These types of problems can be serious, as they can adversely affect the credit score of the individual involved. The lower the credit score, the harder it is to obtain credit or to get a loan at a favorable interest rate.

According to the Fair Credit Reporting Act, consumers are supposed to be able to fix these problems quickly, but it often doesn?t work out that way. Sometimes, even if the person has proof that the information contained in the report is wrong, the bureaus are reluctant to correct it. A reason often given is that the bureaus would prefer to believe the lenders who provided the information rather than the consumer adversely affected by it.

The best way to avoid such credit report problems is to check your credit report regularly and to report problems or incorrect information immediately. You can do this, for free, by visiting http://www.annualcreditreport.com, a Website that allows Americans to obtain one free credit report per year from each of the three major credit bureaus.

?Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to establishing credit, debt consolidation and credit counseling.

If you have never heard of a FICO score before, you should become familiar with the term. Named for the firm that invented it, Fair Isaac Corp., the FICO score is the three-digit credit summary that, in essence, reduces your entire financial life to a simple set of numerals.

The score represents a distillation of information gleaned from the three main credit-reporting bureaus ? Equifax, Trans Union, and Experian, regarding your loan and payment history, as well as any bankruptcy filings you may have made. Andy liens or payment defaults will be incorporated into the score as well. The score, which can vary from a low of 300 to a high of 850, represents an attempt to quantify a lifetime of financial dealings into a single number. It has been quite successful. In fact, most people would be surprised to see just how important that score has become and how many businesses use it for reasons that aren?t entirely obvious.

Most people would assume, correctly, that lenders would check the score of a potential borrower who was applying for a car loan or a home equity line of credit. Many would be surprised, however, to see that the score is often accessed by potential employers, landlords, or even insurance companies. While some states have strictly forbidden the use of FICO scores as a guideline for setting insurance prices, some insurance companies still access the scores in order to assess risk for potential customers. Employers access the scores to see if a possible employee might be a security or theft risk, and landlords may use the score to determine whether or not a tenant should post a high security deposit prior to moving into a rental property.

A substantial argument can be made that there is no way to accurately reduce someone?s financial status to a single three-digit number. That said, it is simply a whole lot easier for most companies that need a financial ?snapshot? of a customer to look over their credit report, look at the score, and offer a ?yes or no? response based on the score alone. Fair or not, this is the way things work today, and it is probably unreasonable to expect lenders, employers and landlords to start looking deeper into their customers? and employees? finances.

The best solution for anyone who is concerned about his or her credit score is to examine their own credit report, which can be obtained for free at annualcreditreport.com. Report any errors to the appropriate credit bureau, and try to check your report once or twice a year. Fair or not, we are our credit score. Making sure that the number is accurate is an important step towards a solid financial future.

?Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and HomeEquityHelp.com, a site devoted to information regarding home equity lending/a>.