If you haven’t been a victim of credit card skimming you may not even be aware of what it is and where it can happen.  The sale of these devices which are known as portable magnetic credit card readers is not illegal.  In fact they are used commonly by small stores that could be at a mall such as the ones used at the kiosks in the middle of most malls.  You might also have seen them used at conferences or seminars to purchase merchandise.  This is why they are not illegal and can be purchased quite readily.  A spokes person for eBay states that they sell the devices as they aren’t illegal; however, they have a caveat that they can’t be used fraudulently.

How can you make sure that you aren’t a victim of credit card skimming?  You will need to be vigilant when you make purchases.  Make sure that you can see your credit card at all times even if you have to be obvious about it.  There is no reason to be embarrassed about it as you are protecting your assets, but you should try to be discreet about it.  If the clerk notices that you are particularly interested in what they are doing you could explain you just like to see what is going on.

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You may have gotten laid off, or had some other financial hardship, and now you realize you’ll soon be late or default on your credit card payments. Before you fall for debt scams that promise you debt settlement for pennies on the dollars and end up costing you years of bad credit and your financial health, take action into your own hands and call your lender. Many lenders are willing to work with their customers in order to receive payment and it can mean the difference between salvaging your credit score and filing for bankruptcy.

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The days of college students getting credit cards are gone. New legislation makes it much harder for people under 21 to get a credit card. In order to do so now, the applicant who is under 21 has to have a parent or guardian co-sign the credit card agreement or they must be able to prove they can make the payments. As most of these people are still in school, it’s highly likely they’ll be shut out from obtaining a credit card without their parent’s permission. Where are they going to turn to when they need emergency cash for books, a medical problem, or just for extra cash?

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Let’s face it: we all could use some new ways to pay off the mounting debt that is associated with our credit cards.  Unless you are one of the lucky few who have been able to refrain from incurring huge credit card bills or do not own a credit card, you are probably suffering from owing more on your credit card than you make in a month’s time.  There is a light at the end of the tunnel, however, when it comes to paying off your credit card debt.  You just need to know how to get started and what to do to make the debt disappear and keep it that way.

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Tax time is here and for some lucky folks, that means a nice tax return! What can you do with a bit of extra cash? Here are the top 5 ways to use your tax refund and have some fun too!

1. Become an Angel Investor

You may not have huge loads of cash, like famous angel investors, but what you do have can help someone start a business. There are numerous sites that will help you fund social or business projects worldwide. Some sites, like Prosper.com, will allow you to lend your money to others for a specific purpose and then gain interest on that money. Other places, like Kiva.org, aren’t commercially oriented to provide a large return in interest, but they will make you feel good for helping a worthy cause.

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There’s been a lot of hype in the national media about consumer debt levels decreasing, particularly credit card debt. The CEO of CardHub.com, Odysseas Papadimitriou, decided to take a look at those statistics a bit closer because something just didn’t make sense. How were people who were supposedly unemployed (and others in financial hardship due to high interest rates on existing debt) able to pay down their debts? Apparently, they really weren’t and what Odysseas discovered is that the real reason consumer debt has declined is due to credit card company write-offs.

What Are the Real Numbers?

We do know that there were $93 billion dollars assigned to credit card debt reduction by the media. Of that, Mr. Papadimitriou discovered only $10 billion dollars came directly from consumer pockets. The rest, a full $83 billion dollars were write-offs.  The same sort of pattern was seen in 2009.

By analyzing the Federal Reserve’s monthly G. 19 report on Consumer Credit Report, Mr. Papadimitriou argues that debt paydowns are more obvious in the first quarter of every year due to tax refunds that are applied to existing debt. However, by the end of the year, consumers become cash-strapped again and end the entire year in debt more than when they started. In 2009, by year’s end even with consumer debt write-offs and consumer debt payments, outstanding credit card debt had still climbed almost $21.5 billion dollars.

A Vicious Cycle of Debt

The problems that consumers are facing are multiple. They may have lost a job in the household. They may only be able to find part time jobs, not full-time. They may have had their hours cuts. Business owners may be faced with declining revenue. Prices are increasing over all. Yet, if they already maintain some level of credit card debt, they are also faced with spiraling interest rates, some higher than 30%.

In the past, consumers were able to take those balances and transfer them to a card with a lower rate. However, due to the recession, all banks are facing record losses and they aren’t in the mood to lend, especially to people with no jobs or a loss of income. That makes it nearly impossible to transfer accounts or reduce rates even by negotiating with the current lender.

Bankruptcy and Defaults

That leads to massive numbers of people either refusing to pay their credit cards or filing bankruptcy. Once a consumer fails to make a payment for 180 days or files bankruptcy, the banks that issued the credit card have are forced to write-off the entire balance as a loss. This is what we’re seeing more and more of, not actual consumer debt repayments.

Consumer Habits Changing

Consumers have also changed their habits drastically, as sources of income disappear. Many are less likely to even want credit cards. Others are forced to make decisions based on whether they buy food or pay the credit card company, and that decision is easy. With more people being cautious about what they spend and where they spend it, it will be likely we will see more credit card defaults unless the economic engine starts to get into gear much more quickly.

Times are tough in many communities and citizens are finding it difficult to make ends meet. When this situation occurs, it is often important that they stay away from heavy credit card usage, but sometimes, that action is unavoidable. Taking a second job or clamping down on budgeting is almost always a better answer. As we progress with our lives, we sometimes find it necessary to buy things and when we do not have the money in our bank accounts, we must turn to credit. In many cases, recently unemployed individuals are forced to live on a credit card, which can be stressful if we do not have the capacity to make more than the minimum payments each and every month.

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The economy is slowly recovering from one of the worst recessions we have seen in decades. As it starts to recover, people will also begin to make more purchases to boost it. This consumer spending puts money back into the economy and creates demand that leads to new jobs. It is a cycle that keeps our country afloat. When we started this horrible recession, the Government decided that banking was somewhat at fault for the problems we were experiencing and decided that credit card spending and bank fees for certain services were out-of-line and needed to be changed. So, starting on July 1st, banks can no longer charge overdraft fees to those who have exceeded their balances. This will severely limit the amount of money a bank can make on its customers. Many people do not realize that a bank makes a great deal of money on overdrafts fees as many people use their debit cards and go over their limits.

Bank of America has decided to implement this change right now rather than wait. Rather than allow their customers to go over limit, Bank of America will now stop purchases if they exceed the balance in their account. Many people do this unknowingly as they are not aware of certain transactions taking place on their account and with current salaries at a low, many are purchasing items dangerously close to the bottom of these accounts. With current trends, the banks stand to lose millions of dollars in revenue from fees as well as purchases.

As of July, banks will have to get the consent of their customers to charge any overdraft fees and Bank of America is well aware that it would be an uphill battle and that their customers will not sign these types of guidelines. Rather than fight it, Bank of America has decided to institute the new laws now to possibly keep customers and show that they are not predatory like the Government seems to portray than as in the media. Many of the larger banks will fall in line with Bank of America as they all scramble to find new and inventive ways to charge fees. It is likely that fees for checking account maintenance will go up as well as yearly fees on credit cards, which is already occurring across the board.

In the past, students were besieged with credit card offers a few years before graduation. The cards proved too tempting to most college students who weren’t informed enough to use them responsibly, leading to a significant debt burden upon graduation. Whether that situation was a problem of poor financial management on the part of the student or aggressive credit card tactics that targeted a vulnerable demographic, changes have now been made. While much of what is happening is good news, other people fear it can lead to an increase in other types of loans amongst college aged students, most notably payday loans.

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Financial regulations are in the works to revamp the credit card industry. There will be limits put on late fees and interest penalties. While that’s a welcome reprieve for many credit card holders, what this actually means is that credit card issuers are going to be quite tough with their lending practices. Fewer people will receive offers, and those that do will have much different terms to contend with on the new cards. It will make other forms of financing, like payday loans, much more attractive than in the past. (more…)