Credit Card Affairs Blog

TransUnion just released their latest data on the credit market and it's looking pretty grim. Despite the economy downturn, credit card debt increased by 2.7 percent to $1,700 in the second quarter of 2008. Surprisingly, Alaskans carry higher balances than anyone else in the US. At almost $2,500, nearly double what residents of Iowa owe on their credit cards. Alaska has also seen a 4.8 percent increase from the previous quarter, topped only by Washington, DC, where residents now have 6.6 percent higher credit card balances.
I expected to see higher balance increases in 'mortage meltdown states' such as CA, FL and NV, but none of these states have seen sharp increases in credit card debt. Maybe all those people who lost their homes down here had to flee to Alaska?

For more data click here

Student debt can add up quickly over the years and paying it down can take decades. So could it possibly make sense to transfer some high-interest private student loans to your credit card to pay them off?
Maybe, but most likely not. Here's why: Credit card interest rates are usually higher than those on student loans. Yes, you might be tempted by one of those 0% APR offers, but keep in mind that those usually only last for 6-18 months. Also, there are fees associated with balance transfers that can quickly wipe out the savings you were hoping for
For more advice from an LA Times columnist click here

Another tough day out there. All major credit card companies saw their stocks slide sharply this Monday, not surprising considering all the turmoil in the financial sector. Many experts believe that credit card issuers could be hit hard by the economic slowdown as people curb their spending.
MasterCard was down 4.4 percent, Visa 3.2 percent and AMEX and Discover around 2 percent.
Source: AP

Desperate to avoid a credit card debt meltdown, banks are doing their best to keep customers afloat. What exactly the banks are doing varies. Most are trying to detect potential collection cases sooner by calling customers who have only been paying the minimum amount due. WaMu and Amex are mainly trying to work with customers and come up with payment plans, while CapOne and Citi have hired additional, more aggressive collectors.

I am very happy to see that most banks have realized that their better off giving up some of their profits to help out customers, rather than pushing everyone into bankruptcy...

To find out what Banks are using what strategy exactly click here

Source: WSJ

With technology advancing faster than ever before it should come as no surprise that many tech freaks consider credit cards to be antiquated. Barclaycard Canada just announced that they will start pushing contactless cards and plan to issue over one million cards by the end of the year. Pretty soon credit card issuers should be able to implement those chips in our cell phones, PDAs, mp3 players or whatever. Pretty cool.
Now if they only would figure out a way to make those contactless payments more secure...

Source

Yet another sign that the economy is slowing down: Consumer credit growth has slowed down dramatically. This may be bad news for many investors, but for most of us it's actually good news... After all, being the most indebted nation in the world is not something to be proud of.

Source: WSJ

Many people would never even consider getting a Discover card. What for, right? Turns out that Discover is currently undergoing rapid expansion. The company expects to be almost as widely accepted as Visa and MasterCard by next year, thanks to cutting deals with card processors. By acquiring the Diner's Club network, Discover will soon also be widely accepted in Europe, which is a huge plus for travelers.
Is Discover the new AMEX? No, certainly not, but it's good to see an often unfairly ridiculed brand expanding its customer base.

Source: The Virtues of Flameproof Plastic

After decades of unregulated credit markets the party may soon be over for issuers. While some congressional aides doubt congress will vote on any credit card legislation before next year, Rep. Carolyn Maloney's bill cleared the House Financial Services Committee in July and might be voted on before this year's presidential election.
While not as aggressive as many people had hoped the bill would definitely help out many cardholders:

It would, among other things, require credit card issuers to give account holders 45 days notice of any increases in interest rates. Monthly bills would have to be mailed at least 25 days before the due date, up from the current minimum of 14 days, and fees could not be charged on the remaining interest-only balance of a customer who has paid their bill on time.

I'm really glad consumer rights advocates have finally been able to push this through and we should let our representatives know that we will no longer tolerate unjust lending practices.

Source: CNN Money

Financial companies been a little shy about introducing new credit cards ever since their mortgage businesses went belly up, but now GE Money Bank is coming out with new gas rebate cards. If you sign up right now you could get $0.30 per gallon statement credits at Chevron or Texaco for the first 60 days. After that it'll be $0.10 per gallon, plus 3% in fuel credits at gas station convenience stores and 1% on all other purchases.
HOWEVER, there is an annual cap. You can only earn and redeem up to $300 in rebates a year and with a minimum APR of up to 20.49% you better not carry a balance.
If you live close to a Chevron or Texaco station and don't mind the $300 rewards limit, this might be a decent deal for you.

http://www.chevrontexacocards.com/

The Los Angeles Times has an interesting story about a reporter who was traveling in Northern Europe and was asked for a PIN code when trying to make a purchase with a credit card. It's how it works there: No code, no purchase.
European countries have been adopting a new technology called 'Chip&PIN' over the last couple of years, mainly to reduce fraud. Since most thieves have no way of obtaining your personal code, stolen cards are useless to them.
No US banks are issuing cards with chips and there are no plans to switch to the European standard, despite potential long-term savings. Most US cards will still work in Europe, as card readers there can read magnetic stripes, but make sure you ask your credit card company for a PIN code for your credit card. That way you won't be stuck using your debit card everywhere.

Source: Los Angeles Times