Perhaps it's happened to you - a period of mounting medical bills, loss of wages, natural disaster and even identity theft. Any one of these things can cause a person's credit score to plummet. Today, more than ever before, a decent credit score can be a positive force in every aspect of your life.
We all want to have enough money to pay our bills and have enough money left over to live. To accomplish this, we're expected to manage our money and our credit wisely. Our credit score is a picture of how well we handle our debts. What are the typical purchases and decisions that are affected by a person's credit score?
Applying for a job
Buying a car
Purchasing a home
Renting an apartment
Applying for insurance
Requesting a credit card
Opening a bank account
This is only a short list of products and actions that involve a credit score. So, what is this mystery called Credit Scoring? It all starts with your "credit report".
The three national credit reporting agencies are Equifax, Experian and TransUnion (with smaller ones including ChexSystems). These agencies act as warehouses for your information. Your credit report contains personal data, which includes your name (priors and variations), birth date, addresses, Social Security number, and past and present employers. In addition, creditor history, inquiries or authorized credit checks, relevant public records and collections are also used for identification purposes Your credit report card includes your creditor history detailing your accounts, payments to banks, credit unions, finance companies, mortgage companies, credit card companies, retail stores and other creditors. These credit lines detail if you pay on time, balances, credit limits, burden of debt and how long you have had your account. Other than you, outsiders can access your credit report by making an inquiry. Credit card companies are notorious for making inquiries, and you can see on the credit report who has accessed your account, and when.
Relevant public records and collections are also on your credit report. This may include bankruptcies, foreclosures, tax liens and any collection agency debts you may have incurred. A foreclosed property can remain on your report for as long as seven years, Chapter 7 bankruptcy for 10 years and, depending on your state, unpaid tax liens can remain on your credit report indefinitely.
The industry standard for calculating a credit score was invented by The Fair Isaac Corporation (FICO). The scores generate a three digit number ranging from 300 to 850. Credit scores are used to assess your level of credit risk by predicting whether you will pay back your credit obligations in a timely fashion. The higher your score, the better credit risk you are. Because there are three different credit agencies, consumers who have a credit report have three FICO scores. Creditors use these scores to determine if they are going to grant credit to a consumer and what interest rate they will charge.
Are you 100% confused yet? It might bring some consolation to know that information sharing is getting better. Prior to 2001, consumers did not have access to their credit scores. Now you can get free copies of your credit report once a year from each of the three reporting agencies.
Uncle Credit Score is watching you and constantly adding or deleting information. But you do have influence over your score and the fluctuations that can have instant impact. The following is a sampling of some actions you might take that can affect your score:
Paying your mortgage on time
Applying for a credit card
A late payment or closure of a credit card
Your level of debt and payment performance account for 65% of your FICO score. Lenders can also consider your income, a spouse’s income, an appraisal report from a licensed appraiser and other factors when considering an application for credit. If you are turned down for credit, by law, lenders must advise you of the reason in a rejection letter. There could be an error in your credit report which you can fix and possibly increase your score. All the more reason to check your credit reports regularly.
Friday, September 28, 2007
Be Wary of Phony Credit Scams
People with bad credit histories are in a tough spot. Even if you’ve recently cleaned up your act, it can take a lot of time and work to get your credit score back to a workable place, and the process can get wearing fast—especially if you’re trying to get a small loan or mortgage. So if you have bad credit, and someone sends you a letter that says that they can have your credit score right as rain by the end of the week for just a small fee, you’ll probably sit up and pay attention.
Unfortunately, you’ll also probably be falling for a scam. Every day, companies send out fliers, letters and even make phone calls to people who are badly in debt, promising them that they can make their credit problems disappear. These companies offer different ways of doing this, some of which work, but only very temporarily (a day, at most), while others are just downright illegal. At the same time, they are taking money from people who need it the most.
The best rule of thumb on these things is, “If it seems too good to be true, it probably is.” If you get a letter or a call that says something like, “Bad credit? No problem!” or “We can clean up your credit history instantly!” someone is probably trying to take advantage of you. These companies know that people who are in debt are frequently desperate and looking for a way out, and they exploit that desperation by offering services that they can’t really provide to people who can’t afford them. The cold hard truth is, the only way to clean up your credit is by hard, careful work that takes place over time. No one has a magic wand that can wave all of your overdue balances away.
But this doesn’t mean that there aren’t services out there that can help you. In fact, there are lots of not-for-profit debt counseling organizations out there who genuinely have the means of alleviating some of your debt—but to alleviate isn’t to make disappear. The consultants at these organizations can help you balance and manage your debt, and contact your credit card company to help reduce the amounts of your monthly payments, late fees and finance charges, and maybe even get you more time to pay your debt off. Don’t let scammers scare you away from legitimate help when it is available.
After that, there are many steps that you can make toward repairing your damaged credit. The first thing you have to do is get a look at your credit report. You can acquire it from any of the major credit-checking agencies for a small fee (less than $10), or may even qualify to get it for free, depending upon your circumstances (if you have been denied credit, for instance, you will be entitled to a free copy).
Next, you will need to carefully examine the report to check for any incorrect or out-of-date information, and tell your consumer reporting company what errors you think have been committed. Support your assertions by sending copies of documents that provide evidence of your claim. Once you have settled any disputes you have, you will have to start the dirty work of creating a manageable payment schedule for your debt. If you feel that you need it, contact a debt counseling organization for help. Gradually paying off your debt, and establishing good credit habits after you have paid it off, is the only way to get your financial situation back on track. It’s no magic bullet, but with time and work, it will have you back on your feet.
People with bad credit histories are in a tough spot. Even if you’ve recently cleaned up your act, it can take a lot of time and work to get your credit score back to a workable place, and the process can get wearing fast—especially if you’re trying to get a small loan or mortgage. So if you have bad credit, and someone sends you a letter that says that they can have your credit score right as rain by the end of the week for just a small fee, you’ll probably sit up and pay attention.
Unfortunately, you’ll also probably be falling for a scam. Every day, companies send out fliers, letters and even make phone calls to people who are badly in debt, promising them that they can make their credit problems disappear. These companies offer different ways of doing this, some of which work, but only very temporarily (a day, at most), while others are just downright illegal. At the same time, they are taking money from people who need it the most.
The best rule of thumb on these things is, “If it seems too good to be true, it probably is.” If you get a letter or a call that says something like, “Bad credit? No problem!” or “We can clean up your credit history instantly!” someone is probably trying to take advantage of you. These companies know that people who are in debt are frequently desperate and looking for a way out, and they exploit that desperation by offering services that they can’t really provide to people who can’t afford them. The cold hard truth is, the only way to clean up your credit is by hard, careful work that takes place over time. No one has a magic wand that can wave all of your overdue balances away.
But this doesn’t mean that there aren’t services out there that can help you. In fact, there are lots of not-for-profit debt counseling organizations out there who genuinely have the means of alleviating some of your debt—but to alleviate isn’t to make disappear. The consultants at these organizations can help you balance and manage your debt, and contact your credit card company to help reduce the amounts of your monthly payments, late fees and finance charges, and maybe even get you more time to pay your debt off. Don’t let scammers scare you away from legitimate help when it is available.
After that, there are many steps that you can make toward repairing your damaged credit. The first thing you have to do is get a look at your credit report. You can acquire it from any of the major credit-checking agencies for a small fee (less than $10), or may even qualify to get it for free, depending upon your circumstances (if you have been denied credit, for instance, you will be entitled to a free copy).
Next, you will need to carefully examine the report to check for any incorrect or out-of-date information, and tell your consumer reporting company what errors you think have been committed. Support your assertions by sending copies of documents that provide evidence of your claim. Once you have settled any disputes you have, you will have to start the dirty work of creating a manageable payment schedule for your debt. If you feel that you need it, contact a debt counseling organization for help. Gradually paying off your debt, and establishing good credit habits after you have paid it off, is the only way to get your financial situation back on track. It’s no magic bullet, but with time and work, it will have you back on your feet.
Unfortunately, you’ll also probably be falling for a scam. Every day, companies send out fliers, letters and even make phone calls to people who are badly in debt, promising them that they can make their credit problems disappear. These companies offer different ways of doing this, some of which work, but only very temporarily (a day, at most), while others are just downright illegal. At the same time, they are taking money from people who need it the most.
The best rule of thumb on these things is, “If it seems too good to be true, it probably is.” If you get a letter or a call that says something like, “Bad credit? No problem!” or “We can clean up your credit history instantly!” someone is probably trying to take advantage of you. These companies know that people who are in debt are frequently desperate and looking for a way out, and they exploit that desperation by offering services that they can’t really provide to people who can’t afford them. The cold hard truth is, the only way to clean up your credit is by hard, careful work that takes place over time. No one has a magic wand that can wave all of your overdue balances away.
But this doesn’t mean that there aren’t services out there that can help you. In fact, there are lots of not-for-profit debt counseling organizations out there who genuinely have the means of alleviating some of your debt—but to alleviate isn’t to make disappear. The consultants at these organizations can help you balance and manage your debt, and contact your credit card company to help reduce the amounts of your monthly payments, late fees and finance charges, and maybe even get you more time to pay your debt off. Don’t let scammers scare you away from legitimate help when it is available.
After that, there are many steps that you can make toward repairing your damaged credit. The first thing you have to do is get a look at your credit report. You can acquire it from any of the major credit-checking agencies for a small fee (less than $10), or may even qualify to get it for free, depending upon your circumstances (if you have been denied credit, for instance, you will be entitled to a free copy).
Next, you will need to carefully examine the report to check for any incorrect or out-of-date information, and tell your consumer reporting company what errors you think have been committed. Support your assertions by sending copies of documents that provide evidence of your claim. Once you have settled any disputes you have, you will have to start the dirty work of creating a manageable payment schedule for your debt. If you feel that you need it, contact a debt counseling organization for help. Gradually paying off your debt, and establishing good credit habits after you have paid it off, is the only way to get your financial situation back on track. It’s no magic bullet, but with time and work, it will have you back on your feet.
People with bad credit histories are in a tough spot. Even if you’ve recently cleaned up your act, it can take a lot of time and work to get your credit score back to a workable place, and the process can get wearing fast—especially if you’re trying to get a small loan or mortgage. So if you have bad credit, and someone sends you a letter that says that they can have your credit score right as rain by the end of the week for just a small fee, you’ll probably sit up and pay attention.
Unfortunately, you’ll also probably be falling for a scam. Every day, companies send out fliers, letters and even make phone calls to people who are badly in debt, promising them that they can make their credit problems disappear. These companies offer different ways of doing this, some of which work, but only very temporarily (a day, at most), while others are just downright illegal. At the same time, they are taking money from people who need it the most.
The best rule of thumb on these things is, “If it seems too good to be true, it probably is.” If you get a letter or a call that says something like, “Bad credit? No problem!” or “We can clean up your credit history instantly!” someone is probably trying to take advantage of you. These companies know that people who are in debt are frequently desperate and looking for a way out, and they exploit that desperation by offering services that they can’t really provide to people who can’t afford them. The cold hard truth is, the only way to clean up your credit is by hard, careful work that takes place over time. No one has a magic wand that can wave all of your overdue balances away.
But this doesn’t mean that there aren’t services out there that can help you. In fact, there are lots of not-for-profit debt counseling organizations out there who genuinely have the means of alleviating some of your debt—but to alleviate isn’t to make disappear. The consultants at these organizations can help you balance and manage your debt, and contact your credit card company to help reduce the amounts of your monthly payments, late fees and finance charges, and maybe even get you more time to pay your debt off. Don’t let scammers scare you away from legitimate help when it is available.
After that, there are many steps that you can make toward repairing your damaged credit. The first thing you have to do is get a look at your credit report. You can acquire it from any of the major credit-checking agencies for a small fee (less than $10), or may even qualify to get it for free, depending upon your circumstances (if you have been denied credit, for instance, you will be entitled to a free copy).
Next, you will need to carefully examine the report to check for any incorrect or out-of-date information, and tell your consumer reporting company what errors you think have been committed. Support your assertions by sending copies of documents that provide evidence of your claim. Once you have settled any disputes you have, you will have to start the dirty work of creating a manageable payment schedule for your debt. If you feel that you need it, contact a debt counseling organization for help. Gradually paying off your debt, and establishing good credit habits after you have paid it off, is the only way to get your financial situation back on track. It’s no magic bullet, but with time and work, it will have you back on your feet.
How Credit Cards Work
You find something you absolutely have to have, slap down a piece of plastic and voilà – it’s yours! Life sure is good, isn’t it? But have you ever wondered what happens behind the scenes, from the time your credit card gets swiped (actually or virtually) until the time the purchase shows up on your credit card statement?
Anatomy of the credit card
Transmission of the account number, a systematic rather than a random combination of numbers, is where it all starts. The account number identifies: the type of credit card being used (VISA, American Express, etc.), a bank number, an account number and a check digit. In the case of America Express, the third and forth numbers indicate the currency.
Equally important is the magnetic stripe on the back and it tells quite a story. For simplicity, let’s just say the stripe contains the account number, cardholder name, country code, expiration date and other validating information that’s unique to the credit card issuer and the banking industry.
The Credit Card “Family”
Quite a few organizations are involved in the credit card purchase and approval cycle. Here are the major ones:
Acquiring Bank – The bank that the merchant works with to get credit card purchases converted to cash and deposited into the merchant’s account.
Association – The family of banks and credit card issuers that are behind a branded card. Fort example: Visa and MasterCard are associations.
Cardholder – That’s you and anyone else who carries a credit card.
Independent Sales Organization (ISO) – This is the company that provides basic credit card services to the merchant such as merchant accounts and credit card funding reports.
Issuing Bank – The financial institution authorized by the Association to issue credit cards to cardholders.
Merchant – A place of business that is authorized to accept credit cards for purchases.
Payment Gateway – The company that provides the credit card processing terminals and network that ties the merchant to the credit card processing network.
Payment Processor – The company that moves the approved funds between the various financial accounts that exist between the cardholder and the merchant’s bank.
Authorization
The multi-step authorization process goes on hundreds of millions of times every day. This behind-the-scenes flow of data forms the foundation of credit card purchasing.
The cardholder initiates a purchase from a merchant.
The merchant access the Payment Gateway and transmits the customer’s credit card and purchase details.
The payment gateway looks up the merchant’s acquiring bank and ISO details and forwards the transaction to the appropriate Payment Processor.
The payment processor determines the Issuing Bank’s ID and sends the transaction information to that bank.
The issuing bank verifies the customer’s account status, open-to-buy limits and security details. If everything is in order, the bank deducts the amount of purchase from the cardholder’s available balance (open to buy) and transmits an authorization code back to the payment processor. If there is any problem with the transaction, the issuing bank transmits a “transaction declined” message. In cases of fraud, the bank may also issue an order to pick up the card.
The payment processor passes the approval or decline code back to the payment gateway.
The payment gateway passes the approval or decline code back to the Payment Gateway.
The Payment Gateway displays the message to the merchant who either completes or terminates the transaction. End of Day Settlement
At the end of each day, the merchant performs a “capture routine” which sends details on all completed transactions to the Payment Gateway. The Payment Gateway passes the data up the chain to the Payment Processor which determines which issuing bank to send the transaction to. The issuing bank electronically transmits the money to the acquiring bank which transmits it to the merchant’s own bank account. And everybody is happy.
Anatomy of the credit card
Transmission of the account number, a systematic rather than a random combination of numbers, is where it all starts. The account number identifies: the type of credit card being used (VISA, American Express, etc.), a bank number, an account number and a check digit. In the case of America Express, the third and forth numbers indicate the currency.
Equally important is the magnetic stripe on the back and it tells quite a story. For simplicity, let’s just say the stripe contains the account number, cardholder name, country code, expiration date and other validating information that’s unique to the credit card issuer and the banking industry.
The Credit Card “Family”
Quite a few organizations are involved in the credit card purchase and approval cycle. Here are the major ones:
Acquiring Bank – The bank that the merchant works with to get credit card purchases converted to cash and deposited into the merchant’s account.
Association – The family of banks and credit card issuers that are behind a branded card. Fort example: Visa and MasterCard are associations.
Cardholder – That’s you and anyone else who carries a credit card.
Independent Sales Organization (ISO) – This is the company that provides basic credit card services to the merchant such as merchant accounts and credit card funding reports.
Issuing Bank – The financial institution authorized by the Association to issue credit cards to cardholders.
Merchant – A place of business that is authorized to accept credit cards for purchases.
Payment Gateway – The company that provides the credit card processing terminals and network that ties the merchant to the credit card processing network.
Payment Processor – The company that moves the approved funds between the various financial accounts that exist between the cardholder and the merchant’s bank.
Authorization
The multi-step authorization process goes on hundreds of millions of times every day. This behind-the-scenes flow of data forms the foundation of credit card purchasing.
The cardholder initiates a purchase from a merchant.
The merchant access the Payment Gateway and transmits the customer’s credit card and purchase details.
The payment gateway looks up the merchant’s acquiring bank and ISO details and forwards the transaction to the appropriate Payment Processor.
The payment processor determines the Issuing Bank’s ID and sends the transaction information to that bank.
The issuing bank verifies the customer’s account status, open-to-buy limits and security details. If everything is in order, the bank deducts the amount of purchase from the cardholder’s available balance (open to buy) and transmits an authorization code back to the payment processor. If there is any problem with the transaction, the issuing bank transmits a “transaction declined” message. In cases of fraud, the bank may also issue an order to pick up the card.
The payment processor passes the approval or decline code back to the payment gateway.
The payment gateway passes the approval or decline code back to the Payment Gateway.
The Payment Gateway displays the message to the merchant who either completes or terminates the transaction. End of Day Settlement
At the end of each day, the merchant performs a “capture routine” which sends details on all completed transactions to the Payment Gateway. The Payment Gateway passes the data up the chain to the Payment Processor which determines which issuing bank to send the transaction to. The issuing bank electronically transmits the money to the acquiring bank which transmits it to the merchant’s own bank account. And everybody is happy.
Best Credit Card Rewards - Naughty and Nice
Every company that gives away credit cards is obviously providing a way for their customers to buy “on time”, and it’s completely normal. It’s your responsibility to make certain to pay your bills when due so they don't get out of control. Then the credit card company can’t back you into a financial corner.
But when it comes to credit cards, you typically have ample choices. So why should you choose one company over another, though, if the cards and interest are virtually the same? This is where credit card rewards play a key role. Rewards are actually intended to lure you from one company to another or to use one already-existing card before another. It’s also a way to get you to open more accounts and possibly transfer balances.
Credit card rewards are made available to customers normally because they have used their other credit cards faithfully for purchases and previously paid their bills on time. Rewards actually are a way to entice people into signing up with the company as well. Their offers are similar to free offers that some companies provide to boost their sales and promotions.
There are several types of credit card rewards offered by the many companies from which you can select.
The most effective “freebie”, or reward, is probably the best known and sought: cash back. Cash back is the most straightforward credit card reward. Cash is more tangible than any of the other promises offered; and customers understand that cash is handier than earning points or whatever else may be available. It definitely attracts more customers than any other promotion. Even financial experts claim that cash back programs are the most opportune credit card rewards. Cash back can be offered in several creative ways such as college savings, retirement investments, and payment in part of utility bills. It all depends on the company, their partners, and their offers.
There are, however, additional options for people who do not prefer cash back rewards. These include freebies, giveaways, and frequent flyer rewards. The frequent flyers receive flight discounts and even free tickets the more they use their credit cards. Such rewards are preferred by customers who do not want plain cash back but rather something more exciting.
There are a lot of credit card rewards that attract different types of customers. The main intent of these rewards is simply to encourage customers to pay back their bills sooner.
Finally, a number of credit card companies target people who spend a lot with their cards. In fact, these are actually the primary customers that companies want to retain.
But when it comes to credit cards, you typically have ample choices. So why should you choose one company over another, though, if the cards and interest are virtually the same? This is where credit card rewards play a key role. Rewards are actually intended to lure you from one company to another or to use one already-existing card before another. It’s also a way to get you to open more accounts and possibly transfer balances.
Credit card rewards are made available to customers normally because they have used their other credit cards faithfully for purchases and previously paid their bills on time. Rewards actually are a way to entice people into signing up with the company as well. Their offers are similar to free offers that some companies provide to boost their sales and promotions.
There are several types of credit card rewards offered by the many companies from which you can select.
The most effective “freebie”, or reward, is probably the best known and sought: cash back. Cash back is the most straightforward credit card reward. Cash is more tangible than any of the other promises offered; and customers understand that cash is handier than earning points or whatever else may be available. It definitely attracts more customers than any other promotion. Even financial experts claim that cash back programs are the most opportune credit card rewards. Cash back can be offered in several creative ways such as college savings, retirement investments, and payment in part of utility bills. It all depends on the company, their partners, and their offers.
There are, however, additional options for people who do not prefer cash back rewards. These include freebies, giveaways, and frequent flyer rewards. The frequent flyers receive flight discounts and even free tickets the more they use their credit cards. Such rewards are preferred by customers who do not want plain cash back but rather something more exciting.
There are a lot of credit card rewards that attract different types of customers. The main intent of these rewards is simply to encourage customers to pay back their bills sooner.
Finally, a number of credit card companies target people who spend a lot with their cards. In fact, these are actually the primary customers that companies want to retain.
Credit - A Manifestation of Your Financial Status
Credit is a financial term indicating 'giving away' of a loan or creation of debt. The term credit is used in business while accepting delayed payment for goods sold to a party. Every business is desirous of a healthy credit. However, credit is not granted to individuals or firms with unstable financial positions. Sometimes, credit is also offered to customers who purchase products from particular stores. Since credit is denominated as a unit of account, it acts as a medium of exchange. In business, credit is considered as a form of money and is accounted for. In markets, credit can also be traded for.
A credit report is a documentation that essentially contains important financial information about the organization or the proprietor. The report contains statements or facts about place of residency, identity proof, office address, bill payment, due-dates, public record information etc. Name, address, age, nationality, marital status, date of birth, family members and other information is also entered in the credit report. Information regarding income, employment, duration of job or business is also required to make credit report. A credit history section consists of all the credit experiences with credit givers of the individual. However a credit report usually does not carry information on medical fitness or specific purchases or any such related thing. There are special credit report agencies that compile all the information and make a credit report for a business that can be used for various purposes such as insurance, employment, law etc.
Credit repair helps one improve their credit reports, get lower interest rates on loans and improve the overall credit status. There are a lot of service providers that offer specialized services to fix bad credit and prepare effective credit repair programs. There are professional consultants who look in to the matter and repair the credit score for a nominal fee.
A credit score is nothing but analysis of a person's credit reports that represent the creditworthiness of the person. The credit score is expressed numerically. The score indicates the possibility of the repayment of debts of the person. Banks, financial institutions, credit card companies etc all typically use a credit score to evaluate the financial status of the person and the risk involved in lending loan to the individual. Many of the lenders use credit score so that they can decide on the interest rate and the credit limits too.
A credit report is a documentation that essentially contains important financial information about the organization or the proprietor. The report contains statements or facts about place of residency, identity proof, office address, bill payment, due-dates, public record information etc. Name, address, age, nationality, marital status, date of birth, family members and other information is also entered in the credit report. Information regarding income, employment, duration of job or business is also required to make credit report. A credit history section consists of all the credit experiences with credit givers of the individual. However a credit report usually does not carry information on medical fitness or specific purchases or any such related thing. There are special credit report agencies that compile all the information and make a credit report for a business that can be used for various purposes such as insurance, employment, law etc.
Credit repair helps one improve their credit reports, get lower interest rates on loans and improve the overall credit status. There are a lot of service providers that offer specialized services to fix bad credit and prepare effective credit repair programs. There are professional consultants who look in to the matter and repair the credit score for a nominal fee.
A credit score is nothing but analysis of a person's credit reports that represent the creditworthiness of the person. The credit score is expressed numerically. The score indicates the possibility of the repayment of debts of the person. Banks, financial institutions, credit card companies etc all typically use a credit score to evaluate the financial status of the person and the risk involved in lending loan to the individual. Many of the lenders use credit score so that they can decide on the interest rate and the credit limits too.
Discover Credit Card - How To Get Ahead
Despite early challenges by the major credit cards at the time, Discover credit card emerged from the shadows of Sears Financial Holdings to become a credit force to be reckoned with. Initially offered in 1981 as part of Sears, then the largest retailer, it was joined by Dean Whitter Reynolds and Coldwell, Banker and Company to add financial offerings to the company.
Due to the failure of the financial services market Sears divested this part of its business and the Dean Whitter Discover credit card was introduced in 1993. The company then merged with Morgan Stanley in 1997 and continued to push the Discover card as an alternative to Mastercard and Visa. These companies were not ones to allow another credit card company to eat into its business, and told retailers that if they accepted the Discover credit card, they would lose the ability to accept Mastercard and Visa Credit cards.
It took a ruling by the Supreme Court in 2005 to end this exclusionary practice and the acceptance of the Discover credit card by many merchants was quickly achieved. Growing rapidly, the Discover credit card is now one of the major players in the credit card industry. In June of 2007 Discover was spun off from Morgan Stanley to become a separate entity.
Discover Still Offers Amazing Rewards
Today's Discover credit card is still issued without an annual fee, with many other card companies forced to follow its lead to maintain their cardholders, and has several deals with retailers on the sales of gift cards and cash back bonuses. Some of the rewards available to Discover cardholders include:
5% Cash Back Bonus in Specific Categories Quarterly
5-20% Cash Back Bonus on Purchases at Exclusive Online Site
1% Cash Back Bonus on all Other Purchases
No limit on Cash Back Rewards
No Annual Fee
Zero Liability on Discover Credit Card Fraudulent Purchases
No Fee for Extra CardsThey also offer increased reward if the Discover credit card is used with gift cards from 80 of the company's cash back bonus partners. Applying for a Discover card is quick and easy through the company's online credit center and cardholders can check their balances and purchases online as well, helping to detect fraudulent use of their card quicker and report it to the company.
The Discover credit card does carry varying charges for over the limit fees and late fees, usually in relation to the balance on the account. Additionally, initially there is no charge for balance transfers during the initial introductory period, typically about one year. No interest will be charged if the entire balance is paid in full within the 25-day grace period, but the interest rate will vary depending on the credit standing of the cardholder.
Due to the failure of the financial services market Sears divested this part of its business and the Dean Whitter Discover credit card was introduced in 1993. The company then merged with Morgan Stanley in 1997 and continued to push the Discover card as an alternative to Mastercard and Visa. These companies were not ones to allow another credit card company to eat into its business, and told retailers that if they accepted the Discover credit card, they would lose the ability to accept Mastercard and Visa Credit cards.
It took a ruling by the Supreme Court in 2005 to end this exclusionary practice and the acceptance of the Discover credit card by many merchants was quickly achieved. Growing rapidly, the Discover credit card is now one of the major players in the credit card industry. In June of 2007 Discover was spun off from Morgan Stanley to become a separate entity.
Discover Still Offers Amazing Rewards
Today's Discover credit card is still issued without an annual fee, with many other card companies forced to follow its lead to maintain their cardholders, and has several deals with retailers on the sales of gift cards and cash back bonuses. Some of the rewards available to Discover cardholders include:
5% Cash Back Bonus in Specific Categories Quarterly
5-20% Cash Back Bonus on Purchases at Exclusive Online Site
1% Cash Back Bonus on all Other Purchases
No limit on Cash Back Rewards
No Annual Fee
Zero Liability on Discover Credit Card Fraudulent Purchases
No Fee for Extra CardsThey also offer increased reward if the Discover credit card is used with gift cards from 80 of the company's cash back bonus partners. Applying for a Discover card is quick and easy through the company's online credit center and cardholders can check their balances and purchases online as well, helping to detect fraudulent use of their card quicker and report it to the company.
The Discover credit card does carry varying charges for over the limit fees and late fees, usually in relation to the balance on the account. Additionally, initially there is no charge for balance transfers during the initial introductory period, typically about one year. No interest will be charged if the entire balance is paid in full within the 25-day grace period, but the interest rate will vary depending on the credit standing of the cardholder.
Tuesday, September 4, 2007
Do College Kids Need Credit Cards?
College campuses are swamped by credit card companies trying to get students to sign up for credit cards. Whether the college kids need it or not, the credit card companies dangle freebies and incentives to get them to sign. College kids succumb to temptation easily and sign up without thinking long term. They are soft targets for the credit card companies.
The fact is that most college students don’t need a credit card. I went through college never needing one. I know times have changed, but the basic facts have not. The only time I needed a credit card was when I was working for a company and had to go for a company trip. So my first credit card came almost 1 year after I was working and that too because of a “need”.
College kids have a pressing “need’ to have a credit card. As it is they have very little money. To dangle more money in front of them is asking for trouble. Obviously, they are going to overspend because there is much less thought to long term and more to instant pleasure. Life’s realities have not yet taken hold and they think the party will go on for ever. Most college kids honestly believe that credit card money is “free money”. Truly, college kids are a very ‘high risk’ group. Then why are credit card companies targeting them?
Several reasons. Not only are college students gullible but they know that young people tend to run up huge bills very quickly. If the college student cannot pay then the credit card companies know that they can go after their parents, who are more than happy to help because it is their child after all that is in trouble. It is this indirect assault on parent’s pocket book that credit card companies are counting on. And they also love the fact that college students will hide the bad news as long as they can, thereby running up huge finance charges and other fees. A win-win situation for credit card companies. They love a consumer who spends without regard and runs up HUGE fees. What more could they ask for?
Why do college campuses allow credit card companies to prey on college students? Simple answer ‘easy money’ & ‘greed’. College campuses forget that they are educators. It seems when credit card companies come calling with their lure of big advertising money, most campuses give in as harmless venture. After all, it doesn’t affect the college funds; and the colleges put it on ‘personal responsibility’.
I think most campuses will be better served by guarding their college students from credit card companies. It is teaching several bad lessons to the students. For one, the campus greed for advertising money from credit card companies teaches the student that ‘greed’ at any cost is good. Once they have access to credit cards, it teaches the student that being reckless spenders is in style.
Both are very bad precedents. If campuses give access to credit card companies then they should require them to fund ‘responsible spending’ classes where they teach the students the many perils of credit card abuse. Teach then that not all credit cards are created equal and if they have to have one then how to compare. How to check the fine print? How to look at comparison tables like the one at ‘Look up Credit Cards’ dot com? How to assess which credit card suits them and costs them the least in the long run? That it is not ‘free money’ but giving away your future savings.
Freedom has a price. The credit card companies should be required to fund teaching the college students the ‘freedom of having credit cards’ and how to act smartly. After all, the habits that they develop at college are going to stay with them for a long time. And it is time we help the college students get the right education!
The fact is that most college students don’t need a credit card. I went through college never needing one. I know times have changed, but the basic facts have not. The only time I needed a credit card was when I was working for a company and had to go for a company trip. So my first credit card came almost 1 year after I was working and that too because of a “need”.
College kids have a pressing “need’ to have a credit card. As it is they have very little money. To dangle more money in front of them is asking for trouble. Obviously, they are going to overspend because there is much less thought to long term and more to instant pleasure. Life’s realities have not yet taken hold and they think the party will go on for ever. Most college kids honestly believe that credit card money is “free money”. Truly, college kids are a very ‘high risk’ group. Then why are credit card companies targeting them?
Several reasons. Not only are college students gullible but they know that young people tend to run up huge bills very quickly. If the college student cannot pay then the credit card companies know that they can go after their parents, who are more than happy to help because it is their child after all that is in trouble. It is this indirect assault on parent’s pocket book that credit card companies are counting on. And they also love the fact that college students will hide the bad news as long as they can, thereby running up huge finance charges and other fees. A win-win situation for credit card companies. They love a consumer who spends without regard and runs up HUGE fees. What more could they ask for?
Why do college campuses allow credit card companies to prey on college students? Simple answer ‘easy money’ & ‘greed’. College campuses forget that they are educators. It seems when credit card companies come calling with their lure of big advertising money, most campuses give in as harmless venture. After all, it doesn’t affect the college funds; and the colleges put it on ‘personal responsibility’.
I think most campuses will be better served by guarding their college students from credit card companies. It is teaching several bad lessons to the students. For one, the campus greed for advertising money from credit card companies teaches the student that ‘greed’ at any cost is good. Once they have access to credit cards, it teaches the student that being reckless spenders is in style.
Both are very bad precedents. If campuses give access to credit card companies then they should require them to fund ‘responsible spending’ classes where they teach the students the many perils of credit card abuse. Teach then that not all credit cards are created equal and if they have to have one then how to compare. How to check the fine print? How to look at comparison tables like the one at ‘Look up Credit Cards’ dot com? How to assess which credit card suits them and costs them the least in the long run? That it is not ‘free money’ but giving away your future savings.
Freedom has a price. The credit card companies should be required to fund teaching the college students the ‘freedom of having credit cards’ and how to act smartly. After all, the habits that they develop at college are going to stay with them for a long time. And it is time we help the college students get the right education!
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