FTC Consumer Protection for Credit Cards & Consumer Loans

ftcTHE FEDERAL TRADE COMMISSION IS A RESOURCE FOR CONSUMER RIGHTS. Click on the link below to access facts and reports about many practical and important matters to consumers like you and I, including ways that scammers attempt to rip us off in the area of credit cards and loans. One type of company you should be wary of are those certain lenders “guaranteeing ” that you are likely to get a loan or a credit card – even before you apply! Click the link below and read the 2-page FTC report on this matter titled, “Advance-Fee Loan Scams: ‘Easy’ Cash Offers Teach Hard Lessons.”

Avoiding Credit and Charge Card Fraud: Steps to make it more difficult for a crook to capture your card or card numbers, and how to report losses and fraud.

Before You File for Personal Bankruptcy: Information About Credit Counseling and Debtor Education. This report advises consumers about the new bankruptcy law requiring credit counseling before filing for bankruptcy and debtor education after filing.

Billed for Merchandise You Never Received? This report explains your rights and steps to take to correct the problem.

Building a Better Credit Report: Learn how to legally improve your credit report, how to deal with debt, how to spot credit-related scams, and more.

Choosing A Credit Card: The Deal is in the Disclosures.
This report explains credit card terms, how your balance is computed, how to shop for the best deal and outlines cardholder protections.

Co-signing a Loan: Lists your obligations if you decide to cosign on a loan for a friend or relative. At the top of the list: you may have to pay up to the full amount of the debt if the borrower does not pay.

Credit, ATM and Debit Cards: What To Do If They’re Lost or Stolen
. Outlines procedures for reporting loss or theft, and how to minimize your risk.

Credit and Divorce: Encourages recently divorced consumers, and those contemplating divorce, to look closely at issues involving credit. Understanding the different kinds of credit accounts opened during a marriage may help illuminate the potential benefits – and pitfalls – of each.

Credit and Your Consumer Rights:
Explains credit laws that protect your right to obtain, use, and maintain credit. Offers practical tips to help you solve credit problems.

The Credit Practices Rule: The Rule prohibits many creditors from including certain provisions in consumer credit contracts. It also requires creditors to provide a written notice to consumers before they cosign obligations for others about their potential liability if the other person fails to pay.

There is considerably more info on credit, finance, foreclosure, debts, scams and consumer alerts.

Click this link for all the report and info:

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Falling Credit and Soaring Unemployment

credit-fallingBLOOMBERG REPORTS THAT U.S. CONSUMER CREDIT FALLING: “Borrowing by U.S. consumers dropped in May for the fourth straight month after the unemployment rate reached the highest in more than 25 years and accessing loans remained difficult.” The article also notes that there is “evidence that more consumers are falling behind on payments as unemployment cuts their income.”

These are not happy times for consumers, creditors or the economy. Consumers are having a hard time making their debt payments, and those that have money are saving more. Of course putting money in the bank is always a good idea, even if it has not been a tradition for many Americans in the past few decades.

In this era when “cash is king,” if you have money, good deals can be had. But if you are barely making ends meet, cutting back may be the main way of getting by.

And if you’re over your head in debt, then this may be the time to learn more about debt settlement and debt negotiation. Just click “Contact Effective Financial Solutions” for a free and no-obligation personal debt consultation to get you on the road to a debt free life.

Click the following link to to read the full Bloomberg article entitled, U.S. Consumer Credit Fell for Fourth Straight Month

Posted in Finance and Economy Tagged with: , , , , , , , , , ,

Is There Really A PrePaid “Credit” Card?

Prepaid Credit CardsYOU MAY SEE ADVERTISING FOR PREPAID CREDIT CARDS, BUT THERE IS NO SUCH THING. In simple terms, a prepaid credit card is “not” a credit card at all, since the most elemental aspect of the card does not exist: “Credit!” More directly, there is NO credit offered by the issuer of the card. The card stores money (like a gift card) which has already been paid by the card-holder or someone else (such as a parent, or someone else, providing a gift or an allowance).

A purchase made via an actual credit card does not use any of the purchaser’s own money. That is paid back later, and for most credit card users, it’s paid back with interest.

However, such cards that are prepaid are using money that is already set aside. These plastic cards look like regular credit cards with Visa and MasterCard logos. Since they work just as easily and in the same ways as regular credit cards the term “prepaid credit card” is used merely as a reference of familiarity, rather than a factual depiction.

With prepaid credit cards there is no interest charged but there is probably a purchasing fee plus monthly fees added to the billing.  (Which means they are more expensive than the gift cards referenced above.)

These prepaid cards offer a way for parents to allow limited purchases for their teenage children, without either parent needing to be present to complete the transaction.

These types of cards may offer certain conveniences, but they are not a cost-effective way to handle money.

Posted in Credit Card Debt Tagged with: , , , , , , , , , , ,

What is a Credit Crunch?

Credit Card CrunchA CREDIT CRUNCH IS A REDUCTION IN THE GENERAL AVAILABILITY OF LOANS, or even a sudden tightening of the conditions required to obtain a loan from the banks. Either scenario is not good for you and I. The current credit crunch was partially caused by careless and inappropriate bank lending which resulted in losses for lending institutions (as well as losses for the investors in the debt when the loans turn sour).

As we have seen, this has resulted in widespread foreclosures and bankruptcies for investors, entrepreneurs, business owners and everyone else directly impacted by the ramifications of previously inflated assets dropping precipitously.

The way such institutions handle their reckless ways is to reduce the availability of credit. Heck, we have seen lenders unable (and/or unwilling) to lend further, even with government bailouts, as a result of the banks’ earlier losses.

As a loose comparison, it’s somewhat like a business owner who has such a gambling problem that he failed to make payroll and adversely effected all his employees. And then, after receiving a loan from the government, didn’t want to spend the money because he is still crippled with other complexities resulting from his gambling.

That comparison is flawed for an important reason: In spite of his gambling problem, the business owner may very well be presiding over a business that provides fair exchange and value to its customers.  The credit industry is not based on such a premise, even in the best of times.  Its entire purpose and reason for existence is to mire consumers into debt problems so that the credit card companies can ensnare  consumers within a never-ending debt trap and keep them paying high fees and interest rates for the rest of their lives.

If you are caught in that trap, and would like to get out of debt, without bankruptcy, click “Contact Effective Financial Solutions” for a free and no-obligation personal debt consultation.

Posted in Finance and Economy Tagged with: , , , , , , , , , , , , ,

Credit Card Issuers are Saying One Thing and Doing Another

Credit Card IssuerTHE WALL STREET JOURNAL BLOG REPORTED TODAY that “Card issuers are saying one thing and doing another” in response to the credit-card industry reforms that will take effect in February 2010. The post is based upon a Credit Card Study by Bankrate, which looks at the details of 20 card issuers. One thing that will continue is that credit card companies will still be demanding high fees.

Furthermore, Ellen Cannon, Bankrate’s managing editor, states that the use of the term “universal default” is an example of credit cards saying one thing and doing another. “Universal default generally means that card issuers can look at a consumer’s overall credit profile and change the terms as they see fit. Most issuers say that they don’t practice universal default. ‘But they tell consumers they change things ‘because of market conditions,’ Cannon says. ‘It’s practically the same thing.'”

Which is why analysts believe the credit card companies are expected to make big profits in spite of the regulations.  The card companies will continue to take advantage of consumers while keeping a large percentage of the world’s population trapped in the never-ending debt cycle.

Click here to read the Wall Street Journal article on their blog.

Posted in Credit Card Debt Tagged with: , , , , , , , , , , ,

Credit Card Companies Will Continue to Take Advantage of Consumers

Credit Card CompaniesREUTERS REPORTS THAT CREDIT CARD COMPANIES WILL CONTINUE TO MAKE “LUCRATIVE” RETURNS. Just in case you were worried that the new rules of the Obama administration might harm the credit card companies by limiting  their ability to rake consumers over the coals, today Reuters reported that:

“The credit card industry will continue to provide one of the most lucrative returns of the asset classes within banks’ portfolios even after new U.S. credit card rules are put in place…”

For more details, here is a link to the Reuters article, Credit card industry to remain lucrative: study.

Further, in spite of the fact that talk about reigning in the credit card industry from the Obama administration has been loud and clear, “Stocks of credit card issuing companies have risen about 150 percent in the second quarter and have outperformed the industry, despite challenges….”

Stated another way, the players know the real truth, that regardless of whatever public relations spin is promoted about making credit card companies more friendly to consumers, they will still be making a fortune from those very same credit card holders that are getting abused by high interest rates and oppressive fees. In short, taking advantage of consumers is a living goldmine for the credit card companies and regardless of what you and I hear otherwise, credit card companies will continue to devote the might of their resources towards keeping consumers enslaved by debt and keeping the credit card company coffers filled with gold.

Posted in Credit Card Debt Tagged with: , , , , , , , , , , , ,

5 Ways to Improve Your Credit Score

Improve Your Credit ScoreREVIEW THE FUNDAMENTALS OF YOUR CREDIT SCORE for the purpose of keeping it high, or helping to move it higher in the longer term. A higher credit score means lower interest payments for an auto loan, home loan, personal loans, new credit cards, etc. Maintaining a high credit score can save you thousands of dollars in interest payments.

Since your credit score is all about payment history, amount owed, length of credit history, etc., you want to keep that all in good standing.

5 Ways To Improve Your Credit Score:

1. Make timely payments: A 30-day late payment may reduce your credit score by 50 points. Your account may be sent to collection due to repeated late/missed payments.

Even if an account is in collection, pay it off and have the status updated on your credit report as “pay for delete” or “paid collection” after negotiating with the creditor.

For some people, setting up an auto bill payment through your bank account is a simple way to make timely payments.

2. Pay off debt instead of moving it around: It’s better to pay off debt rather than move it from account to another. This is because when you owe the same amount of debt but have fewer accounts open, it lowers your score further. Maintain low balances (around 10% of the available credit) on your credit cards and revolving accounts.

3. Establishing new credit: Try to shop for new credit and loans within a short period of time. Usually, for mortgage and auto loans, all credit inquiries made within a 30-day period are treated as one inquiry. So, the sooner you complete shopping for new credit, the better it is for your score.

4. Authorized users: When you add an authorized user to your credit card account, make sure that the user doesn’t overspend. Being the principal card holder, you’ll have to make the payments and in case you can’t afford it, your credit score would get the hit along with that of the authorized user.

5. Avoid store cards and small debts: Getting too many store cards isn’t a good move if you’re going for credit score repair. Such cards are open lines of credit and too many of them are considered as risky by credit bureaus, especially if these are not affiliated to a national creditor (such as MasterCard, VISA etc).

Posted in Credit Score Tagged with: , , , , , , , , , , , , , , , , ,

What is Debt Validation?

Debt Validation or Debt VerificationUNDER THE FAIR DEBT COLLECTION PRACTICES ACT (a federal law regulating debt collectors), you have the right to request that any debt collector send you proof of the debt in question. This process is called debt validation or debt verification.

The right to dispute a debt and receive validation are part of the consumer’s rights.

A debt collector is any person or entity, including lawyers, who regularly attempt to collect consumer debts. Such a person is required to respond to your debt validation request

A consumer can dispute a debt at any time, but only a written request sent within thirty days of the first written notice of the debt triggers validation rights. However, failure by the consumer to dispute the debt during this thirty day period does not constitute a legal admission of the debt.

A debt collector must cease all attempts to collect the debt until they have sent a sufficient response.

At a minimum, the debt collector is required to confirm with the creditor the amount being claimed is correct and that the person from whom they are attempting to collect the debt is the person who owes it.

To be valid, your request for debt validation must be submitted in writing. You can dispute the entire debt, part of the debt, or request the name of the original creditor (debts are bought and sold and any specific debt collector may not be at all associated with your original creditor).

Your debt validation letter should be sent in writing. It’s best to send the letter via certified mail with return receipt requested. This way, you have proof of the letter’s mailing and receipt by the debt collector. If you have to file a lawsuit against the debt collector, the certified and return receipts will help strengthen your case.

Any dispute of the debt must also be reported by the creditor on the consumer’s credit report pursuant to the Fair Credit Reporting Act (FCRA).

Posted in Consumer Rights Tagged with: , , , , , , , , , , , , , , , , , , , , , , , , ,

How Many Errors Are On Your Credit Report?

Credit Report ErrorsIS THERE WRONG INFORMATION BEING REPORTED ABOUT YOUR CREDIT? A study released by the U.S. Public Interest Research Group (PIRG) in June 2004 found that 79% of the consumer credit reports surveyed contained some kind of error or mistake. That represents a significant majority of the population that would be effected by incorrect information about their personal credit.

However, the General Accountability Office (GAO) released a follow-up study disputing those numbers. Then the Federal Reserve Board issued a similar study noting that “the proportion of individuals affected by any single type of data problem appears to be small.”

In 2007, the Consumer Data Industry Association (CDIA) which represents the credit bureaus testified that less than two percent (2%) of 52 million credit reports had data deleted because it was in error.

OK. Let’s just say we don’t know for sure what percentage of credit reports are wrong.

Although there is great disagreement over “how many” credit reports are erroneous, there is no disagreement that some amount are incorrect. Even if only 2% are wrong, that would mean that well over 1 million individuals have bad information representing their credit history.

The good news is that consumers like you and I have rights and bad information can be removed.

Furthermore, if you have become overwhelmed with credit card debt and other unsecured debt, and you don’t want to consider bankruptcy, there is professional debt negotiation help available to lower your unsecured debt obligations and get your family’s financial situation back on the path towards prosperity.

Click “Contact” to find out for yourself.

Or enter your name and email on this page to automatically receive more details about getting out of debt without bankruptcy.

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