Co-Branded Credit Cards: Everything Merchants & Consumers Need to Know

Co-Branded Credit Cards

Co-branded credit cards have become increasingly prevalent in the credit market in recent years. In fact, many large corporations are now offering these handy pieces of plastic, promoting cards such as the SaksFirst Platinum MasterCard, the Barnes & Noble MasterCard and the Amtrak Guest Rewards MasterCard.

Co-branded credit cards, as the name suggests, are the product of a mutual partnership between a particular merchant and a credit card issuer. Together, they work to create a credit card that bears the merchant’s name and provides merchant-specific benefits to brand-loyal consumers. As a result, not only do cardholders gain rewards and discounts from the brands they are most loyal to, but affiliated merchants also acquire a larger customer database.

The Best Way to Pay Off Debt: Which Debt to Pay First & More

Best Way To Pay Off Deb7

It’s common for indebted consumers to hold multiple balances with various creditors. In such a situation, it’s fair to wonder which debt you should prioritize. Here are the basic steps that you should follow:

  1. Stop the Bleeding: This step is crucial, as it includes two important components. First, it’s important to curtail all unnecessary spending in order to devote as much financial firepower as possible to your debt situation. Second, you need to get caught up on minimum payments in order to mitigate the credit score damage that comes with being classified as delinquent.
  2. Attempt to Lower Your Interest Rates: Whether through a balance transfer, debt consolidation or a debt management plan, it’s important that you at least try to minimize the finance charges that you pay and thereby ease your path to debt freedom.
  3. Build an Emergency Fund: Without an emergency fund of at least a couple months’ take-home, even if you pay off all of your balances you’ll only be a lay off or market crash away from ending up right back where you started – mired in debt.
  4. Pay Off Your Highest-Rate Balances First: Some people will recommend focusing on your smallest balances, but getting rid of your most expensive debt first will save you both money and time.
  5. Explore Other Debt Solutions (If Necessary): If scrimping and saving aren’t enough to get you out of the hole, you may need to look into other options like debt settlement or even bankruptcy.

Now that you know the general roadmap to debt freedom, let’s take a closer look at each of these objectives. Afterward, make sure to check out our Ask The Experts Section for additional insights into how to get out of debt and stay out for good.

Placing Fraud Alerts On Your Credit Report: When and How To Do It

Fraud Alert Credit Report

Identity theft has become increasingly common – but so have preventive measures. Although there are various methods to choose from, one of the most effective ways to go about protecting yourself is to take advantage of a fraud alert. Fraud alerts are messages you can add to your credit report from each major credit bureau (Equifax, Experian and TransUnion) indicating that you believe you may be a potential victim of identity theft. Therefore, when people (such as potential creditors, renters or anyone who needs to pull your credit) view your credit report, they will be notified that further steps are needed to verify your identity. These extra steps significantly mitigate the chances of someone else establishing new lines of credit in your name without your consent.

  1. Types of Fraud Alerts
  2. How To Set Up Fraud Alerts
  3. Pros and Cons: Should You Use Fraud Alerts?
  4. Alternatives To Fraud Alerts

Credit Card Reconsideration: How and When To Request It

Credit Card Reconsideration

No one enjoys rejection – especially from banks. It’s pretty frustrating to be informed that you are not eligible for the credit card you’ve been waiting for. The reasons are endless; they tell you it’s because of your recent delinquency, or maybe, it’s because you have too many active accounts open. Regardless, it is important to know that you can get your credit card application reassessed and it is often worth a shot – after all, you have nothing to lose. Doing so is often known as a credit card reconsideration, meaning that you reengage with the same issuer to politely negotiate your way to an approval.

Generally, your initial rejection is issued to you by a computer with an algorithm that is designed to turn down people with select types of credit histories. However, note that issuers are required to reconsider your applications upon request. Under regulation 1002.6 in the ‘Equal Credit Opportunity Act’, it states that creditors shall consider “any information the applicant may present that tends to indicate the credit history being considered by the creditor does not accurately reflect the applicant’s creditworthiness”. Therefore, you can get in touch with an actual human representative to reposition your case by providing more information. They tend to have more empathy and understanding than the computers regarding your application – if you maneuver the process correctly, that is. Thus, if you were rejected the first time, you might have a better shot the second time by requesting a reconsideration.

Credit Freeze: When & How to Do It

Credit Freeze

Although identity theft only happens to a fraction of us, the repercussions can be extremely severe and tedious to resolve. Thus, it is recommended that you consider preventive methods whenever possible. One such preventive measure is called a credit freeze. Freezing your credit – also known as “locking”, “sealing” or “securing” your credit – essentially means that you preclude your credit reports from being accessed by most third parties.

A credit freeze prevents fraudsters from using your personally identifying information to open financial accounts or make transactions that require a credit check under your name. In other words, it nips certain types of financial fraud in the bud, enabling you to avoid the monetary loss and potential credit score damage that often accompanies them. Below you can learn more about how a credit freeze works, how much it costs, and alternative measures for protecting your financial life.

Dynamic Currency Conversion: What It Is, How It Works & How to Avoid It

Dynamic Currency Conversion

When shopping overseas, a merchant may ask you if you would like to convert your credit card transaction from the local currency into U.S. dollars. This is called Dynamic Currency Conversion (DCC). And while it may sound like an enticing offer, this conversion is very expensive for the cardholder and should be avoided.

Generally, when overseas merchants make this offer, they will use a conversion rate that is far higher than the actual going rate – as much as 7 percent higher – and pocket the difference as a fee. They get away with it because many customers are not checking the math at the point of sale.

Types of Prepaid Cards

 
Types of Prepaid Cards

“Prepaid card” is a very general term that can be used to describe a variety of different types of payment vehicles used for varying, and often very specific, purposes. This article is designed to clarify the subtle differences between each type of prepaid card, enabling consumers to better understand industry jargon and avoid misuse.

Usury Laws by State, Interest Rate Caps, The Bible & More

Usury Laws

Usury laws cap the interest rates that can be charged on a line of credit or loan. More than half of all U.S. states today have usury laws in place, and each dictates its own maximum legal limit. However, they have no effect on most credit cards, thanks to effective deregulation that began in the ‘70s.

For decades since, usury laws have remained in the economic spotlight, with constant debate centering on whether they should be changed or maintained. Many decry usurious practices for hurting consumers while others claim that the absence of usury laws open up access to credit for more people. The debate is one that surely will continue for years to come.

Bankruptcy Costs: Attorney & Filing Fees, Cheap Alternatives & More

 Bankruptcy Costs

Bankruptcy isn’t cheap. In fact, it’s expensive. Between filing costs, attorney’s fees and mandatory counseling, the tab associated with today’s average bankruptcy case is more than $1,500. Such high costs have in recent years made filing completely unaffordable for about 200,000 to as many as one million Americans, according to the National Bureau of Economic Research. But there are ways to minimize the cost of bankruptcy.

To help you strategize, we’ve broken down the various fees as well as credit damage and other penalties associated with bankruptcy in detail below. We’ve also consulted some of the foremost authorities on bankruptcy to give you the best advice about navigating the process.

Paying Debt in Collections: When to Do It, How to Pay & Expert Tips

Debt Collections Guide

Unfortunately for consumers, the debt collection industry is thriving.  Not only does it boast $13 billion in annual revenue, but the industry is expected to grow by 15% from 2012 to 2022 – far faster than the average occupation.  That shouldn’t really come as any surprise, though, considering how debt-obsessed we’ve proven to be in recent years.

After spending our way into a Great Recession, we’ve defaulted on more than $182 billion in past-due credit card debt and racked up roughly $123 billion in new plastic-borne balances since 2009.  We’ve also allowed outstanding student loan balances to surpass $1 trillion.

What is a Good Credit Score?

 What Is A Good Credit Score

The FICO credit score is what most banks and lenders use, and anything in the 660-720 range is considered a good credit score under the FICO model (the higher the better).

However, there are more than 1,000 different types of credit scores, and they often utilize different score ranges. So, what’s a good credit score under one model might not be considered good under another. For example, 700 would denote good credit if it’s from FICO but would be below the good credit score range of the Vantage scale. The chart below shows the breakdown for the two most popular credit scores.

Credit Counseling: What It Is, How It Works, Credit Impact & More

Consumer Credit Counseling

Credit counseling is the process of educating consumers about personal financial management as well as the steps that one can take to either avoid accumulating unsustainable balances or escape them with minimal damage. The ultimate goal of credit counseling is to help consumers mitigate financial difficulties through careful budgeting, enrollment in debt assistance programs, and the long-term adoption of responsible monetary habits.

Not only are there different types of credit counseling companies and professionals (nonprofits usually are best), but there are also various types of counseling services – from budget analysis to court-mandated bankruptcy counseling.  A credit counselor will be able to analyze your finances and steer you toward the proper improvement plan.  It is your job to find a trustworthy counselor who knows what he/she is talking about, and we will give you the tools and information necessary to do so below.

Credit Monitoring: What It Is, What to Watch Out For & How to Use It

Credit Monitoring

Most people use credit monitoring to get notified about fraud as quickly as possible and, ultimately, minimize its impact on their finances.  It entails signing up for a service that keeps tabs on one or more of your major credit reports and then notifies you whenever a new account gets opened under your name, someone makes an inquiry into your file, or other potentially suspicious activity crops up.  Many credit monitoring packages also provide you with access to at least one of your credit reports and credit scores.  As such, consumers often use credit monitoring simply to keep track of their credit building progress.

A variety of different companies offer credit monitoring services, including the three major credit bureaus (Experian, Equifax, and TransUnion) and most of the major banks.  It’s no surprise that there’s a large market for such a product either, as identity theft has topped the Federal Trade Commission’s annual list of the most common consumer complaints for more than a decade.  And while credit monitoring won’t, strictly speaking, prevent identity theft or related credit card/loan fraud, it does have the potential to alert you about unauthorized access to your personal information before you would otherwise notice a problem.

Bankruptcy: What It Is, When to File, FAQ & More

Bankruptcy Information

Bankruptcy filings have increased more than 500% since the early ‘80s, and well over 1 million people now file each year.  Interestingly enough, the dramatic rise in the “popularity” of bankruptcy has coincided with our increased societal reliance on credit cards.

“Overall, the increase in credit card and possibly mortgage debt levels since 1980 provides the most convincing explanation for the increase in bankruptcy filings in the United States,” Michelle J. White, a professor of economics at the University of California, San Diego and a research associate at the National Bureau of Economic Research, wrote in an article for the Journal of Economic Perspectives.  “But adverse events and debt levels interact with each other in explaining the increase in bankruptcy filings because, as debt levels increase, any particular adverse event is more likely to trigger financial distress and bankruptcy.”

Divorce and Credit Card Debt: Who Owes What?

Divorce And Credit Card Debt

Want to complicate an already complicated situation?  Mix credit card debt with a failing relationship.  Unfortunately, figuring out what happens to credit card debt in a divorce is an all-too-common predicament for the contemporary consumer, as divorce rates continue to hover around 40% and the average household owes well over $6,000 to credit card companies.

Understanding how to approach credit-related debt once the divorce papers have been filed (or even during a separation) is therefore a must.  And since the particular dynamics and solutions that are in play are largely situation-specific, you should choose the link below that is most applicable to your own circumstances in order to garner the most pertinent advice.

Identity Theft: What It Is, How It Happens & the Best Protection

Identity Theft

Identity theft occurs when someone gains unauthorized access to your personally identifying information – such as your name, Social Security Number (SSN), or bank account information – and uses it to commit fraud or other crimes.

The crimes that an identity thief is able to commit with your personal information range from applying for a credit card under your name before subsequently racking up prodigious charges to poaching your tax refund.  In some cases, identity thieves are even able to assume an unsuspecting person’s identity entirely, obtaining identification bearing their name and often committing crimes “as that person.”

Credit Card Fees: Most Common Types, How to Avoid Them & More

Credit Card Fees

Credit card fees can be expensive and annoying, there’s no doubt about it.  But many of them can be avoided if you’re careful and others may be worth paying if you get something worthwhile.  For example, many of the best rewards credit cards charge annual fees, but people who use them frequently are able to earn additional rewards that outweigh the extra cost.

Given the myriad different fees that credit cards are known to charge, the differing situations in which they apply, how quickly they can add up, and the corresponding implications for your account/credit standing, it’s definitely worth familiarizing yourself with the ins and outs of these pesky charges.  The following topics are explained in detail below.

Canceling Credit Cards: Should You Do It & How to Avoid Credit Score Damage

Canceling Credit Cards

It’s common for consumers who have old, unused credit cards or who no longer trust themselves to wield plastic responsibly to express interest in canceling their accounts.  You might assume doing so to be a no-brainer, but the truth is that in many cases keeping your account active may actually be preferable.

The primary reason why it’s often best to refrain from closing old credit cards, even if you longer use them, is the significance of credit utilization and Length of Credit History to your overall credit score.  We’ll discuss the specific credit scoring implications of closing a credit card account in a bit, but in a nutshell, doing so will make it appear as if you’ve started using more of your available credit and may also effectively shorten your credit track record – both of which can make you appear less trustworthy to financial institutions and other decision makers.

Can a Credit Card Company Sue You?

Credit Card Collections Lawsuits

You may think that it’s just an empty threat, but credit card companies and the debt collection agencies that often assume old debt can and will sue you for amounts owed.  In fact, they aren’t legally allowed to threaten a lawsuit if they do not plan to go through with it.

The chances that you’ll be sued for an unpaid credit card balance and the odds of the plaintiff being successful in recouping amounts owed depend on a variety of factors, including how far past due you are, when you made your last payment, and whether you can work out an alternative arrangement with your creditor.  Financial institutions typically don’t sue customers who owe less than $1,000 or are making regular payments.  As such, you shouldn’t need to worry about a lawsuit unless you owe a substantial amount and are well behind on your payments.

How to Fix Credit Report Errors

 Fix Credit Report Errors

The importance of your Experian, Equifax, and TransUnion credit reports cannot be understated, as all credit scores are based on the information in these reports and your credit standing dictates the credit card and loan terms that you qualify for, where you are able to live, the car you drive, and even the jobs you can get. But while certain types of information should be included in your credit reports, errors are not among them.

Credit report errors are unfortunately an all too common fact of life, however. The Federal Trade Commission estimates that roughly 1 in 5 people (or about 42 million Americans) have an inaccurate credit report, and other studies indicate that the prevalence of credit report mistakes is even higher. For example, the non-profit group American Consumer Credit Counseling pegs the error rate at an astounding 90%.

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Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. If you have any legal questions, please consult an attorney. Please let us know if you have any questions or suggestions.