New credit card rules add accountability

In a world where shopping online and booking a hotel or a rental car usually demands plastic, few people can survive without a credit card.

But vast changes in credit regulation coupled with a souring economy turned 2009 into the most turbulent credit year in decades, with a record number of rate hikes, consumer cancellations and changes in fees, terms and credit limits. And experts say there's more in store for 2010.

"2010 is going to be the year of accountability," said Adam Levin, chairman and co-founder of Credit.com, a credit-shopping website. "Credit card companies are going to be more accountable to consumers, but consumers are going to have to be more accountable too."

What should you expect in 2010, and how can you put yourself in the best position to lessen the pain, or even profit from the changes?

First it's helpful to recap what's already happened, said Bill Hardekopf, chief executive of LowCards.com. That's mainly because many of the anticipated changes are linked to a consumer protection law that was passed earlier this year but is taking effect in stages.

In May, Congress passed the CARD Act -- short for the Credit Card Accountability, Responsibility and Disclosure Act of 2009. But legislators gave banks time to acclimate to the new rules by putting in three effective dates. The first was in August, the second is in February and a final rule that affects gift cards applies next August.

What happened last August? Credit card issuers were required to give consumers 45 days' notice of rate hikes and bill people at least 21 days' before their payments were due. That was intended to assure that consumers were given adequate time to pay without getting hit with late fees.

In addition, consumers got the ability to "opt out" of a rate hike. The catch on this opt-out provision is that when you say no to the higher rate, the bank can close your account and double your minimum monthly payment, Levin said.

If you do elect to close the account, you can't be forced to pay off your balance all at once. But the new law does allow banks to set up a schedule that guarantees you'll have paid off your debt within five years. On the bright side, you pay off the debt at the old interest rate, not the higher one that the bank wanted to impose.

But most significant changes go into effect early next year.

As of Feb. 22, if you have a consistent history of paying on time your rates cannot be increased on outstanding balances except when a "teaser" rate expires or when you have a variable-rate credit card.

If a credit card company hikes rates on a fixed-rate card, they are only allowed to charge the higher rate on new charges.

Your rate can be increased if you've been irresponsible about your credit use, though. If your payment is more than 60 days late, the issuer can charge a penalty rate that could be vastly more expensive than what you were paying previously and that rate can be applied to an existing balance. However, the credit card company must reinstate the lower rate if you make at least six months of on-time payments.

And then there are those fees for exceeding your credit limit. You cannot be charged an "over-limit" fee unless you affirmatively opt-in to a program that will allow your card issuer to accept charges that put you over your credit limit. If you don't opt in, the bank will simply reject any such charges.

All consumers also must be told how long it will take to pay off their credit balances if they make only the minimum required payments.

Youthful borrowers those under 21 will not be able to get credit cards unless they have a co-signer or can show that they have income to pay their own bills.

Issuers of "subprime" cards those going to people with bad credit histories may not charge customers upfront fees to obtain the card that amount to more than 25% of the credit limit.

These changes have already spurred a flurry of activity. In an effort to maintain their ability to change rates, banks have been converting fixed-rate cards to variable-rate cards and they've hiked rates on millions of customers.

In addition, some 58 million individuals have had credit cards canceled or their credit limits cut, said Craig Watts, spokesman for Fair Isaac Co., the makers of the FICO score. These cuts aren't being imposed only on bad risks, either, Watts said.

The typical cardholder whose credit limit was affected had an excellent credit score, ranging from 760 to 770.

10% of underwater homeowners would walk away, survey finds

A new national survey looking at the phenomenon of strategic defaults, in which homeowners choose foreclosure over continuing to pay on underwater mortgages, has found that nearly one out of 10 homeowners say they would walk away if they felt financially vulnerable and owed more on their homes than they were worth.

The telephone poll of 1,000 homeowners, conducted for Reecon Advisors, publisher of Real Estate Economy Watch, revealed that most would choose other options: 61.7% would talk to their lenders about modifying loan modifications, 44.3% would try to sell and 25% would rent out a room to help meet expenses.

To what extent homeowners are underwater also plays a role in the decision making process. Owners with negative equity of 10% or less rarely default, according to researchers from the graduate schools of business at the University of Chicago’s Booth School of Business and Northwestern University. But once negative equity reaches 50%, close to one in five owners would walk away.

The findings show that one out of four homeowners who default on their mortgages are making a strategic decision.

Whether owners should feel guilty about walking away has also been the subject of recent reports. In "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis," University of Arizona law school professor Brent T. White urged homeowners to stop paying their underwater mortgages if it was in their best financial interests. Further, he said they should not think of the decision as doing something morally wrong.

It's a subject that's ripe for debate.

One debit-card overdraft can trigger an avalanche

Many banks rack up fees by counting the biggest transactions first and enrolling customers in overdraft programs without their knowledge or consent.

One mistake could cost Trina Lee her Christmas.

Things have been tight for the Arizona-based nursing assistant since she got laid off two years ago and suffered some medical problems that have kept her from working full-time. As a result, she's become meticulous about watching her bank balance, which is often uncomfortably close to zero.

Earlier this month, she was feeling temporarily flush because she has prepaid most of her bills and figured the rest of her December income from child support and a part-time job could be spent on Christmas gifts. So she splurged on a $65 meal with her mom and brother, knowing that it was possible that this one meal could overdraft her checking account. Debit card transactions like this one require a signature and usually take a couple of days to clear, so Lee monitored every purchase after that, copying her daily bank account activity into a computer file each night to make sure she wasn't stepping over the line.

On Dec. 7, the night before her son's child support payment was due, she breathed a sigh of relief. At 10:45 that night, the dinner charge still hadn't posted and wasn't even listed as pending. After subtracting every pending payment, she had precisely 16 cents in her checking account. She went to bed imagining that she'd dodged an overdraft because she would get a $156 payment in the morning.

She got a rude awakening.

Before crediting her account for the child support payment, Chase bank not only put through the dinner charge, it also "reordered" every one of her pending transactions, turning one potential overdraft into four. The mounting overdraft charges of $35 each then triggered two additional overdraft charges for small debit transactions that Lee did that day, before she'd realized that her account had gone into the red.

In total, Chase levied $210 in overdraft charges -- $175 more than Lee imagined was possible.

"I accept responsibility for one overdraft," said Lee, a 29-year-old mother of two. "But they created the rest of these. It's really frustrating."

Bank spokesman Greg Hassell said Chase would not reverse these charges because "Ms. Lee intentionally overdrafted her account, knowing she had insufficient funds for all her purchases."

The fact that Chase in effect created five of the six overdrafts by changing the order of her transactions -- deducting the biggest items first to drain her account faster -- is simply current policy, the spokesman said.

The policy is common among big banks, industry experts say.

Bankers justify the policy by saying that it ensures that big, important transactions -- such as mortgage payments -- are paid first and thus have a lower chance of bouncing. Critics, however, say that argument doesn't hold water because the banks pay all the transactions regardless. In that case, changing the posting order simply magnifies the effect of a single mistake by turning a single overdraft into several, just as it did with Lee. Indeed, an FDIC study completed late last year found that policies like this had caused overdraft fees to quadruple in just two years, ringing up some $24 billion in revenue for the banking industry in 2008.

Industry consultant Michael Moebs estimates that overdraft charges have continued to soar and are likely to account for some $38.5 billion in revenues this year, with roughly 90% of those fees being paid by just 10% of bank customers. Worse, the FDIC study found that most bank customers had no inkling they could suffer an overdraft charge in advance. Why? They'd been automatically enrolled in an overdraft program without their consent or knowledge.

Consequently, millions of bank customers used debit cards for small purchases, assuming that the swipe would be rejected if they didn't have sufficient funds. They learned later that, say, a $2 coffee cost $37 because it triggered a $35 overdraft fee - a practice so common that many experts now say using a debit card has become dangerous.

The Federal Reserve announced this year that it will require banks to get advance permission before enrolling customers in overdraft programs, but the rule doesn't go into effect until July. Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) and Rep. Carolyn Maloney (D-N.Y.) have also introduced legislation demanding that banks stop this practice of systematically "modifying posting order" and post transactions chronologically.

The overdraft legislation, which has been temporarily stalled while congressional leaders work on health reform and other financial regulations, would also require that fees bear some relationship to the cost of processing an overdraft; prohibit enrolling customers in an overdraft program without their consent; and limit the number of overdraft fees a bank could charge to a single consumer in any given month or year.

"To actively reorder checks to cause a tidal wave of overdrafts is unconscionable," said Ginna Green, a spokeswoman for the Center for Responsible Lending, which has been pushing for the legislative fix. "This is exactly why we still need legislation."

In the meantime, several banks including Chase have announced they will voluntarily revamp their policies.


Chase's new policy, spokesman Hassell said, will eliminate changing posting order the crux of Lee's complaint.

It will also reduce the maximum number of overdraft fees the bank would charge in a single day, reducing it to three per customer from six under current policy, and it will eliminate fees for overdrafts of $5 or less. Any of those changes would have dramatically helped Lee. Unfortunately, none has been implemented to date. The legislation is expected to be voted on early next year. Chase's policies have an amorphous starting date -- "in the first few months of 2010," according to Hassell.

In the meantime, Lee and consumers like her are out of luck.

Debtor's Dilemma: Pay the Mortgage or Walk Away

In Down Real-Estate Market, Homeowners Are Deciding to Abandon Their Loan Obligations Even if They Can Afford the Payments


PHOENIX -- Should I stay or should I go? That is the question more Americans are asking as the housing market continues to drag.

In good times, it would have been unthinkable to stop paying the mortgage. But for Derek Figg, a 30-year-old software engineer, it now seems like the best option.

Mr. Figg felt trapped in a home he bought two years ago in the Phoenix suburb of Tempe for $340,000. He still owes about $318,000 but figures the home's value has dropped to $230,000 or less. After agonizing over the pros and cons, he decided recently to stop making loan payments, even though he can afford them. Mr. Figg plans to rent an apartment nearby, saving about $700 a month.

A growing number of people in Arizona, California, Florida and Nevada, where home prices have plunged, are considering what is known as a "strategic default," walking away from their mortgages not out of necessity but because they believe it is in their best financial interests.

A standard mortgage-loan document reads, "I promise to pay" the amount borrowed plus interest, and some people say that promise should remain good even if it is no longer convenient.

George Brenkert, a professor of business ethics at Georgetown University, says borrowers who can pay -- and weren't deceived by the lender about the nature of the loan -- have a moral responsibility to keep paying. It would be disastrous for the economy if Americans concluded they were free to walk away from such commitments, he says.

Developments: Is Walking Away FromYour Mortgage Immoral?

Walking away isn't risk-free. A foreclosure stays on a consumer's credit record for seven years and can send a credit score (based on a scale of 300 to 850) plunging by as much as 160 points, according to Fair Isaac Corp., which provides tools for analyzing credit records. A lower credit score means auto and other loans are likely to come with much higher interest rates, and credit card issuers may charge more interest or refuse to issue a card.

In addition, many states give lenders varying degrees of scope to seize bank deposits, cars or other assets of people who default on mortgages.

Even so, in neighborhoods with high concentrations of foreclosures, "it's going to be really difficult to prevent a cascade effect" as one strategic default emboldens others to take that drastic step, says Paola Sapienza, a professor of finance at Northwestern University. A study by researchers at Northwestern and the University of Chicago found that as many as one in four defaults may be strategic.

Driving this phenomenon is the rising number of households that are deeply "under water," owing much more than the current value of their homes. First American CoreLogic, a real-estate information company, estimates that 5.3 million U.S. households have mortgage balances at least 20% higher than their homes' value, and 2.2 million of those households are at least 50% under water. The problem is concentrated in Arizona, California, Florida, Michigan and Nevada.

Josh Cotner, who owns an insurance agency, says his mortgage balance is about $100,000 more than the market value of his home in Gilbert, Ariz. Mr. Cotner could rent a bigger home nearby for $600 a month, far below the $1,655 he now pays on his mortgage, home insurance and property tax. He says he recently stopped making mortgage payments because his lender wouldn't help him reduce the principal on his loan under a federal program in which he believes he is qualified to participate. Given the sometimes lengthy legal process of foreclosure, he may be able to stay in the home for at least another nine months without making any payments.

Banks warn they may get tough with strategic defaulters by pursuing legal claims on a borrower's other assets. "We will try to reduce people's payments if they have a hardship," says Thomas Kelly, a spokesman for J.P. Morgan Chase & Co. "But we have a financial responsibility to get people to pay what they owe if they can afford it."

Steven Olson, a loan officer and roof installer in Roseville, Minn., defaulted in 2007 on a plot of land in Florida he had bought as an investment. "I thought I could move on with my life," he says. But the lender, RBC Bank, a subsidiary of Royal Bank of Canada, sued him, seeking to make him pay more than $400,000 to the bank to cover its losses on the loan. Mr. Olson has hired a Florida lawyer, Roy Oppenheim, to resist the claim. An RBC spokesman declined to comment.

The Burning Questions



States where lenders generally can pursue such legal claims include Florida and Nevada but not California and Arizona, where laws generally prohibit lenders from pursuing other assets of mortgage borrowers. A new Nevada law will protect many borrowers from these judgments if they bought a home for their own use after Sept. 30, 2009.
Another risk for defaulters is that banks could sell the rights to pursue claims to collection agencies or other firms, which could then dun the borrowers for up to 20 years after a foreclosure. Such threats appear to deter some borrowers. A recent study from the Federal Reserve Bank of Richmond found that under-water borrowers were 20% more likely to default in a state where mortgage lenders can't pursue claims on other assets than in those where they can.

How much of your home's value do you owe on your mortgage?

Brent White, an associate law professor at the University of Arizona who has written about this issue, says homeowners should make the decision on whether to keep paying based on their own interests, "unclouded by unnecessary guilt or shame." He says borrowers can take a cue from lenders that "ruthlessly seek to maximize profits or minimize losses irrespective of concerns of morality or social responsibility."

But it isn't just a matter of the borrower's personal interest, says John Courson, chief executive of the Mortgage Bankers Association, a trade group. Defaults hurt neighborhoods by lowering property values, he says, adding: "What about the message they will send to their family and their kids and their friends?"

In Mesa, another suburb of Phoenix, low prices are helping to draw buyers who may walk away from other homes. Christina Delapp bought a house out of foreclosure in July for $49,000 in cash. She says she will stop paying the mortgage on another home she still owns in Tempe if she can't sell in the next few months for more than the $312,000 that she owes.

Ms. Delapp, who has been jobless for 18 months, says that the new home is part of her survival strategy. "I feel very fortunate," she says. "Regardless of what happens to my credit, we've managed to put together the best safety plan that I possibly could."

Mr. Figg says that deciding to default on his loan was "the toughest decision I ever made." He worried that if he ever loses his job he would be marooned in a home that he couldn't sell for enough to pay off his loan, limiting his ability to find work in other parts of the country: "I couldn't move up. I couldn't move down. I couldn't move out of the city. It was a very claustrophobic situation."

By moving to an apartment, Mr. Figg expects to lower his costs by about $700 a month. He plans to put that into his savings account and says he is willing to rent for the next five years or so.

Lenders are guilty of having "manipulated" the housing market during the boom by accepting dubious appraisals, Mr. Figg says. "When I weighed everything," he says, "I was able to sleep at night."

Experian loses ruling that could strengthen Fair Credit Reporting Act

The U.S. 9th Circuit Court of Appeals rules in favor of a woman who had been pursued by a collection agency that used an Experian credit report to try to recover a towing fee owed by her son.

For seven years, a bill collector enabled by the powerful Experian credit reporting bureau pursued Maria Pintos over a $3,000 towing bill.

"They used to call me at work and threaten to ruin my good credit," Pintos, 71, said of Pacific Creditors agents who hounded her at her San Mateo County mental health department job for months after the May 2002 towing. "It was so embarrassing, because there were patients around who could hear."

On Thursday, the 71-year-old Pacifica, Calif., woman beat the firms in federal appeals court, winning a ruling that could have wider implications for the credit industry.

A divided three-judge panel of the U.S. 9th Circuit Court of Appeals ruled that Pacific Creditors Assn. and Experian Information Systems Inc. violated Pintos' privacy, as well as the Fair Credit Reporting Act.

Pintos had bought a sport utility vehicle for her son, turning over the title to him after he paid her back.

Based on a review of her Experian credit report, Pacific Creditors tried to collect on behalf of a towing business that had towed and impounded the vehicle. The collection agency had pegged Pintos a better bet for paying the bill than her son, who had financial problems and poor credit.

The appeals panel ruled that the agency had no right to request, nor Experian to provide, Pintos' credit report, because she had never initiated a credit application or failed to pay a debt willingly assumed.

Experian spokeswoman Roslyn Whitehurst said it was "corporate policy not to comment on anything pertaining to pending litigation."

The California Department of Consumer Affairs was reviewing the ruling and still assessing its implications for consumers, said spokesman Luis Farias.

The decision could lead to the two firms' paying damages to Pintos. It could also serve as a warning to the credit industry to adhere to the specific conditions outlined in the Fair Credit Reporting Act for buying and selling consumer credit histories.

"This is a very important case for victims of identity theft because credit reporting agencies have been arguing for years that they can give your credit report to anyone they think is reliable," said Andrew J. Ogilvie, the San Francisco attorney to whom Pintos was referred when she appealed for help from the San Mateo legal aid services for seniors.

The 9th Circuit ruling could lead to broader adherence to the Fair Credit Reporting Act, which firms routinely violate without consequences because of the expense of litigation and poor prospects of winning monetary compensation, Ogilvie said.

Barring appeal by the credit agencies, the case will go to trial in federal court on whether Pintos is due compensation for emotional suffering and lost wages.

They can also point to the dissent of one of the three judges, Carlos T. Bea, who argued that Pintos did trigger the agencies' sharing of her credit history by her decision to leave the vehicle on a public street "where she knew it might be towed."

Redeem All of Gift Card, or Give Store a Present

Like it or not, gift cards are now a fixture of the holiday season. And this year, some of the changes in the card world seem favorable at first glance.

Giving gift cards this year? Hope to get one?

Nearly $5 billion of the money that is given this year as presents on gift cards is likely to go unspent.

Last month, the Federal Reserve proposed new guidelines for the industry, rules that legislators had outlined in the sweeping credit card legislation that passed earlier this year. They prohibit fees for cards that have been inactive for less than a year, outlaw expiration of funds within five years of when someone has loaded the cards with money, and call for clear and conspicuous disclosures.

That is fine as far as it goes, though most major retailers already follow these rules. American Express, which issues cards that are good at any retailer that accepts its plastic, went even further. It did away with all consumer fees, other than the ones you pay to purchase and load the gift card in the first place.

But a big problem remains, and it’s awfully hard to legislate away. This year, nearly $5 billion of the money that well-meaning givers have put onto gift cards will go unspent, according to Tower Group, a financial services consulting firm. The money then reverts back mostly to the retailers and banks that loaded the plastic initially.

In the industry, this is known as breakage, and here’s what it means: If you buy a gift card for a family member or friend, there’s a good chance you’ll give a little gift to the retailer or bank that issued it as well.

How does breakage happen? People lose their cards. Or they abandon them in a drawer and assume they’re expired when they’re unearthed years later. Fees can still eat away at some of them. And people may use $46 of a $50 card and then throw it out rather than make another trip back to the store.

The most obvious question here is whether retailers and banks like it when this happens. On one hand, enlightened companies may see the cards as akin to frequent-flier miles. Customers are unhappy when any miles expire, and if they are able to redeem them easily, they’re more likely to patronize the airline and collect more miles in the future. That’s how loyalty works, and one would assume that gift card issuers want to create the same seamless experience.

Some third-party providers that set up gift card systems see it a bit differently, however. Head over to the Gift Card USA home page, and you’ll see the company behind the site announcing: “Experience shows that 5-15% of gift card values are never redeemed. This fact can pay for your program by itself.”

It isn’t just a break-even proposition either, according to the people behind Acceptvisamastercards.com. If you count 10 to 12 percent breakage in your calculations, the site contends, the gift card display can become the “most profitable square foot of space in the place.”

This is how some of the people in the industry talk about gift cards when they think consumers aren’t listening. And for big companies, breakage can add up to real money. Not every big retailer or bank discloses it, but Best Buy was kind enough to note that it kept $38 million in breakage in its most recent fiscal year. Home Depot cleared $37 million. Breakage can be total when a retailer goes out of business.

Retailers will generally still let you redeem your gift card many years after you received it. But they still record the revenue once they’re certain, based on historical redemption patterns, that most of the unspent money from years ago will stay that way. And yes, most of them do tend to keep it, though some states may try to seize the money as unclaimed property (which leads many companies to place subsidiaries in friendly states to try to avoid this).

Even as gift cards exploded in popularity over the last decade, it was reasonably easy to avoid getting them, as long as you put together a specific enough holiday wish list for friends and family. But recently, companies have started sending rebates in the form of gift cards, instead of old-fashioned paper checks. So you may end up with the cards whether you want them or not.

Why is this happening? Because you wanted it to happen, of course. “It’s the convenience,” said Cletis Hoffer, treasurer at Young America, a marketing company that specializes in rebates and has studied the issue in focus groups. “Consumers are more interested in getting a card than a check. You have to take a check to the bank. But with a card, you can spend it immediately.”

This makes little sense to me. I can drop a check in the mail to my bank in about two minutes. But with the gift card like the Citi Visa that I recently received from Verizon, I have to remember to put it in my wallet and take it out at a store. Then, I need to find a retailer where the people at the register won’t look at me cross-eyed when I request that they split the transaction between the gift card and another form of payment. It holds up the line, too.

At least that Citi card gives you the right to take its gift card to any Visa member bank and extract the cash. I took it to arch rival Chase. The transaction was seamless and it took just 10 minutes, five times as long as it would have for me to send a rebate check to my bank. I was that lucky, though, only because I work across the street from a bank.

Perhaps I’m in the minority in finding all of this a bit too complicated. “We have seen incredible increased utilization, in terms of people getting the cards down to zero, than we were two years ago,” Mr. Hoffer said. “Particularly the Visa and other cards.”

Brian Riley, the research director at Tower Group, confirms that overall breakage numbers have fallen in the last year or two, as consumers have gotten wise to the disappearing funds. “People realize they can lose it,” he said. “And the fact that we’re in a bad economy gives the $3 a bit more meaning now.”

If you do end up with an unwanted card, there are a few ways to get rid of it. You could sell or swap it at Web sites like Plastic Jungle, GiftCardRescue and Swapagift, though you’ll lose some of the card’s value in the process. A charity might take it off your hands, too.

If you’re going to use the card, try buying something that costs a bit more than the loaded amount, so you’re not faced with a tiny leftover balance that you’ll be tempted to abandon. If you have a Visa or similar card, calling a catalog merchant with an order may make you feel less sheepish than holding up lines with an in-person split transaction.

As a giver, it’s easy to tune all of this out when buying a card is so much easier than redeeming it. And recipients often treat it like found money; what’s a loss of $4 when the $96 you did get to use was money you didn’t have before?

But we could put an end to all of this waste if the givers got wise to the billions in annual giveaways to retailers and banks and just handed over cash. You’re kidding yourself if you think that loading money onto a plastic card is somehow more polite than slipping money into a paper envelope.

Nobody neglects to spend cash. The reason they came up with the word breakage is that the gift card system was more than a little bit broken.

Credit card's newest trick: 79.9% interest

NEW YORK — It's no mistake. This credit card's interest rate is 79.9%.

The bloated APR is how First Premier Bank, a subprime credit card issuer, is skirting new regulations intended to curb abusive practices in the industry. It's a strategy other subprime card issuers could start adopting to get around the new rules.

Typically, the First Premier card comes with a minimum of $256 in fees in the first year for a credit line of $250. Starting in February, however, a new law will cap such fees at 25% of a card's credit line.

In a recent mailing for a preapproved card, First Premier lowers fees to just that limit — $75 in the first year for a credit line of $300. But the new law doesn't set a cap on interest rates. Hence the 79.9 APR, up from the previous 9.9%.

"It's the highest on the market. It's the highest we've ever seen," said Anuj Shahani, an analyst with Synovate, a research firm that tracks credit card mailings.

The terms are eyebrow raising, but First Premier targets people with bad credit who likely can't get approved for cards elsewhere. It's a group that tends to lean heavily on credit too, meaning they'll likely incur steep financing charges.

So for a $300 balance, a cardholder would pay $20 a month in interest.

First Premier said the 79.9 APR offer is a test and that it's too early to tell whether it will be continued, according to an e-mailed statement. To comply with the new law, the bank said it will no longer offer the card that has $256 in first-year fees as of Feb. 21, 2010. However, customers will still be able to use their existing cards.



According to First Premier's website, the credit cards are issued by its sister organization Premier Bankcard. The company, based in Sioux Falls, S.D., says Premier Bankcard is the 10th largest issuer of MasterCard and Visa cards in the country, with more than 3.5 million customers.

In a mailing sent to prospective customers in October with the revamped terms, First Premier writes "...you might have less-than-perfect credit and we're OK with that." The letter notes that an online application or phone call is still required, but guarantees a 60-second status confirmation.

The letter also states there are no hidden fees that aren't disclosed in the attached form. That's where the 79.9% interest rate and $75 annual fee are listed. There's also $29 penalty if you pay late or go over your credit limit. The credit limit is $300.

The bank did not say how many people were offered the 79.9 APR card, but noted that it needed to "price our product based on the risk associated with this market."

Even if First Premier doesn't stick with the 79.9 APR, it will likely hike rates considerably from the current 9.9% to offset the lower fees, said Shahani of Synovate.

The revamped terms may not be the only changes; First Premier also appears to be moving away from the riskiest borrowers.

The bank typically mails offers to subprime households, meaning those with credit scores below 700. In the third quarter, however, 84% of its offers were sent to subprime households, down from 91% the same period last year, according to Synovate.

First Premier could be cleaning up its credit card portfolio since the new regulations will limit its ability to raise interest rates. That could mean First Premier won't issue cards as liberally to those with bad credit.

As harsh as First Premier's terms seem, that could be a blow to those who rely on the card, said Odysseas Papadimitriou, CEO of CardHub.com.

"Even when the cost of credit is astronomical, for people in true emergencies, it's much better than not having access to credit," said Papadimitriou.

Until Feb. 21, First Premier is still offering its even-higher-fee card online. So the price for credit the bank charges is at least $256 in first-year fees.

How to Invest in a Certificate of Deposit (CD)

Certificates of deposit (CDs) make financial sense for people of all ages who want a low-risk investment to park cash they don’t plan to use immediately. Maybe you want to use your cash to buy a car or make a down payment on a house pretty soon.

If you won’t need your cash reserve the day after tomorrow or next week, you’ll likely want that money to earn a better rate of return than your checking account offers—without taking on too much risk. This is when a CD is useful.

Two factors to consider when deciding whether a CD is right for you:

• Your time horizon. When will you need part or all of your cash? Do you have other cash resources to access in a pinch? If you have a sum of money and don’t expect you’ll need to use it for six months or longer, a CD may be ideal.

• Interest rates. The anticipated direction of interest rates will help you determine how long to tie up your money. If rates are rising (usually when inflation is on the rise), a short-term CD may be best. If rates are falling (usually when the economy is on a downswing), a longer-term CD may earn you more money, since you’ll lock in a higher rate.

How to Invest

Before you shop for a CD, there are two numbers you need to know:

• APR —The annual percentage rate, or the interest rate a bank is offering on the CD.
• APY —The annual percentage yield, which tells you what you’ll earn over the multiyear life of the CD as your money compounds.

What’s compounding? Put simply, it’s how your investment grows over time. Let’s say you invest $10,000 in a three-year CD earning 5% annually. In the first year, your $10,000 investment will earn $500. In the second year, 5% of the new total ($10,500) will be $525. In the third year, 5% of $11,025 will be about $551. The total amount of money grows each year, so the amount representing 5% of your investment also grows. That’s compounding.

You’ve decided a CD is an ideal investment for your cash. Here’s what to do next:

1. Choose your term. Determine how long you want to tie up your money. This will depend on when you need the money or whether you have other cash assets to tide you over until the CD matures.

2. Pick your type. Decide which kind of CD suits you best. For example, if you want to invest for two years and don’t want the risk of being stuck with a low rate, then a bump-up CD may be ideal. Afraid you’ll need part of your deposit for an emergency? Consider a liquid CD. (Look here for an explanation of the basic types of CDs.)

3. Review the rates. Once you’ve selected the duration and type of CD you want, find out what rates are available at different banks.

Consider a ladder

One way to reduce a CD’s drawbacks is to use a technique called “laddering.” This strategy gives you regular access to part of your cash and protects you against rising interest rates.

Laddering is simple. Instead of investing one big chunk of cash in one CD, you divide your lump sum into equal parts and invest each in CDs of varying durations.

Here’s how it works: Let’s say you want to invest $15,000. By laddering, you would invest $5,000 in a one-year CD, $5,000 in a two-year CD and $5,000 in a three-year CD. Then, each time one of the three CDs matures, you would either take the cash or re-invest it in another three-year CD to keep your ladder in place.

Laddering provides three benefits:

• Penalty-free access to cash each time a CD matures.
• More favorable interest rates, since you’re always investing in a longer-term CD.
• A shot at better returns if interest rates are higher when you re-invest.

Tips
1. You'll earn more in a longer-term CD, but be sure you won't need the money before the term is up -- the penalties for early withdrawal can be severe.
2. Compare CD rates at Bankrate. Also see if you'd be better off with a high-yield online savings account.
3. Staggering your CD investments, a tactic called laddering, can give you periodic access to the money within your CDs.

Credit-Card Mail May Be Boring, But Ignoring It Could Cost You

Here's some friendly year-end advice: Read those disclosure letters that banks and credit-card companies are sending you in coming months—or at least try really hard.

The text of these mailings may seem like gobbledygook. But they may require you to make important choices soon. Ignoring them could mean paying a lot more money to your credit-card company, having a credit card rejected or getting an unpleasant surprise at the ATM.
In the Fine Print

Some changes to bank and credit-card accounts may require your response. Look for:

* Changes in credit-card interest rates or annual fees. You can opt out, canceling your credit card for new purchases.
* An end to the practice of automatically allowing you to exceed your credit limit. You can "opt in" to run over your limit but will pay fees if you do.
* An end to automatic enrollment in overdraft programs for debit cards. You can enroll and pay the fees—but there are cheaper options.


New legislation and Federal Reserve rules that go into effect in February and next summer will force banks and credit-card companies to give more notice of significant changes in card terms, limit some interest-rate hikes and require more detailed billing statements. But the rules will also require us to decide whether to opt in or out of rate increases and programs such as "overdraft protection" that we may have been automatically enrolled in previously.

The letters may be easy to miss, since some of them look like junk mail. And don't expect reader-friendly prose. The banks' approach is: "It's not our job to teach you the law; it's our job to comply with the law," says Adam Levin, co-founder and chairman of Credit.com, a credit-information Web site.

When you open the envelopes, here are some details to look for and moves you may want to consider:

• Is the credit-card's interest rate or annual fee changing? Many companies have been aggressively raising rates as high as 29.99%. But you now have the right to "opt out" of these changes before they become effective, essentially canceling the card for new purchases, though you can continue to pay off the balance at the old interest rate.

If you have an outstanding balance, this option especially matters right now because credit-card companies have a narrow window to hit you with higher interest rates. After the second round of the Credit Card Act goes into effect Feb. 22, the companies can raise rates on future transactions but not on your current balances unless you are at least 60 days behind in your payments. But until Feb. 22, any interest-rate increase can apply to both future purchases and current balances—which could mean substantially higher costs.

You may worry that canceling a credit card will hurt your credit score. Those fears are not unfounded. But let's do the math: Say you owe $5,000 on the card and you're paying $250 a month. If the original rate was 11.99% and you canceled the card, you'd pay off the balance in 23 months and pay about $600 in interest. If the rate spikes up to 19.99%, however, and you don't make additional purchases, you would pay off the balance in 25 months, along with more than $1,100 in interest—a $500 difference.

So here's another way to look at it: If you cancel the card and your credit score falls, your score likely will rebound in a year or two if you pay your bills on time and keep your debt levels in check. But if you keep the card and pay the higher rate, your $500 will be gone forever.

Of course, if you truly need the credit and fear you won't be able to get a card somewhere else, it may be worth the money to keep the card. And if you pay your bill in full every month, the higher rate may be irrelevant.

• Has your credit limit been lowered? And do you borrow close to your limit? Starting in February, the new law will bar credit-card companies from charging fees (typically up to $39) for exceeding a credit cap unless the customer "opts in," or agrees to pay fees for the convenience of busting the limit. If you don't opt in, you run the risk that your credit card will be rejected when you near your limit. That could put those with small credit limits or high balances in an awkward position at the cash register. It also makes travel trickier since hotels and rental-car companies often put a hold on your card as a precaution, reducing your available credit.

Statute of Limitations on Debts

Below are the State Statutes of Limitations for various kinds of agreements. All figures are in years.

Oral Contract: You agree to pay money loaned to you by someone, but this contract or agreement is verbal (i.e., no written contract, "handshake agreement"). Remember a verbal contract is legal, if tougher to prove in court.

Written Contract: You agree to pay on a loan under the terms written in a document, which you and your debtor have signed.

Promissory Note: You agree to pay on a loan via a written contract, just like the written contract. The big difference between a promissory note and a regular written contract is that the scheduled payments and interest on the loan also is spelled out in the promissory note. A mortgage is an example of a promissory note.


Open-ended Accounts: These are revolving lines of credit with varying balances. The best example is a credit card account. Please note: a credit card is ALWAYS an open account. This is established under the Truth-in-Lending Act:

TITLE 15 > CHAPTER 41 > SUBCHAPTER I > Part A > § 1602
§ 1602. Definitions and rules of construction(i) The term “open end credit plan” means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time.

Keep in mind, though, that the state statute of limitations on a credit card may come down to whether the agreement is in writing or not; whether it meets the required elements of a written contract. For instance, in Missouri if the creditor is able to produce a written credit card contract, then the 10 year statute applies. If the creditor cannot show the existence of a written contract, then the 5 year statute would apply - credit card or not. Here is case law in Missouri to illustrate this point:

In Capital One Bank v. Creed, 220 S.W.3d 874 (S.D. Mo.2000), the company alleged the parties entered into a contract, whereby the company would extend credit to the customer. The company alleged that the customer breached the terms of her contract by failing to pay the amounts for which credit was extended. The customer denied the allegations and asserted the affirmative defense that the action was barred by the statute of limitations. The appellate court ruled that the action was barred by the five year statute of limitations under Mo. Rev. Stat. § 516.120 (2000). The customer made a partial payment on December 2, 1999, and the company's petition was not filed until January 3, 2005. The ten year statute of limitations under Mo. Rev. Stat. § 516.110 was not applicable because the company did not produce a written promise by the customer to pay money.

A Change in Credit Card Strategy

If you have an unpaid credit card balance and not much saved up in emergency savings I need you to listen up. My advice has changed.

I want you to only pay the minimum due on your credit card balance and instead make it your top priority to build as much of an emergency cash fund as you can.

Let me tell you why I am now telling you to do this. With rising unemployment, having a big emergency cash fund is vital, even if it means curtailing your credit card repayment strategy.

The sad reality is that the credit card industry is taking actions to protect themselves with no regard to your needs or how good you have been about paying your bills on time. The problem is that most credit card companies are either reducing your credit limits, raising your interest rates and are even paying you to close down your account. Many of you are even finding that when you do finally pay off your credit card debt that the issuing credit card company of that card is closing that card down as fast as they can so you cannot ever charge on it again. You did everything right, and yet still you could have your credit limit reduced, which can have a negative impact on your credit score.

So here is the problem. If you do not have a stash of cash in an emergency fund and you have been using all your extra money to pay down your credit card debt and they keep closing your cards down—what are you going to live on if you lose your job? Chances are you may not have any available credit, or too little credit, to use in the event you are laid off. Nor will you be able to get a new card if you are unemployed.

That’s why I am telling you to pay just the minimum required on your card each month and then use every extra penny you have to build up your emergency savings fund. You want to have a fund that can cover your living expenses for up to eight months.

If you revert to paying just the minimum on your credit card there’s a chance it may indeed hurt your credit score. But as I just explained, even if you do pay it down there’s a chance your credit score will be hurt if the credit limit is reduced.

I want to be very clear: I still believe getting out of credit card debt and making sure your FICO score is as high as possible is incredibly important. For those of you with a fully-funded emergency account please make it a priority to pay off any credit card balances as soon as possible. My new advice is solely for those of you who do not have an emergency savings account, or too small of an account. The single most important Action to take in this severe recession is to build savings so you and your family will be able to have money to cover your basic necessities if you lose your job. As you have heard me say before: Hope for the Best, Prepare for the Worst. And right now we all need to be redoubling our preparation efforts.

Rates on 30-year loans set record low

The average interest rate for a 30-year mortgage dropped to a record low of 4.71 percent this week, pushed down by an aggressive government campaign to reduce borrowing costs.

The rate, published Thursday by Freddie Mac, is the lowest since the mortgage finance company began tracking the data in 1971. The previous record of 4.78 percent was set during the week ending April 30 and matched last week.

The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out next spring. The goal of the program is to make home buying more affordable and prop up the housing market.

Despite the government support, qualifying for a loan is still tough. Lenders have tightened their standards dramatically, so the best rates are available to those with solid credit and a 20 percent down payment.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders across the country. Rates often fluctuate significantly, even within a given day, often tracking yields on long-term Treasury bonds.

This week drop reflects a rush of investors into the security of government debt after concerns about financial trouble in Dubai drove investors to safe harbors. But rates climbed back later in the week, and analysts say they are likely to remain volatile.

"There are no guarantees that mortgage rates are going to stay at these low levels," said Greg McBride, senior financial analyst at Bankrate.com.

And millions of American families have not been able to take advantage of them, particularly in the areas where home prices have fallen the most.

About 11 million households, or 23 percent of homeowners with a mortgage, owe more on their home loans than their house is currently worth according to First American CoreLogic, a real estate information company.

That makes refinancing difficult.

While the government has launched a program designed to help these "underwater" borrowers, only about 140,000 homeowners have used it so far.

In Orlando, mortgage broker Chris Brown says the low rates are a boon to first-time homebuyers who can qualify for a loan. But he says he isn't getting much business from homeowners looking to refinance.

"Most of the people that could refinance probably have" done so, he said. "Rates have been artificially low for quite some time."

The average rate on a 15-year fixed-rate mortgage fell to a record low of 4.27 percent, from 4.29 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.19 percent, up from 4.18 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.25 percent from 4.35 percent.

Fewer Shoppers Using Credit Cards for Gifts

Climbing interest rates, lower spending limits and canceled accounts are prompting more holiday shoppers to leave their credit cards at home this year.

"There is definitely an overall shift from credit to debit," says Curtis Arnold of CardRatings

"This holiday season, it has been accentuated by the credit crunch and the economy."


An estimated 28.3% of people will be using credit to pay for gifts this year.

An estimated 28.3% of people will be using credit to pay for gifts this year, according to a recent survey of 8,692 consumers conducted by the National Retail Federation and BIGresearch. That's down from the 31.5% of shoppers who paid with credit cards during the 2008 holidays, according to the survey.

Mike Cleary's family has ditched credit cards this holiday season. He and his wife had three credit cards with a total balance of about $6,200, but paid those off because of high interest rates. "We were going to get rid of those, bite the bullet and use cash from that point," says Mr. Cleary, a 53-year-old from Duluth, Ga.

Instead of the usual $3,000 to $4,000 he typically spent for the holidays, Mr. Cleary says he will be spending below $1,000 on his family this year. "We just told them, 'Hey, it's going to be a light Christmas.' "

Consumer credit has deteriorated since the last holiday season, when interest rates were lower and spending limits higher, says Mr. Arnold. "Even if you got good credit, no one is immune from having their account closed."

Last holiday season "we charged into it thinking things would end a lot quicker," says Brian Riley, research director at TowerGroup, a financial-research consultant. Unemployment is still high and consumers are skittish about adding debt. Also, credit-card companies are under pressure from upcoming regulations concerning the credit industry, which go into effect early next year.

Plus, "there has been a practical change in people's buying habits," Mr. Riley says. That change has been on display this entire year. In the third quarter of 2009, credit transactions for Visa and MasterCard reached $313 billion, an 11.58% decline over the same quarter in 2008, according to TowerGroup. Debit transaction volume for Visa and MasterCard was $303 billion, a 5.21% increase over the third quarter in 2008.

"Consumers are preferring to use their PIN debit card as compared to credit or even cash," according to Silvio Tavares, senior vice president of industry relations for First Data Corp., a transaction processor for merchants. PIN debit-card transactions, in which the consumer enters a numerical pass code, increased by 9% this Black Friday over last year, according to First Data, which processes transactions for sellers.

Watered-down rewards programs may also be keeping some shoppers away from credit spending. "I think that could be impacting the amount of people who are using their credit cards in their holiday shopping," says Bill Hardekopf, chief executive of LowCards.com, which tracks credit card usage.

Still, there's at least one area where consumers are sticking with credit cards: online purchases. "Credit does tend to be more actively used than debit transactions" for online shopping, says Mr. Riley of TowerGroup. "One of the good reasons for using credit online is the protections are better than using debit." If a debit card gets stolen, it may be harder to sort out fraudulent overdrafts.

Despite the holiday cutbacks, credit-card balances keep rising among U.S. consumers overall. The average credit-card balance went up to $8,083 in the third quarter of 2009, according to Mail Monitor, a credit-card direct-mail service from Synovate, a market-research firm. In the second quarter of 2009, it was $7,489.

"Some people are just maxed out on their cards," says Gerri Detweiler, a personal-finance adviser with a consumer-information site in San Francisco.

What Makes Us Different?

We work to improve your credit and help remove inaccurate and obsolete information from your credit report.

* We are not a debt consolidation or bill payment program. Federal law requires that any unverifiable, outdated or erroneous information must be removed from consumer credit reports by reporting agencies. NCR Credit Plus agrees to use its best efforts to provide these services, and will perform them in accordance with federal and state laws.
* Our warranty is designed to reassure you that our goal is to truly remove inaccurate and obsolete information from your credit profile and that if we can't, we will gladly refund your money. It's as simple at that!
* Our staff includes lawyers, accountants, underwriters, bankers and credit repair specialists and they apply creative solutions while adhering to the rules and regulations of the credit reporting industry.
* Our team keeps fully up-to-date on the latest consumer laws and we understand how to apply those laws to help you clear your credit report.
* Our Progress Status Section is designed in accordance with the latest website technology so you can see the progress of items that you’ve requested be removed and the status of each account as the process takes place. 24/7 anytime
* NCR Credit Plus acknowledges that its Authorized Representatives have been alerted to the sensitivity of the Customer Information. As such, NCR Credit Plus will use its best efforts to ensure that Customer Information will be handled in a responsible and professional manner.
* NCR Credit Plus has more than ten years of experience challenging the credit reporting bureau's and their methods.
* Though each person’s credit history is different, we usually begin to see results in as little as 45 days.
* We offer fees for individuals and couples as well as easy convenient payment plans.
* You’ll NEVER be charged a per deleted item fee.

www.ncrcreditplus.com 866 4696599

How Does Credit Restoration Work?

Credit bureaus insist that individuals cannot repair their credit without waiting years for negative items to be removed. Don't believe that. NCR Credit Plus has been doing this for a long time and in that time we have found that through continually refining and redefining our strategies, we have secured methods that provide optimal performance. Although the details of the process change as new laws are passed and regulations are added, the underlying principle has remained virtually the same.

Here are the four essential steps that make up the process of restoring your credit profile.
Step 1: We examine your credit reports

You begin by mailing or e-mailing copies of your driver license, social security card and a current bill with your current address, Document's MUST have same address as Drivers License. (PLEASE SEND DOCUMENTS IN A PDF FORMAT) to clients@ncrcreditplus.com. If you do not have a current copy (within 45 days) of your Credit Report we request you use one of these company's we recommend.

Obtain Credit Report
Step 2: You tell us which items to dispute

Your Credit Representative will contact you within 24 hours of receiving your documents and reports. We will go over your report in high details while you let us know which items you would like us to dispute. All account information will be avaiable for your access 24/7 online.
Step 3: NCR Credit Plus works your case

NCR Credit Plus begins to dispute your items by using its arsenal of credit restoration strategies and our experienced staff to challenge negative items directly with the credit bureaus. Depending on the number of negative items on your credit reports this step will be repeated for each subsequent loop through the cycle...
Step 4: Sit back and wait for results

The credit bureaus have 30 days to investigate your dispute. Within those 30 days they must provide proof of the discrepancies on your report or be forced to delete those negative items. They will send you an updated credit report, once you receive those documents, you will then fax it to us. This cycle begins again, and we remove more negative items from your reports... Keep in mind that the credit bureaus will only correspond directly with you, not NCR . These updated reports are CRUCIAL for us to see which items were removed successfully. Once you receive updates forward them immediately to our office. By not doing so it will delay the improvement of your score.
24/7 Account Access

Stay up to date on all activity on your account 24 / 7 . You can log into your account, and visit our Progress Status Section and see exactly what is being done, when it was done, and whats next to do on your account.
Unlimited Investigations

There are no hidden fees with NCR Credit Plus. We give unlimited disputes and we do not charge per deleted item.

Cancel Anytime!

There are no hidden fees with NCR Credit Plus. We give unlimited disputes and we do not charge per deleted item.
Under the Fair Credit Reporting Act

You are given the right to challenge inaccurate, misleading or obsolete information. We take on this challenge for you.

IS SOMEONE ELSE’S BAD CREDIT AFFECTING YOUR INCOME!

I would like to introduce you to our company NCR Credit Plus and how our Affiliate Program can help give you the edge to handle and complete more deals. Plus we pay you $50 for each referral that enrolls into the program. We have more than ten years of experience providing excellent credit restoration services to individuals.

We are now offering our premier credit restoration program to Mortgage Brokers, Loan Officers, Real Estate Agents, Financial Advisor’s etc that would like to incorporate our services to develop and execute more sales.

NCR Credit Plus is ethical and an affordable credit restoration resource. As an affiliate you will be offering a valuable service that addresses the needs of your credit-challenged consumers, and also showing your commitment to helping others by offering a solution for those credit-challenged clients.

Our success has been driven by our proven abilities in providing credit restoration techniques, organizational development of credit strategies, and customer engagement. We have built a dynamic client base and now are targeting companies, whose client's bad credit has affected their ability to close deals, for themselves as well as their company. With our dramatic results, 6 out of 10 clients you send our way will be loan worthy within the first 60-90 days. We average one of the highest fix/delete ratios in the industry with an average rate of 55% fix/deletions within the first 45 days alone!


Darren Herrington
Senior Account Manager
NCR Credit Plus
15 North Mill Street
Nyack,NY 10960
darren@ncrcreditplus.com
www.ncrcreditplus.com

Late credit card payments drop in 3rd quarter

The 2009 third-quarter delinquency rate was basically flat with the 2008 third quarter, when 1.09 percent of card payments were 90 days or more past due. TransUnion measures credit card delinquencies at 90 days because three months is considered an indicator that the card holder will default, since it is difficult to make up that many missed payments.

Credit card delinquencies were highest in Nevada (1.98 percent), Florida (1.47 percent), Arizona (1.35 percent) and California (1.33 percent), the states hardest hit by the housing crisis. Rates were lowest in North Dakota (0.66 percent) and South Dakota (0.70 percent).

TransUnion figures showed the average balance on outstanding bank cards drifted down to $5,612 from the previous quarter's $5,719, and from $5,710 in the 2008 third quarter.

One reason for consumers to pay more attention to their credit cards was worry over potential job losses, as the unemployment rate climbed toward double-digits during the third quarter. It reached 10.2 percent last month.

Becker said cutbacks in credit availability and higher interest rates also played a role in cutting the delinquency rate. While the fear of having cards shut down and anger over the moves banks have made can't be easily measured, there's anecdotal evidence that those emotions played into the improvement as well.

Becker said lower savings rates in the third quarter also contributed to pushing down delinquencies, as people shifted from socking money away in the bank to paying down their debt.

The personal savings rate in September was 3.3 percent, compared with 3 percent in August and 4 percent in July, government statistics show. In May, the rate jumped to 6.9 percent, its highest point since December 1993.

The decline in credit card delinquency follows TransUnion data last week that showed the pace of growth for mortgage delinquencies also slowed in the third quarter.

It's too early to tell how the recession has affected consumer behavior long-term, Becker said, but the holiday shopping season will provide some clues. Last year, consumers cut back sharply during the holidays. The National Retail Federation, a retail trade group, expects total holiday sales will drop 1 percent from last year.

Also in play are strict new credit card regulations set to take effect in February. Banks have cut back on the number of cards they have issued and the amount of credit available ahead of that law. Becker said the law will likely lead to the creation of new credit products, and consumers will choose cards based not only on interest rates, but other features.

"The landscape of card lending is going to change fundamentally," Becker said.

www.ncrcreditplus.com 866 4696599

First-Time Home Buyers have until April 30th of 2010 to cash in.

First-time home buyers are cashing in on credit and getting the credit for spiking home sale numbers to new heights.

The National Association of Realtors says home sales surged for the second month in a row in October, climbing to the highest level in two and a half years.

In Eastern Idaho, realtors agree, saying growing sales numbers are in part because of the government's $8,000 incentive to folks who've never owned before.

And now, they're extending the end-of-the-month deadline to next year and offering tax credit for move-up buyers.

Local home sale numbers show many first-time home buyers cashing in during crunch-time.

And one man who just moved to Idaho Falls says the extra $8,000 is helping form his family's foundation.

Matt Johnson lights the fire in a home he never thought he'd be able to afford.

"It's been about five years in the making. We've been saving, lived with the in-laws for a time or two," explained Matt Johnson, who moved to Idaho Falls from Salt Lake City.

As a first-time home buyer, Johnson says the government's $8,000 tax credit is money he can spend on fixing up his new foundation.

"It helped us look at homes that needed new carpet or a little bit more remodeling, so we could use that money toward simple upgrades," said Johnson.

Lenders are lending and realtors are selling.

In fact, when you compare home sales from October of 2009 to October of 2008, you'll see a 64-percent increase.

But, that increase is coming mainly from the lower price-ranges which make realtors think the first-timers tax credit may really be working.

"We weren't thinking the tax credit wasn't doing much for the first part of the year but it's really kicking up the end of the year," said Brett Magleby, who represents the Association of Eastern Idaho realtors.

Realtors hope now that the government's targeting move up buyers it will stimulate homes in the mid-price range that so far have been lagging.

Mortgage loan officers believe with interest rates at the bottom of the barrel now's the time to borrow.

"They're more than low. They're very favorable right now. There are qualifying criteria to get certain interest levels. But for a high quality buyer, they're reaching thirty-year lows again," said Jack Yasaitis, a Bank of Idaho's Mortgage Loan Officer.

For now, Johnson says owning a home is a dream come true and a new beginning for his family's future.

"It's nice to not have to pay rent and to know each month that the money you're spending is going toward your house, equity. It's going in your back pocket," said Johnson.

Realtors say it's taking homes on average about 30 more days to sell.

Although, folks are selling within three-percent of what they're asking for.

Congress renewed the first-time home buyer tax credit that was set to run out at the end of this month. Now buyers have until April 30th of 2010 to cash in. First-time home buyers still get up to $8,000 and move-up buyers can get up to $6,500 back.


www.ncrcreditplus.com 866 4696599

I have no credit, but I want to build credit

I have NO credit, but I want to build credit. I am just about to graduate college with two degrees and I need to build credit.

Answer:

If you have no credit and want to build your credit history, then secured credit card offers can be an ideal option for you. Intended specifically for people with bad or no credit, a secured card will report your credit payments to the major credit bureaus monthly. This will serve your purpose greatly if you make your payments on time and keep well within your spending limit.

Another impressive feature of the secured credit cards is that they don’t check your credit records. This means, that even if you can’t qualify for unsecured credit cards, you may get a guaranteed approval when applying for a secured card offer. You’ll just need to make at least a minimum money collateral deposit ($200-$300) into a bank savings account in order to be approved. Your deposit will be equal to your credit line and will be charged by your lender only if you fail to pay off your debt.

www.ncrcreditplus.com 866 4696599

Home Loans & Auto Loans for Bad Credit

Are you ready to buy a home or automobile, but are having difficulty in finding a loan that you can afford and a lender who is willing to provide financing?

NCR Credit Plus has partner with a nationwide network of lenders who specialize in helping people that don’t have perfect credit. These special financing programs can provide you with a loan approval when others fail to produce the results you would like.

It doesn't matter what your credit score is , we will try to help. We have lenders that work with people that have good, fair, bad, or no previous repayment history, as well as with people that have zero or no money down.

So no matter how good or bad your credit is, please take a moment to complete Loan Application.


Home Loan Application http://ncrcreditplus.com/service/home-loans.php


Auto Loan Application http://ncrcreditplus.com/service/auto-loans.php

Texas tops 2009 Closing Costs Exclusive

Texas beats New York in 2009 as the state with the highest closing costs.

Nationwide, the average origination and title fees on a $200,000 mortgage this year totaled $2,732, according to Bankrate's annual survey of closing costs. The fees in the survey don't include taxes, insurance or prepaid items such as prorated interest or homeowner association dues.

New York had been the most expensive state for four years in a row in Bankrate's annual survey, with Texas occupying the runner-up slot. But this year, the two states swapped places. In Texas, the average origination and title fees on a $200,000 mortgage were $3,855 in Bankrate's survey. New York's fees averaged $3,408.

The least expensive state was Nevada, at $2,276. In 2008, North Carolina occupied the bottom rung. (Here is the ranking of all of the states.)

The annual survey is conducted by obtaining online fee estimates for a $200,000 purchase mortgage on a $250,000 house in each state's most populous city, plus the District of Columbia. Because it is so populous, California was split in two: Bankrate surveyed closing costs for Los Angeles and for San Francisco.

The states with the biggest populations tend to have higher-than-average closing costs. This year, the four most populous states occupy the top four spots: After Texas and New York, the highest closing costs were in Florida and San Francisco. Los Angeles ranked 14th.

On the other hand, Illinois is the fifth most-populous state, and, as usual, it was one of the most inexpensive states for closing costs. Illinois ranked 43rd out of 52, with average origination and title-related costs of $2,486 on a $200,000 mortgage.

Texas is perennially at or near the top of the list because of the high cost of title insurance. In Texas, title insurance premiums are "promulgated," that is, the fees are fixed by state regulators. Title insurers in the Lone Star State can't charge more or less than the promulgated rate. On the purchase of a $250,000 house, the title insurance premium in Texas would be $1,644.

Of the seven lenders that Bankrate surveyed in Texas, none got the title insurance premium exactly right, although most were in the ballpark -- between $1,572 and $1,697. That's why these closing cost averages should be taken with a caveat -- they are, after all, derived from estimates.

New rules for good-faith estimate
Beginning Jan. 1, lenders will be required to give more accurate estimates of closing costs, as part of a revision of the Real Estate Settlement Procedures Act, or RESPA. The new rules are designed to prevent the lender from low-balling closing costs when the borrower applies for a loan then surprising the borrower with higher fees at the closing table.

Under RESPA, the lender is required to provide a document called the good-faith estimate of closing costs when you apply for a mortgage. The GFE divides settlement costs into two types: those charged directly by the lender and those charged by third parties, such as title insurance companies, appraisers and flood certifications.

Lenders will have to stand by that first category of fees -- those charged directly by the lenders. So a lender won't be able to put a $250 processing fee on the good-faith estimate and then change it to $500 at the closing table.

The regulations will allow 10 percent of slack in the estimates for third-party closing costs. For example, if next year a lender's good-faith estimate says that the title insurance, appraisal, attorney's fees and flood certification will total $1,500, then the final bill can't exceed that total by more than 10 percent, or $150.

The more-accurate GFE is scheduled to arrive next year. And there has been a substantial change this year: Appraisals cost more.

In Bankrate's 2008 closing costs survey, the average appraisal cost $296. This year, the average appraisal cost $362. The culprit, according to appraisers, is something called the Home Valuation Code of Conduct, or HVCC.

The HVCC is the product of a legal settlement stemming from a lawsuit filed by New York's attorney general. As part of the settlement, the mortgage industry agreed to forbid mortgage brokers from choosing appraisers. The idea was to prevent brokers from pressuring appraisers into overvaluing houses so the loans could go through.

But critics contend that the HVCC weakened independent appraisers and strengthened appraisal management companies, which act as middlemen between lenders and appraisers. By adding a middleman, prices went up, critics say.

Pat Turner, CEO of P.E. Turner & Co. Ltd., the largest appraisal firm in Richmond, Va., said this summer that a bank-owned appraisal management company demanded that he cut his appraisal fee by $150, to $200. He refused, and he says the company will no longer hire him to do appraisals.

The kicker: "That lender charges the borrower $500 per appraisal," he says.

www.ncrcreditplus.com 866 4696599

How Do the Credit Bureaus Interpret Your Score ?

You may have worried many times about what your score is, and how to keep it at the optimal level. Do you however, know how the credit bureaus interpret or calculate your score? It's very important that you know about such details when you want to repair your credit in a hurry.

Here is a glimpse into how the credit bureaus mark your credit score.

Regular Payment Is Most Important

As much as 35% of your credit score is allotted to your payment history. This is why it's extremely important for you to pay your bills on time. Every time you are late with a payment, you are hurting your score. Unfortunately, this damage cannot be undone even after you successfully repay the loan. This is why the first and most important thing about keeping your score up is to pay your bills on time.

The Indebtedness Level

The next important thing is how much you owe; 30% of the score is allocated to this aspect. There are two important facets here: (1) the amount of your overall debts, and (2) how much credit power you are using. For one, if your total debts repayment amount exceeds 30% of your income, you are trading on thin ice.

In the second case, say – if you are maxing out all your credit cards and also have 2 - 3 other loans, it looks like you are about to overextend yourself. This is something that the credit bureaus and creditors will not find desirable.

The Length of Your Credit History

This is something that you often cannot do much about. Your credit history accounts for 15% of your score. The creditors love to see a long period of history, because that gives them a better idea of what your financial habits are. You cannot make your credit history any older (or younger) than it is. However, you can try to keep it as flawless as possible. The credit bureaus and creditors like to see very little deviation in payments.

The Rate of Opening New Credit

This is earmarked as 10% of the score. One other thing that creditors and credit bureaus treat as a flashing red light is opening too many accounts at the same time. This will be seen as a negative trait even if you pay all your bills on time and carry minimum balances. Your score will also be hurt if you are changing credit card providers too often. This is interpreted a you being desperate to borrow, which does not throw a healthy light on your financial status.

Types of Credit You Have

This accounts for another 10% of your credit. There are two types of credit – (1) open-ended (i.e. "revolving") credit, which does not come with a fixed number of payments (such as credit cards), (2) and installment loans, which will be closed when the whole amount due is repaid. Creditors need to see that you handle both types of loans with responsibility and maturity.

Now, that you know how your score is calculated you will find it easier to improve on it. Whatever your financial past is, once you make up your mind to be steady and put this resolution in practice, your score will reflect it.

visit us http://ncrcreditplus.ning.com

What Makes Us Different ?

We work to improve your credit and help remove inaccurate and obsolete information from your credit report.

* We are not a debt consolidation or bill payment program. Federal law requires that any unverifiable, outdated or erroneous information must be removed from consumer credit reports by reporting agencies. NCR Credit Plus agrees to use its best efforts to provide these services, and will perform them in accordance with federal and state laws.

* Our warranty is designed to reassure you that our goal is to truly remove inaccurate and obsolete information from your credit profile and that if we can't, we will gladly refund your money. It's as simple at that!

* Our staff includes lawyers, accountants, underwriters, bankers and credit repair specialists and they apply creative solutions while adhering to the rules and regulations of the credit reporting industry.

* Our team keeps fully up-to-date on the latest consumer laws and we understand how to apply those laws to help you clear your credit report.
* Our Progress Status Section is designed in accordance with the latest website technology so you can see the progress of items that you’ve requested be removed and the status of each account as the process takes place. 24/7 anytime

* NCR Credit Plus acknowledges that its Authorized Representatives have been alerted to the sensitivity of the Customer Information. As such, NCR Credit Plus will use its best efforts to ensure that Customer Information will be handled in a responsible and professional manner.

* NCR Credit Plus has more than ten years of experience challenging the credit reporting bureau's and their methods.

* Though each person’s credit history is different, we usually begin to see results in as little as 45 days.

* We offer fees for individuals and couples as well as easy convenient payment plans.

* You’ll NEVER be charged a per deleted item fee.

http://ncrcreditplus.ning.com/

TEN9EIGHT TRAILER

EXCELLENT TRAILER

Weird stuff that hurts your credit

What seems smart, like moving a balance to a lower-interest credit card, can ding your credit scores. Here are some of the other hidden threats to your credit and how you can fight back.
advertisement

One of the things that drives people nuts about credit scores is how they react when you close an account.

A Client named Charles put it this way in an e-mail:

"You say . . . that canceling a credit card, even one that has been kept in good order, can negatively impact your FICO score. This seems unreasonable, even unfair, almost un-American. Is there some reason that makes it all right for the scorekeepers to do this?"

I'm not sure about "un-American," but it certainly can seem unreasonable or unfair until you understand a bit more about how credit scoring works.

Losing points for voluntarily closing accounts is just one of the unexpected ways you can hurt your credit scores, those three-digit numbers that lenders use to gauge your creditworthiness.

You also can get dinged for:

* Opening accounts, both when you apply and for as long as a year afterward.

* Transferring credit card balances.

* Settling debts.

* Using "limitless" cards.

* Incurring library fines, parking tickets or other penalties seemingly unrelated to credit.

Here's what you need to know and what you can do to minimize unintentional damage to your scores.

Among all the bankrupts, you're the best!

The FICO credit-scoring system, which is the most widely used, groups together people with similar histories when rating them. These groups are called score cards.

If you have a bankruptcy on your report, for example, you'll be grouped on a score card with other bankrupts. Your credit habits may look pretty good compared with theirs, but if the bankruptcy were to disappear from your record, you'd be lumped in with people who have stronger histories. Your credit behavior might not look so good compared with this new group.


Something similar apparently happened to Jessica Lopez, who had $62,000 of credit card debt and a 710 FICO score. After paying off $19,000 of debt in a few months, her score rose to 726. A few weeks later, though, her score suddenly plunged to 686.

Such abrupt drops can often be traced to a negative item, like a delinquency or a bankruptcy, disappearing from a borrower's credit report. In this case, though, the change was even more subtle.

Here's how Barry Paperno, the manager of customer service for Fair Isaac -- the company that created the FICO -- explains it:

Identity theft and your credit scores

"Jessica had opened a new account (a year previously) which, at that time, put her in a different scoring group consisting of consumers who had newly opened accounts on their credit files. Then when this recently opened account had aged enough to take her out of this scoring group and put her into one with consumers who had not opened any accounts recently, her score dropped."

There's not much you can do about this quirk in the scoring formula, other than brace for the potential effect. The good news: Georgescu's score recovered within a few months, as Paperno had predicted. The key was continuing to pay down debt and holding off on opening any new accounts.

(Keeping your balances low, by the way, has become even more important since Fair Isaac rolled out the latest version of the score, FICO 08.)

Don't transfer your problems

Lower interest rates are generally better when you're trying to pay off debt, but taking advantage of a balance-transfer offer can wallop your credit scores in a number of ways.

Just opening a credit card account to take advantage of the offer can ding your scores by 5 points or so. Transferring your balance to a card with a lower limit can hurt your scores, as can consolidating debt.

That's because the FICO model is heavily influenced by your "credit utilization ratio," the portion of your available credit limit you're actually using. The formula likes to see a wide gap between your balances and your limits. Transferring a balance from a high-limit card to a lower-limit card makes it look like you're closer to maxing out that second card, and the scores can react negatively.

Become a member of NCR Credit Restoration Group http://ncrcreditplus.ning.com/

To put it simply: The FICO formula typically would rather see $1,000 balances on five cards than a $5,000 balance on one card.

You can compound the damage to your scores by closing the card from which you transferred the balance. Closing the old account trims the amount of available credit that's used in the credit-scoring formula.

If you're planning to take advantage of a balance-transfer offer, read the fine print and consider the following:

* Limit the number of accounts you open. If you want to improve your credit scores, don't keep bouncing your balances from card to card.

* Pay down your debt. Use the lower rate as an opportunity to reduce your debt load. Paying off debt is good for your wallet and good for your credit scores.

Settling debts
For years, a glitch in the FICO formula often penalized folks for paying old debts that had been charged off and sent to collection agencies. That glitch finally got fixed, as I wrote in "When paying bills can hurt your credit."

But you can still do substantial damage to your scores if you settle a current debt for less than you owe. If an account hasn't been charged off and you're dealing with the original creditor, Fair Isaac officials say, a settlement can be worse than leaving the account open and unpaid. Of course, leaving an account unpaid will eventually result in a charge-off and a referral to a collection agency, which isn't good for your scores, either.

Raising your FICO credit score

It’s important to note that raising your FICO credit score is a bit like losing weight: It takes time and there is no quick fix. In fact, quick-fix efforts can backfire. The best advice is to manage credit responsibly over time. See how much money you can save by just following these tips and raising your credit score.

Payment History Tips

* Pay your bills on time.
Delinquent payments and collections can have a major negative impact on your FICO score.
* If you have missed payments, get current and stay current.
The longer you pay your bills on time, the better your credit score.
* Be aware that paying off a collection account will not remove it from your credit report.
It will stay on your report for seven years.
* If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor.
This won't improve your credit score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.

Amounts Owed Tips

* Keep balances low on credit cards and other “revolving credit” Below 30%.
High outstanding debt can affect a credit score.
* Pay off debt rather than moving it around.
The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
* Don't close unused credit cards as a short-term strategy to raise your score.
* Don't open a number of new credit cards that you don't need, just to increase your available credit.
This approach could backfire and actually lower your credit score.

Length of Credit History Tips

* If you have been managing credit for a short time, don't open a lot of new accounts too rapidly.
New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

New Credit Tips

* Do your rate shopping for a given loan within a focused period of time.
FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
* Re-establish your credit history if you have had problems.
Opening new accounts responsibly and paying them off on time will raise your credit score in the long term.
* Note that it's OK to request and check your own credit report.
This won't affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.

Types of Credit Use Tips

* Apply for and open new credit accounts only as needed.
Don't open accounts just to have a better credit mix - it probably won't raise your credit score.
* Have credit cards - but manage them responsibly.
In general, having credit cards and installment loans (and paying timely payments) will raise your credit score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
* Note that closing an account doesn't make it go away.
A closed account will still show up on your credit report, and may be considered by the score.

www.ncrcreditplus.com

Hey, it's not my bill to pay !

Dear Debt Adviser,

A debt collector called me last week about a debt from 2002! I know this is not my debt. It's for a phone bill from a different state! They had my Social Security number and everything. This is a debt that showed up on my credit report a few years back and I notified the credit bureau that it wasn't mine. They supposedly reviewed it and the matter was to have been resolved, but I never got any paperwork. Now this debt collector is calling and harassing my family and sending me notices. What do I do?

Do I have to pay for another credit report and file a complaint again? This is so upsetting and really causing a lot of stress for me. Can you steer me in the right direction? Thanks so much!
-- Amy


A:
Dear Amy,

I know how upset you must feel. Having a collector harass you out of the blue is a lot like being the victim of an assault or a crime. Will anyone believe you? How do you prove your innocence? And it is so embarrassing for most of us.

Fortunately, the law is on your side. The Fair Debt Collection Practices Act, or FDCPA, says you have 30 days to respond to a collection attempt and you are well within your rights to dispute the alleged debt. The collector might have the wrong person, or you could be the victim of a scam to get money for a bogus bill. Either way, you have the right to have the collection agency prove that you owe the money.

All you need to do is ask that they provide proof of the debt. Write to them using certified mail, with a return receipt requested. Keep copies of everything and notes of any calls. Demand communication through the mail. Having information mailed opens any possible scammers to mail fraud charges and ups the ante for them. For more tips regarding the FDCPA, go to the Federal Trade Commission's Web site or search under FDCPA.

When you dispute the bill, the collector must stop all collection activity and send you proof before reinitiating contact. If they violate this provision, you can have them sued.

As for your credit report, you no longer have to pay for your credit reports from the three major credit bureaus. All you need to do is visit AnnualCreditReport.com and you can receive a copy of your credit report from Equifax, Experian and TransUnion absolutely free with no strings attached once every year. I typically recommend that requests for reports be spaced out throughout the year rather than getting all three at once, unless it is necessary to see everything that is being reported at one time. Getting all three right away would probably make the most sense for your current situation, but going forward you could space out your review of each bureau's report throughout the year.

I want you to take a look at your credit reports and see if the phone bill debt shows up as "in collection," or for that matter at all. Because this isn't your bill, you need to again dispute the debt with the bureau, or you can dispute it directly with the creditor that reported it. The dispute process will be spelled out in the materials you get from the bureaus. The Fair Credit Reporting Act requires that the credit bureau investigate the dispute and if there isn't sufficient proof that the debt is yours, it must be removed. I also suggest that you write to the creditor and tell that firm to stop reporting debt incorrectly.

Errors on credit reports are not unusual for the simple reason that billions of pieces of information are reported, mostly by computers, and mistakes are bound to happen. Still, that doesn't help your sinking stomach when the phone rings. Once you have disputed the bill and sent your letters, screen your calls with caller ID or an answering machine. If the harassment continues, see an attorney. They just love dealing with collectors who are bullies and mistaken. And that will be the end of that tune!

Good luck! www.ncrcreditplus.com 866 4696599