Window Shopper

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Due to the incredible financial crisis going on, the credit card companies have decided to make it harder for you, the card holder. Perhaps you have no idea this is going on. Know this. The credit card companies are covering their backsides at your expense. They are tightening their terms without your knowledge. Beware! Do your research. Check out your company. Make sure of what the current terms and conditions are on your card before you try to use it again!

These are things to be aware of up front (not that THEY are being upfront):

They have begun to lower credit limits. The problem here is that they may inform you but if you didn’t read the fine print, you have no clue. You find this out at the checkout or the cashier when the item does not go through. Worse, if there is even a tiny glitch in your credit anywhere, they can lower the limits for that. How much of a cut? A LOT. Some companies are dropping the limit to just above your current balance. Then, when you pay on the balance, the limit goes down with the balance. Even worse than that is the fact that they can charge fees for exceeding your limit. But by dropping your limit, it can appear that you are using much more of your available credit. Doing that drops your credit score. Remember, the credit card companies MUST inform you of these changes. However, it might come in the form of a brochure with the changes in small print. So, watch out for that.

Hope you enjoyed those zero percentage offers. It is unlikely that you will see many of those anymore. Those offers used to be all over the place, giving no fee, no percentage on the cards for a year. Now, it is more likely that if you get one at all, it will be for six months or less. Plus IF you qualify, they will likely charge a transfer fee and it could be pretty high. Only a very few are still offering such deals.

Speaking of limited offers, remember all those card offers coming in the mail? Some were actual pre-approved credit offers, some were simply pre-approved to apply for a credit card. Those will not be coming in the mail much anymore. Most companies have cut off or cut way down on such offers. You will have a much harder time getting that credit approval too. Oh, and if you are doing the searching, they didn’t approach you, your credit score goes down.

Getting tired of hearing how many ways your credit score will go down? Better get used to it. And then there are those inactive accounts. Banks are closing them. That emergency card that you have that you have not used in a while? You might just want to check and see if it’s still active because if it is not, the bank is canceling those so that their cost goes down. They do not like maintaining them. And guess what. It hurts your credit score.

And last for the time being but not least, if you mess up even a tiny bit, there are no second chances. Big fees and late charges are in your future if you happen to be late even one time. That’s it. Banks are not hesitating for a second to hang that fat fee on your card. Once upon a time, you could call the bank and ask for the fee to be removed, apology accepted. No more. They are no longer a forgiving bunch.

Times have become exceptionally hard and the banks and lenders are showing it. The truth is that the greed of Wall Street and the lenders, many of whom are now either out of business or getting bailed out, are the culprits. We get to pay for all that both with the bailout, which is after all taxpayer money, and through the tightened credit and the restrictions that accompany it. The stock market has rebounded some more as of this writing but what is in our future? Certainly, we cannot afford to trust the credit companies.

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Want to finish that sentence? I don’t. Because I could come up with a bunch of things and people, most of which are or were not that brilliant in their actions. Some are simply clueless. You know who you are. There are others who are so involved in themselves that they have no idea about anything around them. I have people in mind for that too. But what I think is a real problem are those who say they want to improve their credit so they obtain a credit card, max it out and then cry because it didn’t work for them. Why? Couldn’t pay it back. Uh huh.

Also on that list would be those who had no credit but still did a dive into that morass of problems associated with the current mortgage crisis. I am not talking about those who were really great with payments. I’m talking about the people who are not interested in payments. They simply want the stuff or the mortgage so they can have the house for however long before they get caught.

Now, I do believe there are people out there who did the smart thing; wanted a house, researched, called the mortgage lenders and got a deal…at the time. Now it’s anyone’s guess what will happen next. If you find a good, reputable lender, you have a real prize. They will help you any way they can. If because of the current situation, you are in deep doodoo, the good ones will do all they are able to help you stay out of foreclosure hell. Thing is, these folks do not want the property on their hands any more than you want to lose it. So, get out there and contact your lender and see what they are able to do for you!!! Or you can sit on your can and wait for them to take it away.

People buy cars they cannot afford. The payments looked good at first but they can’t actually come up with that one payment in two months let alone one month. How about those students. The credit outfits go to the schools and get the students that just got away from home for the first time and put them into credit card hell. The student thinks it is okay to use the card but cannot pay it back on time. Ah, those wonderful interest payments keep a climbing.

Beyond that, there are those who get some credit, max it out…sort of like the credit cards and wallow in their financial problems. You can expect them to not choose to pay back all that. They did not get into it to pay it back. Thinking of some people right now. Heck, there are all sorts of folks like that. Most of the people who want credit will pay it back but the other ones are the folks who will mess it up for the rest of us who do want credit. It’s a lot harder now to get credit and that’s when you would think it’d be easier. Lenders need the people to borrow. But now, if you are even a slight credit risk, the answer is no!! Not just a no but NO!!!! Sigh. That’s the way it goes, I guess.

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Going to the pump these days is bad enough, don’t you think? I have not heard of one person who is happy with the current gas prices. The greedy oil companies keep on pumping it out to us like we do not matter to them at all. And you cannot get them to even acknowledge that they are ripping us off. Congress does nothing about it. And NOW there is one more ripoff. Credit cards at the pump. HELP!

Have you been watching your receipts when you buy gas with a credit card? If not, you should. The credit card companies love to tack on a fee for use at the pump which they do…..but wait, it gets better..or worse….Now the gas stations are tacking on a fee for using the card. The price can be a lot higher than if you pay cash. WHAT? Yep. The price can be as high as *9* cents more, sometimes more than that. That was as high as I had seen it on the news today.

EDIT NOTE: As awful as the 9 cents might have sounded, it’s not compared to the 50 cents a gallon that some stations are charging simply for using a credit card instead of cash. If a person uses cash, they have to go inside where they can get ripped off by the prices of the goods in the store. There is no win here unless the person buys the gas with cash and refuses to buy anything else in the store.

It seems that the local gas station wants you to come inside to pay because if you don’t, you do not also buy other things. They have been losing money with the plastic. So, if you don’t pay with cash coming inside to do that, you can count on paying more at the pump. It’s sort of a penalty for having a credit card.

I call that a ripoff. It forces the customer to do things they did not want to do. On a purely physical note, if you need the exercise, go ahead and walk inside. Might do you some good. However, if you are just mad because they are making you do things you had no intention of doing, perhaps finding a new gas station to buy from might be in order. I do not believe that they all do this. But it looks like they do this in the bigger cities for certain.

We live in a rural area where we use a gas card from a well known retailer. We get a discount. But my husband watches to make certain we get that discount every time. If we don’t, the pump does not go on and he goes inside to find out why. In these times, you have to watch your every dollar going out. If you don’t, all of a sudden you are broke and it isn’t anywhere near the next paycheck time. We should know.

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For years, the credit card companies were allowed to be on campus to seek out new customers. The students were ready, willing and able and wanted them there. They bit into the credit card apple very heavily. But somewhere along the line, the colleges and universities decided that it wasn’t too healthy to have those greedy individuals on campus to get to the students who were simply there to have an education.

Way back when this first was occurring, it wasn’t so bad. The student got the credit card and used it for a pizza with friends, some groceries, snacks and a couple of tickets to the latest concert. But now, the students who do get the new credit cards are using them for much larger things…like tuition and books. This creates a bigger problem since they are unable to pay the companies back without an income. The credit card companies were preying on them because they knew that at some point these people would have better incomes. They struck while the iron was hot.

Now, since they are banned from many campuses, they have found new ways to get into the pockets of the students and it’s quite devious. A student will find that they have a coupon for a free sandwich at the local fast food store. But when they get there for the free food, they find out that in order to get it, they have to fill out an application for a credit card.

The problem I see is that too many students are vulnerable to having something “free”. In this fast paced world, they believe that free is truly free when, in fact, it may be totally different. Confronted with having to fill out an application, many will do this for the free food. They figure..what the heck…I don’t expect to get one anyway. Why not? Then, in a few weeks, a credit card is mailed to them with a good sized balance on it.

What they do not see is that the credit card holds fees and charges that are not incurred until they use it the first time. For instance, let’s say that the tuition is due. Hey, pay the leftover with the credit card! Not bad. It gets that out of their hair and saves money to spend elsewhere. Good idea. Is it? The first fee is the start up which could cost $100. The student would not know about that one until the first bill showed up. Then there is the monthly charge posted ahead of the month. An annual fee is charged to the card unknown to the customer until the bill comes. Late fees. Rising interest rates because they are not locked into a specific rate at the time of sign up. From there, it gets pretty costly.

Anyone who has had to deal with low credit ratings can tell you that a card like that will have a very high interest rating plus attached fees. This way, if the company does not get all it’s original money back, it can keep the student broke for years. The only way to deal with that particular type of card is to pay it off when the bill comes. Period. Then cut it up.

I consider credit card companies that prey on students to be a form of low life. They are well aware that many students are not going to resist this dangling carrot. It means the rest of the tuition paid without worries. It means concert tickets when they could not otherwise have it. It means extra pizza for finals week. It means more snacks for study time. It really means more debt before the student even gets out in the world.

Most students do not come out of college with a clean slate. That’s bad. It puts an amazing pressure on them that they would not ordinarily have. Perhaps the best way is to do without the card and the things it provides because, in the end, it will be a huge albatross on the student’s neck even after they get out of school, perhaps more so then than when in school.

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I had to check this out for myself but it looks to be a good plan. So many families are going under because they are paying things that will not matter and do not pay things that really do matter. People need a place to live. They need food. They need to have lights and water. They need to have heat in the winter and, frankly, these days with the weather outside looking the way it does, they need the air conditioning as well. It is no longer an option. Now it’s a necessity.

But you can do some things to help your family. These are just suggestions. They are not a rule of thumb or any type of real advice since everyone’s situation is different. These things may not have anything to do with your situation at all. But if this is good for you, then it helps.

1) Deal with credit card debt. Pay the bills on that because the interest rate is going to kill you financially if you don’t. When the things are paid off, CUT THEM UP!!! Get rid of them. They are a huge part of the problem.

2) Pay what you need to have….utility bills are top of the list there. Also, your rent or mortgage is very important. If you don’t pay that, you won’t have to worry about utility bills. As homeless people you won’t have any. If your bills or mortgage are out of control, contact those whom you owe. They will work with you. DON’T IGNORE THIS! The bills do not go away magically. Things get shut off or you become homeless. That should not be an option.

3) For those who use heating oil or propane, contact your company and see if they have an incentive plan to pay for the oil or propane in the summer time when the prices are lower. Most places have such plans. Then, in the winter when the prices are way higher, you will get the fill up for the summer rates. The risk is that the price will go down but since that is highly unlikely, it’s worth the risk.

4) You can do things around the house to lower your heating and cooling bills by simply..in winter, lowering your thermostat a couple of degrees. Believe me, you get used to it. We did. In the summer, raise the thermostat a couple of degrees. This will save you some money. That bill is going to be high enough.

5) Insulate if at all possible. That will cut down on your loss to the outside.

6) Prioritize what is needed and what is not. Be brutal if you have to. No one needs that many snacks or cokes. Do you really need that extra cell phone? Does your cable or satellite have to have all those extra channels? Stepping down one level on either of those will save you quite a bit of money. Must the family eat out all those times? Go back to home cooking. There’s a benefit. You have family meals again.

It’s getting so that people are desperate now. I understand that. But it’s time to get in there and find ways to survive all this. With families helping each other, this can work. People don’t always have to lose out.

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These times are harsh especially in the financial world. Variable rate loans for homes were the big deal back a couple of years ago. Now they’re causing problems for homeowners who have them. The rates are changing and the owners can no longer pay the payments. Foreclosures come next. There are a lot of unhappy people that are now in that predicament if they have not already lost their homes.

Next on the chopping block are home equity loans. These are the loans that come from people who have been in their homes long enough to have some principle paid off of the home loan thus making equity. Lenders loved this idea because they could get the homeowners to take out an equity loan on the home. Of course, it seemed like a good idea at the time. Who knew??? Now, thousands of homeowners are using their homes as ATM machines by getting more and more small loans for when they need a few extra bucks.

Here comes the problem. With the boon in home loans, the lenders were having a heyday, that is until the bottom dropped out of the housing market. Values of homes has gone down dramatically in the last year. The result? Homes are no longer the same values that they were when the loan was acquired. Lenders like Countrywide Financial say that there is a regulation that states the lender can freeze the loans if “the value of the dwelling that secures the plan declines significantly below the dwelling’s appraised value.” (quote from Countrywide and Federal Reserve board)

What does this mean, exactly? Countrywide and other lenders will stop any action on the loans they previously approved when the value of the home goes down significantly. When that happens, it would be because the loan is higher than the value of the house that secured the loan. If a person has a line of credit because of the value of their house and the value goes down, they are able to stop any action by the homeowner to get more of the money from the line of credit. This can put homeowners in a real bind especially if the lender calls the loan, which apparently, many are doing. And that means foreclosure for those who do not have the ability to pay the total back again right away. And it can ruin a person’s credit.

At the rate these lenders are going, there will likely not be many who will qualify for loans in the future since they and the homeowners are trashing the credit of so many right now. Will that make it easier to get a loan in the future?? Uh, no!!! Actually, it’s likely to mean that the lenders will get really cautious about loans instead of getting easier. Of course, THAT means that anyone with a less-than-stellar credit record can kiss any shot of getting anything on credit goodbye; be it cards, loans for homes, cars or whatever.

The American Dream just went down in flames. God bless America!

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Recently, I came across a phrase that I had not heard before, fee harvesting credit cards. What the heck is that? It’s quite simple really. It is a credit card that has all sorts of fees and interest tacked onto the bill for every little reason. For instance, you could have a fee for starting to use the card, activation. Then, there would be a monthly fee for HAVING the card. In addition, you might get late fees if you are even a day late with a payment. And so on and on. The fees will be there whether you like it or not.

I talked with a friend of mine who believes that she should pay everything on the credit card bill because it’s the honorable thing to do. I agree that if you incur bills that you should pay them. I agree that if there is a balance on a card, it should be paid and on time. I agree with all that. HOWEVER, I do not agree that your money should be poured down a rat hole just because some unscrupulous company decides to milk you for all you are worth and then get more. That’s what a fee harvesting company does. The whole thing is in a very technical language that you will not be able to understand, sometimes even the lawyers do not understand it.

Now, this friend has a credit card bill that is so far above what she and her husband could pay that she will drown in the debt of it if something is not done. Before you start to judge this person about paying for things bought, I should like to let you know that the couple in question has no income other than social security. I wonder what type of credit card company would be willing to give a card to somebody who has no more income than that? And you should know that they were needing some type of way to pay their bills. This was not as cut and dried as it may seem. One more tiny thing here. These people scraped and put together $500 a month to pay it off and still did not dent the balance. COME ON!!! That type of credit card, legitimate one, is simply not possible with their income.

The end result here is that they are piling up interest and fees on a very low balance. And after a number of years that they had not been contacted because the company was sold to another and then the credit card bill sold again….all the while, fees and more fees, interest and more interest being put onto an already inflated bill and you have a mess that will likely NEVER go away. EVER! There are only a couple of ways this will be resolved. ONE, they find a lawyer or mediator that will make the company drop all fees and interest and pay only on the principle of the bill. TWO, go file bankruptcy and hope that this company doesn’t sell the debt again. If they do, the nightmare will likely continue until the people either die or change their names.

So the answer to the above question is NO, NO, NO!!! NO WAY will I get wrapped up in that mess of credit cards and the ripoff companies that hand them out. There is a word for these people, GREEDY!!!!

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In an effort to ease the pain caused by the latest mess with credit, the Fed (Federal Reserve Bank) is increasing the amount of loans available to banks. Banks and lending institutions are feeling the crunch of the failure to pay back loans including the foreclosures which are currently at an all time high. Foreclosures continue to plague the homeowners, banks and loan companies.

The fear is that we are falling into a recession. With jobless rates up due to large numbers of layoffs all over the country, 65000 in February alone, and people unable to pay off their mortgages because of incredibly ridiculous subprime loans made on mortgages a couple of years ago, recession does appear to be on the horizon.

The Fed is trying to stop the bleeding with boosting the size of the auctions to lending institutions by $50 billion. The auctions are a form of short term loans to the banks to make sure they have money to lend out. The Fed has plans to keep the auctions going for the next six months and beyond that if necessary.

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The first thing you want to know is…what is zombie debt, right? And the second is…are you going to have that? Answering the first question..zombie debt is really old debt that you have forgotten about or is actually not yours in the first place. This is especially true of people who’s identities have been stolen. But it is also true of those who have old credit card debt, for instance. So, the answer to the second question is that if you have collectors after you and you have no idea why, that would be the problem.

What happens is: a bank will sell an old debt to the collectors for a very small amount. That gets it out of the bank’s hair, so to speak. Then, the collectors will get extremely aggressive in trying to collect the old debt. It is right here that you should know your rights concerning this situation. For instance, if seven years have passed, it is unlikely that they could actually make you pay the debt. You would want to ask for a printout of the debt owed. Then, when you receive that, you will want to send them a certified letter stating that you know your rights, to cease trying to collect. They should back off. If not, an attorney can advise you further.

However, when it gets settled with one company, often it gets sold to the next company which will start to aggressively pursue the debt again. This could get rather involved and be very costly to fight. So, you will want to get the information as soon as possible. With that, send the letter. And if all else fails, contact your attorney and sue each company that haunts you with the zombie debt.

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You go to the mailbox, get out the bills including the credit card bill that you always pay on time. The envelope is opened up and you get the shock of your life. Your credit card has an interest rate hike that you knew nothing about AND…..it was retroactive back a few months. Now, the payment you thought would be enough to bring it down is going to go for the interest payment alone. You are now wondering how you will ever pay what you owe them.

Does this sound familiar? Likely, if you have not already seen it, it will be visiting your next bill or the one after that. Banks and credit card companies are raking in the money by changing the interest rate on your credit card and they do not even have to tell you about it before they do it.

Is this fair? Absolutely not!!! Is it legal? Unfortunately, yes. They can pretty much do what they want to since you signed the agreement that says they can raise the interest rate without prior knowledge or for any reason. You can be the best customer they have and they will still raise the rates because they want to regain the money lost from others who do not pay their bills.

Banks are trying to regain the money they are losing in the foreclosure mess they brought on themselves. I admit that people should have seen the problem with a balloon payment. But now, there are thousands and thousands of consumers who, at a time of the year when it’s the hardest to make ends meet, having to deal with the greed that comes from banks and credit card companies. And GREED it is, pure and simple.

So, my recommendation is to get rid of the credit cards. Yes, Virginia, there is life without credit cards. Those of us who could not get credit cards before are now very thankful we do not have them. If you spend beyond your means, you will end up regretting it sooner or later. Seems like later is here.

I do think it is a bad idea to continue to have credit cards. Things can only get worse. I know that you can find a new card company that will give you amazing rates….for a few months. When that happens, watch out for the string attached. They may not even tell you it’s there but it certainly is there.

For those already in the situation, there is hope. Contact the company and tell them that you have this problem, the payments are too high, the rate is too high and you will not be able to pay it unless there is a change. If you have the right person on the phone, I suggest a supervisor at least, the rate will drop and you will be back in business. Once the card is paid up, get rid of it!!!! Frankly, I consider this a scam from the credit card companies and the banks. This may seem to be good business but in the end it will be a real problem for them…as well as you.

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