Credit Card Companies Are Now Canceling Cards Due to Not Enough Use!

Charging too much on your credit cards is a good way to get into financial trouble. So, in this economic climate, it’s best to keep those cards in your wallet, right According to an article in MSN Money, not necessarily so. Banks are apparently taking a hard look at customers who don’t use their credit cards — or who don’t use them anough — and simply canceling those cards. The banks reason that closing rarely-used accounts lowers their risk profile, because getting rid of unused accounts limits the bank’s liabilities (potential available credit) compared to the bank’s assets. Also, simply...

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Credit Bureaus Won’t Let You Add Credit History

The NY Daily News reports on an individual who noticed his credit reports did not show all his credit cards. He gathered his credit card documents and sent them to the credit reporting agencies asking them to add them to his credit history with the idea it would improve his credit standing. Trans Union wrote back saying no dice. They won’t accept credit information from consumers. It has to come from subscribers. A TU spokesman dodged the real issue why not by saying consumers “cannot dispute an item that does not exist on their credit report.” Of course, the consumer...

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Banks Are Increasing Credit Card Rates & Fees and Pushing Lousy Products to Make Up for Mortgage Related Losses

In an interview on NPR’s Fresh Air with Terry Gross, Prof. Elizabeth Warren warns consumers that banks are increasing interest rates and fees on credit cards for no other reason other than that they need revenue to make up for losses in other lines of their business. The banks reason that in a climate in which credit is harder to obtain, consumers are less likely to close their accounts when hit with these increases and switch to different credit cards. Banks are also adding such “trips and traps” as double cycle billing (you pay interest on recent charges). Banks are...

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Credit Card Industry Targets College Students to be “Credit Pushers”

Credit card companies love to market cards to college students. That point was eloquently and tragically made in the superb recent film Maxed Out. In the film, two mothers of college students describe how their bright and high-achieving children applied for credit cards as college freshmen. But they soon found themselves in serious credit card debt. Feeling profoundly depressed and overwhelmed, each of them committed suicide. These two moms have since made it their mission to stop credit card solicitation at college campuses. A new BusinessWeek article tells the tragedy from a student’s perspective. Ryan Rhoades, a freshman at the...

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New Credit Card Rules Proposed by Federal Reserve

Credit card companies are endorsing the Federal Reserve Board’s proposal to mandate better disclosure of credit card terms to consumers, apparently hoping that more disclosure will head off Congressional attempts to outlaw some of the practices consumers complain about the most. Kathleen Day of the Washington Post has been following the dynamic between some lawmakers’ attempts to prohibit some of the worst industry practices and the Federal Reserve’s proposal to disclose those practices but keep them legal. As Kathleen Day’s article (discussed above in Mark Anderson’s May 27 post) points out, some of the worst industry practices include “universal default,”...

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