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Your Credit Score Affects Your Interest Rate

The APR you receive on credit cards and loans is partly determined by your credit score. Just another reason to achieve the best credit score possible.

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Credit / Debt Management Spotlight10

About Credit Card Rewards

Saturday October 6, 2012

If you're going to use a credit card, you might as well get something out of it. Rewards credit cards give you a small kickback for making purchases with that credit card. Not all credit cards give rewards and not all consumers qualify for rewards credit cards.

The prospect of earning cash, points, or free flights for something you'd have done anyway sounds attractive, but be careful because rewards cards can lead to debt. Since interest rates on rewards cards are often higher, it's better to pay your balance in full every month. Otherwise, you're funding your own rewards with finance charges.

Some rewards cards are cleverly promoted making you think you can earn more than you actually can. Before you send in your application, check out reviews of the rewards card you're considering to see if it's really a good deal.

The Dangers of Ditched Credit Card Payments

Thursday October 4, 2012

From the time you miss your first credit card payment, you trigger a series of actions that could be hard to stop. If you think you're having a hard time making your payments now, wait until you're three or four months past due. It might be impossible to catch up then.

Here's what you can expect to happen When You Stop Making Credit Card Payments. As you read through the list, you won't see anything good and it might be worse than you expected.

If you foresee trouble making your credit card payments, explore your options before your due date passes. Once you're past due, some options disappear. For example, you won't qualify for a low interest rate balance transfer once a late payment shows up on your credit report.

American Express to Pay $85M to 250K Consumers

Tuesday October 2, 2012

The Consumer Financial Protection Bureau means business. After ordering Capital One to refund $140 million to consumers and Discover to refund $200 million, the CFPB has ordered American Express subsidiaries to refund $85 million to approximately 250,000 consumers.

American Express is considered to be one of the most prestigious credit card issuers. While their settlement involves lower dollar amounts and fewer consumers, the charges seem a lot more severe.

The Bureau decided American Express did several things wrong over the span of several years.

American Express subsidiaries promised a $300 reward to some consumers who signed up for the American Express Blue Sky credit card. However, the bank failed to give the $300 bonus. The CFPB requires this bonus to be paid to eligible cardholders.

In some cases, consumers were charged a late fee above the legal maximum of $25 ($35 if late two times in six-month period). CFPB is requiring American Express to reimburse the late fees plus interest.

They also violated the Equal Credit Opportunity Act by using age as a factor in a credit scoring system but failing to apply the system to applicants over age 35.

American Express subsidiaries led some consumers to believe they could improve their credit by paying old debts when the accounts were actually beyond the credit reporting time limit, which is seven years for most kinds of debt. Your credit score isn't influenced by paying debts that are no longer being reported. The CFPB now requires American Express to notify consumers when they're collecting a debt that is too old to be reported to a credit bureau.

Some consumers were told they could accept a settlement offer and have their debt forgiven. However, the debts were not actually forgiven and consumers were later denied an American Express card because of it. To these consumers, American Express has to pay $100 and send a pre-approved credit card offer. Consumers who already paid a settlement to receive a credit card will receive a refund of that debt paid plus interest.

American Express will also have to pay $27.5 in penalty fees to the CFPB, the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency.

If you are eligible for a refund, you don't have to do anything. The refund will be made automatically as a credit to your existing American Express account or a check mailed to you.

Discover Refunds Over $200M; Watch for Scams

Sunday September 30, 2012

The Consumer Financial Protection Bureau has charged another credit card issuer with deceptive marketing of add-on services. Discover Bank is required to refund more than $200 million to 3.5 million consumers who enrolled in the company's Payment Protection, Credit Score Tracker, or Identity Theft Protection services.

The CFPB says Discover enrolled customers without their consent, misled customers about the cost of these services, failed to disclose information about eligibility for benefits, and charged customers before fulfilling their promise to first send details about the products. In addition to refunding customers, Discover also has to pay a $14 million penalty to the CFPB and U.S. Treasury.

In July, Capital One had to refund $140 million for similar charges from the CFPB.

According to the CFPB refunds will be made automatically by check or by a credit to eligible cardholder's accounts. The best way to find out if you're eligible for a refund is to contact Discover via the number on the back of your credit card or the number on their website.

Watch out for phishing scams related to both Discover and Capital One's refunds. You do not have to pay money or give up personal information to receive a refund. Do not click on email or advertising links pertaining to these refunds. Also, do not answer questions to a company who initiates contact with you over the phone.

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