If you’ve ever applied for a credit card, there’s a good chance you’ve seen the “household income” section on the application form.
And when you came across it, you may have wondered how to fill it in. If you were a kid, you may have added your parents income to your non-existent income.
Or perhaps you combined the income of your roommate(s) or spouse. And while doing so may have seemed fairly innocuous, those people wouldn’t really be on the hook if you were unable to make your minimum credit card payment.
The reality is that only those who co-signed would be accountable if you were unable to make a payment, or worse yet, missed a payment.
And so credit card issuers will now have to consider a card holder’s ability to repay, not the household’s, per Federal Reserve rules tied to the recently enacted CARD Act.
The Fed felt the term “household income” was too vague, and simply didn’t allow credit card issuers to properly evaluate an applicant’s ability to repay their debts.
So in order to protect consumers from taking on unaffordable levels of credit card debt, the Credit Card Act will require that before opening a new credit card account or increasing a credit limit on an existing account, card issuers will have to consider an individual’s income/salary.
Of course, this doesn’t necessarily mean they’ll be asking for income documentation. It just means it’ll possibly
The first and most important step in applying for credit cards is being absolutely honest. How is your credit rating? Your credit score is going to be a major factor in the application process to grant you access to a revolving line of credit. If you dont know your credit situation, I suggest that perhaps applying for a credit card is not your best option right now!
Choose a card according to your credit rating.
If your credit is poor to fair, apply for a credit card with the lowest APR and dont worry too much about the rewards. Normally shouldnt apply for the top rewards cards with fair to poor credit because they are reserved for excellent credit. When you have improved your credit score, then apply for one of the best credit cards with rewards like the chase freedom card.
If your credit is poor, apply only for credit cards that report to the major credit bureaus.
As a result of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, Americans have been given more clarity regarding the terms and conditions of credit cards. However, due to a lack of industry knowledge, many consumers still may not understand what they’re signing up for.
In the first quarter of 2010, issuers mailed out 47 million “professional” credit card offers, which are typically directed toward small businesses and entrepreneurs, according to the Oklahoma Examiner-Enterprise. Consumers, however, have been the ones receiving these offers in their mailboxes. Credit CARD Act regulations don’t apply to professional cards, so issuers can continue to hike fees and rates at their whim on any consumers who agree to such offers.
“By moving cardholders out of protected consumer cards into professional cards, banks are trying to recoup some of their lost revenue,” personal finance specialist Eileen St. Pierre told
Do you ever feel like you’ve been toting around the same archaic piece of plastic in your wallet for years, one that is both lackluster and susceptible to theft?
Well, a new credit card design aims to change how we see and use credit cards forever.
The next generation payment device coined “Dynamics Card 2.0” from you guessed it, Dynamics Inc., is a paper-thin, flexible computing platform that pretty much looks and acts just like a regular credit card.
The big difference is that the credit card contains an Electronic Stripe™, which the company claims is the world’s first fully card-programmable magnetic stripe that works at any existing point-of-sale (POS) magnetic stripe reader.
There are a few different versions of the card – one allows you to replace all the credit cards in your wallet by morphing into your personal credit card, a business credit card, or even your debit card.
Doesn’t seem like that big of a deal right? I mean credit
With the Credit CARD Act set to take full effect on August 22, many credit card issuers are reportedly already altering their policies to come into compliance with the law. And, because that law seriously limits some of the fees issuers can charge (including overdraft fees), many banks are also, according to this article, introducing new fees.
What You Might Notice
Make sure you’re reading your credit card statements closely in the coming months, as any new fees will be mentioned there. Here are some you might encounter:
Annual Fee: This isn’t a new one, but many issuers have abandoned annual fees in favor of inactivity fees, charging customers who don’t use their cards often enough. Because the CARD Act outlaws inactivity fees, sources note that you should expect the annual fee to work much the same way: if you make enough purchases, your issuer might waive the expense, but if you don’t spend a minimum amount of money (i.e. if your
As many people who have filed for bankruptcy know, one of the main causes of filing bankruptcy is unmanageable credit card debt. Often, a bankruptcy filing comes after months of missed payments.
Recent data from the American Bankers Association (ABA) shows that, as a nation, we’re improving our on-time payment rate for our credit cards. In fact, we’ve improved in a variety of areas:
Bank card delinquencies reportedly fell to 3.88 percent of all accounts, down from 4.39 percent in the fourth quarter of 2009. The
