How to Choose the Right Credit Card – Part 4

To read the prequels to this article click…

Part 1Uses of Credit Cards, Finding the best rates, Different Types of Rates.

Part 2Credit Card Fees, Credit Limits, Grace Periods

Part 3Interest Calculations, Cash Advances, Premium Credit Cards, Credit Card Features.

Understanding the Terms of Service and Application

By law, credit card companies must show you all the terms of the credit card.  Reading through the terms of service may seem like a daunting task, but if you break it down it is not too bad.  Use How to Choose the right Credit Card Parts 1 – 4 as a guide to help you sift through the information.

Look for the disclosure box which breaks down the

  • Rates
  • Grace period
  • Calculation Methods
  • Fees
  • Minimum Finance Charge
  • and all the other pertinent information.

What to do About a Stolen Credit Card

If your credit card is stolen (or lost/presumed stolen) report this information to the credit card company immediately.  You will be able to find the phone number on your credit card statement or on the credit card companies website.  When you report the card stolen the credit company will immediately put a stop on any further purchases or transactions made from your card.   From that point on that credit card will be useless.  The credit card company will issue you a new credit card if you desire.

You can take precautionary measures by recording your credit card information and phone numbers in a secure location.  If your purse or wallet gets stolen you will be able to contact all your credit cards and banks immediately without having to try and find a whole bunch of phone numbers.

If your credit card is used after it has been stolen you will never be liable for any charges over $50.  The federal truth in lending act protects purchase made without permission that exceed $50.  Extra insurance can be purchased to protect the entire amount if the credit card is stolen and used.

Dealing with Mistakes on Your Bill

If you find a mistake on your bill then there is a few steps you can take to dispute the error.

  1. Place a phone call and speak with a representative. If the error is small they can often times take care of the issue immediately.
  2. If you cannot settle the dispute by phone you must write a letter to the credit card company within 60 days of the statement.  There will be an address on the bill where you can send the dispute.  Include:
  • Full Name
  • Date
  • Account Number
  • Explanation of the Error
  • The Dollar Amount of the Error

You still must pay all the other parts of the bill, but the disputed amount does not need to be paid until settled.

If the error was the credit companies fault, they will correct the bill and you will not have to pay the disputed amount or any interest charges.

If there is no error the credit company is require to write you a letter back explaining the bill.  They must also include a statement indicating how much you owe from the disputed amount, including interest charges.

Best CD Rates in Utah – October 2009

Below you will see the best CD rates for the state of Utah.

We have reviewed and sifted through many banks to find the best local rates Utah, and more specifically Salt Lake City, has to offer.

While with local CD rates you often get the personal touch of a friendly local banker, you may find the rates to be just under the national average.  You can check out our best cd rates to help you determine whether your local cd rates or national cd rates are better.

We determine the “highest” local rates by factoring in the CD rates with their respective term and comparing them to the national average.

Here are Salt Lake City, Utah’s best local CD rates.

6 Month –

  • First Utah Bank – 1.76% APY – Minimum deposit = $500
  • Delta Community Credit Union – 1.50% APY – Minimum deposit = $1,000

12 Month –

  • First Utah Bank – 2.02% APY – Minimum deposit = $500
  • Delta Community Credit Union – 2.00% APY – Minimum deposit = $1,000
  • Home Savings Bank – 2.00% APY – Minimum deposit = $1,000

24 Month –

  • Hudson City Savings Bank – 2.50% APY – Minimum deposit of $5,000
  • First Financial Bank – 2.50% APY – Minimum deposit = $5,000

All of the banks listed are FDIC or NCUA insured.

Remember CD rates are time sensitive.  Please check with the financial institution for current rates and more details.  Refer to the date of this article for probable accuracy of cd rates.

BofA To Impose Credit Card Annual Fees By Next Year

bank of america nycEven though new credit card reforms are sweeping the industry, which is scheduled to go into effect as early as December 1st, Bank of America customers have not yet seen the last of the credit card fees and charges that are costing them their hard earned dollars.

Charlotte, N.C. based Bank of America said last week that they will not raise credit card interest rates before the implementation of the new credit card laws, but that announcement did not state that it will not charge ‘new’ credit card fees. This is a move by Bank of America to gain back the anticipated revenue loss caused by the new credit card laws. Bank of America revealed that they are making plans to impose annual fees on a number of their cardholders as soon as next year.

According to BofA spokesperson Betty Reiss, the annual fees would range from $29 to $99, and the proposed fee would initially affect about 1% of the bank’s credit card customers. “We’re testing this to see what the feedback is. In terms of any plans going forward, we haven’t made any decisions yet,” said Reiss.

Bank of America is one of the largest credit card companies in the country with about 80.2 million cards issued and in circulation. BofA is third only to Chase with 119.4 million cards and Citibanks with 92 million cards.

So who will be affected by the annual credit card fees? The customers that could be the first affected are being selected based on their risk and profitability, which means, those cardholders who are in good standing, never pay late and almost never get charged with interest fees could be the first ones hit by the new annual fees. I guess it does not pay to be a good customer anymore, or you have to pay because you are a good customer.

Customer complaints of the steep interest rate hikes and the sudden cut in credit card limits prompted congress to take action against some banks’ practices. The new credit card consumer protection laws include how and when a bank or credit card company can raise interest rates and fees, the reason why banks are changing their policies now, before the law takes effect, as early as December 1st of this year.

Bank of America states that their decision to charge the additional annual fee is “in response to market changes, new federal laws and regulations, and the increasing cost of providing unsecure credit.” If a customer is affected by the new changes and is required to pay the annual fee, they will have the option to reject it, but by rejecting the fee the card company can have their account closed.
Does this sound fair? I know when I get those new terms I’m rejecting it as I have a credit card from Bank of America and would fall under the ‘good customer’ category.

Mortgage Rate Analysis-Friday October 16th, 2009

Sorry for missing posting an update yesterday, I just found out I am going to be a dad for the first time and my day was crazy from there as you can imagine!  The good news is there was not really anything happening with rates yesterday so we didn’t miss much!

Mortgage rates moved slightly higher yesterday but managed to hang in there a lot better than expected considering all the economic data and earnings reports we got this week.  Today, mortgage-backed security prices are mostly unchanged and mortgage rates trended just a little bit lower.   But in the big picture however, compared to last week mortgage rates are about 0.25% higher.

Rates are holding steady today!

Rates are holding steady today!

Although there is talk of an extension, the first time home buyer tax credit is currently scheduled to expire on November 30th.  If you want to take advantage of this great money opportunity, get your loan application submitted.  One thing you should know is, you will be unable to lock your interest rate until you have secured a home contract.  Additionally, if you lock and change your mind on the original home for a different home, you will be required to do a new lock at the current market rate since the lock goes with the specific address.

Lock Today!

As for the question as to lock or float your rate today, we are somewhat neutral based on your risk tolerance level.  If you want to try to get a lower rate, it could happen, but it could increase just as easy.  If I am making that choice I would lock and secure the piece of mind.

Highest 5 Year CD Rates Paying 3.80% APY – October 16 2009

The highest 5 year cd rates (certificates of deposit) that are nationally available are currently paying 3.80% APY. Many CD rates are based on the bank who is offering the rate and the economy of that location. Some local economies are flourishing and so are those banks, which allows those banks to offer higher than average CD rates.

The top 5 year CD rate (which are nationally available) goes to Melrose Credit Union. Melrose Credit Union has an open New York State charter and there are no geographic or group affiliation field of membership restrictions. Regardless of where you live you just may qualify for a membership.

Here are the membership requirements for Melrose Credit Union:

A $1.00 one time membership fee and a minimum opening deposit of $25.00 to open an account. However the minimum deposit for the certificates of deposit is $5,000. You must provide:

  • Valid Photo ID (Driver’s License, Passport)
  • Proof of Address (shown on a Utility Bill)
  • Social Security Number

If you can afford a larger CD, your next best bet is Apple Federal Credit Union which has one of the highest 5 year CD rates yielding 3.70% APY, however this cd comes with a minimum deposit of $50,000.

If you are only looking for online banking options for 5 year cds your best bet is to go with iGoBanking, USAA Bank, CitiBank, and FlagStar Bank all have 5 year CDs yielding 3.50% APY. These online banking options have requirements between $500 and $1,000. If you know of a better 5 year cd rate from your local bank please let us know!

How to Choose the Right Credit Card – Part 3

Click to read…

Part 1Uses of Credit Cards, Finding the best rates, Different Types of Rates.

Part 2Credit Card Fees, Credit Limits, Grace Periods

Interest Charges Calculations

Current account balance and the interest rate are the two primary factors typically used to determine the amount of your Interest Charges every month.

The balance may be calculated in 3 different ways.

  1. Calculated over 1 to 2 billing cycles.
  2. Calculated using the adjusted balance, average daily balance or the previous balance.
  3. Calculations may or may not include recent purchases within the current grace period.

Typically the lowest interest charges will accrue with the 1 cycle, with no recent purchases included is the calculation used.

Minimum Finance Charges

Most credit companies have minimum finance charges.  For example if you owe only $50, the calculated interest charge is $2, but the minimum charge is $5, you will pay $5.  The extra will be applied to the principle balance on the account.

Using The Cash Advance Feature

Some credit cards have a cash advance feature.  This allows you to pull cash out from the credit card, and your balance will increase in the amount of cash you withdraw. Cash advances can usually be accessed from ATM machines or the credit company will send you checks in which you use to get cash.

When using this feature there are a few things you need to know. Most credit card companies treat cash advances differently then regular purchases.  They may have different rates and fees.  Keep in mind these things when using a cash advance.

  • The Interest Rate is Usually Higher for Cash Advances.
  • There are usually fees associated with cash advances.
  • There are typically limits to the amount of cash you can withdraw.  A percentage of the balance or a fixed amount will determine the maximum cash advance you can receive.
  • Sometimes your monthly payments will apply first to standard purchases until they are paid off.  At that point payments will be applied to cash advance money.  Since the interest is usually higher on cash advances this means the credit company can collect more interest charges on the cash advance money.  This is why they do not pay that money off first.  Often times you can request to have extra payments applied to the cash advances.

Use the cash advance feature with caution. Read the terms of service regarding cash advances before you ever use the feature.  After fees and higher interest cash advances can be pretty expensive.

Standard, Secure and Premium Credit Cards

  • Standard Credit Cards – A standard credit card is what most people qualify for.  There are usually no extra special features, and do not typically have annual fees.  The high credit limit is usually not as high as the premium cards, but can be increased with good credit history.
  • Secure Credit Cards – Secure credit cards are normally for people with bad credit, no credit or people that are trying to rebuild their credit.  Secure credit cards require a security deposit, the amount of which will help determine the high credit limit.  The more the security deposit the higher the credit limit.
  • Premium Credit Cards – Premium credit cards often have annual fees, but come with all the bells and whistles.  They usually have warranties, protection, traveler bonuses and many more.  Usually the premium credit cards have the highest credit limits.

Credit Cards Special Features

Credit cards, especially the premium cards discussed above, can come with special features to benefit customers and entice borrowers to use the credit card more.  Although there are hundreds of different features out there, here are a few of the more common features you will see.

  • Air Miles – Credit cards often offer air miles for every dollar spent, which can be redeemed for airline tickets to fly around the world.  Usually for every $1 spent you receive 1 mile.  Some cards or certain usages of cards will give you 2 miles for every dollar spent.  For example a credit card from a specific airline will offer you double the miles if you purchase your airline ticket through them, using their card.
  • Rebates – Rebates are a popular feature.  You can receive money back for every purchase you make.
  • Warranties – Credit card warranties will help protect the purchases you make using the credit card.
  • Rental Car Benefits – Many credit companies will provide rental car insurance or special offers, like upgrades, if you use their card to rent the car.
  • Travel Insurance – Protect your travels with insurance from some credit cards.

There are some other credit card features that can be purchased. These features are usually insurance type deals that will help pay your bill if you become unemployed.

Many of these features either cost money or come with cards that have annual fees.  Be sure you will use the features, otherwise you will just be throwing your money away.

Check MoneyAisle For The Best CD Rates

MoneyAisle is a unique way of finding the best CD Rates online! The basic concept of MoneyAisle is that banks bid on your money and the bank who gives you the best rate wins. Its an auction for your money, since a bank will take your money and invest it to make more money for the bank. In essence you are loaning the bank your money. The great thing about MoneyAisle is that they are now as competitive as the top CD rates offered by the larger well known institutions.

How Does MoneyAisle Work?

Their site allows you (the customer) fill in your deposit information such as how much you wish to invest, the time frame you wish to invest for and what state you live in, etc. Then within their network of banks serving the area you live in, bid for your business. The bank who offers the highest CD rate wins and then you have the option of signing up to lock in that CD rate.

They also deal with other investments such as high-yield savings. MoneyAisle makes it easy to see your interest rate, time of maturity and bank that will hold your CD.

Try it here to see what kinds of rates are available today.

Currently the highest yield CD rate we can find is 2.05% APY. That is what is offered for a 12 month CD with a $10k deposit in our state. MoneyAisle will become more competitive in the coming months so watch out for better rates!

Highest CD Rates In Las Vegas, Nevada – October 2009

Here are the best CD (certificate of deposit) rates for the residents of Las Vegas, Nevada. We have put these rates in the form of the 6 month CDs, 12 month CDs and 24 month CDs. After going through many local banks and credit unions serving the city of Las Vegas as well as most of the state of Nevada, we found for the most part that you will find better rates with national institutions than with your local banks.

Keep in mind that CD rates are always changing so you will want to refer to the date of this article for accuracy. You can always get the most up to date CD rates from our national CD Rates page.

How do we choose which CDs are best?

As you may already know, the higher CD rates tend to accompany the longer maturities and/or the higher deposit minimums and therefore we wanted to give our reads options in choosing which CD is best for them. Instead of putting only information of the highest CD rates, which tend to accompany the Jumbo CDs, we have come up with a list of banks and credit unions that are easier to obtain.

Highest 6 Month CD Rates In Las Vegas, Nevada:

  • Nevada Commerce Bank – 6 month CD yields 1.77% APY with a minimum deposit of $10,000.
  • Branch Banking and Trust Company (Henderson, NV) – 6 month CD yields 1.75% APY with a minimum deposit of $1,000.
  • Nevada National Bank – 6 month CD yields 1.65% APY with a minimum deposit of $1,000.

Highest 12 Month CD Rates In Las Vegas, Nevada:

  • Black Mountain Community Bank – 12 month CD yields 2.15% APY with a minimum deposit of $1,000.
  • Bank of Las Vegas – 13 month CD yields 2.10% APY with a minimum deposit of $500.
  • Mutual of Omaha Bank – 16 month CD yields 2.10% APY with a minimum deposit of $2,500.

Highest 24 Month CD Rates In Las Vegas, Nevada:

  • Nevada Commerce Bank – 24 month CD yields 2.53% APY with a minimum deposit of $10,000.
  • Hudson City Savings Bank – 24 month CD yields 2.50% APY with a minimum deposit of $5,000. This is a national bank and will accept deposits nationwide.
  • Washington Federal Savings and Loan Association – 24 month CD yields 2.50% APY with a minimum deposit of $1,000.

All of these banks and credit unions are federally insured by either the FDIC or NCUA. Be sure you check with your bank to make sure they are federally insured and only deposit money in banks and credit unions that are insured. If you live in Las Vegas or in the state of Nevada and know of better CD rates from your local bank or credit union, then please let us know.

Watch Out For Chase’s CD Early Withdrawal Penalty

chase logoWe have all heard stories about hidden bank fees from ATMs and overdrafts, but there is another fee that savers need to worry about and that is the early withdrawal penalty of a certificate of deposit (CD). This penalty usually varies depending on the length of cd and what bank the cd is with. Usually for a long term CD the typical penalty is six months of interest. However, the early withdrawal penalty at Chase Bank is much more severe.

Last year if you had a CD at 5% with WaMu and that CD is now maturing as a Chase CD, it is very important to NOT allow it to automatically renew. You have a choice to not allow your CD to renew automatically, while some banks do not practice auto renewed cds, there are still those banks who like to keep your money as long as they can. This story comes from the site Bank Deals who reported about Chase’s early withdrawal penalty.

“A friend of mine had a Chase/WaMu CD flip over. It used to be at WaMu. To Cancel this Chase $100k CD, Chase wants $3k + $25. At the new interest rate of 0.20 for 12 months, that is a 15 YEAR interest penalty for canceling the CD. I know of no other bank in the world that charges this.”

Let’s say if you are on vacation and your $100k CD or even a $10k CD is coming up to maturity date. If you forget to close the CD during the grace period or the CD automatically renews, you will be liable for the early withdrawal penalty if you decide to try to get out of a second CD term. As Bank Deals’ reader found out, the penalty is much more than the usual six months of interest. Here is Chase’s disclosure (page 11), of the early withdrawal penalty for a 12 month CD:

‘For terms of one year or more, the early withdrawal penalty is equal to $25 plus 3% of the amount withdrawn.’

Plus your penalty may eat into the principal:

‘Early withdrawal penalties may require a reduction in the principle amount if the amount of accrued and unpaid interest on the deposit is less than the penalty.’

So by missing the grace period and doing an early withdrawal of the full amount, you will have to pay a large penalty to get your money out of the CD. An example is a $10k CD for more than 1 year you will have to pay a fee of $325.

Currently the Chase CD rates are not competitive, you can easily find better deals, higher interest and less penalties by going with a different bank.

Chase’s standard 12 month CD rate for Texas is only 0.25%, which you can find better rates just by searching for them. One positive note about Chase is they are a very financially sound bank and your money will be safe.

Amboy Direct Offers 2.10% APY On 1 Year CD

Amboy Direct another online banking site is offering a 2.10% APY 1 Year CD for balances over $10,000, called the eSavings CD. The minimum opening deposit is a mere $100 but the CD rate drops to 1%. Any deposit over $10,000 will lock your rate at the 2.10% level, plus the great thing about AmboyDirect is that you can add to the CD within the first 6 months! So if you start off with a deposit of $10,000 you can continue adding to it like a savings account with much higher interest. Most certificate of deposits do not allow you to continue adding to the balance, so if you came across more cash you would have to open another CD. With the eSavings CD it makes saving so much easier and the maximum deposit you can have is $100,000 for the CD. Visit Amboy Direct here.

How To Start With Amboy Direct

Amboy Direct makes it easy to get started by having an online application form and if you are already an Amboy Direct customer you will still have to fill out the application. As soon as you submit the application your cd rate is locked at the current offering which is 2.10%. As soon as the cd matures it is converted over to an eSavings account automatically unless if you ask for it to be renewed, making it that much easier to manage your savings.

It’s important to find out about any early withdrawal penalty on any CD that you get. With Amboy Direct their early withdrawal penalty is only 3 months’ interest (unlike Chases’ massive penalties that you can read about here). A great strategy for this type of CD is to start with $100, then watch to see how rates increase over the next few months and if the 2.10% is still a competitive rate, then bump up your balance over the $10,000 mark to get the 2.10% APY. If rates increase past 2.10% then start another CD at the higher rate and go from there. Just remember you have 6 months to add to your eSavings CD.

Watch out for possible issues with Amboy Direct as they currently have 1 out of 5 stars for soundness rating from bankrate, so be careful and do not go over the FDIC’s $250,000 limit to protect your money in case of a bank failure.

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