Bloggers, journalists, financial analysts, and your co-workers are all in agreement – the recession is pinching at the pursestrings of every industry and the wallets of everyone. Lucky for you, we’re keeping track of some worthy articles, advice, and analysis on how to survive the recession with your credit intact by cutting back and using credit wisely.

Economy

• GrandForksHerald warns you to beware of credit robo call pitches.
• U.S. Economy: Payroll Losses Slow, Jobless Rate Up; learn more at Bloomberg.com.
• Look out for SmartMoney’s Christmas in September? Sizing Up the Early Deals.
• U.S News reports Americans Downsize Home Improvement Projects: 5 Things to Know.
• Wall Street Journal pops the big question: Is This the End of Free Checking?

Credit Scores

• Wallet Pop asks what is a good credit score and how do you get—or keep—one?
• Consumers’ credit scores can fall when card issuers cut limits explains USA Today.

Credit Cards

• Credit Cards: Friend or Foe? the New York Times blogs.
• Credit.com tells us consumers cutting back on credit use.
• Reuters reports that U.S. credit card satisfaction down amid higher rates: poll.
• SmartMoney explains why card issuers face stricter ‘Loco Parentis’.
• Credit-card minimum payments rising says Tulsa World.

Debt

• Check out MSN Money’s 10 ways to thrive after the recession.
• RisMedia challenges you to take charge: is your credit and debt profile optimized?
• Examiner.com shares ways of reducing your personal consumer debt.
• Students borrow more than ever for college reports the Wall Street Journal.
• MintLife blogs Is Your Debt Making You Sick?
• FiveCentNickel.com talks about Debt Reduction: Penny Wise and Pound Foolish.

Credit Karma

• Learn how to win at the credit scoring game at CNNMoney.
• CNN Travel Companion shares some tips to fight your travel credit card dispute.
• AllanKintz blogs about good things and bad things about credit.
• How to read the new Credit Card Rules @ The Faster Times.

Are you as credit savvy as you think you are? Did you know that the average consumer credit card debt in July was $6818, or that your credit report could shape the approval and account terms when you apply for a credit card, home loan, and auto loan? If you’ve been keeping up with our blog, you probably know many of the ins-and-outs of the credit world, but take this quiz to see if you have the financial know-how to keep up with your credit health.

1. Income is a key component of your credit score? True or False
2. What state had the highest average credit score in July?
   A. California
   B. Colorado
   C. Illionois
   D. New Jersey
3. What is the amount of credit card debt you currently have divided by your total credit available?
   A. Credit Card Utilization
   B. Credit Card Default
   C. Credit Limit
   D. Credit Charge-Off
4. What are the first two changes of the Credit Card Bill of Rights? Choose two:
   A. 30 day advance notice for arbitrary interest rate increase
   B. Issuers must deliver billing statements at least 21 days before due date
   C. Co-signer necessary for credit card applicants under 21
   D. Double-cycle billing no longer permitted
5. What credit card is best to help consumers start building or rebuilding credit?
   A. Unsecured Credit Card
   B. Student Credit Card
   C. Rewards Credit Card
   D. Secured Credit Card
6. What credit card do you rarely, if ever, want to close?
   A. Any unused credit card
   B. Most used credit card
   C. Oldest credit card
   D. Most recently opened credit card
7. Credit scores can impact your credit limit? True or False
8. Once a creditor charges off an account, the consumer is no longer responsible for payment of the debt. True or False
9. When does the $8000 First-time Homebuyer Tax Credit expire?
   A. November 1, 2009
   B. December 1, 2009
   C. December 31, 2009
   D. January 1, 2010
10. A co-signer on a loan or credit card account can expect to:
    A. Pay-off the account if the primary accountholder cannot
    B. Have the credit line added to their personal credit history and report
    C. Have their credit score affected if the primary accountholder defaults
    D. All of the above

Answers

1. False. Your credit score is determined by several factors including the length of your credit history, on-time payment history, credit utilization, total accounts, and number credit inquiries. Consider using the Credit Report Card to see a summary of your key credit factors as well as how you compare to other Credit Karma members.
2. D. New Jersey. New Jersey’s average statewide credit score for July was 694. Credit Karma’s national average consumer credit score in July was 674.
3. Credit Card Utilization. Credit card utilization basically tells you how much of your available credit you are actually using. Try to keep your total credit card utilization to 30% or less. The credit card utilization ratio of your total debt to available credit determines roughly 30% of your credit score.
4. A & B. One provision of the Credit Card Bill of Rights will be an additional 30 days advance notice for arbitrary rate increases, credit limit change, or any other ‘significant’ change to your credit card’s terms. The other provision to go into effect is that credit card issuers must deliver billing statements at least 21 days before the due date (previously 14 days). These changes go into effect August 20, 2009.
5. D. A Secured Card. A secured card is designed to help consumers build a credit history by providing them the opportunity to demonstrate responsible credit usage and regular on-time payments. A secured card requires a security deposit from the cardholder that functions as cash collateral which sets the credit limit and helps keep consumers from defaulting on their payments.
6. C. The oldest credit card. Age of credit history is a key component of your credit score, so closing your oldest card will likely shorten your credit history and could cause a significant drop in your credit score.
7. True. Credit card companies use a consumer’s credit score as a prediction of how much risk they will be as a cardholder, and determine a cardholder’s credit limit based on this assessment.
8. False. When a credit card company charges-off your debt, meaning they declared it a loss for the company, the consumer is still responsible for paying off the debt. The credit card account will be closed so the cardholder will not be able to charge to it and interest will no longer accrue on that debt, but you will still receive bills until and the creditor will attempt to collect until the entire debt is paid off.
9. B. December 1, 2009. While the deadline is a few months away, consumers are advised to begin shopping for their home now because complications like getting approval for a loan, negotiating a mortgage rate, navigating inspections, managing paperwork with escrow, and the closing process of the Tax Credit could take months to complete and first-time homebuyers definitely do not want to miss out on this opportunity.
10. D. All of the above. As a co-signer, you contractually agree to pay off the account if the cardholder does not and you are obligated to the account until it is paid off in full. Any delinquent actions reported on the account will affect your credit score as if you defaulted on the payments yourself.

Scoring:

If you missed 0-2 questions , you are a credit know-it-all and chances are you have a good credit score. But don’t sit back and think that you and your credit score are safe. Make sure you put your credit know-how to good use by being diligent about keeping your credit health in check.

If you missed 3-4 questions, you are on your way to knowing more about credit. You might know the basics of how credit works, but empower yourself to learn more specifics about your credit report, the Credit Card Bill of Rights, and more details about how to manage your credit score in the process.

If you missed more than 5 questions, you may be a New Kid on the block when it comes to credit. The ins-and outs of credit scores and credit reports may be a bit fuzzy for you. The first step towards getting a good credit score is to understand how credit works, so keep learning and build a more solid foundation of what credit is, how to use it responsibly, and how to maintain healthy credit.

Good karma is in you and your wallet’s future with three standout credit card programs that turn your spending power into the power to give back. Whether it’s a green cause, a cause of your very own, or the fight against breast cancer, check out these credit cards and maybe you too can send good karma out into the world through your everyday spending.

While other credit cards continue to churn out cash back bonuses, travel miles, or reward points, these three cards caught my eye and my heart by offering consumers a chance to do good for a world beyond the shopping mall.

Good for the environment, good for your wallet

Help protect Mother Earth by shredding the not-so-eco-friendly credit cards you usually us to charge for purchases and start shopping with a biodegradable credit card from Discover. Jumping into the green movement with the first environmentally-conscious card of its kind, Discover provides consumers a bio-degradable card design that can be used with any Discover credit card. 99% of the special PVC material in the card’s plastic will breakdown in five years in landfill conditions, and if the trend catches on, will start to prevent the millions of discarded credit cards Americans go through a year from leaving a toxic effect on the environment. Do your part to save our environment and start charging for a greener tomorrow today.

Turning credit charges into fundraising

Raise money for your neighborhood Little League Team, your local Red Cross, or maybe your very own non-profit with the Capital One Card Lab Connect program. By using the program to support the cause you believe, your Capital One credit card becomes a convenient way to donate to the nonprofit or public organization of your choice anytime you shop. It works like this: nonprofits register for Card Lab Connect online, design credit cards unique to their organization, and then encourage their supporters to apply for their Capital One credit card; as a supporter of their organization, you simply sign up and open the nonprofit’s specific Capital One credit card, and 1% of all your net purchases, plus an additional $25 with the first purchase, will go directly to support your nonprofit. Capital One’s Card Lab Connect is the first to cater to nonprofit and public organizations of all sizes, from your living room book club to national nonprofit giants.

Bank of America has consumers seeing Pink in every purchase

Whether it’s using your credit or debit card, making purchases on Pink makes money to support Komen for the Cure. With every new pink ribbon-themed credit card, check card, or checking account opened, Bank of America will make a donation towards the fight against breast cancer. Bank of America has already pledged to donate more than $2 million to Komen for the Cure by the year 2011, and you can add-in your two cents by spending to promote breast cancer awareness and prevention. Think Pink and make every dollar you spend help bring us one step closer to saving countless of lives.

These three programs are the tip of the ever-growing iceberg in how credit card companies are finding value in helping cardholders do something more meaningful with their consumer power. Companies are beginning to see that going the extra mile to do a good deed is good for business, good for environment, and good for consumers. For consumers, those of us who did not think we have the time or resources to regularly support something we believe in now have an easy, no-hassle way of fitting charitable donations into our everyday lives. Cheers to putting a little bit of heart and a whole lot of warm, fuzzy feelings back into our plastic world.

Cash in on these special, limited-time bank promotions to earn extra money by simply opening a Bank of America Checking, WaMu Free Checking, or WTDirect Savings accounts to get cash back bonuses. Time is of the essence, so if you’re thinking of opening an account, don’t leave $100 or $150 in the big banks’ vaults when it can be in your wallet by acting now.

Here’s what you need to know –

WTDirect is offering up to a $150 cash bonus for new savings account clients,  based on the account balance.
Expires July 31, 2009
Terms: Deposit at least $10,000 and you receive $25 bonus; $20,000 gets $50 bonus; $30,000 gets $75 bonus, $40,000 gets $100 bonus, and the top tier of $50,000 qualifies you for $150 bonus. Regardless of the cash bonus, your savings will earn 1.76% APY.
Good Stuff: WTDirect is known for a savings rate in the top 5% of US banks. The bank ran a similar bonus promo last year and ended it within a week because of the high demand; so be warned that this offer might be cut even shorter than expected.
Fine Print: You must open and fund your account with at least $10,000 before July 31, 2009 and keep your funds at WTDirect until October 31, 2009 to qualify for the cash bonus.

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Not to be outdone, Washington Mutual, now a division of JPMorgan Chase Bank, is offering a $100 cash bonus for opening a new WaMu’s Free Checking account.
Expires August 5, 2009
Terms: Open a new checking account with a minimum deposit of $100 of new money (not currently held at a WaMu or Chase bank). Within 60 days of account opening, initiate a direct deposit OR have at least five debit card purchases posted to your account.
Good Stuff: WaMu Free Checking offers no monthly service fees, free checks, free online banking and bill pay, free ATM cash withdrawals at any ATM, access to 14,000 WaMu and Chase ATMs nationwide, and a refund on one overdraft fee per year.
Fine Print: Offer is limited to one bonus per household. The reward will be deposited directly into your account after either the direct deposit OR debit card requirements have been fulfilled.

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Bank of America is pulling in new customers with a $100 cash back bonus to open a new personal or business checking account.
Expires – No expiration date posted, but these offers tend to jump in and out of the market.
Terms: Here’s how to get your $100: Get $75 back when you open a qualifying personal or business checking account with a minimum $250 deposit, plus you must use your debit card to make a purchase within 30 of opening the account. Bring home the additional $25 simply by making two online bill payments within 30 days of opening the account.
Good Stuff: Bank of America’s checking account offers free online bill pay, free online and mobile banking services, and the Keep the Change program can save you cents on every purchase.
Fine Print: Only new customers are eligible and the account must be opened online or at a Bank of America banking center. If you are deemed eligible, Bank of America generally pays the cash bonus within 90 days of the account opening.

The clock is ticking on these limited time offers, so if you qualify for any of the above promotions and are looking to open a savings or checking account, think about cashing in on the opportunity to earn up to $150. There’s no better way to pad your savings than by putting the banks’ money in your pocket.

For an online bank that claims to “value integrity as much as deposits”, newcomer Ally Bank actually has the customer-friendly services to deliver. With competitive rates, straightforward and simplified terms, as well as live round-the-clock customer service, Ally Bank breaks away from its previous ties with GMAC Financial Services while also breaking away from traditional banking.

Their pro-customer attitude towards banking, with a name change like “ally” to fit the bill, promises no monthly fees, no minimum balances, and no minimum deposits. But is too-good-to-be-true Ally Bank better than all the brick-and-mortar and online banks already out there?

One of the best APY rates available

Ally Bank has an edge in offering 1.95% APY (as of 7/13/09), the highest savings rate you can get with no minimum balance or monthly fees, and also a rate double that of the national average. The closest competition with similar no minimum balance and monthly fees is HSBC Direct with 1.55% APY and ING Direct with 1.65% APY.

Ally’s all-online functionality allows for streamlined, cost-effective operations which passes it’s saving on to you directly through its high yield savings rate. This means you get to earn as much as you can by the simple act of saving your money with Ally.

APY rates and no penalties for CDs

Your best bet with Ally Bank is the No Penalty 9-month Certificate of Deposit with 2.00% APY. Simply put, you won’t get charged for withdrawing your money even if you withdraw within the first 9 months. While most banks carry high fees for withdrawing your money before the CD matures, Ally’s gives you a painless option for you and your savings without a fear of fine print.

If you don’t think you’ll be withdrawing prematurely, then enjoy an even higher rate of 2.10% APY with Ally’s 12-month classic CD. With one of the highest rates in the market and no minimum deposit restrictions, this makes it a product consumers should consider.

Unheard of in the market before, Ally’s CD rates stay high regardless of deposit size. Also, all APY rates, including that of the savings account, have interest compounded daily.

Looking out for you, the consumer

Small yet differentiating changes such as 24 hour telephone customer service, above average rates, and a vow of no “sneaky disclaimers” is quickly making Ally Bank a reliable place for better banking.

Ally Bank has been making a large investment in branding through a strong TV commercial and online advertising push that shows off its pro-consumer approach. If you haven’t seen their Pony commercial poking fun at traditional banks by commenting that, “Even kids know it’s wrong to hold out on somebody, why don’t banks,” Ally’s doing-it-right, straightforward mentality aims to let consumers feel that it’s safe to trust again.

Does the revamped look and philosophy work?

It’s going to take time and good customer experience stories, but in this day and age, finding a bank that claims to be accountable and honest may just be as easy as winning customers over with Ally’s simple, anti-gimmick philosophy to offer the best rates with customer flexibility.

It’s a great option that you can profit from and begin to feel secure again about the future of your savings.

The government released the results of a two month effort to gauge the financial health and fiscal ability of the top 19 banks in America. Of those banks, 10 banks were told that they lacked the reserves and to raise additional capital, most notably Bank of America, Wells Fargo, GMAC, and Citigroup. The total amount of capital recommended by the federal government is nearly $75 billion.

This additional capital is to be raised without the government’s assistance, and banks have nearly six months to comply. Banks are exploring options such as offering common-stock shares to the public, selling off debt, assets or business lines, as well as raising equity from private sources. However, some banks were given a cleaner bill of health, the government not require them to raise any capital. These banks include Bank of New York Mellon, American Express, Capital One, and JP Mortgage Chase. The full scorecard can be found here and you can read the entire 38 page report here.

After the release of results, stocks surged upwards, even for banks that were being required to raise additional capital, such as Bank of America. This was seen as a sign that the worst was behind us; banks have weathered the storm and now have sufficient funds to stay afloat. However, the stress tests results state that 10 of 19 of the largest US banks still require nearly $75 billion additional capital. That doesn’t sound like good news, but the market responded positively to this news, which is counterintuitive. The stress tests were intended to bring clarity to the financial health of the US banks, but instead have continued to keep investors and consumers in a “wait and see” mode. For a more detailed read on the results of the tests, WSJ has a great article about the results.

With all the stories about how credit card companies are lowering credit limits and raising rates, we thought it would be refreshing to talk about a credit card company doing the right thing for their customers. We looked to the Credit Karma Community for bright spots in a dim market.

Low credit score borrowers know all too well that most sub-prime products are costly with high APRs and riddled with every imaginable fee possible. In one sub-prime credit card comparison, we showed how one bank was charging $265 in up-front fees for a credit card with a $300 credit limit. At the same time, that same card had an additional $230 in annual fees, did I mention the APR for the card is 19.92%. With products like these, we wonder how any consumer can improve their score without paying an exorbitant penalty.

That is where Orchard Bank steps in. Serving the same sub-prime market, Orchard Bank has developed a sub-prime secured credit card that is actually in our opinion good for consumers. In stark contrast to the credit card above, Orchard Bank provides a secured card with 7.9% APR, a $35 annual fee (waived in year one), and no processing fee.

Our members and other consumers seem to have nothing but praise for the Orchard Bank card, their credit limit increase, and their general approach to helping consumers improve their credit. Comments in our Orchard Bank review range from stories of good customer service to a credit line increase program designed to help consumers move off the secured credit card.

• “…this card is so great at rebuilding credit that Chase recommended it to me. [They] said to start with this card before getting their card.”
• “Orchard Bank is probably the best place to start building credit. They helped me. I started with a secured card with a $200 deposit and a $35 annual fee… After about a year, their parent company, HSBC sent me a pre-approval for an unsecured card.”
• “I’ve been with Orchard for several years now. They have been good to me and stuck with me even through some financial challenges.”

Other sites seem to suggest the same.

To be fair, some members do complain about the quality of the customer service which is out sourced to India, but the complaints are about the communication not the service. Also, we have seen a few reviews about a steadfast over limit fee they apply to their customers.

In general, we don’t normally promote a particular bank. But with all the bad news about how banks are abusing their customers, we thought about it would be refreshing to hear about a bank who is doing the right thing for their consumers. Let us know if you have had similar experiences with your credit card providers.

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For most people, the thing that launches them into credit trouble in the first place is an unexpected financial emergency. Individuals who pay their bills on time, people who use credit cards wisely and people who always keep up with their mortgages can suddenly be thrown into a complete financial crisis when a surprise strikes them. Here are ten ways that you can prepare for and handle financial emergencies.

1 - Plan ahead in order to make a difference.

Start a savings and make provisions for whatever may occur. You should put a portion of every pay check into a savings account.

2 - Expect the unexpected so that you may plan and prepare accordingly.

You should be prepared for every scenario. Plan for the worst, so that you can handle anything that may come your way.

3 - Pay yourself first rather than waiting until the end of the month to put money into your savings.

Putting the money into savings now will ensure you do not spend it easily through out the month. Otherwise, you may not be able to save when the time comes.

4 - Increase your income if you are having trouble paying your expenses.

This may entail finding a better job, or supplanting your income through another job. You may also be entitled to a raise at your current job.

5 - Sell off some assets to accrue extra income if you are having trouble paying your expenses.

This can be as small as a garage sale or as large as selling one of two cars. Having stuff is pointless if you are unable to pay for rent or utilities.

6 - Borrow against your home if you absolutely have to, so that you can pay off emergency expenses without allowing them to overwhelm you and put you further into debt.

The equity in your home should be used as a last resort, as you are putting your home at risk. It is your largest asset, however, so it can be helpful for a tight spot.

7 - Call on friends and relatives to see if you can get some financial assistance in your time of need.

Those close to you can provide the assistance you need. Everyone is connected and those close to you would help you; you would help them if the situation were reversed.

8 - Defer your retirement contributions, funneling the money toward a more important cause such as an emergency expense instead.

If you are unable to proceed in the now, planning for the future is worthless.

9 - Seek professional help if you cannot find any other way to deal with the emergency expense without putting yourself into debt.

There are experts out there who are specially trained just for this purpose. Do not ignore this important resource.

10 - Declare bankruptcy if there is no other option available for you to overcome the obstacles created by a financial emergency.

Bankruptcy is a government provided way to get out of debt and start anew, although it carries with it a stigma which will be hard to shake off of your credit report.

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Yesterday, the Fed lowered the federal funds rate rate to near zero in an attempt to bolster the sagging economy. The federal funds rate is an overnight lending rate that banks use to set rates for a variety of loans such as adjustable rate mortgages, credit cards, and home equity lines.

For many consumers with variable rate loans, they should see a monthly savings. For example, a family with a prime indexed home equity line of credit would see their interest rate lowered from 4.00% to 3.25%. On a $50,000 draw, their minimum monthly payment would decrease  from$167 to $135.  The same types of saving could be seen in variable rate credit cards however the effect may not be as pronounced since credit card rates have a higher prime plus index.

For the consumers who wonder if this is a good time to refinance their homes, the answer is not so clear. While the goals of the Fed is to lower long term interest rates, their recent moves only lowers short term interest rates. 30 year fixed mortgage rates are consider long term interest rates and often indexed to the 10 year treasury. While the rates on the 10 year treasury are also at historic lows, the credit credit crunch has more lenders charging higher premiums eroding the value of the historically low rates.

So what should you do in this environment to save money? Here are some tips:

If you have a home equity line of credit, consolidate your bills. If you have good credit and an open HELOC, consider consolidating your credit card bills and other expenses. With a prime rate of 3.25%, you will rarely get another opportunity to get such a low priced loan. The caveat is that rates may rise in the future so make sure you have flexibility to move debt around. You are also using your home at collateral so be careful.

Shop for credit card rates. Not all credit card interest rates are variable. If you have a fixed rate credit card from when prime was 6% or 7%, this could be a good time to look into a new card with a lower rate.

Stay on top of this market and interest rates. We are at an historically low interest rate period. As the Fed looks to unfreeze the credit markets, there could be unprecedented opportunities to refinance or purchase a home assuming you have good credit. This period won’t last forever so be savvy, stay on top of the market, and look for your opportunity to save.

According to prominent bank analyst Meredith Whitney that the US credit card industry may reduce credit lines by over $2 trillion dollars over the next 18 months on fears of a worsening economy and regulatory changes. If this were to be true, it could mean that credit card limits could be reduced by as much as 45%. Regardless of the actual amount and severity of the credit line pull back, most credit card companies are more cautious about new customers and existing customers alike.

While you many not think this affects you cause your credit cards are not maxed out, there may be other repercussions. Most notably if you carry a balance and your credit limit is lowered, your credit card utilization (credit card balance/credit limit) may increase. Higher credit card utilization could then lower your credit score which could then increase your interest rate or lower your limit again. It is a vicious cycle and can be very unfair. Here are a few tips to avoid the trap.

Keep an eye on your credit cards limits. Your credit card company should notify of any impending changes. But with all the junk mail it can be easy to miss. Almost most people take their credit limit as a constant and only look at balances.

Try to lower your credit card debt. This is easier said than done but this should be a goal at all times to improve your credit.

Have several credit cards. Having a 3-6 credit cards gives you options should one of your issuers lower your limit or increase your interest rate. If you are looking for a card, these are some of the best credit cards for each credit range.

Keep your balances on any given card low. High credit card utilization on any single card can be a sign of future risk so make sure that your credit card utilization is lower than 35% on any single card.

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