March 10th, 2010
Wednesday Trends in Credit Cards & Debt
Consumer credit levels have up and down results at the start of 2010. On the one hand, overall consumer credit increased 2.4% in January (as compared to a 2.2% decline in December) and showed $2.45 trillion in consumer credit outstanding, reports Credit.com. But, the good news is that revolving consumer credit has consistently decreased every month for over a year, showing that consumers are continuing to pay off their credit card debt.
Credit.com writes, “Though a drop in revolving consumer credit may be taken as a positive sign in the form of people paying off their credit card debt, it also can have a negative connotation. A drop in revolving debt outstanding could also mean that banks had to charge off of what is owed to them as customers find it hard to pay off their credit card debt.”
Stay on top of your debt and credit card news with the rest of today’s roundup favorite personal finance articles and posts.
March 3rd, 2010
Wednesday Trends in Credit Cards & Debt
America is shopping again! Most retail sectors, including electronics, men’s clothing, and luxury items, gained in sales in February. Online sales also rose sharply, however some spending categories, such as women’s clothing stores, slowed down; Associated Press blames bad weather and snowstorms keeping consumers indoors and away from cash registers. Despite these increases, spending overall remains tepid in the face of high unemployment and tightened credit.
Need some debt help or advice on your latest credit card? This roundup features great articles and blogs that will fill you in.
March 3rd, 2010
Review: Prosper’s Talk About The Taboo Campaign
If people will divulge the ups and downs of their love life via Facebook and Tweet about their breakfast, Prosper’s Talk About The Taboo campaign hopes America will be as eager to open up and talk about what’s in their wallets.
Prosper, a peer-to-peer lending site, boldly goes where financial companies haven’t ventured before to bring taboo topics about personal finance into consumers’ everyday conversations.
February 24th, 2010
Wednesday Trends in Credit Cards & Debt
When consumers were asked if their bank does what’s best for the customer, the nation’s biggest banks ranked rock-bottom of the list, reports CNN Money.. Last on the list in regards to customer service were Bank of America, Chase, Capital One, TD Bank/Commerce, Citibank, and HSBC.
Customer dissatisfaction is old news in the banking and credit card industry, as the CARD Act–in effect this week–attempts to reform and regulate practices to improve consumer protections. For customers looking to break up with their bank, financial institutions that scored well amongst consumers in the survey include local and regional banks, as well as credit unions.
More credit cards and debt news and advice included in today’s roundup.
February 17th, 2010
Wednesday Trends in Credit Cards & Debt
Across the credit card industry, delinquencies and charge-offs for major issuers trended upwards in January. Capital One reported its credit card delinquencies rose for the second month in a row, from 5.75% to 5.80% since December. Meanwhile, charge-offs– past-due credit card debt that can no longer be collected– rose from 10.14% to 10.41% in December. Tips to help you steer clear of stress and risk of delinquency with the following debt reduction articles and credit card news in today’s roundup.
February 10th, 2010
Wednesday Trends in Credit Cards & Debt
Big banks may be getting the biggest backlash yet: general public anger over taxpayer bailouts, big bonuses for bankers, and unfriendly customer service have egged more and more Americans to switch to smaller banks, reports CNN Money.
Bank of America, Wells Fargo, Citigroup, and other big banks may consider overhauling banking practices to keep their customers as resentment continues to grow over how big financial institutions are nickel-and-diming customers in tough economic times.
Check out the following round-up on credit card news and debt advice.
February 3rd, 2010
Wednesday Trends in Credit Cards & Debt
“The CARD Act finally protects consumers against the credit card industry’s most abusive practices: Yes AND no,” writes The Washington Post. The Post debunks five myths about America’s credit card debt, discussing how credit card legislation won’t magically fix everything, and even while a credit-scarce economy has pushed cardholders to switch to debit, America is still largely a plastic-carrying consumer society. For more credit card news and debt help, including blogs on more effective debt-reduction strategies, this week’s roundup has it all.
January 27th, 2010
Wednesday Trends in Credit Cards & Debt
This eye-opening chart compares overall credit card transactions and credit use across several countries: the U.S leads the pack with a sky-high $1,693 billion in credit card transactions, the United Kingdom trails at 20% that of U.S credit use with $388 billion, and the lowest use of plastic is China with $12 billion. In addition, the visual shows that by the mid 2000s, 80% of American households own a credit card and the average credit card debt hit an all-time high of $10,385. Are Americans too credit-obsessed and debt-heavy? Check out the following roundup with the week’s worth of credit card news and debt tips.
Credit Card News
- Credit card-issuers find creative ways to skirt new law reports MarketWatch.
- MoneyNing blogs on the difference between 0% purchase and 0% balance transfer credit cards.
- Wall Street Journal advocates credit card rewards you can invest.
- Credit cards get friendlier after recession and reforms writes The Washington Post.
- CNN Money reviews ‘consumer-friendly’ credit cards.
Debt News
- Ready for you financial IQ test for the day? How healthy is your debt management?, asks Wise Bread.
- Myth or truth: is there such a thing as good debt? Eliminate The Muda investigates.http://www.debtfreeadventure.com/debt-reduction-while-planning-career-change/
- Can you reduce your debt while planning a career change? Debt Free Adventure answers this predicament.
- The Smarter Wallet discusses whether debt counseling services are an effective method of debt relief.
- Another guide to debt relief, Personal Finance Analyst reviews credit card debt consolidation loans.
January 20th, 2010
Wednesday Trends in Credit Cards & Debt
Reuters reports that credit card charge-offs at major credit card companies are decreasing. Three out of five U.S companies reported declines, including Bank of America, however BofA has the highest default and delinquency rates of the five companies. JPMorgan and American Express report a steady decline in charge-offs.Issuers with the highest percentages of cardholder charge-offs include Bank of America with 13.53%, Capital One with 10.14%, and Discover Financial with 8.68%.
Avoid a charge-off, which will leave a negative mark on your credit report and damage your credit score, at all costs, and keep up with credit card news and debt help with the following roundup:
Credit Card News
- Issuers may be looking beyond credit scores of credit card applicants and into more personal information. SmartMoney writes on this issue and more credit trends for 2010 and the future of plastic.
- Think the balance on your credit card is like any other kind of debt? Think again. Credit Card Guide website explains 4 reasons why credit card debt is different.
- 6 new credit card booby traps on the way reports MSNBC. Look out for more cards with annual fees and unexpected changes in your rewards program.
- The Tennesseean posts an interesting editorial suggesting that the Credit Card Act will bite those it meant to protect.
- Do you make this dangerous credit card mistake? asks Money Under 30. If you have a cash-back or rewards credit card, banks might be baiting you with incentives to make you pay more.
Debt News
- Slash your credit card debt in four simple steps, brought to you by LoveMoney, starting with reducing the cost of your debt.
- WiseBread advises goal-setting in debt to more effectively achieve your debt reduction goals.
- For more debt reduction strategies, Rapid City Journal posted some Q&A from The Credit Guy on what steps are needed to eliminate debt in 2010.
- Heard of the debt buster challenge from Lending Club? Take on a low-interest loan to ditch your debt, and Lending Club will send you a backpack of freebies!
- Is there a “good reason” to go into debt? questions Bible Money Matters. Are there certain things that you want badly enough to make you willing to take on debt?
January 18th, 2010
Review: Debt Consolidation Loans with Lending Club
Lending Club’s debt consolidation loans could be your best plan to reducing your debt. Nearly 60% of Lending Club borrowers using the site to consolidate debt or pay off their credit card. Lending Club uses a peer-to-peer lending model (P2P lending) to facilitate loans online between consumer lenders and consumer borrowers without the need of a traditional lender or bank.
What makes P2P-facilitated loans such an intriguing alternative to typical debt consolidation options? For a prime borrower, Lending Club offers lower interest rates than a bank, is more credible than debt consolidation companies, and more accessible than 0% APR balance transfer credit cards (which are getting harder and harder to acquire). Plus, if you participate in Lending Club’s DebtBuster Challenge promotion running until the end of January, you score a Lending Club care package with free merchandise.
Why It’s Worth It
The no-hassle online application enables you to find out quickly and for free what interest rate you qualify for. Their low, fixed interest rate is competitive in the market and starts at 7.89%. Lending Club’s standard, 3-year loan term keeps monthly payments manageable while maintaining a reasonably short loan life that won’t overwhelm you in long-term interest payments. Another plus is that the interest rate will never change throughout the term of your loan, unlike the variable rates of credit cards. There is no prepayment penalty if you pay off the loan sooner than 3 years, which some lenders will charge. Also, the automatic payment process deducst monthly from your checking account so staying on the road to debt reduction is a breeze.
The Catch
In order to secure a loan through Lending Club, good credit is a must. Given the nature of P2P lending, Lending Club has strict borrower qualifications to safeguard against default. Criteria for borrowers include a minimum FICO score of 660, a debt-to-income ratio below 25%, no recent delinquencies, bankruptcies, and charge-offs, no more than 10 inquiries on credit report in the last 6 months, at least 3 credit accounts of which 2 are open, and minimum 3 years credit history. Additionally, Lending Club sets borrowers’ interest rate based on their credit history, credit score, and loan amount; prime borrowers definitely have an edge in approval and better interest rate offers. Finally, there is a loan processing fee that ranges 1.25%-4.5%, depending on the borrower’s credit standing, which will be deducted from the loan amount.
Ditching That Debt Now
If you are in great credit standing and considering debt consolidation, Lending Club is worth looking into. Another alternative is Prosper, another P2P lending site with different borrower qualifications and uses a eBay-like bidding process to determine the loan’s interest rate. P2P loans as a debt reduction strategy has all the incentive you need, with Lending Club’s DebtBuster freebies and better interest rates, to get yourself on the path to debt freedom.
At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!
