Student Credit Card Blog

The Brief History of Credit Cards

admin — Tue, 05 Jan 2010 01:40:31 +0000

It was less than 60 years ago in 1951 where the first version of a credit card appeared when inventor Frank McNamara created the Diner’s Club Card. This paper wallet sized card was intended for consumers to pay off their restaurant bills on a monthly basis which therefore made it a charge card. Then about 50 years ago in 1958 Bank Of America released the first bank issued paper credit card called the BankAmericard. They distributed about 60,000 unsolicited cards in Fresno, California. The card was the first of its kind that gave the consumer the choice of when they wanted to pay back the charges on the credit card.

In 1959 American Express decided to jump in the mix and differentiate themselves from the pack by issuing the first ever plastic credit card, which was the American Express Card which is still widely popular today. They touted that plastic cards were more durable and could hold up better to frequent usage. Then in 1968 they diversified their offering and came out with the American Express Executive Card which catered to the more affluent heavy spenders. This Gold card became a status symbol and anyone who was anyone during the time was sure to have one. Soon after more competition jumped into the market with the premier of the Master Charge Card which we know now as MasterCard. The name was changed in 1979 but their classic logo has remained virtually unchanged.

Credit Cards continued to gain popularity which is why another competitor came in 1984 which was the Chase Visa Card. One of the key reasons that companies wanted to get into the space was that consumers were carrying larger and larger amounts of debt. New comer Discover card came out in 1986 and the co-branded card started to appear in 1989 with the Visa/NFL card. Then in 1997 the first student credit card came out which was the University of Delaware MasterCard. Credit cards continue to change forms with customizable cards and variations like titanium, platinum and diamond. Now we will just have to wait and see what the next big change in credit cards will be.

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Smart Spending and Your First Student Credit Card

admin — Thu, 24 Dec 2009 02:29:01 +0000

When you get your first student credit card you have the opportunity to learn good spending habits and proper use of credit. It will also help start your credit history and build your credit score which are both extremely valuable to your future. These factors will help determine the type of interest rates you will get when you need a loan for a major purchase like a house or car. If you use your student credit card correctly and do not treat it as if it is free money, then you will have a much better financial future.

One smart rule to follow is to only use your student credit card as if it were cash that you have to spend which means you can afford the item. If you do not follow this simple rule then you run the risk of accumulating lots of college student credit card debt that will be increasingly difficult to pay off. Another rule you need to follow is to not just pay the minimum payment. Since your credit card is basically a loan it has an interest rate associated with it and if you only pay the minimum payment, then it will be extremely tough to pay down the debt since the money will mainly go towards interest. If your student credit card spending does get out of control then do not cancel your card as it will hurt your credit score. You need to make sure you stop using it and create a plan to pay off the debt before you use the card ever again.

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3 Tips to Help Manage Multiple Student Credit Cards

admin — Thu, 03 Dec 2009 02:13:57 +0000

Use Automatic Payments or Utilize Online Banking

If you happen to be bad at remembering to pay your credit card bill each month then it may be smart for you to set up automatic payments with your bank and card issuers. This will help save you from missing payments and accruing late fees as long as you always have enough money in your bank account to cover the payment. You still need to try and pay more than the minimum payment even if it is automatic.

Another option if you are more disciplined is to use online banking so that you can set up a payment amount you can afford each month to automatically go out right after you get your bill in the mail. This will still make it easy for you to pay your student credit card but give you the flexibility to change the amount you want to pay.

Focus on Multiple Dues Dates

Having more than one student credit card often means payments at different times of the month. This means you need to be careful about your money management so that you always have the funds needed to pay your bills. If you are having trouble juggling dates you can try and contact one of your card issuers and see if they can change your payment date which they sometimes will accommodate.

Make Smart Spending Choices

Credit cards should not be viewed any different than cash unless it is a true emergency and you need your card for something. Treating cards like cash will ensure that you do not make purchases with money you do not have. You always have to remember to live within your means and make smart choices about what you buy. One of the best ways to do this is create a budget so you can keep track of where all of your money is spent.

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Beware of Credit Card Robocalls

admin — Thu, 18 Jun 2009 05:42:53 +0000

If you have not heard one of these calls then this is a warning to watch out for: Robocalls that claim they can negotiate lower interest rates with your credit card companies. Many people have decided to become part of the Do Not Call lists but despite their efforts these calls continue. These automated calls can come at any hour and the pre-recorded message will often say something like “There are no problems currently with your account; however it is urgent that you contact us concerning your eligibility for lowering your interest rates to as little as 5.9 percent”.

What they do not say is the part that should provide you with an immediate red flag because they claim they are from something generic like “card services”. What this means is that it is not your credit card issuer and they would never contact you in such a manner. The Better Business Bureau has had hundreds of complaints about these companies because people get confused and think that it is from their credit card company. The way these companies work when you do contact them back is to offer you their services to help lower your interest rate for a one time flat fee. In many cases they do not end up doing anything to help and even if they do help it does not mean you cannot do what they do yourself. So if you are having trouble with your interest rates on your credit card and making payments then call your card issuer and explain your situation and your commitment to pay the debt. They will often lower your rate temporarily but that may be enough to help you pay off the credit card debt.

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Delinquency Rates on Credit Cards Increase

admin — Wed, 10 Jun 2009 05:32:46 +0000

Compared to the first quarter of last year, the delinquency rates on credit cards have experienced a minor increase. Due to the recent decline in the economy many consumers are faced with tough decisions on which bills to pay. Unfortunately it seems that credit cards are falling low on the list and not getting paid because other bills are a higher priority. During the first quarter of 2009 the rate in the United States rose to 1.32% for consumers who were at least three months behind on paying their bills. This is up approximately 11% from the previous year which was at 1.19%.

Unemployment has been a huge factor in this increase as consumers are really struggling to get by in some parts of the country. The hardest hit areas tend to be the states that have also had increased foreclosures due to the huge dip in the real estate market. If this overall trend continues it could be trouble for major credit card issuers. Companies like Bank of America Corp., American Express Co., and Discover Financial services have to eventually write off the debt that consumers do not pay and that would be yet another hit to their bottom line which has already had a rough last couple of years. On top of the economic situation these credit issuers are also struggling to figure out how to create more revenue because they will soon be faced with the legislation that just passed regarding credit card fees and interest rates.

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Top 5 Tips to Protect Yourself From Credit Card Fraud

admin — Tue, 09 Jun 2009 01:49:05 +0000

Make sure to review all credit card statements
Growing up in the age of technology, most of us use online banking to pay our bills and check our credit card statement. Some consumers do not even have their paper statements mailed to them and strictly use the Internet. Regardless of which method you use, you need to make sure and review every charge on your statement to ensure that it is correct and that there are not any suspicious charges. If you do see something that looks odd then you need to contact your credit card issuer right away and explain the situation to them. The other reason to review the statements is so you stay current and familiar with your terms and interest rates.

Be smart about how you use your credit cards
Credit cards are serious business and you need to make sure you take proper care of them at all time. This means that you always keep your card in a safe place and do not keep it lying around on the counter at your house or buried at the bottom of your purse. Always keep your credit card in a secure place so that you do not lose it or have it stolen from you. Another thing to watch out for are non secure websites. Avoid making any purchase on a site which does not have https:// in the url.

If possible keep an eye on your credit card each time you make a purchase
While it is not a common occurrence some people have had their credit card information stolen at restaurants or other businesses. Therefore anytime you give your card to a waiter or clerk you need to do your best to watch what happens to it. It is very easy for someone to copy your info quickly and use it at a later date. You need to stay focused at all times when using your credit card so that you do not wind up with fraudulent charges.

Be extremely careful when handling your credit card receipts
Some merchants and many restaurants often print your full number on your credit card receipt. If this happens and you have to leave them with a copy it is acceptable to mark out all but that last four digits as your number appears on most receipts. You also need to be careful when you shove those receipts in your pocket so that you do not lose them and let them wind up in the wrong hands.

Never provide your credit card information to someone contacting you via phone or email
No matter if it is someone calling you and asking for your credit card information or emailing you, you never want to give out your information in this manner. If this happens the smartest thing to do is to call the company direct. If it is your credit card company then you can feel safe calling their direct number to make sure you are talking to them and not someone pretending to be them. In email, banks or credit card issuers never ask for this information so again it is best to call them or go see them if possible.

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Credit Card Act Looks to Help Merchants Better Negotiate Fees

admin — Fri, 05 Jun 2009 03:11:37 +0000

Did you know that every time you make a purchase with your student credit card the merchant or retailer has to pay an interchange fee for the transaction? This fee is one of the key reasons why many small restaurants only take cash, because they cannot afford to pay these fees. Interchange fees are also the reason why gas stations will sometimes charge you a different price if you plan to pay with cash instead of your credit card. The Credit Card Fair Fee Act was introduced in the U.S. House of Representatives this week and it looks to help merchants and retailers cut these fees so that they can be more competitive and pass some of the savings on to you by lowering their prices.

If this the bill were enacted, then banks would take yet another hit after the last couple years of rough economic times. Credit unions might take an even bigger hit because they have as high of volume of credit card transactions as the bigger banks. Merchants however are very excited about this bill because they feel like they have had an extremely hard time negotiating the interchange fees despite Visa and MasterCard having said merchants and retailers do have the opportunity to negotiate lower fees. The bill will make the negotiation more formal and proper so things can be accomplished. As a student, money can be tight and if these merchants and retailers are able to be more competitive then it should benefit you in the long run because they may offer lower prices to gain your business.

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New Rules for Students Wanting Credit Cards

admin — Sat, 30 May 2009 23:43:54 +0000

On May 22nd 2009 President Barack Obama signed into law a ground breaking Credit Card Bill that looks to better protect consumers by banning certain practices and enforcing some new rules. One of the most significant changes applies to college students under 21 who are looking to acquire a student credit card. If you are under 21 and a full time college student you will unfortunately have your credit restricted to 20% of a your income. Many students are super busy going to class and studying so they do not have much time to work therefore there overall income is quite low and their credit limit will be just a small fraction of that minimal amount money. This means that college student’s will have to be smarter about how they use their student credit cards but it should also lead to better overall money management.

However there is one way that students can get around this new change and that is for them to have a co-signer which in most cases will be their parents. Some students just want to focus on school and do not want have to work but still usually want credit cards just in case of an emergency or to pay for certain expenses like buying textbooks online. In this case the student has no choice and therefore a co-signer will be the only way to go. One of the positive things about this a co-signer is that they can now help you become more responsible with managing your credit because you will be protected from sudden rate increases. Under the new law a student’s co-signer has to approve any such rate hikes. Keep in mind this is not completely official yet but it will be something to continue to watch if you have a student credit card.

-Written by Nicholas Scholy

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Credit Scores Decline In the US

admin — Thu, 28 May 2009 03:27:48 +0000

As a continued sign of the struggling economy the average credit scores in the US fell an average of 6 points as reported by TransUnion. The data that comes from the third quarter of 2008 to the first quarter of 2009 is based upon their TransRisk score as compared to the more commonly used FICO score. Regardless of the differences between the two scores a 6 point dip is more significant than it sounds when you consider than at least 190 million consumers in the US have a credit score. The key contributors to the decline come from credit card users paying late and carrying more debt.

With many people in the US losing their jobs or homes, credit cards have become a go to source for many to get by for a bit until things improve and they can pay off the debt. This however is not a normal way to manage your credit so over time it can start to have negative impacts on your credit score. For the consumers who have been so unfortunate to lose their homes they may have incurred some of the biggest hits to their credit scores because the foreclosures have a huge reflection on their credit worthiness. When the economy has tough times like this it makes it even harder to obtain those big loans because the lenders are even more scrutinizing of who they let borrow money and how much money do the extend.

In order to improve things consumers need to start paying down their credit card debt and return to a normal way of money management. As more people work their way out of debt and make their payments on time their credit scores will gradually increase which will make it easier to qualify for the credit cards you want or the car or house loan you may need.

-Written by Nicholas Scholy

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Tips to Lower Your Credit Card Interest Rate

admin — Wed, 27 May 2009 04:42:56 +0000

In today’s economy, it is surprisingly no easier or harder to lower your credit card interest rate. However, there are a few things to keep in mind before doing so. First and foremost, make sure you are in good standing with your credit card company. If they decide to raise you rate and you are already in bad standing, you have little to no hope of lowering your rate. But if you are in good standing, following the three tips below will greatly increase your chances for success:

1. Understand your personal finances

When you call your credit card company to lower your interest rate, make sure to have certain documents handy to reference so that you can prove you are a good customer. Things like your W-2, pay stubs, previous credit card statements, a current bank statement, and current balance information shows the credit card company you are on top of your finances – definitely a good thing!

2. Understand what you want

It will do no good if you collect the information on your finances, and contact your credit card company to lower your interest rate, only to not fully understand what you want beyond ‘a better rate.’ Have a specific rate in mind when you get ready to reach out, and be prepared to negotiate with the company if they don’t accept your first suggestion.

3. Actually call the credit card company!

Most credit card companies suggest you write if you have specific questions about your account. In these situations though, it is truly best to pick up the phone and call your credit card company. Also, the first line of defense is always customer service that will deny, deny, deny your request. Don’t be afraid to work your way up to the person who has the authority to discuss and potentially change your rate.

-Written by William Ciesla (Guest Blogger)

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