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7 things credit card issuers don’t want you to know

Published: Thursday, September 28, 2017 @ 4:52 PM

I’m not one of those people who thinks that credit card companies are inherently evil. Credit card companies are businesses and their goal is to make a profit for their shareholders. Hey, that’s okay. It’s capitalism at work.

But to make a profit, they sometimes cross the line between being transparent and being a little sneaky, especially when it comes to the fine print. It’s usually easy to find the big things, like the APR and the annual fee, and that’s as it should be.

But all the rest? It’s like putting together a bookcase you bought from IKEA without getting any directions at all. And that can be a difficult task even with the directions.

RELATED: How to dispute mistakes on your credit report

You’re the boss!

You have more power than you know. Think of it this way: The credit card issuers work for you, not the other way around. And if you have an excellent credit score, then you’re truly in control of your credit destiny.

Don’t get sucked into thinking that you have to accept whatever rates or terms that are dished out by your issuer. If your rate gets increased, get on the phone pronto and find out the reason. If possible, negotiate for a lower rate.

But even if you don’t have a great credit score, you’re still in charge. You might not have as much negotiating power as those with excellent credit do, but you can still demand excellent customer service and prompt responses to any questions you have. If you’re unsatisfied, then that credit card company doesn’t deserve your business. Time to move on to a better credit card.

And that leads us right to number two…

Everything’s negotiable (even before you apply for a card)

That’s right. You can ask for a lower APR, change your due date so it works better with your cash flow, and even request that a late payment be removed from the credit bureaus. You don’t always get what you ask for, but it doesn’t usually hurt to ask for what you want.

When could it hurt? If you have a low credit score and you ask for a credit limit increase, the issuer might worry that you’re becoming a risk. This could result in a credit limit decrease. So be sure your credit score is in the good-to-excellent range before you try to get better terms.

Now, if you get several credit card offers in the mail, you can play them against each other.  Let’s say the offer for Credit Card A is a 12.99% APR on purchases and there’s a $95 annual fee. And let’s say that the offer for Credit Card B is a 15.99% and it also has  a $95 fee that’s waived for the first year.

With both letters in hand, call the issuer for Credit Card B and ask if you can get an APR that matches the offer from Credit Card A, which gets your APR down to 12.99%. And while you’re at it, ask to have the annual fee waived for the second year as well. You might not get all that you ask for, but you’re likely to walk away from that phone call with a better credit card deal than the ones you received in the mail.

The 45-day notice you get when your APR increases is misleading

The Credit CARD Act of 2009 gave consumers some much-needed protection. If a credit card issuer makes a major change in terms, such as raising your APR, they must give you a 45 days of notice that your rate is being increased.

Here’s what that actually means: You have 45 days before you have to pay the extra interest accrued on the higher rate. But you actually start accruing interest at the new higher rate on any purchases you make 14 days after the notice was mailed. So on the 15th day after the post-marked date, you start accruing interest at the new higher interest rate on new purchases. You just don’t have to pay it until 45 days has passed.

Is this legal? Yes, it is. But don’t count on getting this explained clearly. If you get notice of an APR increase, as soon as you get the notice in the mail, look at the postmark date so you know when the new rate takes affect. And take care not to make new purchases since you now have a higher APR.

Grace periods aren’t required by the Credit CARD Act of 2009

Just in case you aren’t familiar with the term, a grace period gives you a chance to pay your bill in full by the due date and avoid paying interest on your purchases. A grace period is usually between 21 and 25 days.

The CARD Act does not require a credit card company to have a grace period on their credit cards. But the CARD Act does require at least a 21-day grace period if the issuer decides to offer a grace period. The lack of a grace period usually isn’t an issue with major credit cards, but you do need to look at the grace period and note how long it is.

If you have bad credit, though, be vigilant about reading the fine print and look for a grace period on credit cards you’re considering. If there isn’t one, you will start accruing interest on your purchases as soon as it’s posted to your account.

Credit card payment protection insurance is kind of worthless

You’ve probably gotten phone calls or mail about this type of insurance. I’m all for insurance when it comes to my health, car, house, and things like that. But the difference is that health insurance, for example, actually pays off when I need it. So I haven’t wasted money on premiums.

Credit card payment insurance supposedly allows you to stop making monthly payments on your balance for a period of time if something unfortunate happens, such as a job loss. But there are so many exclusions. It isn’t as valuable as your credit card company says it is.

And it isn’t cheap. You’ll pay around $0.89 per $100 of your monthly statement balance. Example: Your monthly balance is $1,800. Your insurance payment is $16.02. Over a year, if the balance stays around the same amount, you pay $192.24. And then if you need to use the insurance, it might not come through for you.

Cash advances are an expensive way to borrow money

The APR and transaction fee for a cash advance is stated pretty clearly in the Schumer Box for each credit card. But you’ll have to read the fine print to find out that there’s no grace period for a cash advance.

And it gets worse. You’ll usually pay a higher APR for a cash advance plus a 3% to 5% transaction fee. The APRs can be 25% or more and the interest starts accruing right away. So that $2,000 you borrowed on your credit card will cost you interest at, say, 25% plus a $100 transaction fee (assuming a 5% fee).

You know who comes out ahead in this scenario? The credit card company wins hands down. Cash advances often lead to debt and then the issuer makes interest off your balance for a very long time. Just say no to a cash advance.

How to dispute mistakes on your credit report

5 fast facts that will help make filling out FAFSA a breeze

Published: Wednesday, December 13, 2017 @ 10:32 AM

The following points are what you need to know, as well as common mistakes to avoid when filling out the FAFSA Fill it out – you have nothing to lose The sooner you submit your FAFSA, the better Gather the information you'll need Watch out for common mistakes like leaving fields blank Keep an eye out for requests for more information

It's that time of year again when parents and college or college-bound students fill out the FAFSA (Free Application for Federal Student Aid).

The idea of wading through a form – especially one that requires financial information – is definitely not an appealing idea, but the FAFSA could be a tremendous help in getting your student money to attend college.

RELATED: 20 financial aid terms every college student and parent should understand

The following points are what you need to know, as well as common mistakes to avoid when filling out the FAFSA.

Fill it out – you have nothing to lose.

You may think that you don't need to fill out the FAFSA, especially if you believe you might not qualify for need-based aid. But there's no income cut-off point with federal student aid, according to the U.S. Department of Education. In addition, the FAFSA can help you qualify for all kinds of grants, loans and scholarships, including those offered by your state, school or private organizations.

By investing a few minutes of time, you could reap thousands of dollars in potential rewards.

Submit it ASAP.

The sooner you submit your FAFSA, the better, according to consumer adviser Clark Howard. Although the federal deadline isn't until June 30, 2018, you should check with the financial aid administrator at colleges you're interested in to make sure their deadlines aren't earlier.

Submitting earlier will help you plan how you'll pay for college. You'll also have a better chance of getting as much aid or scholarship money as possible since some colleges distribute their available money on a first-come, first-serve basis, Howard says.

Gather the information you'll need.

The FAFSA asks questions about the student as well as his or her parents if the student is a dependent.

You'll need the following information on hand as you fill out the FAFSA:

  • The student's Social Security number
  • The parents' Social Security numbers
  • Driver's license number (if you have one)
  • Alien registration number (if you're not a U.S. citizen)
  • Federal tax information for the student (and his or her spouse, if applicable) and the parents. This can often be imported online, so you may not need your records.
  • Information on the student's and parents' assets, such as money held in bank accounts and real estate holdings (not your primary residence)
  • Records of the student's or parents' untaxed income, such as veterans benefits and interest income

Watch out for common mistakes.

The National Association of Student Financial Aid Administrators points out some common mistakes that can delay your form's submission or cause you to not get the aid and scholarships you might qualify for. They include the following:

  • Leaving some fields blank – Instead, put in a "0" or "not applicable."
  • Listing an incorrect Social Security or driver's license number – It pays to recheck these numbers.
  • Failing to use your legal name – Use the name on your Social Security card, not a nickname.
  • Forgetting to list colleges – Even if you're not sure of which college you'll be attending, add any reasonable possibilities to the list of colleges that will receive your information. You're under no obligation to apply to or attend these colleges, and they can't see which other colleges you're interested in.

Keep an eye out for requests for more information.

Your FAFSA may be selected for verification, which means you'll have to provide some additional or supporting information, U.S. News & World Report explains. This process doesn't necessarily mean you've done anything wrong. You may have a discrepancy or mistake on your form, but some FAFSAs are just randomly selected for verification (lucky you!).

These requests will often come to the student's personal email account or university email address, so he or she will have to be diligent about checking it and responding to any requests by the stated deadline.

Related

Is credit monitoring a scam?

Published: Wednesday, November 22, 2017 @ 12:01 PM

Clark Howard explains how to protect yourself.

With the recent massive security breach of Equifax — one of the three credit bureaus with which many may have thought their private information was safer than most — now many people are dealing with more insecurities, wondering where they can entrust their private information, if anywhere.

Here are some options:

Credit freezing

Better and cheaper than credit monitoring, an option for optimal security is freezing your credit through each of the three credit bureaus (Experian, Equifax and TransUnion), according to WSB money expert Clark Howard at Clark.com.

The fee is $3 to $10 per person per bureau, depending on your state, to allow you to seal your credit reports — except now it's free with Equifax from here on out due to the recent data breach.

You will be provided with a personal identification number (PIN) that only you know and can be used to temporarily unfreeze (or "thaw") your credit when legitimate applications for credit and services need to be processed such as when you are buying a car.

This added layer of security means thieves can't establish new credit in your name even if they are able to obtain your personal information.

LifeLock vs. CreditKarma.com

While LifeLock advertises it can help consumers secure their information to guard against identity theft, LifeLock charges monthly services that start at $10 a month.

This kind of credit monitoring is not the same or as effective as a credit freeze, said Craig Johnson for Clark.com.

Instead, he recommends CreditKarma.com for free credit monitoring.

Equifax

If you haven't already frozen your credit, now would be the time since Equifax recently got hacked and the information of possibly 145.5 million people was attained by these hackers.

Information accessed primarily includes names, social security numbers, birth dates, addresses and, in some instances, driver's license numbers.

To try to compensate, Equifax is offering free identity theft protection and credit file monitoring (but only through Jan. 31, 2018) with its TrustedID Premier.

Experian

Another point of confusion is the unsolicited free Dark Web Email Scan offered by Experian to your email, leading to a monthly fee for further scanning.

Experian IdentityWorks also offers a free 30-day trial membership for identity theft protection and resolution, involving a monthly automatic deduction of $9.99 for the plus plan or $19.99 for the premium plan.

It's free to cancel within the 30-day trial period, but the consequences are not revealed up front for those who decide to cancel their membership once the monthly fees begin.

TransUnion

The third credit bureau, TransUnion, also offers credit monitoring at $19.95 monthly. However, TransUnion says it offers free identity protection through its TrueIdentity program.

Free helpline

Those with specific questions about the Equifax breach and how it may impact them may contact Howard's Consumer Action Center — a free helpline open 10 a.m. to 7 p.m. EST Monday through Friday with Team Clark volunteers available to answer concerns at 404-892-8227.

Related

4 of the best ways to turn your home into a cash cow

Published: Friday, November 17, 2017 @ 4:17 PM

Sites like Airbnb let you rent out your home to make money.
Sites like Airbnb let you rent out your home to make money.

Your house is a large expense with many associated costs like a mortgage payment, insurance, maintenance and more.

RELATED: How to Cash In on Short-Term Rentals Like Airbnb, VRBO

It provides a roof over your head, of course, but since it usually costs you money each month, why not put it to work for you and earn some cash in the process?

The following are four ways your house can make you money:

You can relax on the lake, in the woods or even in the back of a van when you're looking for a staycation in Gwinnett County.(Airbnb)

List your home with Airbnb or VRBO.

If you're planning to be out of town for a few days or don't mind bunking with a friend, you may be able to make some money by renting out your home through sites like Airbnb and VRBO.

Before jumping in, you'll need to take time to learn about the market, your expenses and any taxes you may need to pay. And before you list your property, you'll need to understand how to make it stand out with a good listing, including compelling photos and competitive pricing. Airbnb has a series of toolkits to help with this.

RELATED: Atlanta has Airbnb's most desired rental property in the world.

Rent it out to the area's growing TV and film industry.

When TV, film and commercial producers want to depict a home on screen, many times they'll rent the real thing, according to Money. It can be inconvenient for owners, however, since their homes may be taken over by a large crew and be completely rearranged.

On the other hand, homeowners often have fun with the experience while making some extra money. And while you're watching TV or a movie, you may be able to spot your home.

Host a foreign exchange student or faculty member.

Temporarily hosting a foreign exchange student or faculty member who's studying or teaching in this country can help you make some extra cash for anywhere from six weeks to six months at a time. You'll also be exposed to a different culture and language, and the experience could help you form a bond that lasts even when your guest returns home.

The Penny Hoarder suggests contacting student housing offices at local community colleges and universities, asking to be placed on their list of host families. After this, you'll have to apply, be interviewed, and allow your home to be toured. You'll also need to pass background and reference checks.

The 4-bedroom house sits on a corner lot with a concrete driveway that leads up to the two 2-car garages both having rear service doors. CONTRIBUTED PHOTOS BY KATHY TYLER

Rent out your driveway or storage space.

If you have extra space in your driveway, you may be able to make some money by letting others park there, according to Men's Health. This is especially true if you live near a commuter rail line or sports stadium, but you'll need to check to make sure you're not violating any local ordinances. Check out websites like JustPark to get started.

The Balance also suggests renting out any extra storage space you may have. From vehicles to personal items, your garage or home could help you make money through a site like StoreAtMyHouse.

Related

5 ways to get the most out of your health insurance plan

Published: Tuesday, November 14, 2017 @ 3:15 PM

Here are five ways to ensure you're getting the most out of your health insurance Choose your plan carefully Take advantage of preventative care benefits Work within your formulary Utilize HSAs and FSAs Watch out for surprise out-of-network charges

Health insurance has a large impact on your finances, so it pays to get the most out of your plan.

Understanding its ins and outs can be confusing, but it's worth your time to check on benefits you could be losing out on or mistakes that could cost you money.

Here are five ways to ensure you're getting the most out of your health insurance:

Choose your plan carefully.

When it's time to renew your health care coverage, consumer adviser Clark Howard recommends not just blindly signing up for your current plan, even if you've been happy with it.

Your plan – as well as other options you may be able to sign up for – may have changed. Take a close look at the co-pays, deductibles, in-network providers and other specifics to make sure you're making the best possible choice.

Take advantage of preventative care benefits.

Almost every plan, according to healthcare.gov, offers preventative care benefits that are free. You won't have to pay a co-pay or meet your deductible to get these services at no charge.

Services for adults include age-appropriate vaccinations and colorectal cancer screenings for patients over 50.

RELATED: 8 ways to get the cheapest car insurance possible

Work within your formulary.

Health care plans typically have a formulary, which is a list of medications that they're willing to pay part of or the entire cost of. It may include a list of preferred medications, for which it will pay the highest percentage of the cost.

It pays to be familiar with your formulary before you get an unpleasant surprise at the pharmacy, according to NerdWallet. Print out a copy of the document from your health insurance company's website, or call up an online copy at your doctor's office. Your doctor can work with you to make sure you get an effective medication that you can afford.

Utilize HSAs and FSAs.

If your health insurance plans allow you to put aside tax-free dollars in a Health Savings Account (HSA) or Flexible Spending Account (FSA), you should learn how they can help you. Consumer advisor Clark Howard's website, Clark.com, has a chart that explains the pros and cons of each.

An HSA is usually associated with high-deductible plans, and like an FSA, it helps you save money to pay for health care expenses. These can include everything from prescription eyeglasses to medication.

Watch out for surprise out-of-network charges.

Your insurance plan has a list of network providers, and when you can, you should stay in-network. That's easy enough if you're visiting a single doctor, but if you need to have surgery, things can get more complicated.

For pre-planned surgery, Consumer Reports recommends talking with your doctor's billing department to get a list of everyone who will provide your care, including radiologists and anesthesiologists. Call your health care company to see if they're in-network, and if not, ask your doctor if in-network providers can be used.

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