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 key things you should know about car insurance

Published: Thursday, October 19, 2017 @ 2:46 PM

The following are five things you probably don't know about auto insurance It may cover more than you realize Your car's contents were stolen or damaged? Too bad Other drivers in your house need to be listed on the policy Your rates could go up because of an accident that wasn't your fault You may be missing out on some discounts

Car insurance isn't something you probably think about often, but it's an important tool in protecting your assets.

It pays to learn about your policy before you need it so you can take advantage of its benefits and avoid any unpleasant surprises.

Whether you're shopping for a new policy or are wondering about the specifics of your current coverage, you may be surprised by what you find.

RELATED: 5 ways you can make bank with your wheels

The following are five things you probably don't know about auto insurance:

It may cover more than you realize.

If your car is damaged when a rodent chews through some wires, your expenses will most likely be covered, according to the Motley Fool. Your auto insurer may also pay for damage suffered when your car hits a pothole, and, although you probably won't need it, damage from a riot or meteor. And if you're involved in legal action as the result of a vehicle accident, your car insurance may also provide help with some legal costs.

RELATED: 8 ways to get the cheapest car insurance possible

Your car's contents were stolen or damaged? Too bad.

If you're like many people, you might have several expensive items – your phone, laptop and navigation system – that you often leave in your car. Unfortunately, if you're in an accident and these items are damaged, you're probably on your own when it comes to replacing them, U.S. News & World Report warns. The same is true if your car is stolen while the items are inside.

Other drivers in your house need to be listed on the policy.

In most cases, a car insurance policy provides coverage for you and other people who don't live with you but may occasionally drive your car, according to Business Insider. But if you have other drivers in your home, they will need to be listed on your policy as well. Otherwise, they probably won't be covered if they drive your car and are in an accident.

Your rates could go up because of an accident that wasn't your fault.

The Consumer Federation of America (CFA) found that many companies will raise your rates if you open a claim, even if you're not at fault. The practice is illegal in at least two states (California and Oklahoma), but drivers who live elsewhere are not protected. Companies vary in how much they'll raise your rates, and the CFA found that moderate-income drivers often face higher increases than higher-income drivers do.

You may be missing out on some discounts.

You might be getting a discount for being a good driver or because you're in a certain age group, but you may be missing out on some less-obvious discounts. According to Fox Business, some insurance companies offer discounts if you belong to certain professional groups, are a graduate of a certain college or belonged to one of its affiliated fraternities or sororities. 

Numbers don’t lie: 5 things to know about your FICO score

Published: Tuesday, October 03, 2017 @ 10:37 AM
Updated: Tuesday, October 03, 2017 @ 10:37 AM

To get into the all-important "good credit" score range, experts recommend these five strategies Check and re-check your credit report Avoid quick-fix promises Delinquent payments can seriously damage your FICO scores Pay off more of what you owe Apply for credit cards one at a time

With the 2017 hacking of credit bureau Equifax, credit scores have been in the spotlight recently. But credit scores are important every day for adults who earn or borrow money, especially the FICO score, which is used by 90 of the top 100 largest U.S. financial institutions. 

RELATED: Equifax data breach: What to know

Just what is a FICO score? The short answer: the global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries, created by Fair Isaac Corporation. The average adult has FICO scores from each of the three main credit bureaus: Equifax, TransUnion and Experian. FICO scores are based on amounts owed (30 percent), new credit (10 percent), length of credit history (15 percent), payment history (35 percent) and credit mix (10 percent).

A low FICO score might contribute to a lender's decision to deny you credit and could increase the cost of an auto loan by almost $5,000, according to Consumer Reports. A high FICO can save you thousands annually on everything from reduced credit card interest to the size of the deposit you must pay for electric utility service.

RELATED: Uber isn't everything: 7 other lucrative part-time side gigs 

To get into the all-important "good credit" score range, Consumer Reports and myFICO.com recommend these five strategies:

Atlanta-based consumer credit reporting agency Equifax reversed a decision to include forced arbitration language in its terms of service for its free credit monitoring products after a public outcry earlier this month. The company said a breach of its computer systems had exposed the Social Security numbers and birthdates of up to 143 million U.S. consumers. (Dreamstime/TNS)(The Atlanta Journal-Constitution)

Check and re-check your credit report

Request one free credit report from a different reporting agency every four months through AnnualCreditReport.com and check for errors, according to Consumer Reports. If you find an error, dispute it with the credit bureau. Pay particular attention to make sure no one has incorrectly listed a late payment on any of your accounts or miscalculated amounts owed on any open accounts. "Hard pull" credit inquiries, which are made by potential lenders with your permission, can lower your FICO score slightly, but this is different. When you check on your own credit, there's no penalty. 

Avoid quick-fix promises

According to myFICO.com, so-called "quick fix" efforts to repair your credit history are the most likely to backfire, so consumers should be leery of any advertisements or credit counselors claiming they can improve your credit score fast. Depending on the reason for a low score, you may need 12 to 24 months before any efforts (except for error corrections) start showing on your score. You can accelerate the improvement by enrolling in a debt-management program and making payments on time, but there's no instant fix.

(Contributed by nestiny.com/For the AJC)

Persistently pay your bills on time

Even if you are only missing payments by a few days, delinquent payments can seriously damage your FICO scores, particularly since you can't fix previous missed or late payments. If you have missed payments, get current and stay current so you can demonstrate that the problem is in the past. Accoding to myFICO, older credit problems count for less and will fade as your new on-time payment pattern starts showing up on your credit report. Some older versions of FICO keep collection accounts on your credit report for up to seven years even if they're paid off, but the most current versions of FICO ignore any collections when the balance is zero, according to Consumer Reports.

Pay off more of what you owe

The "amounts owed" category makes up 30 percent to your FICO score calculation. Unlike payment history, you can address it immediately, but you'll need financial discipline: "The most effective way to improve your credit scores in this area is by paying down your revolving–credit card–debt." Don't close unused credit cards as a short-term plan to up your scores, since it may just increase the percentage of available credit you are using - a no-no for high credit scores. The same goes for opening a new credit cards you don't need: while it will increase your available credit, it could negatively impact the average age of your credit accounts and damage your FICO scores.

Apply for credit cards one at a time

When you apply for multiple credit cards at the same time, you generate several "hard pull" requests for your credit history, which can hurt your FICO score, according to Consumer Reports. This advice only holds true for credit cards, not house, car or student loans. 

MyFICO also reminds consumers that while FICO scores are important, they're not the be-all and end-all. Lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history and your credit history. Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you even if your score is low - or decline your request for credit even though your score is high.

To get started improving your FICO score, access myFICO's estimator tool, which helps you approximate your score range without any identifying information. It also offers a direct link that allows you to file an online credit report dispute and gives more detailed answers to the question "What is FICO?"

Disney theme park attendance drops as prices rise

Published: Sunday, June 04, 2017 @ 12:12 PM

Sunday marks an increase in prices for single-day tickets to Walt Disney World theme parks during certain times of year—as well as an addition of expiration dates on all tickets.

Could the House of Mouse be faltering?

In a rare reversal of attendance growth, a new report says fewer people came to 13 of 14 Disney theme parks worldwide in 2016 than in the year prior.

That’s according to independent numbers from the Themed Entertainment Association (TEA) and engineering firm Aecom. Disney does not share official attendance data for the majority of its properties.

Here’s a wild guess — maybe Disney’s endless march of increased ticket prices had something to do with the traffic decline!

Read more: How to visit Disney World for free (or close to it)

You can still save money on Disney if you know how!

Back in February, Disney jacked up its peak pricing strategy in a continuing effort to shift the price of a day pass based on demand.

It’s called “seasonal pricing,” and there are three periods: Value, regular and peak.

  • Value period pricing for the Magic Kingdom became $107 for adults and $101 for children — an increase of $2.
  • Regular period pricing became $115 for adults and $109 for children — a $5 increase.
  • Peak pricing, meanwhile, remained steady at $124 for adults and $118 for children.

Meanwhile, the price of an annual pass also increased in February. The Silver Pass is now priced at $419, the Gold Pass at $559 and the Platinum Pass at $679.

The peak pricing strategy seems to be working from a profit standpoint. Disney’s theme park unit enjoyed operating income of $3.3 billion in fiscal 2016. That’s a 9% increase from the year prior.

So don’t shed a tear for the House of Mouse just because guest traffic slowed down last year!

Disney Theme Parks is still the #1 theme park group in the world. According to the TEA report, Disney had twice the annual attendance of its next nearest competitor, the British-based theme parks operator Merlin Entertainments. And it had more than three times the attendance of the #3 competitor, Universal Parks and Resorts.

When you’re planning a Disney trip, you need every possible advantage on your side to save money. So don’t overlook these areas of savings…

Figure out the cheapest places to stay

If you want to stay on the property, try renting a timeshare. MouseOwners.com has resources for both owners and potential renters. MouseSavers.com also features a lot of info on how to save on the experience.

If you’re going to Disney World, you might consider off-site hotels around Orlando like the Four Season Orlando and Hard Rock Hotel. They’re luring more visitors than ever with competitive rates, water parks and complimentary transportation to area theme parks. Off-site may also turn out to be more affordable, especially if the family has a car.

One caveat to staying off-site: You’ll only be able to book FastPasses 30 days out from the start of your trip.

Know about the military discounts

If you’re military, you have earned the right to save on your Disney trip! ShadesofGreen.org is a special program offered for military personnel and families in partnership with Disney. Discounted lodging generally starts at $95 a night. Other discounts on park admission, dining and transportation are available too.

Use the free FastPass+ option

FastPass+ enables guests to reserve a spot in line at favorite rides prior to their trip. Once guests receive their theme park tickets, they can log into My Disney Experience on the Disney website or app and make an itinerary of preferred rides and attractions. This feature allows families guaranteed access and short wait times to some of the hottest attractions. Visitors who master FastPass+ can minimize the wait times and maximize the time they spend playing in the parks.

If you’re staying on a Disney property, you can begin lining up your FastPasses as soon as 60 days out from the start of your trip.

Have the right gear

Take ponchos from the dollar store with you for afternoon and evening thundershowers instead of buying overpriced ones at the park. Sure, they won’t have cute characters on them, but they’ll help you keep more of those other kinds of characters — like Washington, Lincoln, Hamilton, Jackson and Franklin — in your wallet!

Have the right reading material

Money expert Clark Howard has long recommended that you get “The Unofficial Guide to Walt Disney World,” not any of the official publications that come from Disney. This manual is updated yearly and tells you all kinds of money and time-saving tips that the parks don’t want you to know.

Go when it’s quiet

Even though the new dynamic demand pricing initiative won’t let you steal a deal, you’ll still want to plan your trip during a quieter time of the year if possible. You can get a sense of expected crowd sizes on sites like TouringPlans.com and WDWPrepSchool.com.

In general, fall is one of the best times for Florida vacations each year. Disney World offers discounts to Florida residents that fill the parks with daytrippers at that time of year. That creates some traffic, but not as much as you would have encountered over the summer. The real time to book, though, is during the first two weeks of December. Almost nobody goes on vacation at that time.

Use an app to plan your time in the park

A lot of families planning trips to the House of Mouse find it easy to coordinate all their planning in one app. TouringPlans is one great option, as is Trello. Give them a try!

Easiest way to schedule your kids’ free time this summer

Other stories you might like from Clark Howard:

Related

34 retailers likely to close or go broke before the end of 2017

Published: Sunday, May 28, 2017 @ 1:03 PM

Via @tvnewzguy / Twitter
Via @tvnewzguy / Twitter

The bloodbath at retail that’s seen more than 3,600 stores closures announced since January isn’t over yet.

We could reach the 10,000 store-closure mark by the end of the year, according to credit consulting service F&D Reports.

Read more: 2017 retail closings — What you need to know

Which retailers are next to fall?

F&D’s research has identified 34 retailers suffering from poor sales and too much overhead that it says will likely announces more store closures en masse or bankruptcy filings before the year is out.

  • Shopko
  • National Stores
  • Forever 21
  • Charming Charlie
  • Fresh Market
  • Bloomin’ Brands
  • Ascena
  • Tailored Brands
  • Rent-A-Center
  • Bravo Brio
  • Trans World
  • Fred’s
  • Rite-Aid
  • Conn’s
  • Tuesday Morning
  • Guitar Center
  • GNC
  • Neiman Marcus
  • Toys R Us
  • Sears Hometown
  • J. Crew
  • Noodles and Co.
  • Lumber Liquidators
  • Charlotte Russe
  • Bon-Ton Stores
  • Tops Markets
  • Claire’s
  • Ruby Tuesday
  • Sears Holdings
  • 99 Cents Only
  • Ignite
  • Perfumania
  • Le Chateau
  • Gymboree

It’s not just Amazon killing the brick-and-mortar stores!

We should note that some of the stores listed here — SearsBloomin’ Brands and Ruby Tuesday, in particular — have announced anywhere from dozens to more than 150 store closures this year already.

Meanwhile, it’s been widely reported that others like Gymboree and J. Crew are facing imminent bankruptcy.

Yet in the midst of all the media coverage, one important point is sometimes overlooked: It’s not just Amazon killing off the brick-and-mortars. It’s also that we’re way “over-stored” in the United States, as money expert Clark Howard would say.

“We have far too many retail locations, shopping centers and branches of different chains,” the consumer champ notes. “But stores that are meeting your needs with low prices will continue to thrive.”

The sad truth for ailing retailers is that we have 24 square feet of retail space for every person in the United States, according to F&D.

By comparison, Canada — the next country on the list with the most retail space — has 16 sq. ft. of retail space per capita.

Australia — the third most heavily retailed country in the world — has only 11 sq. ft. That’s less than half the square footage of retail space per capita that we have!

Read more: Lidl — Aldi’s archrival — announces first store openings

Liquidation sales underway at 138 J.C. Penney locations

Other stories you might like from Clark Howard: