Smart Borrower Blog

Archive for the ‘Other Loans’ Category

Credit Unions May Offer Best Credit Cards Deals

According to a recent study released by the Pew Charitable Trust, you may be much better off applying for a credit card from your local credit union than with any of the nation’s top banks. “The observed credit unions presented a distinct alternative to credit card pricing and other practices of the observed banks,” the study entitled “STILL WAITING: ‘Unfair or Deceptive’ Credit Card Practices Continue as Americans Wait for New Reforms to Take Effect” said. “In July 2009, median advertised interest rates on cards from the 12 largest credit unions were between 9.90 and 13.75 percent annually, depending on... more »

Credit Card Companies Continue to Raise Rates, Lawmakers Shocked

So, remember that new credit card law that will go into effect next February? The law is an attempt to curb credit card issuer so-called abuses and protect consumers from steep rate hikes. Well, not surprisingly credit card issuers are not happy about the upcoming restrictions on their business practices. But since the law, which will prohibit them from raising interest rates on anyone except those who are more than two months late on their payments, doesn’t go into effect until February 22, these companies are continuing with their same practices and raising rates even higher than they previously had... more »

Consumers and Banks Continue to Reign in the Credit

For the seventh month in a row, outstanding consumer credit declined in August, according to a recent Federal Reserve report. Total credit debt dropped 5.8 percent to $2.463 trillion dollars , signaling continued caution on the part of consumers and perhaps continued reluctance on the part of lenders to make credit available. The seven month declining streak is a record not seen since 1991 and consumer credit has never contracted for eight straight months in the history of the survey, dating back to 1943. Revolving credit, including credit card debt, fell to $899.4 billion in August, a 13.1 percent drop... more »

Banks to Bail Out the Government?

The Federal Deposit Insurance Corporation, the government agency that insures consumer deposits at banks, declared yesterday that its reserves are way down and that the fund it uses to protect bank deposits is now in the red. The solution: have banks prepay their fees for the next four years, including the current one, before the end of 2009. The FDIC’s money problems are a result of the many bank failures over the past two years. Back in June 2008 the agency had $45.2 billion in its fund, but after 95 bank failures in the first half of 2009 alone the... more »

Frank Wants to Push Up Credit Card Limit Start Date

U.S. Representative Barney Frank, D-Mass., intends to ask Congress to move up the effective start date of credit card legislation signed earlier this year by President Obama. Originally set to take effect in stages with a final date of February 2010, Frank is unimpressed with the changes card issuers are making ahead of the deadline for the Credit Card Accountability Responsibility and Disclosure Act. In anticipation of the new regulations, several lenders including JPMorgan Chase & Co. have raised interest rates and fees, cut credit limits, and closed inactive accounts. “We are not happy about what we are hearing on... more »

Credit Card Education Not Regulation

Some parts of the newly enacted Credit Card Act of 2009 will go into effect this week, meaning big indirect changes for many credit card users. As of today credit card companies must mail out customers’ bills at least 21 days before the due date, a longer period than the previous requirement of 14 days. Before they make any changes to customers’ rates, companies’ must now give them 45 days’ notice instead of 15 days. More provisions of the law will start in February 2010 with more disclosure regulation becoming effective in July 2010. One of the unfortunate by-products of... more »

FICO Score Changes More Forgiving

Good news for those hoping to improve their credit. Changes to the FICO model that credit agencies use to determine your credit score is more forgiving for small credit blemishes, according to a recent article in the Wall Street Journal. The new formula, FICO 08, has been made available to lenders by the big three credit agencies; Experian, TransUnion and Equifax, since last month. Unlike previous versions, FICO 08 will not ding your credit score for bills in collections originally under $100. It is also less likely to lower your scores for occasional missed payments, although those with a pattern... more »

Where’s the Small Business Help?

What is the real driving force behind our economy? Is it the big Fortune 500 companies or is it the entrepreneurs - the small business owners? If the President Obama’s philosophy is true that the economy grows from bottom up, then why has the government been focusing on bailing out Wall Street and not giving breaks to the backbone of America’s ingenuity and innovation? In a recent poll from Intuit Payroll reported in a CNN article, 75 percent of small business owners say they are not getting enough government support and that the opposite is actually true - the Feds... more »

New MDIA Law Spells Danger for Home Buyers

If you read an article in your local newspaper that said the new Mortgage Disclosure Improvement Act (MDIA) helps protect home buyers, you’ve been misled. This new law that went into affect July 30, 2009 is a wolf in sheep’s clothing. I’ll explain. What Sounds Good: Lenders must provide you with the Truth in Lending (TIL) form at least seven business days before closing. This form shows the Annual Percentage Rate for your loan. Receiving this information in advance sounds great. But wait. There is a big catch. The Potential Deception: The Annual Percentage Rate is not the interest rate... more »

Americans Cutting Back on Credit Cards More Than Others

In a new survey commissioned by international lender ING Direct , it appears that Americans are far more likely than their European counterparts to cut back on their credit card use during this recession in order to save money. A full 46 percent of Americans surveyed said they are refraining from charging their purchases with plastic, a much higher percentage than any of the other eight included countries had. For example, only 11 percent of Germans and 17 percent of Italians said they were doing the same. “Whether it’s at home, in the boardroom or in the car showroom, people... more »