Credit Card Debt Management

Summer is a time for visiting family and friends, going on missions trips, traveling to faraway destinations and dream vacations, or enjoying a wedding followed by a honeymoon. In short, there’s a lot of traveling going on during these few months.

It can be easy to get caught up in the trip planning and the awe and wonder of sight-seeing, but vigilance is a must when it comes to your credit cards. So how does a person protect their information when jet-setting around the world?

The Kansas City Star has a few good tips, and below are some of the highlights:

-Report lost or stolen cards immediately. Most misuse of your card(s) will occur within a few days, so time is of the essence.

-Memorize your PIN. It may seem like a no-brainer, but there are those unfortunate few who choose to write their PIN down and keep it in a “safe place” in their wallet. Choose an unobvious PIN (i.e. not your birthdate) and try to change it up for each different card.

-Check your card after transactions, particularly in busy locations like restaurants. This will help you ensure, first of all, that you didn’t leave it on the counter/table/floor and, second of all, that the employee helping you handed you the correct card.

-Keep track of your trash and receipts, particularly when they contain personal information and/or account numbers.

-There may be card restrictions for traveling overseas, so call your credit card issuer beforehand to be sure. This will also warn them to expect to see international charges on the card so it won’t be a red flag.

Overall, traveling with credit cards in tow are just like traveling with cash in tow. Keep it close to the vest and use common sense. Your travels will be happier, and your credit report will thank you for it.

By now, there’s been plenty of hoopla about U.S. Sen. Chris Dodd’s (R-Nev.) housing bill to provide some relief for homeowners (and their lenders) in mortgage distress. The bill would put about $300 billion in a fund to refinance overly burdensome home loans at an amount 15% less than the original loan amount. This would make the payments more feasible for homeowners, but it would mean huge losses for lenders, particularly industry giants Freddie Mac and Sallie Mae.

The bill, currently stalled on the Senate floor but expected to reach President Bush’s desk this week, has spurred some public outcry. There is a perception that we, the taxpayers, are forking over taxpayer money to “bail out” homeowners who never should have qualified for these home loans in the first place. Hartford Courant blogger Jesse A. Hamilton addresses that point fairly well:

“I have to point out that the money source for this loan guarantee of $300 billion actually comes from revenue of GSEs (loan giants Fannie Mae, Freddie Mac and the federal home-loan banks.) It’s not taxpayer funded, which was Sen. Shelby’s main contribution… And the money is actually supposed to sit in a kind of fund that will guarantee newly refinanced fixed-rate loans that replace questionable subprime loans… the amount of the financing must be less than the current market value of the home, so the chance of default is less. Those that do default will be backed up by the fund.”

However, the housing bill is now coming under fire for another reason. A provision, apparently inserted deep in the proposal mid-June, calls for more stringent reporting requirements on credit card transactions. This isn’t just Visa, MasterCard, American Express, Discover. This is Google, Amazon, eBay, Paypal — any card company or third-party payment processor.

There are obviously some serious privacy issues here. Not only with credit card data and transaction data, but also with the social security numbers that double as tax identification numbers for thousands of small business owners across the U.S. Costs associated with collecting, organizing reporting the data could be a serious threat to small business owners on a budget, especially in these tough economic times. Read a concise summary of the problem, as well as an excerpt from the Senate bill summary itself, at Fort Hard Knox blog or on FreedomWorks.org.

Why does the government need to include this monitoring provision in a bill on housing assistance? It doesn’t make sense. While I do believe there is a link between irresponsible credit card spending and inability to meet your mortgage obligations and other bills, I do not think the government should stick its nose in the pot. Either help distressed homeowners or don’t, but do not use it as an excuse for increased governmental oversight and nosing around.

I miss the days of the good old rebate. A check that I could deposit straight into my bank account. Nowadays, mail-in rebates (and even some gifts) are doing away with the check or cash option and instead giving gift cards issued by one of the major credit card companies. As gifts, these are an interesting option because it’s essentially cash that can be personalized according to the gift recipient’s interests.

Again, these are essentially like cash — in no way do they function like credit cards, with interest charges and so on. These gift cards can be used anywhere a debit or credit card could be used, including an ATM. So why do they seem so much more complicated? For someone like me, who prefers to deposit rebate checks straight into the bank and act like that money doesn’t even exist, gift cards require a trip to the ATM to draw out cash and then make the bank deposit.

In my recent Visa gift card experience, I didn’t read the fine print on any fees associated with ATM usage, but the fees probably exist. At any rate, I didn’t read the fine print because I spent the money. Right away. On junk I didn’t need. There really is something about holding that card in your hand; it’s like Temptation Island.

At any rate, should you be among the fortunate ones to receive one of these cards, do read the fine print. Terms and conditions can vary greatly between card issuers, and yes, fees can crop up here and there. These might include fees for issuing the card (if you intend to gift it to someone else) and fees for non-use of the card after a certain number of months. These cards do typically have expiration dates, and if you misplace them, there may be no safety net. It just depends on whether your issuer will be generous enough to replace the lost card (for a fee, of course).

If you live in the states of Connecticut, Hawaii, New Hampshire, Rhode Island and Vermont, you probably don’t need to worry about this as much. There, these gift credit cards probably haven’t caught on with such fierce popularity. In those states, at least one credit card issuer (American Express) has determined legislative regulation makes it too “cost-prohibitive” to issue gift credit cards. Interesting.