Credit Card Blog

A new research study shows that the overall safest card issuers are: #1 Bank of America; #2 American Express; #3 tie - Discover and First National Bank Omaha; #4 Citibank; and #5 Navy Federal Credit Union.

Javelin Strategy & Research says that its research also showed that in fraud prevention Citibank ranked top and in fraud detection American Express ranked as #1. More than half of the top card issuers still require full nine-digit SSNs when interacting with customers, whether by phone, Internet or mail.

The number of issuers offering transaction alerts for transactions such as payment past due, new account set up, foreign transactions and replacement cards is a missed opportunity for issuers. The lack of alerts for changes to personal information makes issuers especially vulnerable to new accounts fraud and account takeover. Only 16% of card issuers provide an alert for physical address change. More than 80% of issuers report having a data breach resolution plan in place. Last year, 8.4 million Americans became victims of identity fraud, with total fraud amounting to $50 billion.

We have had several posts on how legislation is trying to stop unfair credit card practices. But the reality is that the credit industry is very powerful, and unless we start speaking up and demanding change, things won’t get better.

There is an easy way to make your voice heard.

In May, the Stop Unfair Credit Practices Act of 2007 was introduced. Following is a summary summary of the legislation:

1) No Interest on Debt Paid on Time. Prohibit interest charges on any portion of a credit card debt which the card holder paid on time during a grace period.

(2) No Trailing Interest. Prohibit added interest charges on credit card debt which the card holder paid on time and in full.

(3) Limits on Penalty Interest. Prohibit interest rate hikes on a credit card account unless the card holder agrees to them at the time, and, in any event, limit penalty interest rate hikes to no more than a 7% increase.

(4) Apply Interest Rate Increases Only to Future Debt. Require increased interest rates to apply only to future credit card debt, and not to debt incurred prior to the increase.

(5) No Interest on Fees. Prohibit the charging of interest on credit card transaction fees, such as late fees and over-the-limit fees.

(6) Restrictions on Over-Limit Fees. Prohibit the charging of repeated over-limit fees for a single instance of exceeding a credit card limit, and allow such fees to be charged only when a card holder’s action, rather than a penalty, causes the limit to be exceeded.

(7) Fixed Credit Limits. Require that card issuers must offer consumers the option of operating under a fixed credit limit that cannot be exceeded.

(8) No Pay-to-Pay Fees. Prohibit charging a fee to allow a credit card holder to make a payment on a credit card debt, whether payment is by mail, telephone, electronic transfer, or otherwise.

(9) Reasonable Currency Exchange Fees. Require currency exchange fees to reasonably reflect the credit card issuer’s actual costs.

(10) Prompt and Fair Crediting of Card Holder Payments. Require payments to be applied first to the credit card balance with the highest rate of interest, and to minimize finance charges. Prohibit late fees if the card issuer’s actions caused the delay in crediting the payments.

(11) Prime Rate Reference. Require interest rates linked to a “prime rate” to use the prime rate published by the Federal Reserve Board.

(12) Annual Audit. Require the credit card issuer’s primary regulator to perform annual audits to ensure compliance with credit card requirements and prohibitions.

(13) Improved Data Collection. Improve existing data collection efforts related to credit card interest rates, fees, and profits.

(14) Transition Period. Allow credit card issuers six months to implement the bill’s provisions.

You can share your views on the credit card industry with your Senators and Congressional Representative by using the form at Consumer Action.

If you take a close look at your credit cards, you’ll probably wonder what all those numbers stand for. Every digit actually stands for something specific. Let’s have a look at each of those numbers in sequence.
The First Digit

Gasoline cards, department store cards and phone cards have their own programs.

The major credit card companies operate on a standardized system for assigning credit card numbers. The first digit in the series will always be a 3, 4, 5 or 6. This number designates the type of card you have. For instance, a 3 means it’s a travel and entertainment card, such as American Express or Diners Club. A 4 is Visa and Visa-branded debit cards, cash cards; a 5 is MasterCard and MasterCard-branded debit cards, cash cards; and 6 is Discover.
The Other Numbers

American Express and Diners Club use the second digit to identify the company. That means that Diners Club cards will start with either 36 or 38, and American Express cards will lead off with 34 or 37.

The remaining numbers in the series are used for other purposes defined by the issuer and card type. Generally, the numbers grouped after the opening series is the routing number of the bank and the next group is the user’s account number. The final digit is special — a check digit. This is a number calculated by applying a specific formula, and it is used as a fraud check.
Look At Your Card

American Express uses digits 3 and 4 for business or personal card type and the currency of the cardholder’s country of origin. Digits 5 through 11 are the account number. Digits 12 through 14 show the card number attached to that account. The last digit is, of course, the check digit.

Visa uses digits 2 through 6 for the bank number. Beginning with digit 7 and running through 12 or 15, you have the account number, and the last number is the check digit. The number of digits in a group may vary because Visa cards don’t all have the same number of digits.
 
With MasterCard, the second digit through digit 3 (to as high as 6) is the bank number. All remaining digits, except the end check digit, identifies the cardholder’s account.

And that’s it. A slightly complex system necessary to track billions of credit cards across the globe.

General Electric Co. issued a credit card on Wednesday it says will be the first to cut help U.S. cardholders voluntarily cut emissions linked to global warming.

The card, called GE Money Earth Rewards Platinum Mastercard, allows users the option of automatically contributing up to one percent of their card purchases to buy greenhouse emissions offsets.

In voluntary emissions markets, consumers who feel guilty about their greenhouse emissions can buy offsets, or credits, designed to represent emissions reductions that took place somewhere else, like a solar or wind power farm.

“Earth Rewards cardholders will now have a new tool to complement the ways they are already reducing their emissions,” Tom Gentile, an executive at GE Money said in a release. “They can turn everyday purchases into extraordinary rewards.”

For more info visit: http://www.myearthrewards.com/creditcard.html?  

A while ago I wrote a post on one of the most exclusive credit cards around. Well earlier this week CNN Money wrote an article about how alot of companies have introduced “black cards” and are offering some rediculous perks.

The “Black Card” is a status icon. Not only does it offer a range of exclusive privileges, but it looks cool when you pull it out of your wallet. And the titanium it’s made out of makes a nice clinking sound when it taps on the counter at the register.

The mere mention of American Express Centurion card, better known as the black card, conveys a status so rarefied that it literally can’t be quantified by banalities like credit limits, which of course its cardholders are not subject to.

But now there’s an influx of new high-end cards, offering their own fancy perks and services in an effort to take a bite out of the black card market. Whether they’ll steal any of the dark card’s thunder remains to be seen.

Membership has its privileges
Although the exact figure is undisclosed, reports estimate that there are upwards of 17,000 black cards - actually made of titanium - currently in circulation.

And plenty more people want one. Consumers with a minimum net worth of $5 million and annual income of $200,000 rated the American Express Centurion the most prestigious credit card according to a recent survey by New York-based Luxury Institute.

But to qualify for the Centurion card, which launched in 1999, you must charge at least $250,000 a year. Then there’s a $5,000 initiation fee and an annual fee of $2,500. On the plus side, there’s no Annual Percentage Rate, since cardholders are generally required to pay off their balance each month.

Although the Centurion’s costs are high, the perks are equally impressive. After all, if you’re going to spend this much money you’ll probably need some help. To wit: Cardholders are each assigned their own personal concierges who will make reservations, plan events or score sold out concert tickets.

Private shopping services afford exclusive access at top fashion houses. A call ahead to Tiffany will ensure you’ll be greeted with a personal assistant wielding champagne and invited to try on the most coveted baubles from the back of the vault.

Centurion cardholders also receive invitations to “once-in-a-lifetime” events such as a round of golf with Tiger Woods at Oakmont days before the US Open, or a Zero-G flight with Buzz Aldrin, the costs of which vary.

Special requests are also fulfilled. One cardholder had a pint-sized Bentley created for his five-year-old son to match his own.

But these many indulgences are probably beside the point for most Black Card holders, who just enjoy its prestige.

Biting into the black card market
In June, Bank of America introduced the 12.24-percent APR Accolades card, which boasts services similar to the Centurion’s, for its high net worth clients. The credit limit is $500,000 and there’s an annual fee of $295 which is refunded for VIPs. The Accolades also comes with all the premium card features such as travel discounts, a concierge, and privileges like private golf outings with Michael Jordan.

Then earlier this month, Citigroup launched its Chairman American Express card for Smith Barney and Citi Private Bank clients, which offers a personal concierge service, complimentary companion tickets or private jet arrangements and waives foreign currency transaction fees for globetrotting cardholders. There is also 24-hour emergency assistance and medical evacuation and the card’s annual fee will only set you back $500.

Merrill Lynch’s + card has a low APR of 9.99 percent, no annual fee and a line of credit as high as $250,000. Cardholders also get companion airline tickets and upgrades, airport lounge access, travel accident insurance up to $1,000,000 and concierge service. Reward points can be put towards a 529 college savings plan, trading commissions or even to pay for other purchases. For those that spend in excess of $50,000 a year on their card, additional benefits include free flight hours on Marquis jet and a dedicated assistant to remind you in advance of your loved one’s birthday or an upcoming anniversary.

Still, one of the Centurion’s greatest rivals is the the Stratus Rewards Visa, also known as the “White Card,” which can only be obtained by invitation or via a nomination by another member. After the $1,500 annual fee, you’ll get private jet discounts, travel accident insurance up to $1 million, discounts on luxury goods as well as gift bags filled with the stuff “you’d find in the celebrity bags at notable award shows,” according to the company.

In the UK, Coutts & Co.’s World card was the charge card of choice before the black card was even born. But it’s only available to Coutts clients who have at least $1 million at the private bank where Queen Elizabeth is a client.

Although the card costs about $700 a year, and must be paid off in full at the end of each month, the annual fee will be waived if the cardholder spends in excess of $100,000. Reward points can be redeemed as contributions to one of three select charitable organizations.

Perks include access to airport lounges, travel insurance and medical emergency coverage in addition to private shopping expeditions to top stores in London like Van Cleef and Arpels. Even the card itself is couture - it was designed by London-based fashion designer Ozwald Boateng.

All the better to attract the right kind of attention.

 A major credit card has launched a promotion to help knock about 75 cents off each gallon of gas.

The “Gulf MasterCard Promotion” offers new customers up to 25% rebate on Gulf gas purchases, and 2% back in rebates on all other purchases during the first 60 days their account is open. Once customers accumulate $20 in rebates, Gulf will automatically mail a $20 “Gulf Gift Card,” which can be used for gasoline purchases at any of its retail centers in the Northeast.

These terms apply for Gulf MasterCard accounts opened between July 1st and September 15th.

I came across a very interesting article by MSN Money about fast food chains and the effect they have now that they accept credit card payments. It was researched that since fast-food restaurants accept credit cards, you’re less likely to drive past — and you’ll order more, too.

We all know that high-fat and high-calorie fast foods cause weight gain — an estimated 30% of Americans are considered obese — but the combination of flavor and convenience keep them immensely popular.

Today, credit cards make those unhealthful eating habits easier than ever to adopt — and that can help you pack on the pounds.

In years past, fast-food restaurants accepted only cash, largely because credit card transactions took too long to process, impinging on the concept of “fast” food. Consumers who didn’t have enough cash on them would bypass the local fast-food joint and head on home, where the dining choices were bound to be somewhat healthier.

But technology now enables transactions to be made in seconds, and fast-food restaurants across the country are accepting credit and debit card payments. People have less reason to ignore the impulse to grab something quick.

In a new survey commissioned by Visa, 82% of respondents said fast-food purchases made with debit or credit cards are more convenient than dealing with cash, and 68% said they’re faster. Additionally, 77% said they can buy exactly what they want because they are not limited by the cash they have available.