Ways concerning how to Improve Credit Score Right after BankruptcyOutdoor Lighting Options That “Pop”Outdoor Lighting Options That “Pop”Outdoor Lighting Options That “Pop”Outdoor Lighting Options That “Pop”Outdoor Lighting Options That “Pop”Outdoor Lighting Options That “Pop”Outdoor Lighting Options That “Pop”Our Daily Journey: don’t be cruel

What You Should Know Before You File Bankruptcy

Are you overwhelmed with debt, trying to figure out what affects credit and if your credit scores are going to be dropping  then worrying how to improve credit score?  Are you getting harassing calls night and day, or how about at your place of work?  Do your kids need school supplies and new clothes, and you’re simply worried about feeding them, and keeping them healthy?  Will your utilities be shut off soon, do you get home and see that 2 or 3 day notice on your door that the water or gas is going to be shut off?  Are you at your wit’s end?  Are you feeling you haven’t any where to turn?  I can tell you been there done that, its stressful as hell trying to figure out where to spend each dime, each nickel and penny you have, what you can do without and what you have to pay and where to get more money.  Its especially tough if you got kids it just brings the whole thing to another level.

When you are drowning in debt, the enticement may be simply to throw up your hands, run away from it all, and declare bankruptcy.  Some attorneys will even suggest that you do it and its so easy and all you may owe is only 10k.

Bankruptcy should only be a last option, for a number of reasons.

1.  It isn’t that straightforward to start over with a clean slate any more.  An impactful law called the Bankruptcy Abuse Prevention And Consumer Protection Act of 2005 makes it very difficult for individuals and couples to discharge their liabilities.  They really work you over on your debt and what you can pay back.

2.  It forces debtors into a debt repayment schedule that runs for at least 5 years and barely allows consumers to keep up in this period, in which the debtor must pay the vast majority of their disposable income towards a debt plan they have little control over.

3.  Bankruptcy remains on one’s credit history for up to ten years. And if an employer, mortgage or auto finance company asks if you have ever declared bankruptcy, naturally you must answer truthfully.

So that means that in some ways, bankruptcy remains on your record forever.

4. Bankruptcy is not guaranteed to discharge your obligations.

For instance, you still must pay income taxes, you still have to pay child assistance, you still have to pay student loans, and there are numerous other debts that you are required to pay.

This isn’t to say that one should never consider bankruptcy under any circumstances.

You must consult with a professional bankruptcy lawyer before you do anything, though, and be totally fair about your circumstances and your prospects for revenues in the following couple of years.

You should also do your own research before you even go talk to a solicitor, so you can make the final call yourself.  You must know the difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy, find out exactly how long each kind of bankruptcy will remain on your credit score, and learn what kinds of liabilities you’ll continue paying.  You need to get a pragmatic view of what your life will be like after you filedeclare Chapter 7 bankruptcy.

Chapter seven fundamentally means handing over all property not exempted from insolvency cases so it can be sold off to repay yourdebts. There is not any repayment agreement. It stays on your credit history for up to 10 years and nowadays, with the new bankruptcy laws, many people who aren’t earning that much money find that their income is too high to qualify for this option when taking the Means Test.

Chapter thirteen requires a repayment plan and stays on your credit score for 10 years, though it is often removed after seven years.

Before you’re making a call that will have an impact on your life and your credit for years to come, do your research, find out whether or not it is worth filingdeclaring bankruptcy, and consider what your other options may be, such as making an attempt to come up with your own liability payoff plan – one that you have control over. Other options might include a short sale of your house, a mortgage modification, selling off assets, public assistance, and others.

Confused about  Bankruptcy? We will help! Affordable bankruptcy for under $600 plus fees. Real help is waiting for you at http://legalhelpmn.org.

The importance of your score will become very apparent when you apply for a loan whether it be to buy a home or a car loan.  Even credit cards will charge someone double the amount of interest to someone with bad credit vs someone with good credit.   If you want to have your dream home within reach and an affordable car loan best thing is to keep your credit score healthy.  If your score is not at its best then the best thing to do is to get your score up you just need to do the work and learn the systems.   What ever system you use to show you how to improve credit score keep in mind it well require you to learn a few things and require work on your part but it is do able, and learning what affects credit can be a reality for you if you are willing to learn and do some work.

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    For more information and ideas on how to fix credit and improve your credit score stay tuned for more information but the reality is that learning about your credit or at least getting a handle on how to improve your credit is a wise investment not only for today but in your future. You have the choice of paying thousands of dollars to a someone to do the work for you or you can learn how yourself and take control of your financial future and the choices you make but it can be done. I wish the best and many successes in your future if you found that this information was helpful leave me a comment. Ernie Good Luck To Your Many Successes Important Disclaimer: Questions and answers provided on this website and blog is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice. This blog and its content is copyright of www.IFixBadCredit.net. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge www.IFixBadCredit.net as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining www.IFixBadCredit.net permission.

Do You Know What The Different Types Of Interest Are ??

One of the keys to make sure that you never have to worry about what affects your credit or how to improve your credit is never having to get yourself in that situation that being said debt and having too much debt and what kind of debt is usually what gets people in trouble.   Its pretty had to stay out of debt and some times credit cards can be that necessary evil that we just have to learn how to manage and control, part of that is understanding the kind of interest you may be paying when you get a credit card so you know what you are dealing with.

Let’s just get into the  basics.

Annual Percentage Rate
The interest rate (Annual Percentage Rate) is the sum specified in percentage expression to a credit amount which the credit receiver pays for using it counting on the certain period (month, quarter, and year).  This in simple terms is what it is costing you to have credit with that credit card company or loan, basically what it costs you to borrow money over a year.

For example, 5 percentage quarter rates is equal to 20 percentage annual rate,, so for every $100 dollars you borrow it will cost you $20 over that same year.

Interest rates are usually estimated in relation to:

* to the sum on which purchasings are made; sometimes the more you borrow the less it cost its kind of like buying in bulk .. but its money.

* to the sum of monetary advance (cash withdrawal); the more and faster you want money the more its going to cost you like going to a convenient store
* to the sum of the translated balance sheet from other card. pretty much the more business you bring over from one card the more they are willing to give you a better deal.

Annual interest rate on purchasings (APR for purchases).  The rate is applied to the total sum of what ever it is that you purchased with the given credit car, when that says total it may cost $100 but do not forget taxes and if you bought the extended warranty on that TV you will be paying interest on that too.

Annual interest rate on the transfered balance sheet (Balance Transfer APR), the rates extends for the sum which has been transferred from one credit account to the other.   Annual interest rate for the total sum of monetary advance (Cash Advance APR) it is applied to the sum which has been drawn from account in the form of cash.  So if you do any kind of transferring do not forget to add what it costs to do that if your bank or credit card has any fees for doing that, you will pay interest on that as well.

The multi-level interest rate (Tiered APR), this is rate changes as the size of the balance on the card changes. For example, 16 % is charged when the balance is from 1$ to 500$ and 17 % on the balance over 500 dollars.  Before recent changes you were just hit with these now you have to be notified which is good no more surprises but when you do sign up for a new card you have to really read your account information to see how it may apply to you.

Application of the penal interest rate (Penalty APR).  Lets say a payment arrives more than two times late during the period of six months, the creditor has the right to apply punishment in the form of an interest rate increase? Basically because you are continuously late you are no longer a good client and more risk.

Annual interest rate at a preferential induction period (An introductory APR). Such interest rate will be applied to the account till certain time. For example, the annual interest rate can equal 0 % with period of validity of the offer lets say for 6 months or something.  But after the expiration of this term the rate which is specified will be applied to the entire balance.  PAY ATTENTION ON THIS PART.   Some companies will apply the interest rate of the entire term all at once so if for the last 6 months no interest charges have been applied and there is still an outstanding balance of any kind they will take all those interest rate charges that you did not have to pay and slap them on all at once so beware.  Other companies will just start from that day the 6 months are over and no big deal which makes things much more easier manage but its up to you know what kind of deal you got yourself into.

Also keep in mind that the interest rate on cash withdrawal always is considerably higher than just regular purchase transactions.

Different types of penalties or fees:

Under certain circumstances credit companies levy a payment from the client.

The annual installment (Annual Fee) is basically the annual fee for just having the card.  Now only about 20 % of credit establishments establish an annual installment, on the card automatically and it becomes something you owe and you can have a zero balance since you have not used your card, and then you owe that $20 annual fee and if you do not pay it with late fees and interest you can easily see that grow to $100 and then before you know it your credit scores are dropping.  Been there done that.

Payment for cash withdrawal of money (Cash Advance Fees). The credit companies also establish a certain payment at cash withdrawal from the account (through an ATM, for example), and they do charge extra for that little service so only do it if you really gotta do it.

For those who are looking for a place where to find out about credit reports, are welcomed to visit this credit report monitoring site – there is much information about credit monitoring and how to order the service.

The importance of your score will become very apparent when you apply for a loan whether it be to buy a home or a car loan.  Even credit cards will charge someone double the amount of interest to someone with bad credit vs someone with good credit.   If you want to have your dream home within reach and an affordable car loan best thing is to keep your credit score healthy.  If your score is not at its best then the best thing to do is to get your score up you just need to do the work and learn the systems.   What ever system you use to help fix your bad credit keep in mind it well require you to learn a few things and require work on your part but it is do able, and learning how to fix bad credit can be a reality for you if you are willing to learn and do some work.

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    For more information and ideas on how to fix credit and improve your credit score stay tuned for more information but the reality is that learning about your credit or at least getting a handle on how to improve your credit is a wise investment not only for today but in your future. You have the choice of paying thousands of dollars to a someone to do the work for you or you can learn how yourself and take control of your financial future and the choices you make but it can be done. I wish the best and many successes in your future if you found that this information was helpful leave me a comment. Ernie Good Luck To Your Many Successes Important Disclaimer: Questions and answers provided on this website and blog is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice. This blog and its content is copyright of www.IFixBadCredit.net. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge www.IFixBadCredit.net as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining www.IFixBadCredit.net permission.

What Are The 10 Things You Must Know To Protect Yourself From Identity Theft

Having to learn how to improve credit and as well as techniques and strategies and the different factors as to what affects your credit can help you deal with being the victim of identity theft.  I have recently gave you some ideas on what you can do to look out for and the warning signs before you become a victim of identity theft.  So we are going to give you some more steps on what you can do to reduce the risk of identity theft even more. So let’s get started on what is necessary for you to do and what measures you can take to avoid the whole scenario all together.

Actually all the steps are very simple,  all you really have to do is just pay attention to some of the things that you do on a every day basis with your personal information.

1. For ID purposes just use your driver’s license or state ID. Never carry your social security card with you, also don’t write down somewhere on something and carry it around with you do yourself a favor and remember it if for some reason you do have issues remembering it, then use take it our when you need to but other than that your social security card should be stored in a private place along with all your other important papers, and other securities in a safe place.

2. Replace possible paper documents, invoices, and other payments with electronic systems. Subscribe to an electronic document service and even see if  you can direct deposit of your pay check to your account also get yourself a scanner they are easy to use once you get the hang of it and you can save a ton of storage space and really get organized.  Best type of scanner is the kind that let you scan multiple pages of paper vs. scanning one item at a time and you can even print and fax now a days with most scanners making it even more handy.

3. Use effective codes and passwords. I know its easy to remember your bday and you kids bday or your anniversary … but don’t do it its the most popular form of passwords and Identity thieves know this so here are few things you can do.

a)  Choose difficult passwords, mix figures and letters; basically mix it up lets say use March@1 vs just something simple will make your password more stronger and not so simple.

b) don’t use the personal information for your PIN code, for example ? date of birth, a name of the loved one or number of phone. Like I said before this is the most used and abused method for choosing a PIN code and the thieves know it use something random like when you went on that killer vacation trip no one really knows about or when you got promoted.

c)  don’t disclose codes and passwords, even in the house, and change them periodically.  In other words just because its your home, does not mean its safe so don’t have stuff laying around your room that clearly states passwords to important things and if you have your stuff stored on your computer than make sure even your computer has a password as well.

4. Never give out your personal information to unknown persons, I know this is a no-brianer but you have no idea how many people do it every day because they get an email from someone that looks legit but its really just a scam to get your information.  Its usually some kind of email that you may get asking you to verify your personal information for security reasons if you are not sure CALL THEM!!!  SO DON’T answer unfamiliar e-mails, and don’t answer automatic telephone messages which force you to give the personal information for settlement that may have arisen with your bank account.  One of the lookout signs you can do is look a the address of the email does it end with a .com or a .ru for example meaning the domain is from Russia.

5. If you have a house computer, establish and regularly renew the anti-virus software and options of safety of the browser.  I do not think I can stress this enough many sites can be innocent as well as emails and nothing may happen to your computer for days or months but what happens is that a trojan invades your computer and just sits there for some time.  It does not do anything to your computer its main purpose is to steal your information it works just like it sounds as a trojan horse, when you least suspect it is when it attacks a good program will stop this from happening.

6. Ensure safety of your mobile phone, a handheld computer or the laptop, use special programs of enciphering.  When you want to check on your bank info etc etc use a computer or some kind of special software I know its cool how you can look up your bank info anywhere with your phone where there are also devices that thieves use call skimmers that steal your info from the air waves.

7. Don’t fill out tons of offers for credit cards, containing forms with the personal information.  We all get stuff in our emails and they may look good and sometimes they come with some great offers from some credit card companies with a killer interest rates.  First verify that its legit before you start filling out all those forms.

8. Shred all important documents when you are going to throw them out. Also before you toss out old computer stuff destroy it, including all important digital media, as for recycling old computers make sure that your hard drive is formatted and everything is deleted before you toss out that old computer, that includes all devices that store information and don’t forget your phone.

9. Use a safe secure mail box. If your house mail box isn’t safe, consider possibility of actually dropping off your mail at the post office.  I have no idea how many times I have gone to the home of a client and see their out going mail clipped to the outside of the door for the mail man to pick it up.  Its unbelievable, thats like leaving money on the front seat of your car and expecting nothing to happen.

10. Beware of your surroundings when using your PIN code. Remember your environment when purchasing in public places not just your bank but when you are standing at the check out counter and there are people usually a little closer to you than at the bank that can easily see how you input your code just beware of your surroundings more than anything.

So I am sure that if you follow these simple steps you will less likely become another victim of identity theft?

And for those people having credits the question of credit report monitoring is as crucial now as never before. It is not only about credit monitoring, this also allows to save money, time, and nerves and be fast in solving loan related problems. Those who are searching for a spot where to learn about credit report, are invited to visit this credit report monitoring site – there is much information about credit monitoring and how to order the service.

Today we live in the world where information makes life easier.

That is why if you are properly armed with the knowledge you will always find the solution to any bad situation. So, please make sure to visit this web site on a regular basis or – the easiest way to take care of it – sign up to its RSS. In such an easy way you will have your hand on the pulse of the freshest info updates about topics like credit cards, business loans,  and more.

The importance of your score will become very apparent when you apply for a loan whether it be to buy a home or a car loan.  Even credit cards will charge someone double the amount of interest to someone with bad credit vs someone with good credit.   If you want to have your dream home within reach and an affordable car loan best thing is to keep your credit score healthy.  If your score is not at its best then the best thing to do is to get your score up you just need to do the work and learn the systems.   What ever system you use to help you learn how to improve credit keep in mind it well require you to learn a few things and require work on your part but it is do able, and learning what are the different factors on what affects your credit can make a world of difference for you.

a

    For more information and ideas on how to fix credit and improve your credit score stay tuned for more information but the reality is that learning about your credit or at least getting a handle on how to improve your credit is a wise investment not only for today but in your future. You have the choice of paying thousands of dollars to a someone to do the work for you or you can learn how yourself and take control of your financial future and the choices you make but it can be done. I wish the best and many successes in your future if you found that this information was helpful leave me a comment. Ernie Good Luck To Your Many Successes Important Disclaimer: Questions and answers provided on this website and blog is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice. This blog and its content is copyright of www.IFixBadCredit.net. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge www.IFixBadCredit.net as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining www.IFixBadCredit.net permission.

What Are The 5 Ways You Can Protect Your Credit

When it comes to identity theft, and how to improve credit score it is sometimes one of the major reasons so many people are left figuring out how to fix bad credit and how to fix bad credit scores because someone else used their credit and messed it up after they stole their identity.  Which is becoming more and more common believe it or not it can really ruin your life.  So let us continue talking about credit card protection measures and just simple ideas that you can do to protect yourself on an everyday basis.

For Identity theft to become more revealing, and also decrease the amount of fraud risk  it is recommended to try these simple procedures:

1. Regularly monitor your account, also you should be convinced that all operations are authorized. Most people just get the statements in the mail toss it aside stick with the rest of the stuff they get and it just piles up and eventually just piles up.  I have even been guilty of it where I did not pay attention the fees and just tore off the stub to make the payment wrote the check and sent off.  But then one day I took my time only to be really pissed off on some fees that I had no idea were there and that I authorized them. So take the time to check your statements, they do send them to you for a reason.

2. Use a service to notify you by e-mail or text, for  address modification or large purchasing. This service usually is offered by most banks. Check the e-mail regularly.  Many banks or credit cards or your investment accounts will offer you this service free of charge if they charge you might want to open your account somewhere else it should be free there is no reason why it shouldn’t it protects everyone.

3. Attentively look through accounts of payment and reports from banks. This is a little bit of a rehash of the first tip but it does not hurt to remind you again check your statements especially your bank statements and credit card statements.

4. Check your credit. I have no idea how many times I have said this but this is the most important thing out of anything is to know what is appearing on your credit.  I have known people have credit cards used in their name and they never even knew because the other person was paying on time.  Or using their identity in another state and having a life in their name and credit and they were paying the bills.  Your credit report will show you everything that is coming up on your name including the addresses that you have used or are using when you apply for stuff.  YOU can get a free credit report once a year by visiting www.AnnualCreditReport.com.

5. Consider signing up for credit monitoring. For the best protection, be convinced that services perform monitoring of all three cores of credit bureaus.  This is becoming to be a very popular business where they will notify you anytime someone runs your credit or a new account is opened up even if its you doing it so that way you know what is going on.  But just make sure they cover all the 3 big agencies, Transunion , Equifax, Experian.

If you have found out that you happen to be a victim of identity theft it is necessary to do the following actions:

1. Notify the bank, the credit card company immediately, by phone and in writing and make sure you state in the letter the circumstances to the best of your knowledge.

2. Close any accounts which you think may be in jeopardy and compromised as soon as possible.

3. Consult your bank about their policies of how they handle victims of identity theft to help you to solve and overcome any potential losses.

4.  Get a copy of your credit report of all three credit bureaus, you want to report a fraud alert on your credit . It will act 90 days from the date of registration, it won’t allow other creditors to use your name without preliminary identification. During these 90 days you also can subscribe for a longer period of time ?.

6. File a police report as soon as possible they will not be able to do much but its good to have a record that you have reported and it can help your case in fighting any charges that are not yours when they come collecting for money that you did not use.

7. You also can also file a report to the federal trade commission and report that you have been a victim of identity theft as well.

So now you know exactly what to do and how to act in case you happen to be a victim of identity theft as well as some precautions you can use as well.  Just be careful and attentive as it will help you to prevent any bad situation with your credit cards, credit history and your personal money.

And for those people having credits the matter of credit report monitoring is as urgent now as never before. It is not only about loan monitoring, this also allows to save money, time, and nerves and be quick in solving loan related issues. Those who are searching for a place where to learn about credit report with score, are welcomed to go to this credit report monitoring site – there is much information about credit monitoring and how to order that service.

Today we live in the world where information makes life easier.

That is why if you are properly armed with the knowledge you will always find the solution to any bad situation. So, please make sure to visit this web site on a regular basis or – the easiest way to take care of it – sign up to its RSS. In such an easy way you will have your hand on the pulse of the freshest info updates about topics like credit cards, business loans,  and more.

The importance of your score will become very apparent when you apply for a loan whether it be to buy a home or a car loan.  Even credit cards will charge someone double the amount of interest to someone with bad credit vs someone with good credit.   If you want to have your dream home within reach and an affordable car loan best thing is to keep your credit score healthy.  If your score is not at its best then the best thing to do is to get your score up you just need to do the work and learn the systems.   What ever system you use to help you improve your credit keep in mind it well require you to learn a few things and require work on your part but it is do able, and learning how to improve credit can be a reality for you if you are willing to learn and do some work.

a

    For more information and ideas on how to fix credit and improve your credit score stay tuned for more information but the reality is that learning about your credit or at least getting a handle on how to improve your credit is a wise investment not only for today but in your future. You have the choice of paying thousands of dollars to a someone to do the work for you or you can learn how yourself and take control of your financial future and the choices you make but it can be done. I wish the best and many successes in your future if you found that this information was helpful leave me a comment. Ernie Good Luck To Your Many Successes Important Disclaimer: Questions and answers provided on this website and blog is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice. This blog and its content is copyright of www.IFixBadCredit.net. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge www.IFixBadCredit.net as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining www.IFixBadCredit.net permission.

Hidden Debit Card Fees

Backgrounder: Behind the Battle Over Hidden Debit Card Fees

by Marian Wang ProPublica, March 21, 2011, 1:28 p.m.March 18, 2011March 22, 2011

A provision within the financial reform bill that would regulate debit card transaction fees could be postponed by a year or two following fierce objections from banks. Specifically, banks large and small are objecting to a Fed proposal to limit what are known as interchange fees 2014 the fees they collect from merchants every time a customer uses a bank-issued debit card to make a purchase.

Lawmakers in both houses of Congress last week drafted legislation to postpone writing new debit interchange rules for one to two years. According to Dodd-Frank, the rules were supposed to be finalized by April 21 and to go into effect by July 21.

Consumer groups have decried the delay, saying it would postpone much-needed reform to a system that is 201Cuncompetitive, non-transparent and harmful to consumers [1]201D [PDF]. At the same time, these groups voiced concerns that if interchange reform passes, banks will levy other charges on consumers 2014 something many banks have warned they may do.

Given the controversy, we2019re taking a closer look at how interchange works and what2019s at stake for banks, for businesses and for consumers.

How Interchange Works

Many consumers are only vaguely aware of the existence of the interchange fees2014or 201Cswipe fees201D2014but they2019re still paying for them because the costs are ultimately passed on to consumers [2] in the form of higher retail prices. The fees often cause retailers to offer discounts for cash or set minimums for credit and debit purchases.

Aside from the argument that paying with plastic is convenient for both consumers and merchants, the justification for interchange fees is partly that banks assume some risk [3] in these transactions, particularly with credit purchases. But because debit transactions are simpler2014a matter of moving money from one account to another [4]2014some have argued that debit interchange fees are unjustifiably high.

The Dodd-Frank financial reform bill takes aim at only these debit interchange fees. It tasked the Federal Reserve with adopting standards to determine whether interchange fees are 201Creasonable and proportional201D to the cost of processing the transaction.

What the Fed came up with was a plan [5] [PDF] to cap debit interchange fees at 12 cents per transaction2014a proposal that banks appear to uniformly hate [6]. They currently get about 1 to 2 percent of each debit transaction, which averages out to about 44 cents [7].

The exact numbers are squishy here and are negotiated between merchants and payment networks like Visa and Mastercard, but generally fees for credit cards are higher than for debit cards2014and they get even higher if the cards have fancy reward programs. (The card networks also collect their own 201Cnetwork fees [8]201D from merchants, which they keep, but as the New York Times has noted, those fees are smaller, and they2019re not particularly controversial.)

Some have pointed out that this means merchants2014and customers, in the form of higher prices2014essentially subsidize the purchases and perks of card-users [9]. According to an analysis released last year [10] [PDF] by the Boston Federal Reserve, such subsidies average more than $1,000 for card-using households each year.

It2019s also worth noting that debit card payments with PIN numbers are less costly for merchants than debit card payments with signatures. The larger fees are why some banks have tried to encourage customers to use signature debit instead of entering their PINs, even though PIN transactions are more secure [11] and cost businesses less.

The debit transaction themselves, as the Washington Post has pointed out, only cost a few pennies each to conduct [12] if you don2019t count the infrastructure costs. (As it happens, the Fed isn2019t counting infrastructure costs in calculating the fee cap. Costs like network connectivity or overhead costs, 201Ccannot be attributed to any particular transaction, given that they could not be avoided if any particular transaction did not occur [13],201D Federal Reserve Governor Sarah Bloom Raskin testified last month.)

As Reuters columnist Antony Currie points out in his handy FAQ [14], Visa Europe has capped its debit card interchange fees at 0.2 percent of each transaction, and U.S. interchange rates currently average about six times that.

Billions at Stake for Banks, Which in Turn Warn of Impact on Consumers

In their lobbying pitches to regulators, banks and merchants have both argued their positions by citing the effect of the proposed rule on consumers.

201CThe concerns that we have raised revolve around how this is going to impact basic free checking accounts, particularly for low-income Americans,201D a spokesman for the American Bankers Association [15] recently told the St. Petersburg Times.

The banks2019 professed concern for the low-income is interesting: As financial blogger Mike Konczal has pointed out, there really is no such thing as 201Cfree201D checking. There2019s just 201Ca monthly fee that is waived if you do certain things [16]201D and meet certain requirements, like a direct deposit or minimum balance2014which low-income people are the least likely to be able to meet, anyway.

The big banks2014whose cards account for 80 percent of debit transactions2014stand to lose billions in revenue each year. (The amount has been pegged at anywhere from $12 billion [17] to $20 billion [18].) The New York Times points out that debit transactions are forecast to overtake cash purchases by 2012 [8].

Many banks say they will be forced to cut rewards programs or eliminate services such as free checking. Some, like JPMorgan Chase, are even considering putting a cap on the size of debit purchases [19].

Despite an Exemption, Community Banks Say They2019re Concerned Too

Big banks aren2019t the only ones complaining. Even though the Fed2019s proposal exempts banks with less than $10 billion in assets from the interchange cap, and Visa has said it will implement a two-tier system to protect small banks [20], community banks have argued that the exemption won2019t work because merchants will discriminate and refuse to accept their cards, forcing them to lower their fees in order to remain competitive with the big banks.

201CThis rule will unquestionably lead to more consumer fees, fewer product choices and greater consumer confusion regarding card acceptance,201D the trade group Independent Community Bankers of America has stated [21].

Fed Chairman Ben Bernanke has said 201Cit is possible [22]201D that the exemption won2019t work, but Sen. Richard Durbin2014who proposed the community bank exemption in the Dodd-Frank law2014has said Bernanke is wrong. He pointed to 201Cvery strong [23]201D rules by card companies that bar merchants from refusing cards [23] within their networks.

Some advocates of interchange fee reform, including Durbin, suspect the bigger banks are manipulating the community banks and credit unions to raise their objections. Durbin called it 201Cone of the most active lobbying efforts I’ve ever seen.”

201CThe fact is credit unions and smaller banks are just more effective spokesmen on this issue right now,201D Politico quoted [24] an anonymous executive at a large bank as saying.

Retailers Argue Current System Gives Banks and Card Networks Too Much Power

The National Retail Federation, a trade group for retailers, has argued that the current payment system is not competitive and that Visa and Mastercard2014the two major networks in the debit world2014have too much power to control and inflate fees.

And while banks have argued that competition between Visa and Mastercard is strong [3] and enables merchants to apply pressure to drive down fees, a piece in the New York Times from January suggests the competition actually goes the other way: Payment networks compete to keep the banks happy with higher fees [25]. From the Times:

As debit cards became the preferred plastic in American wallets, Visa has turned its attention to PIN debit too and increased its market share even more. And it has succeeded2014not by lowering the fees that merchants pay, but often by pushing them up, making its bank customers happier.

In an effort to catch up, MasterCard and other rivals eventually raised fees on debit cards too, sometimes higher than Visa, to try to woo bank customers back.

Even the federal government2014which some have argued [26] should be able to negotiate rock-bottom interchange fees because the risk the banks front for the feds is next to nothing2014has had trouble controlling the millions it pays in fees deducted from debit and credit transactions.

201CSome federal entities have attempted to negotiate with the card networks to lower interchange rates applicable to their transactions, but with limited success [27],201D read a 2010 Government Accountability Office report. An earlier GAO report found that non-government merchants also had little success [28].

Merchants Promise They2019ll Pass Savings On to Consumers

Small business owners and major retailers have argued that the Fed plan to cap interchange fees is a pro-consumer move, according to Bloomberg, which reported that about 170 small business owners [29] recently flew to D.C. to relay that message.

Several retailers supporting the cap [29] have promised to share their savings. Here2019s the Wall Street Journal [30]:

Retailers maintain that most of their fee-cut windfall would be shared with customers. Home Depot, among those lobbying most aggressively for the cuts, said: “Any relief as it pertains to these fees will give the Home Depot the ability to reduce our cost of doing business. … Such benefits are likely to include lower prices and investment in the business to better serve customers.”

There2019s nothing in the proposed rule or in Dodd-Frank, however, to ensure that savings are passed on.

A 2009 government report found that even if interchange fees were to be capped, 201Cthe ability of merchants to pass on their savings from lower interchange fees would depend heavily on the respective merchants2019 size and market share [31].201D [PDF]

The Fight Continues as Lawmakers Consider a Time-Out

In addition to heavy lobbying on Capitol Hill, banks have taken their pleas directly to consumers by setting a website called Don2019t Make Us Pay [32]. It warns consumers that 201CCongress and the Federal Reserve want to force YOU to pay more to use your debit card.201D201CNO MORE REWARDS,201D 201CMORE RESTRICTIONS,201D 201CHIGHER FEES,201D 201CEND OF FREE CHECKING,201D the website warns. 201CTELL CONGRESS NO!201D (Hat tip to Slate [33] for flagging the site.)

The group behind the website is the Electronic Payments Coalition, whose members include [34] the major banks, bank trade groups, and both Visa and Mastercard. Politico reported that the coalition has also been running television ads [35] and placing ads in D.C. subway cars.

The Hill reported that merchant groups have also taken out ads [36] to promote interchange fees, though between banks and merchants, NPR notes that banks have the edge in the fight [37] based on financial heft:

Commercial banks, credit unions, and Visa and MasterCard2014who run the biggest debit card networks2014spent a combined $75 million lobbying on all issues in Washington last year, nearly double the retail industry’s $40 million, according to the nonpartisan Center for Responsive Politics, which tracks such spending.

Financial firms2019 campaign contributions during the 2009-2010 cycle also were twice those of merchants, according to NPR.

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