It’s been about five years since the Credit CARD Act of 2009 was signed into law.

Over the last few years, changes resulting from the CARD Act have helped consumers pay less in fees, and better understand their credit card statements, and how much credit is costing them.

Positive changes have resulted in consumers that are more educated about the cost of credit, as well as consumers that are no longer subject to the whims of credit issuers.

Advantages of the Credit CARD Act

For consumers, some of the biggest advantages have come in the form of restrictions on the way that credit issuers can charge them fees.

Here are some of the changes resulting from the Credit CARD Act:

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In 2009, the Credit CARD Act was passed.

Among other things, the CARD Act changes how APR can be re-priced, and requires credit card issuers to be more transparent about what fees are charged — and how long it will take for consumers to get out of debt.

Many said the effects of the CARD Act would just shift the fees credit issuers charged from one spot to another and it could even end up costing consumers more in the long run.

It turns out that, for consumers, the CARD Act has truly lowered consumer costs.

At least, that’s the assertion made by a study put out by the Consumer Financial Protection Bureau.

Ways the CARD Act Lowered Consumer Costs and Fees

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Credit card fraud is one of the issues of growing concern for many consumers.

And, unfortunately, it’s easier than ever for fraudsters to get their hands on your information and then use it to make purchases, or to straight up withdraw cash from ATMs.

According to Consumer Reports, credit card fraud is a big money-maker for many scammers.

In fact, two men were recently indicted for setting up gas station skimmers at pumps in three different states. They brought in $400,000 between April 2012 and January 2013.

Wha?!?

How Does Credit Card Skimming at Gas Stations Work?

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The first day on campus.  You’re mind is full of wonder and anticipation of what the next four years will be like as you solidify adulthood.

Odds are, this is the first major foray into life without mom and dad making most of the decisions, and looking over your shoulders (your time at summer camp doesn’t count).

This is true when it comes to finances as well.

With all of this freedom, it can be tempting to get a credit card and then go a little crazy (cue Prince’s Let’s Go Crazy…).

Before you take the plunge, though, here are 5 things on credit cards a new college student must get into their heads:

1. It’s Not “Your” Money

The available balance on your credit card does not represent “your” money.  It is, in actuality, someone else’s money.
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One of the common misperceptions associated with credit cards is that using your credit card is the same thing as racking up debt.

I hear it all the time — “I don’t want to use credit cards because I hate being in debt.”  Who said just using a credit card means you’re in debt?

While using a credit card is, technically, using debt, the reality is that just using your credit card isn’t going to result in large amounts of debt.

It’s the failure to pay off your balance each month that results in credit card debt.

We can take it a step further and say that for some using a credit card is too easy and they end up spending money they can’t cover.  But for now let’s just focus on the concept of carrying a credit card balance.

Carrying a Balance = True Credit Card Debt

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Last summer payment processing giants MasterCard and Visa, along with nine major banks, agreed to a settlement that results in lower “swipe fees” charged to merchants.

However, the reduction in the fees is only temporary, in effect for eight months.  The settlement is designed to address complaints that Visa and MasterCard have been unfairly fixing credit card processing fees.

Processing fees are a charge that the credit issuers require from retailers for using credit cards.  Unfortunately for retailers, Visa and Mastercard together make up 68 percent of all credit card charges.  Retailers haven’t had much bargaining power over the processing fees with just two credit companies making up the majority of purchases.

As part of the settlement, the requirement that merchants not charge less for cash has been lifted in all but 10 states.  The idea is that now stores can charge a fee to customers when they use credit cards — but they can’t charge more than the processing costs.

Will Consumers See Higher Fees for Swiping Plastic?

Retailers can add the credit card fee to credit cards, but not to debit cards.  [Though in a strange twist, if a retailer wants to add the fee but they also use American Express then they can't.  Amex has a rule where adding the processing fee is allowed but only if it's done across all cards, including debit cards.]

However, there is some speculation that few stores will add the fee, preferring not to pass the cost on to customers.  After all, plastic is now one if the most popular ways to pay for purchases.  Adding a charge to customers might make stores less competitive — especially the smaller stores.

Even so, some customers might see increases when they use their credit cards to pay for purchases.  Processing costs usually amount to between 1.5% and 3% of the total purchase, so that can make something of a difference.
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When looking for a credit card, you should consider the fees that might be charged, from annual fees to balance transfer and other fees.

One of the fees that you might not have to worry about, though, is the late fee.

Some credit card issuers are beginning to make their offerings more attractive by waiving certain fees — at least once.

Getting Rid of Late Fees

The new Discover it card features the ability to waive your first late fee.  So, while you might have to pay late fees later, the first time you are late, you won’t have to pay a fee.

The Citi Simplicity credit card is another one that is waiving late fees.  In this case, though, there are no late fees at all.

These cards take away some of the sting for those who forget to pay their bills.  Accidents happen so it’s nice to know there are cards with some flexibility.

In some cases, it might be possible to waive a late fee just by calling your credit card issuer.

If you are a customer who doesn’t have a history of paying late or missing payments, you might have your fee waived just for asking.  Really, you don’t have anything to lose by asking.  Remember to remind the customer service representative that you have been a loyal customer.

Even if your credit card issuer doesn’t have a policy of waiving late fees, you might still be able to save when this type of thing happens. [Read more...]

Chances are that, during the holidays, you are going to be shopping quite a bit.

Most of us make purchases of toys for our kids, gifts for friends and relatives, food for entertaining, and decorations. The spending seems to ramp up during the holiday season.

If you’re going to spend the money anyway, it’s a good idea to make the best of the situation, and take advantage as much as possible.  With the right strategy, you can incorporate smart credit card spending into your holiday budget, and make the most of each dollar spent.

Make Your Purchases with Rewards Cards

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You don’t want to carry cash to pay for everything when you go out, especially if you’re buying something that’s a little more expensive (maybe it’s just me but I hate having to carry too much cash around).

Or maybe you want to be able to buy things online (it’s tough to squeeze your cash into the computer to pay).

Thing is, you don’t have good enough credit to get a credit card to use.

What do you do?

One of the ways that you can work to rebuild your credit score is to make use of a secured credit card.

A secured card can provide you with a jumping-off point for your credit, particularly if you are having trouble qualifying for a more traditional unsecured credit card.

Another popular card you see these days is the prepaid card.

A prepaid card and a secured card can both help you pay for items, in fact they both require money up front.  But they are quite different types of cards.

As you choose which piece of plastic will work best for you, it’s important to understand the difference between a secured credit card and a prepaid debit card.

A Secured Credit Card Versus a Prepaid Debit Card

Secured Credit Card

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One of the confusions that come up when many people use plastic is the difference between a credit card and a charge card.

In some cases, they are basically used as the same thing, especially since there are very few true charge cards in use these days.  Most people swipe credit cards instead of charge cards.

Difference Between a Credit Card and a Charge Card

What is a Charge Card?

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