Archive for the ‘Credit Cards’ Category

Bank-rupture

Friday, December 16th, 2011

It hasn’t been a particularly good year for banks across the globe.

Many are still being downgraded by credit ratings agencies. Standard & Poor’s, addressed in the last post here, upset leading European figures when it issued a threat of widespread sovereign downgrades on the eve of the European summit.

Many banks and governments alike are struggling to raise funds or to find manageable rates at which to borrow. Those that can, on the other hand, are exploiting every drop of political advantage they can muster.

Many banks are commiting various kinds of atrocities. Many are simply finding ways – even unwittingly – to frustrate their customers.

Scandal-Struck

A number of UK banks have been caught up in scandals involving the elderly. As reported on our sister blog in the UK, a succession of banks have been caught and fined for mis-selling risky investment products to vulnerable consumers. Pensioners of 83 years on average were pressured into investing six-figure sums of their inheritence into long-term risk-heavy products, often when they were not even expected to survive the investment term. Collectively, banks have faced compensation payments approaching £150 million ($233 million).

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Fee-Driven Banking Products ‘Taken to Task’

Monday, November 14th, 2011

Are we being taken for fools on the essential banking products that we choose?

An interesting parallel has emerged between Australia and the UK in the world of personal finance: an enquiry into value for money on fee-driven banking products.

Australia: Credit Card Fees

About half of all Australian credit card holders are getting no value from their credit card rewards because of fees, it was reported last week. In most cases, annual fees are outweighing the value of rewards such as air-miles, and only very high levels of spending – roughly $60,000 per year – could make such benefits count.

Contrast this with the average annual Australian credit card spend of $17,000, which itself is artificially heightened by very high spenders, and we see the degree to which fees outstrip potential rewards.

A monthly spend of $1,000 could see fees exceed potential benefits by as much as a third in value even before interest is factored in.

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Near Field Communication strikes Australia. The end of the credit card?

Tuesday, October 25th, 2011

Mobile Payment - the end of the credit card?The future of financial transactions for the next generation may now be upon us.

With the increasing number and popularity of mobile apps, major financial bodies have been looking towards innovative new payment systems for mobile devices.

The prospective launch of these new mobile payment systems could now spell the beginning of the end for the trusty plastic credit card.

Commonwealth Gold: KaChing!

Last month, Google announced their new ‘Wallet’ app, a system using Near Field Communication technology (NFC) which is designed to make payments easier for consumers while offering retailers more ways to offer loyalty programs.

But they may be beaten to the chase by Australia’s Commonwealth Bank, which has launched ‘Kaching‘, an app which allows smart phones / iPhones to connect with cash registers and to make payments by email and Facebook. It will be available before Christmas to iPhone users with operating system iOS4 or above, and makes CommBank the first commercial provider of a mobile payment system.

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Debunking the Credit Score Myths

Thursday, September 8th, 2011

When it comes to personal debts, banks and credit card companies have devised a numerical and statistical analysis of the consumer’s creditworthiness through the implementation of credit scores. This rating is based upon the credit report and data mining information gathered by credit bureaus (like Veda Advantage in Australia, Experian in the United States, and Equifax in the United Kingdom) on stores, financial institutions, and other businesses where consumers have made small to big transactions. FICO and other prominent credit scoring systems are used to evaluate the financial risk posed by lending money to consumers. Therefore, a low-income consumer with a history of delinquent paying of bills may get a low credit score as compared to a high-income individual.

Aside from banks and other financial institutions, mobile phone providers, insurance firms, real estate agencies, and other businesses use credit scoring to determine approved credit and set credit limit. Even though paying the bills on time would mean better credit scores, many of us don’t know how the scoring system works. Besides, we don’t know all the factors involved in determining credit score. Some consumers get bad credit scores especially if they can’t identify fact from fiction. Here are the common myths on credit score: (more…)

Consumer Debt Protection Laws

Tuesday, September 6th, 2011

There are several laws in place to give consumers equal access to credit opportunities and to protect them from harassment by creditors. All consumers stand to benefit by taking some time to educate themselves about the various consumer protection laws.

Truth in Lending Laws

Prior to the passage of this law, consumers frequently complained that interest rates and other charges were hidden in small print or not included in loan documents at all. The Truth in Lending law requires lenders to indicate their annual percentage rate (APR) and other charges, along with an actual dollar figure which tells the consumer how much they will actually pay by the time the loan is paid in full.

Equal Opportunities to Obtain Credit

The Equal Credit Opportunity Act makes it illegal for a creditor to discriminate against an applicant on the basis of race, age, sex, religion, country of origin or marital status when processing their application. All credit applications must be treated on the basis on merit only. (more…)

Credit Card Industry ‘continues to fight fraud’

Tuesday, June 21st, 2011

Credit CardsCredit Card users have been armed with a new anti-fraud technology to help them avoid falling victim to credit card fraud.

Around 30,000 credit cards were cancelled last month alone by banks in Australia, after suspect transactions were flagged as potential foul play. Sony PlayStation’s network was also recently compromised, causing bank details to be leaked.

According to data from the Australian Payments Clearing Association, the previous financial year saw over 660,000 reported cases of credit card and charge card fraud, costing $155 million.

Sam Gooch of Which4U suggested that consumers remain vigilant when using their credit cards in order to minimise their chances of becoming victims of fraud. These include being discreet when entering your PIN and making sure you never lose sight of your card. (more…)