Credit Cards For Less Than Perfect Credit

Higher Education Passing on Credit Card Fees

With students increasingly turning to plastic to pay rising college costs, public and private colleges and universities across the country are passing on the cost of using credit to their students. Tuition being paid with plastic will now incur a fee of up to 2.75%. In the spring of 2009, Northwestern University began accepting credit cards to cover undergraduate tuition and tacked on the 2.75% fee. The University of Illinois and Harper College in Rolling Meadows, IL, also charge a fee to students paying with credit cards.

Universally accepted at businesses around the globe at no additional cost, credit cards have been one way students make ends meet. Almost one third of students charged tuition last year, up from 24 percent in 2004, according to a study by student loan giant Sallie Mae.

According to a Nilson Report, merchants and institutions pay an average of 2% to process each credit card transaction. Colleges and universities have traditionally paid this fee. But that is changing: In 2007, 26% of colleges charged a credit card payment fee, either directly or through a third party, up from 14%in 2003, according to surveys by the National Association of College and University Business Officers.

The move will ultimately drive up the already skyrocketing cost of college by hundreds or even thousands of dollars and hits those who are unable to pay off their balances particularly hard. Nearly four out of five college students carry a balance each month and face finance charges. The fee to students is being described as the price of convenience and is paid to the vendor and not the educational institution. Doug Beckmann, Senior Associate Vice Preside for Business and Finance at University of Illinois said charging the fee is “the only way U. of I. could afford to accept credit cards for tuition.”

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Relief in Sight – Default Rates Projected to Fall

Lenders have seen the largest number of credit card defaults since 1983 and increases in the triple-digits of charge-offs since 2007. But according to regulatory filings by the major credit card lenders, defaults and delinquencies are falling and could be lower than estimated in the second half of the year; the first sign that default rates have reached their peak. According to Bernstein Research, the average 30-day delinquency rate decreased in May to 1.57% from 1.71% the month before. It was the second month in a row that 30-day delinquency rates declined. And with American Express predicting improvement in the second half of the year, there may be a glimmer of hope about consumer credit.

• Capital One Financial Corp. announced a modest rise in annualized net charge-offs in June, much smaller increase than was expected. Delinquent accounts of 30 days or more saw a modest drop to 4.77% in June from 4.9% in May.
• American Express announced delinquent accounts of at least 30 days declined from 4.7% in May to 4.4% in June. Although American Express charge-off rates grew to 10% from 8.5%, it was below the projected rate of between 10.5 and 11%. “Assuming delinquency and bankruptcy trends continue to be below previously expected levels, the company believes that it is highly likely” that write-offs for the third and fourth quarters on U.S. cards “will be better than previously forecasted,” the company said.
• JPMorgan Chase, the largest issuer of credit cards in the U.S., saw a 0.32% decrease of delinquent accounts from  from 8.36% in May to 8.04% in June. Charge-offs fell to 9.9% from 10% in May.
• At Discover Financial, default loans fell from 8.91% in May to 8.75% in June.
• Capital One saw a lower percentage of defaulted loans of 9.41 compared to May’s 9.73.

Analysts believe that the somewhat favorable indicators may be seasonal and remain concerned about credit card charges. One factor that continues to be of concern for a recovery of the financial sector of the U.S. economy, is unemployment, which rose to a 26 year high of 9.5% in June. At the same time, the decrease in May delinquencies could be due to consumers taking advantage of one-time economic stimulus benefits, such as income tax cuts, to pay down debt. The credit card industry does not forcast profitability unil 2011..

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Credit card companies rule out non profit customers

According to credit card news today, credit card companies are turning on customers who dont turn a profit. Good quality customers who use credit cards responsibly may be being targeted by credit card companies using personal data.

According to comparison sites, a number of borrowers with exemplary credit ratings and high incomes are being turned down by card companies this year. The news follows a shift in data sharing legislation, with companies now able to exchange personal data about their customers.

This data should be used purely to lower debt risks for individuals, and not for commercial reasons. However, consumer groups believe that this is not the case. Consumer Focus expert Ed Mayo reportedly commented:

” Credit card providers seem to have given their game away. By refusing credit to consumers with excellent scores, they appear to be measuring something other than risk. We need to know if the rules are being flouted and if peoples information is being used inappropriately. Consumers need reassurance and its up to the Financial Services Authority to look into this.”

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Quicker, Safer Payment Option for Cab Fare

New technology will be installed in Chicago that will offer much relief to both passengers and taxi cab drivers. Creative Mobile Technologies is providing touch screens (free of charge) that allow passengers to pay with credit / debit cards in exchange for rights to generate revenue from advertising. Programming, including local Chicago news, sports, entertainment, restaurant listings and tourist information, is still in the works, along with advertising, said Jesse Davis, president of Creative Mobile Technologies.

Introduced earlier in New York City and Boston, the new touch-screen devices have been installed in 30 taxi cabs in Chicago, the first step in solving the third biggest complaint city officials receive each year – the refusal of some taxi drivers to accept credit cards – behind reckless driving and rude behavior. It’s also the number one complaint heard by the taxi industry. “The biggest thing I’ve heard from the public is the driver doesn’t want to accept credit cards,” said Jeffrey Feldman, president of Taxi Medallion Management, LLC. One reason for the negative attitude is the 5% that credit card companies skim off the top of each fare that pays with credit. Approximately 760 more units will be installed in July in Checker Taxi and Blue Diamong cabs with plans for all 2,600 Chicago taxis to be eventually covered.

The equipment offers passengers the option to swipe a credit or debit card instead of handing over a card or cash to the driver, allowing passengers a quicker and safer payment option, with transactions processed in three seconds, on average. The instrument screen will present a running tab, an opportunity to add a tip and an itemized bill, including tolls and surcharges, at the end of the trip. Google Maps software will give passengers a way to monitor their trip and keep the cabbie honest by avoiding unneccasary detours to inflate the fare. The screen also offers helpful gratuity suggestions of 15, 20 and 25%.

In New York, tips to drivers increased after the card technology was introduced in 2008, according to the city’s taxi and limousine commission. “Customers love swiping the credit card because it’s fast and easy, and sometimes the tips are better,” said Amadou Barry, 37, who has been driving a taxi for three years. According to Tad Fordyce, a Visa Product Development Expert, a recent study by Visa reports a a 7% jump in tip fare payments, from 15% to 22%.

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Rewards credit card unveiled by Egg

Online bank Egg has announced the launch of a new credit card which allows customers to receive rewards for spending money on it.

The Egg Money Mastercard has no balance transfer fees and an interest rate of 8.9 per cent, while credit card holders can receive one per cent cash back on all purchases up to 200 per year.

Owning the credit card also lets customers take advantage of 25 per cent discounts at online stores like lastminute.com and any purchases which the consumer finds cheaper elsewhere in the 30 days after buying it can get the difference refunded by Egg.

Bert Pijls, chief executive officer of Egg, said: “This card not only rewards and protects customers but with tools such as the Spend Tracker and Egg Money Manager it also helps customers manage their finances better.”

Customers with a credit card from telecommunications company BT will now be able to take advantage of unlimited discounts off broadband and telephone bills for using the plastic after it changed its policy.

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