7 Errors That Your Credit Card Company Wants You to Make

You are planning for vacation and so you started saving airline credit miles for that. Finally, you have accumulated enough miles and made flight reservation for the trip. But you were surprised to find out that your airline credit miles are no longer valid because they have expired. This mistake was even committed by no less than John Ulzheimer, the president of consumer education for SmartCredit.com.

The bank won’t give much attention to these mistakes.

Credit card issuers do not bother about this common mistake regarding expiration of credit miles. John Ulzheimer has learned his lesson. He suggested that consumers must read carefully the fine print of the rewards credit card they have selected to avoid the embarrassing situation. They should clearly understand the rules of redemption.

* Pay monthly minimum only. The consumers should pay more than the monthly minimum in order to reduce the interest paid on the credit balance.

* Delay your payment now and then. According to John Ulzheimer, the credit card companies want you to pay your account and they won’t mind if at times your payment is delayed. Don’t be misled by this. Under the Credit CARD Act of 2009 the companies cannot raise interest on your balance for payments that are delayed for 30 days. But if you have received a 45-day notice, they can raise the interest and charge you fee for late payment which ranges from $29 to$39. You can imagine how much these late fees of $29 to $39 could benefit the card companies.

* Don’t mind the mail. You are too preoccupied with so many things that you don’t mind your monthly credit card statement. Statement must be checked once you receive it so that you will immediately know if there are erroneous charges and to avoid paying late fee and higher interest due to 45 day notice.

* Balance transfer to rack up a new debt. Outstanding balance is transferred to a card that charges low or zero introductory interest thinking that through this move, you can save money. According to Cunningham, if you decide for balance transfer, the move should be to pay off debt and not to increase it. He further said that the balance should be paid before the end of the promotional period otherwise the move to transfer the balance would be useless. The balance transfer fee must also be accounted.

* Choose to go over your credit limit. They say that under the new law if you don’t go for buying over the limit, the transaction could be denied and can cause you embarrassment. But Ulzheimer said that if you go over your limit, it can cost you higher interest on your balances and pay an over-limit fee.

* Paying more fees than the rewards earned. It is not practical to sign up for an airline credit card if you do not travel, Cunningham said. You pay $129 annual fee and only earn reward points equivalent to $80 cash. Ulzheimer said that this is like self funding your own rewards program. Therefore it is wiser to get a card with no reward points and no annual fee is required. Ulheimer further said that if your payment in getting a card with a reward points is beyond the promotional interest period the interest due will eat up the earned points. Choose the rewards credit card game after clearly understanding the rules of the game.

Filing Bankruptcy Can Cause Serious Damage to Your Career

An employer cannot use as a reason not to hire somebody who has declared bankruptcy. It is illegal for an employer to do it. But for having a bad credit, it is legal for an employer to deny hiring an applicant for a job. People are not so worried about getting a job due to having a record of bankruptcy. They are more concerned about the negative effect of bankruptcy to their credit record.

How does bankruptcy affect your credit?

It should be noted that before bankruptcy was declared, damage to your credit had already been done. Learn your lessons from your mistakes and start improving your credit score. In two to three years you will be able to purchase a house in the same manner like those who have not gone through bankruptcy.

How does bankruptcy affect you in looking for a job?

As mentioned earlier, bankruptcy does not affect your application for a job. But employers can still use the bad credit record prior to your declaring of bankruptcy in rejecting your application for employment. Companies will do the investigation of your profile including your credit history to determine whether you are qualified or the right fit for the job. The investigation will help companies in their selection process to avoid the big risk of hiring thieves. They presume that people with debts are likely to steal from their employers. In many cases, debts were incurred due to gambling or use of drugs and these are not recorded in credit reports.

Tips on getting an employment after bankruptcy

* Be frank: If the background checking involves your credit history, call your potential boss and explain the reason of your bad credit. Your candor will be appreciated by your potential boss.

* Know and assert your rights: If you feel that your job application for employment is rejected due to bankruptcy, you can call the hiring manager to inquire why you were not hired. Do not be afraid to ask.

* Get many recommendations: Employers want to avoid hiring people with bad credits. They want to protect their business. Recommendations from credible people will help counter all these negative information about you and make employers believe that you are trustworthy.

Bankruptcy and Employment

Companies give only so much attention to your credit history if the position you are applying for involves cash handling. Otherwise, they will give more attention in criminal background check and consider credit check as only part of it. Therefore bankruptcy should not be a hindrance for you to find a job.

For Love or Money

Marriage is a lifetime partnership and commitment made by two people with each other. Though love could overlook some flaws about a person’s financial status, there are some financial blunders according to the recent TD Ameritrade survey that could ruin your chances in marrying the love of your life.

In the survey, the respondents were asked what issues about their future partner would make them think twice and call off the wedding. Among the categories they had to choose from were low credit score, few bank savings or none at all, high liabilities in credit cards, large debt for student loan, mortgage foreclosure, unemployment, no savings for retirement, and file of bankruptcy.

Surprisingly, though all the categories may seem like obvious marriage call-offs, many of the couples would choose to overlook these for their love. The most of the respondents however, find bankruptcy the most unappealing of all the blunders.

Only 32% of those who took the survey said that they would call off the wedding, while 27% would opt to postpone the wedding in a future time, while 41% majority of the takers say that neither measures were needed.

According to Carrie Braxdale, a managing director at TD Ameritrade newly wedded couples often struggle with their financial responsibilities. When they get married people tend to get their financial backgrounds and past debts into the marriage.

Thus, Braxdale advices couples to sit down and talk about their future especially their financial matters first before they exchange vows and say “I dos”. Here are some things that would prove beneficial for couples to know about their future partner:

You should know each other’s major debts and find a strategy together to help overcome them. You may also talk about future student loans you will be taking for your children, this talk is not only romantic but it will be a great deal of help for you two.

Know each other’s credit scores; you should know if you are financially capable. This is in case you need to buy a new house or a car because of your marriage.

You two should also have a broader understanding of investments. It is important for you two to have an ending goal and you should help each other work through them.

Habits should also be watched, if you are not a very good saver then your partner may help you with that problem. Your financial differences may be beneficial if only you could give each other the chance to help.

More Bad News for JPMorgan

JPMorgan Chase is in for more bad news as their credit continues to decrease these past few days. Fitch Ratings gave a lower rating of A+ to the financial agency after they lost $2 billion worth of dollars earlier last week.

According to Jamie Dimon the Chief Executive of JPMorgan, the company’s situation could get worse because they are not liquid enough and ratings companies are asking questions about their company’s risk management status, framework and practice.

The ratings industry head, says that JPMorgan Chase’s reputational and risk governance issues are not as good as they used to be however the current amount that the company is losing can be managed. According to reports JPMorgan’s, last week’s market shares was at $36.96, it went down by 9.3%, then after just a few hours it plunged further down to 0.8%  that’s $36.67.

The bank continues to be criticized and ridiculed by politicians and lawmakers as the ratio continues to drop. Thus a more convenient way for the firm is to have tighter measures and adapt to something like the Volcker Rule which can take care of too much risk-taking done by large banks.

The bank’s Executive Chief Mr.Dimon who has been getting positive regards about his efforts to get the bank back in tact has been open about his thoughts in implementing laws and regulations especially the Volcker Rule.

This however stirs questions from external sources whether the company has tried to implement the regulation in the past. However the total loss of $2 billion that was reported last week has weakened the arguments of the bank for their new measures. Bank investors are currently having difficulties in getting access to financial institutions and international trade and businesses.  Though JPMorgan Chase like the Bank of America and Citigroup have reports that can still be further evaluated, their unseen transactions and unclear records for their strategies could be destructive for them.

Credit Rating Down Due to Low Tax Revenues

There is bad news about state finances. In April, the income tax revenues was short by more or less $2 billion and in the same month a ruling was handed by a judge that the state controller cannot withhold the pay of the lawmakers for not doing their jobs. Standard & Poor is very much concerned about these two recent events that took place this month of April.

This bad news comes at the time when Gov. Jerry Brown prepares his revised May budget. The forecast made for April was $9 billion but the total tax revenue for that month was only $7.1 billion. Controller John Chiang posted in his website the shortage in tax revenue and warns that that the deficit would be higher by $1 billion or $2billion than what is predicted. According to the Legislative Analyst Office, the last week tax revenue was $3.5 billion lower than the forecast of Gov. Brown for the fiscal year.

The proposed budget of Gov. Brown for the new fiscal year is $92.6 billion. He has also proposed through a Nov. ballot to provide budget for education and public safety programs by increasing the annual income taxes on people who are earning more than $250,000 and also increasing the sales tax by one quarter of a cent. The passage of this proposal is certain.

This initiative taken by Gov. Brown addresses the concern of Standard & Poor’s concern about the decrease in tax revenue but the rating agency is still worried about the ruling made by the judge in Sacramento. Judge David I. Brown said that Chiang abused his authority in withholding the pay of the lawmakers after they failed to pass a budget on the date expected. They did pass a budget but according to Chiang it was out of balance budget. Chiang said he withheld the lawmakers pay under authority of Proposition 25 which stipulates that the Legislature is allowed to pass a budget through a simple majority vote. It also said that if the lawmakers fail to pass a budget on time, they would forfeit their pay.

The lawmakers filed a suit against Chiang and the Judge Brown ruled in favor of the lawmakers.

According to Gabriel Petek, S&P analyst, the decision of the Judge may be expedient politically but may not be an effective solution to cure the budget deficit in the long term. The decision also demonstrates the reluctance of legislators to make cuts in their expenditures which will result to more budget deficit in 2013.

California has the lowest credit rating which is an A-minus.