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Tag Archives: Credit Cards

Credit CARD Act of 2009 – what it means to you – Part 2 of 7 – Protections re: rate increases for future transactions

Under the Credit CARD Act of 2009, lenders are now a bit more limited in how they can go about raising your interest rate for future transactions. Mind you, they can still be raised, though:

-Notice – Lenders must give you a written notice before increasing the rate. The rate applies only to purchases made on and after fourteen days following the date that the notice is sent.

– One year (first year) ban – Lenders cannot raise interest rates even on existing purchases on the account nor future purchases and transactions on the account until after one year has passed on the account unless one of several exceptions applies. The exceptions are (a)variable rate cards (e.g. prime rate plus 7.0%); (b) teaser rate cards, but the rate cannot increase for the first six months, it should be noted and (c) if your minimum payment is more than sixty days late.

-Mandatory review and adjustment every six months – Commencing August 2010, a lender increasing a rate must review the account ever six months and should reduce the rate if things have changed such that a reduction might be appropriate. Note: This should give you the opportunity to argue with them if the interest rate is not decreased.

Special thanks to the National Consumer Law Center’s "Guide to Surviving Debt", 2010 edition, pages 74-81, available at www.consumerlaw.org for a mere $20.00 or so. I highly recommend it.

Credit CARD Act of 2009 – what it means to you – Part 5 of 7 – Payments to be applied to portion of balance with highest interest rate.

[Categories: Washington Bankruptcy Attorney]

Finally, any amount that you pay in excess of the minimum payment must be applied to the balance with the highest interest rate, except in the last two months before a deferred interest plan expires.

Previously, many credit card companies would seek to apply payments to the lowest interest bearing portion of the debt. E.g., the creditor would leave high interest rate "cash advance" portions without any change, and would apply payments to the low interest rate "normal" purchases portion. Thus, you would rack up interest charges unnecessarily.

Credit CARD Act of 2009 – what it means to you – Part 4 of 7 – Finally! Some limits on penalty fees.

[Categories: Washington Bankruptcy Attorney]

There are now (finally!) some limits on penalty fees – such as pesky and expensive late payment and over-the-limit fees.

(1) Penalty fees must be "reasonable and proportional" – and the CARD Act requires the Federal Reserve Board to issue rules by August 2010 in order to define and effectuate this mandate.

(2) Over-the-limit opt-in. This is important! Now, no over-the-limit fees may be charged unless the consumer has agreed that the lender may approve transactions that will exceed the credit limit.

(3) Limitations on number of over-the-limit fees. Lenders may charge only one over the limit fee per billing cycle (e.g. usually just one per month). In addition, lenders may only charge the fee in the next two billing cycles unless the consumer uses the card again, or goes below the limit and then exceeds it again. This is a big improvement – you can’t be penalized again and again, billing cycle after billing cycle if your balance stays in excess of the limit.

Special thanks to the National Consumer Law Center’s publication "Guide to Surviving Debt" 2010 edition, page 78, available at www.consumerlaw.org for about a mere $20.00.

Credit CARD Act of 2009 – what it means to you – Part 3 of 7 – Minimum payment protections

[Categories: Washington Bankruptcy Attorney]

When the prohibition against a retroactive rate increase applies (e.g. the payment is late but not more than 60 days late) the CARD Act limits how much the lender can increase your minimum payment. The lender’s options are limited. The lender may either: (1) use the existing minimum payment terms; give you five years to pay off the outstading balance at the old interest rate or (3) increase the minimum payment to no more than twice as much of a contribution to paying down the balance as the old minimum payment.

Special thanks to the National Consumer Law Center www.consumerlaw.org, "Guide to Surviving Debt" chapter 5, page 78. 2010 editions.

Credit CARD Act of 2009 – what it means to you – Part 1 of 7 – Protections re: rate increases

Eight protections (among a number of others) include the following. Here is the first protection:

– Protections against rate increases for future transactions. The Credit CARD Act prohibits credit card lenders from increasing the interest rate that applies to the balance you’ve already incurred on your credit card, a practice known as "retroactive rate increase". There are several exceptions to this rule, which are the following:

(a) Varaible rates – if it is a variable rate card, (e.g. prime plus 7.0%) then the rate can change on all purchases/cash advances when the index changes;

(b) Teaser rates – a lender may raise the rate after the expiration of a teaser rate, but only to the post-teaser rate previously disclosed. Also, teaser rates cannot last fewer than six months.

(c) Sixty-plus days late – a retroactive rate increase on existing balances is permissible as a penalty rate when you are more than sixty days late in making the required minimum payment. NOTE: You can get the old non-penalty rate back and reinstated if you make the next six months worth of minimum payments on time.

Special thanks to the National Consumer Law Center’s "Guide to Surviving Debt", 2010 edition, available at www.consumerlaw.org for a mere $20.00 or so. I highly recommend it.

Never be unemployed again – Spanish speaking Anglos (caucasians) are always in demand.

Over 40% of New Mexico’s population is hispanic, with many speaking Spanish as their primary language, according to The Economist magazine, September 11, 2010, pg 35 "The law of large numbers: the hispanicisation of America"

Similarly, 30% to 40% of the population of California, Arizona and Texas is latino.

Suprisingly, 10% to 20% of the population of Washington, Illinois, Oregon, Idaho, Utah, Illinois, New York, Connecticut and New Jersey is also hispanic.

Many hispanics tend to prefer Republican politics as of late, but anti-immigration sentiment is pushing many back towards Democratic candidates.

Now, human migration is something that is difficult to contain. Eventually, people just migrate. Fences, attack dogs, barbed wire, guard towers and infrared equipped helicopters may slow down migration, but eventually, if people have to move they just move, is my take on the matter (you are free to disagree!).

In late 2005 (contemporaneous with the birth of my first child) I decided to "fix" my Spanish abilities. Learning Spanish will make you "recession proof", I believe. I think that a bi-lingual person will always be able to find employment, even if not "translator" fluent.

Spanish is a wonderful language. I often now prefer to speak Spanish. It is logical and regularly follows its own gramatical rules. It is straightforward to spell and write in Spanish. I like to say that Spanish promotes literacy, whereas English almost discourages literacy.

Here is my recipie for Spanish:

Spend one month in either Antigua, Guatemala or Granada, NIcaragua, studying four to six hours per day, one on one with a teacher at Ixchel Spanish School (Antigua, Guatemala) or Roger Ramirez’s One-on-One Tutoring, in Granada, Nicaragua.

Usually, it is about $100 per week for twenty hours weekly of one-on-one teaching, or about $150 weekly for six hours daily totaling 30 hours per week. This is really the best way to learn.

You can arrange (sponsored and arranged by the school) for room and board with a local family, wherein meals are usually provided six days per week, breakfast, lunch and dinner. The cost for room and board is usually $75-$100 per week, room and board (no joke! it really is that inexpensive!). However, you should tip your homestay family and your teacher at the end of your stay maybe 10% to 25% of your expenditure, but tips are not required.

If you are a big eater, or want a bit more meat, you can arrange to pay a little more to your family, or supplement a bit by eating out.

After you return home, you should search out a local tutor for weekly two hour sessions for about a year. I would write short stories in Spanish, and then my teacher and I would correct and re-write the stories.

You should also subscribe to National Geographic in Spanish, and force yourself to read every issue and define the words you do not know, writing the definitions in the margins.

For fun, you can pick up "people en espanol" magazine.

Pike Place Market in Seattle has a newstand which usually carries a nice selection of foreign newspapers. ISimilar my use of "people en espanol" magazine, I used to buy one every month and read it – looking up and writing in the margins the definitions to unfamiliar words.

I know that many of the readers of this blog might find this far-fetched – after all, there are mortgages and car payments to pay and if facing unemployment, funds can be thin.

However, I can think of no schooling course or training course which will help you to better "stand out from the crowd".

Anglos (caucasians) who can speak Spanish do so well in the workplace and interview process because they are not "immigrants" to the American way of doing things. Spanish speaking Anglos fit well into business organizations and understand employers’ expectations and can provide nuanced service. Clearly, an immigrant speaking Spanish as a first language and later learning English can learn to fit well into an enterprise, but Enlish is so darn complicated and hard to read/write that immigrants struggle with English.

Spanish is a great language – it has a huge and rich vocabulary, and can express many things better than can English.

Challenge yourself to meet the demographic demands of a changing America – learn Spanish – you will never regret it….and say goodbye forever to the unemployment line.

Credit Cards: Additional things to think about before getting a new credit card – Preventing trouble

I have another post "Credit Cards: Things to think about before getting a new card…"

But here are four more things to think about – and probably these are the four most important TIPS anyone can offer when obtaining a new credit card.

– Look for the grace period – Credit cards DO NOT HAVE to offer a grace period during which you can pay off credit purchases (paying it in full) without incurring finance charges. Note that cash advances usually don’t ahve a grace period. Without a grace period, finance charges begin accruing immediately and a low rate may actually be higher than it looks.

Under the new CARD Act of 2009, lenders must mail your credit card statement at least twenty-one days before the end of the grace period. Of course, a grace period that is even longer is more beneficial. If you are running very close to the deadline, you might consider paying, at least for that month, over the internet or by phone. Under the new CARD Act, a lender can only charge you for paying by phone if you need the help of a live customer service representative.

-Watch out for bait & switch offers – Some credit card leners will send you an offer advertising a low-interest credit card wtih a high limit. However, nestled in the fine print in the offer is a less attractive, more expensive card if you don’t qualify. The substituted card often has a higher interest rate, more expensive fees, and/or a lower credit limit. If what they send you is not what they advertised to you, send the card back, certified mail, return receipt requested, along with a letter explaining your rejection of the card.

-Review and compare – BEFORE you send back the credit card application make a photocopy of the front and back of the application including the "disclosure boxes". When you receive the credit card, then compare the new disclosures you get with the card to the credit card application disclosures and make sure that they are the same.

-Cancel the credit card if you discover terms you don’t like – You don’t need to keep a credit card if you don’t like the terms. If the lender changes the terms for your card, you have the right under the Credit CARD act to reject the changes and close your account. If you have used the card you need to pay off the blance.

Many thanks to the National Consumer Law Center’s "Guide to Surviving Debt", available at www.consumerlaw.org for only about $20.00. You should also consider taking a look at our sister website www.life-after-bankruptcy.info.

Hola! The Hispanicisation of America – a major demographic and economic shift.

In December 2005, I booked a United Airlines ticket to Antigua, Guatemala. I had enrolled in an intense course of Spanish instruction. The course was one-on-one. One teacher, one student (me) for six hours per day, six days per week.

I resided with a wonderful Guatemalan family in their large home, studying for about eleven days. I returned in June 2006 for three weeks of study and studied similarly in August 2006, February 2007 and March 2008. March 2006-May 2009 I studied almost weekly for two hours with a wonderful Guatemalan lady, meeting every Monday evening, at Borders Books in Lakewood, WA.

Why?

America is turning hispanic. One study I read indicated that by 2047, Spanish would be the dominant language in California.

An interesting September 11, 2010 article in The Economist magazine was further informative:

Over 40% of New Mexico’s population is of hispanic origin.

30% to 40% of Texans, Arizonians and California are of hispanic origin.

20% to 30% of Nevada’s, Florida’s and Colorado’s population is of hispanic origin.

Washington, Oregon, Idaho, Utah, Illinois, New Jersey, New York and Connecticut have populations estimated at 10% to 20% hispanic origin.

Nationally, 16% of the population is now hispanic/latino, numbering 48.4 million in 2009. The Economist reports that the Pew Research Centre estimates that by 2050, hispanics will comprise 29% of the population, with caucasians declining to 47% of the population, and falling into the minority.

Julian Castro, the young Latino and Democratic mayor of San Antonio, which is 60% Hispanic, says Democrats should not take Latinos for granted. Castro points out that hispanics tend to support better public education and health care, but are socially conservative and religious, according to The Economist.

The Economist points out that even if you don’t see a large number of hispanics today in your area, things will change….The Economist points out that many hispanic immigrants are bypassing traditional destinations of California and Texas and moving instead to states such as Arizona, Georgia and North Carolina, which dollectively had 10% of America’s undocumented aliens in 2009, up from 4% in 1990.

Arizona’s "backlash" against immigration (known as SB1070) now partially blocked by a Federal Judge may have grown out of a "fear" of the minoritization of caucasians. Over the past two decades, Arizona’s latino population has almost tripled, with the majority of caucasians dropping from 72% to 57%.

Unfortunately, a University of Arizona poll found that 81% of the state’s registered voters favor SB1070’s requirement that people produce documentation to show that they are in the US legally, and that 74% agree that police should be allowed to detain anyone unable to prove their status.

This is misleading, though, as hispanics tend to lag caucasians in voter registration and participation, according to The Economist.

I have really enjoyed improving my Spanish, and I welcome much of what the hispanic culture brings. Some of my best friends are Spanish speakers – and I have found them to be generous and caring people, almost to a fault.

Fences, wires, guard dogs and towers are unlikely to contain human migration along the US border.

If you are interested in improving your career and your long-term marketability, consider learning Spanish – perhaps we would all be better off embracing – as opposed to retaliating.

I will make a post on how to affordably prepare yourself (and your children) for this century – by embracing Spanish.

Credit Cards: Part 2 of 2 – Things to think about before getting a new credit card – Preventing trouble

This is part two of a two part series. Lets face it, credit cards have all sorts of new enticing promotions. Frequent flier miles, "cash back" promotions, school contributions, etc.

Adding to the difficulties is that it is difficult to shop for a card. Fees and high post-teaser rates are buried in the fine print and not well disclosed.

Here are some additional things to keep in mind when trying to compare credit cards:

– BIG ONE! – Trick cards – A creditor who acquired a prior credit card lender may offer you a new card – and then trick you by putting the old credit card lender’s debt on the new card, perhaps at rates less advantageous than you were previously paying.

– Look carefully at the interest rate, but recognize that the interest rate can EASILY change. Note that after the teaser rate expires, there will likely be a new rate. Find out what that new rate will be.

– Penalty rates – Credit card contracts, including those that advertise low rates, provide in the small print that our interest rate increases if you make a late payment or go over your credit limit. There are two distinctions here. If you are 60 or fewer days rate, the new penalty rate can only apply to future cash advances and purchases. If you are more than 60 days late, the new higher penalty rate can apply to existing balances of purchases/cash advances AND ALSO it can apply to any new purchases.

-Fees – Find out how much you will be charged for all sorts of fees. Here are a few ideas. Late fees, over-the-limit fes, annual fees, membership fes, cash advance fees, balance transfer fees, even fees for buying lottery tickets.

This post is largely thanks to the National Consumer Law Center’s "Guide to Surviving Debt" a 2010 publication available for a mere $20.00 from www.consumerlaw.org. Buy it – it is a fantastic book.

Credit Cards: Part 1 of 2 – Things to think about before getting a new credit card – Preventing trouble

Lets face it, credit cards have all sorts of new enticing promotions. Frequent flier miles, "cash back" promotions, school contributions, etc.

Adding to the difficulties is that it is difficult to shop for a card. Fees and high post-teaser rates are buried in the fine print and not well disclosed.

Here are things to keep in mind when trying to compare credit cards:

-Avoid accepting too many credit card offers – There is rarely any good reason to own and carry more than two credit cards.

-Avoid "store cards" like Good Guys Video, Bon/Macy’s, Nordstrom, Sears and JCPenny cards – why do you need these? Is there anything at Sears or Nordstroms that is essential to your present daily life?

-BIG ONE! – Avoid subprime credit cards – Avoid credit cards which advertise themselves as helping with "bad credit". Some of these credit cards are "fee harvesters" with low credit limits and so many fees that you couldn’t even charge any purchases to the card because the card was already maxed out when the account was opened.

This post is largely thanks to the National Consumer Law Center’s "Guide to Surviving Debt" a 2010 publication available for a mere $20.00 from www.consumerlaw.org. Buy it – it is a fantastic book.