As of September 1 you can use your credit card to pay certain mortgage loan fees if the loan will be underwritten by Fannie Mae.
You still may not use a credit card for any part of the down payment, but fees such as appraisals, credit report fees, origination fees, lock-in fees, and commitment fees are now allowed. The limit is 2% of your loan amount, so on a $150,000 loan, you could charge up to $3,000 on your credit card.
This may not be a smart move, for a couple of reasons. First, adding $3,000 to your credit card debt could change your credit scores just enough to move you out of the running for the best mortgage interest rates. Even one or two points in your credit score could make a huge difference.
Since your FICO scores are in part based on how much of your available credit you use, it would depend upon the balances you already owe in relation to the credit limits you carry. If you push any one card over the 30% range, it could have an adverse effect.
If you have several cards with no or low balances, you might consider spreading these mortgage loan charges among those cards rather than putting all of them in one place.
If you do put all the charges on one card you run the risk of having your credit limit lowered, which would have an even greater adverse effect on your credit scores. Credit card issuers are still allowed to drop your limit to the balance you owe – and until February they may even drop limits below the balance you owe. This could trigger an over-limit charge and a negative notation on your credit report.
Next, adding these charges when you’re well into the loan process can delay closing on your mortgage.
When you use your credit card for loan fees, your mortgage lender is required to do one of two things. He or she can verify that you have sufficient liquid funds to cover this in addition to your down payment and required reserves, or recalculate your debt to income ratios.
If the debt to income ratios were tight, the new debt could prevent you getting the loan. At the very least the new calculations will require the lender to give you a new truth in lending statement, and that requires a new waiting period before your loan can close. If you’re very close to a rate lock expiration, that could cause you to pay a higher interest rate on your mortgage loan.
If you want a quick start to a good credit rating, get the Applied Bank® Secured Visa® Gold Card. Applied Bank reports to all 3 of the major credit bureaus, so your wise use of the Applied Bank® Secured Visa® Gold Card will put you on track for high credit scores.
As with any credit card, maintaining a balance that is under 30% of your credit limit will benefit your credit scores, as will a record of on-time payments.
Meanwhile, you don’t have to have good credit scores to apply – you don’t even have to show proof of income. All you need to do is supply your name, address, date of birth and Social Security number to comply with the U.S. PATRIOT Act regulations – then Deposit from $200 up to $5,000 in a FDIC insured Deposit Account at Applied Bank.
Your deposit will be security for the Applied Bank® Secured Visa® Gold Card and your credit limit will equal your deposit. You can start small and add to this non-interest bearing account at any time.
The interest rate on both purchases and cash advances will be 9.99%, even if you’re late with a payment. Interest is computed on your average daily balance, including new purchases.
Over limit and late fees range from $32 to $35 depending upon your credit limit. Cash advance fees are 5% or $5, whichever is greater. The annual fee of $50 will be billed to your credit card each year on the anniversary of your account activation. There is no application fee.
This Visa® card comes with zero percent fraud liability, and is accepted anywhere you see the Visa® logo.
Rates and fees are subject to change without notice.
When credit card issuers started increasing credit lines, promising low interest rates “for the life of the balance,” and sending consumers cash advance checks with large numbers already filled in – it was hard to resist.
Some merely transferred balances from higher rate cards. Who wouldn’t trade in their 10.9% balance for 1.9%?
Had everyone kept on paying the monthly minimum payments required at the higher interest rates, their credit card debt would have fallen rapidly. Unfortunately, many used that low interest rate and corresponding lower monthly minimum to reduce their monthly bill payments.
Others saw those offers of 1.9%, and even up to 6.9% as a way to reduce interest payments on a car, or on major home improvements. And again, they used the low monthly payment as a way to spread that debt out over many years.
Now credit card issuers have dropped credit limits sometimes to less than the balance owed – and the fact of being “over limit” has caused the low interest rates to spike.
The result is a monthly minimum that many find difficult, if not impossible to pay.
What to do if you’re in this situation?
First, act quickly. Keep making those minimum payments in order to protect your credit rating while you find ways to finance that debt at a lower interest.
If you owe on a credit card for a car purchase, try to refinance the car at a bank or credit union – and of course, use the money to pay down the credit card. Your interest rate will be lower and the payment will be fixed.
Then, if a good portion of your debt was for home improvements, see if you can get a home equity loan to pay off the card balance. This will put a second lien on your home, but will give you a fixed rate and a fixed payment.
When you’ve gotten that credit card balance as low as you can through those actions, begin working to pay it off. Look for a lower rate card that you can transfer to, or contact your card issuer to see if you can opt out of the rate increase by closing the account.
If you are allowed to opt out and stay at your old rate, remain on the alert for new increases, and put any extra cash you have against the debt.
In today’s economy, one thing we all know is that we should get out of debt, and stay there. It might mean going without a few “wants” right now, but will feel good later.
So, the first step is to quit getting farther into credit card debt, and the second is to pay off the debt you already have. What’s the best way to go about it?
If you have a card with a large credit limit and a low interest rate, it could be wise to consolidate all of your credit card debt into one monthly payment. There are, however, two dangers with that plan.
One is that you will begin making a minimum payment – thus putting fewer dollars toward your debt, which will keep you in debt even longer. Instead, add up all the payments you’re making to all of your credit cards now and apply that entire amount to the consolidated debt.
The other danger is that when you write a check to pay those other credit cards, your high credit limit card could decide to lower your limit to the outstanding balance – or even lower. You can’t trust what they’re going to do these days.
If that happens, it will have a negative effect on your credit scores, so consider your future plans before choosing that course of action.
The alternative is to keep the accounts you have in place, trim your budget to free up more money to pay on them, and concentrate on one credit card at a time until you get rid of the outstanding balance entirely.
You could, of course, spread the extra dollars among all your credit cards and pay them down at the same time, but it feels good when you can write “Paid in full” across a statement. Choosing one at a time to focus on will let you have that “feel good feeling” more than once!
So which account should you choose? Most would tell you to pay off the balance with the highest interest first, in order to save the most money. The alternative is to concentrate on the card with the smallest balance. Paying off a debt is a mental and emotional boost that might help keep you on track, and the smaller the balance the sooner you’ll succeed.
Whichever route you choose, apply all the money you were paying on that “paid off” card to paying off the next one. You’ll have success faster than you think.
Your credit card is one of the first things you’ll put in your pocket when you head out for vacation – and with good reason.
Many cards offer consumer protection features such as replacement of items that may be stolen or broken, and if your card is stolen, you probably have zero liability as long as you report it in a timely fashion. That makes carrying a credit card both safer and smarter than carrying cash.
But there are a few precautions you should take.
First, look over your credit card agreements and choose the cards that do offer replacement features. Then look at your statements and choose the cards that have the lowest balance and the highest credit limit – you don’t want your vacation to wreck your credit scores. Double-check before you leave home just to make sure your credit limit hasn’t changed since your last statement.
Choose two cards, just in case one does get lost or stolen. Consider one the primary and keep one as a back-up.
Once you’ve chosen the cards you’ll carry, call your credit card issuer and let them know you’ll be on vacation. If you don’t take this step, you could find yourself in a strange place with your credit card charges being denied! You don’t want to be accused of identity theft just because your home is in Oregon and you’re vacationing in New York.
If you’re planning to use a debit card, call your bank and let them know your plans as well.
Now make a photo copy of the cards – front and back – being sure that the contact numbers are clear. If the number listed is an 800 number and you’re going out of the country, call and ask for a toll number because you may not be able to use the 800 number.
When you check into your hotel, put the copy in the safe along with your back-up credit card and any other valuables that shouldn’t be laying around loose in your room.
Since you probably will need a little cash in your pocket while you’re sight-seeing, you’ll probably use an ATM to get it as you need it. Check the fees and take a couple day’s worth of cash out each time.
Be careful about the ATM you use! Some are bogus, so plan ahead and use the ATM at a bank if at all possible. One in your hotel lobby should also be safe.
Be sure to carry your cash and credit cards in an inside pocket – not in a wallet or purse that is easy prey for a pickpocket or a “snatch and run” thief.
The American Express Platinum Card is a business card for much-traveled executives. With an annual fee of $450 and a charge of $175 for up to 3 additional Platinum cards, regular use is required to offset the fees.
If you’re searching for a “prestige” card, look no farther.
This card carries no pre-set spending limit because payment is due in full each month. Purchases are approved based on account history, credit record, and personal resources.
This business card is also a rewards card – and you’ll earn 25,000 Membership Rewards® bonus points when you spend $1,000 in the first 3 months of membership. This is redeemable for one round-trip domestic airline ticket.
While at the airport, Platinum Card® members enjoy complimentary Airport Club Access worldwide. members also receive a complimentary overseas companion ticket on any of 17 selected airlines when purchasing a qualifying ticket through the Platinum Travel Service.
Members also enjoy special amenities at over 500 boutique, resort, and luxury hotels, complimentary memberships in premium car rental programs, and exclusive cruise amenities when they book travel through Platinum Travel Service.
In addition, members have access to travel specialists to plan their Platinum Destinations® Vacations and 24-hour access to Concierge service while traveling.
Members receive a complimentary subscription to Departures magazine, and enjoy exclusive shopping privileges and amenities when shopping at selected luxury retail establishments.
American Express Platinum Card® members who book their travel using their card and the American Express Travel Service can qualify to receive a credit of $100 one per year.
In addition, their baggage will be covered up to $3,000 per person and travelers will be covered by up to $500,000 in accidental death and dismemberment insurance.
Should the Card be lost en route, travelers can still check into a hotel and charge the stay to the Card. As will all American Express® travel plans, your reservations are guaranteed even if you arrive late.
When shopping, either at home or away, members are covered against unauthorized or fraudulent charges, and satisfaction is guaranteed with Return Protection for up to 90 days from the date of purchase.
If purchases are stolen or accidentally damaged within 90 days, American Express® Purchase Protection will credit the member’s account for up to $300 per item. Purchases are also covered by an extended warranty which mirror’s the manufacturer’s warranty and extends protection for up to one additional year.
This week First National Bank of Omaha customers received a letter outlining changes that will go into effect on November 24, 2009.
In the letter, they explain that they are trying to operate the business efficiently by attempting to reduce rising credit and operating costs. This, according to FNB, allows them to offer “quality products at competitive terms.”
The next paragraph blames the bad news on the new federal regulations – which have “significantly increased” their costs.
Customers have until noon on November 24 to reject the changes. If they choose to do so, ability to use the account will terminate on the “good thru” date shown on their credit card. Then they will be allowed to pay their remaining balances under current terms and conditions.
What are the changes?
Cash advance fees will be higher. Balance transfer fees will be higher. And most significant to card holders carrying a balance, the annual percentage rate is changing.
Rather than a fixed rate, the rate will be variable. The new rate will be equal to the Index plus a margin of 26.74%. That means that right now it would be 29.99%. With the Index this low, it probably can do nothing but rise, so paying off that card as fast as possible is smart.
The new rate will apply to all existing balances except promotional rates, and all future purchases, balances transfers, and cash advances.
This move was an expected reaction to the new federal regulations, because after the new rules go into effect, credit card issuers will be prevented from imposing higher rates on existing balances. They needed to get these high rates in place and transfer fixed-fee balances to variable rates before the law changed.
The move by Citigroup, which has now imposed annual fees on many of its existing credit card accounts, was also expected.
Citigroup, like FNB, cited the increased cost of doing business as its reason for the new charge. It also offered to waive the fee if the consumer uses the card to charge at least $2,400 over the course of the year. In other words, they hope you’ll carry a balance and pay them some interest.
Citigroup is not alone – about 28% of credit card offers carried an annual fee this year, compared t about 17% last year. The amount of the fee is also increasing and now is at an average of $82.
The bottom line: Read credit card offers carefully, and read every correspondence from your credit card issuer.
With all the talk of bail-outs and settlements and debt forgiveness, some consumers have been led to believe that they can simply call up their credit card issuer and request a settlement.
While that might be nice for those with the cash to pay off half or two-thirds of their credit card balance, it isn’t going to happen.
That is, it isn’t going to happen unless you are willing to first destroy your credit rating by becoming severely delinquent in your credit card payments. From all indications, it appears that some (NOT all) banks will offer a settlement after payments become 6 months or more past due.
Of course, during those 6 months, your account balance will have been growing by leaps and bounds. After your payment is as much as an hour late, your interest rate will have jumped – perhaps it will have gone even as high as 29.9%. On top of that, your available credit will have been slashed to at or below the amount you owe.
Thus, on top of usurious interest, you’ll be charged a late fee. And because the new interest and penalties will put you over your credit limit, you’ll be charged an over limit fee as well. Your balance could double over those 6 months.
Under the new rules, credit card issuers won’t be allowed to automatically raise your interest rate until you’re 60 days late, and they won’t be able to slash your credit limit to an amount less than you owe, but those rules don’t go into effect until February.
Why would they offer you a settlement on your credit card balance? Because at this point they believe that you aren’t going to catch up on payments and they will be forced to do one of two things:
Sell your loan to a collection agency for pennies on the dollar
Turn the account over to an attorney to sue for collection
They’re going to lose money, no matter which method they choose. So accepting at least a partial payment from you could be more profitable than the alternatives in the long run.
They may send a series of letters, each time offering to take a smaller percentage as a payoff. If you’ve come into a windfall and can pay the settlement amount they offer, do it, because after all this time, your credit scores are already so bad that the settlement notation won’t do much more damage.
The American Express® Preferred Rewards Gold Card is for consumers who pay their balance in full each month. Instead of paying interest, card holders pay a $125 annual fee.
Those who wish additional cards for family members or employees may get up to 5 additional cards for $35 and $35 each for additional cards after the first five.
There is no pre-set spending limit. Instead, purchases are approved based on such factors as your credit record, your account history, and your personal resources.
The rewards are great for this level of participation. You earn 1 point for virtually every dollar you spend. In addition, when you spend $500 in your first 3 months of Card membership, you automatically earn 10,000 Membership Rewards bonus points, which are redeemable for a $100 gift card.
You can redeem points for rewards for shopping and entertainment, or choose from 21 airline partners, a wide variety of vacation packages, over 50 cruise itineraries, hundreds of hotels around the world, and exclusive spa retreats.
You can also transfer your points into 17 different frequent flyer programs. In most cases your points will transfer point for point with airline miles. In order to offset the federal excise tax on conversions, you will be charged a fee of $0.0005 for each conversion of points into the Frequent Flyer program of a U.S. airline. The maximum fee for each transfer is $75 and will be charged to your Card account.
Unlike points earned with some cards, your American Express® Preferred Rewards Gold Card points never expire and there is no limit to the number of points you can earn.
Many customers carry the American Express® Preferred Rewards Gold Card just for the Gold Card Events. With this card, you have access to the most sought-after tickets for concerts and shows to major league sports events in cities across the U.S. Often, tickets are available to Card holders in advance of public sale.
The American Express® Preferred Rewards Gold Card makes shopping safer. Our Fraud Protection covers you against fraudulent charges, while our Return Protection guarantees that you’ll be able to return merchandise within 90 days of purchase – or we’ll credit your account up to $300.
Travelers especially appreciate our Purchase Protection – which protects covered items from theft or damage for up to 90 days after purchase. In addition, when you purchase with our Card, our Extended Warranty mirrors manufacturer’s warranties for up to an additional year.
And speaking of travel – when you use the Card and American Express® Travel Service, you’ll receive a credit of up to $100 once per year. Your baggage will be covered for up to $1,250, and your reservation will be guaranteed, even if you’re late checking in.
Travel Accident Insurance and Car Rental Loss and Damage Insurance are two more of the benefits of booking your travel with our Card.
For complete details, and to apply for this Card visit http://www.bestrateforcreditcards.com/ <http://www.bestrateforcreditcards.com/best-rate-reward-credit-cards/>and choose American Express® Preferred Rewards Gold Card.
Has the minimum payment on your credit card suddenly jumped to an unmanageable figure? If so, you’re not alone.
This is the latest in the risk-avoidance tactics being used by credit card companies. Along with other methods to get their money back faster, they’re using both interest rate increases and minimum payment increases to reduce their own risk.
A jump in monthly minimum occurs naturally when your interest rate is increased – and many consumers have seen that happen over the past few months.
If you owe $5,000 at 5.99% you need to pay a percentage of your balance plus the interest each month. That balance percentage has been at about 2% for some time. Under your old terms, you’d have paid $100 toward the principal and $24.96 for interest – for a minimum payment of $125 per month.
When your interest suddenly jumps to 18.99% that interest jumps to $79.13 so your new payment is $180.
You don’t like it, but you can probably manage it. But the new tactic credit card companies are using is to simply increase your minimum monthly percentage of the balance. Where you were expected to pay 2% plus interest, you’re now required to pay 5% plus interest. That means instead of $100 you’ll be paying $250 per month against your principal balance.
Now, even if your interest rate stayed at 5.99% your new payment is $275 per month. For many consumers, especially those hit by the massive layoffs of recent months, that figure could be more than they can handle.
It appears that people who have been targeted for the minimum payment increase are those who carry debt under low fixed rate terms. In other words, the credit card issuer promised that there would be no increase in interest rate for the life of the balance.
Most consumers want to maintain a high credit score and want to pay their debts. Some are struggling to do so in the face of reduced income and higher prices on life’s necessities.
Instead, the profit-generating, risk-avoidance measures being taken by the credit card companies are forcing many of them to give up. Some take bankruptcy and some simply quit paying.
Either way, as a direct result of their actions, the credit card companies take the losses that their measures were designed to prevent. It doesn’t make much sense, and one is tempted to call and ask “What were you thinking?”
As of September 1 you can use your credit card to pay certain mortgage loan fees if the loan will be underwritten by Fannie Mae.
