Credit Card Lowdown

Old-fashioned is in: Save and spend

Most of us have suffered from this unnerving urge to buy something knowing well enough that we don’t have the means to pay for that expensive item. We bill it to our credit cards and hope the enjoyment of the object will help us forget its price. Of course, we may well be able to forget, but your card company does not, and very soon you will be saddled with a debt so huge, you wouldn’t know how to begin repaying.

One of the most difficult questions to answer is how to keep your credit card debt under control. But when you think of it, it is not such a difficult task. All you need is to treat your credit card as a plastic check. Try this little trick that some people have used successfully.

Every time you use your card, enter this transaction into your checkbook. Also, don’t forget to debit your checking account for that sum. Then ensure that you pay the total every month. Another important thing: Only spend how much you have in your bank. Don’t overspend and keep a check on your balance sheet. Try to avoid going into the red and the minute you feel that your balances are diminishing, exercise some self-restraint and control your expenditure.

Another thing you could do is to make major purchases in cash or using your debit card. This way, you will control your purchases, and slowly but surely, your urge to overspend will also be curtailed. This may seem difficult initially, but if you stick to it, you will find your bank account growing stronger again. Agreed, it may seem old-fashioned but if you do it this way, then you can rest assured that you will not overspend or be saddled with a debt that you cannot repay.

What you can do to avoid foreclosure

While foreclosure is not an imminent danger in Coachella Valley, there are still a few things that residents can do to tackle potential interest rate hikes. One of the best options is refinancing; owners holding ARMs will have the freedom to refinance into fixed-rate programs and get better terms. Thedesertsun.com reports:

Don't sell on a dip. A local drop in overall sales prices is not yet on the horizon, but if one happens, don't sell until prices recover. Have financial reserves on hand in advance to ride out any tough times. If taking out equity on a home, do so while values are still rising - but beware of spending against equity and creating more debt.

Read more: Foreclosure trend may mask trouble

Credit cards: Pay up fast or regret

Agreed it is not easy for most of us to keep pace with our credit card payments. But what you don’t realize is that credit card companies have many tricks up their sleeves that they use one by one to ensure that you not only pay up but also pay much more than what you originally have to. Mailtribune.com reports:

Says Matt Conens of Consumer Credit Counseling of Southern Oregon, "It’s not easy being a savvy consumer, but knowing what you are up against can keep you from paying more than you have to, and help maintain a high credit score".

Read more: Late for an important date: credit card payments

Visa gets an all-new look

This may sound like old news, coming as it does a few weeks later. But for those who still don’t know, Visa USA recently announced that it's launching a new logo for the first time in 30 years.

You will now get to see this most recognizable of cards in a set of different colors. Instead of the colored bands that have served as the unmistakable identity of the Visa credit card, now you will find the card sporting three colors. Its famous blue, white and gold colors that are there in the Visa brand name will now adorn the card as well.

Don’t go yet. There’s more. The card company has also redesigned its cards. The dove hologram that was on the front will move to the back of the card and will be integrated into the magnetic space. As part of the redesigning, the three-digit security code will no longer be over the signature panel. To make it easier to read, the code will now occupy a separate panel next to the signature panel.

Consumers upbeat about repaying credit card debt

Consumers are extremely upbeat about the overall credit situation if an Experian-Gallup Personal Credit Index(SM) survey is to be believed. For the second month in a row, optimism levels are at their highest. Most customers strongly believe that they can and will reduce their debts and improve their financial situation soon.

Three quarters of the people surveyed were planning to reduce their credit card debt in the New Year. However, not everyone could say the same thing about their overall debt levels. One possible reason for the optimism is that people have learned a bitter lesson the hard way. The year that went was one of the toughest in recent years.

Daily costs were on the upswing, many people lost their jobs and prices of things were rising. All of these are good breeding grounds for a heavy credit situation. However, with the experience of 2005 behind them, people have a better idea and a plan to deal with debt and to even eliminate it.

Students in credit card trap

Credit card debt, the bane of modern America, has tainted young students as well. The average student today has a credit card debt that ranges between $3 and $7,000. So, when they graduate from college, these youngsters already shoulder a heavy debt burden. And this is in addition to their student loans!

And the worst part is that credit card companies are targeting a very young segment. Students, who are still to cross the age of 20, roam around with four or five credit cards. An alarming trend shows that even before they enter college, these youngsters are propositioned and charmed by credit card companies into taking cards. Thetraveleronline.com reports:

A recent article in USA Today stated that 23 percent of college students have gotten credit cards before they entered college, said Joel Doelger, Director of Counseling for Credit Counseling of Arkansas. Debt from those cards can begin to accumulate as early as freshman year because when students enter college, they are targeted by credit card companies as potential new customers.

Read more: Student credit card debt in the thousands

Debt consolidation information center

In a bid to help consumers get all kinds of information on debt consolidation, DebtDIY.com recently unveiled the Debt Consolidation Information Center. The hundreds of articles in this website help consumers get answers to most of their important questions regarding debt consolidation. Prweb.com reports:

The Debt Consolidation Information Center also includes hundreds of links to additional resources online for people in need of assistance in making informed decisions. Some of these resources include information about Debt Reduction, Debt Consolidation, Student Loans, Credit Card Debt, Mortgage Loans and much more.

Read more: DebtDIY.com Unveils Debt Consolidation Information Center

New application provides on-demand credit card processing

Payment Processing, Inc and Salesforce.com recently announced the launch of a new application PPI PayMover(sm) for salesforce.com's AppExchange. This application will allow salesforce.com customers to accept credit and off-line debit cards for payment; process payments; and create custom reports. Businesswire.com reports:

PPI PayMover for AppExchange enables better visibility into the total customer experience with higher satisfaction levels, larger purchases, and more frequent buying using credit cards.

Read more: Payment Processing Inc. Introduces PPI PayMover for Salesforce.com's AppExchange

Helpful Hints on Using Credit Cards

There are two sides to credit cards. They can be a boon for emergencies, and being able to pay the balance off every month makes for an advantageous privilege. However the very same credit cards can be a downright hellish experience if you don’t control how you use them.

Think twice before carrying balances as cards charge as much as 20% and more in interest in the name of finance charges.

Examine your statements very carefully and in case of any doubts get them clarified with the company right away.

Cash advances generally incur a huge finance charge with interest being charged from the moment the money is withdrawn instead of after the next statement closing.

Be careful about annual fees that many cards charge over $50 merely for the privilege of using the card.

Credit card offers in the mail promising low rates may have an expiry date after three to six months. So make sure you know from when and how much you’ll be charged on expiry of the introductory offer.

Avoid impulse purchases that you are not able to afford without the card.

If you fall behind in payments, it’s time to reduce recreational expenses. You could speak to the company for a repayment schedule that is convenient. Prepare a budget and stick to it. You may also consider credit counseling services to overcome debt. Credit card info.com reports:

Credit cards can be helpful in emergencies or if you are able to pay off the balance each month, but be wary! Credit cards can also get you into trouble. Here are some helpful hints on using credit cards:

How Credit Cards are Billed

Credit cards differ from conventional loans in repayment as the amount can’t be spread over a fixed period. Minimum monthly payments are required as specified in the terms.

The amount for minimum payment is mostly 2 percent of the outstanding balance. However paying only minimum amount each month will increase your debt. Late fees and higher interest rates on cash advances are also possible.

Students have to make their own decision on whether they are ready for the responsibility of a credit card. Getting one is much easier than managing it and you can easily end up running a huge balance that is attracting interest but without payments being made. A study found that from 79 percent of students with multiple reasons for using credit cards, just 13 percent were able to restrict card usage to emergencies alone.

Your need for a credit card should be preceded by asking yourself certain questions. Do you really need a credit card and can you afford one? Will you be able to repay the balance every month?

Having made the decision to get a credit card, the smart advice is to shop around. The factors that you need to consider include low interest and finance charges or the APR, low or no annual fees, a grace period prior to finance charges being levied and additional benefits like purchase warranties, free gas, airline miles, etc. Credit card info.com reports:

Unlike repayment on a traditional loan, such as a student or car loan, credit cards do not allow you to spread the amount you owe over a fixed period of time. Instead, you are required to make a minimum monthly payment, which is the smallest amount you can pay and still meet your cardholder agreement (the terms you agree to when signing up for the card).

Errors and disputes

When you open a credit card account, the issuer must notify you about the rules for correcting billing errors. The issuer needs to act promptly on these rules if errors occur.

Mistakes on your bills can be disputed. During the investigation period, the payment of the amount is withheld. The error may be a charge for the wrong account, anything you refused or failed delivery. The rest of the bill not in dispute including finance and other charges however, need to be paid.

To dispute a charge, write to the creditor with all your details mentioned. Don’t delay as the creditor must be informed within 60 days of the bill with the error having reached you.

If your complaint is not rectified, the creditor has to acknowledge it in writing within 30 days. The dispute has to be sorted within a maximum of two billing cycles but not beyond 90 days.

If your card has been used without your knowledge you are responsible for only up to $50. But if you are able to report loss of the card before the card is used, you cannot be held responsible for any of the charges. Credit card info.com reports:

Errors on Your Bill. Issuers must follow rules for promptly correcting billing errors. You'll get a statement outlining these rules when you open an account and at least once a year. In fact, many issuers include a summary of these rights on your bills.

Credit card considerations

Different credit cards offer different terms so you need to consider how you plan on using your card. If you intend to pay in full each month, annual fee and other charges are key considerations if there is a grace period for purchases. For cash advances, grace periods are mostly not valid even if they are for purchases. For taking your time to pay for purchases, the APR and balance computation method are major factors.

The credit limit could also be a consideration as may wide acceptance of the card and the services and features offered by the plan. There are affinity cards which are all-purpose and sponsored by professional organizations, college alumni associations and travel companies. Usually a portion of the annual fees or charges is donated to the sponsor or you may be entitled to free travel and other bonuses.

Find out if there are special delinquency rates. Cards with low rates for timely payments may charge a huge APR for a number of delays in a specific period. The rates could be almost 20 percent.

According to federal law issuers cannot send you cards you never asked for. But renewal or substitutes cards may be sent without request. They may also send you applications and solicitations or ask you over the phone.

The day your payment reaches the issuer, it must be credited to your account. This doesn’t apply only if it has not been done according to the prescribed procedure or if the delay in crediting will not incur a charge.

On making any return or paying more than the balance, you can keep the credit on your account or request a refund. Refunds have to be issued within seven days of receiving your request. A credit remaining in your account for over six months should be refunded by the issuer. Credit card info.com reports:

Credit terms vary among issuers. When shopping for a card, think about how you plan to use it. If you expect to pay your bills in full each month, the annual fee and other charges may be more important than the periodic rate and the APR, if there is a grace period for purchases. However, if you use the cash advance feature, many cards do not permit a grace period for the amounts due - even if they have a grace period for purchases. So, it may still be wise to consider the APR and balance computation method. Also, if you plan to pay for purchases over time, the APR and the balance computation method are definitely major considerations.

Balance Computation Method for the Finance Charge

Some credit cards try to lure you with offers of a free period. A free period also known as a grace period exempts you from having to pay the finance charges of the credit card by paying the complete balance before the expiry date.

Without a free period or if you intend to pay for purchases over an extended period, you need to know the issuer calculates the finance charge. One way of doing this is the average daily balance. The most common method, it credits your account from the date of the payment receipt by the issuer. The beginning balance for each day of the billing period minus any credits made to your account the same day is totaled for the balance due. The plan determines whether or not new purchases are added to the balance, which typically includes cash advances. The daily balances are then added to the billing cycle and the total divided by the number of days.

Another method is the adjusted balance which is most beneficial for card holders. The balance is worked out by deducting payments and credits received during the period from the previous period’s balance. Purchases are normally not included. Here, you have to pay a part of the balance to avoid interest charges. Sometimes unpaid finance charges from the previous balance are excluded.

Then there is previous balance which is the amount owed in the previous period but usually excluding payments, credits and purchases of the current period.

Two-cycle balance takes into account the previous two month’s activities. Find out if your issuer uses this method and which specific one. Clarify all doubts with your issuer. Your billing statements also must carry an explanation. Credit card info.com reports:

Free Period. Also called a "grace period," a free period lets you avoid finance charges by paying your balance in full before the due date. Knowing whether a card gives you a free period is especially important if you plan to pay your account in full each month. Without a free period, the card issuer may impose a finance charge from the date you use your card or from the date each transaction is posted to your account. If your card includes a free period, the issuer must mail your bill at least 14 days before the due date so you'll have enough time to pay.

Choosing and Using Credit Cards

More likely than not, you would have been the recipient of a fair share of the credit card offers that pour into mailboxes everywhere, offering everything from low introductory rates to extra perks. Most will try to convince you to hurry and act before the offer expiry. But don’t accept any unless you are clear about the facts.

Credit cards are merely a means of borrowing for extra charges. The terms and conditions of each card has an impact on the overall cost. Therefore compare the terms and feeds of different cards by all means before deciding on one. Certain terms are of great importance which you need to be aware of.

The Annual Percentage Rate or APR is the yearly cost of the credit service. You need to know this before making a commitment. Another important factor that the issuer needs to inform you about is the periodic rate that is applied to your outstanding balance to determine the finance charge for every billing period.

There may be credit card plans where the issuer can change your APR due to changes in interest charges and indexes. As the rate charge is affected by the index performance, the plans can also be termed variable rate programs. Credit card info.com reports:

Chances are you've gotten your share of "pre-approved" credit card offers in the mail, some with low introductory rates and other perks. Many of these solicitations urge you to accept "before the offer expires." Before you accept, shop around to get the best deal.

Foreclosure filings sharply increase

Massachusetts saw a rise of 34 percent in foreclosure filings last year as compared to the previous year. And the worst part is that many first-time homeowners also had to undergo this traumatizing experience.

For those interested in figures, the number of foreclosure filings through November was nearly 10,500. These figures are from the website ForeClosuresMass.com. The site states that the number of foreclosure filings in Essex County rose by 49, and other counties like Suffolk, Plymouth, and Bristol saw filings rise by more than 42 percent.

So, what is the reason for this sudden increase? According to the Office of Federal Housing Enterprise Oversight, one important reason is the sharp rise in prices of real estate. In some places, prices have risen by $100,000 in the past five years.

Tips to avoid credit card debt

According to the American Bankers Association, most Americans fall behind on their credit card bills. And the Association has the statistics to prove its point. The report released by the Association recently states that in the period between July and September 2005, the percentage of credit card accounts that were 30 days past due or more, was at an all time high.

Of course, that is not to say that Americans as a people are not capable of managing their affairs. It is also important to note that the past few years have been quite bad for most of the people. Terrorist attacks followed by natural disasters and a general slowdown in the economy have taken their toll. People are finding it difficult to earn a decent salary and savings are down to almost nil. But that does not mean we can wring our hands and worry about not being able to do anything to avoid a credit card debt. Michigansthumb.com reports:

The Federal Trade Commission offers the following credit card tips: Protect your cards and account numbers to prevent unauthorized use. Draw a line through blank spaces on charge slips so the amount can't be changed. Tear up carbons.

Read more: Tips for avoiding, exiting credit debt

Credit reports become hard-to-get

There are times when credit reporting agencies refuse to provide credit reports or investigate credit disputes, claiming that they can not identify the consumers. They ask consumers to mail them copies of ID and utility bills or any other important documentation. Emediawire.com reports:

For the men and women in the military it is even more difficult to get their own credit reports and sometimes it is impossible when serving overseas. How can a CRA demand that a soldier in Iraq mail utility bills or rent receipts? The CRAs’ toll-free numbers do not work outside the US and the military postal service is extremely unreliable.

Read more: Fraud Alerts on Credit Reports Cause Hardship for Many Consumers and Military Personnel Overseas

Agencies help deal with credit card debt

You’re going to get a New Year’s surprise that’s not going to make you feel any better as beginning January, credit card companies will charge higher minimum payments based on guidelines from the Federal Reserve Bank. And to help you counter the problems you may face when having to pay extra money, credit counseling firms have come up with many new options. News-journalonline.com reports:

Marc Eisenson, a financial writer at Good Advice Press in Elizaville, N.Y., said card-balance juggling can work if the borrower is disciplined enough to avoid further charging and pay off the balance before the teaser rate expires. Another caveat is to make sure no special "transfer fees" will be incurred for moving balances. Some banks will waive the fees if a borrower is bold enough to ask, Eisenson said.

Read more: Planning can avoid getting caught up in debt

Gen P sets the pace for plastic

Consider this scenario: You are out shopping and once you buy everything you want, you reach the check out counter. What do you reach for, cash or your debit/credit card? Chances are you reach out for that card especially if you belong in the 20-30 age group!

Money has taken on a completely new meaning for the young generation of today. Or should we call them the plastic generation. People today are flashing their plastic for most purchases, even the mundane ones. And they prefer not to pay in cash. In recognition of their penchant for plastic over hard cash, Visa USA recently coined an apt name for people belonging to this age group: Generation Plastic or Gen P. As the younger lot grows up and begins to learn the advantages of using cards over hard cash, they are forcing merchants to learn new ways of doing business. One of the most prominent changes is that more merchants, shopkeepers, discotheques and other services are now open to the idea of accepting cards over cash.

But this does not mean that everyone accepts this trend as a good thing. Many people are worried about this growing fascination among youngsters for things plastic. And rightly so. Parting with cash is often more difficult than paying with a card. When we pay for purchases with a card, we don’t see the money actually leaving your hands. So, in a way, we are insulated from the feeling of having spent beyond our limits. Another problem is of diminishing savings. While a credit card may incur heavy debts on you, using a debit card is no better. According to The Nilson Report, a newsletter that follows spending trends, in over 23 billion transactions, debit cards were used as modes of payment.

Smart and Simple Financial Strategies for Busy People

Personal finance is something not all of us are comfortable with. Most Americans are a pampered lot and are very used to the easy and unlimited access to credit.

This makes personal finance seem like a tedious chore. Jane Bryant Quinn, a personal finance columnist and syndicated newspaper writer offers a few nuggets of wisdom in her book Smart and Simple Financial Strategies for Busy People.

She provides you with simple strategies to buy a house and get out a debt trap. One of her better pieces of advice is to automate your personal finance wherever possible. This includes using services such as online banking and putting in place an automatic savings plan for your retirement. Ensure that you buy financial products directly from companies whenever possible and try to avoid brokers or planners.

Unpaid parking tickets could cost you a loan

Did you know that a small event like not returning a book to a public library could affect your credit score? Of late records of outstanding money for small things like parking tickets and fines, are finding their way to individuals’ credit records. Authorities that are try to retrieve almost $40 billion in unpaid fees, parking tickets and even utility bills; do not have much choice in this matter. They are faced with the tough choice of either trying to clear past-due accounts or raise taxes and cut spending. Since the second alternative is not a very popular choice and can raise the hackles of more than just a few people, the government is left with no choice whatsoever.

However, the only problem with such an approach is that it can taint a person’s credit record credit record to such a point that s/he finds it difficult to make big purchases like a house or a car. So while this may be a legitimate way to get back money that is rightfully owed to it, is the state doing more harm than good in the long run? Msnbc.msn.com reports:

And when you do pay the debt, try to get a letter that agrees to remove the mark from your record. Kevin Howard has tried to do just that. But the city of Houston hasn't budged, which means he'll have to wait seven years until it's finally erased — in 2012.

Read more: Overdue library books impact credit scores

How to handle your credit report

While now it is public knowledge that you can get your credit reports for free, many people are still wary of trying to access their reports on the net. Mailed reports are no better because there is a chance of a mail thief intercepting them. Nj.com reports:

The big problem with using the Internet to get your reports isn't really hackers, but the possibility that you'll type in the wrong URL and get sent to a look-alike or bogus site.

Read more: Hints for handling credit reports, cards

Acies reports growth of 138% in merchant accounts

Acies Corporation, a financial services company specializing in payment processing and online banking services to merchants in the United States, recently announced growth statistics for its merchant account portfolio for the 12-month period ended November 2005. According to the report, total merchant accounts grew 138 percent in the period. Businesswire.com reports:

"We are pleased to report such a strong increase in our merchant account portfolio, even through the typically slow month of November, just prior to the holiday spending season, " said Oleg Firer, President & CEO of Acies.

Read more: Acies Reports Continued Merchant Account Growth in November

Data breach at Visa

Visa USA recently acknowledged that a U.S. merchant’s credit card account information might have been compromised in a data security breach. In a statement, Visa said that it quickly alerted affected financial institutions to protect its consumers. News.com.com reports:

Data theft and identity theft came to the fore this year when a data security breach at payment processing company CardSystems Solutions exposed more than 40 million credit card accounts to fraud, primarily Visa and MasterCard cards.

Read more: Visa deals with possible data breach

Reward cards

What type of credit card do you hold – regular or reward card. Chances are you already have a reward card with your regular credit card or are planning to get one soon. So what is it about these cash-back cards that have people gunning for them? It’s simple human nature. Not many people can say no to rewards that are offered for doing what you like to do most – shop. It’s just too tempting. So let’s have a look at this segment of the credit card market, which is growing at an enormous rate – at last count, over 32 million people across the country were using reward cards!

The credit card industry is not known for its generosity. On the contrary, high interest rates, and changing terms and conditions are more de rigueur in this industry. So the very fact that these companies are today offering cash or rewards to people who shop with their cards may sound a bit absurd. But not when you realize that they are now banking on something businesses have done from time immemorial – customer loyalty.

When any credit card company offers a cash-back or reward scheme for using its credit card, customers are known to usually use this particular card more than the regular ones. So now you have companies like Discover giving away almost $500 million in 2005 alone. Discover was the company that introduced the cash-back scheme nearly two decades ago. Soon other credit card companies like American Express, Citibank, Visa, and many others were offering reward cards and business was booming.

So how good are these cards for customers? Do they come with some hidden charges or are they simply what they claim to be? Questions any persons should ask him/herself before going in for a reward card.

If you were to go by customer surveys, this industry is yet to peak. People are in general very happy with these cards. Only one thing, you need to find out which card suits you and your wallet best. You only need to remember one thing: your choice of card depends on what kind of shopper you are – you buy books, grocery, or clothes. So it is important to know more about every card before you choose the one that is right for you.

Credit reports and identity thefts

A Wisconsin draft bill that proposes to allow customers to freeze their credit reports points to a deeper problem – something that needs to be tackled on a war footing. Identity theft has not only become a common feature across the country nowadays, it is also rising at an alarming rate. This has caused consternation in Wisconsin, which has seen an almost unbelievable rise in the number of cases where people’s identities had been compromised.

Between 2002 and 2004, reports of identity theft in the state grew by 49 percent! The draft bill, which will be introduced in the next few weeks, aims to put a stop to this disturbing trend. It proposes measures that will allow consumers to freeze their credit reports.

This will prevent criminals from misusing the information. Social Security numbers are a prime concern and the draft bill proposes limits on when businesses can collect the number from their clients. Heavy penalties on the bill aim to serve as deterrents to prospective criminals.

The draft bill has also inserted provisions that will allow consumers to ask credit reporting agencies not to share their credit reports without their consent. This is by no means a revolutionary idea. Quite a few states have already made legal provisions that allow consumers to freeze their reports.

Another bill to protect consumers includes a provision that requires businesses to intimate customers within 30 days if their identities have been compromised or personal identities stolen.

But a major cause for concern is how to stem the flow of personal information to foreign countries. Identity thefts today are being carried out on foreign shores. This makes enforcement almost impossible. And that brings us back to square one – how can you effectively protect your personal information and prevent it from going into wrong hands?

First Data may sell off card-processing unit

The card-processing unit of First Data, one of the major processors of credit card accounts for banks, is now on its last legs. By the end of the month, First Data is expected to announce if it will sell its card-processing unit, which has been in the red for quite some time now.

The company plans to retain its Western Union money-transfer business and its merchant-processing unit, which handles credit card transactions for retailers. Both these operations are presently making profits.

While First Data may not be the first casualty in the race for technical and market supremacy, it is still a mighty fall for a former leader in the business. One of the reasons First Data lost steam was its determination to stick to the old technology. When it first began operations in 1992 as a spin off from American Express, it was way ahead of any rivals.

And consolidation sounded the death knell for the company. Nytimes.com reports:

First Data stuck with the same technology all those years, while Total System, or TSYS, overhauled its processing programs. Total System rolled out a new system, TS2, with great fanfare in 1994.

Read more: Parent Weighs Abandoning Credit Card Processing Unit

Beware of Visa-Mastercard telephone scams

There is a new credit card scheme doing the rounds nowadays. Called the ‘Visa-Mastercard telephone scam’ it involves people calling on your home or mobile number and claiming to be ‘investigators’ with your credit card company. Wrgb.com reports:

The scammer then asks for the security numbers located on the back of the card.

Read more: Avoid credit card scams

High fees for multiple-use gift card

Beware! The ‘multiple-use’ gift card that you received this Christmas may not be as great a gift as you thought it would be – especially if you are living in Connecticut. You may end up paying a huge sum as fees on these types of gift cards, which are issued through American Express, Discover, MasterCard or Visa. This despite the fact that a Connecticut law prohibits inactivity fees and expiration dates on gift cards. The catch here is that the law still does not apply on multiple-use gift cards.

But the stringent rules have ensured that at least some of the card issuers stay out of the state. While Discover Card does not offer gift cards in Connecticut, American Express does not sell its cards directly to Connecticut residents.

What has irked state representatives are the numerous types of fees that the issuing companies charge for a small gift card. When you get a multiple-use gift card, you not only have an expiration date, you have to pay a purchase fee, inactivity fee and even a processing fee if you want any money that remains on the card after you’ve used it to be returned to you.

Should credit cardholders fear Bank of America?

The year has begun with a bang for Bank of America, which will soon become the largest issuer of credit cards in the country once it completes its acquisition of MBNA Corp. However consumer advocates fear that Bank of America may use its sheer size and dominance to take advantage of its cardholders. Delawareonline.com reports:

"Consumers should expect to pay more on their credit card bills because of this acquisition," said Rashmi Rangan, executive director of the Delaware Community Reinvestment Action Council, a consumer advocacy group focused on banking.

Read more: Consumer advocates fear MBNA buyout will cut competition, up fees

Prevent abuse of your credit information

If you are like most other people, you depend on your credit card issuer to keep your personal information safe and secure. But a recent spate of incidents where such information has been compromised, throws up a lot of uncomfortable questions. The latest in the line of companies where identities have been compromised include Marriott Vacation Club International and Ford Motor Company.

This means that the onus of keeping your credit information safe at all times rests with you. While that may not be practically possible, you could always take steps to prevent the abuse of your credit card information. This means you must increase your awareness about the means to be used to prevent abuse. Abuse can be in many forms.

If your credit card number falls into the wrong hands, the consequences can be disastrous. Abclocal.go.com reports:

Once your credit card number or social Security Number are in the wrong hands, they can be used for other crimes. Sergeant John Lucki, head of the Chicago police financial crime calls identity theft a feeder crime that can lead to more serious and long lasting problems for the victims.

Read more: Security breaches remind consumers to keep an eye on credit reports