Student Loans: Five big mistakes that students make with credit cards.

Credit cards and students don't always mix well, mostly because easy money is too soon spent

But if students avoid these mistakes then they will have an enjoyable experience with money. This applies to any first time credit card user, but students are can also be away from home and that puts them at greater risk.
The Five biggest mistakes students make with credit cards are:

1. Getting a credit card without understanding the terms.

Credit cards are a financial contract. "I'll do this for this much, if you do pay me this much."
Contracts also carry consequences.
Do you know what those consequences are using your credit card, and who might be affected, besides yourself?
For instance, do you:

• Know the interest rate on your credit card
• How that interest rate is calculated
• What penalties apply if you breach the terms of the contract?
• What those breaches will cost you in money
• What those breaches will cost in your parents credit score if they are guarantor
• What those breaches will cost your future credit?

If your parents guarantee the loan what will happen to their credit and repayment costs if you default?Do you know all the ways you can default on a credit card loan?

2. Buying things you don't need because you have a credit card

Its so easy to buy with a credit card. The money isn't real and its painless. Everybody's doing it right.
Retailers love credit cards because they know people, especially students will spend more because they have a credit card.
Here's a few credit card tips:

• Always know your monthly budget
• Never buy what you know you can't afford to pay off in advance.
• Never go to sales, just because you might find a bargain. Target purchases in sales that you know you need.
• Never buy lunch with a credit card. Get cash out and then buy.

Remember the average student carries over $3,000 in credit card debt. Do you know how much that means in payments you have to make every month, just to cover the minimum repayments.

3. Make do with just one credit card

The average student carries 4 credit cards. That's four ways to get into debt. Four service and monthly fees.

Remember if you fail to meet the minimum requirements on your credit cards your credit score will tank and then all the interest rates could increase.

4. Keep track of credit card purchases

It easy to have $100 in your wallet and then wonder where it went by the next day.
Well a credit card is like having that $100 constantly replaced with fresh ones. You need to keep count and keep track. Otherwise you will soon max out your credit and card.

5. Pay less credit card interest

Choose the card with the least amount of interest payable. Know the terms of the contract and ensure you don't breach them.

• You will always have to pay back the credit card debt 
• Plus interest 
• Plus service fees and charges 
• Plus credit card baggage if you mess up. 

When you mess up your credit scores, every credit reporting agency gets to know about it. There is no where to hide. You need to know this before you use that credit card the first time, not when you have a mountain of debt and no way to repay it.

If you buy something for $500 and it ultimately costs over a $1,000 in interest repayments, added fees and charges and penalty fees and interest, and extra interest rates because you have destroyed your credit, was that $500 purchase the bargain you thought it was?

Credit cards make it easy to get what you need to complete your studies.
It also makes it easy to get whatever you want. Know the difference.
Source: Mr Mortgage

Credit Cards: No interest rate credit cards on the Rise. Where's the catch?

Credit card interest rates are rising relative to the RBA cash rate here in Australia, if you haven't noticed, but you can win with interest free credit cards in the US. So where's the catch you might ask?       

US consumers are using credit cards less.

Keeping their debt levels lower when it comes to credit cards is the current focus for Americans nationwide since the recession. Many credit card issuers have evidently noticed this trend, as they are offering no-interest cards at an increasing rate. But those deals have a catch, as you would expect.

No interest credit card offers

Nearly half of all major credit card issuers throughout the U.S. offering no-interest credit cards, the latter half of the year appears to be an opportune period for many consumers to jump on offers.

No fees on credit cards for the first year deals

In addition to the considerable number of credit card companies offering zero interest, Waters noted many are also offering no fees for the first year of having the cards, as well as extended teaser rates.

Your Credit score, and credit history are important to qualify for a no interest rate credit card. Going in and during the credit card use

Many banks and card companies are gearing a number of their credit card offers toward the high-credit-score demographic, who are the consumers who can mostly qualify for no-interest cards.

If you have recently improved their credit standings may find you qualify for the zero-interest cards on offer.

So. What's the catch with interest free credit cards?

Well, you would think that not defaulting will keep your credit scores high.
That can be a mistake, because no-interest rate credit cards, have clauses that say that if your credit score falls during the introductory period you get hit with interest charges of between 10 and 25 percent.

Keeping your credit score high is essential to keeping a no interest rate credit card active. And the credit card companies are betting on you falling off the wagon.
The catch in no interest rate credit card deals is in the fine print.

Source: Mr Mortgage

Credit card scam: Half a million Credit Card numbers breached in Australian Point-of-Sale Hack

Australian Police are investigating a breach of half a million credit card numbers by the same gang that struck the Subway restaurant chain in the United States.

The credit card hacking intrusion occurred at an unidentified merchant in Australia and is being blamed on Eastern European hackers who installed keystroke-logging software on point-of-sale terminals (POS) and siphoned card data from the terminals remotely, according to SC Magazine.

The company’s network used default passwords and stored unsecured transactional data. The gang allegedly used an unsecured Microsoft Remote Desktop Protocol (RDP) connection to transmit the data.

"The network was setup by some local suppliers who didn’t understand IT security,” Det. Sup. Marden told the magazine. “It was a disaster waiting to happen.”

The hackers are believed to be members of the same Romanian group that was responsible for hacking 150 Subway sandwich shops and other unnamed retailers in the U.S.

Last December, four Romanian nationals – Adrian-Tiberiu Oprea, 27; Iulian Dolan, 27; Cezar Iulian Butu, 26; and Florin Radu, 23 — were charged in the District of New Hampshire with four counts related to those hacks, including conspiracy to commit computer fraud, wire fraud and access device fraud. The indictment also referred to two unindicted co-conspirators who used the online nicknames “tonymontanamiami” and “marcos_grande69.”

Few details have been released about the credit card hack in Australia, but in the Subway case, the hackers compromised the credit-card data of more than 80,000 customers and used the data to make millions of dollars of unauthorized purchases, according to authorities.

From 2008 until May 2011, they allegedly breached more than 200 POS systems in order to install a keystroke logger and other sniffing software that would steal customer credit, debit and gift-card numbers. They also placed backdoors on the systems to provide ongoing access.

POS systems generally consist of a card scanner at a checkout register where customers scan their cards and type in a PIN or provide a signature, as well as a computer system for transferring the data to a card processor for verification and approval.

The indictment didn’t identify the POS system used by Subway, nor does the news from Australia indicate the brand of terminal attacked in that breach, but Subway announced in January 2009 that it was deploying the Torex Quick Service POS in all of its 30,000 restaurants.

The Subway case shared similarities to what occurred to seven U.S. restaurants that sued the maker of a POS in 2009 for failing to secure the product from a Romanian hacker who breached their systems.

Credit card fees: Visa & Mastercard deal may not help stores recover charge fees & costs

What appeared to be a clean 'n' sweet credit card fees deal may have opened a can of worms, in some States, and with convenience stores [low value transactions.]

Stores and e-tailers may not find it easier to charge shoppers fees for paying by credit card as a result of a $7.25 billion class action settlement with Visa and MasterCard, which might delay or sabotage its approval, an analyst said on Monday. And larger retailers are saying that they don't want to make extra charges.

The Proposed Visa Card and MasterCard settlement

The proposed settlement between retailers and the two biggest credit card companies would resolve class action stores' claim that Visa and MasterCard conspired with major banks to fix swipe fees, the amount paid to process debit and credit card payments.

In addition to a $6.05 billion payment and temporary $1.2 billion swipe-fee reduction, the deal would also allow stores to start charging so-called checkout fees to customers who pay with MasterCard or Visa credit and debit cards, to defray their costs From Visa, MasterCard and Banks for using credit cards.

But retailers might not in reality get much help from the deal in offsetting the credit card swipe fees by charging customers more.

The settlement's much-touted credit card surcharging provisions actually have no real usefulness to merchants.
Because buried in the fine print of the agreement are provisions that undercut the stated intent of the settlement.

For instance, if retailers force customers to pay more for using Visa or MasterCard, they essentially must charge consumers more when they pay using other credit card networks, such as American Express, according to Bouregois' analysis of the proposed settlement.[not part of the claim or settlement]

But American Express prohibits merchants from implementing policies that discriminate against its cards, like discounts designed to steer customers to different forms of payment. Although this may be unlawful I feel.

The credit card settlement is also subject to approval by a federal judge.

The surcharge rules will also not apply in the 10 states that prohibit that practice, including Texas, California and New York.

Credit Cards increase sales

This could undermine the settlement if merchants voice their objections to this provision during fairness hearings prior to the court's final approval.
Some stores have said they will not impose extra fees for paying with plastic, even if they can.
One of the largest U.S. retailers, Target Corp., issued a statement Friday saying it did not intend to impose checkout fees, and calling it "bad for both retailers and consumers."

The National Association of Convenience Stores believes the deal does not address convenience stores merchants long-standing concerns over how Visa and MasterCard set credit card swipe-fee rates.

Credit Cards Fees: Retailers have a few options

The settlement would give retailers a couple of different options should they choose to pursue checkout fees.

For instance, stores could choose not to assess the fees, or if they did, they could re-examine their agreements with competing credit card issuers or even drop those other cards altogether, he said.

The settlement agreement should now give freedom to merchants to make those choices that they think are in the best interest of their business and their customers.

Because the value merchants get from MasterCard acceptance is far in excess of the actual cost of acceptance, so merchants would not have to impose credit card use checkout fees, as the costs have been taken care of.
Source: Mr Mortgage

Retailers & e-tailers win credit card swipe fee war against Visa, Mastercard & Banks

Entrepreneur Mitch Goldstone lead fight with credit card giants Visa and MasterCard for 7 years to help reach a $7.2-billion settlement over transaction fees.

Mitch Goldstone of ScanMyPhotos was a lead plaintiff in antitrust litigation against Visa, MasterCard and the banks that issue their cards over credit card "swipe fee." 

Visa, MasterCard to pay $6 billion to settle retailers' lawsuit

Most small-business owners regarded the rising fees they paid to Visa and MasterCard as an unavoidable cost of doing business. Not so photo processor Mitch Goldstone. He saw it as a ripoff.

Contending that a price-fixing cartel was exploiting him and other entrepreneurs, Goldstone went to war in media interviews, blog posts and as a lead plaintiff in a giant class-action lawsuit, comparing the payment processors to drug pushers and to the railroads that profited at the expense of farmers.

What Goldstone calls his "Erin Brockovich moment" arrived with last week's $7.2-billion settlement with Visa, MasterCard and the banks that issue their cards after seven years of antitrust battles in federal court in Brooklyn, N.Y. The agreement will shift power to sellers of goods and services and could transform how — and whether — millions of Americans use their credit cards.

The agreement also allows Retailers to charge customers to recover costs.

Now Visa and MasterCard have agreed for the first time to bargain with groups of retailers over credit card fees, so small businesses can team up to gain leverage.
The agreement also allows merchants for the first time to charge customers extra for using credit cards, so long as the charges reflect the actual cost and are broken out clearly for consumers to see.

That would drag the processing charges — formally known as interchange fees, colloquially called credit card swipe fees — into the light, so consumers can finally see how costly they are to the businesses they patronize.

"If you ask customers what's an interchange fee, they'll say it has something to do with a freeway," Goldstone said. "And millions and millions of merchants just accepted it as a cost of doing business."

The interchange fees are complex as well as arcane. The latest version of MasterCard's online rate summary, current as of April, runs 131 pages.

The Federal Reserve last year cut debit-card fees from 44 cents to 21 cents per transaction. But credit-card fees run much higher, especially for popular rewards cards, averaging 2% of a purchase price and reaching 5% for minor purchases from small retailers — a cost most Americans have been blissfully unaware of.

Goldstone says the ability to bargain collectively will gradually bring down card costs for retailers, who in a competitive environment will pass along the savings to customers across the country.

Imposing credit card surcharges is trickier. For one thing, the practice is banned in 10 states including California, although the Golden State makes an exception for gas stations.

A recent California Supreme Court decision that federal law preempts state laws dealing with credit cards means that courts could nullify the state ban on surcharges.

Many retailers say credit cards are king these days, despite efforts by some jewelers, spa owners, movers and even dentists to entice shoppers to pay with cash.

Goldstone thinks few merchants will impose surcharges but says the threat will force the card companies to lower their fees. "The balance of power is going to shift very fast," he said.

That would be a distinct contrast with the situation in 2005, when digitizing old snapshots became so cheap that his 30 Minute Photos shop slashed its charge to scan a picture from $5 to 15 cents.

Technology also was transforming credit card companies, with electronic transfers replacing manual imprint machines and carbon-copy receipts — yet the rates Goldstone paid the payment processors were rising.

"I kept asking Visa and MasterCard if they'd charge me less," he said, "but they wouldn't even call me back to discuss it."

Now that the interchange war is over, Goldstone says he will devote time to nonprofits, creating a foundation that will monitor the credit card industry and a group that will lobby small businesses to support President Obama.

Credit Card Skimmer caught: Protect your credit cards by checking accounts for fraud.

The new rules for getting credit card fraud at bay. Never let that card out of your sight, and check your account constantly for suspect charges.

Think twice before using your credit cards for low cost transactions where low paid workers serve you.

A Chicago man pleaded guilty Tuesday to organizing an ATM “skimming” ring that stole more than $200,000 from diners using bank or credit cards at restaurants and attractions across the city, including Wrigley Field.

Joseph Woods, 32, pleaded guilty to felony conspiracy to commit a financial crime before Cook County Circuit Court Judge Diane Cannon, who sentenced him to five years in prison, according to the Illinois Attorney General’s office, which prosecuted the case.

Woods organized an identity theft and bank fraud scheme which “skimmed” information from credit cards at several restaurants, including RL on the Magnificent Mile, Taco Bell, McDonald’s and a food vendor operating at Wrigley Field, according to a release from the attorney general’s office. More than $200,000 was stolen using the victims’ bank and credit cards.

Food Service employees accepted payments to commit the credit card skimming fraud.

Woods paid employees of the restaurants and eateries to skim customer credit card information using a small card reader provided by Woods, prosecutors said. Employees would swipe customers’ cards, giving Woods access to account information, with which he created counterfeit credit cards and made phony purchases.

Compromised in the scheme were accounts from Chase, U.S. Bank, Citibank, Harris Bank, American Express, Bank of America and Fifth Third Bank, all of which assisted in the investigation and notified potential victims.

Co-defendants in the credit card skimming fraud have cases pending.

Skimming operations are a growing threat to your credit card account.
To protect yourself:

1. Consider using cash for mall transactions to minimize credit card use especially on low cost transactions.
2. Use a debit card for these transactions.
3. Check credit card bills and financial statements regularly for unauthorized charges.
4. Report any suspect charges to your bank immediately.
5. Never allow your card out of your site. never hand your credit card to the waiter at your table. Insist on paying at the the counter so you can see the transaction.
6. Remember that even then the card reader may be swapped by the skimmer gang. so the debit card is always the safest way to go. You can only be cleaned out for the amount you have on the card at the time.

Rick Adlam: Mr Mortgage

Credit card fees: Excessive surcharges to be banned

The Reserve Bank of Australia is urging business owners and operators to get ready for the ban on excessive credit card fees, to come into effect in January 2013

Taxis, Restaurants, Tourism and e-tailers are the worst offenders of credit card excessive charges

A Reserve Bank of Australia ruling to limit credit card surcharges to a "reasonable cost of card acceptance" will come into force on January 1st 2013.
The RBA had noted a large rise in the number of businesses levying card charges, with taxis, restaurants, tourism operators and e-tailers among the worst offenders.
The RBA says large businesses are the most common surchargers, but the proportion of small businesses that charge for card use has grown from about 4 per cent in 2005 to 25 per cent today.

The National Australia bank already working with Business Owners

NAB's David Gall says business owners will need to speak with their bankers. "Businesses that accept cards need to know what the cost of accepting cards is and the reasonable cost of surcharging," he says.
Processing costs can vary dramatically but are typically between 0.5 per cent and 2 per cent of the transaction cost.
NAB has introduced a more transparent credit card billing approach for its 120,000 business customers and Gall says it has been well received.

 "Merchants now receive a monthly breakdown of the fees charged by card issuers, allowing them to understand exactly how their monthly bill is made up" he says. The RBA will accept submissions about its surcharge plans before Friday. 

 It has received concerns that some businesses are using credit card surcharges to slug customers,rather than recoup the cost of accepting cards.

Credit Cards: RBA Announces end to unreasonable credit card surcharges

Credit Card Surcharge: Reverse Bank to bring the fair and reasonable test to surcharges of credit cards 

Australia's central bank, the Reserve Bank of Australia seems to be coming more proactive in the regulation of the business of banking RBA is targeting excessive credit card surcharges. 

The ripoff off merchants include big brands such as Qantas, Virgin, and Cabcharge

The Reserve Bank has finally set the sunset clause on the credit and debit card surcharge earner on January 2013, with what they term a variation in surcharging standards.

Credit card surcharging standard: The fly in the ointment

Whilst card companies may stipulate a “reasonable limit" how much merchants can charge consumers for using their credit cards, it does not specify what reasonable means.
This will I guess be left to the Trade Practices Act to determine, and regulate, as this seems to fill into the consumer law of equity of contract.

Credit card surcharge standards

And that brings up a question; given the financial services industry's record on setting their own standards, isn't it reasonable that the RBA spend the next six months in talks with the Office of fair trade and the ACCC to nut out some guidelines for these cowboys?
But there are some guidelines of what a reasonable limit might include in the various costs that might come with accepting payment by cards. These include actual fees charged by the credit card providers, the cost of terminals and the like.
One card scheme did propose that the “reasonable” cost recovery should include an appraisal of the benefits merchants get by being able to accept card payment – a concept that could have tied up bank vaults of lawyers and sundry consultants for years to come.

Credit card surcharge relief at last

The obvious change to the consumer will be that Cabcharge 10 per cent rort or that flat whack charged by Qantas and Virgin for actually using a credit card to pay for flights or even buy drinks on board!

Finally we will get a level playing field in the fringe area of credit card  fees and charges, those pushing the envelope surcharges.http://mrmortgage.com.au/

Credit cards out of reach for 3 Million Aussies

Nearly 3 million Adult Australians do not have access to a cluster of fundamental financial services, including credit cards, bank accounts & car insurance

Australia's banks need to take a good hard look at themselves

    Got a $3,000 emergency? Save yourself the embarrassment of a decline of a credit card and don't ask your bank! Your family and friends are more likely to respond to your emergency than a bank.

Pay day lenders fill the gap

Payday lenders, who will charge much higher rates will fill the gap. And a little known source for smaller amounts can be Centre-link, if you are a client.
How can you operate without a bank account today? Move to Woollongong or the ACT!

Parts of NSW have the highest number of people without even a basic bank account, let alone a credit card.
But the Wollongong region tops the nation, with 7 per cent of adults without a bank account.
The number of adults in Sydney's southern suburbs and the ACT without a bank account is running at 5 per cent, with the National Australian average of 3 per cent of adults.

And that excludes Aborigines and Torres Strait Islanders. If you add those, then up to 43 per cent operating outside the mainstream banking system.
Why do people have problems getting credit cards or insurance?

Main issues in credit exclusion cited were:

1.     The cost of basic financial services remains too high.
1. The average annual combined cost of banking, credit card and either car or home insurance is $1794. 
2. The level of documentation needed to establish an account can often be a hurdle, 
3. Many banks won't lend less than $5000 as a personal loan, instead steering customers to credit cards.

National Australia Bank says Australia's banks need to lift their game

The National Australia Bank were part funders of this survey, and NAB chief executive Cameron Clyne says the banking industry needed to "lift its game" by providing affordable products to more people.

    "The absence of access to mainstream financial services does preclude people from advancing socially and economically,'' Mr Clyne said yesterday.

When the fridge, telly or car breaks down or someone needs to get to a job interview the banking system needs to improve financial inclusion and community spirit.

Access to credit is improving

While efforts to improve access to basic bank accounts & to promote low-cost credit products are being made, more needs to be done.
The Government has recently chipped in with Federal Treasurer Wayne Swan brokering an agreement with the banking industry to provide free ATM transactions for indigenous people in remote communities. That still leave millions left to help.

Source: Mr Mortgage