Quoted – 5 questions to ask before getting a credit card with an annual fee

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There’s no doubt about it: More credit card issuers are adding or increasing annual fees. But there are still plenty of no-fee options, so before you sign up for a new card with an annual fee, make sure the benefits are worth the costs.

Spurred by the Credit CARD Act and new Federal Reserve Board regulations that limit the types of fees that credit card issuers can impose, card issuers are looking to increase revenues by adding or raising annual and other fees. In fact, 35 percent of all credit card offers mailed to consumers in the last quarter of 2009 carried an annual fee, the highest percentage in the past decade, according to Synovate Mail Monitor, a direct mail tracker.

5. Have you done your research to get the best deal? If you’re looking for a new card and considering paying an annual fee, your due diligence should include comparing rewards cards that have a fee with those that don’t and calling customer service to get more information if there is something you don’t understand. Many credit cards don’t offer a lot of specific information about redeeming rewards on their websites and in mailings, so make sure you know what you’re getting into before you get a new card.

If you already have a rewards card, check periodically to make sure the benefits you originally got the card for still exist, says Scott Testa, a professor of business administration at Cabrini College in Philadelphia. “Credit card companies generally are not in the business to advertise what they’re taking away from you,” he says.

And make sure to call your card issuer and ask them to waive the fee every year, Testa adds. “You’ve got nothing to lose,” he says. “The worst case, they say no.”

http://www.creditcards.com/credit-card-news/help/5-key-questions-credit-card-annual-fee-6000.php

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Quoted – Consumer credit contracts at slower pace – Medill Reports

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Consumer credit contracts at slower pace

December’s consumer credit figure, released by the Federal Reserve Board Friday, declined by $1.8 billion to $2.46 trillion from about $2.47 trillion in November, a drop of 0.07 percent. This follows a 0.5 percent drop of $13.8 billion in October. The drop in December was well under the $10 billion contraction estimated by economists in a survey by Bloomberg LP.

“I think things are starting to loosen,” said business professor Scott Testa about the nation’s overall credit market. But Testa, of Pennsylvania’s Cabrini College, cautioned that an improvement of credit would be slow.

“It’s not stuff that happens overnight,” he said.

Revolving credit, which includes credit card financing, continued to slide, falling another $8.5 billion to $866 billion from $875 billion in November, a drop of almost 1 percent. This follows a 1.6 percent drop of $13.8 billion from October.

“It’s all about the jobs,” Testa said of the drop, emphasizing that the figure reflects the weak job market, consumer spending and the remaining but decreased fear banks have about lending.

“It’s an indication that banks are nervous about extending credit,” he said.

http://news.medill.northwestern.edu/chicago/news.aspx?id=155826

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Firms know what to look for when it comes to target marketing

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Some firms are very good and know what to do when it comes to target market selections.  Target market adapts the marketing mix for one or more segment.  Credit card companies for instance target young college students like me.  They hope to influence the way I buy things. Just yesterday, a credit card company called me to tell me that I have been selected to receive a certain credit dollars from the company even though they know that do not an income right now. Because, I am a college student they are banking on me getting a good job with good disposable income.

The credit card companies take big risk but it must pay off because they have been doing that for many years.  Sometimes, I wonder if they make profit this way. Because, I believe and I am sure that not every credit card holder is able to pay off their loan. Credit card companies continue to do this so the data must support their decision.

Credit t card companies are not doing so well these days; it is interesting to see if they will change their tactics.

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Quoted – Creditcards.com – What to do if your retail credit card issuer goes bankrupt

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What to do if your retail credit card issuer goes bankrupt.

http://www.creditcards.com/credit-card-news/bankrupt-retailer-credit-cards-1282.php

Circuit City cardholders hold cards that were underwritten by Chase Bank. Any payments, liabilities or issues pertaining to the card must be taken up with Chase. “If you have a negative balance with Circuit City, or with most retailers who have gone out of business, you have to pay the balance,” warns Scott Testa, a professor of marketing at St. Joseph’s University, located just outside of Philadelphia. “It’s Chase that assumes the debt as it’s the bank behind the Circuit City credit card.”

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