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Are Credit Card Fees Out of Control?

Monday, June 22nd, 2009 at 2:27 AM

We all know that borrowing money does not happen for free. In fact many consumers are so accustomed to additional “fees” that they barely blink an eye when paying them as long as they continue to have access to financing. Credit card companies know this and for years have been profiting billions of dollars off of those fees that appear on your monthly statement. It should come as no surprise then to so what is currently happening within the credit card community. As banks rush to lessen the hit from rising defaults, more and more fees are showing up on consumer statements. The problem is many consumers are no longer able to afford these fees and paying them is much less enjoyable when you have maxed out your credit which is the case for millions of Americans.

The following fees contribute to growing consumer debt and increasing profits for credit card issuers.

Balance Transfer Fees For many consumers moving high interest credit card debt to a lower interest card is the fastest and easiest way to save money each month. While your payment may stay the same, more of your payment is applied to your balance instead of paying interest charges. In the past you could safely bet on balance transfer fees that did not exceed $75, however in current economic conditions there are now no limits. The fee is based on a percentage of the balance transferred and can rise to exorbitant proportions.

Cash Advance Fees Using your credit card for cash may be convenient but you can expect to pay for that convenience. Not only will you get hit with a fee to access the cash but you will also pay a much higher interest rate on cash advances if you do not pay your balance in full each month. Remember under terms, consumers who do not pay their balance in full have their payment allocated to the lowest interest balance (cash advances are not the lowest). This could mean paying months and months of interest charges before you actually pay back the cash advance.

Foreign Transactions Fees With summer travel season just around the corner many people have plans to travel abroad. Your credit card may be accepted at millions of location world wide but again, you will pay for the convenience of using your credit card for purchases. To facilitate the transaction your credit card company will charge you a 3 fee.

Late Payment Fees One of the most common fees consumers occur is the result of making a payment past the due date. Fortunately this is one of the fees that remain within your control. Take the necessary steps to ensure your payments are posted to your account on or before the due date each month to avoid incurring these fees which have risen in the recent years. Keep in mind paying late not only leaves you vulnerable to late fees, but also a higher interest rate and damage to your credit.

Over the Limit Fees Another fee that you can control is the fee charged when you exceed your credit card limit. Over the limit fees are similar to overdraft charges in that they can quickly balloon out of control making it more difficult to get your account in good standing. Always pay attention to your balance, especially now when card issuers are slashing credit limits.

BIO: Elizabeth Williams, Editor-in-Chief for CreditCardFlyers.com is a consumer’s haven for credit card balance transfer information and offers.

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Bankruptcy Judgments and How to Make Money With Them

Wednesday, June 17th, 2009 at 1:37 AM

Comments (1)

Before you sue, make sure your opponent is solvent and has assets you can grab.

Even after you win a lawsuit, you still have to collect the money you were awarded: your judgment. And the court won t collect it for you when it comes to collecting what you re owed, you re on your own.

Collecting from solvent individuals or businesses isn’t usually a problem, because most will routinely pay any judgments entered against them. If they don’t, there are a number of legal ways to force them to pay.

Unfortunately, some people and businesses sued in court are either broke (lawyers say judgment proof ) or so adept at hiding their assets that collecting your winnings is likely to prove impossible.
Protected Property

When a deadbeat debtor won t pay voluntarily, collecting your judgment can be difficult. Debtor protection laws keep you from seizing and selling many types of property, including the food from the debtor s table, the clothing from her closet, and the TV from her living room.
Vehicle Protections

In many states it will even be impossible to seize and sell her car, because a debtor s motor vehicle is protected from being sold to satisfy a debt if the amount of equity in the vehicle is below a certain amount (often about $2,000). And if the vehicle is used as a part of the debtor s business (is a tool of her trade), you probably won t be able to grab and sell it, even if the debtor s equity is higher.
Bankrupt Debtors

If a person or a business declares bankruptcy under Chapter 7 of the Federal Bankruptcy Act and lists you as a creditor, your right to recover a small claims court judgment is cut off, along with most of his other debts. (If your judgment was based on a secured loan, however, you do have the right to recover the property pledged as security.) One big exception to this general rule exists if your judgment was obtained because you or your property were injured by the malicious behavior of the defendant: In this situation, your right to collect your judgment should survive the bankruptcy (but you may need to intervene in the bankruptcy proceeding). An example of malicious behavior would be someone getting drunk and then attacking and injuring you.
Garnishing Wages

If a person fails to pay a judgment voluntarily, the easiest way to collect is to garnish up to 25 of his wages. (The wages of very low income workers, however, are exempt from garnishment.) But you can t garnish a welfare, Social Security, unemployment, pension, or disability check.
Levying on Deposit Accounts

Bank accounts and stocks and bonds are other common collection sources.
Levying on Real Estate

Real estate other than the debtor s primary residence is another source for collection. (In many states, homestead laws prevent you from getting at the judgment debtor s equity in a residence.)
Collecting From Business Receipts

Where a business is the judgment debtor, you can often collect by ordering the sheriff or marshal to take the amount of the judgment right out of the debtor s cash register (this is called a till tap ).

Another good source is a valuable piece of equipment or machinery owned by the business, which you can order sold to pay off your judgment.

But if the business is a fly by night outfit with no permanent address or obvious collection source, such as a cash register or owned fixtures or equipment, you may be out of luck (lots of businesses lease business equipment or take out a secured loan to purchase it).

Finally, in some states, if your lawsuit is against a contractor who has a current license, you may file the judgment with the state licensing board. If the contractor doesn’t pay off the judgment or post a bond, he faces losing his license.

You can collect your judgment for years. If the defendant is not working but likely to get a job in the not too distant future, be patient. Laws in many states allow a judgment to be collected for ten to 20 years from the date it is entered, and you can usually apply to have this period extended.

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