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The times are tough, and everyone has been hurt by the state of economy. Universities have been hit hard as less people can afford to go to school. The financial aid that used to be provided by government could be in jeopardy (even though Barack Obama has promised otherwise). But all this hasn’t kept credit card companies from marketing their cards to young students in college campuses. Michael Moore ran a piece on the very same issue on his website recently. The truth is, credit card companies want our students to pick up the cards and put large amounts they can’t afford to pay in one shot on them.

Have you wondered why is it that credit card companies are not experiencing more losses than they are these days? The answer is you and I. Folks like us pay the obscenely high interest rates to keep our credit record clean, and we are being taken advantage of by credit card companies. A whole lot of students don’t have a clear understanding about how to use credit cards. They buy things they can’t afford, and they pay their bills late. Late fees and high APR is a fact of life for many students.

Smart students understand that the money you borrow needs to be paid back. That’s why they are now using prepaid credit cards instead of regular credit cards. Prepaid credit cards allow you to spend the money that you have without going overboard. These cards are not perfect, and they do come with fees and limitations, but responsible students should stay away from attractive credit cards unless the understand the dangers of playing with fire. In these tough economic times, the last thing anyone would want to deal with is a greedy credit card issuer.

2008 is finally over, and I can’t say I am too sad. The year started with a lot of promise and ended with turmoil and uncertainty. 2009 seems to be another challenging year for both consumers and card issuers. Many card issuers have been hit hard by the state of economy, and things are expected to get worse in the upcoming months. While the credit industry hasn’t collapsed completely, it’s hanging on by a thread.

As a consumer, you can expect credit cards to get even tougher with us in the upcoming months. You can expect the rates to go up and borrowing money to get more difficult. At the end of the day, credit card issuers are out to make profit, and one way to do that is by increasing fees on poor consumers (this will change in the near future with the recent ruling).

What will the 2009 have in store for us? Nobody knows. But let’s hear your predictions…

Happy New Year everyone. 2009 is finally upon us, and many challenges are ahead. But it can only get better, right?

Now, this may be well known to you, but I haven’t had to deal with the driver’s license office in 4 years. So, I tried to outsmart folks today by getting up early and trying to renew my driver’s license. The funny thing was, I decided to leave my checks at home and bring my credit cards, assuming that in 2008 (almost 2009) most places would accept credit cards. No dice! I was told that only check or money order would be accepted.

This shouldn’t really be surprising. Credit card companies make a lot of money out of businesses that accept credit card. And the DMV office never really planned to jump on the whole credit card bandwagon anyway. Does that mean it’s right not to accept credit cards? I am not sure. It’s way more convenient to use a card, but it’s most costly to businesses too. Then again, these guys don’t accept cash either! Talk about making it easy to get a license.

A lot of folks have been hurt by the credit crunch, and credit card companies have had trouble pulling in profit from their card holders. That has made credit companies to make some tough decisions. For one, credit card companies are increasing fees on folks who have less than stellar credit background. Even some folks with excellent credit have been hit by higher rates. Secondly, many credit companies are tightening the criteria for getting approved for cards. This all means that you are going to find it difficult to get a credit limit in the upcoming months. The bad news is credit struggles will continue in 2009. The good news is that you may still get approved for some of the better offers if you apply for a card right now.

You can always compare cards to find the one that is best for you by going to your favorite credit card comparison site. I personally recommend the following comparison sites:

• CreditCards.com
• Credit-Land.com
• Intellicreditcards.com

You may still qualify for some of the better offers before the year-end. But you can be sure that a few cards will no longer be offered in the new year, and those that will survive will have tougher approval criteria.

Your take: Have you been hit by the financial crunch?

Credit card consumers have finally something to cheer about in these tough economic times. Federal Reserve has finally put the hammer down on credit card issuers that use deceptive business practices to extract more fees from their card holders. Credit card issuers have gotten away with many shady practices in the past few years, but the new ruling will bring more transparency to the credit card business and empower the consumers. Here are the major points of this decision:

• Credit card companies can not increase your interest rate on existing balances unless they have gotten your payment late by 30 days.
• Credit card companies can not charge you a late fee if they don’t give you at least 21 days to pay your dues.
• Credit card companies can not move your payments around in a way to make you pay more interest over long-term.

The only downside to the new rule is that it will go into effect on July 1st, 2010. As someone who has worked for credit card corporations before, I do understand the frustration on their part. But it’s simply not acceptable to play with consumers’ lives by charging them hidden and misc fees. I can just name a few card companies that will be not too happy about this (and you can expect them to look for ways to challenge this rule or find a loophole).

Your take: will the new ruling stop credit companies from continuing to apply their deceptive business practices?

Advanta has renamed their 90 day interest free credit card to Advanta Net-90 Platinum BusinessCard. Advanta Net-90 was introduced a while ago to challenge the likes of the Plum card and is still going strong. The card allows you to get 90 days of free financing on your transactions, as long as you make your minimum payments. You can still read the Net 90 card review for the card here.

If there was any indication a few months ago whether our economy was struggling or strong, there is no question now. We are half way through our way to a depression, and credit companies are affected by the state of economy as well. The volume of bad debt has put the squeeze on major credit card companies, and many are firing a few of their employees to cut cost.

But credit card employees are not the only ones who are getting the end of the stick from credit cards. Honest, good folks who have been paying their bills on time are also suffering. A few credit card companies have taken the initiative to reduce the credit limits of folks who are getting the most out of their cards. Let’s say you have a card that comes with $4,000 limit. If you are averaging only $1,500 a month on that card, you are going to have to expect to lose your credit limit soon. The argument here is that “you are not using your credit limit to it’s fullest,” and I guess that’s a valid argument. But that still counts as a penalty in my eyes.

Your take: is it fair for credit companies to reduce their best customers’ limits?

As you may know by now, Advanta has decided to discontinue the life-of-balance card and add the ninety day interest free card to help small businesses manage their debt more effectively. The Advanta 90 day grace card is in many ways similar to the American Express plum card but as a small business owner, I would consider applying for both credit cards.

Unless you haven’t been watching TV or reading newspapers for a while, you have probably heard of the hyped up Plum card from American Express. The Plum card used to be the only card that allowed small businesses to manage their cash flow operations more effectively by delaying their debt payments by up to 2 month (with no interest).  The Plum card was so popular and hyped up that a lot of small business went out of their way to get their hands on it and take advantage of its benefit. So it is no surprise that other card issuers are taking a page out of American Express’ book to introduce cards with similar features.

The latest card that comes with similar, if not better, features is the Advanta 90-Day Interest Free BusinessCard. The 90 days grace card that has just been released by Advanta allows cardholders to defer their payments by up to 3 months. Advanta makes it clear on its credit card application page that the 90 day offer is not an introductory offer, which means that you should expect no major surprises on your bill year after year as far as this feature is concerned.

Advanta also offers generous credit limits to small business owners to allow them to use the 90 days interest free card more effectively. So you will have enough credit line to cover your business expenses and more with the Advanta interest free Platinum card. The 90 Days Grace Card comes with a set of platinum rewards which allow you to earn a point for each dollar spent with this card and use it towards travel and merchandize for your small business. In addition, there is no annual fees which sets this card apart from the Plum card (which comes with $185 annual fee).

The only downside to the Advanta 90 day card in comparison to the Plum card is lack of any rewards for paying your bill early. The Plum card gives small business owners a larger percentage in cash back if they pay their bills within 10 days.  In addition, the Plum card allows you to defer 90% of your payments for 2 month. With the Advanta 90 day interest free card, you will still be required to make minimum payments but you won’t be charged any interest fees for three months.

While both the Plum cards and Advanta 90 day cards are designed for small businesses and startups, they are not for every business owner. Unlike the Plum card, you don’t have to pay your Advanta debt in full after your 3 months period is over. So that is a big plus for smaller businesses who won’t realize their cash in-flows in three months. But at the same time, the APR is quite high, so you don’t want to park large amounts on your Advanta 90-day grace card. If you are a small business or startup owner and you are looking for a card that allows you to manage your cash flows more effectively, you should definitely review both the Advanta 90 day and the Plum card to see which one fits your needs the best. But with no annual fees and free lifetime 90 day grace period, Advanta 90-day card is one of our favorite credit cards just now.

I never thought it would happen to me. I have paid my credit card bills on time and have never had any negative item on my credit. But that still didn’t keep a few credit card companies from cancelling a few of my credit cards (worth $25,000 in limits). The truth is that is happening to many consumers and business owners around the nation. Credit companies are not making as much these days as they used to, and as a result they have decided to pull the trigger on their unprofitable customers.

There are two ways to be unprofitable to your card issuer. You can either pay all your bills on time, or you can put your cards away until you have money to spend. Either way, you are making card issuers upset. Card issuers don’t like folks who avoid fees. That’s their business model. I know why my cards were cancelled. I wasn’t using my cards as much as I used to. Before, I used to get a warning before having my cards cancelled. This time, however, the credit company took it upon itself to cancel 2 of my cards without letting me know. They were kind enough to send me a letter to give me a heads up not to use my card again, but I wish they had let me known they were planning to cut me off.

Credit companies are hurting these days but they are still making money. That still doesn’t keep them from being more greedy. So, don’t be surprised if you find your limits slashed in half or your account cancelled after years of paying your bills on time. That’s what credit card companies do…

Your take: Is it fair for credit card issuers to cancel your credit card without giving you a warning beforehand?