Pictured: The Schumer Box

Shopping For A New Credit Card

You’re shopping for a new credit card and you’ve narrowed down the offers to a handful that seem right for you. This was no small task on your part as there are thousands of credit card offers available today, even scores from the same provider.

Picking the “winner” will depend on a number of things, key elements you value and expect from your card. Unfortunately, you may still be having a problem going through all of the fine print, trying to determine exactly what you’re getting and just what your responsibilities are as a card holder.

There is a way for you to determine if a particular card meets your needs without stinging you with a bunch of surprises later on. Thanks to the work of U.S. Senator Charles Schumer, every credit card must come with specific disclosure information, details known in the consumer industry as the Schumer Box.

The Schumer Box

The Schumer Box mandates the following information be disclosed with your credit card offer:

Annual Percentage Rate (APR) for purchases: The interest rate you must pay on your credit card balances. This line will tell you whether you are receiving an introductory rate and how long that rate will last. Many rates are variable and will change as the prime rate goes up or down.

Other APRs: Features the rates you will pay on cash advances and balance transfers if you choose this option.

Penalty Rates: On the same line as “Other APRs” the credit card issuer must tell you what your penalty rate is if you are late making payments and what action triggers the higher rate. In this example your interest rate suddenly skyrockets to 30.99%.

Method of Computing the Balance for Purchases: There are different ways a credit card issuer can compute balances. Average daily balance calculates your interest charges on one-cycle billing; while two-cycle average daily balance will mean you pay interest on debt you’ve already paid off. Choose the former if you want the better plan.

Annual fees: Most issuers do not charge an annual fee, but if they do that information must be included. Airline cards and some rewards cards typically charge a fee while most other cards do not.

What’s Missing?

Of course, the Schumer Box isn’t perfect as some information that consumer advocates say should be disclosed is hidden away within the fine print. These include:

Default rate applied to other creditors. If you are late with your electric bill, will your credit card issuer suddenly jack up your interest rate even if you are on time with them?

Rate hikes. If your credit card issuer has a provision where they can hike up your interest rate at any time or for any reason, then you’ll want to avoid these cards.

Ultimately, you as the consumer will make the final determination about a credit card offer and whether it is worth it to you. Do your homework and compare credit card offers to find the best card for your particular needs.

Tags: annual fee, Consumer Financing, credit card disclosure, Credit Cards, finance charges, penalty APR, rebate credit cards, rewards cards, Schumer Box

The rocky economy has something going for consumers, especially those in the market for new cars. End of model year incentives will be terrific, providing the opportunity for savvy consumers to save a lot of cash on their next set of wheels.

And, the model year doesn’t just change in October anymore. Throughout the year automakers are releasing new product, and slashing prices on the old. The best deals can be had with last year’s model which could still be a 2008 if the 2009 has already been released.

If you are planning to buy a new car, there are some thing you will want to keep in mind before making your purchase:

Do your research. Quite frankly, not all cars are the same. A Kia retailing for $14,900 and a Toyota priced the same share one thing only: price. The Kia likely is better equipped, while the Toyota has a better reputation. Check Consumers Report and pay the $6 they want for their advanced ratings and reviews, an investment certainly worth the price. Search online for additional information about that make/model.

Check for incentives. Almost across the board, all manufacturers are offering incentives. Popular models are typically not included, but then again the Ford Focus is on sale and carrying a cash back rebate that will vary upon your location. Last month, the incentive was $1500 on a car that gets 35 mpg! Use an automotive financing tool to help you compare offers.

Pay cash if you can. If you’re able to pay cash for your purchase, you should be able to negotiate the best deal possible while also taking the rebate. On the other hand, if both zero percent financing and cash back are offered, then finance your car for the highest amount possible. Then, take your cash and let it earn interest in a high rate savings account at ING Direct or elsewhere paying 3.5% or better on your money. Another alternative is to secure auto financing on your own and keeping the rebate.

One final thought as to why you should buy your car now: incentives are the strongest they’ll be for quite some time and some manufacturers are planning to increase the price of cars beginning this fall to recoup the cost of additional safety and technological improvements featured across the board.

Tags: auto financing, autos, Consumer Financing, Money Management, new cars

It is a fact: not all credit cards are created equally. Some credit card providers charge annual fees, others offer low introductory rates, while some offer rewards every time that you use them. Confusing, isn’t it? We think so! With this in mind, SayEducate offers the following tips to help you navigate through the credit card maze.

When comparing credit card offers, even having a master’s degree in business administration will not ensure that you will understand every single offer. The language used by credit card providers is often confusing, even nonsensical with enough small print qualifiers to give anyone a headache.

So, why should you consider a new credit card in 2008? Well, if you have received you most recent credit card statements, it likely reflects the spending you did for Christmas. For some consumers, the shock of a January credit card statement can put them into a panic forcing them to scramble to find the money to pay their bill. Sure, making minimum monthly payments can buy you some time, but you know how that goes — you’ll never get the card completely paid off before the next important holiday or event comes up.

Comparing offers can get complicated, but the following should be considered whenever you apply for a new credit card:

Annual Fee — unless your credit isn’t good or excellent, then paying an annual fee makes no sense. Yes, American Express and some other elite cards will charge a fee, but these fees are usually offset by some special services including travel insurance, concierge services and the like.

Interest Rate — if you pay off your card every month, then it doesn’t matter what the interest rate is for you. For everyone carrying monthly balances, the lower your interest rate, the better. Lots of cards offer teaser balance transfer rates as low as 0% for the first three to twelve months, with a higher rate offered for new purchases.

Rewards — if you pay off your card monthly, then shopping for a card that offers rewards is the way to go. Some will give one or two percent cash back on your purchases, while others will allow you to accumulate points which you can redeem for gifts.

With any card you choose there are some things you should be aware of:

• What is the default rate on your card should you be late with a payment?

• If you run into a problem with an unrelated company (a dispute with the telephone company, for example) will your credit issue with that company automatically cause you to be charged the default rate?

• What fees are involved when transferring balances from one credit card to another one? Usually, that rate is as much as 3% of the balance, so do the math to see if transferring balances makes financial sense.

• Are you planning to apply for more than one card? If so, be careful! Multiple credit card applications can work against your creditworthiness. Your credit score can take a hit and impact the rate you pay for other loans.

• Make certain that you understand the terms of your consumer agreement. Most credit card providers reserve the right to change the terms of your agreement at any time — you could be in for a rude awakening when you suddenly realize that you are being charged a higher rate on balances!

Shopping for a new card means you should be very careful which card that you use. If the card you select doesn’t live up to your expectations, then contact the credit card provider and cancel it immediately. An unused card can work against you if it has been activated, but not canceled by you.

Tags: American Express, consumer debt, Consumer Financing, credit card, credit card consolidation, credit card fees, credit card transfers, Credit Reports, Discover, low interest rate credit cards, MasterCard, personal finances, rewards cards, VISA