Credit Card

The Rev. Nathaniel Pierce of Trappe says he transferred his credit card balance to a Chase card a few years ago after getting assurances of a low interest rate and low monthly minimum payments. Now, Pierce accuses Chase of bait and switch tactics. Chase notified Pierce that starting next month, his minimum payment is going from 2 percent to 5 percent of his outstanding balance, roughly raising his monthly payment from $100 to $250. He suspects the shift is tied to credit card reforms that take effect in February.

Will that be cash or charge? Debit or credit? Bill Me Later, Billeo or PayPal? Consumers have more choices than ever in how they pay for goods and services, and it is clear the days of paying by cash or check alone are long gone. Payment choices have expanded along with Internet commerce. Consumers buying more online have sought more secure, convenient ways to pay. Meanwhile, Web-based technology allows relatively low investment from merchants who want to offer new options. In a recession, experts predict alternatives that offer noncredit options, such as same-as-cash installment plans, likely will get renewed attention from consumers.

TIP 36 Manage cash flow with disciplined credit-card spending Credit-card grace periods - the time from when you buy something to when you have to pay your credit-card bill - amount to an interest-free loan, as long as you pay off the full balance. Here's a way to stretch those reprieves. It takes disciplined spending and attention, but it can give you two or more extra weeks each month before you have to pay the piper. Get two cards, one with a monthly bill sent on the 15th, the other with one sent on the 1st. (Many lenders will adjust your billing date, but you have to ask.)

If you vacation outside the country this summer, you might come home to find your checking account smaller than expected. Who raided it? It might have been your bank. The fees charged by banks as well as other financial institutions to use foreign automated teller machines can deplete cash faster than lunch in London. Some U.S. banks charge as much as $5, plus a percentage, every time a debit card they issued is used at a foreign ATM. Not that you would know it at the time. Unlike in the U.S., where you receive an on-screen warning if additional fees are to be collected for a machine withdrawal, these charges can be invisible until you receive your bank statement back home.

Jack McMillin of Alaska says consumers should be able to count on their credit card terms not changing - at least for a specified time. June Peterson of Florida complains that she has barely any time to mail in her card payment before interest starts racking up. Lee and Patsy Solomon want card issuers to print the payment due date in bigger type and display it prominently on the monthly bill. "It's as if they want you to be late so as to accrue interest charges," the California couple say. And Floridian Ben Brooks just wants to see a certain credit-card issuer "gutted, fined and shut down."

You think you've found the perfect gift, but are you sure? Just in case it's the wrong size, color, scent, decade, what-have-you, it's best to check out a store's return policy before making your purchase. That way your loved one isn't stuck with an ill-fitting, dust-collecting gift, no matter how well intended. And if you're the returner? Don't feel the least bit guilty. "Returns are a fact of life," says etiquette expert Peggy Post. "Just let the giver know you appreciate the effort and money they put into finding you a gift and say thank you."

On the seventh floor of a generic building on Deereco Road in Timonium, a young company is trying to change the way people shop online by providing a payment alternative to the credit card. Called Bill Me Later, the seven-year-old business is taking on major competitors, including MasterCard, Visa and PayPal, which made its name as an online payment provider. So far, Bill Me Later is holding its own. It is the sixth-fastest-growing company in the country by revenue - on track to bring in more than $100 million this year - according to Inc. magazine's September issue.

Federal law dictates that credit-card issuers can't hide fees from customers. But does that mean you're not paying any fees you don't know about? Not necessarily. You could be missing the fine print - and the many fees that come with everyday transactions (or blunders). In fact, Americans pay about $31 billion in credit-card fees each year. The ones most commonly overlooked: The late fee Banks charge as much as $39 (on top of finance charges) if your payment doesn't arrive on time. If you're prone to forgetting, schedule automatic payments.

Paper or plastic? That question is at the center of the controversy over Hasbro's recently updated The Game of Life: Twists & Turns edition. For this update, Hasbro partnered with Visa - and replaced cash with a Visa-branded credit card. Hasbro says plastic reflects the way we make purchases today. But critics see this as marketing run amok. They worry about introducing children as young as 9 to the world of plastic before they're ready to understand credit. Card issuers now throw cards at college students without jobs, and critics see the Game of Life's credit card as a way for the industry to reach kids at an even younger age. "A bad idea," says Robert Manning, director of the Center for Consumer Financial Services at the Rochester Institute of Technology.

WASHINGTON -- Nearly one-third of U.S. consumers who have bought products on the Internet say they have experienced online fraud or misuse of credit-card information, according to a survey conducted for the National Consumers League.Just 24 percent of consumers who go online actually make purchases, the Louis Harris & Associates Inc. poll showed.About 7 percent -- the equivalent of 6 million people, based on an estimated 85 million U.S. Internet users -- have had credit-card trouble.Online auctions are the largest source of consumer complaints to the consumers league's online fraud Web site, said league President Linda Golodner, and they usually involve sellers who accept bids for things they do not own or they misrepresent the products.

Theodore Casser has been a loyal Bank of America credit card customer for about 10 years. But the prospect that the bank might start charging him an annual fee because he pays off his balance monthly has the Baltimore software developer ready to sever that relationship. "I take it almost as an insult," says Casser, who hasn't heard yet if he will be among the small percentage of unprofitable Bank of America customers to be charged a $29 to $99 fee starting next year. "I'm happy to take the hit to my credit rating to cancel the card."

As students head back to college, marketers are promoting prepaid cards as a way for young adults to learn financial responsibility and for Mom and Dad to monitor a child's spending. But a prepaid card can be an expensive teaching tool, and not necessarily the best one. Basically, parents buy a card, load it up with money and give it to a child to use like a credit card on campus. It's up to students to track their spending. Once the money runs out, parents can reload the card with more dollars.

The Rev. Nathaniel Pierce of Trappe says he transferred his credit card balance to a Chase card a few years ago after getting assurances of a low interest rate and low monthly minimum payments. Now, Pierce accuses Chase of bait and switch tactics. Chase notified Pierce that starting next month, his minimum payment is going from 2 percent to 5 percent of his outstanding balance, roughly raising his monthly payment from $100 to $250. He suspects the shift is tied to credit card reforms that take effect in February.

Are you seriously behind on credit card payments? Next time the card company calls to collect, you might see if it's willing to settle for less than you owe. Such settlements have been around for years. But the new twist, as recently reported by The New York Times, is that not only are settlements increasing but front-line customer representatives are making settlement offers on the spot. "It doesn't mean everyone out there will qualify for a settlement," says Curtis Arnold, founder of CardRatings.

I last wrote about America's abysmal savings rate. Now, the flip side: our even more crippling credit card debt situation. According to a recent study, in 2008 more than 91 million U.S. households, or 78 percent, held at least one credit card, with an average of 5.4 cards per household. Total credit debt as of December 2008 is $973 billion, with a household average of $8,329. Almost 90 percent of that outstanding debt is held by 10 creditors; Chase, Bank of America, Citi, American Express and Capital One (the company with those zany commercials)

Residents' sleep deprivation a danger True, spending money so docs in training can sleep seems exorbitant, but people outside medicine do not understand the toll sleep deprivation takes on health providers and patients. Most doctors in training toil in inner city hospitals and take care of the poor, who are far sicker than other patients when they arrive in hospitals. Decisions have to be made fast and procedures done quickly to save lives. Calm doctors with alert minds and steady hands make the difference between life and death for severely ill patients.

WASHINGTON -Responding to anger and frustration from consumers, and a push from President Barack Obama, the House of Representatives on Thursday passed sweeping legislation aimed at shielding consumers from sudden credit card rate increases. By a 357-70 vote, lawmakers approved the "Credit Cardholders Bill of Rights Act of 2009," a detailed list of safeguards for consumers who feel battered by industry practices. "This bill will bar some of the more outrageous abuses," pledged Rep. Carolyn Maloney, a New York Democrat who has been trying for years to get the bill passed.

I returned a rental car Feb. 2 to San Francisco's airport in the same condition as it was in when I picked it up. (I'm a Budget Fastbreak member, so there is no person who goes over the car with me.) Two weeks later, I received a letter stating that I had returned it with "excessive soilage which will require special detailing," and my credit card was charged $127.24 for "the interior damage to the vehicle." This is not true. I was a single driver visiting my aunts in their retirement homes.

Her name is Jennifer and she's one of those many barely middle-class Americans - social workers, counselors, advocates - who work with people who have nothing. She works with Baltimore children in foster care, children born at the bottom, boys and girls who know poverty, abandonment and abuse before they know anything else. Jennifer asked me not to use her full name because she's not supposed to speak publicly about her cases. Plus, her husband won't be happy when he finds out she used their credit card again.

TIP 36 Manage cash flow with disciplined credit-card spending Credit-card grace periods - the time from when you buy something to when you have to pay your credit-card bill - amount to an interest-free loan, as long as you pay off the full balance. Here's a way to stretch those reprieves. It takes disciplined spending and attention, but it can give you two or more extra weeks each month before you have to pay the piper. Get two cards, one with a monthly bill sent on the 15th, the other with one sent on the 1st. (Many lenders will adjust your billing date, but you have to ask.)