MyCardBlog

We all know that, Fair Isaac, which created the popular FICO credit score, is making some small adjustments to the way it calculates American people’s credit scores. My previous report pointed out that the authorized user account will not be calculated in your personal FICO score. But according to the latest news, Fair Isaac will re-consider the new change and will take your authorizes user account as a factor of your FICO score. This might be good news for those who want to take advantage of policy.

Last month, Fair Isaac announced that its latest credit scoring system, “FICO 08,” will include authorized user accounts when calculating someone’s FICO credit score. Some credit repair companies used this policy and offered a way for folks with bad credit to raise their FICO scores. You would pay thousands of dollars to get added as an authorized user to the credit card of someone with a great credit history. When that account showed up on the authorized user’s credit report, the person’s credit score would rise. Normally, the authorized user will not receive the credit card.

However, it could be a long wait for us to get the new FICO 08 score. Fair Isaac is still revising the model with the three major credit reporting agencies, after which the company will focus on getting lenders to test and use new FICO. About the authorized user issue, it has been long known that if you have an account with a primary account owner with super credit performance, your credit score will be improved. Could people still do so by getting family members with great credit to add them as authorized users and improve their own credit performance? It seems that Fair Isaac will take this into consideration and make some necessary changes.

If you look at how FICO score are calculated, you would find that you can benefit from being an authorized user in the length of credit history and amount owed which take 45% of your FICO score. But there is still a risk— what if the primary account holders make a mistake? Authorized users could see their credit scores plummet if the primary cardholders default on the accounts.

It’s a really new policy and we should wait until the final result comes out.

Citi just released a new checking account bonus last week. Just followed Citi’s step, Amboy Direct is offering a $50 sign-up bonus for its Amboy Direct eSavings Account. Amboy Direct was offering $50 bonus back to this February. If you are not familiar with Amboy Direct, Amboy Direct is a division of Amboy National Bank which has been around for 118 years. The Amboy Direct division is aimed at online banking and has been around for about ten years.

This offer is good through 09/30/2008. Another reason why I introduce this banking bonus is the yield on the eSavings account is now 3.25% APY for balances of over $3K.

How to receive the $50 bonus?

To receive the $50 bonus, you must open a new Amboy eSavings account and keep a minimum monthly average balance of $3,000 or more for 90 days. The bonus will be credited within the following statement cycle after account meets 90 day balance requirements. Only one new client bonus per household. This bonus offer cannot be combined with other promotional offers. Offer good until 9/30/08.

Please note that if you previously have an account at Amboy Direct, you are not qualified to get the $50 bonus.

Features of the eSavings Account:

• No monthly balance minimums or service fees
• $100 minimum opening balance
• 3.25% APY on balances from $3K to $100K
• 1.00% APY on balances from $300 to $2,999
• No interest on balances below $300

The Amboy Direct’s eSavings Account has the ACH transfer feature like ING Direct’s Organge Savings Account, HSBC Direct Savings Account or Capital One Savings Account does. The ACH feature can allow you to do direct deposit to other bank accounts. Meanwhile, there is no hard pull during the account opening process.

Another banking news is TD Banknorth is offering a 2GB iPod Shuffle for opening a new checking account with direct deposit before 09/17/2008. If you apply for their credit card on the same day you apply for the checking account and get approved, you can get a 4GB iPod Nano.

You can either apply online at their website or you can go to the local branches to open an account. But this bonus is only eligible to residents in Maine, New Hampshire, Vermont, Massachusetts, Connecticut and Upstate New York. Promotion page can be found here.

Citibank just released a new checking account bonus promotion on Friday. Citi had many promotion offers this year and all of the promotion offers were proved to be true. Indeed, Citibank is a reliable bank to jump their promotional offers. The new promotion code is CY73. You can apply for a regular citi checking account online or by phone at 1-800-374-9500.

How to get the $100 bonus?

• Open a qualifying Citibank regular checking account and fund it with a minimum of $1,000 by 12/31/2008
• Within the first month after your account is opened, make at least one direct deposit into your account or make at least two electronic bill payments from your account each month for three consecutive months

The promotion page can be found here.

Some important information you have to notice within the fine print:

• This offer is only available to Citi cardmembers who are the primary credit card account holders
• Offer is not valid for existing Citibank checking customers
• Checking account must be funded with $1,000 or more by 12/31/2008 and must be in a Citibank Account, Citibank Everything Counts or Citigold account relationship package
• The $100 cash bonus will be deposited to your Citibank checking account within 120 days from the end of the statement period in which you met the qualifying requirements

Although $100 bonus is good, you will find that you have to keep combined minimum $6,000 balance in your citi account (checking, savings, loans and/or credit card account) to avoid monthly fees. When you apply for this account, you should think about this. My previous post has some useful thoughts from Jim Semple.

Good news is there is no hard pull reported during the account opening process.

The Starwood Preferred Guest Credit Card from American Express is one of my favorite credit cards. With this credit card, you can accumulate starpoints for free hotel stays. You can also use starpoints to redeem a gift card from Amazon.com or Banana Republic, GAP and Starbucks etc. If you like, you can also transfer starpoints to many airline miles including AA, UA and Delta Airlines. If you apply now, you can get 10,000 bonus starpoints.

Starwood Preferred Guest program introduced the SPG Flights yesterday, a new redemption opportunity, which allows you to redeem your starpoints for a free airline ticket without any restrictions. This is the first hotel rewards program to offer airline ticket redemption option. This truly will benefit all starwood preferred guest members. Another obvious advantage of the SPG Flights over other airline rewards programs is you can redeem Starpoints for airline tickets whenever you choose, even during peak periods such as holidays.Thus you can avoid the standard restrictions that limit most frequent-flyer awards program.

With SPG Flights, you can choose hundreds of airlines over the world with no blackout dates. If there’s a seat available for purchase with cash, you can use your Starpoints. If you don’t have enough starpoints in your account, you can buy starpoints and use them for airline ticket redemption immediately.

Use your starpoints at SPG Flight is very easy:

1. Search for flights at www.spg.com/flights

2. Select your flight from many available options

3. Redeem Starpoints for an airline ticket

4. Fly

According to the SPG Flights Starpoints Chart, I think redeem airline ticket is much better option than other kinds of redemption choices.

SPG Flights Starpoints Chart (Thanks Sander for reminding me of this!)
up to $150 10,000
$150-$215 15,000
$215-$280 20,000
$280-$345 25,000
$345-$410 30,000
$410-$475 35,000
$475-$540 40,000
$540-$605 45,000
$605-$670 50,000
$670-$735 55,000
$735-$800 60,000
$800-$865 65,000
$865-$930 70,000
$930-$995 75,000
$995-$1060 80,000
Higher prices (examples)
$2,880-$3,140 235,000
$4,960-$5,220 395,000
$9,900-$10,160 775,000

Starwood Preferred Guest has been known for having the industry’s best redemption program.I hope they can keep current excellent work and offer more rewards opportunities.

Million of Americans are carrying debts in their daily life. And that is a good reason why there are more than 6,000 debt collection agencies in the United States. Most of these agencies operate their businesses under the law but we are sure that there are some of them do not. According to the Better Business Bureau, the complaints to debt collection agencies are increasing dramatically in 2007. So it’s necessary to understand some basics to deal with the aggressive debt collection agencies even if you legitimately owe the debt.

A collection agency is a business that pursues payments on debts owed by individuals or businesses on behave of the debt owners. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed. However, some agencies, sometimes referred to as “debt buyers”, purchase debts from creditors for a fraction of the value of the debt and pursue the debtor for the full balance.

Here are some tips on how to deal with debt collection agencies:

1. Avoid your debt goes to debt collection. Believe it or not, once your debt is transferred to a debt collection agency, things will go worse. The best strategy is try to contact and negotiate with your creditor and work out a reasonable payment arrangement.

2. There is a law out there to help you. You should know that The Fair Debt Collection Practices Act (FDCPA) helps you fight back against unfair, unethical and even illegal bill collection tactics! The U.S. Federal Trade Commission (FTC) also has several publications designed to educate consumers about their rights under The Fair Debt Collection Practices Act. Harassing and nuisance phone calls, threats and abusive language are illegal and should be reported to the FTC and your state attorney general’s office.Don’t feel scared when you are dealing with a debt collector.

3. Don’t ignore notice from debt collectors. It’s a wrong wrong way to deal with debt collectors if you just ignore their notice (letters or phone calls). You should remember that the debt collectors might have your personal information including social security number. You are allowed to send written requests for verification of debt within 30 days of being contacted by a debt collector. If a collection information appears on your credit report, your credit will be ruined in the next 7 years. It will affect your ability to get low rate loans, cheap insurance and great rewards credit cards.

4. Keep copies and records. It’s a good habit to keep important files when you are dealing with debt collectors. Some experts would suggest you keep those documents forever. Because you don’t when you would use them again—specially proof of settlement or resolution of debts. This is an important step to protect yourself. You should also bear in mind that any agreements for making debt collection payments should be confirmed in writing and signed by the debt collector before sending in any payments.

5. Keep an eye on your bank accounts. There are some cases that debt collectors might file suit against consumers for nonpayment of debts. And if they win the lawsuit, freezing savings or checking accounts is one of the court-ordered options for collecting debts. What would happen if your bank accounts are not usable? I can’t imagine a life without any bank accounts! However, funds for Social Security or disability checks are exempt and cannot be used as a source of court-ordered debt payments.

The FTC Facts for consumers might be helpful to everyone too!

J.D. Power and Associates just released the 2008 Credit Card Satisfaction Study yesterday. According to this study, American Express ranks highest in overall customer satisfaction with credit card issuers for a second consecutive year! Yes, American Express should pride itself on its outstanding customer service.I would also vote for American Express.

The Credit Card Satisfaction Study measures customer satisfaction with credit card by examining five key factors according to J.D. Power and Associates: interaction; billing and payment process; fees and rates; reward programs; and benefits and services. I would say this study really encompasses every factor of a good credit cards. The study is based on a 1000 point scale and relies on more than 7,600 customers’ responses. American Express scored 783 points and ranked highest. Discover Card followed American Express with a score of 751.

Ironically, although the industry average score is 721, only American Express and Discover can score higher than that. HSBC scored the lowest score—667. Capital One also performed not well with only 10 points higher than that of HSBC.

As indicated by the study, American Express performed well in every category. American Express got the highest score out of any of the other credit card companies in all of the five categories. Discover Card performed well in only 3 of the 5 categories: interaction, billing and payment processes, and reward program sections. In the press release of this 2008 Credit Card Satisfaction Study, Rocky Clancy, executive director of financial services at J.D. Power and Associates, pointed out that “American Express and Discover Card are very different in their fees, reward programs and incentives, and their strong performances indicate their ability to suit the various needs that dissimilar types of cardholders have.”

The study also revealed that people who pay off their balances every month tend to choose their credit cards based on rewards programs (77%). People who carry balances on their credit cards pay more attention on interest rates and fees when choosing their credit cards (65%).

This study also found that 72% of cardholders use some kind of reward program. And the most interesting part is free hotel stays are the most satisfying type of reward! I think the Starwood Preferred Guest Card from American Express and the Hilton HHonors Platinum Credit Card from American Express will be very popular in the near future.

Another find of this study is 25% of all cardholders don’t know if their card offers them additional benefits and 33% haven’t used any during the past year. (If you are reading this post, you should look at your credit card benefits now.) I hope this will change in the future as mycardblog.com becomes more and more popular among general American readers.

The pdf version of the press release of 2008 Credit Card Satisfaction can be viewed here.

My question is which credit card company can surpass American Express the next year.

In the redesigned October issue of Consumer Reports (www.ConsumerReports.org), there is a report about the American’s best and worst credit cards. This result is based on a complete study of hundreds of credit cards and actually only a small portion of them is named. In this report, consumer experts indicates 12 credit cards that are worthy of consumers’ consideration and 3 to stay away from.

Most of credit cards in the 12 named credit cards are very common at mycardblog.com. But some of them are not that good, at least, from my point of view. The best credit cards for low-rate or low-fee as rated by consumer reports were: Capital One Platinum Prestige, Clear from American Express, and Iberiabank Visa Classic (You might find a similar credit card from some credit unions). The best cash-back cards included Capital One No Hassle Cash Rewards, Chase Freedom Visa, and Discover More. The best gas cards were Chase PerfectCard MasterCard, Discover Open Road, and Hess Platinum Visa (I would also put Chase BP Visa card here.).

Three cards to avoid were First Premier Bank, HSBC American DreamCard and New Millennium Visa or MasterCard. These are subprime credit cards. They usually charge very high interest rates and sky high annual fees or other kinds of fees like account setup fees, processing fees, and monthly service fees. Of course, you should avoid them.

In this report, the experts also point out that consumers should do a credit card checkup to make sure their accounts haven’t changed for the worse. “Several card issuers have doubled or tripled interest rates for some customers in recent months, even though many were current on their bills and have good credit.” said Greg Daugherty, executive editor of Consumer Reports.

According to this report, the consumers’ credit card balances are up from $825 billion at the end of 2005 to $962 billion in May. Some credit card issuers are beginning to tighten their credit limits and charge higher interest rates for many borrowers. We also often hear that someone’s credit cards are closed by the credit card issuers these days. This is a sign that credit card issuers are going to make some changes to minimize their risks.

The most interesting part of this report is the consumer experts give out some useful tips on how to get most from a credit card.

1. Find a low interest rate or even 0% APR credit card if you carry balance on your credit cards.

2. Check your mails from credit card issuers to see whether they are about changing your credit card terms like lower credit limit or increase interest rate.

3. Try to contact credit issuer if you find anything that you feel uncomfortable.

4. Be aware of some “dirty tricks” from your credit issuers.

5. Choose the right credit cards according to the type of borrowers you are.

The full report can be found at ConsumerReports.org with paid subscribers.

Consumer Reports is an American magazine published monthly by Consumers Union. It publishes reviews and comparisons of consumer products and services based on reporting and results from its in-house testing laboratory.

Sam is a subscriber of mycardblog.com. He just finished an AOR (App-O-Rama) and wanted to share his results with mycardblog.com readers. He sent an email to me and listed all the credit cards that he applied for within one day. He told me that he was inspired by my post “MyCardBlog Reader Daren’s AOR Result”.

I believe the AOR trick is pretty easy to mycardblog.com readers. I have some posts about how to perform an AOR and what you should know about AOR. (App-O-Rama, App-O-Rama: Profiting from Credit) You must remember that the most important thing to do before an AOR is to pretty up your credit scores to present the most attractive picture to potential creditors. And you must reduce your accounts at a single credit issuer if you have many accounts there. You chances to get approved by a credit card issuer is significantly increased if you submit your applications in a short time period.

Sam’s case:

Inquiries within last 12 months: TU = 1, EX = 1, EQ = 0
Inquiries within last 24 months: TU = 21, EX =9, EQ = 5

HHI: $225K (Includes investment income and wife’s income)

Chase Flexible Rewards 9,000 CL
Citi Mastercard 3,000 CL
Citi Diamond Preferred 16,000 CL
Discover More 8,000 CL
HSBC GM Flexible Earnings 6,500 CL
BOA Financial Rewards Visa 21,000 CL
WAMU ESPN Total Access 21,000 CL
GE Money Cash Rewards Card 15,000 CL
AMEX True Earnings (Costco) 23,000 CL
AMEX Hilton Honors 22,000 CL

AOR Result

• Chase Freedom Visa Card—————————Approved, 16,000 CL
• Chase United Mileage Visa Card——Approved, 8,600 CL
• AMEX Preferred Rewards Gold Card————Declined
• The Gold Card from American Express OPEN———Approved, 13,000 CL
• AMEX In Chicago——————————-Declined
• One from American Express——————Declined
• Gold Delta SkyMiles Card——————Declined
• AMEX Starwood Preferred Guest Card—————–Approved, 7,000 CL
• AMEX Starwood Preferred Guest Business Card—————Approved, 10,000 CL
• Discover Business Card———Approved, 10,000 CL
• Citi Business Card with ThankYou Network—–Approved, 12,000 CL
• Citi Platinum Select AAdvantage World MasterCard———-Declined
• Citi Professional Card with ThankYou Network–——Declined
• Advanta Platinum Business Card with Rewards Options————Approved, 22,000 CL
• Advanta Life-of-Balance Platinum Business Card——————Approved, 8,000 CL

According to sam, he thought he would make his AOR much better if he can eliminate the credit inquiries within 24 months or wait until them disappear.