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Everyone knows that current American economy is under a very bad situation. There are a lot of economists, politicians, financial advisors and bloggers talking about how the Wall Street finance crisis will hit our main street. The truth is the failure of Wall Street has already hit our main street. You would never believe that Lehman Brothers, AIG, WaMu and Merill Lynch will fall down some years ago. The question is how the finance crisis will affect our average Americans?

Based on current credit card and banking news, I think there are 5 aspects that the finance crisis will be directly related to your personal finance.

1. More Banking Promotions: this has been proved to be true! Before WaMu was acquired by JP Morgan Chase & Co, it was running 5% CD promotion. The 5% 1-year CD rate is pretty high considering the current banking status. Bank of America is offering $100 sign up bonus for opening a MyAccess Checking Account. Wells Fargo Bank is offering $50 bonus for its new customers. Chase is currently offering $125 to open a free checking account with direct deposit. (More banking deals.) The reason is very simple: banks are trying to attract more customers to bring more deposits!

2. Credit Card Limit is Reduced: I heard some of MyCardBlog.com readers complained that their credit card limit was reduced. The most ridiculous thing is that Citi sent a mail to my friend about his Citi Dividend Credit Card. The credit limit was $8,100 before he received the mail and the mail was stating:”Congratulation, because of your excellent history with us, we’re increasing your credit line to $3,800. It’s our way of saying thank you.” American Express recently cut the credit for 10% of its cardholders. All of these are indicating that your spending power might be reduced because of the bad economy.

3. Easier to Get a Loan with Good Credit but Harder to Get a Loan with Bad Credit: Even banks are suffering the finance crisis. They are still in business. They want to make money from you. If you can still maintain a good credit, this means that you are a responsible consumer and banks are willing to do business with you. I have heard many friends got instant approvals recently. However, if you are with a bad credit. You should face more rigorous credit check. Your credit performance will dramatically determine your loan rate as well.

4. Harder to Get A Student Loan: The bad news comes with the message that Bank of America and Wachovia is stopping issuing student loans. Because not only banks and mortgage companies are in crisis but also student loan industry is under crisis. Many private lending companies will also decrease the amount for issuing student loans.

5. More Deals and Ad Campaigns: It’s no doubt that your family budget has tightened due to the finance crisis. The price of every product seems going up day by day. Retailers are anticipating the tough holiday sales season ahead. You would see 42″ and up plasma and LCD TVs starting at $499 during the Black Friday! You might even see a laptop for only $99! Of course, retailers are going to spread their names more often than before. eBay working together with Microsoft is offering 30% cash back for buying qualified items on eBay. (Go to live.com and search for wii, wii cheap, xbox 360, PS3 etc. and you can see the offer link.)

Credit score is nothing if you’re not using it. Nowadays most credit card consumers have been aware that they can meke some small money by taking the chance of credit card sign up bonuses. Due to the competition between credit card issuers, credit card issuers are always give out sign up bonuses to promote certain types of their credit card products. The most famous ones may be the Chase Freedom Card $250 Bonus offer and the University of Iowa WorldPoints Platinum Plus Mastercard Credit Card $250 Bonus offer in 2007.

Because of the severe economy situation, we are not expecting the huge promotion from our credit card issuers for a while. But the fact is there are still may sign up bonues oppportunities out there. I have a Comprehensive List of Frequent Flier/Point Sign Up Bonus. Following is a comprehensive list of cash backsign up bonus. I hope this list will be of some help for you to get some free money.

I have many posts about how to profit from credit cards. I mention a lot about the sign up bonus opportunities here at mycardblog.com. But I actually miss a lot about how to profit from credit card balance transfer offers. The primary reason why I don’t mention a lot of credit card balance transfer is different credit card issuers will target to different credit card members. Thus different people might qualify for different balance transfer offers. The credit card balance transfer is not so easy for many new to credit card game. I have a series of posts on how to do balance transfer.

But I’m still receiving some emails inquiring the credit card balance transfers. Some readers are keeping receiving the balance transfer offers from credit card issuers. And they don’t know how to deal with them? jump or not jump? Profitable or not profitable? This post: Win A Balance Transfer Game is kind of a brief guide to the balance transfer game.

What’s credit card balance transfer?

A balance transfer is the act of transferring balance from one credit card, usually with high interest rate, to another credit card which is supposed to have better terms and rates. When you receive a balance transfer offer, you will be informed with the following items: offer rate, offer duration, and transaction fee. Please be noted that when you have many items with different interest rates on your credit card statement, usually your payments will be applied to lowest-rate balances first and highest-rate last.

Why are you receiving balance transfer offers?

Credit card merket is very competitive today and is a big business. Credit card companies are making a lot of profit from finance charges. The national average APR on credit card is about ~15% which is significantly higher than any other financial products. With that kind of interest, it’s tough to pay down a credit card, because it is consistently charging interest and adding to the principle. Unfortunately, it’s normal for American households with credit card debt to carry balances of $10,000 or more on credit cards. A typical family has to pay more than $1,000 in interest charges on credit cards each year. This is much more profitable than the transaction fees. In an effort to lure consumers to their credit card, many companies offer balance transfer offers to your credit card. And you might become one of the money machines for them in the near future.

Would the balance transfer work for you?

Balance transfer credit cards are very popular credit cards. It can be an emergency fund for you if you are short of cash for a while. Or it can give you some profit from the interest rate difference between a high rate savings account and you credit card offer. For a savvy consumer, this can be an excellent method to reduce credit card debt.

Looks good but you have to watch out……

You should always bear in mind that credit card companies aren’t making these offers out of the goodness of their hearts. They are gambling that they’ll win. They are wait for you to fail to pay off your balance or neglect to switch your balance to another credit card before the grace period is up. So to win the balance transfer game, diligence is required. You also have to read carefully about the fine print.

You should be shopping for the following features:

Low interest rate offers: A 1% APR will cost you a lot of money in a 1 year period if you carry a lot of balances. Some credit cards come with 0% APR promotion with short duration time (3~6 months). You should consider a step ahead before you jump for it.

Low transaction fees: Today’s balance transfer offers always come with a 3% transaction fee. Some with a cap some don’t. You should read carefully about the offer before you use the balance transfer checks. The American Express Blue and Blue Cash Card offer great 4.99% fixed interest rate without any transaction fees. If you are short of money, they are good choices.

Annual fees: Of course, you want a credit card without any annual fees.

Sign-up bonus/other rewards: Well, this is a great additive for me to jump the offer. The Citi Dividend Platinum Select Card and Citi Diamond Preferred Rewards Card are offering balance transfer bonus for making a balance transfer larger than $1000.

At last, as a kind reminder, please don’t forget to minimum balance to your credit card every month. Pay late only once and you will fall into the debt hell.

Many of us may still not know that credit score actually can help you earn some free money. Some of you might be worried that if you apply too many credit cards, your credit score will be dramatically affected. My opinion is: credit score is nothing if you’re not using it. If you are not going to buy a house (or apply for a mortgage) in the next two years (Credit inquiries will disappear from your credit report after 24 months.), you are free to use your credit.

My post”Earn ThankYou Points for A Free Trip To Europe and Asia” was a very popular post (update). Actually, there are many frequent flier programs out there. You may get a free flight ticket from any airline company. Following is a comprehensive list of frequent flier mile/point sign up bonus.

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!

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.

Happy labor day!

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This is my monthly updated list of credit card sign-up bonus. I have a special page for credit card sign-up bonus where you can find a complete list of credit cards which will offer you a certain amount of sign-up bonus. I hope this list will be helpful for those App-O-Rama planners. I think it’s necessary to keep a tidy list of credit cards with some fulfillment requirements. The aim is to keep you updated with sign-up bonus offers. There are two main requirements for a specific credit card entering in this list: minimum $50 sign-up bonus and must be a mainstream brand like American Express, Discover, Citi, Chase, BOA, etc. Thus all the credit cards on this list are available to everyone.

All the credit cards are listed in order of value and I will try my best to keep this list updated in a monthly manner. Basically, I assume 100 points/miles=$1. Because you can always redeem your points or miles for certain gift cards.