Category: Credit Cards

But the new head of the Consumer Financial Protection Bureau said that will stop as soon as possible. According to a report from Fox Business, CFPB boss Elizabeth Warren, just a few weeks after her appointment by President Barack Obama, spoke before 400 members and guests of the Financial Services Roundtable in Washington, D.C., and promised swift action.

Warren vowed to limit confusing language and specifically singled out obscure provisions that may lead to consumers taking additional credit card debt as a result of late fees and or other penalties.

"In fact, there’s a new epithet: fine print," she said, according to Fox. "I understand that some of you call it 'mice type.' Where I come from, nobody calls fine print, hidden fees and surprise penalties 'negotiated contract terms' or 'innovations.' On a polite day, my brothers in Oklahoma call that kind of stuff 'garbage.'"

Warren urged banks to adopt a new approach to credit contracts, the report said. She also suggested that she may be persuaded to lighten regulation if lenders work with her, telling them that their new first principle is "fair treatment for customers."

If her proposals are followed, contracts would clearly spell out all interest rates for credit card debt, penalties, and the gifts or rewards that may come with the card, in addition to any other terms, the Fox report said. These changes are designed to allow consumers to better understand the agreements into which they are entering, and what would happen if they breached that contract.

Warren, who is a Harvard Law School professor, has long been an outspoken critic of lending practices, and her appointment was something against which the banking industry lobbied heavily. Her position was created as part of the Wall Street Reform and Consumer Protection Act that led to the overhaul of many of the federal laws related to the banking and lending industry. Her primary mandate is to ensure that all lenders follow the new regulations, though she has some power to tighten or loosen them as she sees fit.

According to a report from the Treasury Department, it will soon expand its efforts to allow more people who receive federal benefits payments automatically and electronically. Its broadened direct deposit marketing program is tied to its MasterCard Direct Express prepaid debit cards, and may help eligible consumers avoid taking on credit card debt.

While the direct deposit option is currently available to those receiving Social Security and Supplemental Security benefits, it will soon be expanded to people who get payments from Veterans Affairs, the Railroad Retirement Board and other federal benefits programs.

The program's expansion eliminates the need for benefit receivers to wait for their check to arrive and then clear, which will cut down on the amount of time they are without additional funds, and therefore may help them avoid additional credit card debt.

Many consumers have taken on more credit card debt as a means of making ends meet as they ran into financial problems.

Consumers who don't want to take on credit card debt when they sign up for the new PlayStation Plus plan can now just go to their local Target store, where Sony is selling membership cards that can be paid for in cash, video game news site Joystiq reported.

In addition to the ability to avoid credit card debt, the new product also allows gamers to gain access to video games before they go on sale, exclusive discounts on downloadable content, and the ability to try full versions of games before they purchase them, the site said. The plans to release the card were announced in June.

Many video game companies, such as Steam service operator Valve, have recently announced or started similar programs to this, aimed at holiday shoppers and young children who don't have the ability to take on credit card debt themselves.

In the first half of the year, many Americans used their maturing CDs to pay down their total credit card debt, according to a report from Market Rates Insight.

MRI, which tracks rates for deposits, loans and fees for financial institutions, said CD balances dropped by about $200 billion from January to June, and 15 percent of that – $29 billion – went toward people's credit card debt.

"One of the significant findings of this analysis is the positive relationship between CD and credit card balances," said MRI's Dan Geller. "The research indicates a strong and significant linear relationship between these two variables, which means that as CD balances drop, so do credit card balances, and vice versa."

Many consumers have been more conscientious about reducing their total credit card debt in recent months. However, some experts have begun to question whether the nationwide drops in credit card debt are due to more people paying off their balances, or increased charge offs.

While many financial experts have long credited these declines to consumers being wiser about how much credit card debt they take on and pay off every month, some are now wondering whether another reason exists. The New York Times said that many are increasingly of the belief that an increase in charge offs, credit card debt lenders believe they will never recoup, could be the real culprit.

"There is a lot of debate going on right now among economists" Cristian deRitis, the director of credit analytics with Moody’s, told the paper. "Is there truly deleveraging or are charge offs removing a lot of balances?"

Another possible reason for the declines, which is related to charge offs, is that many consumers may have seen their rating decline so sharply that they can no longer get approval from lenders on applications, and therefore are unable to take on credit card debt as they once did.

Many college students are piling up credit card debt, and quickly, according to a report in the Columbus Dispatch, which cited statistics from Sallie Mae. Many students are now taking on credit card debt to pay for things like tuition and other expenses related to attending college.

The report said that while it may be advisable that students carry one card in case of emergency, having more can sink them in serious financial trouble. The average undergraduate carries 4.6 accounts in their name, and over $3,100 in credit card debt. College seniors have even more debt, as well – about $4,100 on average.

Many experts advise that parents should talk with their children about issues related to their finances so that the kids have a better understanding of the peril they can find themselves in if they spend irresponsibly.

While many people may imagine the regular gamer as being a male in their teens or early 20s, it turns out that the average person playing so-called social games – in which they can show off their accomplishments and help friends – is a middle-aged woman. According to a report from CNN Money, recentstudies have found that millions of older women have taken up gaming and are happily taking on credit card debt to upgrade their experience.

This has left companies scrambling to add premium upgrades to otherwise free games, and they're cashing in, the report said. Older women are not only taking on credit card debt to buy things for their accounts, but they're doing it for their kids as well.

One social game that has grown popular with all demographics is Farmville, in which a user maintains a few acres of land, harvesting crops and caring for livestock.

According to a new survey from Oracle, entitled Opportunity Calling: The Future of Mobile Communications, 31 percent of respondents said they expect to use their smartphone instead of conventional payment methods to take on credit card debt by 2015. In addition, 58 percent of consumers said they would prefer to do this within a few years.

But with the increased demand for convenience of payment come concerns about privacy, the survey found. While 61 percent of consumers said they would at least try taking on credit card debt with their smartphone, only 33 percent liked the idea of receiving targeted advertisements using information culled from those purchases.

Several banks, such as Visa and Bank of America, are already testing payment methods that allow consumers to take on credit card debt through their smartphones in major cities across the country.

Major League Baseball is currently testing a new system that will allow consumers to take on credit card debt in exchange for having their peanuts and Cracker Jack delivered straight to their seats, according to a report in the Philadelphia Inquirer. The new program, which is being tried out at the Phillies' home field, Citizens Bank Park, allows people with the MLB At Bat 2010 app for their iPhone or iPad to order food without getting up.

The report said the transaction will lead to a few additional dollars of credit card debt than if they got the food themselves, but fans can order everything from sandwiches to beer through the app, and it will be delivered within 30 minutes.

Several ballparks across the league already allow consumers to take on credit card debt when ordering food from their seats, either through concierge services in premium sections or through programs similar to this one.

When someone's credit card information is stolen, that data often winds up on hacker websites where it's traded and sold, according to a new report from security expert Brian Krebs. The cost of details for consumers in the U.S. is just $1.50, and $4 for those in the United Kingdom, but that's a small price to pay for the ability to make purchases and stick someone else with the credit card debt.

In addition, identity thieves can buy more information for a few dollars more, Krebs said. This would allow them to open accounts in that person's name and leave them with even more credit card debt they wouldn't even know about unless they ordered a credit report.

When consumers are hit with fraudulent credit card debt, experts advise that they contact both the financial institution and local law enforcement, including their district attorney, about the problem.