Credit Cards Hit Historic Levels

Credit union card experts and analysts say the latest nationwide credit card flap has given credit unions have another good opportunity to market their credit cards as better for consumers.The widespread controversy centers around the use of arbitration to adjudicate delinquent credit card debt. Most large card issuers build an agreement to use an arbitrator, as opposed to going to court, to settle card disputes into their card agreements. Most consumers have no idea that they have signed away their right to sue the card issuer when they agreed to take the card.But now the arbitration system for credit card accounts nationwide has been thrown into confusion because the biggest firm that provided this service, the National Arbitration Forum, has gotten out of the business. Further, the American Arbitration Association has said it will stop administering any consumer debt programs that are rooted in arbitration until industry standards or governmental regulations are established.The Minnesota Attorney General sued the over what it alleges were non-disclosed connections between the and major collections firms.
card analysts said these changes largely do not impact credit unions since credit unions, in general, do not use arbitration but suggested that credit unions might have another pro consumer point to make when marketing their card programs.The policy discussion comes in the wake of recent complaints by residents who have requested town attorney Mark Tilghman review potential ethics violations by Frank White, Princess Anne Town Commissioners president. According to town records, White charged more than on town issued credit cards over a three-month period starting in early February.Town Commissioner Dennis Williams recommended at the July monthly town meeting that elected officials on town business spend their own money, then submit an invoice along with justification of purchases or charges for reimbursement.Williams called for tonight's discussion on spending practices by elected officials, saying that it is uncommon for a town commissioner to have a town-issued credit card and vehicle.Agenda discussions tonight also include an update to a travel per diem policy, and revisions to policies for petty cash, purchase orders and debt collection.A recent article in The Daily Times chronicled White's credit-card charges at restaurants and hotels, as well as the president's use of a town vehicle news that prompted a group of residents, led by John Nicholson, to call for a legal review of spending.Credit card charges in question happened when White was a volunteer top town executive after former town manager Jay Parker quit abruptly in February. According to town records acquired by the newspaper, White placed some of the charges on the credit card issued to Parker, and some on a town-issued card in his own name.Residents have complained publicly about the town's recent purchase of laptop computers for elected officials; and an percent property tax hike both measures coming during a national recession as town employees are forced to take furloughs. My fiance and I are trying to secure financing for our first home, but his credit scores are just below the mark. I was thinking of adding his name to my credit card account so that my available credit line shows up on his report. Would this boost his scores at all? Is there any danger of it lowering his scores?If you have a good history with this account you always pay on time and you're not carrying a large balance adding him as an authorized user may help his scores.The key is whether the credit card issuer will "export" this data from your credit file to his. Some issuers automatically do this export for any authorized user; others do so only for spouses. The only way to know for sure is to ask your credit card company.If the data is exported to his file, it will be used to briefly toyed with the idea of excluding authorized user data in its latest formula,If you add him as an authorized user, you don't need to give him a card or access to your account. What you should do, however, is take some time to go over his credit reports and discuss what steps he's taking on his own to clean up his financial act. A temporary boost in his scores might land you a mortgage, but you could wind up much worse off financially if he continues to mishandle his credit. I just received rate increases on two of my credit cards that are together going to send me into bankruptcy. I didn't think it could happen to someone who has perfect credit, has not maxed out the card and has been steadily reducing the balance and not charging anything, but obviously it a month to my payments have made it impossible.I feel foolish for having this debt at all, but I lost my mortgage business and my husband is in construction. We have had a really bad four years. If they had just allowed me to continue making the payments per our original agreement, I would have been able to continue reducing the balance and they would get their money. This way, they won't receive any money at all. How does this make sense?Credit card issuers know full well that their latest rate increases will send some of their borrowers to Bankruptcy Court. What they're hoping is that they'll get enough interest from those who can still pay to offset the losses from those that can't.All may not be lost. Many issuers who have instituted these rate hikes offer an "opt out" provision that would allow you to keep your original rate if you agree to close the account. You should contact your issuers to see if this option is available. Closing accounts can ding your credit scores but will cause far less damage than a bankruptcy.Be realistic about your financial situation, however. The amount of the proposed payment increase indicates you're carrying substantial debt on those cards. Unless your financial situation improves dramatically, it's probably only a matter of time until a misstep or another change in terms causes you to fall behind.If that's the case, bankruptcy may be a better option than continuing to struggle with debt you'll never repay.The new "cash for clunkers" law has spawned a bunch of scam websites hoping to fool you into revealing private financial information. Don't fall for them. For the straight scoop on the new law, Liz Pulliam Weston is the author of the book "Your Credit Score: Your Money and What's at Stake." Questions for possible inclusion in her column may be sent.