How do you plan to shop this holiday season?  Do you plan to shop online by computer or smartphone and/or in the stores?

Price Grabber, a division of Experian – one of the credit reporting agencies, conducted a survey of 2,322 U.S. consumers who shop online. The survey was conducted from September 19 to October 17, 2011.   Compared to the responses last year, there was a slight increase of 1 percent in those who plan to shop online by computer, an increase of 44 percent who plan to shop online from a mobile device and a 26 percent decrease in those that will shop at brick-and-mortar stores.

Where they will shop

When the responders were asked all the ways they will shop this holiday season, here is how they responded: read more »

The National Foundation for Credit Counseling (NFCC), a viable alternative to hiring debt settlement companies, conducted an online poll of 2400 during the month of October, regarding debit card fees. Only three percent of responders would continue to use their debit card as usual if they were charged a fee.

Results

They were asked “If my bank were to impose a fee related to debit card use, I would…” Here is how they responded to the five choices: read more »

The latest data from the Federal Reserve G-19 Statistical Release indicated that consumer credit dropped in August 2011, which was the most in one year. Total consumer credit was $2.4449 trillion in August 2011; compared to $2.4544 trillion in July. The decrease was $9.5 billion or -4.6% from July 2011, compared to an $11.9 billion increase in July 2011.

Non-revolving debt (credit cards)

Most of the decrease was attributed to non-revolving credit, which decreased by 5.2 percent or $7.23 billion from July 2011; compared to a rise of $15.48 billion in July 2011.  This was the largest decline since August 2008. Non-revolving debt included student loans, auto loans and mobile home loans.  Loans secured by real estate, such as home mortgages and home equity lines of credit, are not tracked for this report. read more »

PriceGrabber, a division of Experian (one of the three credit reporting agencies), conducted their first winter holiday shopping survey.  It was conducted from September 7 to 15, 2011 on 3,070 U.S. online shoppers.  Almost all plan to spend the same or less than last year and are looking for bargains. Approximately 49 percent of those surveyed plan to spend the same amount in 2011 as they did in 2010, 45 percent plan to spend less and 7 percent plan to spend more.  Most (68 percent) attributed the economic climate to their spending. read more »

In previous blogs I have discussed the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit Card Act or CARD Act). The Federal Reserve approved a rule that amended Regulation Z to clarify the Credit Card Act, which became effective October 1, 2011.  Before I discuss the rules, I want to refresh your memory on both the Credit Card Act and Regulation Z.

Credit Card Act

The Credit Card Act’s purpose was to protect consumers from certain abusive practices by credit card issuers.  Some of the changes involved unfair interest rate increases and changes in terms; advanced notification of increases; how payments are applied; fairness in due dates and times. For example, the Credit Card Act required that bills be mailed 21 days prior to the due date instead of the norm which was 14 days. read more »

Recording machines across the nation are being clogged with prerecorded phone calls from companies that claim to be able to negotiate significantly lower interest rates with your credit card issuers, if you just pay them a fee first. According to The Federal Trade Commission (FTC), the nation’s consumer protection agency, consumers who get these interest rate reduction robocalls should listen to them with extreme skepticism, and delete them. Many are scams.

The companies behind the sales pitches claim to have special relationships with credit card issuers. They guarantee that the reduced rates they offer will save you thousands of dollars in interest and finance charges, and will allow you to pay off your credit card debt three to five times faster. They claim that the lower interest rates are available for a limited time and that you need to act now. Some even use money-back guarantees as further enticement. (The FTC frowns heavily on guarantees) read more »

TSYS, a global payments processor, and Mercator Advisory Group, a research firm, conducted an online survey of more than 1,000 debit card users whose cards were issued by a financial institution. They were asked about their payment choices, debit card usage and feedback on being charged fees for debt card usage.

These questions were asked to determine how consumers will react to banks charging for debit cards.  Some financial institutions plan to charge for debit card usage in reaction to the Durbin Amendment to the Dodd-Frank Act, which becomes effective on October 1, 2011.  This amendment sets a cap on the fees banks can charge merchants for swiping debit cards issued by the bank.   The fee is half of the amount the banks received previously, and some banks are charging consumers for debit card usage to make up for the loss.

Those surveyed preferred to use debit cards for purchases and credit cards were a distant second. If they stopped using their debit card, most would use cash instead of credit cards.  More than half would close their checking account or stop using their debit card, if they had to pay fees to use it. There was no difference in responses by age, income or gender. read more »

The housing market hasn’t recovered from the recession and CoreLogic tracts this market through its propriety databases. CoreLogic recently released a study of negative residential equity covering the second quarter of 2011.  CoreLogic provides consumer, financial and property information to businesses.

Negative equity exists if your mortgage balance is higher than the home’s value. This is usually because market value decreased or mortgage debt increased or a combination of both.

There are approximately 48.5 million residential properties with a mortgage in the U.S.; 10.9 million or 22.5 percent of mortgages had negative equity in second quarter of 2011, down from 22.7 percent in first quarter of 2011. An additional 2.4 million had less than five percent equity, which is considered “near-negative equity”. The combined group with negative and near-negative equity are called “below water”. The combined total of the “below water” group was 13.3 million or 27.5 percent. read more »

Auriemma Consulting Group conducted research on private label cards with 402 credit cardholders in July 2011.  Almost half (47%) of the cardholders had private label credit cards.  Private label cardholders were more likely to carry a balance than bankcard holders.

Private label cards are issued by retailers to be used at their stores to purchase merchandise. These cards are limited to the places that accept them, and the balances and credit limits are lower than those of bankcards. Because the underwriting criteria are less stringent than bankcards, the risk is higher to the card issuers and interest rates are higher.  This is reflected in higher charge-off rates on private label cards.  According to Fitch, as of June 2011, the average charge-off rate on private label cards was 9.45% and for bankcards was 6.33% read more »

Payday loans are considered advance loans, check advance loans, post-dated check loans, or deferred deposit loans. Regardless of their name, these small, short-term, high-rate loans by check cashers, finance companies and others all come at a very high price.  Consumers with no bank accounts or credit cards are the usual customers of payday lenders.

Here’s how they work;  A borrower writes a personal check payable to the lender for the amount the person wants to borrow, plus the fee they must pay for borrowing. The company gives the borrower the amount of the check minus the fee, and agrees to hold the check until the loan is due, usually the borrower’s next payday. The fees on these loans can be a percentage of the face value of the check or they can be based on increments of money borrowed, such as a fee for every $50 or $100 borrowed. The borrower is charged new fees each time the same loan is extended or “rolled over.” read more »