Consumer protection is one of the things many credit card issuers like to laud about when touting the benefits of using plastic over cash.  When you end up in disputes with merchants over purchases, the credit card is supposed to help you by reversing charges or cancelling the transaction.

It sounds like a great way to secure your purchases. Unfortunately for most consumers, they buy the whole spiel without looking at the finer details of that deal.  In reality, consumer protection on credit purchases aren’t so comforting.  Check your terms right now and 9 times out of 10, you’ll probably see these rules about consumer protection spelled out.

1.  You can only ask for consumer protection if the price of the item you bought exceeds $50.  Anything less and you’re on your own.

2.  You can ask for consumer protection only after you have satisfactorily tried to work things out with the merchant.  The exact definition of this is not laid out and can be the cause of a large dispute with customer service later on.

3.  The protection can only be enforced when you bought the product from a retailer located within either your home state or 100 miles of your mailing address.

Simply put, majority of items you buy on a daily basis won’t be covered by this clause, likely making it useless for many transactions.  Of course, while the above are the standard consumer protection rules, some credit card companies may actually offer better security.  They don’t come all that often, though, so make sure you verify by checking the terms of agreement before signing up.

Using your credit card abroad can prove a costly affair.  If you don’t watch your card’s billing mindfully, you could be paying through the nose for charges and fees as a result of overseas use.

Dynamic Currency Conversion

Anytime a merchant asks you if you would like the charges to your credit card to be made “in your home currency,” they’re talking about a Dynamic Currency Conversion.  Instead of letting the credit card companies handle the conversion, the merchant does it on their end.

While it might sound like a smart idea (since you can see your charges on the currency your account is going to billed in), this offer is really nothing more than a scam.  The conversion rate the merchant uses on these types of purchases are so ridiculously skewed (read: higher than actual), you’re literally paying extra money for nothing.  Always say an emphatic “NO” when you’re asked.

Foreign Transaction Fees

While some merchants will try to convince you that charging in your native currency will remove the Foreign Transaction Fees usually levied by credit card companies, they’re really guessing at best.  Some credit card issuers won’t charge the fees, while others will continue to do so.  It all depends on your credit cards’ terms, not the word of some merchant who stands to eke out a little more profit from the deal if you agree.

Legality

As much as we would like to declare these types of setup as fraudulent, they’re actually legal, as long as you agree once you’re asked.  Always disagree to being charged with an automatic currency conversion - there’s absolutely zero benefits for you when you let them.

The Amex Platinum Card is, hands down, one of the best rewards cards currently on offer.  If you have good credit and are looking for a card with serious benefits, you may really want to consider choosing this one.

The concierge service and the “By Invitation Only” programs, alone, should make you love this card to pieces.  If you frequently book tours, packages, dinners or events for clients and other folks, you can’t get better help than this!  The “By Invitation Only” is particularly special, allowing you access to several very exclusive events.

Another useful feature for cardholders is the partnership Amex has with a surprisingly generous number of popular restaurants, who have Platinum-reserved seats so you can call up for a last-minute reservation and get instant seating.  It’s not the best seats - but you’re in!

Should you be a frequent traveler, you might even enjoy this more than a regular travel rewards card.  Check out these great travel privileges:

Optimal bookings. Basically, these guys will facilitate your entire booking, arranging it to make the best use of your rewards points.

Airport lounge access. Granted, most other travel and airline cards will probably get you lounge access but this card does it whiel offering so much more.

Hotel and villa benefits. Using the Amex Platinum gets you instant room upgrades, free late checkouts and special amenities at over 600 luxury hotels and a number of gorgeous villas.

Free complimentary ticket. With over two dozen international airlines, you can get a complimentary ticket (of same value) when you use the card to purchase a business class or first class ticket.

Gold Starwood membership. If you like staying at the Starwood, this card automatically gets you Preferred Guest membership at no cost!

Global assistance. Called the Premium Global Assist, this is a hotline Amex provides for all Platinum cardholders.  You can call them 24/7 anywhere in the world for emergency medical and legal assistance.

The card is pretty expensive to get and maintain but if you manage your balance well and make use of the benefits, the value you can get out of the Amex Platinum card is truly something else.

Defaulting on a credit card is one of the worst things you can do.  However, it’s also a harsh reality now.  Many people are losing their jobs and are unable to keep up with their debt payments.   Sometimes, there really is no choice.  When times are at their hardest and there’s no other option left, you’ll have to make the decision to stop paying your credit card.

A Hard Choice

Choosing to default on your credit card is a difficult decision.  Doing so, for one, is a guaranteed way to trash your credit record.  Even worse, you’ll end up on one end of collection activities that can become a frustrating and overall unsavory experience.

What To Expect

When you default on your credit card, you can expect the following events to be set in motion.

1. Your account will be turned over to collections

You’ll start receiving Final Notice letters and, later, calls at any phone numbers they can get their hands on, including your home, work, cell phone and emergency contacts.   If you refuse to respond or make any payments, collections will begin getting more aggressive.  If they can’t get in touch with you (because you’re hiding), they’ll pass you over to skip trace, who will track you down by literally calling everyone they can associate with you.

2.   Your debt will be put on the market

If the issuer can’t get you to pay (over several months to a year), the bank will cut its losses and auction off your debt to a professional collections company.  Instead of dealing with the bank, you will now be went after by a company whose sole job is to run after unpaid debt.  That means they’ll be more insidious, often resorting to threats and borderline illegal tactics to try and get you to settle.

3.  The collections company will file a judgment

If you still don’t pay, the collections company will likely seek judgment from a civil court.  You will have to appear before a judge and come to a settlement with the debt collector.  If you have a good lawyer, this can prove a good opportunity to bring your overall debt to a much lower amount than your actual balance.  If you don’t come to terms with the collections company, there is a likelihood that your wages will be garnished.

The Citi Forward Card is a new reward credit card specifically geared towards young adults.  It’s created quite a bitt of buzz, thanks to Citi’s aggressive marketing campaign to bring it into consumer consciousness.

First, a word about Citi’s rewards.  Bear in mind that 100 Citi points converts to $1 worth of rewards, so don’t let the large points earnings trick you into making it look more attractive than it actually is.

With the cautionary word out of the way, let’s take a look at this rewards card in depth.  The basic rule is that you earn 5 points ($0.05 worth of rewards) for every dollar you spend on the following categories: dining, movies and music.  For all other purchases, you get 1 point for every dollar.

Cardholders get a bonus 6000 points after accumulating at least $50 in purchases for the first three months of the account.  If you sign up for the Paperless Statements (all your billing statements will be sent via email) within the same amount of time, you can get another 5000 bonus points.

Citi is also making a big deal of their 100 extra monthly points that you can get every time you settle your minimum payment on time without going over your credit limit.  While nothing earth-shattering (100 points is just $1 in rewards), it’s better than no incentive, right?

All cardholders get a 0% APR for the first six months, both for purchases and balance transfers (3% one-time fee).   If you’re single and spend much of your income on dining and entertainment, this will probably be a good rewards card to keep for the next few years, until you actually outgrow all those restaurants, movie and music expenses.  For most other folks, though, this doesn’t really sound all that interesting.

Suze Orman has already made her position clear.  She doesn’t want you to pay down your credit card debt and instead keep setting aside the money until you have at least eight months of worth of spending cash saved up.

For most financial advisors, though, paying down that debt is still the best solution, a looming economic recession and all. Of course, telling you to pay off your debt is way easier than the actual act of paying it down.  There are many ways you can do it, although the so-called “Snowball Method” has always been my personal favorite.

1. List down your credit card debts in the order of their interest rates.  The higher the interest rate, the earlier it should appear on your list.  In the event that two debts carry similar interest rates, put the one with the higher balance on top.

2. For each of those debts, pay only the minimum amount per month, except for the one in the first position.  For the highest interest debt, pay it down as much as you can.    Try not to worry about the interests those other liabilities are incurring - there’s nothing you can do about it at this point.

3. After that debt in the number one position has been paid off, start doing the same for the next one in your priority list.  Pay only the minimum for the other debt except the new highest-interest one.

4. Continue doing the process, snowballing the payment process down to the bottom, until all your debts are paid in full.

It’s not easy and, if you carry a considerable balance, it will likely take you several years before clearing it all for good.  Hang in there, though.  You can do it!

Ever been curious how widespread credit card use is among young adults?  Check these numbers that may leave you shocked:

• Over 50% of high school seniors have debit cards.  Not bad, right?  After all, debit cards are probably the easiest way for parents to send emergency money to their kids whenever they need it.  In fact, I’m surprised the number isn’t much higher than 50%.  The fun seems to end there, though, as….
• Over 30% of high school seniors have credit cards.  Yes, that many young and largely financially immature 17 and 18 year olds carry their own credit cards under their own names, many of which aren’t supplementary at all.
• Over 1/3 of all college kids have at least four credit cards before they graduate.  Considering I didn’t get my first credit card till about three years out of college, it really surprised me.  As long as they can be responsible about it, though, there should be no problem.  However…
• Over 50% of recent college graduates have accumulated at least $5000 in high-interest credit card balances shortly after leaving school.  That is a serious financial problem right there.  Can you imagine being that neck-deep in debt already, with probably nothing to show for all your spending (considering that most college kids spend their money on restaurants, school supplies and entertainment)?

With those kinds of numbers, it doesn’t come as a surprise that the number of 18 to 24 year old young adults filing for bankruptcy has increased 96% over the last ten years.  Parents, do you know what your children are doing with their credit?

Financial guru Suze Orman has her own share of fans and critics alike.  However, her latest advice does sound a bit too much like it’s designed to bring out the ire of most other financial advisors.

While she used to advice credit card holders who keep large balances to try and pay down their debts as much as they can, she has now changed her tune.  According to Suze, it is now a priority to put your money in an emergency cash fund instead of using it to pay off your credit card debt.

Her advice about your credit card bills?  Pay only the minimum balance.  With the uncertainty of the current financial environment, Suze feels that everyone should realign their priorities towards preparing for the worst and the best way to ensure your readiness is to have a minimum eights months of spending money tucked away somewhere.

Credit card companies are about to fold.  At least, that is Suze’s theory.   Even if they don’t, she predicts more and more credit card companies will close customers’ accounts, reduce their credit limits or pretty much make their credit cards undependable within  the near future.  When they do, you’ll lose your sources of emergency spending in a heartbeat, leaving you out in the cold in case of an unforeseen exigency.

Many financial experts are up in arms over Suze’s new pronouncement.  Personally, I think the whole advice is a recipe for disaster.  She’s basically telling people to put their cash in accounts that can earn 2% interest, all while allowing their credit card balances to balloon by up to 20%.  Still, only the future knows what the future will bring.  Think long and hard before following advice, even if it is from such a well-known expert as Suze.

Store credit cards have been a popular option among folks having trouble getting good unsecured credit cards from regular channels.  If you regularly shopped at a store, after all, a private label credit card can be very useful both in the short and long term.

Despite their low credit limits and often higher APRs, we actually recommend obtaining store credit cards as a way to raise your credit ratings.  Of course, you should take the same care using them just like you do with typical credit accounts to maximize those benefits.

According to recent news, though, store credit cards are experiencing some serious bumps on the road with the growing financial crisis in mainstream American society.

Default Accounts

Numbers have shown that charge-offs and deliquent accounts on store credit cards are increasing at an alarming rate, even more so than other credit card sectors.  Since store credit cards usually have smaller credit limits and have limited use (in-store purchases only), more consumers in financial distress seem to be choosing to default on them in favor of their other existing debt.

Less Spending

People have also been spending less in general (due to the economic scare). As a result, stores have been seeing less use of their credit cards even among regular customers.  In fact, almost all stores are now trying to offer some sort of rewards (like gift certificates and other concessions) to encourage better retail sales from their private label cardholders.

Getting A Store Card

With many stores trying to prop up business, this may be a great time for you to get a store credit card to improve your credit score.  Even if you don’t intend to use them all but once or twice, they will increase your overall available credit in possibly enough ways to create noticeable changes.

If you thought this was a modern urban legend, rest assured it isn’t.  High school kids below 18 years of age can now get and use student credit cards under their name.

It’s true.  Credit card companies, looking for new markets to expand in, are now actively pursuing high school juniors and seniors as new credit card customers.

Parent Should Take Notice

If you’re a parent and hadn’t known till now, it’s time you took a close look.  Your kid may already be deep in debt without you even knowing it!  Even if they don’t fall into the debt trap this early, credit card use at an age where they are impressionable and (for the most part) financially unprepared can create destructive habits that can haunt them towards the later years of their lives.

High School Credit Cards Are Widespread

According to surveys across several states, as many as 1/3 of all junior and senior students have at least one credit card.  Unless they are accessory cards from parents who can monitor and discipline their spending habits, these kids are, for the most part, left to fend for themselves with a serious financial instrument in their pocket.

Do You Know What Your Children Are Paying For?

When your kids have their own credit cards, they are likely paying for all sorts of items without your knowledge.  While the danger of buying things they can’t afford is an obvious issue, an even bigger problem is their newfound ability to purchase medical treatment and drugstore purchases without a parent’s knowledge.

Educating Your Children

Proper education in responsible credit card use is a necessity now, more than ever, especially if this trend persists.  Don’t wait till its too late before you equip your children with the financial knowledge that can guide them through the rest of their lives.