JP Morgan Chase Drops $10 Service Charge

Even though it took an entire economic collapse to bring this about, credit card companies are finally starting to listen to their customers.

JP Morgan Chase announced on Friday that it is eliminating a $10 service charge fee that it added to certain credit accounts last year. More importantly, JP / Chase is also refunding $4.4 million dollars in these fees that it collected last year.

"Credit card issuers have been very active during the first few months of 2009--raising rates, adding fees, and lowering credit limits. The addition of a $10 monthly fee by Chase really angered its cardholders and they loudly objected. This was essentially a $120 annual fee and a terrible deal for consumers," says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook."

Thanks to CT Watchdog for breaking this story.

If you have a JP Morgan / Chase credit card, you should contact them about receiving your refund

Save Money or Pay Debts?

In today's dismal economy, many people are facing the choice of paying their or saving money in a rainy day fund. When faced with unemployment and the rising cost of living, paying monthly credit card debts is becoming more of a luxury than a certainty for many consumers.

The solution to this dilemma depends on your personal situation. If you have a healthy savings account, and feel that you could weather the storm if you were to lose your job, then you are in a position to pay your debts without worry.

However, if you are living paycheck to paycheck and have uncertainty in your employment, then creating an emergency savings fund is more important that paying off your debts.

You have two choices in this situation: pay the minimum balances on your cards and stash all your extra cash in a savings accounts or stop paying your credit cards completely and consider debt negotiation.

Both choices have pros and cons. If you choose to pay the minimum amounts on your cards, your balances will not really diminish and you run the risk of incurring late and over-limit fees. However, your credit score will likely remain in tact and you will continue to have good relationships with your creditors.

If you choose to stop paying your credit cards all together and enter a debt negotiation program, your credit will be immediately and severely damaged and you run the risk of entering collections and incurring charge-offs. However, on the positive side, you can start saving all of the money that you would normally use to pay credit card debt and build a savings that you can later use to negotiate with your lenders and try to obtain substantial reductions in your pay-off amounts.

Also, keep in mind that tax debts are in a league all their own, and you should not stop paying these debts without consulting an attorney first. The IRS has the ability to gain control of all of your bank accounts and assets, so you should not stop paying them without obtaining legal counsel.

Are you considering debt negotiation? If so, leave us a comment.

Citigroup Spending Tax Dollars to Lobby for Wal-Mart

As virtually every person on the planet is well aware, save for a few pygmies living deep in the Amazon, Congress approved a massive bailout of $750 billion for the financial services industry last year. In spite of the fact that a lack of regulation was the primary cause of the current economic collapse, that money was approved with virtually no regulations.

Last week the Huffington Post reported that Citigroup, one of the largest financial institutions in the universe and a recipient of $50 billion in tax payer dollars, spent some of its bailout money to lobby against the Employee Free Choice Act (EFCA). The EFCA would make it easier for workers to form unions and bargain for better wages and benefits.

The bill would immediately impact large corporations like Wal-Mart, which is closely intertwined with Citigroup. On Tuesday of last week, Citigroup downgraded Wal-Mart's credit score out of fear that the bill would pass.

In light of the fact that Citigroup is only able to survive because of the hard-earned tax dollars of the same blue-collar workers that they are trying repress, this moves is pretty shocking.

"Everyone should recognize that when we are talking about Citigroup here, the emperor has no clothes," said Dan Pedrotty, director of the Office of Investment at the AFL-CIO. "You have a company surviving on taxpayer largess weighing in against workers who want to improve their lives."

Read the full story at the Huffington Post -->

Are you a member of a union? Do yo work for Wal-Mart? If so, leave us a comment

Bankers Used Corporate Credit Cards on Prostitutes

In a pathetic example of the sorry state of affairs that our financial industry is in, New York Madam Kristin Davis has gone public with a who's-who list of investment bankers and real estate magnates who used their corporate credit cards to pay for prostitutes.

THE CULPRITS INCLUDE

• The CEO of one of the country's largest private equity firms

• A major New York real estate developer who, according to the list, "will come to the door wearing women's panties," and who spent nearly $100,000

• A partner at the Wall Street law firm Cravath Swaine Moore who spent a total of $20,000

• An investment banker from Lehman Brothers

• An investment banker at JP Morgan Securities who spent $41,600

• An investment banker at Goldman Sachs who spent $27,000

• A managing director from Merrill Lynch

• A managing director from Deutsche Bank

Shockingly enough, the New York district attorney is not pursuing any of these executives. In light of the billions upon billions of dollars that tax payers are currently injecting into these companies in the form of federal bailouts, this is quite insulting. Watch the video on ABC.com.

Credit Card Companies Slashing Rewards and Increasing Rates

Credit card companies are taking dramatic steps to reduce their risks and trim their customer accounts. Major creditors such as Citigroup, J.P. Morgan Chase, and American Express are slashing rewards and increasing fees and interest rates.

Creditors that used to throw money and free rewards at consumers, such as Citigroup and Discover, are now slashing rewards across the board.

A RISKY CREDIT ENVIRONMENT IS MAKING LENDERS NERVOUS

• Analysts estimate credit card chargeoffs—debts the card companies believe they will never be able to collect—could total $75 billion in losses in 2009;

• Reward programs are costly. Discover Financial Services posted revenue of $5.7 billion in 2008, while the net cost of its rewards program was $710 million;

• Analysts estimate that Americans' credit card lines will be cut by $2.7 trillion, or 50 percent, by the end of 2010;

AS A RESULT, CONSUMERS ARE PENALIZED

• Citigroup Citi Dividend MasterCard card holders received 30-day notices in fall of 2008 that they will receive 2% cash back, rather than the current 5%, on purchases they make using their credit card. In addition, Citigroup now requires many more rewards points for domestic flights for its Thank You Rewards program;

• Discover now requires cardholders to forfeit cash rewards if an account is inactive for 18 months or if they pay more than two months late. Also, Discover once offered 12,000 bonus airline miles to new customers. Now, new cardholders earn 1,000 miles each month they make a purchase, for a total of 12,000 miles at the end of the first year;

• American Express recently axed the domestic companion airline tickets provided free to Platinum and Centurion cardholders;

• At JP Morgan / Chase, consumers who got the Freedom credit card after Nov. 4 2008 will receive a 1% cash reward on most purchases and a 3% reward on promotional items, which constantly change. In the past the card provided a 3% automatic cash back on the categories in which consumers spent the most.

Has your credit card issuer reduced your rewards or increased fees or interest?

The Secret History of the Credit Card

In "Secret History of the Credit Card," Frontline and The New York Times collaborate to investigate the complex history of the credit card industry. In this 60 minute report, correspondent Lowell Bergman investigates the techniques used by credit card companies to earn record profits and get consumers to take on more debt.

The video reveals some disconcerting facts about American's relationship to plastic and the hidden motivations of credit card companies.

• Customers who pay their debts in full each month are called "deadbeats" in the credit card industry - they are the least profitable type of customers for credit card issuers;

• Customers who carry monthly credit card debt are called "revolvers" and are considered dream customers by creditors;

• The average family owes roughly $8,000 on their credit cards. This debt has helped generate record profits for the credit card industry;

• Critics say that a growing share of the industry's revenues come from what they call deceptive tactics, such as "default" terms spelled out in the fine print of cardholder agreements -- the terms and conditions of which can be changed at any time for any reason with 15 days' notice.

This report is a must-see for people in debt. Watch the full report online at PBS.org >

First Premier Gold MasterCard - Good Deal for Borrowers with Bad Credit

The First Premier Gold card was specifically designed for borrowers with bad or no credit. There are a lot of cards like this on the market, and many of them leave the borrower with the short of the stick with excessive annual fees and high interest rates.

However, the First Premier Gold Mastercard sets itself apart by offering a very low APR rate on purchases. For borrowers who are re-building their credit, the First Premier card is an affordable option.

Visit the First Premier Bank website -->