Getting a student credit card is going to be harder starting in February 2010 thanks to the credit card reform bill that was passed this summer.

The new legislation prohibits credit card issuers or banks from issuing credit cards to anyone under 21 unless they have an adult co-signer or proof that they can cover the monthly credit card payments.

The changes are actually a good thing for young adults who probably haven’t yet learned how to manage credit wisely.

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Sallie Mae, the company that provides federal and private student loans for undergraduate and graduate students, did a study that found 84% of undergraduates have one credit card and 50% carry four or more credit cards. Young adults graduating with credit card debt with exhorbitant interest rates are creating a financial burden for themselves.

Now that you will probably be co-signing a credit card application with your child and you’ll be on the hook financially, you should make sure your child understands how to use credit to their advantage and not to their detriment.

A good place to start is to educate your child about credit first. The following are some tips on building credit.

Credit is a good thing when used properly and teaching your child how to use credit properly will benefit him or her for the rest of their life. Helping them build a credit history early on will raise their credit score and lower the rates they will be offered in the future, enabling them to get a lower mortgage rate when buying their first home.

Balance transfer credit card offers used to have a zero percent promotional interest rate for a year. Since the credit crunch and the recession that started late last year most credit card balance transfer offers now only have an introductory interest rate for six months. More often than not, the intoductory interest rate isn’t zero percent anymore.

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Another change these days in balance transfer offers is the balance transfer fee the credit card company will charge you for the transfer. The maximum transfer fee charge used to be a fix dollar amount, usually around $50 to $75 dollars depending on the credit car issuer.

A few years ago the charge was changed to a percentage of the total dollar amount of the balance transfer, usually three percent.  Then the average fee was raised to four percent. Now some banks have raised the fee to five percent of the total balance transfer amount.

When you factor in the fee you are paying for the balance transfer the promo interest rate you are paying isn’t so attractive anymore. A five percent fee on a $15,000 balance transfer will come to $750. The zero percent offer is looking less like zero percent when you consider the transfer fee.

If you are thinking of taking advantage of a zero percent balance transfer offer from your credit card company be sure to read the fine print on the balance transfer fee, do the math and make sure the transaction is worth it.

Prepaid credit cards and debit cards have become more and more popular these days since the credit crisis of last year. Credit card issuers and banks have raised the bar when approving credit cards for borrowers.

Gone are the days of easy credit like getting multiple credit cards from the same bank or getting a mortgage without proving your income.

Credit card companies are also lowering credit card limits for even their best credit card customers. The Credit Card Holders Bill of Rights has also changed the credit card business. New rules include giving a credit card holder 45 days advance notice when any major changes to their account is made, like raising the credit card limit. The new rules don’t include notifying a holder when their credit limit is lowered.

As a result of more restrictive credit, consumers have been turning to prepaid credit cards and debit cards to make purchases. A pre-paid credit card allows one to enjoy all the benefits of having a credit card without the risks. You can only spend what you have on your prepaid card limit.

Prepaid cards also allow you to build your credit history and credit score. Other features include direct deposits to a prepaid card, replenishing your balance. Best of all if you have less than perfect credit or even a bad credit history, you will more than likely be approved for a prepaid card.

Debit cards are another alternative to traditional credit cards. With a debit card, your purchases are withdrawn from your checking account. Although with a debit card you might not have all of the benefits of a traditional credit card, including being covered for auto insurance when renting a car.

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New credit card rules take effect this week that were passed in the Credit Card Holders Bill of Rights this past spring. The biggest credit card change is starting on August 20, 2009, credit card companies will have to give consumers 45 days notice before raising their credit card interest rate. You have the option to turn down the new credit card rate but if you do be prepared to payoff the balance.  Which you could have done in the past before this new credit card rule takes effect.

Another new credit card change taking effect this coming Thursday is monthly credit card bills must be mailed out 21 days in advance by credit card companies. The idea behind this change is some credit card issuers were mailing credit card bills out late giving credit card holders a limited amount of time to pay their bills, sometime incurring a late fee. This change will help credit card holders get their monthly payments in on time and aviod late payment fees.

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Also this week if your credit card interest rate was raised because you were late making a payment after six months of making payments on time the credit card issuer has to lower your credit card rate back to the previous rate.

Several banks have been making changes and sending out notices to their credit card holders before these new rules take effect. Several big credit card companies and issuers, including American Express, have been raising interest rates on credit cards.  Some banks have also raised the balance transfer and cash advance transactions fees.

Credit card issuers are fighting back the recent credit card changes by charging higher interest rates, higher credit card balance transfer fees and even charging a minimum monthly finance charge.

Balance transfer fees used to be capped at a certain dollar amount, then it was raised to a percentage of the transfer usually around three percent. Now most credit card issuers have raised the fee to five percent.

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Like millions of Chase Bank credit card holders, I recently received a letter in the mail from Chase about important changes to my credit card account. Chase came right out and  said why they are making these changes, here are the bank’s exact words:

“We are sending you this notice to let you know that we will be making some changes to your credit card account in response to market conditions, new federal laws and regulations and our increasing costs.”

Some of the credit card account changes include the following:

• Credit card balance transfer and cash advance transactions fees are raised to 5% of each transfer or advance.
• Chase has the right to decline any standard APR balance transfer transactions, including balance transfer checks on your account
• Placing limits on or stoping your ability to make cash advances and balance transfers
• Clarifying the ways in which credit privileges or account features can be closed or suspended by Chase
• Minimum monthly finance charge is now $1.50 if there is a finance charge for a given month

I can remember paying off a credit card one month and receiving a credit card bill the following month for interest charges of less than 50 cents. I wonder if Chase will raise the charge to a $1.50 instead of just zeroing out the balance. By the way, Chase says you have the option to cancel your account if you don’t like the changes but you’ll have to pay off the balance when doing so - some option.

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Some large credit card issuers including J.P. Morgan Chase, Bank of America, and Discover Bank have recently told some of their credit card holders that their fixed rate credit cards were being converted to a variable rate credit card. 

Although the banks are saying the changes are to better manage their business costs and credit card market conditions (another way of saying credit card defaults)  the change is probably brought on by the Credit Card Accountability, Responsibility and Disclosure Act which starting next month will require banks to notify fixed rate credit card holders of any increase in their credit card rates 45 days in advance.

To bad Congress didn’t think of passing a law that prevents credit card companies from changing a credit card from a fixed rate to a varible rate. Though if they did banks would have just found another loophole.

Variable rate credit cards are usually tied to the Prime Rate and rise and interest rates rise.

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New laws effecting credit cards go into effect this year and next thanks to the Credit Card Accountability, Responsibility and Disclosure Act. Most of the credit card changes help consumers but some might also hurt consumers.

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Starting in August 2009 monthly credit card bills must be mailed out 21 days in advance by credit card issuers. This should help credit card holders getting their payments in on time and from incurring late payment fees. Also starting next month credit card companies have to give consumers 45 days notice before increasing credit card interest rates and credit card fees.

More credit card changes are instore for 2010. Starting in February 2010, banks can’t raise credit card rates on existing balances unless your behind more than 60 days on your payments. Without a doubt, this is probably the biggest win for consumers. Introductory rates, like balance transfer credit card rates must have a minimum six month period.

Another big benefit for consumers is payments that are over the minimum payment due must be applied to higher interest rate balances first, then on down in descending order.  Just the opposite happens now. This rule change will also take place in February 2010.

You have to opt in for going over your credit card limit. Unlike now where card issuers allow you to go over the limit but smack you with an over the limit fee. Also in February 2010, you must have an adult co-sign a credit card application or show proof income to be approved.

Universal default, which is a nasty practice credit card issuers were allowed to do will no longer be an option for them. Universal credit card default was the practice of raising your credit card rate if they learned you were late making a payment on another credit card account.

Starting in August 2010 if your credit card rates were raised because you were late making a payment after six months of making payments on time the credit card issuer has to lower your credit card rate back to the previous level.

Banks are looking into other ways to generate more revenue of their credit card accounts. Some banks might increase credit card fees now and start charging new fees to replace the fees lost because of the changes. Banks might also pair back credit card rewards.

Looking for the best credit card rates? MonitorBankRates.com has a credit card comparison search engine. You can compare rates by category including low interest credit cards, instant approval credit cards, rewards credit cards, gas credit cards,  cash back credit cards, business credit cards, student credit cards and more.

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Let’s face it, whether you like it or not credit is a fact of life. You can keep the amount of credit cards you have to a minimum and pay cash for everything but unless you have the cash to make all purchases outright - including buying a home - sooner or later you’re going to have to use credit.

Even if you have the cash to buy a home, did you know your credit score can affect the amount you pay for auto insurance, home insurance and all other types of insurance?  Many insurance companies determine risk by using your FICO credit score, this is called a ”credit-based insurance score”. Having a good credit score will lower your insurance costs.

Now that you’re resigned to the fact that credit is going to be a part of your life, why don’t you do what you can to get a higher credit score? Getting a higher credit score will get you better credit card rates, mortgage rates, auto loan rates and insurance rates.

Have you ever wondered how credit scores were determined? There are bascially five factors that affect FICO credit scores and managing these factors appropriately can raise your credit score.

1. Make your payments on time. Your credit payment history counts for 35 percent of your FICO credit score. Negative payment histories will hurt your credit score.  Having a good track record on your payment history will help your credit score.
2. The amount of money you owe compared to your overall credit available also has an impact on credit scoring. The more you owe, the lower your credit score will be. This accounts for 30 percent of your credit score.
3. The length of your credit history accounts for 15 percent of your credit score. The longer your credit history, the more this contributes to your score. Several years ago I closed a department store credit card I hadn’t used in a long time and my credit score dropped about 20 points. That being said, keep your long term account open even if you’re not using the accounts and as long as you’re not paying annual fees.
4. Applying for new credit can affect your credit score. This accounts for 10 percent of credit scores. If you apply for or open many new accounts in a short period of time, this will also affect your score.
5. Other factors contribute about 10 percent of your FICO credit score.  The mix of loans you have will affect your score like credit cards, mortgages and auto loans.

Taking a proactive approach to manage your credit will improve your credit score. You are also entitled to a free credit report annually, although if you want to get your credit score that will cost you.

Credit Cards, ATM Cards and Debit Cards are widely used these days and are a convenient form of payment for purchases. Losing your cards or having your cards stolen is a hassle in general, having unauthorized charges on your accounts can make a bad situation worse.

The good news is there are laws in place that limit your responsibility for unauthorized charges made on your account if you follow the procedures in The Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA) if your cards are lost or stolen.

Immediately report the loss or theft of your credit cards and your ATM or debit cards to the bank or financial institutions that issued the cards. Be prepared to give an exact time that you noticed your cards were lost or stolen.

Banks will ask you what your last charge was to see if there are any unauthorized charges already made to your accounts. You can find the toll free numbers of credit card, debit card and ATM card issuers online. You can also be proactive and create a list of phone numbers from the back of your cards before they are lost or stolen. Usually the numbers are listed as “number to call if your card is lost or stolen”.

Under federal law your maximum liability under for unauthorized use of your credit card is $50 for each card. If you report the loss before your credit cards are used the card issuer cannot hold you responsible for any unauthorized charges.

More and more credit card numbers are being stolen and not the credit card itself. I recently experienced this problem. I used a credit card to make a software purchase on a small obscure website and a few months later I received a courteous call from the credit card issuer about a recent Dell laptop purchase that was made on my account. I didn’t make the purchase but thankfully I wasn’t responsible for any of the charge, not even the $50 limit since my credit card number was stolen and I was still in possession of the card.

Consolidating credit card debt or eliminating credit card debt isn’t an easy thing to do, especially these days when money is tight for everyone.

Combined household wealth has gone down by trillions of dollars, the value of your investments have gone down, the value of your home as gone down and the unemployment rate is nearing 10 percent.

Trying to eliminate credit card debt with all these financial pressures on you is almost impossible but doable. Credit card debt elimination is possible but you first need to start with a budget that takes into account all your spending. You will be surprised to see how much the little incidentals add up to a big chunk of change.

In the past several years, when one ran up a ton of credit card debt one refinanced their home and payed off their debt. Unfortunately a lot of people repeated the cycle of spending, piling up much debt and using their home to payoff the debt again. Then came the housing bubble bust, making it impossible for many to refinance again.

If you are one of these folks, the best way for you to consolidate credit card debt may be to take out a consolidation loan with a bank or lending institution. If you are behind on your credit card debt, some banks will allow you to pay less to eliminate the entire debt, sometime as low as 50 percent of the total debt.

A consolidation loan can be secured or unsecured, depending on how much you owe and the bank that is giving you the loan. If you decide to go down the path of a debt consolidation loan, the bank or financial institution that is giving you the loan will require you to close the credit card accounts you are using the loan to payoff.

A loan will carry a lower interested rate than your credit cards have, a lot lower if you are in default on your cards. With the lower interest rate, your consolidated payments might be lower than the monthly minimums you were paying on your cards. This might be the best way to consolidate credit card debt or have total debt elimination.

Consolidation loans are a good way of turning around your financial situation and can also improve your credit score. Make the sacrifices now and consolidate your debt, it will be hard but once you have gotten through the ruff period you will feel financially more secure and actually feel like you have control of your financial future. That is as long as you don’t repeat the cycle and pile on more credit card debt.

Going forwarded don’t open more credit card accounts, a prepaid credit card or a debit card is a good way to control your spending. We have a prepaid credit card and debit card search engine you can use to help you with your search.

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So if you think you are in need of a consolidation loan because of credit card debt do some more research on the subject and be sure to only use reputable companies, there are many companies out there that will take your money and not actually help you at all, putting you further in debt.