The Charge-It Blog

  • Kayla Albert

    Debt collection rules in an age of texts, social media

    As text messages replace phone calls and social media grows as the primary way we stay connected with friends and family, debt collectors are using new ways to reach and keep tabs on debtors.

    That’s forcing regulators to modify long-standing rules, reining in some debt collectors’ use of new technology and new media.

    Rules for debt collection in the age of texts and social media

    The Federal Trade Commission enforces the Fair Debt Collection Practices Act (FDCPA), and in late March the agency clarified that while it’s OK to use text messages and social media to contact debtors, debt collectors cannot be deceptive in doing so.

    What does this mean? Well, the only debt collection communication explicitly forbidden remains the postcard, because the debt can easily be revealed to a third party. However, using social media and texts to collect on a debt isn’t exactly a free-for-all.

    If you’re being contacted by a debt collector through text or social media, know your rights:

    1. Creditors and collection agencies can’t tell your friends and family about your debt.
    It is illegal for collectors to disclose the existence of debts to anyone other than authorized individuals (such as an attorney representing the debtor, spouses, parents or guardians of minors who may have accounts, executors and administrators) — unless the debtor gives permission to disclose that information. In addition, debt collectors cannot publicly post about your debt on any social media site.

    2. Creditors and debt collection agencies can’t contact you — or your social media connections — under false pretenses.
    If debt collectors are going to attempt to reach you through text or social media, they must do so in a way that makes their intentions clear. Sending a Facebook friend request, for instance, could violate the law if you don’t know who they are or why they are contacting you. In addition, they can’t make up a story in order to get personal information about you from your friends or family.

    3. Texts can’t be designed to deceptively resemble fraud alerts.The FTC cites “YOUR PAYMENT DECLINED WITH CARD xxxx-xxxx-5463 … Call immediately” as an example. The text, similar to ones sent by defendants in the Messaging for Money law enforcement sweep, were “a sneaky – and illegal – way” for collectors to get a response from debtors.

    While harassment and deceptive collection practices aren’t allowed with texts and social media — or any other form of communication for that matter — debt collectors can use these channels in ways that aren’t against the law. 

    For instance, debt collectors may collect public information from your social media accounts as well as from the pages of your connections.

    Just because a debt collector hasn’t “friended” you on Facebook, it doesn’t mean he can’t see enough public posts and pictures to determine basic information, such as where you live, work or what kind of car you drive. All of this information can be compiled to make initial contact or attempt to make a case against you.

    Even if you have stringent privacy settings, your information can be pulled from the pages of your connections, such as messages you’ve written or pictures you’ve been tagged in.

    So as with everything you post on social media, be careful. You never know who is checking you out online. It might even be a debt collector.

    SEE ALSO: Know your rights with debt collectors and 8 tips to deal with debt collectors like a pro

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  • Jeff Herman

    Pink Ribbon card helps Susan G. Komen year-round

    This blog post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, see the bottom of this page.

    As runners and walkers savor the pink afterglow of the Susan G. Komen Race for the Cure this past Mother’s Day weekend, race participants or anyone who wants to support the organization year-round can do so with every purchase using the Pink Ribbon Banking MasterCard benefiting Susan G. Komen.

    With each swipe or dip, the cardholder benefits Susan G. Komen for the Cure, the largest breast cancer education and research group in the United States. Komen receives $3 for each new Pink Ribbon BankAmericard account opened and 0.08 percent of every purchase (8 cents of every $100) using the MasterCard.Pink Ribbon card benefits Susan G. Komen with every purchase

    “Those micro-donations” add up, says Carrie Hodges, managing director, cause marketing and sponsorship. Since 2009, Susan G. Komen has received more than $7 million from Bank of America through the Pink Ribbon credit card and checking program. Bank of America also is the presenting sponsor of the Race for the Cure — held in cities across the U.S. and around the world on various dates through the year. Bank employees also volunteer more than 13,000 hours for Komen events every year.

    The Pink Ribbon credit card, though, benefits both the organization and the cardholder with cash back.

    “Cardholders don’t have to give up cash back,” Hodges says. “Bank of America gives that back to cardholders on top of” the percentage given to Komen with every purchase.

    Cash back on the Pink Ribbon card is 3 percent on gas, 2 percent at grocery stores and 1 percent on all other purchases. The fine print: Grocery store and cash bonus rewards apply to the first $1,500 in combined category purchases each quarter.

    With this card, there’s no annual fee, and the card has a 0 percent introductory APR for 12 billing cycles. After that, the variable APR is 13.24 to 23.24 percent (interest rate depends on your credit score).

    A couple of things to note about cards affiliated with a cause or charity (often called affinity cards):

    Some affinity cards benefiting nonprofits have high APRs and/or annual fees. If you don’t pay your bill on time and in full, cardholders can easily go into debt trying to do good. And with some affinity cards, the perks (miles, points or cash back) for the cardholder are limited.

    Also with affinity cards, it’s important to note the percentage of purchases that go toward the organization. While it’s easy to donate with each use of an affinity card, it can be more beneficial to the organization — and you — to make a single gift (which you can deduct on your taxes).

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  • Jeff Herman

    Rack up miles and points with gifts for Mom

    You’re likely to buy flowers, chocolate-dipped strawberries or some other gift for mom for Mother’s Day, so why not snap up the bonus offers available through your credit card’s shopping portal, an airline e-shopping mall or airline dining clubs?

    For example, if you use American Airlines AAdvantage e-Shopping portal, you can get 30 miles per $1 spent on ProFlowers orders. You also can earn 250 miles with $150 or more spent on gifts for Mom at select merchants at the portal. And some retailers offer free shipping.Motivational mantras that can doom your credit

    You don’t need an airline credit card to score these extra miles and more. Just open a frequent flier account with your preferred airline or airlines, register your credit cards and order your gifts as you normally would at the airline’s e-shopping mall. If you sign up for emails from the shopping portals, you’ll get advance notice of the sweetest deals.

    And if you’re taking mom to brunch, lunch or dinner for Mother’s Day, you can earn miles while using a card registered in a credit card rewards dining program.

    Check out Susan Johnston Taylor’s story on “How to score airline miles without having an airline card” for details and links to several of the airline shopping portals and dining programs.

    Taylor mentions that the airline dining programs often have sign-up bonuses. The popular travel site notes that signing up for United’s dining program can net you up to 5,000 bonus miles and instant VIP status (5 miles for every dollar spent). Here are the details:

    If you’d rather not use airline e-shopping malls, several card issuers have their own shopping portals with discounts and sometimes free shipping with purchases at everyday retailers.

    For example, Chase’s online shopping portal for cash-back cards offers 15 percent cash back on ProFlowers purchases, and 10 percent cash back on orders and Shari’s Berries orders. Read Dawn Papandrea’s story, “Rewards malls can turbocharge miles, points, cash,” for details.

    And if you’re using a shopping portal that’s not affiliated with an airline or a card issuer, Taylor offers “5 tips to boost savings using cash back shopping portals.”

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  • Dawn Papandrea

    These motivational mantras can doom your credit

    Sometimes when people try to rationalize overspending, they do so almost in a defiant way by turning to inspirational quotes and Internet memes for support. For instance, how many times have you contemplated flying first class with the rationale that “you only live once?”

    If you’ve used any of these Instagram-worthy mantras to explain away your shopping habits, learn how to tone down the rhetoric to make better credit decisions:

    Carpe diem: This phrase made popular by English poets translates to “seize the day,” but I’m not sure how they would feel about it being used as a rallying cry to shop those “last chance” sales. Still, the notion that you’ll regret passing up a sale or missing a concert often is enough to get one to whip out the plastic. After all, you may never get such an opportunity again … or so the story goes.Motivational mantras that can doom your credit

    Tone it down: You can live a carpe diem lifestyle if you prepare for it. While that might sound counterintuitive, it’s not. Setting aside a fun budget will allow you to finance those once-in-a-lifetime or last-minute opportunities that come up, and you won’t have to think twice.

    FOMO: In the age of social media, it’s hard not to have anxiety or “fear of missing out” after scrolling through everyone’s amazing-looking social activities. We always want to give the appearance of doing exciting things, and seeing others taking part in events is enough to make us want to head straight to that new trendy restaurant, too.

    Tone it down: You don’t have to miss out, but you need to make modifications if something doesn’t fit your budget. If you can’t afford playoff tickets, get some friends together to watch the game at a local sports bar. Take advantage of happy hour prices, and check Groupon and other local deal sites for discounts at upscale restaurants. Oh, and stop comparing yourself to friends on social media — for all you know, they could be up to their eyeballs in debt on maxed-out credit cards.

    You can’t take it with you: You often hear people say this after an illness or tragedy, and while it is a true statement, blowing off your responsibilities will have both immediate and future consequences. Yes, we all want to enjoy life to the fullest and bad news can put that in perspective, but especially if you have children, think about the situation you’re creating for them if you leave behind piles of card debt.

    Tone it down: You don’t want to be so frugal that you never treat yourself, but be careful that you don’t go too far in the other direction when you decide to go on a rebellious streak. Make memories that matter, but not at the expense of your long-term financial health.

    Shopping is cheaper than therapy: Retail therapy might feel good in the moment, and well-meaning friends will even encourage a trip to the mall after a breakup or bad day at the office. And don’t think that this doesn’t apply to the guys as well, especially when it comes to their love of tech gadgets or cars.

    Tone it down: Shopping while emotional usually results in a whole new reason to feel down in the dumps — a large credit card balance after a spending spree. Instead, look for other less expensive activities when you need a pick-me-up. Maybe it’s going to a kickboxing class to punch out your frustrations, meeting a friend for coffee, or treating yourself to a giant ice cream sundae.

    When it comes to money choices, we can talk ourselves into anything, especially if we’ve got a cool mantra to quote. If you’ve gone into debt because of any of the above reasons, however, here’s a better mantra for you to remember for next time: The only place where success comes before work is in the dictionary.” Put some work into your finances and you can reap the rewards with no regrets.

    SEE ALSO: Can an app keep you from splurge spending?

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  • Dawn Papandrea

    Can an app keep you from splurge spending?

    Ever wish there was a little voice to talk you out of the urge to splurge? That’s the idea behind Ally Financial’s newly launched free app, “Splurge Alert,” which enlists the help of family and friends to steer you away from purchase temptations.

    Using geolocation technology, the app determines when you enter a “splurge zone” based on criteria you specify (for instance, if you’ve indicated that department stores are your weakness), and alerts the people you pre-selected to be your shopping Big Brothers. what-costco-switch-means-2-u_Sm

    While the concept might sound like it’s bordering on creepy, it’s really just using technology to keep you accountable to a personal goal — in this case, a commitment to spend less on frivolous items. It’s not unlike a fitness app in which you can befriend buddies who will motivate you to get in those extra walking steps.

    Whether or not you’re considering trying out this app, here are three low-tech ways to keep yourself on a budget and sidestep splurges:

    1. Avoid going to stores to shop. If you know that walking into certain stores will trigger a much bigger spending spree than you intended, find another place to shop. Or, shop online so that you’re only putting what you need into the shopping card.

    2. Use shopping baskets instead of carts. When you’re carrying around items, you’ll be more mindful, and hopefully more selective, as to how much you are buying. With shopping carts, there’s a tendency to keep filling them mindlessly.

    3. Allow splurges, but only after you’ve saved for them. Being frugal is hard work, but it should come with a few rewards from time to time. There’s nothing wrong with a splurge as long as you’re not draining your checking account or running up a credit card bill you can’t handle.

    SEE ALSO: 6 ways to recover financially after a spending spree

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  • Kayla Albert

    What Costco’s card switch means for you

    What does Costco’s split from American Express in favor of Citigroup and Visa mean to cardholders? Three words: More cash back. And just weeks after that news, the biggest U.S. retailer, Wal-Mart, has stepped up the rewards offered with its own cards.

    The new card on the block
    Citi purchased AmEx’s portfolio of Costco-branded credit cards in February, and Costco AmEx cardholders will be able to use the new Costco Anywhere Visa cards starting June 20. No muss. Not much fuss (although some cardholders aren’t happy with the change). No additional application process for the new card and no credit pull.

    The new credit cards don’t have an annual fee, but Costco customers do have to pay the warehouse club’s membership fee of $55.what-costco-switch-means-2-u_Sm

    Already have a Visa? You’ll be able to use any Visa at Costco starting June 20.

    Until then, Costco shoppers paying with plastic will need to hang on to that American Express card. Costco AmEx transactions will cease after June 19.

    Richer rewards
    In addition to greater flexibility at the register (Visa is the largest card network in the U.S.), Citi is giving Costco customers better credit card rewards.

    Costco Visa cardholders will get 4 percent cash back on gas (up to $7,000 annually, then 1 percent after that), 3 percent on restaurants and certain travel purchases, 2 percent on purchases made at Costco and 1 percent on everything else.

    Under AmEx, cardholders received 3 percent on gas (up to $4,000 annually), 2 percent on restaurants and travel and 1 percent on everything else.

    Awards earned by Costco AmEx customers will be transferred to the new Visas after the switch.

    Credit card competition heats up
    Just weeks after news of the impending Costco switch to Visa, Wal-Mart announced increased rewards for its credit cards and prepaid MoneyCards.

    These higher awards include 3 percent cash back on purchases, 2 percent on gas purchased at Wal-Mart or Murphy gas stations, 1 percent on purchases made in-store and everywhere else.

    That’s up from $5 in cash back for $500 spent at Wal-Mart, and 5 cents per gallon on gas at Wal-Mart gas stations.

    Worth noting is that Costco rival Wal-Mart’s Sam’s Club has its own cash back program similar to Costco’s new one — 5 percent cash back on gas at Sam’s Club, 3 percent cash back on dining and travel and 1 percent cash back on all other purchases. Sam’s Club went through its own card network switch in 2014, shifting from Discover to MasterCard.

    The bottom line
    With increased payment flexibility for Costco customers, better rewards for cardholders and increased credit card competition, it’s a win-win-win for card users.

    What do you think of the card switch and rewards changes? Drop me a line. Let us hear from you.

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  • Tom O'Connell

    Some restaurants switching to plastic only

    Cash once was king, but it’s being dethroned at some plastic-only restaurants.

    A 2014 study by financial services group TSYS found that 74 percent of customers of dine-in restaurants preferred to pay with a credit or debit card. Just 18 percent preferred cash.

    It’s also easier than ever for eateries to accept plastic, even food trucks, thanks to payment systems such as Square. Ninety-two percent of U.S. restaurants now take credit cards, according to 2015 data from Euromonitor.

    For these reasons — and because there’s less chance of robberies with card swipes instead of printed money in the registers — some restaurants are just dumping cash transactions altogether.

    Korean fusion chain Chi’Lantro in Austin, Texas, is going cashless this month. The local chain’s food trucks have been cashless for months for safety plastic-only-table-tent_Smreasons.

    Owner Jae Kim told Eater that though most of the local chain’s customers (85 percent) pay by credit or debit already, the shift to only plastic at all of Chi’Lantro’s rolling and sit-down restaurants is “a big risk for us.”

    Other restaurants accepting only cards and mobile payments include Split Bread in San Francisco and Bozzelli’s Deli & Pizza’s Washington, D.C., location.

    “Cash is archaic,” said Michael Bozzelli, co-owner of Bozzelli’s. “Going cashless allows us to expedite the transaction process.”

    Accepting plastic also increases sales, notes Anita Campbell, founder and publisher of Small Business Trends. Cards also boost tips. “Why? Simple: Consumers are not tied to what is in their wallets at the moment,” she writes.

    “When you pay cash, you can ‘feel’ the money leaving you,” writes money-management guru Dave Ramsey. “This is not true with credit cards. Flipping a credit card up on a counter registers nothing emotionally. A study of credit card use at McDonald’s found that people spent 47 percent more when using credit instead of cash.”

    At Chi’Lantro, signs noting the switch to cashless payments have been posted throughout the restaurants. Not everyone is pleased.

    Kim tells Austin television station KXAN that people have walked out the door when told of the policy, “because they just don’t agree with it.”

    “It may hurt our business in the beginning, but we think in the long term, it will really benefit everyone,” he says.

    For hungry boomers, cashless restaurants harkens back to actor Karl Malden’s advice in American Express commercials of the ’70s and ’80s: “Don’t leave home without it.”

    SEE ALSO: 3 groups slowing any shift to a cashless society in the U.S.

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