Citi starts closing Mastercards without warning

People across country reporting their cards linked to gas companies denied

NEW YORK - Shannon Burdette tried to pay with her Shell Mastercard after filling up her gas tank this weekend but found the card rejected.

Confused, she called the customer service line on the back of the card, issued by Citibank, and was told the account was closed because of something that appeared on her credit report. But when the Sykesville, Md., resident got a copy of her credit report online, the only negative thing she saw was "closed at credit grantor's request" on the Shell MasterCard account.

"They said there was a routine review," said Burdette, who maintained that she and her husband, Brian, used the card regularly and always paid the bill on time.

Burdette isn't alone. People across the country have been reporting similar experiences in postings on various consumer Web sites.

Citi confirmed the basics. The bank said in a statement it "decided to close a limited number of oil partner co-branded MasterCard accounts." That includes not only Shell, but Citgo, ExxonMobil and Phillips 66-Conoco cards.

The close date was Wednesday, and letters were sent out Monday to customers informing them of the change, a Citi spokesman said. The bank would not say how many cards were shut down or how much available credit they represented.

But unlike the bank's move to shut down its Home Depot cards, Citi did not discontinue the sale of these cards altogether. It is still accepting applications, promising rewards like 3 percent cash back on fuel purchases and 1 percent cash back on other spending.

No law, including the Credit CARD Act that has started to take effect, prevents banks from closing down credit accounts without warning. Credit card issuers all maintain the right, typically listed in the fine print on credit card agreements.

Citi would not say why the cards in question were shut down, issuing a statement that said only it continuously evaluates its products.

"It is kind of an extraordinary action, but these are extraordinary times," said Ben Woolsey, director of marketing and consumer research for CreditCards.com.

He noted that Citi is not the healthiest bank. In fact, Citi posted $8 billion in consumer credit losses for its third quarter last week, including both mortgages and credit cards. Like many banks with big consumer lending portfolios, Citi is expecting defaults on credit cards to rise in coming months. Credit card delinquencies typically track the unemployment rate, which is at 9.8 percent and is expected to top 10 percent soon.

Analysts noted following the earnings report that Citi has sharply reduced its outstanding credit to consumers.

A card being closed may, but does not always, damage a person's credit score.

Such scores, which lenders use to determine if you're a good credit risk, take into account a series of factors, including how long you've had credit accounts, your payment history and the balance versus available credit.

It could be that last factor that hurts consumers most, said John Ulzheimer, president of educational services for Credit.com. If a consumer had a high credit limit on the closed account, and that credit is no longer available, it could alter the "utilization ratio" for the person's remaining credit. If another type of credit carries a high balance, the loss of the credit line could push down their score.

What should you do during Recession?

1. Minimize Debt
   Most of us are overstretched ourselves with credit cards and other debt. These bills now haunt us every day. One hast to reduce this expensive debt, even before saving for retirement or investing in the stock market. One smart strategy is to take advantage of much lower gasoline prices. One year ago, gas cost more than $4 a gallon in much of the country. Today, it's less than half that. You should devote the money you save to eliminating your credit-card debt.

2. Set a Budget
   Plan and set a budget, measuring exactly what you spend and looking for ways to save money. Most of us are eating out more than you appreciate or spending too much on a cup of coffee. Budgeting is a lost discipline for many people and one that should be rediscovered. If you are just getting started on developing budgeting discipline, talking with others who are doing the same can help make it easier.

3. Inflation
   Currently, inflation is a relative non-issue, and most commentators -- not to mention the Federal Reserve -- believe that it won't become a problem anytime soon. For that reason, it's smart to have a portion of your fixed-income investments in Treasury inflation-protected securities, or TIPS. These bonds are backed by the U.S. government, like normal Treasury’s, but also have built-in protections that boost returns to account for inflation.

4. Stock-Market
   In Recent times, investing in stock market has been a roller coaster. Outside of your retirement account, be sure to maintain a diversified approach among stocks, bonds and cash. A good rule of thumb is to use your age as the percentage of assets you should have in safer bond investments. Thus, if you are 50, you would be split 50-50 between stocks and bonds. If you want to be more conservative, you'd carve back some of the stock exposure and leave it in cash. Even with the recent run-up in stocks, you still might have a larger-than-usual chunk of your assets in bonds these days, because bonds did well last year and have remained solid this year. If that's the case, rebalancing toward stocks makes sense, especially with their prices so low.

5. Protect What You Have
   One of the lessons of the past few years is that the stock market and your home are not ATMs. They are assets that can rise and fall. Having a strategy to protect your gains is prudent in these challenging times. Along with diversification of assets -- stocks, bonds, cash -- maintain diversification in the stock market, as well. Buy broad, low-fee index funds, rather than individual stocks, to lower your exposure to risk. And maintain a rainy-day fund in safer places, such as TIPS, certificates of deposit or highly rated municipal or corporate bonds. A good rule of thumb is to have a reserve of six months' earnings in case of a job loss.

For information regarding how you can minimize your debt, cutting the balance to 50-70%, debt settlement, debt reduction and debt negotiations, contact debtfreeafterall.com.

They can help you save money during this tough economic crisis. Call 1-877-208-6770 for help!

Written by Naz

Be Debt Free and Build up your net worth!

When one has cleared all their debts, a new beginning has come and start building your net worth. Here are few tips to accomplish this:


Keep away from credit cards: Use cash, check or debit card whenever possible, stick with a budget.


Save More: Save as much as possible, a minimum recommended saving and investment will be 10% of your earnings.


Set-aside funds: Open an account and try to build up $3000-$4000 for various purposes including taxes, insurance, auto and home repairs, appliances, furniture, etc.. Ensure this is automatically detected from your checking account.


Create an emergency fund: For emergency purposes like job loss or illness, try to set aside four months of wages. One can invest in mutual funds with automatic deductions from your checking account.


Start Saving for Retirement: One cannot merely depend on social security alone, you’re your employer’s 401k, or open an IRA to start saving money for your retirement. A weekly contribution of $25 @ 10% interest earns $205,000 in thirty years.


Look after your family: Buy a “term” life insurance policy worth five times your income, a health-care policy covering your medical needs, a disability policy paying 60-70% of your income, an auto policy paying at least $100,000 per injury, $300,000 per accident, and $50,000 in property damage, fire, and theft, a home owner’s policy for 80% of your home value.


Invest in a home: Home investment is one of the best investments; value and equity increase, interest and property taxes are tax deductible. More than two thirds of all Americans own their own home.


If you or anyone you know has trouble managing debt, contact the nations leading debt management firm debtfreeafterall.com, who specializes in debt settlement, debt negotiation, and debt reduction.




Written by Naz

Which Credit Card to Pay Off first?

Consumers are often confused when they have lot to pay and have several cards to take care. You’ll get a variety of opinions depending on which debt guru you talk to. Each one has its own merits and demerits.

Paying off the card with the smallest balance:
This can psychologically boost to knock-out at least one card and offers victory that could help you motivate to pay off the debt on other cards. But if other debts are mounting at higher rates, one would wind up paying more in total debt.

Paying off the highest-rate balance first:
This can be the most recommended plan, since you retire the costliest accounts first. But, if this takes you longer to achieve your first paid-off account, then it may not be the most helpful, especially for your credit score.

Paying off the balance that’s closest to its limit:
If one or more of your cards are maxed out, then this becomes an excuse for your creditors to raise your interest rates-both on the affected accounts and on any others you might have that have a universal default penalty. Paying down these high-balance debts can help your credit score and ultimately contain your total interest costs.

Paying off through Debt Settlement Companies:
If you have difficulties in choosing the above methods you can contact a professional Debt settlement company such as www.debtfreeafterall.com and they will be able to help you accomplish a debt free life.

Written by Naz

Rebuilding Credit History

There are several ways one can rebuild their credit history or if they want to get their first credit card:

1. Check the credit report: Contact all three credit bureaus and get a credit report from them. Federal law entitles you to get one free report from each of the three major bureaus once a year. One can order reports by calling 877-322-8228 or by visiting www.Annuaalcreditreport.com. Once receiving the report see if there are any errors, outdated information, or if you are a victim of identity theft. If so, one has to clear them up before applying for new accounts.
   
   
2. Checking and Savings Account: Set up checking and savings accounts. Usually, lenders see these accounts as a sign of stability. Make sure that you don’t bounce any checks.
   
   
3. Apply for the right credit card: Get a right credit card for your situation. For example, if one is a college student who has no credit history, if will be difficult to get a Visa or Mastercard. One can apply for Amex cards, but they usually charge a fee. However, one can start a credit history started this way. Sometimes they wave their fees for the first year. Whatever the case, don’t go overboard. Limit yourself with not more than one or two cards.
   
   
4. See if someone could co-sign: One can build the credit faster if one can convince someone with good credit history to add you as an “authorized” or joint user on a credit card. But this has a draw back that if for any reason the person who sponsors defaults payments, your credit history will be also tarnished.
   
   
5. Get a installment loan: For someone to have a good credit history, one should have both revolving accounts (eg: credit cards, lines of credit) and installment accounts (eg: auto loans, personal loans, mortgages). If one opts for a loan, make a large down payment so one can refinance in a year or so when their credit has improved.
   
   
6. Safe guard your credit: One has to use the card regularly to generate a credit score. Don’t charge more than you can pay off each month or 30% of the card’s limit. Pay all your bills on time, all the time. Don’t take too many cards or loans, a few accounts is enough to build a good score.
   
   

If you or someone you know have credit card debt problems and needs help, contact info@debtfreeafterall.com. They can help in debt settlement, debt reduction, and debt negotiation.

Article Written by Naz