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Financial Conversations with Fitz #53 - Questions on Changes in Credit Card Rules - 02/16/2010

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Wow this wind is raw! Schools are in a dilema.  But fortunately they are looking at safety…. Dow looks to open flat.   Maybe a little higher.   Still some carryover from Greek Drama from last week.    Not sure where grains are going after last week.   Look to be erratic again this week.   We are only two weeks away from March 1st selling by farmers to make payments of land and rents.

Last week we discussed the major changes in credit cards since a new law goes into effect on Feb 22nd.   They are still going to be quite expensive, but they have to give you more notice.    The majors have changed from a low fixed rate to a higher variable based off the prime rate which is low right now companies are adding more fees to make up the changes.  They can change your limit now without warning.   I have had several calls and comments from last week.   One question I need to clarify is that creditors cannot issue credit to someone younger than 21 unless they can prove they can make the payments.  Not sure how they are going to handle that at football games.  The other item I had questions on I will explain a bit.   

Utilization rate of your cards.   If you have three cards with a $3,000 limit.   You current balance on those cards is $5,000.    The credit card company can raise your rates for being over 30% your balance…..In other words you are using 55% of your $9,000 limit.   This also lowers your credit score we think.  Your FICO credit score can range anywhere from 300 to 850.    So rather than dropping one of your cards you should take a look at your balances to get them under the 30%.   This should protect your rate and help your credit score.  If you have a high plus 700 score might not make a difference.   Lenders have credit categories for different classes of rates and acceptance based on credit scores.  This score can affect your car loans and house loans.    If you are hoping to look at a house mortgage this year you might want to seriously have your credit files looked at months before to get some of these items repaired.   This can help you get the loan under the best program and save you lots of interest over a 15 year period on house payments.  Stop in to visit with any of our loan officers to see where you are at.   Take a look at a TSB card with a fee but it is fixed rate at this time.   It will probably go to variable later this year.  If you have any questions call TSB at Forest City, Thompson, Titonka 

Say, TSB was just approved for a new SBA Express and SBA Patriot this month.   It is a quick way to advance business loans for veterans and small business.

Remember that you should deal with people in community banks and organizations. That when they put something together for you that they will be sitting with them at ball games, church or community events.  So, if in doubt give us a call.