How the new credit card changes affect you



Interest rates What has changed: Credit card issuers can no longer raise interest rates on existing balances. For example, if you're carrying a balance of $5,000 with a 13% interest rate, your credit card issuer can't raise that rate, except under certain circumstances. In addition, if you open a new credit card account, the issuer can't raise the interest rate for 12 months. This provision is the most significant reform in the legislation and has the potential to save consumers a lot o money as consumers can no longer experience enormous rate increases.
What hasn't changed: The legislation imposes no limits on the rates credit card issuers can charge new customers. Nor does it limit how much card issuers can raise rates on future purchases, says Josh Frank, senior researcher for the Center for Responsible Lending.The prohibition on retroactive rate increases means credit card companies "are going to be more aggressive at changing rates on future purchases, and rates in general for new accounts are going to be higher than they were," says Ben Woolsey, director of consumer research for CreditCards.com.There are also exceptions to the retroactivity rule. Credit cards can raise rates on existing balances if:•The card has a variable interest rate and the underlying index — such as the prime rate — increases. In anticipation of the reforms, most banks have moved away from fixed-rate cards. In July 2009, less than 1% of bank-issued cards offered fixed rates, down from 31% in December 2008, the Safe Credit Cards Project says.•The card has an introductory "teaser" rate for a specific period and that period expires.•You're more than 60 days late on a monthly payment. However, the issuer must restore the old interest rate after six months if you make on-time payments during that period.



Fees What has changed: Credit card companies are no longer allowed to charge a fee when you exceed your credit limit unless you sign up for this service.Card issuers will also be prohibited from charging extra because of the way you pay your bills. For example, you can't be charged a fee for paying your bill by phone unless you request expedited payment or ask for help from a customer service representative, Bourke says.
What hasn't changed: Credit card issuers will still be allowed to charge annual fees, inactivity fees and other types of fees, Woolsey says. And an increase in those types of fees is a certainty, says John Ulzheimer, president of consumer education for Credit.com. Card companies are facing the loss of billions in revenue in over-the-limit fees, he says, "which means higher fees elsewhere and new fees we've never even heard of yet.

"Billing practices What has changed: Many borrowers have several lines of credit with different interest rates on the same credit card. For example, you could have one rate for a cash advance, another rate for purchases and still another rate for a balance transfer. In the past, when borrowers sent in a payment, issuers usually applied the entire amount to the balance with the lowest interest rate first. Now, issuers will be required to apply any amount paid beyond the minimum to the balance with the highest rate, Bourke says. Other changes:•Credit card issuers must mail or deliver your bill at least 21 days before your payment is due.•Due dates must be the same every month. If the due date falls on a weekend or holiday, the payment must be credited on the next business day, with no late penalty.•Banks can no longer use a customer's average daily balance over two months to calculate interest, a practice known as "double-cycle billing.
"What hasn't changed: When card holders have credit lines with different interest rates, card issuers are still allowed to apply the minimum payment to the lowest-rate debt. "If you're making just the minimum payment, this won't help you," Bourke says.



Disclosures and notices What has changed: Card issuers are required to give 45 days' notice before raising interest rates, changing certain fees, such as annual fees or cash advance fees, or making other significant account changes.Credit card issuers must provide borrowers with more information about the cost of carrying a balance. In monthly statements, you'll receive an explanation of how long it will take to pay off your balance if you make the minimum monthly payment. Your statement also will include an explanation of how much you'll need to pay monthly to eliminate your balance in three years.Statements also must disclose the dates by which payments must be received to avoid late charges.
What hasn't changed: Card issuers can close your account or lower your credit limit for any reason, without giving you advance notice, Frank says.In recent months, credit card companies have sharply lowered credit limits for thousands, a trend that's expected to continue, credit card analysts say.Still, the new provisions will change some of the industry's most egregious practices, Bourke says. Now, "If you use your credit card for purchases, pay your bills and occasionally you're a couple of days late, your card is not going to blow up in your face," he says.

The Coveragejet 2010

Must have Insurance a Small Business Owner Should Have



1. General Liability Insurance: Every business, even if home-based, needs to have liability insurance.  The policy provides both defense and damages if you, your employees or your products or services cause or are alleged to have caused Bodily Injury or Property Damage to a third party.

2. Property Insurance:  If you own your building or have business personal property, including office equipment, computers, inventory or tools you should consider purchasing a policy that will protect you if you have a fire, vandalism, theft, smoke damage etc.  You may also want to consider business interruption/loss of earning insurance as part of the policy to protect your earnings if the business is unable to operate.

3. Business owner’s policy (BOP): A business owner policy packages all required coverage a business owner would need. Often, BOP’s will include business interruption insurance, property insurance, vehicle coverage, liability insurance, and crime insurance . Based on your company’s specific needs, you can alter what is included in a BOP. Typically, a business owner will save money by choosing a BOP because the bundle of services often costs less than the total cost of all the individual coverage’s.

4. Commercial Auto Insurance: Commercial auto insurance protects a company’s vehicles. You can protect vehicles that carry employees, products or equipment. With commercial auto insurance you can insure your work cars, SUVs, vans and trucks from damage and collisions.  If you do not have company vehicles, but employees drive their own cars on company business you should have non-owned auto liability to protect the company in case the employee does not have insurance or has inadequate coverage.  Many times the non-owned can be added to the BOP policy.

5. Worker’s Compensation: Worker’s compensation provides insurance to employees who are injured on the job. This type of insurance provides wage replacement and medical benefits to those who are injured while working. In exchange for these benefits, the employee gives up his rights to sue his employer for the incident. As a business owner, it is very important to have worker’s compensation insurance because it protects yourself and your company from legal complications. State laws will vary, but all require you to have workers compensation if you have W2 employees.  Penalties for non-compliance can be very stiff.

6. Professional Liability Insurance: this type of insurance is also known as Errors and Omissions Insurance. The policy provides defense and damages for failure to or improperly rendering professional services.  Your general liability policy does not provide this protection, so it is important to understand the difference.   Professional liability insurance is applicable for any professional firm including lawyers, accountants, consultants, notaries, real estate agents, insurance agents, hair salons and technology providers to name a few..

7. Directors and Officers Insurance: this type of insurance protects the directors and officers of a company against their actions that affect the profitability or operations of the company. If a director or officer of your company, as a direct result of their actions on the job, finds him or herself in a legal situation, this type of insurance can cover costs or damages lost as a result of a lawsuit.

8.  Data Breach:  If the business stores sensitive or non-public information about employees or clients on their computers, servers or in paper files they are responsible for protecting that information.  If a breach occurs either electronically or from a paper file a Data Breach policy will provide protection against the loss.

9. Homeowner’s Insurance: Homeowner’s insurance is one of the most important kinds of insurance you need. This type of insurance can protect against damage to the home and against damage to items inside the home. Additionally, this type of insurance may protect you from accidents that happen at home or may have occurred due to actions of your own.

10. Renter’s Insurance: Renter’s insurance is a sub-set of homeowner’s insurance which applies only to those whose who rent their home. The coverage is protects against damage to the physical property, contents of the property, and personal injury within the home.

11. Life Insurance: Life insurance protects an individual against death. If you have life insurance, the insurer pays a certain amount of money to a beneficiary upon your death. You pay a premium in exchange for the payment of benefits to the beneficiary. This type of insurance is very important because it allows for peace of mind. Having life insurance allows you to know that your loved ones will not be burdened financially upon your death.

12. Personal Automobile Insurance: Another very important type of insurance is auto insurance. Automobile insurance covers all road vehicles (trucks, cars, motorcycles, etc.). Auto insurance has a dual function, protecting against both physical damage and bodily injury resulting from a crash, and also any liability that might rise from the collision.

13. Personal Umbrella Insurance: You may want some additional coverage, on top of insurance policies you already have. This is where personal umbrella insurance comes into play. This type of insurance is an extension to an already existing insurance policy and covers beyond the regular policy. This insurance can cover different kinds of claims, including homeowner’s or auto insurance. Generally, it is sold in increments of $1 million and is used only when liability on other policies has been exhausted.
 

WHAT TO DO ABOUT YOUR AUTO INSURANCE SURCHARGE

What do you do if your auto policy is surcharged? What is a surcharge? Insurance companies typically collect insurance surcharges from policyholders whose driving records include certain motor vehicle offenses. The surcharges that are imposed are different for different offenses. Surcharge-able events include (but aren’t limited to) alcohol and drug related offenses, regulatory offenses such as driving without a license, driving without valid insurance or driving while suspended, and accumulating violation points in a certain time period. If you had an accident and was not at fault or if you are not guilty of the aforementioned offenses, then you may have valid reason to contest the surcharge. To do so, do the following:

1. Call your agent to discuss this issue. Have them review your record
2. Check with family members to see they drove your car with out your permission and had an accident or moving violation
3. Did one of your friends use the vehicle and commit a violation?
4. Were you late on a premium payment
5. Was this surcharge based on changes in your credit report?
6. Did you get a ticket that was later dropped
7. Clarify your carriers policy on surcharges
8. What is the monetary threshold regarding surcharges. i.e. how much do they have to pay on your behalf before your rates go up?
9. Do you need to contact your state department of insurance to request their input regarding surcharges on your policy
10. If you had an accident and was not at fault but was surcharged, you may want to get a copy of the police report to show to your agent, claims person and underwriter.

The above should assist you in appealing auto insurance claims surcharges. They serve as a good starting point. You will have to pursue the matter to conclusion.