Chicago Bankruptcy Lawyer Blog

It seems that every time Americans turn around, there's a new credit card law going into effect. And though the purpose of all these rules is to protect consumers, they sometimes have unintended consequences.

Most recently, a law went into action this weekend to limit credit card penalties. Previous legislation enacted this year restricts credit card issuers from suddenly changing interest rates. On the one hand, both laws can help us save money on our credit cards. On the other hand, banks are finding fresh ways to take our money - this time, through higher interest rates on new cards and purchases.

Continue reading "New Credit Card Laws Lead to Higher Interest Rates for Chicago Consumers" »

When it comes to making decisions about our purchases, sometimes habit trumps common sense.

That would explain why I recently plunked down $100 on insurance for my new cell phone. I've always purchased the insurance plan before, so I didn't think twice about doing it again - never mind that I have yet to lose or break a phone.

But according to Consumer Reports, I could save big bucks by forgoing my wireless provider's insurance policy - and some other common financial products - next time around.

Continue reading "Save Money By Avoiding Some of the Biggest Financial Product Rip-offs" »

If you can't beat 'em, join 'em - at least, that's what big banks are doing.

After their effort to stop the financial reform bill failed with the overhaul's passage Thursday, banks have no choice but to play along - but they're playing on their own terms, according to Chicago bankruptcy laywers. That's bad news for the many folks struggling with large debts.

For instance, new debit rules in the legislation decrease the interchange fee - the amount that retailers must pay to banks for debit card transactions. So while more retailers might start accepting debit - a benefit for consumers who want more payment options - banks plan to make us pay elsewhere.

Continue reading "Banks Are Back to Old Tricks and New Fees after Financial Reform Bill Passes" »

As banks pile on the account fees and other inconveniences, customers are starting to shop around. But to get the best banking bang for your buck, you need to be able to weigh all the options - and that means including credit unions.

Consumers often overlook credit unions because they assume they won't qualify for membership, according to Chicago bankruptcy attorneys. But many unions have been opening their doors to the general public, meaning you might be eligible for their notoriously lower rate credit cards and car loans. Hey, when you're struggling to manage bills and debt, a more affordable interest rate goes a long way.

Continue reading "Compare Banks and Credit Unions to Make the Most of Your Money" »

Wouldn't it be great if the government paid you to go to school? Maybe that's why a growing number of Americans are falling for college scholarship scams.

Chances are you've noticed the online advertisements claiming the government is giving grants to folks who earn less than a certain amount every year, to stay-at-home moms, to job seekers- by the looks of it, to just about everyone. Or maybe you've received a phone call or e-mail from someone claiming to work for the Department of Education - and who's willing to replace your existing student loans with government grants. If so, be wary.

Sure, the idea of free money might sound tempting, but are you willing to risk your financial solvency for it? Upwards of 350,000 people fall for scholarship scams every year, costing Americans $5 million, according to Investopedia.com. You're not going to save money by forking it over to scam artists. However, you can save money by using common sense.

Continue reading "College Grant Scam Ads Put Chicago Students in Debt" »

Would you give up your paycheck to get paid earlier? Doesn't make sense, does it?

But millions of Americans do just that by taking out payday loans.

When you're strapped for cash and payday is days away, a short-term loan can look like a quick solution. Get the money now, pay for it later. But the problem is short-term loans mean high-interest, and interest rates don't get much higher than at payday loan centers, where paying $100 for borrowing $300 is not uncommon - and annual interest rates can exceed 500%. Makes your credit card APR look cheap, huh?

If you're not already in debt, relying on payday loans is a sure way to get there. Here's why.

Continue reading "Payday Loan Scams Are Putting Chicago Workers in Debt" »

Ever found a not-so-pleasant surprise when you opened your wireless bill - and saw some unexpected cell phone charges? Those days might be over, according to Chicago bankruptcy attorneys.

This week the Federal Communications Commission announced it was looking into a plan to notify wireless customers when they are ringing up cell phone fees not covered by their plan, like roaming or data usage charges.

For phone customers, it can only help. But is it really needed? The truth is, you don't have to wait for a bill to find out how much you're spending. All you have to do is make an effort to keep better track of your money.

Continue reading "Keeping Track of Cell Phone Charges Is Key to Lower Wireless Bill" »

Don't be surprised if you see an unfamiliar site in your mailbox soon - credit card offers.

That's right, after many months of tightening up credit, banks are on a mission to lure back customers they hope will start spending again as the economy picks up. And that means more credit card pitches, according to Chicago bankruptcy attorneys.

It's a good sign for the economy. But it can be a bad sign for careless consumers. As always, using a credit card to spend more than you earn can quickly land you in debt - and with a host of new fees, these new cards can make it harder than ever to climb back out.

Continue reading "Chicago Consumers Might Notice An Increase in Credit Card Offers As Banks Loosen Up Credit" »

I'm used to paying for services like electricity, TV and food - but somehow I don't think I should have to pay a bank to take my money.

Yet banks in Chicago and all over the country are charging Americans hundreds of dollars per year just for the privilege of being customers, according to Chicago bankruptcy attorneys. Since most of us don't budget for those kinds of fees, they can catch us off guard. Sometimes we don't even realize we're being charged until we take a closer look at our statement - and, by then, it's too late.

Twenty bucks a month is $20 you could spend on tank of gas, a meal in your favorite restaurant or - best of all - towards lowering your debt. Instead, it's going to your bank. How would you like to recover that lost cash? Here are a few tips.

Continue reading "Don't Let Chicago Bank Account Fees Leave You in Debt" »

It seems like just yesterday that a round of credit card reform laws was enacted (well, actually it was just last month). But the Federal Reserve already has another idea to help consumers.

If passed, a proposed law will limit credit card fees by prohibiting your credit issuer from charging you more than your violation. So if you exceed your credit limit by $5, then you'll owe $5 - instead of the $40 they currently charge. Credit card companies would be banned from charging more than one fee for the same violation and inactivity fees - penalties levied for not using an account - would be eliminated.

Pretty cool, huh? But here's the catch. To benefit, you have to use less credit. And for some folks, filing for bankruptcy is the best way to reduce dependence on credit cards - and therefore lower debt.

Continue reading "Consumers in Chicago Could See Limited Credit Card Fees If New Law Is Passed" »

You can't believe everything you read - especially when it comes to your bank, say Chicago bankruptcy attorneys.

Many banks are sending out letters urging customers to sign up for overdraft protection, a program that allows your bank to authorize a debit purchase - even if there's not enough money in your account to cover it. Some letters are going so far as to threaten customers, warning that their debit cards won't continue to work unless they contact their bank immediately, according to the New York Times.

With bold font and terms like "emergency" and "contact us immediately," these messages can be unnerving - not to mention confusing - for folks who frequently rely on a debit card to make purchases. But their purpose is actually very simple - they're advertisements. And you shouldn't fall for them. Overdraft protection isn't about saving you the hassle of overdrawing; banks want you to sign up so they can charge a fee each time they authorize money because you don't have enough to cover a purchase. Here's the real story on overdraft protection.

Continue reading "Chicago Bankruptcy Attorneys Warn Consumers About Overdraft Protection Fees" »

Using cash usually makes more sense than credit. You don't have to deal with interest, you know you can't spend more than what's in your account and the act of physically parting with your money makes you less likely to splurge -- and wind up in debt.

But there's at least one pitfall to paying with paper - ATM fees. Let's say you need to take out some money and you aren't anywhere near your bank. Instead, you go to the nearest ATM. You can expect a fee of at least $3 for using an ATM other than your bank's. And that's not all. Your bank thinks it has to punish you for withdrawing money elsewhere, so you can also expect to get dinged up to $2 on the other side. If you're taking out $20, you've already spent a quarter of your money before you even break the bill.

Fortunately, the situation can be pretty easily avoided.

Continue reading "Watch Out for ATM Fees That Add Up" »

If you're in the habit of tossing mail from credit card companies before opening the envelopes, you might want to rethink your strategy.

With creditors in the process of making changes to counteract stricter regulation, it's likely that some of those envelopes you assume are just advertisements or routine legal notices are actually important updates from your credit card company of changes that could impact you financially.

For instance, both Bank of America and Citibank announced plans this year to begin testing an annual fee on certain credit cards. And American Express recently notified holders of its airline cards, including Delta, JetBlue and Hilton and Starwood hotels, that it would be revoking rewards to customers who don't pay their bills on time, whether they're repeat offenders or normally careful consumers who happened to make a one-time mistake.

Other predicted changes include higher late fees, a fee for calling customer service, receiving paper statements or merely requesting a higher credit line and higher interest rates. My words of advice? Check your mail carefully.

Continue reading "Read Your Credit Card Junk Mail Before You Toss It" »

There's a lot of (legal) pick pocketing going around, but that shouldn't mean we have to put up with it.

Remember last month when we discussed the growing cost of credit cards? In response to new legislation meant to protect consumers from unfair fees and term changes, credit card companies are lowering limits, raising rates and adding brand new costs - like an annual fee or a penalty for non-use.

Now, banks are getting in on the action by becoming greedier with their checking accounts. Unlike a credit card - which, believe it or not, you can choose whether or not to use - checking accounts are pretty much a necessity now that we don't hide our cash under the mattress like Grandma did. So it was a little disturbing when I noticed my former bank had started charging a $9 account maintenance fee each month.

Continue reading "Banks Find Ways to Make Checking Accounts More Expensive, Chicago Bankruptcy Lawyers Say" »

Imagine paying for the privilege of spending your money. Sounds a little ridiculous, doesn't it?

But it could become reality for millions of credit card holders once the last part of credit reform legislation goes into effect this February. Don't get me wrong - the regulation changes are much-needed. They'll protect consumers by eliminating things like sudden interest rate hikes, fees undetectable in fine print, double-billing cycles and billing periods that are so short it's nearly impossible to get your check in on time.

So what's the problem? Banks just so happen to make most of their money off credit card fees. In the past, they've made it easy for you to make late payments and exceed your credit limit. But without their old tricks, they're forced to come up with new ones - like annual fees. Creditors are returning to the early days of credit, when they billed charge card customers a certain amount just for holding their cards. Bank of America is one of the first banks to pilot the program, charging a $29 fee on 1 percent of its customers.

Continue reading "Annual Fees Are Back As Credit Card Companies Face Reform" »