There are several tricks that credit card companies can use to hike fees and potentially lead customers into an endless cycle of debt. One such practice is known as universal defaults and enables companies to increase interest rates if a cardholder makes just one late payment to another credit card company or even pays a phone or utility bill late. This means that if your credit card payment arrives past due, you risk having interest rates on all of your other cards rise. The trouble is that nearly half of all US banks use universal defaults, enabling them to raise interest rates as high as 40%. Nationwide, banks collected a record $17.1 billion from such penalty fees in 2005, a 15% increase from 2003. Meanwhile, late-fee charges increased 160% over a 10-year period to an average of more than $33 per late payment in 2005. Clearly this is a problem that needs to be addressed, but sadly it may be a reality until lawmakers decide to change the laws.

Unpaid medical bills do not go on your credit report unless the hospital or doctor to whom you owe the money subscribes to at least one of the three major credit reporting agencies (Experian, Equifax or Trans Union) or the debt is turned over to a collection agency. Moreover, if you dispute the validity of the debt within 30 days of receiving a payment notice, a creditor or debt collector cannot place the account on your credit report without a notation that you are disputing the debt.

Once a medical bill is recorded on a credit report it still can be removed if you agreed to pay the debt and negotiated to have the account removed from your credit report. Be sure to get any such agreements in writing, however, as otherwise it will not be legally binding. Do not only rely on the debt collectors oral promise that the account will be removed!

Garnishing wages is one of the only ways that creditors can get access to funds owed to them by their customers. Federal laws regulate just how much of a persons wage can be garnished and outlines several other restrictions that are in place to ensure that people are still able to make a living. Below is the actual federal law regarding wage garnishing:

UNITED STATES CODE: TITLE 15, CHAPTER 41, SUBCHAPTER II

§ 1673. Restriction on garnishment

(a) Maximum allowable garnishment

Except as provided in subsection (b) of this section and in section 1675 of this title, the maximum part of the aggregate disposable earnings of an individual for any workweek which is subjected to garnishment may not exceed

(1) 25 per centum of his disposable earnings for that week, or
(2) the amount by which his disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206 (a)(1) of title 29 in effect at the time the earnings are payable,
whichever is less. In the case of earnings for any pay period other than a week, the Secretary of Labor shall by regulation prescribe a multiple of the Federal minimum hourly wage equivalent in effect to that set forth in paragraph

(b) Exceptions

(1) The restrictions of subsection (a) of this section do not apply in the case of
(A) any order for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative procedure, which is established by State law, which affords substantial due process, and which is subject to judicial review.
(B) any order of any court of the United States having jurisdiction over cases under chapter 13 of title 11.
(C) any debt due for any State or Federal tax.
(2) The maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment to enforce any order for the support of any person shall not exceed
(A) where such individual is supporting his spouse or dependent child (other than a spouse or child with respect to whose support such order is used), 50 per centum of such individual's disposable earnings for that week; and
(B) where such individual is not supporting such a spouse or dependent child described in clause (A), 60 per centum of such individual's disposable earnings for that week;
except that, with respect to the disposable earnings of any individual for any workweek, the 50 per centum specified in clause (A) shall be deemed to be 55 per centum and the 60 per centum specified in clause (B) shall be deemed to be 65 per centum, if and to the extent that such earnings are subject to garnishment to enforce a support order with respect to a period which is prior to the twelve-week period which ends with the beginning of such workweek.

(c) Execution or enforcement of garnishment order or process prohibited

No court of the United States or any State, and no State (or officer or agency thereof), may make, execute, or enforce any order or process in violation of this section.

§ 1674. Restriction on discharge from employment by reason of garnishment

(a) Termination of employment

No employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness.

(b) Penalties

Whoever willfully violates subsection (a) of this section shall be fined not more than $1,000, or imprisoned not more than one year, or both.

§ 1675. Exemption for State-regulated garnishments

The Secretary of Labor may by regulation exempt from the provisions of section 1673 (a) and (b)(2) of this title garnishments issued under the laws of any State if he determines that the laws of that State provide restrictions on garnishment which are substantially similar to those provided in section 1673 (a) and (b)(2) of this title.

§ 1676. Enforcement by Secretary of Labor

The Secretary of Labor, acting through the Wage and Hour Division of the Department of Labor, shall enforce the provisions of this subchapter.

§ 1677. Effect on State laws

This subchapter does not annul, alter, or affect, or exempt any person from complying with, the laws of any State
(1) prohibiting garnishments or providing for more limited garnishment than are allowed under this subchapter, or
(2) prohibiting the discharge of any employee by reason of the fact that his earnings have been subjected to garnishment for more than one indebtedness.

While it may be tempting for college students to whip out a credit card and simply charge their expenses, experts warn that that kind of mentality could end up hitting students harder than they think. For all the benefits of building a credit history early in life, there are many more drawbacks for not meeting monthly payments on credit cards. Nationwide, elderly and younger people are facing increasing amounts of credit card debt because they don't understand how credit cards work or fail to correct their spending habits. According to www.creditcards.com, 83% of college undergraduates have at least one credit card with an outstanding balance of more than $2,300! Meanwhile, the combination of credit card debt and student loans can be crushing to students looking to find a career and build a life after college. How can this be avoided? Simple, just remember to spend less than you earn, diversify your investments, save regularly and often, and remember rule number one.

Soon Americans may be able to push back even the most basic forms of spending: parking meters. Wisconsin is testing the waters in the capitol city of Madison with new meters that will accept credit cards. The city said it would begin testing the new meters next month and leave them in operation for 90 days. Instead of a line of gray meters, the new system will use a single battery-powered box that controls up to 14 spaces. While each system costs $10,000, the city hopes to recoup the costs with collection and maintenance savings. The spaces will cost $1.25 per hour but the city could change the rates at different times of the day depending on demand. Some see this move as yet another move towards a cash-less society that further leverages itself with debt in order to cover even more of our daily lives.

Prepaid credit cards are a wonderful idea for children and for those struggling with debt.  Prepaid credit cards work just like a normal debit or credit card, but the limit on the card is what you initially place on the card before it is activated. The limit allows you only to spend what is on the card, and you cannot be charged with fees thereafter or with bill payments each month.  

However, there is a catch to prepaid credit cards.  Each time you initiate a new card, there is an activation fee that applies, usually between $5 and $10 to setup the account.  With that, you will also have to pay additional fees for each time you deposit money on the card.
 
Prepaid credit cards work just as well as any other credit card and can be used anywhere and anytime.  Prepaid credit cards work well for people that are dealing with poor credit and need to use a credit card for bill payments, credit applications, etc., but that have been denied for credit cards and other credit.  However, there have been issues with companies not allowing monthly bill payments with prepaid credit cards, such as automatic monthly bill payments, for fear that there may not be sufficient money in the account at the end of the month.  

Prepaid cards are a wise tool to use for children, teaching them how to balance and account for their own finances.  They also work great for people trying to get back on their feet while struggling with debt and credit issues.  

“Life takes Visa.”  We’ve all heard the slogan.  Yes, Visa is accepted virtually everywhere around the world.  And now, it’s common that Visa is also being accepted at your local church. Visa’s ad campaign has repositioned the organization from a credit card company to a major player in electronic payments, offering credit, debit, prepaid and commercial products. The company wants to be known for the ability that their cards and services are accepted anywhere and anytime all over the world.  Even at church.

Credit cards, in general, are becoming ever more popular with temples, synagogues, churches, and other places of worship. If you forget to bring your donation change or cash, don’t worry, you can probably use plastic. Over the last year, the ability to use credit cards to donate to places of worship has increased over 21% over the last year.

In addition to onsite kiosks, worshippers can set up automatic donations online, much like they do with car or utility payments, said Bill Dobbins, vice president of merchant relations at Visa. Charging your charity allows you to keep better track of payments, while streamlining record-keeping and cutting down on mailing costs for religious organizations.

Most people believe that “offshore” banking is illegal, and quite comparable to money laundering.  However, it is not illegal.  Offshore banking is only illegal when you do not inform tax authorities about your decision to bank offshore.  It is very important to discuss the idea before-hand with a qualified financial advisor. The problem is found when you do not report taxes on these offshore accounts, whether you forget or try to sneak it past the government.  The IRS believes that they lose an average of $70 billion a year to taxes lost to these tax havens abroad. Most offshore banks are domiciled in Panama, the islands of the Caribbean and the Bahamas. 

Offshore banking allows people to save tax legitimately by having interest paid on their savings before the deduction of tax.  The tax saving advantages of banking offshore are generally only available to a few people who are usually expatriates, non-residents in a high taxation country and with tax liability in a country where taxation is low or even non-existent. However, the asset protection benefits, personal privacy advantages, and the potential to access better account structures and services are available to the majority of us when we choose to bank offshore.

Many offshore jurisdictions are strongly regulated to protect investors and to prevent money laundering, which can grant those who bank offshore a greater degree of confidence and security. Many jurisdictions have strict guidelines that cover the maintenance of client privacy, which grant those seeking personal and asset protection the assurance that their identity and transactions will remain confidential. Offshore structures such as bank accounts and trusts are often used to protect your assets from potential unfair litigation.

There are many benefits to banking offshore. Most offshore banks allow you more flexibility and access. As well, offshore banks generally pay better interest rates and often have lower charges. It is common that offshore banks offer flexibility and the benefits necessary for those who regularly travel for work or pleasure; as for those who travel often, multiple currencies and easy transactions from all around the world are another benefit to doing offshore banking. 

However, there are some issues with offshore banking. It is important to know the risks of offshore banking, as it is possible that a situation may arise that your offshore bank may not meet international standards (such as those set by the Financial Action Task Force and the Organization for Economic Cooperation and Development) and your account can then be frozen and inaccessible. 

It is common that most offshore investors are fairly ordinary people - dentists from Chicago, manufacturers from Frankfurt and merchants from Tokyo - who have been advised by their accountants to funnel at least some of their assets offshore.  Offshore banking is infamous for housing accounts to drug dealers and terrorists.  The amounts of money to be invested within various countries is a limited amount, as you most likely will not be able to invest $3 billion into a Caribbean bank.  It is now becoming more common that most offshore banks will not take more than $5,000 in cash deposits and will generally require a third-party testimony, by an accountant or lawyer, as to the source of the deposit.