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In the wake of the credit meltdown and financial crisis, Congress authorized stiffer regulations that forced banks and other lenders to discontinue many of their sneaky and sometimes unlawful tactics. The new banking laws were passed, but it took months before they were fully implemented and enforced. During that interim period, many credit card companies decided to embrace the change and put a positive marketing spin on it. With great fanfare they celebrated a new found commitment to customer service and financial transparency.The motives behind the changes may be questionable; after all, card issuers didn’t get serious about greater transparency until federal regulators put their feet to the fire. The bottom line is that credit card companies now offer much improved ways for cardholders to decipher and manage their accounts.
First the look of monthly credit card statements dramatically changed. Suddenly it became much easier to read and understand those statements and to spot any interest charges, fees or penalties. Cardholders could glance at a statement and see how much more they would have to pay over time if they only made minimum monthly payments. The APR was prominently displayed and banks started sending credit card bills faster, so they arrived a couple of weeks before a payment was due.
Next, card companies started offering a whole new menu of free online tools that allowed cardholders greater control of their accounts and a better understanding of how to manage them. You can use innovative online tools, for example, to help budget your money, pay down your credit card balances, track your spending patterns, and avoid abuse of your credit card by unauthorized third parties.
Divide and Conquer Credit Card Debt
Many companies now offer programs, for instance, that let you focus on paying off one particular purchase, so that you can effectively eliminate that credit card debt in a more deliberate, organized, and faster way. You didn’t have a choice prior to the tougher regulations.
Let’s say, for example, that you are accustomed to using your credit card for small, everyday purchases like groceries and gasoline that you then pay off at the end of every month in order to avoid paying interest charges. If you use your card to buy something expensive like a new appliance that cannot be paid off in one month, you’ll have to carry a balance from one credit card statement period to the next. With new tools like Chase’s “Blueprint” feature, you can set up a repayment plan that lets you pay for that appliance purchase over time, all while you still pay off your smaller daily purchases at the end of every month. The advantage of that kind of system is that it permits you to pay off a major purchase over time without being penalized with costly interest payments on ordinary items like bread, pizza and gasoline that you can pay off each month.
Track Your Spending Habits
To successfully pay off your everyday expenses each month, however, you may first need to get a handle on what those everyday expenses are. Online tools make that easier by letting you view a summary of your recent purchases in various categories such as travel, restaurants, or utilities like cell phones or cable TV access.
Many card companies also let you set up budgets to manage your spending and they’ll send you a text or email alert when you max-out your budget. Track the frequency of your credit card usage, too, to find out how many times per week or day you’re using plastic instead of paying cash. That’s a good tool for parents who lend credit cards to their kids, for instance, and who want to monitor that usage to make sure that it is not being abused.
Parental Controls for Plastic
There are quite a few other great tools, too, for parents who want to offer children the flexibility and security of a credit card but don’t want that financial freedom to be unlimited.
As described in an earlier article devoted to parental controls for plastic, you can find credit cards that set spending limits on your kids, for example, or enable you to make online deposits to your child’s card quickly and easily. There are cards that also offer to send you an email or text message alert if your son or daughter tries to use the card in ways that are inappropriate or illegal for their age. So, if a 16-year old tries to use the card to buy beer, for example, the card company will send you a head’s up almost immediately.
Pick a Toolkit that Fits You
The availability of online tools at your disposal all depends on which card you carry, though, because not all credit card companies offer the ones described above. Meanwhile there are a lot of cards that include free online features not mentioned in this particular article. So figure out what you need and want from your card. Then use the various card comparison features on our website, like our debt payoff, to find a card that offers specific tools that are an ideal match for your unique financial lifestyle.
All week we will be bringing you a roundup of the best tools for credit card owners. Perhaps there's some available you aren't aware of that could be saving you money.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.