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Getting Credit
Credit Access and Use Equal Rights
The Equal Credit Opportunity Act guarantees you equal rights in dealing
with anyone who regularly offers credit, including banks, finance
companies, credit card companies, and credit unions.
When
you apply for credit, a creditor may not:
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Ask
about or consider your sex, race, national origin, or religion.
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Ask
about your martial status or your spouse, unless you are applying
for a joint account or relying on your spouse's income.
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Ask
about your plans to have or raise children.
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Refuse
to consider reliable public assistance income or regularly received
alimony or child support.
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Discount
or refuse to consider income because of your sex or marital status
or because it is from part-time work or retirement benefits.
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The
NextCard Difference
The amount of information NextCard requires to process
applications is actually less than the amount asked for by
most other credit card companies.
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Choosing
a Credit Card
Credit
terms vary among issuers. When shopping for a card, think about how you
plan to use it. Do you expect to pay your bills in full each month, or
do you plan to pay off your purchases over time? Consider the Annual
Fee, Finance Charges, balance computation method, and whether or not
there is a Grace Period for purchases.
NOTE:
Some cards do not permit a Grace Period for the amounts due if you use
the Cash Advance or Balance Transfer feature, even if they have a Grace
Period for purchases.
It's
also a good idea to look at the Credit Limit and how widely the card is
accepted, as well as the plan's additional services and features.
Consider
and compare all terms, including the following, before you select a
card:
Grace
Period
The Grace
Period is the date by which or the period within which any credit
extended for purchases may be repaid without incurring a Finance Charge.
Knowing whether a card gives you a Grace Period for purchases and Cash
Advances is especially important if you plan to pay your account in full
each month. Without a Grace Period, the card issuer may impose Finance
Charges from the date you use your card or from the date each
transaction is posted to your account.
Annual
Percentage Rate (APR) and Finance Charges
The APR
(Annual Percentage Rate) is a measure of the cost of credit, expressed
as a yearly rate. The card issuer must also disclose the "periodic
rate," which is a rate applied to your outstanding balance to
figure the Finance Charge for each Billing Cycle.
Some
credit card plans allow the issuer to change your APR when interest
rates or other economic indicators (called indexes) change. Because the
rate change is linked to the indexes' performance, these plans are
called "Variable Rate" programs. Rate changes raise or lower
the Finance Charge on your account. If you're considering a Variable
Rate card, the issuer must also provide information that discloses to
you:
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That
the rate may change.
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How
the rate is determined, which index is used, and what additional
amount (the "margin") is added to determine your new rate.
NOTE:
Most credit card plans allow the issuer to "reprice" your
current APR if the account falls into poor standing or becomes
delinquent. Repricing is the act of increasing the APR.
Annual
Fee
Some
issuers charge annual membership or participation fees. They often range
from $25 to $50, and sometimes reach as much as $100. "Gold"
or "Platinum" cards sometimes reach as much as several hundred
dollars. These fees may be charged whether or not you use the card.
Transaction
Fees and Other Charges
A card
may include other costs. Some issuers charge fees if you use the card to
get a Cash Advance, make a late payment, or exceed your Credit Limit.
Often an issuer will charge a fee to transfer a balance from another
creditor's account to their account. Fees are disclosed to you in your
Terms and Conditions as well as in your Account Agreement. It is
important that you read these documents in order to understand your
responsibilities as an accountholder.
Balance
Computation Method for the Finance Charge
If you
don't have a Grace Period or if you expect to pay for purchases over
time, it's important to know what balance computation method the issuer
uses to calculate your Finance Charge. This can make a big difference in
how much a Finance Charge you'll pay – even if the APR and your buying
patterns remain relatively constant.
Examples
of balance computation methods include the following:
Average
Daily Balance: This is the most common calculation method. The
issuer totals the beginning balance for each day in the Billing Period
and subtracts any credits made to your account that day. While new
purchases may or may not be added to the balance, depending on your
plan, Cash Advances are typically included. The resulting daily
balances are added for the Billing Cycle. The total is then divided by
the number of days in the Billing Period to get the "Average
Daily Balance."
Adjusted
Balance: This is usually the most advantageous method for
cardholders. Your balance is determined by subtracting payments and
credits received during the current Billing Period from the
outstanding balance at the beginning of the Billing Period. Purchases
made during the Billing Period aren't included. This method gives you
until the end of the Billing Cycle to pay a portion of your balance to
avoid the Finance Charges on that amount. Some creditors exclude prior
unpaid Finance Charges from the previous balances.
Two-cycle
Balances: Issuers sometimes use various methods to calculate your
balance that make use of your last two months' account activity. Read
your agreement carefully to find out if your issuer uses this
approach. This is the sum of the Average Daily Balances for two
Billing Cycles.
The
Truth in Lending Act requires a lender to inform you of the cost to
borrow, so that you can compare the cost and terms of credit offered
by various lenders.
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The
NextCard Difference
NextCard
features links to Account Terms & Conditions on the first
page of the application as well as on the page where
individual custom offers are presented. In addition, once a
credit card offer has been accepted, NextCard promptly issues
an email to approved customers with an electronic copy of
their specific Account Agreement, which includes the specific
Terms and Conditions of their account. A printed copy of the
Account Agreement information is also provided along with the
credit card.
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Using
Your Credit Card Responsibly
Bad
credit can cause you many headaches in years to come. Credit Card
delinquency may prevent you from qualifying for other types of loans,
such as a mortgage or an auto loan. Furthermore, when you miss a
payment, you may receive a call or other correspondence reminding you of
your overdue balance. To avoid this, be sure to pay at least the minimum
payment by the due date printed on your statement every month.
The
NextCard Difference
NextCard offers CreditGuardSM,
a special, non-insurance product we've created to help our
cardholders protect their good credit in times of financial
difficulty. CreditGuard, is an optional feature that allows
you to put your account on hold so you don't have to make
your NextCard payment if you lose your employment income as
a result of involuntary unemployment, illness, injury,
disability, or even a leave of absence. During a deferment
period, we simply put your account on hold for you. No
further Finance Charges will accrue, and no new fees will be
charged to your NextCard account. Your account will remain
in good standing with NextCard, and will not be reported as
delinquent to any outside agencies. And if you ever need to
use CreditGuard, in a time of difficulty, all it takes is a
call to our customer service center.
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Protect
Your Credit Record
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Pay
bills promptly to avoid late fees and to protect your credit rating.
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Keep
track of your charges and don't exceed your Credit Limit to avoid
Over-limit Fees.
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Report
any change of address prior to moving so you receive bills promptly.
The
NextCard Difference
NextCard has online management tools that can help you use
credit responsibly. You can set NextCard Account Alerts to
automatically email you about your account activity and remind
you when your NextCard bill is due. You can set NextCard
Account Alerts to:
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Remind
you that a payment is due. |
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Advise
you that your line of credit is approaching its limit. |
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Notify
you that your balance has reached a limit that you
specify. |
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Notify
you that a payment or a credit has posted to your
account. |
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Notify
you that an item above a dollar amount you specify has
posted to your account. |
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Tell
you when your monthly statement is complete. |
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Your
Credit Card Rights
The Fair
Credit Billing Act applies to credit cards and can be used for:
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Billing
errors.
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Unauthorized
use of your account.
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Goods
or services charged to your account, but not received or not
provided as promised.
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Charges
for which you request an explanation or written proof of purchase.
If your
card is lost or stolen, you will not be held liable for any changes.
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The
NextCard Difference
The NextCard 100% Safe Shopping PledgeSM
says NextCard will cover the full cost of any fraud arising
from your usage of a NextCard product. No exceptions. No
excuses.
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Credit
Billing and Disputes
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Write
to the creditor or card issuer within 60 days after the first bill
containing the disputed charge is mailed to you. However, if more
than 60 days have passed since you were billed for the item, you
still might be able to dispute the charge if you only recently found
out about the problem.
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Send
your letter to the address provided on the bill. Do not send the
letter with your payment.
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Be
specific. In your letter, give your name and account number, the
date and amount of the charge disputed, and a complete explanation
of why you are disputing the charge.
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Keep a
record of receipt to document that your letter was received. You
might wish to send it by certified mail with a return receipt
requested.
If you
follow these requirements of receipt, the creditor or card issuer must
acknowledge your letter in writing within 30 days of receipt and conduct
an investigation within 90 days. While the bill is being disputed and
investigated, you do not need to pay the amount in dispute. The creditor
or card issuer may not take action to collect the disputed amount,
including reporting the amount as delinquent, and may not close or
restrict your account. If there was an error or you do not owe the
amount, the creditor or card issuer must credit your account and remove
any Finance Charges or late fees relating to the amount not owed. For
any amount still owed, you have the right to an explanation and copies
of documents proving you owe the money. If the bill is correct, you must
be told in writing what you owe and why. You will owe the amount
disputed, plus any Finance Charges. You may ask for copies of relevant
documents.
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The
NextCard Difference
NextCard uses technology and the power of the Internet to
make your account management easy and accessible. If you
have a questionable charge you'd like to dispute, simply
login at My.NextCard.com, then click on "Customer
Service" and "Dispute a Charge" to complete
an online dispute form.
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Understanding
Your Credit History
The
Fair Credit Reporting Act controls how your credit history is kept, used
and shared among lenders. It is designed to promote accuracy and ensure
the privacy of the information used in credit reports. The three major
Credit Reporting Agencies have credit files on millions of consumers
nationwide.
Contact
information is as follows:
Equifax
P.O. Box 740241
Atlanta, GA 30373-0241
1-800-685-1111
www.equifax.com
Experian
P.O. Box 2104
Allen, TX 75013-2104
1-888-397-3742
www.experian.com
Trans
Union
2 Baldwin Place
P.O. Box 1000
Chester, PA 19022
1-800-888-4213
www.transunion.com
Anyone
who takes adverse action against you in response to a report supplied by
a Credit Reporting Agency – such as denying your application for
credit, insurance, or employment – must give you the name, address,
and telephone number of the Credit Reporting Agency that provided the
report.
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You
have a right to know what is in your credit report, including
medical information and, usually, the sources of the information.
Make sure your report is accurate.
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Get
your report for free if a company takes adverse action against you
based on the report and you request your report within 60 days of
receiving the notice of the action.
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Request
one free report a year if you can prove that you are unemployed and
plan to look for a job within 60 days, if you are on welfare, or if
your report is inaccurate because of fraud. Otherwise a Credit
Reporting Agency may charge up to $8.50 for a copy of your report.
If you find
inaccurate or incomplete information in your report:
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Contact
both the Credit Reporting Agency and the company that provided the
information to the Credit Reporting Agency.
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Tell
the Credit Reporting Agency in writing what information you believe
is inaccurate. The information provider must investigate and report
the results to the Credit Reporting Agency. If the information is
incorrect, it must notify all nationwide Credit Reporting Agencies
to also correct your file. If the reinvestigation does not solve
your dispute with the company, ask that your statement regarding the
dispute be included in your file. A notice of your dispute must be
included anytime the Credit Reporting Agency reports the item.
Credit
Report Access
Only
people with a legitimate business need can get a copy of your report. An
employer or a prospective employer can only get your credit report if
you give written consent. Creditors, employers, or insurers cannot get a
report that includes medical information without your approval.
Duration
of Negative Information
A Credit
Reporting Agency can report negative information for seven years, and
bankruptcy information for ten years. Information about a lawsuit or an
unpaid judgment against you can be reported for seven years or until the
statute of limitations runs out, whichever is longer.
When
Your Debt Is out of Control
If you
ever find yourself in a situation where you can't make a monthly
payment, notify your credit card issuer and work out a modified payment
plan that reduces your payments to a more manageable level. Be cautious
about turning to a debt counseling company to solve your debt problems.
Avoid paying such a firm in advance until you find out what the company
can really do. Before you sign a contract, check out the organization
with the U.S. Better Business Bureau or with your local consumer
protection agency.
Counseling
services provide assistance to individuals having difficulty budgeting
their money and/or meeting necessary monthly expenses. Many
organizations, including credit unions, cooperative extension services,
family service centers, and religious organizations, offer free or
low-cost credit counseling.
The
National Foundation for Consumer Credit Is There to Help (NFCC)
NFCC has
1,400 members that provide money management techniques, debt payment
plans, and educational programs to help consumers learn to budget and
use credit wisely. Many of its members are locally managed nonprofit
agencies operating under the name Consumer Credit Counseling Service (CCCS).
To locate the nearest NFCC member, call toll-free, 24 hours a day
1-800-388-2227, or visit its website at www.nfcc.org.
Myvesta.org
is the nation's first nonprofit Internet-based debt counseling service.
It assists families and individuals with debt, credit, money and
financial problems through its website at www.myvesta.org,
as well as through one-on-one counseling at 1-800-680-DEBT.
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Credit
Glossary
At
NextCard, we believe in providing you with information to help you make
informed financial decisions. The following industry terms are broadly
defined, and they are no substitute for the detailed definitions
provided in an Account Agreement, Supplemental Disclosure, or Terms and
Conditions. Always read the specific Disclosures for any credit account
issued to you.
Annual
Fee
A yearly bank charge for use of a credit card that is billed directly on
the customer's monthly statement.
Annual
Percentage Rate (APR)
The interest rate reflecting the total yearly cost of the interest on a
loan, expressed as a percentage rate. Under the federal Truth in Lending
Act, it must be calculated in a standard way to allow consumers to make
"apples-to-apples"comparisons of lending terms.
Authorization
An Authorization occurs when you present your card or account number to
a merchant for payment. An authorization reserves the purchase amount
against your available credit to ensure that the credit is available at
the time the transaction posts to your account.
Average
Daily Balance
This is a method by which many creditors calculate Finance Charges.
Adding each day's balance and dividing that total by the number of days
in a Billing Cycle determines an Average Daily Balance. The Average
Daily Balance is typically multiplied by the Periodic Annual Percentage
Rate in order to calculate the amount of Finance Charges assessed on an
account.
Available
Credit
Available Credit is the amount of credit you have available to use
for Purchases, Balance Transfers and Cash Advances.
Automated
Teller Machines (ATMs)
ATMs are self-service machines that dispense cash and process deposits.
Balance
Transfer (BTs)
A Balance Transfer is the process of transferring a balance from one
credit account to another.
Billing
Cycle (Billing Period)
The Billing Cycle is the period between billings for products and
services - usually a month.
Carrying
a Balance
Carrying a Balance means the balance revolves on an account from one
month to another. When a cardholder carries a balance he/she does not
pay the balance in full every month.
Cash
Advance
A Cash Advance allows you to obtain cash from your credit card account.
Please note there may be restrictions on the amount you may withdraw.
Typically, a Cash Advance is obtained through a financial institution or
an Automated Teller Machine (ATM).
Cash
Advance Fee
A Cash Advance Fee is a charge by the bank for using a credit card to
obtain cash. This fee can be stated in terms of a flat per-transaction
fee or a percentage of the amount of the Cash Advance.
Cash
Advance Limit
The Cash Advance Limit is the established limit by which cardholders can
withdraw cash from their accounts. This limit is typically established
as a percentage of the Credit Line.
Credit
Payment Insurance
Credit Payment Insurance is a credit protection service offered by
some creditors to their customers. It assists customers in maintaining a
good credit rating in times of financial difficulty.
Credit
A Credit on your statement reflects any monetary transaction other than
a payment that decreases your Outstanding Balance.
Credit
Limit (Credit Line)
The Credit Limit is the total amount of credit extended to the
customer by the lender.
Credit
Reporting Agency (Credit Bureau)
A Credit Reporting Agency compiles data on consumers' credit payment
history. Trans Union, Equifax, and Experian are the three major Credit
Reporting Agencies in the United States.
Credit
Report
The Credit Report is a critical factor in credit scoring systems that
lenders use to issue credit cards, mortgages, or other loans. A Credit
Report contains information regarding a customer's payment history and
comes from a Credit Reporting Agency.
Creditor
(Card Issuer)
A Creditor is an entity to whom money is owed.
Current
Balance
The Current Balance is the total amount of credit spent on Purchases,
Balance Transfers, and Cash Advances. This balance may include Finance
Charges and fees.
Daily
Periodic Rate
The Daily Periodic Rate is used to calculate the amount of Finance
Charges assessed on an account. It is typically calculated by dividing
the Annual Percentage Rate by 365.
Delinquency
A Delinquency means that payment is overdue on an account.
Finance
Charge
Finance Charge is a fee for using credit. It is comprised of interest
charges and other fees.
Fixed
Interest Rate
A rate of interest charged on an account. This rate is in effect for the
life of the loan, provided the account remains in good standing. This
rate will not fluctuate based on the Prime Lending Rate.
Grace
Period
If the cardholder does not carry a balance, the Grace Period is the
interest-free period of time a lender allows between the transaction
date and the billing date. The standard Grace Period is usually between
20 to 30 days.
Introductory
Interest Rate
A rate of interest charged on an account for a specific, limited period
of time. This rate is typically lower than the Ongoing Rate and is used
by the creditor as an incentive.
Late
Fee
A Late Fee is a charge to your account if the minimum payment due does
not reach the lender by the payment due date.
Minimum
Payment Due
The Minimum Payment Due is the smallest amount you must pay each month
to keep your account in good standing. Your minimum payment can vary
from month to month based on your current balance and is typically based
on a percentage of the Outstanding Balance. You can always pay more than
your minimum payment.
Ongoing
Interest Rate
A rate of interest charged on an account for a period of time. This rate
can be either a Fixed or Variable Rate.
Over
Limit
Over Limit refers to the amount of your balance that exceeds your Credit
Limit. If this occurs, an Over Limit Fee will be assessed.
Over
Limit Fee
An Over Limit Fee is a charge for exceeding the Credit Limit on the
account.
Outstanding
Balance
The total amount you owe the creditor.
Post
Date
A Post Date is the date that the transaction was debited or credited to
your account.
Pre-approved
A credit offer with a "Pre-approved" status means that a
potential customer has passed the preliminary credit-information
screening necessary to obtain credit with the creditor.
Personal
Identification Number (PIN)
A Personal Identification Number (PIN) is a secret number that
identifies you and allows you to perform transactions at ATMs.
Prime
Lending Rate
Prime Lending Rate is a variable interest rate that is often used in
calculating the Interest Rate on a credit account.
Repricing
Repricing is the act of changing a cardholder's APR.
Secured
Card
A Secured Card is a credit card that a cardholder "secures"
with a deposit to ensure payment of the Outstanding Balance if the
cardholder defaults on payment. Secured credit cards are general-purpose
credit cards targeted to customers with imperfect or limited credit
histories who do not qualify for a traditional unsecured credit card
loan.
Transaction
date
The Transaction Date is the date a transaction was initiated.
Variable
Interest Rate
A rate of interest charged on an account. This rate may change and is
typically calculated by adding or subtracting an amount to a base
standard interest rate, usually the Prime Lending Rate.
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