New tools can help curb credit

Itz time 4 U 2 stop spending. UR 2 close 2 credit limit.

A text message from a credit card company? It is one new strategy that could help college students and others avoid getting socked with hefty fees and higher rates.

This summer, Chase credit card holders will even be able to get a $10 credit when they sign up for three such tools — free alerts, automatic payments and online statements.

Think of such cyber-friendly gimmicks as a natural response by the credit card companies to increased heat in Congress. Some lawmakers are calling for tougher restrictions on credit card practices. And the card companies are rolling out more ways to save their skin while maybe even saving you money.

Discover Financial Services launched the Discover Motiva Card this year, which gives consumers rewards for good credit management.

Make an on-time payment six months in a row? You get the next month’s interest on any unpaid balance back as a bonus.

The card allows consumers to pay their bills over the phone for free — yes, many cards charge for that.

The card highlights optional e-mail alerts. Such alerts are available on other Discover cards, too.

Some others companies offer deals for on-time payment, including a Citi mtvU Platinum Select Visa for College Students.

Chase option

Last month, Chase launched what it calls its Chase Clear & Simple program, which has the $10 credit. The offer will appear gradually in statements throughout the summer.

Customers can select text messages, phone messages or e-mail. Want an alert of a transaction of $500 or more? Or a heads-up when approaching the credit limit? Or a reminder to pay the bill?

“It can be very easy to forget a due date,” said Paul Hartwick, a spokesman for Chase Card Services in Wilmington, Del.

Hartwick said about 1.7 million of Chase’s 100 million customers have signed up for alerts, which have been available for about a year.

Text messaging is a way of life for young consumers. So alerts on billing? FBM (fine by me).

Chase now has a site — www.chaseclearandsimple.com — to offer strategies. Chase allows consumers to pick their own due date, if that helps. Or consumers can request that they not be allowed to charge more than the credit limit.

Word of caution

Beware, though, such a system isn’t going to stop every charge. You might still be able to go over the limit at a gas station or restaurant, based on how such transactions are authorized. But you’re not going to be able to go overboard to buy a new wardrobe.

Hartwick said if a Chase customer signs up to prevent over-the-limit charges, the company will not charge an over-the-limit fee — even if a gas station purchase puts them over the limit.

Credit card companies maintain that many consumers don’t want to be automatically declined, especially if there’s an emergency.

Yet, a real limit is not a bad idea — and if you have to sign up to get one, well, FBM.

XSusan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at stompor@freepress.com.