Credit Card Quick

Credit Cards – Spending Habits and Blame

Credit Card Debt

That little plastic card can be a blessing. It can also lead to financial ruin. The most important aspect of owning and using a credit card is using it wisely. There are a lot of people who use their credits cards for nearly everything. For those who can afford it, that’s just fine and dandy. However, the truth is that the majority of Americans – those in the working class -  really can not afford to do that; not without getting in way over their heads. Yet, those cards still keep getting used and people don’t seem to know at which point their financial lives took a turn for the worst.

Spending

Credit cards have always been enticing. Who can really resist the idea of by now, pay later? Unfortunately, the idea has been taken way too far out of context. Plastic is a nice idea for quick and easy purchases, especially large and expensive purchases, giving you the chance to get what you want  now and pay the balance plus interest over time. In a way, it is much like the concept of layaway, only you get to take the item home before you have paid in full. Credit cards are very convenient for emergencies, air fare when you don’t have the cash, deposits on hotel rooms and rental cars, etc. They are not a bad option if you can afford to pay the price.

Unfortunately, far too many credit card holders, especially with the downturn in the economy, have resorted to using their credit cards to buy groceries and household necessities and to pay their living expenses. Credit cards were never intended for this purpose. You have to ask yourself two things, in this case: a) Do you want to be paying for your food and necessities a year or two after they have been consumed? After all, with interest rates and possibly being unable to pay the full balance at the end of the month, that is exactly what is going to happen. b) If you can’t pay your living expenses without the help of your almighty credit card, how in the world can you expect to pay off the credit card itself?

Blame

When people find themselves in over their head in credit card debt, most knew it was coming, even if they won’t admit it. Call it being overly optimistic, but many people think if they can just do what they need to do now, they can handle the financial repercussions later on. Unfortunately, “later on” is when the financial trouble really begins. At this point, you often hear “I don’t know what happened.” Or “It’s the credit card company. My rates are too high. They should not have given me the card.” Other people blame low income, their personal situations and the economy. Blame is great, right? It makes you feel better about the situation at hand, right? Takes some of the responsibility off of you. No, no and no.

You still have the financial responsibility for yourself, your bills and your credit card usage, no matter what your situation or who or what  you try to blame. Yes, life happens and we often can not control those circumstances entirely on our own. Yes, the credit card companies reel people in with their tantalizing offers and convenience. However, life itself is not fully to blame. as for the credit card companies, they are a business with a job to do. That job is to get the customers. It does not mean they forced you into obtaining the credit card or using it.

If you find yourself in financial dire straits, come up with a plan. Try to improve your income, focus on paying down your bills and expenses, putting your basic expenses ahead of your credit card use. This does not mean do not pay the credit card bill; however, put the credit cards aside and stop using them until you have your head above water. Using your credit card to bail yourself out of a tight situation that you could never afford in the first place can and will only result in more headaches down the road.

Your Guide to Getting the Best Credit Card in your Wallet

Choosing Credit Card

If you’re like most credit card holders, your goal is to get a credit card with the lowest interest rate and the most perks. However, how do you begin to find the perfect credit card?

Well, it is best to start your search online, as many websites will compare credit cards, side by side, according to their APR, annual fee, terms and conditions, and perks. This will give you a broader picture of what types of credit cards may be available to you and what you can expect in terms of APR and promotional rates.

However, beyond that, here are some tips that will help you score the credit card that best fits your lifestyle and your budget:

• Chuck the annual fees – There is simply no reason to pay an annual fee for a credit card anymore, unless of course you are involved in an advantageous rewards program. But for most credit card holders, it just doesn’t make sense to fork over an annual fee for a credit card.
• Think “fixed” in terms of interest rates – You may find a credit card with a fantastic, variable interest rate, but beware that this interest rate can shoot up at any given time. The new credit card legislation has clear boundaries for creditors when it comes to raising interest rates on fixed-rate cards, but variable-rate cards are still fair game. No matter how attractive the offer seems for a variable rate credit card, your best bet is to find a card with a low, fixed interest rate.
• Don’t get pulled in by an attractive introductory rate – Introductory rates, which are often as low as 0 percent, may seem like a great deal. However, introductory rates are just that – introductory – which means that after the introductory period has ended your interest rate can shoot up to very high levels.
• Pass up rewards programs (most of the time) – For the average credit card user, rewards programs are just not beneficial. However, if you are a big spender, and you pay off your card in full each month, a rewards credit card may be worth it.

The Popularity of Cash-Back Reward Credit Cards Continues to Grow

Credit Card Rewards

We all love our cash-back rewards credit cards, and now that the bulk of the credit crisis has been resolved, credit card companies are once again hunting down credit card customers who want a great deal on cash-back rewards.

A cash-back credit card can be a great deal, provided you follow the new credit card rules. If you act responsibly and pay your credit card on time, a cash-back credit card can provide you with many perks – simply for spending as you normally would.

Although credit card companies are stilling shelling out loads of cash-back rewards to their customers, the rules have become slightly stricter, particularly for individuals who fail to pay their bills on time. Another factor to also consider when choosing a cash-back rewards credit card is the interest rate, as some come with fairly high APRs.

Cash Back versus Other Perks

Do you want cash back or do you like the perks, such as airline points? It seems that the vast majority of people want the cash. In fact, according to J.D. Power’s 2009 credit card satisfaction survey, nearly 62 percent of respondents opted for cash rewards, which was nearly five times that of the next popular perks, which were airline points or rewards.

This is probably due to the fact that many individuals just don’t want to deal with points and rewards, all of which can prove to be quite confusing. But let’s face it: cash is cash and everyone understands that.

There are also many credit card companies that offer very generous cash-back programs, such as Discover. Using their 5% cash back program, customers can earn rewards on everyday purchases, such as gasoline, groceries and restaurant bills, just to name a few.

Chase’s Freedom card also offers good cash rewards, as it boasts a 0% introductory rate, as well as a $100 cash reward if you charge at least $799 on your credit card in the first three months.

Considering that the average family spends about$6,000 a year on credit cards and it’s clear that rewards programs can certainly pay off for many credit card customers.

Teaching your Teen about Responsible Credit Card Use

Introduction

An uneducated teen with a credit card is a recipe for disaster. It is therefore up to you, as the parent, to educate your teenage spender about the advantages and disadvantages of credit cards so that they have the knowledge necessary to make smart financial choices.

A credit card can be a powerful financial tool and can help your young adult establish credit so that they can enjoy the benefits that come with a great credit score. However, it can also prove to be incredibly detrimental and can affect their financial decisions for years to come.

It is therefore never too early to begin talking with your teen about credit card and finances in general. Your instruction and guidance will allow them to make better choices when it comes time to establish their own credit.

Here’s what you should let you teen know about credit cards:

1. Think before you buy – Many people find themselves in deep financial trouble, merely because they failed to think before they purchased. Credit cards can enhance debt, mainly because many people are more likely to spend on them than they would if they were spending cash. Let your teen know that credit card purchases must be well thought out ahead of time; otherwise, their credit card decisions could come back to haunt them if they can’t afford to pay them back.
2. Your mistakes now can affect your life for years to come – Don’t just assume that because you’re young that your credit decisions don’t matter; nothing could be further from the truth! Your spending decisions can haunt you for years to come if you spend wildly on credit cards. Renting an apartment, buying car or purchasing your first home can all be sidelined if your credit suffered as a result of poor credit management.
3. Always make your payments on time. Never assume that credit card payments are any less important than other financial obligations – You should treat your credit card payment jus t like you would any other type of debt because it is just as important as other debts in the eyes of the credit card companies and the credit reporting agencies.

Couples and Credit: What to Discuss

Credit Card Debt

For those who are married, getting married or involved in a serious and committed relationship, finances are an important part of your life together than should be considered and openly discussed. This includes credit. Few couples keep their finances separate, therefore, it is vital to be in the know and be in agreement on every aspect of money, debt and credit. This helps to avoid conflicts and confusion that could lead to a disruption or destruction of the relationship. Many break-ups occur over money. This is unfortunate and can often be avoided with open communication. Here are some important things that couples must discuss when it comes to credit.

Joint Accounts or Individual

While few couples maintain separate accounts, some do, for various reasons. It is important for those in long-term relationships to weigh the pros and cons of their individual situation to decide whether or not to combine accounts or keep them separate. Couples need to consider the ramifications of each decision and must have complete trust in each other for either situation to truly work.

How Often to Check Credit Scores and Activity

This one is pretty straightforward. For the most part, people will opt for checking on things annually. However, if there is suspicious activity or large purchases have been made, it might be a good idea to take a look more often, especially for those looking to build up their credit rating.

How Much Debt is Acceptable

Debt is an unavoidable part of life. However, couples need to discuss and set a limit on the amount of debt they are willing to carry at any given time. This could make the difference between financial stability and financial disaster. This should be based on income, expenses and ability to pay and should also take changes in income into consideration.

Then When, What and Why of Credit Card Usage

Couples should discuss and be in agreement on the specifics of using their credit card or cards. This plan should be made, with trust in mind, and both parties should adhere to it. Surprise debt can really hurt a relationship, and if harmony is what you’re going for, then a credit card usage agreement is vital.

Couples also need to discuss the opening of new credit lines prior to ever doing so, determining what is right for them and their situation. No spouse should open a new line of credit without consulting the other spouse, as the financial situation affects both of you, as well as your children. If one spouse winds up in credit trouble, it can affect the other spouse, thanks to community debt.

You will need to decide which of you will manage which accounts and create a plan of action for financial and credit disasters. If you follow these simple steps and have these conversations, your relationship with each other and your money could remain much tighter than without having discussed these things.

Credit Card Mistakes – What to Avoid to Save Your Credit Score

Credit Score

Credit cards have become a way of life for many people all over the world; especially here in the United States. A credit card can be a very beneficial financial asset in many ways, so long as the card holder is careful and responsible. However, many people find themselves missing things or making mistakes they did not intend to make. When it comes to credit cards, these seemingly small mistakes can cost you your card, your rate, your credit limit and even your credit score. If you want to avoid such hassles, watch out for some of the following common mistakes.

Due Dates

Make sure you know when that bill is due; not only the date, but check for time of day, as some companies charge penalties if the payment comes in after a certain time. This will help you to get that bill paid on time. This should not be very hard for most, especially now that the new credit card laws will soon be in effect and your bill will be required to be due on the same day every month.

For holders of multiple cards, this can get tricky. Use a calendar to track due dates, set up automatic pay and e-mail reminders, or consider calling your numerous companies and trying to get your due dates in sync based on what you can afford.

Watch Paying Minimum Balances

Admittedly, it is nice to have the option to pay the minimum balance on your card when money is tight. However, doing this often does not help you out. You are incurring more and more interest on carried balances. You wind up paying a lot more in the long run. To protect yourself and your credit, it is best if you can keep your balance down and pay the balance due  in full each and every month. If you are having a hard time, try to at least pay more than the minimum balance and work as fast as you can to pay off the rest. Remember, if you don’t carry a balance, you don’t carry any interest, saving you lots of money and headaches.

Keep Your Debt Under Control

Watch your credit card spending. Do not pull your card out for every purchase. If financial troubles hit, curb or eliminate your spending until things are back on track. If the debt is mounting, do not ignore it. Take control, stop spending, pay down your balances and cancel the card or cards if you have to. Save yourself from debt. You don’t have to sign your soul over to the credit card companies!

This does not apply to credit cards alone. Want to save your credit score and your good rates? Watch all of your debts. Those credit card companies can and will monitor customer credit reports. Any slow-pays or no-pays will send up the red flag, whether or not the credit card company has any real reason to worry. You will then be tagged as a high-risk and might be penalized with lower limits and higher interest. Who wants that?

Learn to budget, pay down your debt, give up those little (and big extras) until you have control. Take care of debt first and foremost and save you credit score from falling into a hole that is near impossible to crawl out if. If this does occur, give credit cards up until you can gain control. Use other methods to rebuild your score once your debt is paid down and think about credit cards later on when you have the means and the knowledge to keep things flowing smoothly.

A Sign of the Times: Credit Users Slowly becoming more Responsible Spenders

News

Many of us have been guilty of it: spending way beyond our means over the last few years. And it’s no wonder; we all were in overdrive, enjoying a booming economy and a healthy housing market. However, all good things had to come to an end, that the economy was no exception.

As a result, many Americans found themselves in record debt; savings depleted, homes foreclosed; and credit cards maxed.

Fiscally Responsible Spending

The other side of this chaos, however, has been a silver lining, of sorts. Fiscally responsible consumers have emerged, giving way to more responsible spending. Late credit card payments have dropped and the personal savings records has jumped 3.6 percent after many months of freefalling.

In addition, it appears that many credit card customers are now making more than the minimum payment on their credit cards and the country’s outstanding credit card debt has fallen nearly $100 billion over the last year.

A Glimmer of Hope

Even though the unemployment rate across the country is still problematic in terms of credit card repayment, there does seem to be more than just a glimmer of hope on the horizon.

Many credit card consumers have learned one important lesson: that we alone are responsible for our credit card debt and that we must make adjustments in our lives to overcome our debt and lead a more financially responsible lifestyle.

Although the credit card legislation has helped many credit card customers, in realty it has been the customers themselves that are simply tired of living in credit card debt. Many people, as such, have learned that credit cards can be a very useful financial tool without becoming a burden or worse, a nightmare.

Many credit card companies have also begun restructuring their businesses, lowering credit card limits and tightening standards on credit card approval. From clearer repayment terms to upfront interest rates and fees, credit cards have jumped on the responsible bandwagon, and there’s sure to be many credit card customers that will benefit as a result.

The Dreaded Late Fee: How to Avoid It

Introduction

You’ve been waiting for your monthly credit card statement. It seems like it is arriving later and later, leaving you little time to get the money in the mail. Because of the sluggish way the mail tends to run, you’re lucky if your payment makes it in the door ahead of the clock. You did your part, yet the following month, your credit card company still slams you with a huge late fee.

You can not help it that they don’t send those billing statements out way ahead of time, or that the credit card company not only wants that payment by a certain date, but has also decided to consider it late is they receive the payment after a certain time of the day. You also can not help how long it takes the postal service to get your money to the company, and you certainly are not responsible for Mother Nature, who can add to the delays. What you can do, is to be prepared and to help yourself. Here are a few tips to help you avoid paying more than you owe, simply because of late fees:

Set Up Automatic Payments

If you know you can have the money in the bank and are comfortable setting up ACH withdrawals, allowing the credit card company to automatically deduct the payment from your bank account will allow you to avoid those annoying late fees. You’ll want to stay on top of things, however, ensuring that the money is there, you don’t wind up overdrawn. Check your balance and statements often around the time of the withdrawal to ensure that everything is going smoothly and that no mistakes have been made that could wind up costing you more.

Pay Online

Most credit card companies give you this option. You’re payment will post much sooner, ridding you of headache and hassle. Simply do a  manual transfer from your bank account. This is different than automatic bill pay, as you control when this occurs and the frequency of it as well.

Be Prepared in Advance

If you still prefer the tried and true method of sending money orders through the mail to make your payments, know you’re balance and due date in advance. You can call the credit card company (many have automated systems for this) to find out this information before you ever receive the bill itself. Prepare a money order for the full balance or the amount you plan to pay. That way, when the bill comes, you can drop it right back in the mail within 24 hours. Even better, if you know the billing address, you could just send it as soon as you know the balance in advance. Hang onto your money order receipts. You will want proof of payment as well as a way to track that money order, just in case.

Balance Transfers

Transferring you balance to a lower interest card might be another way to avoid those late fees, but watch out! This means you’re carrying an additional balance on another credit card where you could encounter late fees if you are not prepared.

What to Do When a Late Fee Appears

If you genuinely know that you mailed your payment ahead of time, or there was some kind of disaster, such as an ice storm or tornado or earthquake, among others, that got in the way and slowed things down, cal the credit card company. Be honest with them and ask them to waive the late fee. Often, they will do just that, so long as the privilege is not abused.

Credit card late fees don’t come cheap. You want to avoid them altogether or try to get out of them if there is a good reason why your payment is late or you do not deserve the added charge. Following these tips should help you to breathe a bit easier when opening your credit card bill.

Are you making the Most out of your Credit Card Rewards Points?

Credit Card Rewards

You’ve amassed loads of credit card rewards points. Now what? Do you know the best way to make the most out of your credit card rewards points? Make no mistake about it: there are lots of great goodies to grab with your credit card rewards points; the hardest part about amassing so many rewards points is that you have to figure out what to do with them!

In 2009 alone, 68 percent of Americans said they participated in some kind of credit card rewards program; that’s an increase of 10 percent over 2008.

With so many people using credit card rewards points there are now many options for spending them. Here are a few tips that will put you on the right track when it comes to your credit card rewards points:

• If you have only considered cash-back reward programs in the past, consider looking at airline, retailer or hotel credit cards, as often their rewards programs often beat out cash-back programs. Many hotel, airline and retailer credit cards offer back up to two percent in gift certificates, compared with about one percent when dealing with cash-back credit cards. In fact, some airline credit card rewards programs offer even better deals!
• If you have several rewards credit cards, check out the deals on all of them, as they may differ from one company to the next. For example, a rental car may cost you fewer points on one card than it does another.
• Don’t assume you have to amass thousands of credit card rewards points in order to cash in. In fact, because there are so many rewards programs out there, many credit card companies are offering rewards with fewer points. In other words, instead of waiting around to get enough points to pay for an airline ticket, indulge in a restaurant gift card and enjoy a night out on the town.
• Don’t assume you have to cash in on prizes using all rewards points. In other words, you can often pay for an airline ticket, for example, using some points and some cash.

Can You Really Save Money for College with Your Credit Card?

Credit Card Rewards

You bet you can save money for college with your credit card. Sure, it is going to take some time to add up, and probably won’t cover your entire education or that of your child, but still, it adds up to additional money you can use toward educational purposes. With the ever-rising cost of a college education, it’s nice to have one more option to help pay the bills.

UPromise

UPromise is a program that allows consumers to sign up to receive points toward money for college education. It can be applied to several different things, including store savings cards and credit cards. When you purchase items with the UPromise logo, you get rewarded.

Bank of America

UPromise and Bank of America have teamed up to bring you the UPromise credit card. With this card, which is linked directly to your UPromise account, you are given the opportunity to earn more and more toward and education. The first use of a card will bring the cardholder a $25.00 bonus. After that, there is added savings and 1% cash back will be deposited into the cardholder’s UPromise account for each purchase. Bank of America also offers bonuses on these cards. For every qualifying grocery store or drugstore purchase made, the cardholder will get an addition 10% in their account. The savings can really add up! There are also gas card and dining card options which will bring you some nice cash back for college and additional savings on fuel and food. With so many participating merchants, these cards are a great choice for those wanting to save up some cash for that expensive but valuable education.

To top it off, UPromise credit cards carry no annual fee and have no cap on the rewards that can be earned. as long as you pay your balance and use your card often but responsibly, the UPromise card can bring you a lot of educational expense benefits as well as tons of savings on everyday grocery purchases, a trip to the drugstore, filling up your tank and good eats! Sounds like a credit card worth having for the parent or student who really needs to save up for college.