Credit Card Quick

Do Retail Cards have a Place in your Wallet?

Choosing Credit Card

We often hear the negative aspects of retail credit cards, as this type of credit card often comes with much higher interest rates and fees than typical, major credit cards. This often leaves many consumers wondering whether there is ever a good time to use a store credit card. Simply put, store credit cards may be practical for some consumers and a recipe for disaster for others.

When to use a store credit card:

• When you pay it off each month – If you enjoy using retail credit cards and make a point of paying them off each month when your bill arrives, then you likely will not need to worry about high interest rates and fees that come along with them.
• When it comes with special discounts and coupons – We like retail credit cards that come with special discounts, coupons and shopping days for credit card customers. Before applying for a retail credit card, ask a store clerk about the perks of carrying this card. If you shop frequently at this particular store and are afforded special discounts by being a card carrier, it may be worth your while to apply for it.

When NOT to use a store credit card:

• When you shop more because you have the card in your wallet – Many studies have shown that consumers will spend more if they have a store credit card in their wallet. In other words, store credit cards often create a feeling of having more money and, in turn, these consumers spend more. If you find yourself doing just that, a store credit card is probably not right for you.
• When you are unable to pay off the balance each month – If you know there is very little chance of you paying off your retail credit card each month, it is probably best not to use one, as the interest paid on these purchases will mount very quickly.
• When there is no discount or benefit from using the card – If the store does not offer special discounts or benefits for using the card, it is probably best to ditch it in favor of a major credit card with a low interest rate.

How do Credit Cards Fit into your Financial Future?

Introduction

Contrary to what some financial advisors and television personalities may tell you, credit cards are not your enemy. Well, at least they shouldn’t be.

The key to a strong financial future is not eliminating credit cards, but instead using them to strengthen your credit and your overall financial health. Here’s how to make friendly with your credit cards so you can use them to your advantage to achieve a positive financial future:

• Think of your credit cards as a lifeline in case of an emergency.

Having access to quick cash in the event of an emergency is vital. Consider what you would do if your car broke down and you needed it repaired to get back and forth to work, or if your furnace broke during a cold snap. There are certain, unexpected expenses that need to be immediately handled, and credit cards are often the best solution to handling these emergency expenses. Don’t cut off your nose to spite your face and ditch your credit cards. Having a credit card or two in your back pocket to handle emergency expenses may prove to be extremely beneficial.

• Think of your credit cards as the path to a solid credit score.

Credit card usage is one of the easiest ways to build a strong credit history and, in turn, a strong credit score. Credit card usage, over time, shows the major credit reporting agencies that you are able to handle lines of credit and monthly payments. If you want to build a strong credit score so you can enjoy low interest rates on everything from car loans to mortgages, begin using a credit card in a responsible fashion.

• Consider credit cards if you need to consolidate higher interest rate debt.

Using a credit card, with a competitive interest rate, to pay off other higher interest rate debt, such as car loans and personal loans, for example, may prove to be a smart financial decision, as it will enable you pay off the debt sooner and pay less finance charges on that debt. In other words, you may be able to enjoy more money in your pocket by simply finding a great, low-interest-rate credit card.

Congress Seeks to Limit Credit Card Interest Rates

News

If Congress has its way, there may be yet another change to the credit card industry.

In short, Congress has introduced a bill that will limit the amount of interest a creditor can charge you. Called the Interest Rate Reduction Act, this legislation will limit the interest rate on credit cards to just 15 percent, thereby making it, perhaps, the biggest change in the credit card industry to date.

Authored by U.S. Representative Maurice Hinchey, the Interest Rate Reduction Act is a way to help American better make ends meet in this challenging economy. Hinchey states that “credit card companies are finding new ways to squeeze the middle class despite significant reforms in the last Congress.”

In other words, it is clear that many members of Congress are dismayed that creditors have found a number of loopholes in the credit card legislation that was enacted last year. The only exception to the 15-percent rule, under this new legislation, is the ability for a creditor to raise interest rates if they would be “in dire financial straits otherwise.”

Although this new legislation has only been introduced, it is a distinct possibility that Congress can get it passed. In the meantime, however, it is important to pay close attention to your credit card’s interest rate so you can be sure you are getting the lowest, most competitive rate. Here’s what you need to do:

• Pay attention to all literature sent by your credit card company. Because the CARD Act requires credit card companies to inform consumers, in advance, of changes to their credit card accounts, you may find that your creditor is sending quite a bit of literature to you, either by itself or with your credit card statement. Although it may seem quite inconvenient to read this literature, it may detail changes in your credit card’s interest rate. In other words, take the time to read any and all information you receive from your creditor.
• Beware of introductory and balance transfer rates on your credit card accounts. Although introductory rates can be quite attractive, the creditor may raise your rates significantly once this special period has ended. In short, pay close attention to the default interest rate on a credit card if you are accepting an introductory rate.

Negotiating your Way to Lower Credit Card Rates

Introduction

According to information obtained by IndexCreditCard, credit card rates are nearing all-time highs. The near-constant increase in interest rates is likely coming off the heels of the CARD Act that was enacted last year. This legislation was passed in an attempt to force creditors to become more transparent regarding their cards’ terms and conditions, and to also limit them from charging consumers outrageous – and often unfair – fees.

As a result, credit card companies have been looking for ways to recoup their losses, and it looks like they are coming in the form of higher interest rates.

If you find that your credit card interest rate has become too high, you may wonder if there’s anything you can do about it.

In short, if you have a strong credit score to back you up, there is a good chance you can negotiate a lower rate with your credit card company. Here’s how:

• With your credit card statement in front of you, contact the credit card company and ask for a rate reduction. Make sure to point out that you have always consistently paid your bills on time and you have proven yourself to be a loyal customer. If you feel as if you’re getting nowhere with the customer service representative, ask to speak to a supervisor and plead your case to him or her.
• Often times, threatening to close your account is enough to get your rate lowered, so try this tactic if you are prepared to do just that if they won’t play ball with you regarding your credit card interest rate.
• Many credit card companies are, once again, opening up credit to good customers, so consider checking out all of the credit card balance transfer offers you are likely receiving in the mail and transfer all of your higher-rate balances onto a new, lower-rate card. The good news is that, in addition to creditors extending credit once again, they are also luring good credit card consumers in with great balance transfer deals, so consider the terms and conditions of a creditor’s balance transfer offer when deciding which card is right for you.

Hot New Cash Back Credit Card Offers for 2011

Choosing Credit Card

The New Year has brought about a new batch of great cash back credit card offers. Here is our list of the best credit card offers for the first of 2011:

• Chase Freedom Visa

This newest Chase offer comes with a zero-percent introductory APR and $100 bonus cash back. Some of the features of the Chase Freedom Visa include five percent cash back on a number of rotating categories, including department stores, gas, groceries, movies, home improvement and travel.  In addition to these rotating, quarterly categories, the Chase Freedom Visa offers once percent cash back on everything else. The Freedom card sends customers a $100 check after spending just $500 on the card in the first, three months. The zero percent introductory rate is good on balance transfers for 12 months and purchases for six months.

• Discover More Card

The Discover More Card is another great cash back credit card that gives customers five percent cash back on quarterly, rotating categories, including home improvement, travel, gas, restaurants and movies, just to name a few. The Discover More Card also offers one percent cash back on all other purchases once your total annual purchases exceed $3,000. Like the Chase Freedom card, the Discover More card offers customers a $100 check after they spend $500 during the first three months. The zero percent introductory rate is good for six months on purchases and 12 months on balance transfers.

• American Express Blue Cash

The American Express Blue Cash credit card is a great cash back credit card for individuals who spend a lot. It offers customers five percent cash back on purchases in grocery stores, gas stations and drug stores and 1.25 percent cash back on all other purchases once you have spent $6,500. Before customers meet the $6,500 threshold, they will receive one percent cash back on grocery stores, gas stations and drug stores and a half percent on all other purchases.  In addition, customers receive a $25 statement credit if they spend $500 during the first 60 days of opening the account. This card also features a zero percent introductory rate on purchases for 12 months.

Understanding your Responsibility when it comes to Credit Cards

Introduction

The credit card reform enacted by Congress last year did a lot for credit card consumers. From requiring credit card companies to alert consumers to changes in their card’s terms and conditions to putting an end to outrageous fees and less-than-transparent credit card practices, the new legislation has allowed consumers to use their credit cards without fear of confusing terms and skyrocketing fees.

However, it is important to realize that, even though the government has changed some of the ways in which credit card companies operate, it does not dismiss your role in becoming — and remaining — an educated and aware credit card consumer. In other words, it does not negate your responsibility when it comes to handling your own finances.

Here’s what you need to be doing:

• Carefully checking your credit card statement each month – Instead of ripping open your credit card bill and paying the amount in the “due” box, take the time to read each transaction and compare it with your receipts. It is possible that errors and discrepancies exist on your credit card – errors and discrepancies that you may be paying for if you don’t take the time to review your statement.
• Reading all literature sent by your credit card company – Because the new legislation requires credit card companies to be more forthcoming when it comes to changes in your credit card’s terms and conditions, you may begin receiving letters and notices from your credit card company. Although it may be a bit annoying to take the time to read this information, it is important because it may include important changes to your credit card that you can choose to accept or reject. If you don’t respond to the correspondence, you may be forfeiting your right to reject the changes to your card.
• Taking advantage of the new statement features – The new legislation requires that credit card companies show consumers the result of paying just the minimum payment on their credit cards. Because of this, you should find a chart on your statement detailing the interest you will pay, and the amount of time it will take, to pay off your credit card paying just the minimum balance. Often times, it is this information that serves as a prompt to begin paying more on our credit cards each month.

Important Steps to Take when Closing a Credit Card Account

Introduction

If you want to clean your financial house and close a credit card, there are a number of steps you should take to make sure the transition is a smooth one.

Here is our list of steps you should take when closing a credit card account:

1. Make sure you have negotiated with the credit card company before closing the account. Often times, consumers close their credit card accounts out of sheer aggravation over high interest rates or unfair terms and conditions. But don’t be so quick to close the account; many credit card companies will negotiate better terms if you threaten to close the account. If they don’t want to play ball with you regarding better terms, then you can close the account and move on.
2. If you have a balance, pay it off first. You can’t close the card without first paying off the balance, so consider either transferring the balance onto another credit card or simply paying it off upfront.
3. If you have outstanding rewards on the credit card, collect them before closing the account. In addition, consider keeping the card open if you are close to receiving certain rewards. Once you have achieved the points or dollars desired, you can then redeem the rewards and close the account.
4. If you have automatic credit card payments through your bank, remember to stop them when closing the account. The last thing you need to do is pay on a credit card account that is no longer active! Although you would receive a refund from the credit card company, it would be a pain to do so.
5. If you are transferring a balance onto another card, make sure your balance is $0 before you stop paying on the card. Often times, consumers will transfer balances and assume they no longer have a payment, but sometimes finance charges appear after the balance has been transferred. In addition, before you stop making payments, make sure the balance transfer has been completed; otherwise, you could be inadvertently skipping a payment.

Why now may be the Best Time to Look at a New Credit Card

Choosing Credit Card

If you’ve worked hard to maintain a positive credit score and you haven’t taken a look lately at your current credit cards, now may be a great time to understand what you have and what you could have if you take advantage of one of the many new credit card offers.

Consumers with good credit scores are being wooed more now than they have in a few years because creditors are finally loosening their grips on credit and are, once again, offering credit. Because of this, you probably are receiving a plethora of new credit card offers — most of which are offering very attractive rates and promotions.

If you want to take advantage of one of the new credit card offers, here’s what to do:

• Examine your current credit card interest rates, terms and conditions so you have something to compare when you begin looking at new credit card offers. If you have a particular credit card you really enjoy using, you may want to contact the credit card company and negotiate a lower rate or different terms. It is important to keep in mind that it is always best to negotiate better terms with your current credit cards than to open up new accounts.
• If you get nowhere with your current credit card companies, or if the new credit card offers are just too good to pass up, consider paying off any balances on your current credit cards first. It is always best to avoid carrying balances on multiple credit cards because it could put you in a precarious situation if you forget to pay on one of your bills or if you become more spend-happy because you have access to so much credit.
• Amass all of your current credit card offers and compare them, side by side. It is important to not only look at the card’s interest rate, but other factors, as well, such as promotional rates if you are transferring a balance, and the card’s general terms and conditions.
• If you are looking into a rewards credit card, carefully review the fine print, as there is often much more to rewards credit cards than meets the eye.

The Top Five Reasons why you Should Pay off your Credit Card Debt this Year

Credit Card Debt

If you want to make a fresh financial start in 2011, perhaps the best place to start is with your credit card debt. Simply put, there is no good reason to carry around mounds of credit card debt. We have all found ourselves, at one time or another, in a situation where we’ve spent more than we had anticipated; however, it is important to look ahead and not worry about bad spending habits of the past.

There are a number of great reasons why you shouldn’t be paying on credit card debt every month. Here is our list of the top five reasons why you should make 2011 the year you say good-bye to credit card debt:

1. You have better things to do with your money every month – Writing a check, each and every month, to your credit card company is not an enjoyable task. This is because there are probably countless other things you could spend that money on each month. From setting aside grocery money to handling your ever-increasing monthly gas bill, there are much better ways to allocate your monthly income.
2. You can start getting serious about saving for retirement – If you’re like many Americans, you want to save more for retirement, but you can’t seem to find the money in your budget. Now, imagine how satisfied you would feel if you were able to take the money you spend on credit card debt every month and sock it away into your 401K or IRA. Sounds exciting, doesn’t it?
3. You can concentrate on paying off other debt – From student loans to medical bills and car notes, Americans often have other installment-type debt that must be paid on a monthly basis. If you didn’t have to pay on credit card debt every month, you could instead focus on paying off your other debts so you can really lead a debt-free lifestyle.
4. You can (finally) beef up your savings – Instead of writing a check to the credit card company, write a check to yourself, and watch your personal savings grow.
5. Because paying finance charges is like throwing away your hard-earned money – You work too hard for your money, so don’t throw it away by paying unnecessary finance charges to your credit card company each month.

Which Type of Credit Card Customer are you?

Choosing Credit Card

Not all credit cards are created equal, and not all features benefit every customer. In other words, what might make one credit card ideal for one person may make it a poor choice for another person.  It therefore pays to consider what type of credit card customer you are before embarking on a search for a new credit card.

Here are a few questions you should be asking yourself before applying for a new credit card:

• Will I use my credit card frequently throughout the month?

For customers who use their credit cards frequently throughout the month, either for business or personal expenses, it probably pays to use a rewards credit card. It is quite easy to begin racking up rewards points if you use the card frequently, even for smaller purchases, such as groceries and gas. The type of rewards customer you are, however, will depend on what you need or want. Remember: rewards credit cards can range from gas perks to airline perks, so take the time to examine which type of rewards credit card is best for you.

• Will I pay my balance off each month?

If you spend a lot, but you don’t pay off your balance each month when your bill arrives, it probably makes more sense to stick to a credit card with a low, competitive interest rate instead of rewards. This is because, although you may be earning rewards, they will be likely offset by the finance charges you will be paying on the card each month. Don’t forget, too, that some rewards cards come with higher interest rates to account for the card’s rewards, so if you are not paying off the balance of your credit card each month, you could be paying far more interest than you should.

• Will I use additional credit card features?

If you want to take advantage of some of the features found with new credit cards, such as online payments and fraud alerts, then you need to pay close attention to the features afforded with each credit card. In other words, take the time to read about all of the features that come along with a particular credit card.