Credit Card Quick

How to know when it’s Time for your First Credit Card

Choosing Credit Card

A credit card is a big financial responsibility.

Make good credit decisions and you can enjoy a strong credit score. Make a bad move or two and your credit score is ruined. But beyond this, you must also be in a good financial situation before applying for a credit card.

If you want to enjoy the many benefits of a credit card, there are a number of things to first consider. In other words, there may be a number of ways to know when it’s time for your first credit card:

• You have a steady job, with at least a few months of employment under your belt.

If you’ve landed a steady job that you enjoy and you feel like your employment there is stable and the hours and salary are predictable it may be time for your first credit card. Applying for a credit card when your employment is on shaky ground is just not a smart move because you could be stuck with a balance you simply can’t cover.

• You have a checking account in good standing.

Most credit card companies will want to see an open checking account for applicants. Open a checking account, keep it in good standing with a positive balance, and you could be ready to apply for your first credit card.

• You are managing your monthly bills, including utilities, rent and student loans.

If you are currently handling a rent payment, utility payments, and even student loan payments each month you are in luck, as these steady payments are what most credit card companies want to see. In other words, your timely payments show a creditor you are capable of handling the responsibility of a credit card.

• You understand the responsibility that comes with a credit card.

Before applying for a credit card, make it a priority to understand the terms and conditions of the card so you can be certain you are making the right financial choice. If there are terms and language you don’t understand, don’t be afraid to contact the credit card company and ask for clarification.

Tips for Applying for a Small Business Credit Card

Choosing Credit Card

Finding a small business credit card is a bit different than finding a personal credit card, as there are a number of unique factors to take into consideration. If you own a small business and are looking for a small business credit card, here are some things to consider:

• Small business features – One of the biggest reasons small businesses choose small business credit cards is because they often include a include a number of features that allow businesses to track their spending each month. If you want to remedy your tax headaches when tax time rolls around, consider getting a small business credit card and use it to purchase all of your business-related expenses so you have a clear record for tax purposes.
• Rewards – From cash back rewards and airline miles to discounts and special perks, many small business credit cards feature rewards. Remember, also, that rewards for small business credit cards build up quickly due to larger and more frequent purchases.
• Credit limit – Most small businesses benefit from small business credit cards because they typically offer higher credit limits than personal credit cards.

Once you have found a small business credit card that fits your business’ needs, there are a few things to consider:

• Terms and conditions – It is vital to thoroughly read the card’s terms and conditions because they often differ greatly from personal credit cards. In short, business credit cards are not covered under the blanket of protection that personal credit cards are afforded through the CARD legislation. Because of this, creditors are likely to impose much stricter terms and conditions on small business credit cards than personal credit cards.
• Interest rate – Small business credit cards are often chosen to help businesses in tighter financial times throughout the year; as such, you may not be able to pay your credit card bill in full every month. It is therefore important to compare interest rates between small business credit cards. It is not uncommon to find very different finance charges between business credit cards, so take your time and compare interest rates.
• Credit limit – A small business credit card is only as good as its credit limit, so make sure the credit limit on your chosen small business credit card will suit your company’s monthly spending.

The Four Most Important Factors to Consider when Comparing Credit Card Offers

Choosing Credit Card

Credit card offers are piling up in your mailbox, and you know you want to research the possibility of getting a new credit card, but you’re not sure how to best compare credit cards.

The fact is that the interest rate of a credit card is just one factor to consider when researching credit cards. Here is what you may want to consider when choosing a new credit card:

1. Interest Rate – OK, of course you will check the interest rate. But what may be just as important as the interest rate is the length and type of interest rate. First, if the card offers a low, promotional rate, make sure to pay close attention to the length of the promotional rate and, perhaps more importantly, the default interest rate once the promotional rate has ended. In addition, make sure the interest rate on the card is fixed – not variable – to save yourself from any surprises down the road.
2. Billing Cycle – A generous billing cycle should be an important consideration when choosing a new credit card. This is because you want to be assured that you will have sufficient time to make payments each month without incurring finance charges on your previous month’s purchases. Although the CARD Act has set limitations regarding billing cycles, it is still quite common to see small variations regarding billing cycles and grace periods, so don’t overlook this feature.
3. Rewards – If you want a credit card with rewards, you must do your homework and read the fine print! Rewards credit cards are NOT created equal, and there are a huge number of differences between cards. It is therefore important to read and understand all of the features associated with a rewards card before accepting the terms and conditions of the card.
4. Annual fee – If you want a no-frills, competitive-rate credit card, you will likely not need to pay an annual fee for using the card. However, you may notice that many of today’s rewards cards come with annual fees. Don’t automatically toss any credit card offers that charge an annual fee, though, as the rewards aspect of the card may be well worth the small, annual fee. In other words, consider all features of a card before discounting a card because of an annual fee.

What you Need to Know about Small Business Credit Cards

Choosing Credit Card

If you are a small business owner you’ve no doubt witnessed the flood of business credit card offers as of late. Many banks, in an attempt to lure back their small business owners, are now offering small business credit cards with attractive promotions and rewards programs.

Many small business owners, however, are unsure whether to apply for a small business credit card, and for good reason; these credit cards are not protected under the CARD Act. So, is it a financially smart idea to apply for a small business credit card if you are a small business owner?

Here are a few factors to take into consideration:

• Small business owners who use small business credit cards are not protected by the CARD Act. In short, all those “transparency” regulations afforded to consumers are not afforded to small business owners, so those fantastic offers and promotions may not all they’re cracked up to be.  A good example of this is creditors can issue rate increases at any time and for any reason when it comes to business credit cards. For example, if you fail to make a payment on an unrelated loan, your creditor can raise the interest rate on your business credit card.
• Small business credit cards are not superior when it comes to taxes. In other words, if you charge a business expense to a personal credit card you can still claim it as a business expense on your taxes. A business deduction is a business deduction, regardless of how you pay for it.
• Business credit cards do not protect business owners when their employees overspend. Remember that you are responsible for the expenses charged by your employees if you provide them with their own business credit card. In other words, you can’t ask the credit card to reverse the charges if your employee overspends or charges unapproved purchases. It is ultimately your responsibility to cover any purchases charged by your employees.
• Business credit cards are always personally guaranteed by the business owner. In other words, if your business fails or if you fall behind on your credit card payments on your business credit card, your personal credit history will suffer. The notion that business credit cards do not affect business owners on a personal level is a common misconception.

Should you Pay a Balance Transfer Fee?

Choosing Credit Card

There are a number of features now being offered by credit card companies, and competitive, balance transfer offers are one of them.

If you want to pay off your higher interest rate debt, you may be tempted to go after a balance transfer offer to erase this debt.  And, although there are many benefits to taking advantage of a zero-percent balance transfer offer, it is important to understand that there are fees associated with this credit card feature.

Should you or shouldn’t you?

It may seem like it doesn’t make sense to move higher-rate balances to a zero-percent balance transfer credit card if you have to pay a high transfer balance fee to do so.

A balance transfer fee is the amount charged by the credit card company for the luxury of transferring your balances onto the new card. This fee may be fixed, or it may be a percentage of the transferred balance. Most balance transfer credit cards charge three to five percent of the transferred balance. If you have a $10,000 credit card balance, for example, and the balance transfer fee is five percent, you will be charged a $500 fee.

Although a balance transfer fee is expensive, it is important to figure out what you would pay in interest charges if you didn’t transfer the balance, and then compare it with the balance transfer fee. If you come out ahead by transferring the balance, it only makes sense to make the switch to a zero-percent balance transfer credit card.

Considering all of the Advantages

There may be more advantages to transferring your balances to a balance transfer credit card than just monetary ones. For example, many consumers find that transferring all of their debt onto one credit card makes it easier to maintain their debt and pay it down. If you’re struggling to keep track of all your debt and pay on it every month, consider the practicality of transferring all of your debt onto one credit card.

Shop Around

Just like any other credit card feature, balance transfer offers and their fees vary widely from one credit card company to the next, so it is important to shop around and compare a variety of zero-percent balance transfer offers so you can decide which one is best for you.

When to Choose a Credit Card over a Debit Card

Choosing Credit Card

Debit cards are ideal, as they allow individuals to stay within their budget and spend only what they have. However, there are time when using a debit card is not a good option. Credit cards boast a number of advantages over debit cards, although they can be used in generally the same way. In other words, don’t let the debit cards fool you: they simply can’t offer the protections afforded by credit cards.

Here are times when it is best to choose a credit card over a debit card:

• Shopping online – Because debit cards are linked directly to your bank account, you may leave your finances vulnerable should an identity thief steal your card’s numbers. Although there are some protections afforded to debit card customers in the case of identity theft, the protections afforded to credit card customers are more comprehensive. In addition, although you may be protected from fraudulent use of your debit card, having your bank account drained may cause additional problems, like bouncing checks or not having enough money to cover living expenses.
• Expensive purchases – Any expensive purchase is best bought using a credit card, as it will likely offer you dispute rights if something goes awry with the product or service. Also, many credit cards feature extended warranties, thereby eliminating the need to purchase them from the retailer.
• Deposits – If you must use a credit card to hold anything from a hotel stay to a car, the company will likely take a security deposit against your debit card. In other words, if you reserve a hotel they may charge you a $200 security deposit that is returned after your stay; however, if you use a debit card to reserve the hotel room, you won’t have access to that $200 until your stay had ended.
• Restaurants – Using a debit card at a restaurant may set you up for loss. Anytime someone needs to walk away from you, out of your sight, to make a charge purchase, there is a chance of theft. With this in mind, it is best to use a credit card when you dine out, thereby better protecting yourself from the ill effects of identity theft.

HELOC or Credit Card: Which is Right for you?

Choosing Credit Card

If you need access to quick cash, where do you turn?

For most people, access to cash means either a home equity line of credit (HELOC) or a credit card. The question is: which one is right for you?

Both HELOCs and credit cards provide convenient sources of financing. Both a HELOC and a credit card are an open-ended line of credit, and both can be ideal for large purchases.

Here are the pros and cons of both HELOCs and credit cards:

PROS – Home Equity Line of Credit (HELOC)

• A home equity line of credit is open, meaning that the cash is available when you need it, regardless of the expense.
• A home equity line of credit, because it is tied to your home, usually comes with a low interest rate.
• Depending on the amount of equity you have in your home, a HELOC can provide you with access to a significant amount of cash for everything from a home remodel to your child’s college education. Plus, if you use your HELOC to pay for home improvement or home remodel projects, you are increasing your home’s value, which therefore further raises your home’s equity.
• The interest you pay on a HELOC is usually tax deductible.

CONS – Home Equity Line of Credit (HELOC)

• Because a HELOC is tied to your home, your inability to pay on the loan could result in the foreclosure of your home.
• Some HELOCs have specific time frames in which you can access your money, which can leave you in a financially vulnerable position if you need quick cash.

PROS – Credit Cards

• You do not need to own a home to enjoy the benefits of a credit card.
• A credit card is easier to apply for than a HELOC.
• You do not risk the loss of your home if you fail to pay on a credit card.
• Depending on your credit score, you can achieve a low interest rate.

CONS – Credit Cards

• The interest on credit cards is not tax deductible.
• The credit limit on a credit card is likely lower than a HELOC.

Your Guide to Finding a Good Credit Card Match

Choosing Credit Card

The credit card industry has done a good job of providing a number of credit cards to consumers, from secured credit cards to those with low, introductory rates and rewards programs. It is important to realize, though, that not every credit card will be a good match for you and your financial situation.

The two, main factors to consider when shopping for a credit card include: identifying and understanding your personal spending habits and your financial history, as they will likely determine which type of credit card is right for you.

Here are our recommendations for choosing a credit card that’s a good match for you:

• Low credit score – If you have a credit score below 650, you will likely want to take the time to build up your credit score before applying for a major credit card. If you apply for a major credit card with a low credit score you will either not be approved or you will end up with a fairly high interest rate. With that said, the best bet for improving your credit score is to apply for a department store or gas credit card. Apply at a retailer you frequent as to take advantage of coupons and special deals for cardholders, but remember to pay it off each month as to establish a strong credit history and to avoid paying interest.
• Really low credit score – If your credit score is in the tank because of major credit indiscretions in the past, it is best to start with a secured credit card. A secured credit card is essentially a credit card that requires a down payment for collateral. After making regular payments for a set period of time (usually a year), you can likely then transfer to an unsecured credit card.
• Paying off debt – If you want to consolidate debt and pay it off, you are likely best suited for a credit card that offers a zero-percent introductory offer and an attractive balance transfer option.
• Frequent spender – If you use your credit card frequently throughout month, but also pay off the balance each month, you will likely benefit from the perks of a rewards credit card. Take advantage of the rewards offered by the credit card, but make sure to pay off your balance each month as to not negate any rewards benefits.

Where to Look for the Best Credit Card Offers

Choosing Credit Card

It seems like everyone’s telling you about the great credit card offers available now, as creditors are loosening up the reins a bit and are, once again, offering attractive credit card deals for individuals with good credit. If you want to snag one of these great new credit card offers (and who doesn’t?), it pays to know where to look:

• Your current credit card company – Many times, if you have proven yourself to be a good credit card customer, you can negotiate better terms on your current credit card with your credit card company. In fact, most of the time it is best to be able to negotiate more attractive terms for an existing credit card account, as it saves you the time and hassle of opening up a new account. Check the current interest rates on some of the newer card offers (you can easily find this information online),  and then go to your credit card company and either ask for a lower rate or negotiate other terms, such as a balance transfer offer.
• Your bank – Many times, your local bank may be able to offer you a great deal on a new credit card. In fact, you may be more likely to snag a good offer because you are a current bank account holder. If you have a solid history with your bank and you want to take advantage of some of the low rates and competitive terms of today, give your bank a call.
• Your mailbox – Credit card companies are sending out more credit card offers than they have in almost two years. Just a quick peek inside your mailbox and it’s easy to see that credit card companies are becoming more aggressive in their quest for new credit card customers.  A great way to get in on some of the great terms and conditions of today’s credit card is to simply set aside the credit card offers you receive on any given week and look through them to determine which card best suits your financial situation and budget.

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.