Credit Card Quick

How to Keep Yourself Out of Credit Card Trouble

Introduction

Although you may think you have your credit cards under control, the truth is that many consumers make a number of mistakes that can change their credit standing from excellent to “you don’t even want to know.”

If you want to play it safe with your credit cards and protect your strong credit score, it may make sense to adhere to the following rules:

• Slow down when it comes to getting credit cards – The more credit cards you have in your wallet, the more chances you have for making mistakes. The bottom line is that too many credit cards spell trouble for many consumers. One major credit card with a competitive interest rate, along with a credit card for emergency use, are all most people really need to have.
• Say NO to retail credit cards – Retail or store credit cards may seem like a great deal, as they usually offer coupons and special shopping events for cardholders. However, they also offer high interest rates, which can cause balances to spiral out of control in a short amount of time. Unless you can commit to always paying your balance in full, each month, it is best to steer clear of store credit cards.
• Always read the fine print – Before you jump on the next credit card offer that flaunts a low, introductory rate, take the time to thoroughly read and understand the card’s terms and conditions. A low, introductory rate may seem like a great deal; until, of course, the introductory rate has ended and you are faced with a high interest rate and related fees.
• Pay more than the minimum payment – It may be quite simple to just send the minimum payment into your creditor and pocket the rest, but the fact of the matter is that paying just the minimum payment will get you nowhere fast.  If you cannot pay off your credit card balance in full each month, remove the credit card from your wallet and pay as much as you can each month until the card is paid off. It just doesn’t make sense to keep spending and sending only the minimum payment in each month because your monthly finance charges will quickly take over.

Do I Really Need a New Credit Card? Important Questions to Ask Yourself

Introduction

You open to the mailbox to find a fantastic credit card offer staring you in the face. Should you or shouldn’t you?

Before you apply for another credit card, it pays to ask yourself a few questions so you can be sure you are making the right decision:

1. Do I really need another credit card? Are you financially stable? What is your current debt load? Is your credit strong? All of these questions must be answered before you can answer this first question. If your finances are screaming “NO!” when you open a new credit card application, it may be best to pass and concentrate on the credit cards and related debt you already possess.
2. Does this card satisfy my spending habits? Because so many of today’s new cards are of the rewards variety, it is very important to understand what you need in a rewards card. And in order to do this, you need to take a look at your spending habits. From gas rewards to airline points and cash back programs, there is no shortage when it comes to rewards cards, so make sure it fits your lifestyle.
3. What features am I looking for in a credit card? If you merely want a credit card that allows you to rack up rewards points, your answer to this question is pretty cut and dry. However, if other factors are important to you, such as promotional rates and balance transfer fees, you will want to do a bit more investigating to make sure this new credit card has everything you need in terms of features.
4. Is this card all it’s cracked up to be? Sure, promotional offers look fantastic at first glance, but it is through the terms and conditions of the card that you really begin to understand the nuts and bolts of the offer. If you do nothing else, always (and I mean always) take the time to read the card’s terms and conditions before signing on the dotted line. If you don’t understand something, by all means call the credit card company and ask. But never, ever sign up for a card you don’t fully understand.

How to Negotiate your Way to a Lower Rate

Introduction

You negotiated a deal on your new vehicle, you negotiated your television purchase, and you even negotiated the price of your home. But what about your credit card rate?

The best thing about today’s credit card industry is that they are now competing for new customers. In fact, a consumer with a strong credit score has his or her pick when it comes to credit card rates. In other words, don’t go for the first offer that comes your way. You can – and should – negotiate your way to a lower rate.

Make a Phone Call

If you receive a credit card offer that looks enticing, but the rate could be lower, don’t hesitate to call the credit card company and ask them if they can do better. If the customer service representative doesn’t want to entertain a lower rate, ask to talk to his or her supervisor.

When calling the credit card company, simply say, “I really like the features of this new card, but I have also received other credit offers with lower rates. What can you do to beat these offers?” Simply by threatening to take your business elsewhere you can bet a credit card company will make you a better offer.

The U.S. Public Interest Research Group found that, in the last several years, more than half of the customers who requested a lower rate got one. And the average consumer saw a decrease in their APR from 16 to 10.4 percent.

A Strong Credit Score Remains King

It is important to understand, however, that the only way you can expect to negotiate a lower rate is if you have the credit history to back up your request. Credit card companies are more than willing to negotiate rates and snag a great customer, provided the customer has excellent credit and a strong history with the credit card company.

In short, a lower interest rate can save you hundreds of dollars in unnecessary finance charges each year, so you should be negotiating every point in interest so you can be sure you are holding the best card with the best rate.

Is a No-Debt Approach to Credit Cards the Best Approach?

Introduction

America loves it credit cards and, as a result, they have become a problem for millions of Americans. It may seem obvious that the answer to solving the credit card problem is to simply eliminate the use of credit cards. After all, they can’t cause us problems if we don’t use them, right?

Well, unfortunately, the answer is not that simple. For starters, credit card spending is a problem for just a small percentage of the population. If you have difficulty controlling reckless spending then a credit card probably isn’t right for you. However, for the rest of us, credit cards serve an important purpose and, let’s face it: they can provide us with an incredible amount of convenience and financial flexibility. Here’s why:

1. Credit cards make a bulk of our credit report – Credit cards are the easiest way to establish a long credit history. They are often the way to build our credit scores so we can be approved for cars, homes and other large items. If we eliminate credit cards from our lives, our credit scores may take a hit. Responsibly using and paying on a credit card throughout the year is one of the most effective ways to build an impressive credit score.
2. Credit cards provide us with convenience and practicality – Credit cards allow us to spend with a grace period. They allow us to spend now and pay later, making budgeting much easier. They allow us to cover emergency expenses and cover unexpected expenses. In short, a credit card, for many people, is like a financial security blanket.
3. Credit cards have an advantage over cash – Credit cards can do much more than cash. They can help us track our expenses; they can help us budget; they can help us run our business; they can provide us with protection against theft; and they can offer us many features, such as travel insurance and rental insurance. They eliminate the need to use cash when traveling, and they are accepted virtually anywhere. Renting a car, purchasing airline tickets and booking a hotel can be done quickly and easily with a credit card.

Your Guide to Understanding Your Credit Card’s APR

Introduction

You see it, you know it costs you money, but you’re not sure exactly what it is. It’s the APR on your credit card, and it pays to understand the ins and outs of this acronym.

What is an APR?

APR stands for Annual Percentage Rate, or the amount of interest charged by the credit card company for your purchases each year. To figure out how much interest your credit card company would charge you for your purchases is to divide your APR by 365. However, the amount in interest you end up paying if you fail to pay off your balance each month is much more because of the concept of compound interest. If you want to always avoid paying finance charges and not worry about your APR, simply pay off your balances in full, before the due date each month.

What is an introductory APR?

An introductory APR is a special, “teaser” APR designed to attract new credit card customers. You will often find introductory APRs last between 6 and 12 months. After that, the card’s default APR will set in. Beware of introductory APRs because they can give you a false sense of security that you have a card with a great APR. Although a credit card company may offer you a zero percent introductory rate, the default APR may be quite high. Therefore, it is important to pay close attention to the card’s default rate and not just the introductory rate.

Will my credit card’s APR ever change?

Perhaps. However, due to the CARD Act legislation, your credit card company must inform you of the change, in writing, 45 days in advance of the APR change. When applying for a credit card, look for one that has a “fixed” APR, not a “variable” one, as a variable APR will change according to the prime rate.

How important is my card’s APR?

Although most people look just at card’s APR, it is important to also look at other features of the credit card when determining whether the card is right for you. In short, thoroughly read the card’s terms and conditions so you can fully understand all features of the card, including the card’s APR.

Important Tips to Remember When Applying for a Credit Card

Introduction

Applying for a credit card for the first time (or the hundredth time!) is typically a very simple process, but there are a few things to keep in mind to ensure you will get the best offer from the credit card company and to ensure your chances of being approved.

Here is what to remember when applying for a credit card:

• Read the application’s fine print carefully – In other words, don’t jump at the first credit card offer that appears in your mailbox. Instead, carefully read the terms and conditions surrounding the credit card and the credit card offer, and take your time to ensure the credit card for which you are applying best fits your needs and your budget.
• State your actual income – People applying for a credit card often either (a) inflate their income or (b) deflate their income. Both of these actions can affect your chances of being approved or affect your credit card limit. Don’t inflate your income level on a credit card application because it could affect your ability to repay the card. Likewise, do not deflate your income because your application can be denied or your credit limit can be much less than what you need.
• Consider the type of credit card for which you are applying – These days a plain vanilla credit card is often unheard of. Instead, credit cards are often attached with rewards of some kind. With that said, consider your lifestyle and your spending habits when choosing a credit card.
• Think twice before requesting an authorized user card – Although authorized users on your credit card account can be an easy way to track spending and simplify your household finances, handing out authorized user cards to a family member who isn’t financially responsible can create a financial nightmare. Therefore, think twice about handing out an authorized user card when applying for a credit card.
• Pay close attention to introductory offers – If you are accepting a credit card offer that comes with an introductory offer, such as a balance transfer offer, pay close attention to the terms and conditions associated with the card. Although the large print on the credit card offer may seem quite attractive, it is important to read the fine print, as this details a number of things you may have not considered.

Why a Credit Card Can be Your Best Friend When Traveling Outside of the Country

Introduction

A credit card is never as useful, perhaps, as when you travel outside of the country. If you have plans to travel outside of the country for any amount of time, whether for pleasure or business, it pays to have a solid credit card in your back pocket. And here’s why:

• If your credit card is lost or stolen, it can be replaced almost immediately. If your card has been stolen, for example, it is best to first contact the local authorities and then contact your credit card company, who can often replace your card in a very short period of time, thereby allowing you to continue your travels without much interruption. Consider, on the other hand, a stolen credit card, which can take some time for the bank to get that money back into your bank account, thereby leaving you high and dry.
• A credit card can help you receive prompt medical treatment if you become sick or injured. Because foreign countries don’t recognize your U.S. health insurance, you are most often expected to pay in cash for any treatment you receive. If you don’t have access to that much cash (and who does?), a credit card can cover your medical expenses.
• A credit card can handle your foreign exchange rates so you won’t have to. Although most credit cards charge a foreign transaction fee for overseas purchases (although there are many credit cards that have dropped this fee), it is still the best way to go because you won’t dampen your budget by converting your American dollars into foreign currency.
• A credit card can take care of paying the proper amount for every purchase. Although you think your foreign currency knowledge is accurate, the truth of the matter is that many Americans are duped out of their cash while traveling because they are not completely familiar with the currency in the foreign country. A credit card, on the other hand, gets it right every time.
• Your rewards points can go the extra mile when traveling. From airline miles to rental car costs, using your credit card while traveling can mean great rewards points for you.

The Top Three Purchases to Always put on your Credit Card

Introduction

Unbeknownst to many of us, our credit cards do more than just provide us with shopping convenience. In fact, credit cards are quite useful when making certain types of purchases. It always pays to carefully read the terms and conditions of your credit card so you can be sure you are taking full advantage of all the perks being offered by your credit card company.

For example, there are a number of purchases that are actually protected when you charge them:

1. Expensive items, such as computers, appliances and electronics – Any big-ticket item should be charged because, chances are, your credit card company offers extended warranties for these purchases. In short, many credit card companies offer better warranties that the original warranty offered by the manufacturer. In addition, many credit card companies offer price protection, meaning that if you find the same item, either through the same retailer or a different retailer, within 60 days of your purchase, your credit card company will match that price and provide you with a credit for the difference in price.
2. Services – Any type of service you receive – from landscaping to plumbing – should be charged. Any company that takes credit card purchases must adhere to the terms set by the credit card company, meaning that if you have a dispute with the service offered, the burden of proof is actually on the service company to prove that the work was done to your satisfaction.
3. Travel expenses – If you are taking a holiday, it pays to charge your expenses. What many people don’t realize is that most credit cards offer such protections as travel accident insurance, car rental insurance and even lost luggage insurance. So, before you take off on your next trip, contact your credit card company and ask what travel perks are afforded to you. Most credit card companies will provide protection for everything from lost luggage to the theft of your belongings from a hotel room, so don’t leave home without your credit card and without a good understanding of the protections afforded by the credit card company.

How Many Credit Cards do you Need?

Introduction

You may have heard the question: How many credit cards should I have?

Well, the short answer to this question is: It all depends.

Now that we’ve thoroughly confused you, here’s a little better explanation.

The fact of the matter is that what’s good for one person in terms of credit cards may not be best for another person. Typically, however, having more than one credit card in your back pocket may help you in a number of ways:

• You have another card in case one of your cards is rejected – Perhaps you forgot to pay your credit card bill on time, or you hit your credit card limit and you really need the security of another credit card. A second credit card can really come in handy in case of these scenarios. Sure, in a perfect world you would never reach your credit card limit or forget to pay your bill, but having another credit card for the “what ifs” is never a bad idea.
• Your main credit card is lost or stolen – If you have trouble with your main credit card and you are unable to use it because it has been lost or stolen (and your credit card account has been compromised), it is always a good thing to have another credit card to use.
• You need access to a large credit line – Often times, an extra credit card is kept by many consumers who want access to another line of credit in case of a financial emergency.
• You want to increase your available credit for credit score purposes – Part of your credit score is determined by something called your “debt to income ratio.” What this basically means is that about a third of your credit score is based on how much available credit you have at any given time. If you have a couple credit cards, chances are your available credit will increase, along with your credit score.
• You want to have spending options – You may have a couple credit cards that you use for different reasons. You may keep one and use it strictly for business expenses and keep another because you can rack up rewards on certain types of purchases. Because there are so many credit card hybrids out there now, you may have more than one card to take advantage of the many features and rewards being offered.

Not Happy with Your Credit Card’s Interest Rate? Here’s What You Can Do

Introduction

A credit card that may have been a perfect match for you over the years may not seem like such a perfect match when you are informed your credit card interest rate is going to be increased. The truth is that many credit card companies are taking a number of actions to recoup losses they incurred as a result of the credit crisis and CARD Act legislation, including raising interest rates and slashing credit limits.

If you recently received an unsavory letter from your credit card company informing you of an interest rate increase, fear not; there are a few things you can do to combat this change.

• Contact the credit card company and negotiate a lower rate – One of the first things you should do when dealing with a rising interest rate is to simply contact the credit card company and negotiate a lower rate. Don’t forget to remind them that you have been a valued customer for “x” number of years and that you always pay your bill on time. This is the perfect time to play the “good customer” card with your credit card company, as many companies will appreciate a solid customer and accommodate a drop in their interest rate.
• Threaten to cancel your account – If playing the sugar-sweet card doesn’t work, simply threaten to cancel the card if the company doesn’t want to listen to your request. Although this tactic doesn’t always work, it’s always worth it if they aren’t receptive to your other negotiation tactics.
• Look for a competitive balance transfer offer – If you are unable to negotiate a lower interest rate with your credit card company, now may be a good time to begin looking elsewhere. In particular, it may be time to look at the newest balance transfer credit card offers, particularly if you currently have a balance with your credit card. Many credit card companies are offering very attractive balance transfer offers these days, so it pays to consider switching credit cards to one with a good balance transfer offer and a competitive interest rate following the promotional period.