Credit Card Quick

What you need to Know when using a Credit Card for Large Purchases

Introduction

If you need to make a large purchase, but you want to avoid taking out a personal loan or other line of credit, you may have considered using your credit card to make the large purchase. Credit cards can be quite convenient for making large purchases, and they can potentially save you from high interest rates commonly associated with retail credit and personal loans.

However, like any other type of financial tool, you should make sure that this is the best option for you. Here’s what to remember before making a large purchase on a credit card:

• Consider your credit card’s interest rate and do the math to see if it worth charging a large purchase. In addition, don’t forget to consider what your minimum payment will be once you have charged the large purchase.
• Some credit cards offer special introductory rates, but pay close attention to the expiration of the introductory rate, as this could affect the amount you pay in finance charges if you are unable to pay off the purchase before the expiration of the introductory rate.
• Consider using convenience checks that often come in the mail from your credit card company. Convenience checks often come with lower interest rates, and often these interest rates are fixed for the purchase. However, consider the fee charged by the credit card company for the convenience of using these convenience checks; often times, these fees can be quite high.
• Before making a large purchase, consider whether it will put your credit limit at its maximum.  In other words, always avoid carrying more than 30 percent of your credit limit on your credit card, as this can lower your credit score.
• If you plan on making a particularly large purchase, you may want to call your credit card company ahead of time to alert them to this charge. Many credit card companies will decline a large purchase if they suspect fraudulent activity. It is therefore wise to avoid the hassle and embarrassment of a credit card denial by calling ahead and alerting them of the impending purchase.

How to Secure a Credit Card when you have no Credit

Credit Repair

You’ve finally made your way through college and are a full-fledged graduate. Now that you have a job under your belt you’re ready to take on the world; but are you?

Making your way out into the world beyond college takes hard work, determination, a good work ethic, and good credit. Although it sounds a bit weird that credit should play such a big role when it comes to independent living, the fact of the matter is that it is quite important for everything from renting an apartment to purchasing a car.

With the recent credit card legislation changes enacted by the CARD Act, many college students are no longer eligible to receive a student credit card unless their parents co-sign for it. Although the new legislation was brought about as a way to protect young adults from getting into debt even before they graduate from college, it has also made it incredibly difficult for them to establish credit during their college years.

The fact of the matter is that establishing credit is very important when heading out into the real world, and having no credit can make the process of moving on from college quite difficult. With that said, if you desire to establish a credit history, there are some things that can get you started:

• An active bank account – Make sure to keep your checking and savings accounts in good standing, and make sure to not overdraw them. Your bank accounts will likely be the first factor that will go into your official credit score, so make sure to keep them in good standing, as this clearly shows creditors that you are responsible with your money.
• Once you have maintained an active bank account at one, particular bank, go to the bank and open a credit card account. The company through with you have your bank account is the most obvious option when applying for your first credit card, as you have a history with them that they can draw from when determining whether you are eligible to receive a credit card.
• If you are unable to secure a major credit card right away, consider applying for a retail credit card. Although retail cards typically come with higher APRs than major credit cards, they are often an easy way to begin establishing a positive credit history. Just be sure to pay off your bill each month as to avoid costly finance charges.

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.

Are Retailer Credit Card Rewards Worthy of Your Interest?

Credit Card Rewards

You know the holidays are upon us when retailers begin pulling out all the stops with their credit cards. Great deals for opening a retail credit card; great deals for using your retail credit card; and special bonuses, coupons and shopping events for being a cardholder are just a few of the things that retailers use to entice us into using a retail credit card.

However, are retail credit cards all they are really cracked up to be?

You may find it all a bit too tempting when you go to make a purchase and a store associate tells you that you can open a store credit card within minutes and save as much as 20 percent on your purchase. This is usually the time when you must make a decision regarding the advantages and disadvantages of owning a retail credit card.

Weighing a Discount vs. a High Interest Rate

If you know, unequivocally, that you will pay off your credit card purchase when your first statement comes then it may be worth your while to open a retail credit card account. However, if you even have the smallest inkling that you may not be able to pay the balance in full then you are probably better off passing on using a store credit card.

This is because retail credit cards come with notoriously high interest rates. In other words, any discount that you may have received for opening a new account will likely be erased the first time you are unable to pay your bill in full.

Too Much Temptation

Another factor to consider is your spending habits. Many times, individuals armed with retail credit cards are likely to spend more than if they were using another form of payment.

You may find yourself making more frequent purchases, purchasing more expensive items or simply purchasing more than you otherwise would have if you were paying with cash, for example.

Consider your Credit Score

Although a nice payment history on a store credit card may bode well for your credit score, missing even one payment may have a strong impact on your credit score, in a negative way. Plus, retail credit cards have lower credit limits, which may just not make much sense when you have a perfectly good major credit card with a low, fixed interest rate.

Retail Credit Cards: Should you Take the Bait?

Choosing Credit Card

We’ve all been there before: we walk through a store, spot an item that we feel we absolutely “must have,” then get lured in by a sales associate promising us a retail credit card in an instant, complete with an incentive. The question is: should we take the bait, or should we remain hesitant when it comes to retail credit cards?

Retail credit cards certainly have their share of advantages and disadvantages, so what might be right for one consumer may not be right for another.

Let’s compare the two:

Advantages of Retail Credit Cards

• Instant approval – There is nothing like being able to purchase items from your favorite retailer when they are able to approve you in just minutes.
• Instant discount – Many retailers offer customers additional incentives for applying for instant store credit by discounting the day’s purchases.
• Future coupons/discounts – Many retailers, in an attempt to lure their customers back into the store send them coupons in the mail, usually along with their statement.
• Special promotions/events for card holders – Another ploy of retailers to get their credit card holders back into the store is to offer card holder-only promotions and events.

Disadvantages of Retail Credit Cards

• High interest rates – It is important to realize that, along with the convenience, comes high interest rates. Over-the-limit fees and late-payment fees for retail credit cards can be quite high, as well.
• More credit – do you need it? – The real question when deciding upon a retail credit card is, “Do I really need another credit card?” For many consumers, a standard credit card with a low interest rate may be a much better option than opening yet another credit account.
• Impulse buys/overspending – Perhaps the biggest reason that many consumers avoid retail credit cards is that they often encourage impulse buying and overspending, Sometimes it is all a bit too tempting to walk into a retailer and buy more than we need, simply because we come armed with our store credit card. Consider whether you can make responsible purchases with a retail credit card before applying for one.