Credit Card Articles

High Credit Score, or Low Debt?

Sun, 03 Aug 2008 00:00:00 GMT

The world of credit cards is full of contradictory advice. “Keep one card for emergencies.” “Keep several cards for a high credit-to-debt ratio.” “Pay off big balances first.” “Pay off the small cards before you tackle the big ones.” It’s no wonder so many of us feel a little confused.

To figure out the best way to proceed, you must first figure out your credit card goals. Do you want to prune your credit score for maximum buying power? That’s a great idea if you plan to take out a loan for a major purchase, like a house or car, within a year. But maybe you’d rather stay out of debt. Those goals aren’t mutually exclusive of course, but you can take different paths to get there.

To Build Your Credit Score…

Experts advise maintaining a high debt-to-credit ratio. That is, take out several credit cards and try for larger credit limits. Keep charges to a minimum. The theory behind this technique is that lenders want to see that you have a lot of available credit and the discipline to use it responsibly. If you have a large amount of credit and a small amount of debt, you’ll look like a good candidate for a loan. This can help you out when major purchases are on the horizon.

To Stay Out of Debt…

To avoid revolving debt altogether, or to dig yourself out of a hole if you’ve already overspent your limits, you need to minimize the number of cards you carry. Making minimum monthly payments won’t get you anywhere. You’ll need to double or triple your minimum payments to make headway. Pay off your lower balances first to get them out of the way. Then your resources can go into tackling the higher balances. Once your cards are paid off, you can decide which ones you really need, and cancel the rest.

Staying out of debt in the first place is much easier than climbing your way back to a debt-free existence. Pay off your credit card balance each month to avoid interest charges, and use your card only when you really need to.

To Do Both…

Always make your payments on time and in full. Avoid carrying a balance on any of your cards. Look for low or no-interest cards, and transfer your existing balances to them. If you need to pay off your debt fast, ask your bank for a low-interest debt consolidation loan. This will keep negative marks off of your credit report, and your credit score will improve as your debt declines.

The path to good credit may twist and turn, but the rules are pretty much the same no matter your goal. Make good credit decisions and reap the benefits for years to come.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.

Live Thrifty Without Cutting Up Your Credit Cards

Sun, 03 Aug 2008 00:00:00 GMT

It seems like times keep getting harder. The cost of living has skyrocketed while wage increases remain sluggish. When it’s hard to make ends meet with paychecks alone, it might be tempting to charge little extras to our credit cards. But is this really such a good idea?

It’s been popularly believed that Americans have been doing just that in the tough financial times of late. But studies have suggested that credit card use is actually on the decline. Whichever theory you hold with, it can’t hurt to educate yourself about the reality of using credit cards to cover your daily expenses.

Credit cards are best used in short-term situations. Ideally, card holders pay off their card balances every month to avoid interest fees. But when we use credit cards to pay for our everyday necessities like groceries and utility bills, we tend to carry a rotating balance. This racks up the interest and causes us to pay more for our monthly needs than we would if we paid cash.

Regardless of what we hear on the news, studies have shown that Americans are using their credit cards less. Instead of using their plastic to maintain their lifestyles, they are simply scaling back on their expenses by staying home and cutting out unnecessary charges, like premium cable. They are also using utilities more sparingly to avoid sky-high energy bills. And eating out is, well, out. More and more Americans are choosing to cook at home in the name of saving a buck.

If you’d rather strike a happy medium, consider getting a cash back reward card that gives you some incentive to make daily purchases. Cut back on your other expenses wherever you can, and use the money you save to make more than the minimum monthly payment on your credit cards.

Low-interest cards are another way to stretch your credit dollars as far as you can. Look for cards with a 0% interest phase. These introductory periods typically last 6 months to a year. The charges you make during that time won't be subject to interest. That's a good thing for thrifty card holders.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.

Taking Responsibility For Your Credit Cards

Thu, 31 Jul 2008 00:00:00 GMT

In numerous cases, credit card companies issue cards to customers who may be deemed, risky. In many cases they do so at a higher interest rate. Some of these cards still have annual fee’s and additional charges. Now, granted, customers should avoid these cards. However, some customers who want a credit card, will do what they have to in order to get one. So begins the snowball effect.

A customer, who probably could not afford a credit card at those terms in the first place, proceeds to max out the card, get immediately behind on their payments, the fee’s begin to build, and that snowball continues to roll down the hill that did not have to be. Again, it is a shared responsibility. The credit card companies have to be aware of their risks and not issue credit cards for profit potential only. On the other hand, customers who take on credit cards, must accept the responsibility of owning up to their financial obligations.

There was once a time in our society where credit revolved around a simple hand shake. Those times have long since faded into obscurity. Why? For one thing, a hand shake was based on honor during a time when someone's "honor" actually used to mean something. Your hand shake was your bond, the reflection of you as someone who could be trusted. This was a reputation that was not taken lightly. Of course, honor does still exist, but it just seems to mean more to some than others. There are instances of course, where hard times just get the best of you and it has nothing at all to do with your honor- just your financial situation!

You end up taking on too much, and then you get buried in an ocean of credit related debt that continues to grow as you find it difficult to keep up with your payments. There is hope, though, and all does not have to be lost. You can still save your honor! You can climb out of the hole that you are in. Don’t give up the ship without a good fight.

Here is how to take responsibility for your credit cards:

If you are going to take on credit cards, you should be prepared to take responsibility for them. Until you can get your financial situation under better control, at least make an effort to make the minimum payment due, before it's due. This will avoid the addition of late fees or increased interest rates that are often the result of a late payment to a credit card company.

Do not depend on your credit card as a bail out. Use it responsively. Call your credit card company and ask to have your interest rate lowered. Many times it will be in the credit card companies best interest to lower the rate, rather than simply inherit a delinquent account. Organize your finances. Know what you have coming in and what you owe out on a monthly basis. Take responsibility for your credit cards and they will take care of you by giving you access to credit when you need it.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.

Credit Card Skimmers

Thu, 24 Jul 2008 00:00:00 GMT

In previous years, identity theft and credit card fraud was a result of thieves sifting through trash bags and uncovering things people threw out without destroying personal information. Waiters disappearing with cards sometimes took the time to write card details down to use for online purchases later... but credit card fraud and identity theft has become a highly advanced, technological operation for many thieves.

Would you notice if a clerk swiped your card through a two card readers in one swift movement? Would you be able to tell if the gas pump where you swipe your card had a “bug” built in to the existing pump's reader, saving your data both to the pump to make your gasoline purchase and to the “bug” itself for later retrieval by the thief? This type of credit card theft comes from the use of credit card skimmers – small units that work by swiping the credit card's magnetic strip through them; just as you would if you were making a purchase. Smart thieves have learned how to attach these units to existing credit card readers so it is almost impossible to detect when one is being used. When a card is swiped through the reader, the card number, account holder name and address and sometimes even the pin number are stored so the thief can access it later. From the stored information (on however many credit cards the thief was able to “skim” through the machine), counterfit, “cloned” credit cards are created and then used to make purchases.

Unbelievably, it is not difficult to get a credit card skimming machine. They can be searched for and purchased online, making it possible for any aspiring thief to gain access to a skimming machine for around $300. Thieves can then choose to sell the card information to “companies” who make counterfit credit cards; or perhaps they'll purchase the equipment necessary to create their own fake credit cards, for around $10,000.

Credit card losses due to credit card skimming theft is estimated at $1 billion each year.

If you've been the victim of credit card fraud, you should know that the Truth in Lending Act limits your liability to $50 is the card has been stolen or lost. Most card issuers waive that $50 fee, as well. But don't think all cardholders aren't paying for these crimes- because we are; in the form of higher interest rates, finance fees and miscellaneous fees. Consumers who are victims of identity theft/credit card fraud also pay in the time it takes to fix their credit reports. It can take months of phone calls and letters to credit reporting agencies to get errors removed and corrected from your credit report; and it's possible that not all errors will ever be fully corrected which can impact your future ability to obtain credit; or affect the interest rates you pay on the money you are able to borrow.

The importance of checking your credit card statement every single month can't be stressed enough. The sooner you are able to recognize fraudulent activity, the better off you will be in putting a stop to it. Many people set their accounts up to pay automatically with checking account withdrawals and such; but even if you do this, you need to be looking over each transaction on your credit card statement regularly to ensure that only charges you've authorized are appearing on your statement.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.

Are You a Typical American Card Holder?

Sun, 20 Jul 2008 00:00:00 GMT

Americans thrive on credit. It’s estimated that each American credit card holder has three bank cards, two debit cards, and four retailer cards at any given time. That’s a lot of plastic! And Americans are relying on their credit cards more heavily than ever before.

If you’re a cardholder in America, you might have wondered how your situation compares to the national average. How much debt does the average card holder carry? How much do they pay off each month? What is an average credit card interest rate?

With some facts and figures from Citigroup Inc and the Federal Reserve, you can see just how your debt compares. You might be a typical American cardholder if…

…you carry a balance from one month to the next. (Industry insiders refer to these types of customers as “revolvers”.)
…you have eight or nine credit cards in your wallet.
…your cards have an interest rate of 14.71%.
…you use your credit cards to make ends meet.
…you have at least $5,219 in credit card debt.
…you only pay 3-4% of your total balance every month.

It’s not the most flattering financial picture, but it’s not as bad as you might have expected. Still, with the cost of living escalating in relation to wages, it’s obvious that credit card debt will continue to climb. Credit card debt rose 315% between 1989 and 2006. With few or no financial resources to turn to, people who need extra cash frequently find it in the form of credit cards.

Has your own spending gotten you into debt? If so, take some advice from the pros. Cut out unnecessary monthly expenses and use the money you save to pay off credit cards balances. This will require about three to four weeks of monitoring your income and expenses. Simple changes can help. For example, brewing your own coffee rather than picking up a cup from the coffee chop each morning can save you nearly a hundred dollars each month. That money can be put to better use in reducing your debt.

Don’t forget that your bank can also be a helpful resource. You can take out a personal loan to pay off your credit card debt. That loan will be repaid at a much lower interest rate than regular credit card payments. Just be sure to go with a lender you trust.

We live in a nation of debt, but there’s hope for us after all. With some careful planning and sound decisions, we can beat the national credit debt average.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.

How to Find the Perfect Rewards Card

Sun, 20 Jul 2008 00:00:00 GMT

It's sad but true: some reward cards just aren't as rewarding as they used to be. Take airline reward cards, for example. Airlines are scaling back their frequent flyer programs. Those seat upgrades, free flights and other perks are getting harder to redeem - and they cost more points then ever before. Do you really want to spend your time and money on a reward card that doesn't give you what you want?

To find your perfect credit card, you must first ask yourself a few questions. Are you a frequent traveler? If so, many cards offer rewards above and beyond airline incentives. Look for cards that offer points and discounts you can apply to rental cars and hotel rooms. Those services haven't lost as much value as frequent flyer programs.

Another question to ask yourself is whether or not you're the kind of card holder who pays their balance in full every month. If so, you could benefit from reward cards. If you tend to carry a balance from month to month, you'll be better off finding a low-interest credit card to make your purchases with. Reward cards tend to come with higher interest rates.

Do you want a reward card with lasting value? Try one that offers cash-back rewards. They retain their value better than cards that offer points whose value can change at the whim of the card issuer. Also, cash can be used anywhere, while reward points are limited to certain types of goods and services. Look for cash-back reward cards that offer 2-5% cash back on common purchases. Avoid ones that offer 1% cash back across the board. You can find a better deal.

Do you charge a little or a lot on your credit cards each year? If you’re a frequent charger, you can benefit from a card like the American Express Blue Cash Card. If you use your credit cards for small, infrequent purchases, you might do better with the Chase Visa Signature Card.

Whatever your spending style, look for reward cards with reasonable interest rates, keeping in mind that they do tend to be higher than regular cards’ rates. Decline cards that charge an annual fee. And don’t get snared by temporary introductory offers. Be sure to read your credit card agreement thoroughly before you sign the contract. What looks good at first might turn into a nightmare down the road.

Need help choosing the perfect reward card? Take a look at our collection of the most popular reward cards organized by type.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.

Credit Cards Can Help You Budget

Sun, 20 Jul 2008 00:00:00 GMT

For people who have learned the effective way to use credit cards, they know they can be a useful budgeting tool. Here's how to use credit cards to your advantage, and actually help yourself keep to a budget:

Determine your average monthly income. If you are a on a salary, write down the amount of income you earn every month (take-home pay). If you have a variable income, find your average monthly salary by adding up your income for the last several months, and then dividing by the number of months you added the income for.
Determine your monthly expenses. Go through bank statements and account statements for the last few months and make a list of everything you pay regularly. Find out the total of your monthly expenses (note - if this number is greater than your monthly income, you need to make some adjustments! Either reduce your expenses or increase your income).
Select a credit card. If you already have a card you like, you can use that one, or maybe you'd rather select a card that offers a valuable rewards program based on your unique spending habits. Look for a card with low interest and a rewards program you'll use - one with cash back, gasoline rebates, or travel programs.
Use your card all month long. You know how much your expenses and purchases are each month. Refer to your expense list and use your credit card to pay for everything that is on that list. Make sure you are not spending more than what you have on your expense list just because you're paying with credit - that's how you get into trouble!
When your statement comes, pay the bill. You can write one check to pay your credit card statement in full, and this is the key! You don't want to carry a balance from one month to the next because you then pay interest and finance charges on that balance. This defeats the purpose of using the credit card as a budgeting tool. If the card you use has a rewards program, you'll also be benefiting the most from that by paying the balance off in full each month.

Using a credit card gives the opportunity to set many of your accounts to automatically pay on their scheduled due dates. It elminates the need to remember to send your payments out, and saves on stamps and check fees. You will have a much easier time balancing your checkbook each month, since the bulk of your transactions will be coming from your credit card, too.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.

Credit Etiquette for First Time Card Holders

Sun, 06 Jul 2008 00:00:00 GMT

Living on credit is a way of life for most of us. When we want to make a purchase but don’t have the money to cover it, that little piece of plastic in our wallet can be all too tempting. Credit cards can make life so much easier – if we use them responsibly. Thoughtless, frivolous spending can lead to a mountain of debt that feels impossible to scale.

If you’ve received many offers of credit in the mail, you know how easy it is to be seduced by the easy terms and other marketing gimmicks on the envelopes. But the truth of these offers is on the inside of the letter, and often written in small print. There you will find hidden fees coupled with high interest rates and rules that can change at the creditor’s whim. Still, it’s hard to refuse a credit card when someone really wants to give you one.

A little preparation can enable you to accept those offers of credit without the fear of digging yourself into a financial hole. If this is your first credit card, look to friends and family for credit etiquette. They can be good examples of how to handle your new credit limit, or they can serve as reverse role-models – living proof that you do not want to live beyond your means.

The first thing you need to do when you get a credit card is to look at your budget. Make a simple ledger or spreadsheet that lists your monthly income as well as your outgoing bills. Credit card interest rates can range from 15-30%. If you make purchases on the card, be sure that you can afford to pay them off each month. If the debt lingers from cycle to cycle, interest payments will make that purchase cost more than it’s worth.

Next, list your bills in order of priority. You have to pay for food, power, and lodging before you pay for credit cards. If your monthly necessities leave you little financial wiggle room, you might want to avoid using the credit card except in emergencies.

What if you’ve already accumulated a heap of debt? Start fixing it right away. Call your creditors, explain your situation, and see what they can do to help. Some lenders will grant a forbearance for a month or so, while others will accept partial payments. Make a good faith effort to take care of your debt, and establish a relationship with your debtors. Make sure they have current contact information, and don’t put them through the trouble of calling you first. Instead, be proactive. Let lenders know when you face financial hardship. If you get in touch with them, they’ll know that you care about paying off your debt - and they won’t hassle you so much.

These simple strategies can be put to use by anyone who has, or is thinking of acquiring, a credit card. Credit cards aren’t free money. Spend only what you can afford to spend, and stay in touch with your creditors if problems arise.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.

Easing the Burden of Interchange Fees

Sun, 06 Jul 2008 00:00:00 GMT

Running a small business comes with a host of unique challenges. Should it really be that difficult to accept credit card payments from customers? Sadly, for many business owners, the fight over rising interchange fees - the fees that credit card processors charge for each credit card transaction a business makes - is getting tougher. What was a $16 billion industry just seven years ago has turned into a $48 billion racket in 2008. Small business owners are watching their profits dwindle as more and more of their money is spent on interchange fees.

How bad is the problem? Soon, you might find it impossible to fill up your gas tank if you pay with a credit card. Gas station operators are losing money because they must pay an interchange fee on every gallon of gas their customers charge. As the fees increase, profits go down the drain. And with the rising cost of gas, some store owners just can't afford to pay the interchange fees. In some cases, the fees cost more each month than gas purchases bring in.

Small business owners are caught between a rock and a hard place. On one hand, they cannot completely refuse to take credit card payments if they want to stay competitive. On the other hand, they feel as though they have no power to negotiate the fees. Luckily, Congress has heard about this plight and has decided to step in. There is proposed legislation that will permit the investigation of hidden fees that businesses report as being unfair. While some balk at the idea of the government getting involved, others hope that new rules will ease the pressure on small businesses.

If you own your own business and feel the pinch of high interchange fees, there are some steps you can take. First, look for merchant account providers that offer “Interchange Plus”. This is a straightforward pricing scale that used to be available only to big businesses. Now smaller businesses can take advantage of this simple alternative to the complicated, tier-based pricing structures currently in place. Some businesses save tens of thousands of dollars each year just by participating in an Interest Plus plan.

Another thing you should do is watch out for hidden fees. Avoid contracts that make you pay an interchange fee for declined transactions. Instead, look for a contract that doesn’t require you to pay for unauthorized charges. And ask plenty of detailed questions before you sign that dotted line.

Finally, look for merchant account providers that offer great customer service. When something goes wrong, you want to know that you can call the company and get it straightened out in a timely manner. This might mean ignoring the companies that offer rock-bottom rates. Remember that with customer service, you usually get what you pay for.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.

Stretch Your Home Improvement Dollars Further With Home Improvement Rewards Cards

Wed, 02 Jul 2008 00:00:00 GMT

Keeping up with home maintenance projects is something most homeowners take pride in. Whether you're in need of additional tools to complete your latest home improvement project, or the actual supplies to make it all happen, using a credit card with home improvement rewards makes sense. While each credit card rewards program offers different benefits, all are designed to help you stretch your home improvement dollars by helping you earn something back each time you make a purchase for repairing or upgrading your home.

Particularly with the nice weather of summer months, homeowners start updating their homes and landscaping. If you're working on any of the following projects, or have been considering them as well as others, you'll be happy to know the supplies you need to complete them can earn you rewards using home improvement credit card rewards programs:

adding a deck or porch
re-landscaping your property with new plants, trees and flowers
paving the driveway
adding a new bedroom or other addition to your home
replacing outdated or broken appliances
redecorating the family room
installing hardwood floors
replacing toilets with energy efficient, low flow versions
replacing lightbulbs with energy efficient lightbulbs

If you regularly make improvements or updates to your home, simply charging the purchases to one of the home improvement rewards cards will give you some of your purchase back in the form of cash back or mortgage payments. If you are worried about interest rates, simply pay your credit card bill in full when you receive it and you can avoid paying interes ton your home improvement purchases – and you'll still receive the benefits from the rewards program.

Here are several credit cards with home improvement rewards programs that you might consider for your home improvement to get the biggest bang for your buck!

Home Improvement Rewards Cards

Home Advantage MasterCard from Bank of America - This card offers double rewards whenever you use it to make home improvement related purchases. As a bonus, you can choose to apply your rewards in the form of additional mortgage payments to help you pay off your mortgage faster.

Citi Home Rebate Platinum Select Mastercard- If your idea of improving your home involves paying off your mortgage, Citi Home Rebate Platinum Select is another option that helps you do just that. When you use the card to pay for your home utility expenses, you'll earn 6% cash back, which can be applied directly to your mortgage to help you pay it off quicker.

Chase Business Rebate Visa Card- This card is targeted to business owners, and would be particularly useful to contractors who frequently purchase home improvement supplies to conduct their business! Purchases on home improvement category items will earn cardholders 3% cash back.

Discover Student Card- Many college students get their own apartments and begin living on their own for the first time in their lives. With this card, students can earn 5% cash back when making home improvement purchases, from home improvement retailers.

Discover More Card- Another option for homeowners wanting to get cash back on their home improvement purchases, the Discover More card offers 5% cash back on all purchases from home improvement retailers.

Leverage Your Money

If you have to make the purchases anyway in order to improve the quality or condition of your home, you may as well make the purchases in a way that gives you something more than the items purchased. The home improvement rewards programs leverage your money and your spending power.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online.