Tag Archives: charge cards

Best Cash Back Credit Cards – Rewards They Offer – Who Has The Lowest APRs

Posted by on August 6, 2011 No comments

The charge card account industry has become a very competitive one to say the least. It seems as though any charge cards are willing to give up everything with exception of the CEOs first born son to get your business. This competition has lead to more and more cash back credit card account offers. Although cash back credit cards all offer 1 thing in common, CASH, they can be very different. I have compiled a list of the best cash back charge card accounts on the market in hopes that this will assist consumers in choosing the best credit card to fit their needs.

The #1 cash back charge card:

This may come to no surprise, however, the number 1 cash back credit card account is offered by Discover cards. The Discover More Card has great perks. With this card, you can earn from 5%-20% cash back on purchases from exclusive online shopping websites and at least 1% cash back from any purchase made on the credit card. Aside from the cash back, this charge card account offers balance transfers at a 0% introductory interest rate and low long term APRs. I have to say Discover is really outdoing themselves every time they release a new charge card account offer. Also, Discover is moving forward in the customer service ratings. As editor of www.JemCreditCards.com I receive emails all the time letting me know how banks are doing and I have to say all I receive with regards to Discover charge card accounts is excellent comments about their customer service.

The #2 cash back charge card:

The number 2 position goes to Chase credit cards. The Chase Sapphire credit card has to be one of the best that Chase has released in a long time. Although cash back is not the major reward offered with this charge card account, it is available. Another key aspect to this credit card is the interest rate. The Sapphire credit card account offers extremely competitive annual percentage rates for the reward credit card account market. Although cash back charge card accounts tend to have higher than average APRs, this one seems to stay competitive in all venues. The Sapphire card has multiple reward redemption offers most pertaining to travel and airfare. However, this is a great credit card account to have in your wallet.

The #3 cash back charge card

Taking the industry by storm, Discover has also taken the number 3 position. The Discover Motiva credit card account is a newer offer released from Discover. This card offers great rewards like pay on time bonuses, 1% uncapped cash back on purchases, and 5%-20% cash back on purchases from exclusive online shopping centers. Aside from the rewards as stated above, Discover has really pulled through as far as customer service is considered,

The 4 Best Balance Transfer Charge Card Accounts – What They Offer – Who Provides The Lowest Annual Percentage Rates

Posted by on July 24, 2011 No comments

Balance transfer credit cards have become a great way to keep banks on their toes when it comes to competing for your business. If you have built and maintained great credit scores, balance transfer charge card account accounts have become your way to keep lower interest rates throughout the life of your debt. I am going to go over the top 4 balance transfer charge card account accounts hopefully this list helps you to pick the best credit card for you:

Balance transfer credit card #1:

The balance transfer credit card account that takes the #1 position is issued by Discover credit cards. The Miles by Discover card is a great choice for a few reasons. First off this card offers a 0% promo annual percentage rate on balance transfers that lasts for 6 billing cycles. After the promo annual percentage rate, the standard interest rate on the card will be a low 10.99-16.99%. Aside from the APR, the reward system on this credit card is phenomenal. You can redeem your rewards points in many ways however the most common ways from Miles by Discover users are airfare, gift cards, and cash back.

Balance transfer credit card #2:

The #2 balance transfer credit card account is the Slate card from Chase. As with Miles by Discover, the Slate card also offers a 0% promotional APR. However, for balance transfers, this 0% offered lasts for a full 12 months. Another thing that is appealing about any Chase cards is the impeccable customer service offered. Chase is known for some of the best customer service ratings in the charge card industry. Finally, the Slate charge card is said to be the most secure credit card out there. With patented fraud protection guidelines Chase really did go all out on this charge card account.

Balance transfer credit card #3:

The balance transfer charge card account in third place is the Escape by Discover card. Much like the Miles card, Escape also offers a 0% promo annual percentage rate for 6 months on balance transfers. The long term annual percentage rate is also the same ranging from 10.99-16.99% depending on your credit. What really sets this charge card apart however is the reward system. Receive double miles on qualifying purchases and 1 mile for every dollar spent on the charge card. Also, reward redemption offers vary. With so many choices for reward redemption with this charge card account, you can’t go wrong.

Balance transfer credit card #4:

Taking fourth place today is a credit card account that is fairly new to the balance transfer industry. The IberiaBank Visa Select credit card has some very unique features. One of the great things about this charge card account is the long term low APR of prime (currently 3.25%) plus 4.25% this is one of the lowest long term annual percentage rates in the credit card account industry to date. The only real draw back to this credit card account is the application process. To be approved for this credit card you must not only have excellent credit but, you must also prove your income which in some cases can be a bit annoying to consumers who have paid their bills on time every time.

Protection For Credit Card Holders

Posted by on May 29, 2011 No comments

The Federal Reserve has come up with some new rules to protect consumers from a list of abusive lending practices.  The changes aren’t in effect yet, and may not actually go into effect.  It’s worth looking at the proposals, though, to understand what’s been going on just lately.  If you haven’t been paying attention, you most likely have no idea what the charge card companies can legally do to you.
The things that would be prohibited would be:

Increasing the rate on a pre-existing balance

At the moment, there are pretty much no rules about this.  Your credit card agreement probably says how they calculate the rate–but it also says that they can change the agreement at any time, including the part on how to calculate the rate.  Many card agreements also provide for you to “decline” to accept changes–but if you use the card after they send out the notice of changes, that’s the same as accepting the new agreement.  And some cards don’t even offer that protection–they can raise the rate for any reason, or for no reason at all, and there’s nothing you can do about it except pay the new rate until you manage to get the debt paid off.

Applying payments to maximize the interest charges

Your credit card account agreement says how they’ll apply any payment that you send in.  It matters, because parts of your balance are at different rates.  If you read the details, things are often set up to pay off low-rate parts of the debt first, leaving you paying on high rate debt for as long as possible.  Under the new rules:

Banks would be required to give consumers the full benefit of discounted promotional rates on charge cards by applying payments in excess of the minimum to any higher-rate balances first, and by providing a grace period for purchases where the consumer is otherwise eligible.

Imposing interest charges using the “two-cycle” method

The “two-cycle” method is a set of rules for calculating the interest owed in such a way that you don’t get any “grace period” if you don’t pay your card off in full every month.  If you carry a balance all the time, it doesn’t matter.  But if you usually pay your card off, but occasionally take an extra month to get back to zero, the two-cycle method can very nearly double the interest you pay.

The rules would also require that banks give card holders a “reasonable” amount of time to make payments.  It used to be that card holders got almost 30 days–basically, you had until the day they printed out your next bill.  Credit card account companies, though, have been shortening the grace period, especially for their riskier customers.  For some cards, it’s gotten to the point where you really have to stay on top of your bills every day, in order not to be constantly late on your payment.

Of course, the only sensible thing to do with charge card accounts is to pay them off every month.  Credit card accounts are a great payment mechanism, but a terrible way to borrow money.  Everybody knows that.  And these new rules wouldn’t really offer much to the people who do use their charge cards to borrow cash.  

What these new rules would do is protect consumers who fail to run an error-free bill-paying and agreement-reading system.  As things stand right now, someone who pays every bill in-full, but who is only 99% successful at paying on-time, could easily end up owing hundreds of dollars in fees, penalties, and interest.  These rules would ease up some of the worst of the “gotcha” effect.  (And it certainly seems that some banks have been changing their rules specifically to set their customers up to make occasional small errors–and turn those errors into big fees for the bank.)

The rules are open for public comment.  No doubt the big banks will be commenting.  They’ll have statistics that show that customers who make a late payment are much more likely to default than customers who are never late.  Maybe a few consumers will comment about the basic unfairness of agreements that the charge card companies can change at any time.

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Understanding Fees Associated With Credit Cards

Posted by on May 29, 2011 No comments

Annual fees, grace periods, balance transfer options…it’s a wonderful world of charge card jargon out there, and depending on your needs and planned uses for charge card accounts, it pays to look at your options.

Following are the various ways in which credit card account companies can get some money out of you:

Interest Rates

All charge card accounts levy an annual percentage rate, the main difference being the percentage charged. Obviously you want to choose the card with the lowest rate. If you already have a card with a higher interest rate but that you like for other reasons, then try calling and asking for an interest rate reduction. According to a 2002 Public Interest Research Group study, 56% of people who called their charge card issuer and asked for a reduction were successful.

Early Interest Posting Dates

If you are in the market for a new card, find out if interest is charged from the date the charge is posted, or the date of purchase. Most will now charge from the date of purchase (which is usually a few days earlier than the posting date), but if you can find one of the other kind, it may be worthwhile.
This is only really an issue if you plan to carry a balance on your charge card account at any time, which if it can be avoided, would be preferable.

How Interest is Calculated

Some cards will charge interest on the balance owing at the month or billing cycle’s end. Makes sense, right?

Well, there is a growing trend now to charge interest instead on the average daily balance. So if you charge $1,500 in September, and pay $1,000 of it off on the due date, the following month you will actually be charged interest on the $1,500 average daily balance instead of the actual $500 left owing.

Grace Periods – or Lack Thereof

Usually, a grace period will allow for a responsible credit card account user to pay off all their purchases within 24-30 days without paying any interest.

But as some readers pointed out in the comments on another article, even those dutiful credit card users who pay off their balance in full each month can sometimes get duped by circumstance (like the bank processing a transfer late) and miss the payment due date by a sliver.

For those consumers above and for those who regularly carry balances, even grace periods won’t save you: if you have an outstanding balance, you are charged interest on new charges from the date of purchase. (All the more reason not to carry a balance)!

Nuisance Fees

In a world of increasing fees for every little thing from booking airline tickets to doing your banking, charge cards are no exception to this bandwagon. The latest in nuisance fees can include:

Late payment fees (as high as $40)
Over-the-limit fees (as high as $25)
Inactive account fees
Not carrying a balance fees (or carrying a balance under a certain amount)
Monthly fees that are a percentage of your credit limit
Annual flat fees
Balance transfer fees
Credit limit increase fees
Set-up fees
Return item fees
Fees for paying by telephone

…and on it goes.

Cash Advance Interest Charges

Many cards charge higher annual percentage rates on money advances in addition to transaction fees.

What They Have to Tell You About

When you are searching for a new charge card account, the following items are required by law to be disclosed:

Annual Interest Rate (also called APR or annual percentage rate)
The teaser or introductory rate, along with the details of when and how the regular rate kicks in
How the variable rate is determined (if applicable)
Penalties for late payments
Annual, periodic, or membership fees
How the balance is computed for interest purposes (ie: average daily balance or balance owing methods)
Minimum charge
Grace period (the period of time you have to pay off the balance without incurring interest)

My Card Sucks! I Want To Cancel

If after reading this you think you have one of those cards with too many fees, you can cancel it. However, there is a chance that it may reduce your credit score. Check out FICO to find out what FICO scores consider, as well as how best to understand your credit score.

To that end, you should be aware of soft and hard closes, and how they affect you.

Soft Closes

With a soft close, the charge card company will acknowledge that you want to close out the card, but they will automatically reactivate it if charges go through. Their rationale is that they are saving you embarrassment of the card being rejected if you happen to be out shopping and inadvertently whip their card out!

Hence, a soft close will also often affect your credit score and ability to qualify for large loans later on if the lender does a credit check and sees that you have all sorts of credit available to you, but doesn’t see that the credit is soft closed.

It also makes you vulnerable to fraud, since if a professional steals your identity, they can order another card from a soft-closed account and start charging.

Hard Closes

Ensuring your account is hard closed entails a little more follow-up work, but can pay off in the end. You must first request a hard close when you are cancelling the card, and follow up with a confirming letter. In your letter, tell the credit company to report “closed by consumer” to the credit bureaus as well, and keep copies of everything.

Some issuers will refuse to do this: their policy might instead be to process a soft close first and a prescribed time period, at which point it reverts to a hard close. Find out how long that period of time is, and ensure that the account is hard closed with a letter at the end of that time.

This article is brought to you by www.JEMCreditCards.com – Not Just Credit Cards, We Create Financial Stability! compare credit cards including Chase cards, Discover credit cards and much more!

Understanding Charge Card Rewards Programs

Posted by on May 29, 2011 No comments

A commenter on a recent article of mine on charge card usage, suggested a follow-up post with an eye to uncovering the mysteries of credit card account rewards programs.

And in my research, I discovered it’s a murky world of points, rebates, fees, and interest rates out there! A lot of it comes down to personal choice, but here is some information to aid your plight for a suitable charge card account rewards program: 

Three types of rewards

There are typically three types of rewards programs: point-based, cash back, and frequent flyer miles. Some programs offer combinations of these rewards, with varying value for point redeemed.

Points-based programs involve accumulating points (based on the amount you spend), and then redeeming your points for merchandise from their catalogue. Points leave a little to be desired, since depending on what you redeem your points for you might not get a lot of value.

For example, Smart Money has an article on this topic , where they show you the Good, Bad, and Ugly of credit card rewards programs. Case in point for the ugly:

You could trade 39,200 Bank of America WorldPoints for a 30GB iPod, which retails for $249. Or you could use just 35,000 points to get a $350 check — enough to buy the iPod at your local electronics store. You’d come out roughly $100 ahead, and saved 4,200 points to use for another reward.

Gift certificates tend to be the best value for your points when flipping through the catalogue, and it is generally recommended that you stay away from the merchandise, since it is over-priced and lacking in quality. The gift certificate option also carries an added value advantage, since credit companies strike deals with the retailers to give them a deal on the gift certificates, whereas a dollar is a dollar when it comes to cheques or merchandise.

Cash back is most common, and offers quick rewards for your buck. However they can also have limitations; Some will only start to honour the cash back policy once you have spent a minimum amount of money, and yet others will cap the total amount of money they’ll reward.

Frequent Flyer Miles for airline tickets will sometimes give you the best bang for their buck, but can be a pain to redeem. Many issuers have blackout times, while others only designate a certain number of seats per flight as airline rewardable seats. If you don’t book your ticket early enough you can be out of luck, especially if you want a flight that’s commonly flown and redeemed for.

Saving for airline ticket rewards can also be tedious and take some time to accumulate for, and in this changing airline world, increasing fees and limitations could pose problems in the future. I have already noticed that one of the rewards programs I use have imposed a stipulation that if you do not use your points within seven years of the point being rewarded to your account, you lose it. So if you are saving up for a big reward (or on the flip side have accumulated tons of points over the years and haven’t used them), you may lose your chance.

Also, expect to pay out of pocket for the taxes, fuel surcharges, and other miscellaneous expenses (like a special booking charge if you redeem on the phone with an agent as opposed to online). But hey – a buck is a buck. To fly across the country (or around the world) for the cost of the taxes is rarely something to complain about.

Tips for the reward-hungry charge card account user

Pay off that balance!

As stressed in my previous article and related comments, using a rewards program is for responsible charge card account users. If you rack up a balance with an eye to getting rewards, and then spend the next 6 months or more trying to pay off the balance (and paying interest all the while), then the value of your rewards decreases significantly. Pay off those darn cards every month and treat your credit card like a debit card or chequebook – if you don’t have the cash in your account, don’t whip out the plastic.

Don’t get sidetracked by the smaller rewards

Initially it can take time to build up a big enough balance to start redeeming for the rewards you really want. Don’t lose patience and redeem your 800 points for an item of insignificant value when what you really got the card for was airline tickets, or special gift certificates. Most rewards programs have tiered systems that offer sweeter rewards (with better value) for those with more points. Your patience in saving up will be rewarded.

Get the card for the rewards you want

If what you want is an airline ticket to Hawaii, then search for the best card to get you there. I found a program (in Canada) where flights to Hawaii required fewer points than even some continental flights, and I chose that card with an eye to getting that ticket. It took time, but my boyfriend and I are now living (temporarily) in Hawaii, and got return tickets for a total of $76 in taxes for both of us (whereas paying in money would have been over $1,600 for both of us).

Look for bonus points

Lots of programs will offer bonus points depending on where you spend your cash or what you buy. Check online for bonus offers regularly, and spend wisely. You can often get triple the miles with a little research and effort.

Look at points conversion programs

Some programs are in cahoots with each other, and you can transfer or convert miles from one program to another. Be wary of those that charge a fee to do so, and take a close look at the conversion ratio. Sometimes they’re way out of whack such that is makes no sense to convert.

Specific programs vary from country to country (and sometimes even within regions), so I won’t go into many specifics with regards to individual program choices. It’s up to you to decide which rewards will ultimately benefit you the most. Just remember to use it wisely or else the interest fees will end up costing you more than you’re getting in rewards, and it’s a safe bet that that is exactly what the credit card account companies are counting on.

This article is brought to you by www.JEMCreditCards.com – Not Just Credit Cards, We Create Financial Stability! compare credit cards including Discover credit cards, Chase cards and much more!

Getting Out Of Charge Card Account Debt

Posted by on May 29, 2011 No comments

Debt is the hottest topic on personal finance blogs around the world. Why? I would venture to guess it is because so many consumers are drowning in it. The unfortunate truth is that few consumers care to read about debt until it has already had a negative affect on their financial situation. This can make the final solution to their debt problems even more difficult to hear about.

I’m no stranger to debt. I had been managing school loans, vehicle loans, and a few small charge card account payments since I was 19, and I was successful in keeping a clean credit record. Then a few poor life choices left me responsible for over $30,000 in charge card debt at age 24. With nothing tangible or memorable to show for my efforts, I could have become bitter. Maybe I could have filed for bankruptcy (this was before the laws changed considerably.) Ultimately, however, I chose to consolidate, reduce the rate, and pay those debts off early.

Why am I telling you all of this? Two reasons: (1) It lends credibility to my view on debt and repayment. (2) To keep you from throwing things at me when you read the next paragraphs:

The number one question I hear from people in debt is NOT: “What’s the best way to pay this off?”

It is usually: “How do I get out of this debt?”

Note that in their wording, they are usually implying that they are wanting to get out of their obligation of the debt, though not necessarily through repayment. Google searches for popular debt-related terms bring up scads of results for help in “Getting out of debt” — all of which seem to give a quick and easy way out. A few clicks and some reading will tell you, however, that the scheme is all the same, and repayment is almost always involved.

So to answer the question of “What is the Best Way to Get out of Debt?” — my answer is simple: Whatever way is quickest, easiest, and costs you the least amount of cash, while at the same being perfectly legal and moral. Ditching your financial obligations by having a cousin co-sign while you walk away is NOT the best way. Making a conscious decision to default when you could be paying something (anything) is NOT the best way. Looking for answers from the sky for a way for you to not have to repay a debt (when you could if you wanted to) is NOT the best way.

I am saying this with the full understanding that someone reading this will have a unique situation that warrants blowing off a loan. I will guarantee that a handful of others will insist that they had no choice. I am, therefore, not talking to you, specifically. The $30,000 in debt that I repaid gave me zero benefit. It was the product of putting my name on a few accounts that were taken advantage of in the most grievous of ways. It would have been easy to say, “It wasn’t my debt,” default and start over 7 years later, instead of taking almost 6 to pay it all back. For this reason, I am speaking to the majority of those suffering from excessive debt who may not feel the benefit of their spending, realized they spent more than they could truly afford, or who simply got the short end of the debt stick. A loan is a loan, which is almost always best to pay back. Period.

I realize that if everyone paid back their loans, small claims courts would shut down, and debt collectors would lose jobs. Search Engine Optimization would change dramatically, and books on finance would lose their place among the Best Seller’s List. Thankfully, there will always be those who won’t pay up. But for the rest of us, there is still one answer to the debt problem: Make payments – no matter how small. As painful as it feels right now, no amount of money can buy the integrity and honor of making good on a loan.

This article is brought to you by www.JEMCreditCards.com – Not Just Credit Cards, We Create Financial Stability! compare credit cards including Discover cards, Chase credit cards and much more!

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