However, credit cards high interest rates carry higher rates than secured loans, and hefty charges if payments are missed which can lead to problems if misused.

Always pay the whole balance every month.

This is the most crucial element in your strategy for using your card responsibly. If you don’t take this route then you can start to see your card a boost to your spending power, but this is the same as building up a loan in small increments. Would you borrow £3000 to casually spend? Probably not. Going down this path makes it easy to build up such a debt and with high interest rates this can spiral out of control. The worst way to use a credit card is the pay of minimum monthly amount, as this guarantees and growing debt. To ensure you are getting the best deal compare credit cards online for the best interest rates.

Don’t use your credit card to withdraw cash.

In an emergency, where there are no other options then it can be literally life-saving to have a credit card with a cash limit to hand. The problem with doing this regularly is that most cards charge a cash-handling fee for ATM withdrawal. As this can be up to £5 per withdrawal it is can be a significant percentage of the money you require.

Increased protection against fraud.

A credit card is a loan, so in the event of fraudulent use the criminal will not have direct access to your bank account. Most companies employ rigorous checks to prevent fraud, and will refund in the event of a crime. In the event of losing your card it far simpler to replace a credit card than a debit card making credit cards a better option for travel abroad.

Purchase protection

Many cards will insure your purchases against loss, theft or damage to purchases for a given period. At the most basic level paying with a credit card provides a paper trail that cash does not; making accounting and proving purchases a snap. Some cards also offer insurance, and will replace the item in the case of an accident. This type of insurance is great for online purchases.

Other perks

Credit card companies will often add sundry perks to their card to attract your business. You may qualify for air miles, travel discounts and access to cheaper insurance. In addition cards associated with a retailer may offer additional discounts for cardholders.

Building a credit score.

Having a good credit score will ease applications for loans, utilities and everyday things like mobile phone contracts. Having a credit card is an opportunity to show you can use credit responsibly and boost your credit rating. It’s advisable to not carry a large balance as this can have a detrimental effect on your credit rating and to pay the card in full each month

Post by Sarah 

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Capital One Rewards cards offer a variety of benefits depending on the rewards card you apply for including Orbitz Visa and Venture One Rewards. Both cards offer more than one mile per dollar spent and have no annual fee. Both also require excellent credit from applicants.

In addition to looking for a card that offers no annual fee and a generous mileage rewards program also look for a card that does not charge a foreign transaction fee. If you frequently travel out of the country and use your credit card for purchases, foreign transaction fees at 2 to 4% can quickly add up. Instead find a card that does not charge foreign transaction fees; you get the benefit of purchase protection by using the card, but you are not penalized by making purchases in a different country with different currency.

If you travel frequently and have excellent credit, make sure your credit card matches this. The ideal card will have no annual fee, a generous mileage rewards program, and will not charge foreign transaction fees. If you have excellent credit, you will find many of these credit cards are eager to have you as a new customer and will reward you generously through their rewards program.

Post by Melissa

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Do you know what freedom feels like? It’s an amazing feeling! There’s nothing holding you back. Nothing following behind you. Complete freedom. Liberty. Independence. Dependence on God alone and not on credit cards, auto loans or payday loans.

I just sent my final two credit card payments today and I am now completely debt free! There are no words to describe this feeling. Now my income can go to investing, saving, and giving without just funneling it to the banks. Be debt free! Live debt free! There’s nothing like it.

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So I saw an unrecognized number ringing on my cell phone. Normally, I don’t answer unknown numbers, but I didn’t have anything to do at the moment so I answered it. Well, what do you know? It was my credit card company calling to do a customer satisfaction survey. It was about the phone call I made a couple weeks ago when they decided to mess me up.

I wanted to have some fun with it so I said, “sure.” The nice lady on the phone started with, “on a scale of 1-10, how satisfied are you with the outcome of your previous call?” I thought for a second. Well, they did reverse all the finance charges and the late charge. But then again, they really should have never been that crazy to begin with. I was only a couple days late and I had never been late before in my life.

“Eight,” I replied. She asked a couple more similar questions. “Eight…seven…nine…” I felt that I was treated all right given the circumstances. The next question started the fun. “On the same scale, how likely is it that you would recommend this credit card to family or friends?” I said, “zero,” without hesitation. The CSR sounded flustered. I couldn’t help but smile. That definitely wasn’t the answer she was expecting.

Nervously, she asked, “could I ask what the reason is for your previous answer?” Again, without hesitation, I said, “Dave Ramsey.” She said, “excuse me?” Again I said, “Dave Ramsey.” Short, sweet, and to the point. Silence. I decided to help her out. “He’s an author.” She said, “oh.” I told her, “I’m getting out of debt. In fact the payment is already on the way to pay off this card.” She quickly ended it, “well, thank you for your time and good bye.”

Good bye is right! Good bye to credit card debt! Later this month I’ll be free!

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I know what you’re thinking. What are snakes doing on a Christian Finance blog? Well, there’s a saying that says that if you play with snakes, you’ll get bit. Dave Ramsey even uses it to describe credit cards.

Well, I’ve got a great “bit by snakes” story for you. As many of you know, I’m on schedule to be completely debt free by next month. I’m still on schedule, but I hit a setback a couple days ago.

As many of you also know, I’ve been doing “credit card arbitrage” where I use 0% balance transfers and earn interest on the cash while using the cash to make payments. I don’t do this anymore, but I used a 0% balance transfer to pay off a student loan about a year ago and I made payments to a savings account to have the amount in a year so by the time the 0% was due, I would have the cash to pay it off.

Before last week, I never had a late payment in my life. But I played with snakes and got bit! When I set my online bill payment for the credit card, I looked at the next statement date instead of the payment due date and so the payment was late. When I realized what I’d done, it was too late.

I checked my credit card account online today and almost passed out! My account “went into default” with one late payment and my interest rate shot up to 25.99% even though it was still under the one year 0% special. They also charged me a $39.00 late fee and a finance charge of $89.25!

This really wasn’t a surprise to me since credit card companies can do practically anything they want because their agreements (that you signed when you got the credit card) allow them to. So I decided to give them a call. Sometimes you can get a lot accomplished with one phone call.

To make a long story short, I got the CSR (customer service rep) to waive the finance charges and late fee and also reduce the interest rate from 25.99%! I actually was amazed at how easy it was. All I had to do was ask a few questions about the charges and then simply ask if they could be waived. It took maybe five minutes!

I’m glad I got those fees waived, but I’m still going to pay off the credit card tomorrow. This was too close for comfort and I don’t feel comfortable carrying a balance when I have the cash to pay it off. I will never use credit cards again. Lesson learned. I hope you will learn from my experience. God bless!

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President Obama signed into law today credit card reform that was long overdue (no pun intended). The legislation had bipartisan support in the House and Senate and President Obama has been pushing it for a while. The legislation passed despite opposition from the credit card industry and I’m glad it did.

These credit card companies are taking advantage of consumers and just plain not treating them right. But if people didn’t get into credit card debt in the first place, so many Americans wouldn’t need this legislation.

Now the legislation doesn’t take effect until February 2010 which is not soon enough in my opinion.

Here’s how it protects you:

• It makes it harder for anyone under 21 to get credit cards.
• It bans rate increases until you’re more than 60 days late and restores the original rate after 6 months of minimum payments.
• It forces credit card companies to post credit rules on the Internet.
• It mandates a 45 day advance written notice of any interest rate hikes.
• It forces them to apply payments to the highest interest rate first.
• It bans universal default, where credit card companies can increase rates if you’re late on payments to any lender.

Well, here’s how you can protect yourself between now and February 2010 when all this takes effect. Get out of debt! You can’t pay any penalties if you don’t have any credit card debt. You don’t have to wait for the government to help you. Help yourself! God bless.

P.S. Did I just notice that President Obama is left-handed? I wonder how many left-handed presidents we’ve had.

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MyFICO is offering a free 30-day trial of their FICO Score Watch which offers 2 free Equifax FICO scores and credit reports! Each FICO score is worth $15.95! This is the real FICO score that most banks and lenders use today.

Your score will be pulled on the day you sign up and you get another one that can be used later on. I would pull the second one towards the end of the trial because it would be more helpful to see the differences further down the road.

Just make sure you cancel before the 30-days ends or you will automatically be charged $89.95 (yikes!). You will get a reminder email from them a week before the trial ends but I would still put it on my Google calendar, sticky notes, bulletin boards, etc. to make sure I don’t forget. In fact, you can cancel immediately after getting your FICO score if you want so you don’t have to worry about canceling later on.

Also, here’s a post about how to pull your free credit report, not your credit score. You get three free credit reports each year from each credit bureau so stagger them every four months and you’ll have them all year-round!

And here’s another post with some basic info on FICO scores.

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Last year I camped out at Best Buy, but I’m not sure this year. I may just decide to stay home and do Black Friday online this year. It really depends on the deals. You would think that with the economy the way it is that retailers would pull out all the stops to get the shoppers out.

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Here’s how you can double your warranty on many items that you purchase. Use your credit card. That’s right. I do disagree with Dave Ramsey on some things (although I agree more than I disagree). Credit cards can be a tool if used correctly and this is one example (out of many examples).

Many of the major credit card companies (Visa, MasterCard, American Express) have some form of extended warranty protection. This is available on all Visa Signature cards and many other Visa credit cards (Warranty Manager Service). MasterCard offers Extended Warranty on their World MasterCard and others. American Express offers its Buyer’s Assurance Plan on all their cards. Discover does not currently offer any extended warranty protection.

Qualifying items must be purchased entirely on the credit card. They will usually add one year to the manufacturer’s warranty for free and if it breaks within that extended period, the credit card company will reimburse you or replace/repair the item! So next time you’re offered to purchase an extended warranty plan, just politely decline and charge it to your credit card! Remember to keep all invoices, receipts, manufacturer warranty papers, etc. as you may need it to file a claim. Also the original credit card has to be kept open in order for it to work.

As a credit card holder, it pays to know your benefits! Take advantage of those benefits and you could save money!

As always, check the terms of your actual credit cards to make sure you have this.

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It’s very refreshing to hear news of a credit card company actually doing something positive once every blue moon. Citigroup, which is the third largest credit card issuer in the U.S., said that it is essentially getting rid of universal default.

Universal default is a clause on credit card agreements where a credit card issuer can raise your credit card interest rate if you default on any other obligations to other lenders. This practice seems to punish you for making mistakes with other lenders. So if you happen to default on a loan that doesn’t even have to be another credit card, all of your credit cards can shoot up to 24% interest and even higher in some states! How fair its that?

Here’s the link to the Reuter’s article.

Even rental property should have an insurance like the life insurance or home insurance, especially when business services exact more attention with conference calls coming in rapidly.

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In a recent article at MSN Money, a study found that 1 in 7 (14.3%)Americans own 10 or more credit cards! The average American has 4 credit cards and the average credit score is 674.

Where do you stand? What’s your FICO credit score? How many credit cards do you have? How many do you carry in your wallet or purse? Leave your comment here. Personally my FICO score is currently 658; down from a high of about 730 (I’ll explain later). I usually carry one Visa credit card in my wallet and my Washington Mutual MasterCard Debit card. I use the Visa for everday purchases which I pay off every month. The debit card is just for ATM use, although I rarely use this unless I’m depositing a check through the ATM.

Now I’m going to explain why my credit score dropped. I’ve got almost 4 grand in credit card debt! I have a MasterCard with $1500 on it at 0% that I’m going to pay off as soon as the promotion is up. I also recently took out a 0% $2300 balance transfer from Citi to myself and it’s sitting in a savings account earning 5.25%. I’ll pay that off in 12 months. I have no problem using free money and that’s essentially what it is. As long as you’re disciplined, this is a great way to earn a little interest on the bank’s money which they normally do to you. I wouldn’t suggest this, however, if you’re swamped in credit card debt, for obvious reasons.

If your FICO score is high though and your credit card interest is at 15% or higher, I would give your credit card company a quick call and ask them to lower your interest rate. What’s the worst that could happen? They might say no but more often than not, they’ll lower your rate. And if they don’t, tell them you’re going to do a 0% balance transfer (even if you’re not). They’ll send you to a retention specialist and they will most likely lower your interest rate to keep your business. There’s so much competition out there for your debt that they’re willing to do these things. All it takes is five minutes of your time!

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