Credit Card Tips

Credit Card Myths Debunked (#ThrowBack Thursday)

There are many different credit card myths that convince people to avoid lines of credit like the plague. Discovering the truth may convince you that a credit card can actually be beneficial in some circumstances.

Credit Card Company Owners are Crooks

This credit card myth is just plain senseless. It’s impossible to lump all credit card companies and executives into a single category. The revelation that one credit card company was using dishonest practices to abuse customers does not mean that all credit card companies are engaged in similar practices. Credit card companies come in many different shapes, sizes, and methods of operation.

Your job is to do your research, compare and then decide on which credit card company you’d trust before signing up with any of them.

Credit Cards Always Create Financial Disaster

Credit cards do not always spell financial ruin for customers. The ruin comes from misusing a credit card, failing to make payments on time, or accumulating a sum of debt that is simply too large to be paid back effectively. If credit cards are used responsibly and sparingly, they can actually be quite beneficial to a person’s financial outlook.

Credit cards can improve one’s credit score, spread payments for large items over several months, and offer a solution in the event of an emergency. To enjoy the benefits though, ensure that you pay your balance in full at the end of every month. This will shield you from compounding interest rates on the card as well as late repayment charges.

Beware that credit card interest rates are higher compared to other forms of debt such as mortgages, car loans etc.

Credit Card Interest Rates are Always Too High

There are credit cards with shockingly high interest rates, but these credit cards are not the norm. Interest rates are determined by industry standards, and labeling these rates as “too high,” is failing to take into account the globally accepted industry practices.

Credit Card Perks are Worthless

One common credit card myth that needs to be discussed is the myth that credit card perks are really just worthless incentives used to convince ignorant customers to choose a specific credit card. Of course, there are some credit card perk programs that fail to offer anything of real value to the customer.

This isn’t the case with most perk programs, however. For example, credit cards that work with airlines to offer the accumulation of airline miles are actually offering something quite valuable to the consumer. Capital One is one of the most well-known credit cards with airline benefits.

With this card, you can accumulate miles through regular use of the card, and then you are able to use those miles whenever and however you wish.

Conclusion

The credit card industry is plagued by myths and false accusations. It’s important for a consumer to make his or her own decisions about the credit card industry before deciding to never open a line of credit. And at the end of the day, its you who is solely responsible for the use of that credit card. You determine whether it will be for your good or if it will lead to debt.

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Weekly Roundup – How To Avoid Credit Card Debt

Credit card are considered evils of our society, things that should be avoided at all costs. Why? Because they can lead to serious debt. Quite a number of people struggle under a load of Credit Card Debts. This is because they keep on purchasing goods and services without realizing that they are over spending thus they end up accumulating huge debts which mostly they struggle to pay. There are some steps you can follow to make sure you don’t get into credit card debt.

Charge only what you can afford

Don’t buy stuff you can’t afford. This might sound obvious, though it is a common trap that many fall in to. If you wouldn’t spend cash on something, why buy it with a credit card? After all, the day will come when you need to spend that cash to pay off your card, so always think twice before charging a large purchase.

Have an emergency fund

Set aside emergency fund to cater for unplanned emergencies that may arise rather than using credit card that might accumulate huge debt.

Create your own budget

Come up with your own budget based on the amount you posses and strictly adhere to the budget. Let every purchase you make with your credit card not forgetting their hidden charges be within your budget.

Pay on time

Pay your balance each month. If you can pay off the balance of your credit card statement each month, you will avoid paying interest charges. Interest and fees are really where credit cards get expensive, so avoiding paying interest at all costs.

Use Prepaid cards

Use a prepaid card whenever you’re shopping. By using prepaid cards, you get a particular amount of money to spend and you don’t have to worry about overreaching your credit limit.

Leave your credit card at home

Leave your card at home when you go shopping. Unless you know for certain thing you’re going to buy using the card, there is no need to take it with you. This will completely take the temptation of using the card for a spur of the moment purchase completely out of the equation.

Avoid cash advances

Avoid using credit cards for cash advances as they attract higher interest transaction fee and you don’t get a grace period.

What is your approach in avoiding credit card debts? Let’s us know in the comments below.

Amazing Reads of the Week

Life After Debt: Planning Ahead For Our Debt Free Future – Disease Called Debt

Top 10 Summer Memories – Financially Blonde

The Four Stages of Financial Independence – The Simple Dollar

If You’re Going To Succeed, You Have To Have a Plan! – Enemy of Debt

Defined Contribution Plans: Why Opting Out Shouldn’t Be An Option – Boomer and Echo

Luzern and a Novel Approach to History Interpretation – Elizabeth M. Covart

Challenges of A Traveling College Student – Twenty-something Travel

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5 Ways to Earn Airline Miles Rewards Faster.

 

1. Use  Credit Cards for Shopping.

Using your credit card to shop might be a quick way to score the air miles quickly. This can be great benefit for the lovers of shopping. There is no limit for for chances to open accounts for both Visa and MasterCard. However, before opening any account, its advisable to look into annual fees and APR rates.Most credit cards also offer bonus points by spending up to a certain amount, in the first months after purchasing the program.

2. Buy Miles from the Airline.

Another way of earning airline miles is to purchase them yourself. This is applicable in cases where you don’t plan to travel or do shopping  with your credit card. Mostly you will get bonus points while you purchase the airline miles when a promotion is available.

Most airline also allow their customers to share their air miles to a family member or a friend. Donations in form of air miles can also be shared to the needy.This ensures that buying the air miles can never count on you.

3. Focus on a particular program.

When you focus on one program, you get a chance to pay attention for any offers and promotions they offer. This may end up helping you to earn a lot more air miles quickly. Also it gives a chance to see what partners they work with where you can earn bonus points.

Apart from that, you will be able to have a chance to access air miles offers such as car rentals, hotel rentals, etc.

4. Shop Online.

Another way of collecting air miles is using you card to shop online. You will find many online partners who are ready to help you check out your shopping. In most cases you will find yourself earning miles for any dollar spent on online shopping.

5. Redeem Miles.

Air miles can be redeemed for hotels, resorts, car hires etc. At the same time , you will earn miles at the same time. This can be very beneficial if you have many miles to redeem.

Alternatively, if you are not into flying, you can get a cruise miles card and enjoy the high seas and exotic destinations while raking in some points. With enough points you can slash your cruising budget, get upgrades in your cabins etc.

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Travel Blogger Interview – Frequent Flyer Bonuses

frequent-flyer-bonusesFounded by Patrick Sojka of Calgary Canada, FrequentFlyerBonuses.com came as an offshoot of RewardsCanada.ca, the much renowned travel rewards resource for Canadians. As Rewards Canada only listed bonus offers available to Canadians, it was only natural and easy to expand and create a site where people from around the World could find and access bonus offers for their favorite airline, hotel and credit card programs. You can also follow FrequentFlyerBonuses.com on twitter, facebook or Google plus

What motivated you to start FrequentFlyerBonuses.com?

FrequentFlyerBonuses.com actually stemmed from my first site: RewardsCanada.ca. I have bonus offer section and that was seeing lots of traffic from outside of Canada but I only covered offers that Canadians could use so it made sense to launch a site that covers all loyalty promotions from around the globe, hence the launch of FrequentFlyerBonuses.com in 2005.

Are you an avid traveler yourself?

Absolutely! Some of my travel slowed down when we had kids but that is totally ramping up again.

What advice do you have for someone looking to apply for an airline miles credit card?

Look at both sides of the equation, that is the earning and the redeeming side. Don’t be swayed by a large sign up offer when those points may not be worth much. A good example was here in Canada where a card offered by ATB offered a 100,000 point sign up bonus, which seems huge but in reality that 100k points was only worth a $100 travel credit

As a Canadian do you get jealous of the wide variety of airline credit card offers available to Americans?

Sometimes but the Canadian market seems to offer other benefits on their cards that many U.S. cards don’t. I guess it is a trade off. The U.S. market is tightening its grip on the sign up bonuses and the actual churning of cards and as the U.S. economy improves this will only become more prevalent so I think the days of 75,000+ miles/points offers in the U.S. are numbered (which made us Canucks jealous)

What are your views on the churn and burn tactic where people are mass-applying for credit cards to get the bonuses?

This is starting to be curtailed as I mentioned in the response above, Amex U.S. is the first major to nix the churn and burn and I believe more card issuers will follow suit, especially on the co-brand cards as the churn and burn tactic does not build loyalty for the card’s co-brand partners. For cards that have proprietary programs Chase Ultimate Rewards etc. this may not happen for a while.

With many airlines struggling financially, do you think that they will eventually scale back their rewards card offerings?

Not for U.S. airlines as they miles sold via credit card sign up bonuses help their bottom lines but like I said above the really large offerings of 75,000+ miles will soon be few and far between.

Do you feel that airline credit cards offer superior rewards compared to cash back or other rewards credit cards?

If you want to travel in business or first class they absolutely do. If you are an economy class traveller most cards are pretty equal in terms of your rate of return

Do you have any tips regarding earning more airline miles?

Use bonus mile offers to your advantage, they are an easy way to work your way up to that reward you want to redeem for. Many of the bonus offers require registration and while you may not think you can take advantage of the bonus offer, register anyway. Who knows when your employer may send you to Phoenix for a meeting and you don’t remember or realize that the airline you’re flying on was offering double miles on all flights to or from Phoenix. By registering for an offer when you first see it, you’re making sure you don’t miss out on any bonus opportunities.

Or what about general ways to save on travel beyond credit cards?

I’ll leave this one to the travel deal specialists!

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4 Key Facts About Credit Card Signup Bonuses

If you are anything like me you get inundated by credit card offers everyday. Be it in the mail, on TV, on flashy billboards, text messages. They are just everywhere. To sweeten the deal further, most card companies dangle a credit card signup bonus to win you over. They can range anywhere from 10,000 points to a whooping 50,000 points, enough for a local or even international flight. So, today, let us separate the facts from the fluff. Before you put pen to paper on your next card with a signup bonus tied in, read through this. It might save you a tonne of headache in the long run.

1) The Bonus Ain’t Free

There are strings attached to the bonus points. On many cards this will include a minimum amount you need to spend on the card to qualify for the bonus. Most times, the spending minimum is time bound, say, spend $3000 in a month or two to qualify for the bonus. The credit card companies are in the business of earning interest for their money. The bonus is a way to woo you over to them. They understand that having your business in the long run will more than make up for the bonus in most cases.

2) Too Many Too Soon, Your Credit Score Tanks

Even with lucrative signup bonuses, these are still credit cards. When you open too many credit accounts to get the bonuses, you trigger credit checks on your credit history. Too many of these close together sends the wrong kind of message. For you it may be that you want to accumulate points fast through bonuses. Credit companies see you in trouble, in a debt hole, and flag you as a risk. Your credit score gets downgraded.

3) Debt Ruins The Credit Card Signup Bonus Fun

Pay your debts first if you want to get a credit card with a signup bonus. Why? As already pointed out, credit cards with signup bonuses have an “eligibility criteria.” Plainly put, you have to do something to earn the bonus miles, such as hit a spending minimum within a specified period, or do something else thats approved for the card you are signing up for. If you have debt, you might end up sinking into more debt as you try to hit spending minimums. Its best to clear your debts first and then consider the bonus credit card offer.

4) Thou Shall Pay Annual Fees

Most of the top signup bonus credit cards have annual fees attached to them. However, sometimes the fees are waived for the first year you signup for the card. In fact, you can get a waiver of the annual fees for some additional time if you politely request it. At the end of the day, banks and card companies want your business in the long run. They are willing to cede ground in the short-run to win it, so take advantage of that.

Conclusion

Credit card sign up bonuses compound your chances of accumulating airline miles and points fast. You don’t have to wait years to qualify for a single domestic flight. With the bonus you can get your first taste of free flights and upgrades. However, get you facts straight before you signup. Understand that the bonus isn’t free and that getting too many cards too fast will affect your credit score. Be smart about signing up for these cards. Plan accordingly and you will be glad you did it especially when you take to the skies on your first “free flight”.

Have you gotten a credit card with a signup bonus of late? What other advice would you give to someone considering signing up? Please, share in the comments below.

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5 Sure-Fire Tactics To Fight Credit Card Fraud

It happens to a lot of people. Its probably happening to you right now and you don’t know it. When is the last time you checked you credit card statement? Did you closely scrutinize it? Notice any funny charges on it? Maybe it’s time you went back and read it with a tooth-comb. You could be the victim of credit card fraud.

So what is credit card fraud and how do you protect yourself from being a victim?

Credit Card Fraud

Credit card fraud can simply be defined as the malicious use of your credit card by an unauthorized person to pay for goods or obtain favors, with your credit card being the source of funds. In most cases it’s a precursor to identity theft, where a malicious individual usurps your documents and legal persona and pretends to be you. They do this to obtain funds illegally or conduct questionable business/personal transactions in your name.

In most cases, credit card fraud starts with the unauthorized person getting your credit card or account information. How they use that information could mean ruin to your credit score and ultimately financial life. It’s worse if it goes unchecked for long periods of time. Here are some steps you can take to protect yourself from credit card fraud and secure your financial data.

Keep Proper Financial Records

Good financial records are not just the purview of small businesses. As an individual, proper financial records come in handy when you are reconciling your credit card statement with your expenses. Without the records you cannot be sure whether the transactions reported was yours or a fraudulent charge.

Monitor Your Credit Card Accounts & Statements

At the end of each month when you receive your credit card statement, take the time to go through it and confirm that all the transactions listed were conducted by you. Otherwise, you can access your card statement online and reconcile all the transactions cataloged. Online access gives you a hawks-eye view on your finances. You can immediately notice any funny transactions.

Keep Cards and Records Safe

Credit card fraudsters are after your financial information. They go to great lengths to acquire it. Keep your cards and financial records in a secure place. Only carry the card you often use when travelling. You might also want to separate your wallet and credit cards and reduce the chance of someone accessing your cards when your wallet is stolen. More often than not, preventing credit card fraud is a matter of awareness when you using your card.

Safe Transactions

Don’t give your credit card information over the phone. This is more so if you are not sure of the person or the organization you are dealing with. Verify they are who they say they are and only deal with reputable organizations.

It’s also sensible to only enter your credit card information on secure and reputable websites when transacting online. Refrain from sending your credit card information in emails, instant chats or other internet channels unless you are sure of the organization or the person you are dealing with, and even then, do it with caution.

Shred Sensitive Financial Documents.

Buy a shredder and periodically shred outdated financial documents, cards and details that you no longer use. Credit card fraudsters may obtain your financial information by rummaging through your trash. By shredding, you reduce the likelihood they will obtain any sensitive data that may lead to credit card fraud or identity theft.

Conclusion

Avoid credit card fraud by practicing safety in the way you handle your credit cards and financial information. This includes being aware of your surroundings, when you use your cards, and immediately reporting stolen or lost credit cards. By taking simple measures you stand a better chance of preventing card fraud and safeguarding your financial life.

Have you been a victim of credit card fraud? How did you deal with it? What other measures can we take to fight against credit card fraud? Share in the comments!

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