personal credit cards Archives

The Top 0% Intro APR Credit Cards You Should Consider

Posted on July 18, 2020 | by Timiarah Spriggs

Credit cards are the holy grails of credit. They carry a lot of weight when it comes to credit scores and financial profiles. Every debtor should have at least one credit card on his or her credit report. Each debtor should also make sure that the credit card of choice is one that works best for him or her. There are many types of credit card options from which a debtor may choose. One of the most popular types of cards is the 0% intro APR option.

Best Credit Cards With Zero Percentage APR

This credit card type has a promotion that offers the debtor 0% interest for a certain amount of time. After the promotional period ends, the debtor must pay the regular APR.

Consumers can take advantage of 0% intro APR credit cards in many ways. They can use them to merge their credit card accounts. They can use them to make large purchases without having to pay any interest. Also, they can use them to boost their FICO scores. We’ve taken the liberty to find some of the top 0% intro APR credit cards on the market right now that you should consider. Sift through this list and then pick the one that seems like it will suit your current needs. We can even help you find more.

Discover It Balance Transfer Card with 0% APR

Discover It Balance Transfer Card

The Discover It Balance Transfer card is a good choice if you’re looking for 0% intro APR credit cards that you can also use to transfer your balances. The initial 0% interest period is for the first six months for purchases and the first 18 months for balance transfers. After that, the annual percentage rate will increase to a 12.24% – 23.24% variable interest rate. This would be a great time to grab this card and transfer the balances from your other cards to it.

The Discover It Balance Transfer Card has other features and benefits to it aside from its promotional offer. You will also be free of paying any kind of annual fee because the current annual fee is $0. Other features that the card offers are features such as a free FICO credit score, social security number alerts, and friendly US-based customer service representatives. Furthermore, the card doubles as a cashback card. You can get up to 5% cashback on the purchases you make with the card. To make it even better, the credit card company will match your cash back earnings at the end of your first year. This card just keeps on giving!

To qualify for the Discover It Balance Transfer Card, you should have a credit score in the 700 point range. You should also be a US citizen who is at least 18 years of age, since you will have to sign a credit card contract.

Capital One Quicksilver Cash Rewards Card

The Capital One Quicksilver Cash Rewards Card is another card that may interest you. It’s one of the 0% intro APR cards that also doubles as a rewards card. The introductory period of having a 0% APR will last for the first 15 months of your purchases. After the promotional period ends, your purchase APR will change to a 15.24%-25.24 variable APR. Your balance transfers will also be at 0% for the first 15 months you have the card. After that, you will also have to pay a 3% fee.

The Capital One Quicksilver Cash Rewards Credit Card also has many other positive features that come with it. For one, you will not have to pay a fee for any foreign transactions that you do with your card. You will not have to pay an annual fee for this card either. Other features that you will have access to include features such as 1.5% cash back on all the purchases you make with your card. Additionally, you will also have access to a $150 bonus if you spend $500 on your purchases within three months after you get your credit card.

It’s worth taking a look at this card and thinking about applying for it. You must be 18 years of age and be a US resident. Capital One is generally more lenient with their approval criteria than some other credit card companies are. You may be able to get approval for this card if you have a credit score of about 670.

Discover It Cashback Card

The Discover It Cashback Card is another wonderful card offered to you by the Discover company. It is strictly a cashback card and does not offer balance transfers. Thus, it will be perfect for you if you’re not looking to transfer any of your balance. The Discover It Cashback Card allows you to earn 5% cash back on some of your purchases and 1% cash back on your other purchases. It also offers a cashback match as part of the promotion. You will receive a cashback match after the first year that you have the card.

This card is one of the 0% intro APR cards that will be a dream for you to own. Card features include features such as unlimited cashback, anytime redemption, Amazon checkout, and social security number alerts. Afterwards, the user would pay an APR of 12.23% – 23.24%.

You should have a credit score of at least 700 points to get approval for this credit card. As usual, you must be 18 years of age or older.

BankAmericaCard Credit Card

Bank of America is one of the most prominent banks in the nation, and it offers consumers a credit card with its name on it. The BankAmeriCard Credit Card has a 0% APR introductory period of 18 months. After the initial introductory period ends, credit cardholders will have an APR of 13.24% – 23.24% on purchases and balance transfers. They will also have to pay a 3% fee when they do balance transfers.

The Bank of America Credit Card has many features for consumers to enjoy. It offers clients free access to their FICO score so that they know how it’s improving each month. The card also has no annual fee and no penalty APR. Therefore, a late payment will not cause a rise in a cardholder’s APR. It may, however, create a drop in the person’s credit score.

Applicants must have a very good or excellent credit score to gain approval for the BankAmeriCard. They must also be at least 18 years old and be a citizen of the US. Applicants do not have to be Bank of America customers, but being a customer may help them to gain approval for the card.

American Express Cash Magnet

Some consumers are into American Express cards. If you’re like them, you will love the American Express Cash Magnet O% APR credit card. This card offers a 0% percent APR for the first 15 months on both purchases and balance transfers. After the initial promotion ends, the cardholder will have to pay an APR of 14.24%-24.24%, and it is variable.

This card is a cashback card, which means that cardholders can earn money back on their purchases. The card offers a 1.5% cashback potential. The promotional offer for this card also includes a $150 bonus for new cardholders who spend at least $1,000 during their first month of owning the card.

The cashback system allows cardholders to earn 1.5% cash back on every purchase they make. They can use the cash back to buy merchandise, get gift cards, or pay for their credit card bills.

Those two features aren’t the only features that this amazing card offers, however. Cardholders also have access to premium features such as no annual fee and the ability to use their cards in more than 3 million stores and websites.

American Express credit cards are generally hard to get. They require a credit score of 700 points or more for approval. A credit score of 700 or more is considered good or excellent. Card applicants must also be at least 18 years of age to apply. They can make their applications over the phone, or they go to the website and apply online. Sometimes, American Express sends offers to potential cardholders. A consumer can follow an invitation and visit the required site to apply for a card that way. Approval should be quick and painless.

Chase Freedom Card

Chase Bank offers the Chase Freedom card to consumers who have scores of 700 to 750 points. The Chase Freedom card has an introductory period of 15 months where cardholders do not have to pay any credit card interest on their purchases. After the initial 0% APR period ends, the cardholders will have a regular APR of 15.24% – 23.99%. Along with the 0% APR in the beginning, the Chase Freedom card gives a new cardholder a bonus payment of $150. The person has to spend at least $500 during the first three months of account opening.

The Chase Freedom card offers a myriad of additional benefits. One thing they offer that’s different from other credit cards is weekly access to the cardholder’s credit score. The Credit Journey feature keeps cardholders abreast of how they measure up in the credit world. Some of the other features that this card has to offer include features such as 5% cashback on certain categories up to $1,500 and unlimited 1% cashback on all other purchases. Cardholders will also get to enjoy a 3% introductory balance transfer fee and no credit card annual fee at any time. This one is worth a try if you have a good credit score, and you want to take advantage of some huge cashback opportunities.

Capital One Savor One Credit Card

The Capital One Savor One Credit Card is definitely a card that you can savor. It comes in a cute little peach color and a memorable name. It’s one of the 0% intro APR cards that you can get if your credit score is not in the “excellent” category. You may be able to land this card if you have a score of 660 or even a little less. You can certainly give it a try if you don’t have too many inquiries on your credit report at this time.

The 0% APR on this card lasts for the first 15 months after you open your account. You will have a 15.24% – 25.24% APR when the first 15 months of time goes by. You can still enjoy a myriad of features even after the initial promotional period ends. One feature that you’ll be able to enjoy is the $0 annual fee. It’s always a pleasure not to have to worry about an annual fee hitting your account when you’ve forgotten all about it.

This card will also not charge you for any foreign transactions you conduct while you’re traveling. Your cash rewards are perhaps the best part of card ownership. You can earn 3% cashback on all of your dining and entertainment ventures. You can also earn 2% cash back on your grocery shopping. You’ll get 1% cash back in every other category, and there will be no limit to the amount that you can earn. Additionally, the card company will give you a $150 bonus if you spend $500 on the card in the first three months that you have it. That sounds like a deal that you shouldn’t ignore.

Capital One Venture One Rewards Credit Card

Capital One offers quite a few credit card options to the masses. The Venture One Rewards Cards is yet another card that gives you a lot of perks and no hassle. It offers an introductory 0% APR for the first 12 months that you own the card. The difference between this card and other cards is that it also offers points that you can use for traveling. You’ll earn 1.25 miles for every dollar you spend on your purchases. You will also get a bonus of 20,000 miles when you spend $1,000 in the first three months that you have the card. 20,000 miles are equal to about $200 of travel.

This card has many more features for you to enjoy. For one, the regular APR is 15.24% – 25.24%, which is a bit lower than the ones on some of the other cards. You can also use your miles to travel whenever you want to travel. You won’t have to worry about blocks or blackout dates when you want to go somewhere.

This card also has no annual fee, no balance transfer fee, and no foreign transaction fee. That’s a lot of no’s for a credit card, and we think you should take advantage of that. Another “no” that this card offers is no penalty APR. You don’t have to worry about being punished for being late on your payment for one month. This might be an excellent card for you to try to grab. Consumers have rated it with four out of five stars on some of the top credit card categories.

Get Approved for 0% Intro APR Credit Cards

Those are just a few of the cards that you can qualify for that have a 0% APR introductory offer. As you can see, most of them have high FICO score requirements. Don’t fret if you’re not quite in the credit category to qualify. You can take several actions to increase your score so that you can get one of these great cards in your hand.

First, you should apply for an easy-to-get credit card with a low initial credit line on it if you don’t already have one. You can qualify for several unsecured cards. Once you get approved for one, you can use it to build your credit score up so that you can get approved for 0% intro APR cards in the future. All you have to do is make your payments on time each month and keep your utilization down below 30%. The credit card company will monitor your usage and payment history.

Your credit score will go up each month you make a timely payment and keep your utilization low. After a while, you’ll start getting offers from credit card companies you may have never heard of. You will be eligible for one of your favorite 0% intro APR cars as well. Work hard and continue to have faith. You’ll get to where you need to be soon enough.

Final Thoughts

You can start applying for 0% intro APR credit cards right now, and you can have one in your hands in about two weeks. You can also contact us and let us help match you up with a credit card that will be perfect for you. We are not a lender, but we are an advocate. We help consumers find a wide variety of financial products and services they need. Loanry can assist you in finding credit cards, consolidation loans, personal loans, car notes, and more. We can also help you get access to debt recovery products and services. Just reach out to us and tell us what you need. We’ll be delighted to help you grab hold of it.

Timiarah Spriggs

Timiarah Spriggs is a personal finance writer who specializes in credit score growth and smart budgeting. She share budgeting, saving, and financial planning advice with various renowned finance shows, podcasts, and finance sites. Timiarah discovered the world of personal finance out of necessity. Her passion lies in helping consumers stay afloat in the world of finance and become masters of their profiles.

Best Airline Credit Cards to Get You Off the Ground

Posted on April 10, 2020 | by Theresa Hammond | Leave a Comment

Stack of traveling luggage in airport terminal and passenger plane flying over sky

Are you ready to explore the world? Whether you travel frequently for business or always look forward to your next vacation, airline credit cards are the great choice for saving on airline miles and other travel expenses is essential. You want to spend less on transportation and hotels so that you can spend more on experiences that create memories you’ll never forget.

Airline credit cards are a subcategory of travel credit cards that allow you to earn free airline miles and other perks. They can substantially reduce the cost of travel if you fly even occasionally. You may also use your airline credit cards to book more direct flights or bump your seat up to first class. The more miles you accumulate, the more comfortable your flights may become.

Get ready to explore some of the leading airline credit cards available today! The first step to selecting a credit card is to compare credit cards online. We compiled a list of some of the most rewarding credit cards to get you started.

Delta SkyMiles Gold American Express Card

1. Delta SkyMiles Gold American Express Card

Delta may become your preferred airline if you’re looking for airline credit cards that give you a variety of options to earn miles. You can earn two miles for every dollar spent at restaurants and supermarkets. And the same deal extends to all purchases with Delta. If you spend at least $10,000 on your card over the course of one calendar year, you can earn an additional $100 in-flight credits.

The Delta Gold credit card also entitles you to one free checked bag and access to priority boarding when you fly with Delta. Redeeming your points is easy because you can pay with the miles rather than waiting for credits or cash to hit your account before you can book a trip.

Pros

Earn approximately 2 miles for each dollar spent. This includes purchasing takeout food and delivery, but in the United States
Earn approximately 2 miles for each dollar spent at a grocery store in the United States
$1 per mile on all other purchases
Earn flight credit from Delta in the amount of $100, which can be used for future Delta travel after reaching $10K annually in purchase
Rewards never expire
Free checked bag
0% interest first year

Cons

Requires an annual fee of $99
Low APR is more than 16%
Credit must be either good or excellent

2. JetBlue Credit Card

JetBlue offers one of the most competitive airline credit cards because it allows you to earn miles for every purchase made with the card. Many cards limit your rewards miles to select purchases, but you will earn at least one mile for every dollar that you charge on this card. That makes it a great choice for an everyday credit card. You can use it for all of your daily purchases and then pay it off by the end of the month to accumulate points quickly without paying interest.

All of your JetBlue purchases will earn you three points per dollar. Purchases at restaurants and supermarkets will earn you two points per dollar spent. All other purchases are limited to one point per dollar spent.

Pros

No annual fee
10,000 bonus points intro offer
Earn points on all purchases
50% off some inflight purchases
First checked bag free for you and companions with the Jetblue Plus card
For every $1 spent, eligible for 3 times Jetblue purchases
For every $1 purchase at eligible restaurants and grocery stores, earn 2 times the points
All other purchases, earn a point for every $1 spent
No annual fees
Chip enabled
No fees for foreign transactions

Cons

No anniversary bonus
Paid checked bags

Delta SkyMiles Blue American Express Card

3. Delta SkyMiles Blue American Express Card

Forbes recognized this card as one of the best airline credit cards for first-time airline card-holders. It allows you to earn unlimited airline miles, and they never expire. There are also no blackout dates when scheduling your rewards flights. That means you don’t have to plan your travel dates around your airline miles.

Delta requires an annual fee of $550 on some of their rewards cards, but this one requires no annual fee. Other cards may offer more lucrative rewards programs, but you have to consider that high annual fee when determining which ones will save you the most on travel.

Delta often offers thousands of bonus miles for those opening cards during promotional periods. Comparing credit card rates and rewards programs online is a great first step. But make sure to check for temporary promotions to see if you can grab some extra miles just by timing your application correctly.

Pros

No annual fee
No blackout or expiration dates
Unlimited earned mileage with no expiration
Welcome bonus, easy to obtain
No fees for foreign transactions
Pay for airline ticket with miles earned - redeem $50 off airline ticket for every 5,000 earned miles. However, you must book the flight on Delta.com
Save 20% statement credit after using the card to buy food and beverages on a Delta flight.

Cons

Lowest APR is over 16%
Excellent credit score required
Small welcome bonus
No offer for 0% APR Intro
No priority boarding or free checked baggage

Capital One Venture Rewards Card

4. Capital One Venture Rewards Card

While Capital One requires an excellent credit score. This credit card lender is known to accept credit rates that are immediately denied by many others. The card comes with a lot of perks even though it does have a $95 annual fee that kicks in starting your second year. For starters, you can make purchases outside of the United States without any added fees.

You can also transfer earned points to other Capital One rewards programs. If you have other rewards credit cards from this lender, you may have the option of transferring points earned on those cards to your Venture card as well, which allows you to save even more on travel expenses. All points earned on this card are redeemable for airline miles, hotel stays and a variety of additional travel expenses. That gives you more flexibility when redeeming your rewards. You will earn two points for every dollar spent on this card. The type of purchase doesn’t matter.

Pros

Earn points on every purchase
Within first three months of owning the card, earn 20,000 bonus miles after spending $500
Annual fee waived the first year
60,000 bonus miles can be earned
No foreign transaction fees
Transfer points to other Capital One rewards programs
Rewards are unlimited
For every dollar spent on purchases, earn 2X miles
If you book a rental cars or hotels with the card, earn 5 miles for every dollar spent

Cons

Lowest APR is over 16%
Excellent credit score required
$95 annual fee after the first year
Interest rates start over 17%

Capital One VentureOne Rewards Card

5. Capital One VentureOne Rewards Card

This is the upgraded version of Capital One’s popular Venture credit card. You will need a high credit score to get approved. But the lack of an annual fee immediately saves you some money over the Venture card and many other airline credit cards. The VentureOne card also offers credit cards with low-interest rates. Interest under 15% for select consumers, which is lower than many other rewards cards.

You will earn 1.25 points for every point spent on this credit card. That’s a slight increase over the points awarded for the Venture card. If you spend at least $1,000 in the first three months, you’ll also receive a bonus of 20,000 points. You can transfer those points to other Capital One Rewards programs as needed, allowing you to maximize savings if you have access to multiple cards from the lender.

Pros

No annual fee
20,000-point introductory offer
Starting APR under 15%
No foreign transaction fees
For every dollar spent on purchases, earn 1.25 miles
Accumulated miles easy to redeem
Travel accident insurance

Cons

Excellent credit score required

Alaska Airlines Signature Visa Card

6. Alaska Airlines Signature Visa Card

If you rarely travel alone, this is possibly one of the most lucrative airline credit cards for your wallet. It allows you to earn discounts on companion fare. So you’re not the only one who gets to fly for less. You earn this perk every year on your account anniversary, and companion fares start at $121 with no blackout dates. Your card also entitles you to a free checked bag, and up to six guests can share this perk when they check in with you.

All purchases made on this card will earn you one mile per dollar spent. All purchases from Alaska Airlines will earn you three miles per dollar spent. When you buy day passes to airport lounges, you’ll pay half price when paying with your card, and inflight purchases are discounted by 20%. There is no limit to the number of miles you can earn. Which makes this a great choice for a daily use card. Just make sure to pay your balance off each month to avoid paying interest.

Are you worried about timing your trips to take advantage of all miles earned before they expire? That madness is eliminated with this card because your miles never expire as long as your account is in active status. Your miles are redeemable with Alaska Airlines and a list of affiliated partners, including Korean Air, British Airways, and American Airlines.

Pros

Earn 3 miles for each dollar spent
Introductory rewards package offered
No foreign transaction fees
Miles never expire
Not limited to Alaska Airlines
New applicants, earn 60K bonus miles, but you must purchase $3,000 or more within the first three months of being approved for an account
No cap on earning miles
Free checked bag
Yearly low companion fare starting at $121
50% day passes for Alaska Lounge while traveling

Cons

$75 annual fee
Miles are limited to select airlines
Credit score of 670 or more required

Chase United Explorer Card

7. Chase United Explorer Card

Chase United Explorer CardThis is one of those airline credit cards that may not seem competitive at first glance. It does require higher interest rates than some of our other top picks. But it’s still worth considering if you travel with a companion at times or want to take advantage of travel perks beyond airline miles. Not only will you receive one free checked bag each time you fly, but your companion will receive the same benefit when checking in with you.

If you spend $3,000 or more on the card within your first three months, you’ll receive 60,000 bonus miles. The card allows you to earn at least one mile for every dollar spent. And you can earn two miles per dollar for all purchases from hotels and restaurants. You need to use your card to pay for your hotel stays directly through the hotel, so purchases from travel deal websites won’t earn you the miles. Purchases from United will also earn you two miles per dollar spent.

Chase offers some travel benefits that move beyond airline miles, which may make the card’s higher interest rates and annual fee worth the bargain. For instance, you’ll receive a statement credit of $100 every four years when you use your card to cover the application fee for Global Entry or TSA Precheck. Remember, the interest rate doesn’t matter much if you pay your charges off each month. This could work as a daily use card that delivers a lot of free miles, free checked bags and other travel-related discounts.

Pros

Annual fee waived for the first year
Companion checked bag benefits
No foreign transaction fees
No flight black out dates
Tap-to-pay technology
Other travel benefits for cardholders
Earn 2 miles for each dollar spent on restaurant and hotel purchases
Earn 1 mile for all other purchases
10K additional miles after spending $6K in the first 180 days
Earn 60K bonus miles as a new applicant, but you must purchase $3,000 or more within the first three months of being approved for an account

Cons

$95 annual fee after the first year
Interest rates start at close to 18%
No annual bonus
High APR
Awards on flights are expensive and controlled

Are Airline Credit Cards Available with the Shopping Trick?

The credit card shopping trick allows you to secure fast credit card approval for store cards. While shopping with select retailers, you’ll receive a popup asking if you want to apply for a credit card. If you accept the opportunity, you may receive an offer of credit instantly. In some cases, the offer is extended without a hard pull on your credit, but that isn’t always the case. Always assume you will receive a hard inquiry and consider it a plus if you don’t with some cards.

If you have bad credit, this trick may appeal to you, but there are some downsides. The cards offered are limited to those backed by select financial institutions, namely Comenity Bank. The big retail stores that you may shop regularly may not offer credit cards with approval through pop-ups, so you may end up with credit cards that you will rarely use. You won’t find many airline credit cards offered if any.

What the shopping card trick may do for you is help you re-establish your credit. So that you can qualify for the airline credit cards you do want. If you open a few credit cards through the shopping trick and then make small purchases and pay them off each month, you can boost your credit score and prove you’re a responsible credit card user. Simply having those accounts open may also increase your available credit. Which can help you achieve a lower utilization rate if you don’t charge them up.

That may open the door to the most lucrative rewards credit cards, which are often offered only to those with high credit scores and limited blemishes on their credit reports.

Are Airline Credit Cards the Best Type of Rewards Card?

Airline miles are valuable rewards for making everyday purchases with a credit card, but there are other types of rewards credit cards that may make traveling more affordable and/or comfortable. If you don’t fly frequently or just want to weigh your options before applying for credit cards, you should consider a few other reward card options before making your final decisions.

Other types of rewards credit cards worth considering include:

Gas Credit Cards – The number of genuine gas credit cards is dwindling. But you may still find one here and there. They allow you to redeem points for free gas fill-ups, which may reduce the cost of everyday driving or cut the expense of a road trip.
Cashback Credit Cards – These cards allow you to earn cash without limiting what you spend it on. You may receive the cash as a credit on your statement or cash transferred to your bank account. Some cards give you the option to transfer your rewards balance to gift cards for a variety of retail stores and restaurants, which you could apply to food expenses and other supplies needed while traveling.
Luxury Credit Cards – Some luxury cards will give you access to VIP lounges and other upscale perks that make traveling more comfortable. If you only want to secure one rewards credit card, weigh the perks of a luxury carefully against the option to simply earn miles toward your next flight.

If you travel a lot or would travel more if it were affordable, you may secure multiple reward cards to enjoy a wider variety of benefits. One strategy is to use credit cards for everyday purchases and then pay the cards off within the same month. Instead of using money from your debit card or cash to make those purchases, you simply pay with a credit card to earn the rewards. And then use your bank account to pay it off so you don’t carry debt and pay interest.

Conclusion

Some airline credit cards have annual fees while others make it more difficult to redeem points earned. It’s important to figure out those cons before you start actively using the card. The most ideal airline credit cards will minimize fees while making the reward redemption process quick and easy. If there are too many restrictions on how you may redeem your rewards, you may never get the rewards that you worked so hard to earn.

Theresa Hammond

Theresa Hammond is a single parent who learned the basics of personal finance the hard way. She now spends her days researching and writing about financial tips and tricks that are relevant to everyday people. She’s also raising two children who have more financial sense than she had before the age of 21. Her writing extends from personal finance to health, wellness, and even a bit of fiction.

www.linkedin.com/in/theresa-hammond-446b6476

Credit Cards for Dummies for Those That Aren’t Dummies

Posted on March 6, 2020 | by Nwayita Perry

Searching for a credit card is a bit like trying to find the perfect outfit. It’s an intensely personal experience. In other words, the credit card you choose should be a reflection of your financial situation as well as your current credit status. If you don’t have A1 credit you can’t apply for a platinum gold Mastercard. You need to know your creditworthiness and what type of credit card you can realistically expect to be approved for. With this being said, it’s a good idea to do your homework before you go ham and just start applying for credit. A little education about credit cards can go a long way and put you on the path to building a strong credit history if you’re proactive.

Starter Pack of Information About Credit Cards

In simple terms, credit is simply a loan. You are using a bank’s money to make purchases that you agree to pay for later. Most credit cards bill credit cardholders every month. This means that you are required to make a minimum payment on your credit card account once a month. You can carry a balance or you can pay the total balance in full. As long as you are making your minimum payments on time, your credit can grow.

However, other factors come into play, like how much you’ve spent on your credit cards and how many other credit cards you have. Although the concept of a loan is simple, other factors can make credit a little confusing. One of the things that many young people may view as an adult rite of passage is getting a credit card. Even if you’re not a young person, choosing to start using credit card, particularly if you’re new to it, can be both exciting and scary. However, it doesn’t have to be. Investing a little time in securing a fundamental understanding of how credit works are all you need. It’s important to know when you have a limited understanding of a topic.

A credit cards for dummies mindset helps you seek education before choosing a credit offer.

Let’s Dive Into the Ocean of Q&A Related to Credit Cards

Credit cards for dummies teaches the uneducated credit seeker to look at the details. You need to be careful and try to avoid credit card mistakes. We’ve learned that credit use is similar to borrowing money from a bank. In essence, that little plastic card acts as cash allowing you to make online purchases as well as purchases at stores and other retailers. The balance you create is interest-bearing, however. Most cards offer users a twenty to a thirty-day grace period. This means that if the balance is paid in full each month by the due date your purchases are interest-free.

However, you aren’t required to pay off the balance in full. You comply with the guidelines of the creditor if you pay the minimum balance by the due date every month. However, failure to male payments by your due date as well as failure to pay the minimum amount required reflects poorly on your creditworthiness and could damage your credit. Plus, you should keep in mind that the interest on your unpaid balance is growing monthly. If you’re not at least paying the minimum amount due, you could end up paying substantially more than the original amount of your purchases due to the interest that credit cards carry when balances aren’t paid in full.

Getting to the Bottom of It…

Credit can be tricky. Credit cards for dummies ideology encourages research and smart planning when it comes to credit. This is why its best to have a plan, process, and strategic approach when it comes to weeding through credit card offers. Truthfully, most sound so appealing, from cashback offers to free air miles, it can be quite confusing to navigate which credit card is worth your time. Fortunately, there are several steps that you can take to determine if a credit card is for you as well as if its al that it’s chopped up to be. As you open the letter with your credit card offer or read a new email detailing your credit card offer, your credit savvy education can come to your rescue.

There are several questions you should answer and consider to help guide your choice:

Is the Credit Offer Unsolicited and From an Unfamiliar Bank?

If so, do your homework. It’s not uncommon for scam artists to craft enticing emails and letters to get your personal information. Do your research to determine the legitimacy of the offer. Credit cards for dummies explores different credit offers and focuses on teaching consumers how to choose the best credit offers for themselves.

Does the Credit Offer Meet Your Needs?

If you know you need a card that offers balance transfers and a low APR, make sure that the card offer you’re considering has the elements of what you’re looking for. It may be a great card offer but if it doesn’t meet your specific needs, its not the card for you. The credit cards for dummies approach forced the consumer to become extremely personal and hyper-focused on their unique situation and whether or not a credit offer is truly for them.

Hand turns cubes and changes the word 'wants' to 'needs'.

Is the Fee Schedule Clearly Outlined and do You Agree with the Terms?

Many people don’t even look at a credit card fee schedule in detail. They may study the APR but don’t look at the nuts and bolts of an offer. This is important. Does the card charge exorbitant late fees? Are some of the fees strange or unusual? Most importantly, are you in agreement with the types of fees associated with the credit card?

These are loaded questions that you must answer for yourself to proceed. People who are intimidated by numbers may shy away from understanding or even looking at the fee schedule. However, this is a mistake. You don’t want to be a dummy when it comes to your credit. Credit cards for dummies encourages education in the place of willing ignorance.

Does the Card Have an Annual Fee and How does it Stack up Against Offers Without an Annual Fee?

Do the math on this one. It will help you to make a decision. You can answer many financial decisions in regards to credit offers by being willing to take a close look at all the fees that come with a card. Credit cards for dummies help people that aren’t in the know learn about credit and make better choices.

If the Credit Card Offer Includes the Lure of Rewards, are these Rewards Truly Relevant to You?

Many credit card offers come with the perk of reward offers attached to making certain purchases. This is an area where you need to pay close attention. If your credit card offers rewards for items or items that you don’t typically buy, it may not be worth pursuing. If you are a person who flies a lot, a card that offers free mileage as a reward for your purchases may be a useful card for you.

Selecting a credit card is an intensely personal experience that should take into consideration your lifestyle, budget and spending habits, as well as your preferences. Be honest with yourself. Not all that glitters is gold. Credit cards for dummies sheds light on how valuable an offer or offers are to your unique situation and challenges you to make sober decisions.

Does the Credit Card Offer Other Benefits that May be of Value?

Does your credit offer mention travel protection or purchase protection? These are both examples of additional benefits that may or may not be attractive to you. Regardless, use the benefits offered to help you decide on the card, along with all the other details. These additional benefits may have a practical use for you. Consider them when choosing a credit card. Credit cards for dummies seeks to eliminate confusion and educate consumers.

Is the Credit Card’s Payment Network Widely Accepted?

You may receive a great credit card offer from a payment network that isn’t widely accepted. For example, Visa and Mastercard are the two most widely accepted payment networks. although Discover and other networks may still be accepted, you may run into trouble with retailers or shops that don’t accept these less popular payment networks. You will need to consider how this might impact your ability to use the card in the way that you want to. If you don’t plan on using the card for a wide variety of purchases, having a card with a payment network that’s not widely accepted may not be a big deal. However, as an uneducated person, credit cards for dummies encourages consumers to consider this aspect of a credit offer as well.

Does the Credit Card Offer Align with Your Credit Score?

This is very important. You may get an American Express credit offer in the mail. However, your 460 credit score probably makes it highly unlikely that you’ll be approved for this card. Be honest and realistic with yourself. Applying for credit that you’re not eligible for only hurts you by creating an unnecessary inquiry on your credit profile. You don’t need that. Choose the credit offers you apply for wisely. Do your research.

Determine the target credit score that these creditors are most likely to serve and extend credit to. If its not your credit score or tier, move on to something more appropriate for you. Credit cards for dummies push consumers to make smart educated decisions when it comes to choosing credit cards that will best serve them. All credit offers aren’t created equal and some offers are better suited for you than others.

Does the Interest Rate Make the Credit Offer a Practical Choice for You and Your Spending and Payment Habits?

This is a big one. If you’re not one to pay off the entire balance on your credit cards monthly, you may need to ask yourself if getting a credit card with a high-interest rate is practical for you. If you’re someone who gets by making the minimum payment, you’ll be paying through the nose for your purchases if you choose a card with a high-interest rate. Also, if you’re someone who typically doesn’t carry a balance, the interest rate may not be as significant to you.

This is a personal question that demands your honesty. This could be the difference between paying considerably more for an item purchased on credit or paying considerably less based on the interest rate.

Have You Read ALL of the Fine Print?

This can be boring and tedious but it’s necessary when it comes to making an educated and informed choice about a credit offer. You will thank yourself later if you do your homework. The fine print will detail everything that will come with accepting this credit card offer. The fine print details fees, the fee schedule, benefits, and rewards, as well as a whole host of other details that you need to know if you want to be a cardholder.

Consider this, you will only have to pour over the fine print once or twice to make an educated solid decision. However, the time you take to do this will be well worth it. You won’t be fooled or caught off guard. Plus, this allows you to ask any questions you may have about the credit offer before you apply.

Putting All the Pieces Together

All the questions that you consider regarding a credit card offer will help you to make a solid and informed choice about which credit cards will be best for you. It’s best to leave no stone unturned. The more you know the better. Many things aren’t readily apparent when it comes to evaluating a credit offer. This is why you should take your time and read between the lines as much as possible. You can’t go wrong by doing this. After all, this is your financial health and future that you will be impacting when you make a credit card choice. It’s best to choose well.

For example, if you need brain surgery and need to choose between two or three different surgeons, yure going to want the one that specializes in your particular kind of brain surgery and has the credits and training to show it. Right? Although credit and brain surgery are two different things, you still need to make a choice that serves you and your unique situation well.

Late Payments, Missed Payments, and Maxed Out Credit Cards

As a new credit cardholder, it’s a good idea to get a firm understanding of one thing. If you don’t make your payments on time you will tarnish your credit history. On the other hand, paying off a credit card balance on time can improve your credit score. Payment history comprises thirty-five percent of your credit score so it’s safe to assume that it’s pretty important to creditors. It’s common sense. If you loan someone money you want to know that you’re going to get it back, as promised. In essence, a credit card is a small plastic promise to pay back borrowed funds. It can help people in a pinch.

However, when it’s neglected and not handled properly, it can destroy your financial health and creditworthiness. If you miss payments, pay late, and /or use all the funds available on your credit card, you will be perceived as a credit risk if this becomes the way you handle credit in general. Be careful with your spending, honor the terms of your credit card, and pay your bill on time.

Calling All First Timers and Credit Card Newbies…

Now that you have a basic understanding of how credit works, you may be wondering how to choose and pursue the right credit card offers best suited for you. This is not difficult either. There are many tools to help you with this pursuit. You can use different tools to help you determine your best first credit card and you can also compare credit cards online. You should do both. Research and explore as much as possible because this will help you to find the credit card that is truly best for you. Loanry can help. We select credible credit card companies for you to consider.

Conclusion

Navigating credit card offers when you don’t know much can be a little intimidating. However, you don’t have to be intimidated if you don’t want to be. All you need is a little education and credit savvy along with the willingness to do your homework. Don’t be lazy and don’t take short cuts. Read the fine print. Research unfamiliar banks and understand the details of any credit offer before you apply. There are many tools that you can use to help guide your decisions. Many are free and most just require common sense and a willingness to pay attention to details.

Nwayita Perry

Nwayita is a personal finance writer who knows the value of getting the most out of her dollars. She understands that financial savvy is the key to making her budget stretch. She takes pride in sharing her financial planning and spending advice generously and prolifically. Her passion lies in helping millennials, as well as people of all ages and from all walks of life, develop rich habits they can use for life.

How to Prevent Credit Card Fraud: Swipe and Beware

Posted on November 24, 2019 | by Carlie Lawson

Those horror stories you see on the news about someone’s credit card getting stolen and the thief racking up thousands in debt happen every week. Credit card fraud is scary. It does not need to happen to you though. You can protect yourself. As you prepare for the holiday shopping season, you need to prepare for the inevitable crush of shoppers, the fights over the last of an item and most importantly, you need to protect your credit card.

Most of my shopping gets done online since I stay pretty busy writing, so I am pretty ratchet about protecting my credit card information. Still, a few years ago someone did nab my information and I had to clean up a ton of problems on my credit report. Sometimes, I think I got invited to write here because I have learned so much the hard way. It happened to me and I can tell you how to protect yourself and how to clean up the mess if it has already happened to you.

Tips for Preventing Credit Card Fraud

Whether you shop in-stores or online, your credit card information remains at risk. You can keep it safer though. It just takes a few extra steps to avoid credit card fraud. You have to learn to be on the lookout for scammers and thieves. It is all in the preparation you make. Start with these tips to get yourself well prepared to shop.

Tuck your credit cards into your purse or wallet and wear it close to your body. This makes it tough for thieves to snatch.
In busy shopping centers or malls or in busy outdoor shopping markets, carry a small purse to make it tougher to steal or pick-pocket.
Take only the credit or debit card you will actually use that day like the zero APR credit card you plan to use for that new stove. Leave everything else at home, especially your cash advance credit card.
Quickly use your credit card and then put it away. The less time it gets exposed, the less likely your numbers can get stolen. Thieves can use their cell phone to photograph your credit card while it is out getting used.
Keep your cards in a separate location from your wallet or purse. If you get pickpocketed, you only lose the cash in the purse or wallet.
During a transaction, keep your eye on your card. Make sure you get it back before you walk away.
Save your receipts, so you can compare them with your statement.
Make sure that you have your credit card with you before you leave the shop or restaurant.
Do not sign a blank credit card receipt. Write a zero into each unused blank or draw a line through it so no person can add to the receipt. Verify your total before signing it.
Be just as vigilant when you stop for gas. Check the gas pump or ATM before you use it to make sure a credit card skimmer has not attached anything to the pump.
Credit card thieves sometimes place credit card skimming devices onto the credit card readers at gas pumps or ATMs. This attaches over the regular credit card swiper and stores all data. Immediately report any such device to the gas station manager and go to a different gas station or ATM.

What thieves do once they steal your info pie infographic.

At-Home Tips for Safer Credit Cards

You also need to be extra careful at home. Handle your financial statements carefully.

Shred anything correspondence with your bank routing number and account number on it or your debit or credit card number on It.
Do not throw your credit card statements in the trash without shredding them first.
Throw the shredded pieces away in different trash cans to thwart thieves from taping pieces together.
Whether you phone your credit card company or they phone you – do not give your credit card number over the phone.
When you phone your credit card company’s customer service, use the toll-free phone number on the back of your credit card.
Do not return calls to a phone number left on your voice mail or sent via email or text message. It could be fake. Always phone the telephone number on the back of the card.
Avoid sharing your phone number with anyone who calls you. You should ask to call them back at the number on the reverse of the card. Get their employee number or extension, so you can reach them directly.
Make it simple to cancel your credit cards by keeping a record of your account numbers, expiration dates and the credit card fraud hotline for each company in your safe or in a safe deposit box. You need it to be in a location that only you can get to the information.
You should be the only person to use your card. Do not lend it to your children, spouse or roommates.
Do not leave your credit cards, shopping receipts or financial statements lying around the house or office.
Open financial mail promptly and reconcile statements with the purchases you’ve made.
Let your credit card issuer know immediately if your address changes.
Let your credit card issuer know immediately if you are going on vacation or will be traveling.
Never write your account number on the outside of an envelope.

Online Credit Card Safety

Your workplace may have a litany of rules for getting online and opening e-mails. Follow them at home, too. For real. They are doing that to keep their servers and systems safe. By following the same rules at home, you can do the same for yourself. You can keep your credit card, bank and investment account information safe, as well as your computer system. Start with these tips.

Be wary of phishing emails. These appear to be from a company you genuinely do business with, but really come from a scammer. Avoid clicking on links in an email appearing to come from your bank, credit card company or any other business that you use. PayPal often gets spoofed in emails. Read the information provided in the email, then take action on it by going to the financial institution’s website on your own – typing the URL of the site into your browser yourself.
Use caution when you use your credit card on the Internet. Enter your number only on sites you know are secure and legitimate.
Use websites that use https:// to indicate there are secure.
Look for the lock icon in the lower right corner of the browser.
Create a really strong password for the card issuer’s website. Make it hard to guess. Keep it safe by not writing it down.
Also, create really strong passwords for any website where you store your credit card number like Amazon or Walmart.
A strong password contains upper- and lower-case letters, numbers, and special characters.
Before you shop with a company for the first time, conduct an online search to read reviews and complaints. This includes online card shops. Use easily checked, reliable sites like Loanry.com or Cashry.com.

What to Do if You Lose Your Card or It Gets Stolen

As soon as you realize your credit card is missing, call your credit card issuer to cancel it. This prevents fraudulent charges. Make a list now of the phone numbers of your credit card companies’ customer service numbers. This makes it easy to find them when you need them.

You are liable for the first $50 charged after the card was stolen. This could be more if you do not report it quickly.

Carefully review your billing statements every month for unauthorized charges. One of the first signs of credit card fraud is unauthorized or duplicate charges. Any charge you see that you know you did not make; you should report to the credit card company right away.

Your credit card issuer can tell if it was an innocuous mistake or if you need to close your account and open a new one to avoid credit card fraud. Does that sound like a lot to go through just to keep your credit cards safe?

When I went through my problem with identity theft, the thieves had first borrowed my address. Once that happened, their information merged in with mine. Many organizations use the information from credit reporting bureaus to verify identity elsewhere. Want to know how bad it can get?

I could not set up a Federal Express account to schedule deliveries to my home because FedEx uses a credit bureau to verify your identity. They want to make sure they are delivering to the appropriate address for your packages and all the others that should go there. Problem was, I was and am the only person to have ever lived in that house. When the verification asked me which of the four people had been my roommate at my lake house, I was at a loss. It took months to clear everything up and I still do not have a FedEx account.

Report Losses and Credit Card Fraud

Call the card issuer as soon as you realize your card has been lost or stolen. Many companies have toll-free credit card fraud hotlines and 24-hour services handle these issues. If you think that your card was used fraudulently, you typically must sign a statement under oath that you didn’t make the purchases or open the account in question.

Reporting Your Identity Theft

While we’re on the topic, reporting identity theft and fraudulent charges does not work quite the same as reporting typical theft like the stealing of a motorcycle. Rather than phoning the 911 line, you should call the non-emergency or business phone number of the local police department. Tell them you need to report a financial crime. If the officer balks at taking the report, you should let them know that you do not expect them to conduct an investigation, but that you are filing it to clear your name and help with the process of reporting it to the credit card companies and credit reporting bureaus. If they continue to balk, request to speak with their supervisor.

Here are five really important reasons to report credit card fraud and identity theft to the authorities.

You help yourself psychologically because it is cathartic. You provide yourself some emotional resolution. Making a police report lets you take back some measure of control that was stolen from you.
Your report provides you proof of the event. Some creditors will request the police report number.
The report means you get the credit report/file freeze for free.
The police might solve the case, especially if you are able to provide the suspect’s name and contact information.
As mentioned, your data provides a piece of information that can lead to the solution of larger crimes.

An investigation could solve a credit card fraud. The more information you can provide, the more likely it is that the police will actually investigate. Cases get scored numerically based on available data provided. The reports that rank the highest by providing the most detail and information get the most attention. If you have identified a suspect or have an actionable activity to investigate, your case stands a better chance of getting investigated. But if a bank just got robbed though, the financial crimes folks will already be busy investigating that. If there already exists a higher-scoring credit card fraud case, they probably won’t investigate you aggressively.

Final Thoughts

You can do a lot to protect yourself from credit card fraud. It begins with your vigilance. Use sites like Creditry and options like store apps to protect your credit cards. Keep on top of your finances. Look at credit card statements as soon as they arrive. Learn the vigilance necessary to protect yourself and, if something does go awry, report it to the police immediately. Stay on top of it and keep it on their front burner. Make sure you help educate others about what it takes to remain safe and protect yourself from credit card fraud. You are your first and best defense.

Carlie Lawson

Carlie Lawson writes about business and finance, specializing in entertainment, cryptocurrency and FOREX coverage. She wrote weekly entertainment business and finance articles for JollyJo.tv, Keysian and Movitly for a combined seven years. A former newspaper journalist, she now owns Powell Lawson Creatives, a PR firm, and Powell Lawson Consulting, a business continuity and hazards planning consultancy. She earned BAs in Journalism and Film & Video Studies from the University of Oklahoma. She also earned her Master of Regional & City Planning at OU. Her passion lies in helping people make money while reducing risk.

The Ultimate Study Guide to Student Credit Cards

Posted on November 7, 2019 | by Julia Peoples

As exciting as college can be, it’s also a bit overwhelming – and we’re not just talking about the papers and exams that are cramming your schedule. We’re talking about the financial aspect, too. Even if you have financial aid, there are probably some expenses it doesn’t cover. Sure, you could ask your parents for help, but you want to be independent. And anyway, you need to prepare for life after college. How can you do that while paying for your own expenses? Student credit cards.

What Is a Student Credit Card?

Student credit cards are a lot like regular credit cards in the sense that you use them to pay for your purchase and then repay the money. The differences typically come with the approval process and the perks that come with them.

Let’s talk about the perks first. Most regular cards offer perks like airline points or cash back at the gas station. These are great rewards for many people. However, they don’t always apply to students.

You know what does apply? Free annual membership to Amazon Prime, meal perks, and streaming subscriptions.

Those are the types of rewards you can gain from using a student credit card. Even better, some offer things like a statement credit if you keep your GPA up to a certain level. Talk about an incentive to hit the books!

Another difference is in applying for the card. Issuers that offer student credit cards are well aware that you haven’t yet had time to build a credit score. Some students haven’t used their credit a single time. Therefore, they make contingencies for that. They typically go more by income than anything else. And most allow you to get your parents to co-sign or even for you to claim your spouse’s income if you happen to be married. In short, they can be a bit easier to get for many students than regular credit cards.

Reasons to Get a Credit Card As a Student

There are plenty of good reasons to get a student credit card. Before we dive into those, though, it’s important to understand something. Credit cards are handy and can help you out. But if you use them irresponsibly, it can mess you up for years to come.

So as we talk about these benefits, remember that we are talking about responsible credit card usage. Don’t let your credit card be an excuse to go wild and fill your dorm full of stuff you can’t afford.

Now that we’ve had that talk, let’s get to the fun stuff.

Incredible Learning Experience

You’re in college to learn, right? Why not extend your curriculum to learn how to manage credit the right way? By using a student credit card, you learn how credit works as a whole, how to track your spending, how to pay your bills each month, and more. And these lessons can follow you until the day you breathe your last breath.

Understand that you’re new to it, so you’re going to make some mistakes. That’s okay – we all do. Mistakes aren’t something to beat yourself up over, though. They’re something to learn from, so you can do better next time. So, as long as you’re mindful while you use it, you can learn a lot from using a student credit card.

Fund Your Needs – And a Few Wants

It’s not uncommon for college students to live on Ramen noodles and to barely skate by with finances. In fact, many people actually enjoy that part – at least to some degree. It’s part of the college experience. However, not a single one of those students will deny that they’d like to order a pizza during all-night study sessions or not have to wait for a monthly stipend to buy deodorant.

Student credit cards can help you get by in between paychecks or monthly allotments without having to call and explain to your parents why you blew all of last month’s. This is, however, one of those don’t go crazy areas. An occasional burger or pizza and purchasing necessities are good. Just try to keep the spending in check.

Pave Way for a Positive Future

You won’t always have a dorm room to stay in or student aid to help cover your needs. One day you’ll graduate and, unless you want to move back in with your parents, you’ll need to rent a place. Unfortunately, this can be hard for most recent graduates as you’ve spent the last two to four years focusing on school.

A student credit card can make a big difference at this time. If you’ve been using and responsibly managing your card while you’re in college, you have two to four years of positive credit history. This can help you get approved for everything from an apartment to a new car.

It can even help you land a good job and get lower insurance rates. Bottom line: you can pave a brighter financial future simply by being responsible with your credit before you ever actually need to use it. Who doesn’t need a jumpstart in life?

You Can Get Some Pretty Sweet Perks

We talked a little about the perks above, but it’s worth mentioning again. Some student credit cards come with some pretty amazing rewards. Who can’t use a free year of Amazon Prime? Granted, these benefits vary between card issuers, but most offer something that a college student can put to work.

For example, there are some cards that offer forgiveness for one late payment in a given period. Since you’re just starting to learn how to manage your credit, this benefit can be really awesome. Some companies even have scholarship programs for their participants. And most offer 0% interest in your first year of use.

Pros and Cons of Student Credit Cards

Okay, so let’s review the pros and cons.

Pros

Ability to build your credit history and score before you’re responsible for all your own bills
Incredible learning experience with real-world applications
Freedom to take care of needs and wants between checks or allotments
Great rewards programs that can help you through your college career
Ability to take care of emergencies, like flat tires or dental appointments for toothaches
Opportunity to build healthy financial habits early
Usually easier to get than a regular credit card

Cons

Leads to temptation to spend when you shouldn’t or to spend more than you should
Could be stuck with a high-interest rate after introductory offer
Irresponsible use can impact your future for years or even decades to come
Usually a lower credit limit than regular cards
Might need a cosigner or have to choose a secured card

How to Get a Credit Card As a Student

Getting your student credit card doesn’t have to be complicated. You just need to follow these steps:

1. Think about what you need the card for and what kind of perks would be nice for you. Before you start looking for one, it’s better to have an idea of what to look for.

2. Start your engines – I mean, your research. Compare the different cards available to find which one offers what you’re looking for.

3. When you’ve found a few that you like, take a look at their requirements. Determine if you’ll need a cosigner, what types of income they require, what documentation they accept to prove you’re a student, and anything else you can find.

4. Gather all of the documentation you need. The process can move a little quicker if you’ve got everything in hand before applying. And if you need a cosigner, go ahead and talk to your parents at this point.

5. Lastly, it’s time to apply.

5 Best Credit Cards for Students

We’re going to help you get started with your research by showing you five pretty awesome options below.

1. Discover It Student Cash Back

This card is a pretty good one, as it’s really easy to apply. You don’t even need a credit score to do it. And yet, you can earn 5% cash back on pretty much anything you buy using PayPal.

So, when you go on an Amazon shopping spree or splurge on pizza night – or do the responsible thing and buy school supplies – you’re earning 5% of that back. If you don’t use PayPal, you still earn 1%. Even better, they match everything you earn that first year.

You also get 0% interest for the first six months. Unfortunately, that can jump up to 22.74% after that period, so you’ll need to be prepared for that.

2. SavorOne Student Credit Card from Capital One

If you like the idea of cashback and monetary rewards, this is a pretty good card. You can earn 3% cash back on streaming, dining, entertainment, groceries, and more. And you earn a $100 cash bonus if you spend $100 on your card within three months of getting it.

There is no annual fee, which is great. At this time, though, there is not a 0% interest rate introductory offer. Instead, you’ll pay 15.24% to 25.24% from the beginning. They do run introductory offers sometimes, though, so look into it before you avoid this card.

3. Chase Freedom Student Card

The Chase Freedom Credit Card is a little different than the other options on this list so far. It offers a lower cashback amount at only 1% on all purchases. This might seem undesirable, but it can actually be nice.

It means you don’t have to keep up with how much you’re earning – it’s the same amount all of the time. And, unlike most cards, you don’t need to hit a minimum balance to redeem those rewards. You can redeem them at any time – no matter how few or how many you have available.

There are some other benefits, too. For instance, you get a credit limit increase after you make five timely payments. There’s also no annual fee and you get $50 after you make a purchase using your card in the first three months.

4. Bank of America Travel Rewards Credit Card for Students

If you’re going to college a long way away from home, this might be the best card for you. The Bank of America Travel Rewards Credit Card for Students allows you to earn 1.5 travel points on every single dollar you spend.

And if you spend at least $1,000 in the first 90 days, you get a bonus of 25,000 points. These can come in really handy when it’s time to fly home for the holidays or during summer break. And the good thing is you don’t have to worry about blackout dates.

Additionally, there is no annual fee. You get 0% interest for the first 15 billing cycles, but that can increase to 24.74% once that intro period is over.

5. Journey Student Credit Card From Capital One

For those who love to stream, the Journey Student Credit Card from Capital One gives a $5 streaming subscription credit each month as long as you make timely payments. Subscriptions like Amazon Music Unlimited, SiriusXM Streaming and Satellite, Spotify, Disney+, and Prime Video are all eligible.

Additionally, you earn 1% cashback on all purchases. And you can increase that to 1.25% if you make your payments on time. There’s no annual fee, but the interest rate is 26.99%. That can quickly add up. The best way to earn all of your rewards and prevent yourself from having to pay such high interest is to pay your balance before the end of the billing period.

How to Responsibly Manage Your Card

One of the most important tools you’ll learn to use as an adult is a budget. It is a clear plan about what you need to pay and where to send your money each time you get paid. That helps you make smarter buying decisions, as you know how much money you have for extras.

As a college student, you might not yet know how to budget or be very comfortable with it, but there is a simple solution for it. Head to the Goalry Mall and sign up for your member key. There you’ll find a budgeting tool that can help you stay on track.

You’ll also find other financial tools and a plethora of educational resources that can teach you everything you need to know about finances. By the time you graduate from college, you can be a master at managing your money.

Conclusion

Student credit cards can be a very helpful tool – as long as you manage them responsibly and find one that suits your needs. Take the time to look through the options listed here as well as any others you come across. Compare them before making your final decision. Then, put a budget to work to ensure that your card helps you instead of negatively impacting your future.

Julia Peoples

Julia Peoples is a long-time business manager focused on providing decision making assistance to the public. She works with people at key points of their lives who are making important retirement and financial decisions. She has had many articles published that educate the public on sound financial decision making.

Julia writes for those who are working towards financial freedom or a better understanding of how finances work. She has shared her financial insights with individuals on a one on one basis for years.

Rewards Credit Cards for a Rewarding Experience

Posted on November 5, 2019 | by Kevin Strauss

Rewards credit cards are a way to earn money back, points, or miles for your spending. You could get rewards for specific categories or you could get a flat rate for purchases. When shopping for a rewards card, you can see that the cards will vary widely in whether or not there are a sign-up bonus and annual fee, and the kind of rewards that are offered. Cash back cards may not have any annual fees but many travel cards will.

Different Types of Rewards Credit Cards

There are a number of different types of rewards credit cards, including airline loyalty cards, hotel, and cash back cards, along with gas and retail cards. About 60% of credit cards that are issued in the country are actually tied to a rewards program.

Gas

These can also be called fuel cards. This type of credit card started back in the 1920s for convenience. New rewards cards have pretty much replaced the gas credit card. However, there can still be some generous rewards for these types of cards and they only require a fair credit score to apply. If you are on the road a lot, this can be a good option for you.

Travel

There are different types of travel rewards cards, including general purpose, hotel, and airline. Some cards will reward you with an extra boost in your points through a redemption portal. This is a good option if you are okay with not traveling with a particular brand. If you choose a hotel or airline card that partners with specific brands, you can redeem your points for those brands. Since hotel partnerships are so large you are able to access hundreds of hotels in many different countries with just a single card.

Cash Back

Discover originally started the cash back program as a way to give money back at the end of the year based on the charges. This has since expanded to cards that give cash back in bank accounts, checks, and statement credits. Many cash back cards will give you a certain percentage for everything and there may be quarterly categories that give you more cash back.

Store

This type of rewards card is tied to a department store or store brand. The cards can give high percentages of cash back for first purchases and can help you save when you shop at that store.

Luxury

If you travel often then a luxury card can be a good choice since you get access to airport lounges and concierge services.

Business

You can get cash back for business-related spending with this type of card. If you spend a lot on business items then this type of card might make sense.

Popular Credit Card Rewards Programs

There are many different types of credit card rewards programs and you are sure to find one that suits your needs.

chase ultimate rewards

Chase Ultimate Rewards

This is a travel portal that you can use. Chase offers two types of rewards cards for a total of six cards. There are some with an annual fee and some without an annual fee. You can earn points through travel and dining, and for rotating categories, such as groceries, gas, and more. With the portal, you can book all types of travel, as well as enjoy redemptions for merchandise and gift cards.

American Express Membership Rewards

You can use these rewards on eligible airfare, hotel stays, retail purchases, car rentals, and more. There are also eligible business purchases, such as office supplies, that can be used.

Hilton Honors

This includes other brands, such as Homewood Suites and Waldorf Astoria. You get the chance to earn points through partners for car rentals, cruises, and more. You can use the points as a gift by purchasing gift cards or treating yourself to a weekend away. Use the points toward flights, vehicle upgrades, and more.

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Citi ThankYou Rewards

This program is offered through a handful of Citi cards with options to redeem for travel, gift cards, electronics, merchandise, and more. Depending on the product, you can earn 1.25x points when you book travel in the same way that some of the Chase cards are structured. There are about 15 different airline partners in this program.

Cash Back

is the most appealing travel reward among U.S cardholders.

Wells Fargo Go Far Rewards

There are two ways to earn rewards with this program. You can get them by spending with a Wells Fargo credit card or by shopping on the Earn More Mall site. Unlike other programs, these rewards can’t be transferred to an airline partner. Redemptions can come in the form of cash back, statement credits, gift cards, merchandise, or travel.

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Bank of America Preferred Rewards

This program works a little differently from other card issuer programs. It also rewards you for how much you keep in your Bank of American bank accounts.

How to Choose a Rewards Credit Card

When choosing between different rewards credit cards, there are some things to keep in mind.

Travel or Cash Back Rewards: Determine if you prefer a cash back or travel rewards card.

How to Earn Rewards: See how to earn the rewards and if this would make sense with your current financial plans.

How Credits Are Redeemed: See how the rewards are redeemed with the card.

Minimum Spending: Make sure that you are able to meet any minimum spending requirements to actually earn the rewards.

When choosing a card, one credit card shopping trick is to pay attention to the sign-up bonus. See if there are any additional perks, such as access to airport lounges or tickets to some special events. Annual fees will vary from one credit card to another and can range from zero to several hundred dollars. You need to see if the annual fee is going to be worth the rewards you are getting. Some cards will also waive foreign transaction fees when using your card abroad. This may make sense for you if you travel abroad a lot.

Pros and Cons of Rewards Credit Cards

If you are going to have a credit card, it makes sense to use a rewards credit card or else you could be leaving money on the table. There can be great benefits, including waived fees, accrued points, and cash back. However, if you have trouble meeting the budget and tend to overspend with a credit card then these cards may not be the best option for you.

Pros

One of the main pros is you get points, miles, or cash back. Rewards cards can offer extended warranties, shopping and travel benefits, and rental car insurance. Just with other credit cards, rewards cards can be used as a way to build your credit, as long as you pay your bill on time each month. Another benefit is the fees waived on some of the best travel cards. Many of these cards don’t have any foreign transaction fees and some even waive the annual fee for the first year.

Cons

Even with so many positives of rewards credit cards, it helps to be aware of the cons. There may be a higher credit score required in order to qualify. While it’s possible to qualify with a lower score, the cards with better rewards tend to need a higher credit score. Be sure to check the required score of a card you are interested in before you apply. Some rewards cards can cost you in time since you have to spend some time to maximize cash or points. Some travel cards also have blackout dates that can limit your choices.

If you don’t want to invest any time then there are some rewards cards with flat rates. While it’s easy to improve your score each month with on-time payments, if you aren’t careful, the cards can destroy your score if you carry high balances. You also don’t want to destroy your budget if you aren’t paying attention to your spending and are only focusing on the rewards. Interest rates on some rewards cards may be higher. If you are going to pay off your card each month then it’s not a problem but that’s not always the case.

How to Maximize Credit Card Rewards

If you are spending wisely then you can earn a lot of cash back or points when you take advantage of rewards credit cards.

Choose a Card That Gives Rewards for Your Type of Spending

If you are loyal to a certain airline then their co-branded credit card can be a good option for you. When you choose a card that rewards where you spend the most money then you can get the most rewards possible. If you don’t travel much then you won’t benefit from a travel rewards credit card. In order to figure out what you spend the most money on, go through your credit card statements from the past few years to help you pick a card that lets you maximize your rewards.

Look at the Sign-Up Bonus

Cards offer a sign-up bonus as a way to get new customers. It’s a good way to be able to quickly get lots of rewards. If a sign-up bonus looks good to you, make sure you know the terms of the bonus. To earn the bonus, you likely need to spend a specific amount of money in a specified time frame. Be sure you are able to pay off what you spend with that sign-up bonus. If you don’t then the points you accumulate may not be worth the interest you are paying. Also, note what purchases qualify for the bonus offer. Things like balance transfers may not qualify.

Use the Card for Everyday Expenses

When you use your card for everyday expenses that you were going to purchase anyway, it’s a great way to get lots of rewards. Add utility bills, grocery shopping, gas, and streaming services to your card. Since these are things you are already paying for then they are likely to fit in your monthly budget. You may even get rewards for these spending categories.

Add Authorized Users to the Account

When you add an authorized user to your credit card, it can help build up your rewards. People will usually like to add family members, such as a child or spouse. You are responsible for paying off the purchases that the authorized user makes so be sure it is someone you trust.

Look for Other Opportunities

Some credit cards have revolving quarterly categories that give you more cash back. These cash back categories can include restaurants, gas stations, and rideshares. If you have one of these credit cards then try planning your spending throughout the year to get more rewards. Some rewards portals let you get more cash back if you purchase through online retailers when you link the card to their sites.

Pick Just One or Two Store Cards

During the holidays, every store you visit tries to get you to apply for its store credit card. The key to getting the most rewards is to hold back and then just have one or two cards that offer the most rewards at the stores you shop at the most.

Final Thoughts

There are plenty of different rewards credit cards to choose from that can help you earn miles, cash back, or points on purchases that you make. Choosing rewards credit cards will depend on your personal financial goals. If you travel often, you may find a travel rewards card is better suited for your needs. Keep in mind that there are pros and cons to rewards credit cards, just as there are to regular credit cards. Once you choose rewards credit cards, learn more about the program and some tips and tricks to maximize your rewards.

Kevin Strauss

Kevin Strauss is a personal finance writer and homeowner based in the Los Angeles area. Being in one of the most expensive markets in the country, he’s learned to maximize resources to plan for both his monthly expenses and future financial needs. Kevin has a passion for helping those in a similar situation navigate the complex world of personal finance so they can pay down debt, plan for the future and live out their dreams. In addition to covering personal finance in depth on Loanry.com, Cashry.com, Debtry.com, Budgetry.com, Billry.com, Creditry.com and Taxry.com. Kevin shares his expertise with readers who want to create budget-friendly habits across the web.

Credit Cards for Fair Credit: Swipe Here

Posted on October 27, 2019 | by Brandy Woodfolk

Credit cards can be excellent tools when handled responsibly. If you have been thinking about obtaining a credit card but are afraid you will be turned down due to your fair credit score, we have good news: there is a card out there for pretty much anyone. Fair credit may not be the best, but you can still find a credit card to help you meet your goals. This information should help you with your search.

What is Fair Credit?

If you are looking into credit, there is a chance that you have heard of more than one type of credit score: a FICO score and a Vantage score. While lenders vary, the most commonly used and well-known credit scores are FICO scores. These usually range from 300 to 850. The following is how these scores are viewed:

580-669

is a score range that is considered fair on the FICO scale.

Approximately 17% of Americans fit in the Fair category. A full 33% of Americans fall into either the Very Poor or Fair credit. If you have fair credit, you are most definitely not alone. The good news is that fair credit still gets some opportunities; so if you are looking for credit cards for fair credit, do not despair. There is hope.

Breakdown of a Credit Score

It is important to know exactly what goes into your credit score, so let’s break it down:

Note that the two biggest factors include your payment history and the total you owe. Though you should work on your credit as a whole, these two sections are a great place to start. As we will go over in this article, you should always try to keep your payment history looking as good as possible. Pay what you owe on time as much as you can. Try not to be a bit late.

Then, pay off as much as you can. The less you owe, the better your credit score will be. Make a repayment plan, even if you can only pay $5 on a debt each month. Try picking up extra shifts or a side hustle to pay it off quicker.

Opening new credit cards can help, too. First, by lowering your credit utilization, then by adding more to your credit mix and putting a little more activity on your credit. Even if your credit is less than desirable at the moment, by following the tips listed here, you can increase your score for the future.

What is the Difference in Credit Cards for Fair Credit vs. Other Credit?

Credit cards are basically the same. They are simply avenues of borrowing money. The difference comes in the terms that come with each credit card. Credit cards for good credit will have much more favorable terms than credit cards for fair credit, though credit cards for fair credit will have more favorable terms than those for poor credit. These terms will include things such as your interest rate and available credit limit.

Things to Know When Shopping for Credit Cards for Fair Credit

Anytime you are getting ready to make a move, especially in your finances, you need to be educated about what you will face. When you are shopping for credit cards for fair credit, there are quite a few facts you should be aware of.

Different Types of Credit Cards for Fair Credit

Some credit cards for fair credit will require that you put up collateral, typically in the form of a deposit. These are called secured cards, and they may require deposits as low as $39, or they may require a deposit in the full amount of your credit limit. As long as you make your payments on time, most companies refund this deposit after a certain amount of payments.

Interest Rates

Most credit cards for fair credit will come with pretty high-interest rates. You cannot really control these rates. They are, unfortunately, one of the major downsides to having lower credit scores. Over time, if you handle your credit card responsibly, you should find opportunities for cards with lower credit card interest rates. Sadly, when your credit is less than stellar, you will have to start out closer to the bottom and work your way up.

Credit Limit

Credit cards for fair credit will likely not have very high credit limits. While it will really depend on the credit card company, it is usually best not to expect more than a couple or a few hundred. Most companies will increase your limit over time if you make timely payments, but the lower your credit score, the lower your initial credit limit.

Fees

Some credit card companies will charge annual fees. These fees can range in price, and sometimes make the card not worth it. As you compare credit cards, make sure you know what- if any- annual fees you will be paying and if there are any benefits to paying those fees. There are usually other fees, too. These can include anything from a paper statement fee to a late fee.

Credit Card Perks

When you are credit card shopping, you have to watch out for the advertised perks. It is very common for people to fall for credit cards with high fees or high-interest rates due to the perks that come with them. The perks themselves are not necessarily bad things, though. The problems come due to the following people sign up for the perks that they never use.

I have actually known people to sign up for credit cards for airline miles. This would not be a bad thing except that these particular people never- and I do mean never- fly. When I asked one of them why they signed up, she said, “Well, so they’ll be there if I ever decide to use them.”

Basically, she paid a crazy annual fee for something she knew she would probably never use. She would have been better off putting that annual fee in a savings account or investment account every year. If she ever did decide to go somewhere, she could easily pay for her plane ticket with that money, or she would have it for something she actually would use.

Do not fall for credit cards just for the perks unless the perks are something you already use. Earning cash back on groceries or gas, for instance, would be worth it for many people- unless, of course, you never drive and always eat out.

Where to Find Credit Cards for Fair Credit

Credit cards seem to be available everywhere now, but finding the one that is right for your credit and your life is not always a walk in the park. It is very important to compare multiple credit cards to get the best terms and interest rates. Especially when you have fair credit. Without shopping are for credit card interest rates and terms, you could end up with a card that does you a lot more harm than good.

The best way thing to do is to buy credit card online. Through the Internet, you can compare multiple cards at once. In fact, you can even start your search with your personal criteria, such as your credit score. Shopping credit cards for fair credit online will save you a ton of time. And most likely show you some options you would not find out about otherwise. You just might be surprised by what you find.

How Can I Improve My Credit to Get a Better Credit Card?

One of the great things about credit is that it can always be improved. Also, they can be used to fix credit. If this is what you are aiming for so that you can get better credit cards or a home, or even if you want to just keep your good credit, here are some steps to take:

Be Responsible

The biggest thing to remember is to be responsible with the credit card. Do not overspend. Spending more than you can repay is the exact step you should take if you want to be in debt and destroy your credit. Otherwise, be sure you only charge what you can repay.

The first step to following through on this is determining how much you can afford to repay. A good rule of thumb is to not charge anything that was not already coming out of your check. If you were not planning to buy an $800 smartphone this weekend out of your weekly paycheck, do not purchase it with your credit card. In other words, do not just go crazy and spend it because it is available.

Large Purchases

At the same time, credit cards can be useful for larger purchases- if you plan and prepare correctly. Here is the thing about credit cards: they are similar to mortgages and auto loans in that they can help you get things you cannot normally afford all at once. You have to remember, though, that they are also like mortgages and auto loans in the fact that you will be paying back more than you borrow. Interest is going to be added, so you have to really think it through.

When it comes to your credit card, you have to look at it the same way. Is the item you want to charge worth paying interest on until you pay it off? For instance, if you were considering purchasing that $800 cell phone I mentioned a moment ago, will you be willing to pay out extra each month to have it? Or would it be better to pick up a few extra shifts at work to pay for it outright?

This decision really comes down to you. You will be the one paying the bill, so only you can decide what is worth the money. Your priorities can help you make these decisions. I, personally, would not put a TV on my credit card, but if one of my kids asked for a really special gift on their birthday, I might consider it- if I have not saved enough for the gift.

Emergencies

Credit cards can be great tools during emergencies if you have any room left on your card. If you have a card that is specifically for emergencies, normally, you should leave it alone. However, if you were only able to get credit cards for fair credit, you may currently be stuck with a $200 or $300 credit limit. What happens if you have a $700 emergency?

While you do want to be very careful with your emergency credit card so it is available when you need it, you also need to put some activity on it so that you can increase your credit limit. Try just using it for $20 worth of gas once or twice a month and pay it off quickly. Definitely do not use your emergency card for shopping, just for some small charges and repayments that make you look like a responsible cardholder.

Pay Your Bill On Time or Early

Do not be late. I repeat, do not be late with your payment. Late payments can affect your credit more than you will ever know. Be on time with your payment, or early if you can. It can be hard sometimes when you are broke or struggling, but it is possible. Let me tell you my “secret” of paying early.

It can be pretty easy to take care of your bill with a little planning and some type of income. It is important to do a few things. First, make sure your credit card does not charge interest until the end of the billing cycle. And you should definitely know when the end of the billing cycle is. Second, figure out which of your checks will come every month prior to the end of the cycle, and be sure you budget your credit card bill into that check.

Pay More Than What is Due

When you receive your credit card bill, it will tell you a minimum amount to pay. It can be very tempting to only pay that amount when you are broke. The problem is that paying that amount is only going to help you for that moment. Typically, that minimum amount is not even enough to cover the interest you owe.

That means that the next month, you will get charged interest on your purchases and the remainder of your prior month’s interest. Every month, you will get charged interest on your interest. What was once a $200 credit card can quickly increase to thousands of dollars. As long as you are making those minimum payments, the credit card company will continue to let your balance grow.

And that, my friends, is how so many people end up in crazy amounts of credit card debt. I promise, it is not what you want to go through, so pay more than is due every month. If you can follow the system I mentioned above, this will not be an issue for you.

Pick a Good Due Date

Many credit card companies will now let you choose your due date. Try to find a company that gives you this option. Then, before you choose a date, consider which check of the month will be the easiest to make your payment from.

Conclusion

While fair credit may sound unappealing, it does not have to be. It also does not have to keep you from building a better financial life for yourself. There are lenders and credit card companies all over the place now. Some of them work specifically with lower credit scores to help those people build their credit.

If you have fair credit, do not just sit around and wait for your score to go up on its own. There is a credit card out there that can help you increase your score and build up your credit. With some patience, determination, and some work, you can find a great credit card for your current financial situation that can help you build a better one.

Brandy Woodfolk

Brandy Woodfolk is an educator, home business owner, project manager, and lifelong learner. After a less than stellar financial upbringing, Brandy dedicated her schooling and independent studies to financial literacy. She quickly became the go-to among family, friends, and acquaintances for everything finance. Her inner circle loves to joke that she is an expert at “budgeting to the penny”. Brandy dedicates a large portion of her time to teaching parents how to succeed financially without sacrificing time with their little ones. She also teaches classes to homeschooled teenagers about finances and other life skills they need to succeed as adults.

Brandy writes about smart money management and wealth building in simple and relatable ways so all who wish to can understand the world of finance.

www.linkedin.com/in/brandy-m-woodfolk/

Your Ultimate Guide to Credit Card Refinancing

Posted on July 24, 2019 | by Julia Peoples | Leave a Comment

We all have credit cards. Many of us use them, but we do not know the best way to do so. According to USA Today, Americans owe over $1 trillion dollars in credit card debt and that number continues to increase. USA Today states that about 40 percent of those who use credit cards are able to pay the balance due every month.

The other 60 percent have a staggering amount of credit card debt. There are tons of reasons why people owe so much in credit card debt. We will touch on some of those reasons as you continue reading. We are also going to talk about your options when you find yourself drowning in credit card debt, including credit card refinancing. Keep reading to find out everything you need to know about credit card refinancing.

What Does It Mean To Refinance Credit Cards?

Credit card refinancing is when you choose to take your debt from one or many credit cards and transfer it to another credit card. The overall goal is to save money on the interest you are paying on your current credit card debt. Typically, when you transfer money from one credit card to another, the new card gives you 0 percent interest on the transferred balance. Credit card refinancing can save you money in the long run. It helps decrease the amount of money you have to pay each month. If the interest does not build, you have an easier time of paying off your credit card debt.

Another way to refinance your credit cards is to get a refinancing loan. This is an actual personal loan that you use to refinance your debt. As with anything else, there are positives and negatives to obtaining a personal loan to consolidate debt. Some of these refinance options can be handled online with online applications. Today, it is much easier to file for credit cards and loans online with online card shops.

Bank Gives You a Credit Limit

The bank gives you a credit limit and you cannot borrow beyond that limit. You can pay off the amount you borrow by a specific date each month. If you cannot pay the full amount, there is a minimum payment you must make. Any amount that you do not pay is subject to interest charges. If you do not make the minimum payment or make the payment late, the bank assess a fee. Only paying the minimum amount or getting hit with a lot of fees puts you in a dangerous place. You may run the risk of drowning in debt and need credit card refinancing. Keep reading for more about that.

When you use the credit card, that decreases the amount available to you. As you pay off the amount you owe, that increases the amount available to you. I will give you an example to illustrate how it works.

Your credit limit is $2,000. You purchased $500 worth of items. Your credit limit is currently $1,500. Your minimum monthly payment is $25. You owe $500, but can choose to only pay $25. If you only pay $25, you still owe $475 and will pay interest on that amount. If you pay $500, you owe $0 interest. If you pay $500, your available credit goes up to $2,000. If you only pay $25, your available credit is $1,575.

70% of the United States population carries a credit card, with 34% of Americans carrying 3 or more cards.

How Does Interest Work On A Credit Card?

I mentioned above that if you do not pay the balance in full each month on your credit card, you have to pay interest charges. That is typically how credit cards work. Some credit cards offer specials where you can get 0 percent interest for a set period of time. I am not talking about credit cards offering special deals. I am talking about a typical credit card interest scenario. It is important to understand how an APR credit card works.

For a typical credit card, they offer a grace period which is a period of about 15 to 30 days between when you purchase items and your monthly due date. Your due date is the same date every month. That means, if you pay off your credit card by your monthly due date, you do not have to pay interest. Interest is calculated on the balance you owe. Every credit card has a different interest rate they charge to your credit card. The initial rate they offer you is based on your credit score. Some credit cards have interest rates as high as 20 percent.

Let’s Take an Example

Let me show you what that looks like with real numbers. This is an example, the numbers may not be what you really see with your credit card.

Your credit card has available credit of $5,000. You have charged $2,000. Your available credit is $3,000. Your minimum monthly payment is $75. You can pay $500. Your new available credit is $3,200.

However, you must consider the interest. Your credit card charges you 10 percent interest. That means you are charged 15.9 percent interest on $1,500 since that is the balance that is left. This is how you determine how much interest you owe. There are a few calculations that take place when determining interest.

You take your interest rate (15 percent or 0.1599) and divide that by the number of days (365) in the year:
0.1599 / 365 = a 0.00044 daily periodic rate
You multiple the daily rate (0.00044) by your daily balance ($1,500):
0.00044 x $1,500 = $0.66
Lastly, multiply the number above by the days in your billing cycle (30):
$0.66 x 30 = $19.80 interest charged for this billing cycle

The bottom line is not paying off your full balance causes you to accrue interest and you pay more money. Over time, this amount adds up and may cause you to have such a high amount of debt, you may consider credit card refinancing.

Hand press button illustration

What Are The Benefits of Credit Cards?

First, I am going to focus on the good things about credit cards. They can help you build your credit. If you are young, or do not have much in the way of credit, a credit card is a great way to begin to build your credit. You should be mindful that the only way you can build good credit is to use a credit card wisely and pay it off every month. Credit cards also provide revolving credit for you. You can keep a credit card forever. As long as you pay the bill timely and more than the minimum amount, you always have credit available to you. You can keep this for times when you have emergency expenses.

Credit cards offer you convenience because you are able to purchase something today even though you will not have the money for it until next week when you get paid. Credit cards provide you the opportunity to purchase the item when you need or want it, even when you do not have the money. Some credit cards offer rewards and incentives, and if used properly, you can actually earn money by using them. You can receive points that allow you reduced prices for airline tickets, dinner, or other items you buy. This translates directly to savings for you.

You can also use them to do credit card refinancing. Some credit cards offer special deals if you transfer the balance of a high interest credit card to a new lower interest one. This can save you money on interest charges, especially if you have 0 percent interest for a set period of time on balance transfers.

What Are The Downsides of Credit Cards?

I would like to touch on the negatives to credit cards. They are another bill. Whenever you use your credit card, you still have to pay for your purchase. That becomes a bill at the end of the month. It is easy not to think about at the time of purchase because you do not have to pay any money in the moment. You will have to pay for it, eventually. There is that pesky interest that I keep mentioning. I keep bringing it up because it is important for you to remember. If you do not pay the bill in full, you have to pay interest on your daily balance. This is something you can avoid, but you must pay the bill in full to do so.

One thing I have touched on only a little bit is your credit score and how credit cards can impact it. Using credit cards improperly can cause your credit score to decrease. When you use credit cards properly, they can help you build your credit. The opposite of that is also true, improper use of credit cards can negatively impact your credit score. Late and missed payments are the most common ways credit scores are negatively impacted. This is true for loans, general bills, and credit card payments. Just using your credit cards can also impact your credit.

The higher your credit card balance, the more credit you are using and this is a negative mark for your credit. Also, the more credit you use the higher your debt to income ratio becomes which also negatively impacts your credit. Carrying a high amount of credit card debt may also put you in a position where you may need to consider credit card refinancing.

What Else Should I Know About Credit Cards?

As I have highlighted above, credit cards are an amazing tool at your disposal. There is a simple credit card that is simple to use. However, you have to use them responsibly. Credit cards can be a constant source of temptation for you. If you know that you have credit available on your credit card, you might feel compelled to make purchases. You may not need these items, or possibly cannot even afford these items, but because you have available credit, you purchase the item anyway.

This is can lead you down a dangerous path of quickly getting over your head with credit card debt. If you begin to feel like your credit card debt is out of control, you may want to consider credit card refinancing. You have to be aware of your own spending habits and will power when it comes to credit cards. There is no one to police you, but yourself.

Another consideration is identity theft. It is much easier with credit cards, especially with online purchasing. You probably have heard that gas pumps are the worse with stealing credit card information. Gas providers try to stay ahead of those who are out to do harm, but they always seem to be one step ahead of the technology used to prevent them from stealing information.

Identity Theft Reports in the United States

Are There Options Other Than Using Credit Cards?

When it comes to credit card debt it is especially important that you remember even though you are not paying money upfront, you still have to pay. If you know that you may not have the best control over your impulse to shop if you have credit cards, you might want to think of alternatives. You can open a savings account and put money in there for extra things you might like to have. Some people call this a rainy day fund. It could be for vacation, emergencies, or just an occasional shopping spree.

It is money set aside for just that purpose, so you are not spending money needed for bills. You are not raking up credit card debt. This way you do not have to worry about negative implications to your credit rating. You will not have to worry about bills coming in at the end of the month.

Saving money for your needs is a great alternative to getting yourself further into debt. If you have ever felt like you were drowning in debt, you know what a terrible feeling that is. Anything that you can do to prevent yourself from getting into the downward debt spiral, is a smart financial move. If you have been deep in debt previously, you want to do everything you can to prevent that from happening again. If you are currently in debt, you want to get out of it as soon as you can. You may feel like it is impossible for you to save money when you are working hard to pay your current bills. This is the time when you may consider credit card refinancing.

What Is Bill Consolidation?

I mentioned a little bit about debt and bill consolidation above, but I want to dig in a little deeper. The major difference between credit card refinancing and bill consolidation is what debt is being paid. Bill consolidation does not just have to be credit card debt. It can be any type of debt that you have. It is consolidating all of your debt into one manageable payment. Often, you are paying off high interest debt with a lower interest loan or credit card. When you are considering consolidating debt, you need to understand what components make up your debt. This helps you determine which debts you want to consolidate and how to do that.

In the following sections, I touch on the positives and negatives about credit card refinancing. It is important to fully understand the pros and cons of consolidation when you are considering it. When you consolidate your debts, you take on more debt initially. No matter if you obtain a loan to pay off your debt, or open a new credit card to consolidate credit card debt, you are adding to your debt to income ratio.

What Are The Benefits to Bill Consolidation?

There are many obvious advantages to consolidating your debt. The biggest one is taking all of your debt with many different payments and consolidating into one payment. This allows you to focus on paying off one payment instead of many different payments. This also allows you to focus on paying off your debt faster. You know exactly what amount you have to pay each month. It does not change based on usage like a credit card does. The interest rate is fixed and does not change based on how much money you pay each month.

Credit card refinancing may also be able to give you a lower interest rate. This is not always the case. However, when it is, it can significantly lower the amount of money you pay over time. When you have a lower interest rate, it decreases the amount of extra money you are paying on top of the actual money borrowed. When you think of interest, you should think of it as a fee the bank, or lender, charges you to borrow money from them.

What Are The Negatives of Bill Consolidation?

There are some negatives that you should consider with credit card refinancing. One major thing you should be mindful about is the interest rate. You should make sure that the interest rate you are given during consolidation is actually lower than what you are paying now. If you end up paying a higher interest rate, you may end up paying more money. When you consolidate your credit, you may have a long repayment time frame. It may take you up to five years to pay off the consolidated amount. Keep in mind that it may take you longer to pay off your debt if you do not consolidate it.

Unlike a loan, there is no time limit to how long it takes you to pay off your credit card debt. In fact, if you only pay the minimum, it could take you over 10 years to pay off credit card debt.

Another major negative to consolidation is you feel like you have managed your debt. Since you have consolidated to one payment, you may feel like you have paid off more debt than you really have. You still have the same considerable amount of debt. You just have one payment. You need to be mindful that you do not get yourself back into the cycle of credit card debt. You actually might want to consider cutting up all but one credit card. Then you might want to hide that credit card so you have it for emergency purposes only.

How Does My Credit Impact Debt Consolidation?

I have not talked too much about your credit score before now, so let me give you some helpful information. Your credit score directly impacts the interest rate you receive during credit card refinancing. That in turn becomes a direct impact on the money you pay each month. Your credit score may seem like it is not that important, but it is a huge deal. Your credit score is prominently displayed on your credit report. Your credit report is a detailed listing of all of your activities involving credit. It shows your payment history, how much debt you have and how you use it.

It shows the age of your credit. It shows all of your late or missed payments. It even shows loans on which you have defaulted. All of these items listed on your credit report impact your credit score. It is built, or destroyed over time and gives lenders an indication of your credit worthiness. It takes hard work to build your credit score. However, it only takes one or two missed payments to send it downward.

Conclusion

I have given you a lot of basic information about credit card refinancing. It is easy to feel like you have no control when you are buried in debt. There are websites that help you focus on getting your debt under control. They can help provide guidance for credit card refinancing so you can feel like you are making sound decisions. When making financial decisions, it is best to have all the information and make rational decisions. This will go a long way to helping you become debt free.

Julia Peoples

Pros and Cons of Credit Cards: Swipe?

Posted on July 14, 2019 | by Brandy Woodfolk | Leave a Comment

As with almost everything in life, there are both pros and cons of credit cards. Nothing is quite perfect. The question is do the pros outweigh the con? I do not think that the answer will be the same for each person, as everyone has a different financial situation, different characteristics, different strengths, and weaknesses. Therefore, anyone who is considering applying must understand the pros and cons of credit cards so they can answer that question for themselves.

Good and Bad Facts About Credit Cards

This article is a pretty comprehensive list that you can use to make credit card decisions. You may be in limbo about whether or not you should apply for one, and that is completely understandable. Some people do really well with credit cards while others are drowning in credit card debt. What is the difference between these people? It is usually that one group handles them responsibly and the other does not.

One advice

When looking for a credit card, make sure you do so by considering only reputable lenders.

Many times, the way a person treats a credit card is based on the knowledge of credit cards or the lack thereof. Knowledge is power, in my opinion, so understanding credit cards gives me more power over them than they have over me. Below is a list of the pros and cons of credit cards to empower you as well.

Speech balloons with two opposite opinions

The Pros of Credit Cards

Ah, yes, the pros, aka the bright side to the cloudy day. When you are truly breaking down the pros and cons of credit cards, it is hard to ignore the following characteristics:

They are Convenient

Let’s be honest: a credit card can be one of the most convenient things ever. You can make purchases before you get paid, and you can purchase items online. You do not have to carry cash, so you decrease the chances of losing your money. And, it is so much quicker to swipe a card than it is to count out cash or write a check- yes, some people still do that.

They Provide Revolving Credit

Credit can have the capability of staying open forever, so long as you are paying the bill. If you pay your balance, it will be there the next time you need it, so you have an ongoing loan available. That is always nice, especially if you find yourself struggling around a certain time every month. If you get paid on the 1st of each month but find yourself need milk and gas on the 27th, you can use the credit card to get you through. Pay the balance when you get paid on the 1st and you will have it again on the 27th if times are tough again.

They Can Help Build Your Credit

Credit cards are a great tool for building your credit if you handle it responsibly. The best way to use a credit card is to have it cover small expenses or bills that you have the money for. Then, immediately pay it off. So, for instance, if you need $20 in gas and have the money on your debit card, use your credit card to pay instead.

When you get home, use your debit card to pay off the $20 on your credit card. This shows you using your credit but you still are not paying anything extra. There is a common myth that you need to let your credit card add debt in order for it to build your credit. That is very simply not true- your credit just needs to be used. And, in fact, the faster you pay the debt, the better it looks.

So, repeat that pattern of using your credit and immediately paying as often as you can. And do try very hard not to use it for something you cannot afford. Otherwise, all of your hard work will go down the drain, and your credit will be messed up instead.

Credit Cards Can Get You Through Tough Times- and Some Not So Tough Ones, Too

If you need gas before you get paid, a credit card can handle it. Emergency room trips and co-pays? Pull out your card. Impromptu date night? All you have to do is a swipe. Really, a credit card can help you through pretty much anything, as long as the amount is within your credit limit.

The Promotions can Be Awesome

Sometimes, you can find a credit card that offers 0% APR for 6 months or more. These promotions offer a great opportunity to make payments on a purchase without paying interest. I once worked in a mattress retail store where we sold some pretty expensive mattresses. (If you have not been mattress shopping for the last ten years or so, prepare yourself or you will go into sticker shock.)

This retailer is linked with a couple of finance companies, and they would often run promotions for 0% APR for 36 months, or 24 months. Once they offered it for a full five years. These promotions were awesome to me because I am a proponent of good sleep and good mattresses. The promotions gave me the opportunity to guide my customers to a much better mattress than what they could normally afford.

So, if you want to make a large purchase with a credit card, look for one that offers 0% interest for a set period. Doing this is really no different than putting it on layaway since you are not paying any extra. Just be sure you pay the money back before the interest kicks in.

Some of Them Offer Rewards

I am sure you have seen the commercials. Capital One offers great airline miles, Discover offers double cash back, and so on. Many credit card companies offer great perks for using their card. You might earn some free gas, or over time have enough cashback for a nice night at your favorite restaurant. The rewards may differ, but you should be able to find a card that offers you something you like.

The Cons of Credit Cards

I have always been told that you cannot appreciate the good things unless you know and experience the bad things. In response to that, we will now look at the second portion of the pros and cons of credit cards, otherwise known as the downs.

They are an Ongoing Source of Temptation

While those credit cards are there for you when you need them, they are also there for you when you don’t. For those who feel the need to spend money, having available credit lying around is too much of a temptation. When you are broke, it is easy to tell the difference between what you need and what you do not. When you have money to spend, those lines can get a little blurred.

If you know you will be too tempted to use your credit card, you need to take some precautions. Find a spot to hide it- just do not be like me and hide it so well that even you cannot find it. More so put it out of reach, and out of sight. Maybe you could put it in a lockbox or hide it behind a picture frame. Basically, anywhere that it is not so easy to grab yet easy enough you can get to it when you need it is a good place.

I cannot really remember when but some amount of years ago, there was a commercial about impulse purchases and credit card debt. The lady was standing in her kitchen when some ad came on her TV. She rushed to the freezer to get her credit card out- she had literally frozen her card. She went through a series of things trying to break and melt the ice before the commercial with the phone number went off.

Fortunately for her, she could not get to her card in time, and she could not see the numbers because the ice blurred them. This commercial still goes through my mind when I consider impulse purchases. While the ice was a drastic measure, it was also an effective one.

The idea behind this is that when temptation arises, you cannot immediately give in. You actually have to put in some effort. Hopefully, by the time you have got the card in your hand, you have decided whether what you are going for it is really worth it. Most often, you will probably find it is not.

Credit Card Payments are Another Bill

I hate bills. I hate them with a passion- as my granddaddy used to say, which always seemed a bit redundant to me since the definition of hate is actually passionate dislike. Anyway, I really hate bills. I, unwillingly, came to terms with the fact that some bills are never going to end. At least not unless I decide to live completely off of the land. If I already have to deal with the necessary bills that I despise, why would I want to add another unnecessary one? Though having a credit card in your wallet is not necessarily costing you, using it does.

The Interest- Need I Say More?

I probably don’t need to, but I will anyway. Though sometimes necessary, interest is never fun. Technically, it is money that you do not get to enjoy in any way. It is simply the fee you have to pay for borrowing the money. I understand why credit card companies charge interest. They are loaning you money and taking a risk in doing so.

What I do not understand is why consumers put themselves into a position to owe interest when it is not necessary. Using your credit card because your baby runs out of diapers or your power is about to get cut off is one thing. It may still not be fun but at least it is justifiable. Using that card to go to a Lakers game you cannot afford is just adding a bill. When it is at all possible, save the money for your purchase instead.

They Can Destroy Your Credit

We talked previously about the fact that credit cards can build your credit. Though that is true, they can also destroy your credit if you are not responsible to them. And this is a major factor when comparing the pros and cons of credit cards. Interest gets calculated and added each month to your bill. If you do not pay that interest and some of the principle, your debt will grow. The more money you owe on your credit card, the higher your credit utilization– which is something you do not want.

Credit utilization should be around 30% or less. If the interest on your credit card grows, your credit utilization could show as high as 100%- way above the sweet spot. If you must use your credit card, use as little of it as possible, and pay as much as you can.

Sometimes They Come With Fees

As if paying interest is not enough, sometimes credit cards come with additional fees. Some of these fees include annual fees, monthly service fees, late payment fees, return payment fees, foreign transaction fees, balance transfer fees, cash withdrawal fees… I will stop there but you get the idea.

You cannot judge all credit cards by the fees of another because not all cards charge fees. Those that do are adding to the bill. It is important to check terms and conditions for any associated fees and make an educated decision according to that information. If there are any fees attached, weigh that fee against the benefits of the card. I would not mind paying a $29 annual fee if I received $200 or more in cash back on groceries. Visit some online card shops, look into a few cards, and judge on a case by case basis.

Identity Theft is Easier with Credit Cards

There was once a time when every transaction was taken care of in-person and with either cash or some form of trade. Back then, it was hard to steal someone’s identity. Well, maybe it was not so much hard since someone could use your name. However, they could not clean out your bank account with a keystroke.

Even if they used your name and acted terribly across the nation, who would know? There was no way to track someone digitally so your boss would not run your name and find out you have credit issues. In this digital age, though, it is all too easy to steal someone’s identity and destroy them. Every time I turn around I hear about some new way that it is happening.

And credit cards do not help the matter. Do you know how easy it is for someone to skim credit card information off of gas pumps now? I think it says something about the state of our world that we need tamper indication seals on gas pumps. And worse, tech-savvy people, or just those with the right equipment, have to do no more than get close to you to transfer your credit card info to their device.

Online ID Theft Can Be Worse

So if you carry credit cards around, be cautious. When you make an online or mobile purchase, check-in the web address bar for the lock emblem- that tells you the site is secure. If that is not on the checkout page, back it up and find one that does. Also, if you choose to pay at the pump, check the seal. It is usually a yellow or red color and specifically says, “If this seal is broken, do not use and inform the cashier”.

The wording may differ from place to place, but it means the same thing. If that tape is broken, there is a really good chance that someone has tampered with the card reader. Anyone that is authorized to work on those card readers will have more tape to attach when they are finished.

Credit Cards Usually Have Very Confusing Terms and Conditions

The phrase “terms and conditions” makes my head hurt long before I have even looked at them. I love to read, but all of those tiny, dry words are not my forte. I just need straightforward, basic words. If a person has to read a sentence more than two times and use a dictionary to understand what the words mean, it is simply too much. It is even worse when you put the effort forward to read them only to be met with confusing terms.

Unfortunately, it is really important that you know them, so what do you do? You have a few options. The first is to get on the credit card company’s website and visit the Help section and the FAQs. The information you find there will probably tell you what you really need to know. You can even Google the card itself and see if there are any easy to read posts about it. Or you can call the credit card company and have someone sit on the line with you and break down the terms and conditions.

The Rewards are Sometimes Complicated, Useless, or Both

I love rewards. Who doesn’t? Rewards are awesome- well, they can be. A credit card that gives rewards definitely catches people’s attention, but what happens if they are rewards you care nothing about? If I have a credit card that gets me airline miles, it is wasted. Why? I will be honest- I do not fly. Nope, not doing it.

As many times as people have tried to talk me into it, I have not changed my mind. And, yes, they have quoted me the statistics about flying being safer than driving. Well, I happen to feel like I would survive a crash closer to the ground than I would with a plane plummeting towards the earth, but I digress…

The point is that if the rewards are not relevant to you, why would you care about them? Give me cashback on groceries. With a household of six to feed, including a teenager and two more kids that are almost there, I buy a lot of groceries. Earning some cashback from that would be marvelous.

Even worse, some rewards programs are so complicated, users have no idea what they even have. What good does that do anyone? If rewards are important to you, you can card shop for some that you can use and understand. If you do not care about rewards, just look for a simple credit card. There is no need for complicated if it is not benefiting you in some way.

Credit Card Debt Can Easily Get Out of Control

Like a fungus, interest just continues to grow and spread until credit card debt has taken over your life. Does that sound extreme? Sadly, it is all too real. That is why there are so many debt consolidation companies- they would not be popping up everywhere if there was not a market for them. And that market is bigger than people like to admit, and it is everywhere.

A week ago, I was driving down the road with the radio on, and suddenly a loud booming voice came over the speaker. A man was explaining that we do not have to have credit card debt and that we should call so this company could get us out of it. The commercial itself did not surprise me. What did is the fact that the guy specifically mentioned my area.

On a very real note, I live in a smallish town surrounded by even smaller towns. It is small enough that when I heard this commercial, I looked around wondering, “Since when do we have enough people living here to justify a target market?” I literally spent the rest of the day trying to determine how much money this company could make off of this little town. The answer- apparently enough for the company to dedicate resources to reaching out to us. Completely shocking.

On a serious note, though, debt is indiscriminate. It cares not about your age, religion, race, socioeconomic status, or whether you play quarterback in high school or playing the trumpet. It hits everyone. If you are not careful, it will knock you out of commission. All it takes is one missed payment or even one low payment, and it can take a turn for the worse. By taking the time to understand the pros and cons of credit cards, you are equipped to make wise choices concerning them.

One Last Word of Advice: Keep an Eye on Your Finances

Do not just pay your credit card bill when it comes in. Check it for any errors. The sooner you catch them, the easier they should be to fix. Also, look through your credit reports and check for any errors. If you see debts you do not recognize or addresses you have never used, or anything like that, contact someone immediately. The credit report should point you to the correct person to speak with about that charge.

After you have looked through the credit report, sign up for a free credit monitoring service. Your bank may have one you can use. If not, Creditry will alert you if there are any changes to your credit report. When you receive that notice, take a quick look to make sure it is something you did. You may not prevent someone from stealing your identity, but you can make it really hard and make them regret it.

Conclusion

I have always told my children that anything can be good, or it can be bad, depending on how you treat it. There are both pros and cons of credit cards. If you are responsible with a credit card, it can absolutely help you and open new doors for you. Those who are not responsible, though, will find themselves suffering. Yes, life happens and things go awry, but being responsible and making good decisions when you are in control is a big step in improving your financial state.

If you are still unsure about having a credit card, read over the list of pros and cons of credit cards again and imagine yourself in each scenario. Working through each, can you see yourself suffering or benefiting from them? Let the answer to that question guide your decision.

Brandy Woodfolk

Brandy writes about smart money management and wealth building in simple and relatable ways so all who wish to can understand the world of finance.

www.linkedin.com/in/brandy-m-woodfolk/

Line of Credit vs. Credit Card: Swipe Here or Draw?

Posted on June 29, 2019 | by Brandy Woodfolk | Leave a Comment

When it comes to finances, there are so many terms and definitions that it is easy to get confused. Many of these terms sound similar, and the available definitions on Google often serve to only add to the confusion. Not everyone is a finance guru, so some of us appreciate much simpler definitions. After all, how are we to know what to apply for or what we are getting into if we cannot even understand the textbook definitions?

For the moment, we are going to speak about the two often confused terms and how they differ: line of credit vs credit card. And for those of us who appreciate simplicity, we will be breaking the terms down into useful definitions and explanations. The simpler, the better, in my opinion. Let us begin.

Line of Credit VS Credit Card: Which is Better?

In truth, it is a matter of need and preference. Both offer benefits and risks. Both can be harmful and helpful. Each can be either the answer to your prayer or temptation you do not need. Either way, in order for you to choose between a line of credit vs credit card, you need to understand them on a basic level in order to make an accurate assessment. Below you will find the pertinent information needed to decide on a line of credit vs credit card.

Benefits of a Credit Card vs Line of Credit

First and foremost, the credit is available when you need it, as long as you are paying on it. You have the convenience of pulling the card out when you need it and simply swiping it. There is not waiting for the cash to be put in your hand. As long as it is available on the card, you are free to use it.

Minimum payments are usually not very high, so you probably will not have a hard time making those payments. My credit card has a minimum payment of $25 per month. Even during the tight financial months, I can usually squeeze $25 into the budget without too much stress. Also, making timely payments can improve your credit score as well as increase your credit limit on your card.

Drawbacks of a Credit Card

One of the biggest drawbacks of a credit card is that the minimum payment required is not really helping you at all. That is because the interest on credit cards is compounded. In simple terms, compounded interest means that it is added monthly. If your interest rate is 10%, your interest will be 10% of the balance on the card for that month. Next month, the interest will be calculated again, and added on top of the previous interest. So, if that is the case, what do you suppose happens if your minimum payment is lower than your interest?

In the simplest answer possible, you will dig yourself into deeper debt every single month. Let’s say you have a credit card with a $200 limit, and that card charges 20% interest. You used $150 of your available credit and your minimum payment is $25 per month. Follow along below to learn what happens if you only pay that $25 minimum.

	Month 1	Month 2	Month 3	Month 4
Total Due:	$150	$155	$161	%168.20
Interest Rate:	20%	20%	20%	20%
Interest Due:	$30	$31	$32.20	$33.64
Total w/Interest:	$180	$186	$193.20	$201.84
Payment:	$25	$25	$25	$25
Balance:	$155	$161	$168.20	$176.84

As you can see, your interest is higher than your payment, so paying only the minimum payment will not get you out of that debt. These numbers are just examples- yours might be higher or lower. The key to getting out of credit card debt is to always make more than the minimum payments. Many cards do not add on interest until the end of the billing cycle. If it is possible for you to pay all or at least some of your balance before then, you will save yourself some cash.

Secured VS Unsecured Credit Cards

As with most loans, there are secured and unsecured credit cards. Secured cards can be of great help to those who have no or low credit. Basically, you pay a deposit on the card, and the company issuing you the card will hold that deposit. Once they have received the deposit, they give you credit. Sometimes, you have to put up the entire amount of credit as a deposit, and sometimes it is just a portion.

For instance, if they are giving you $200 in credit, they might require that you pay as low as $50 as a deposit or may require that you pay the full $200 as a deposit. This minimizes their risk, which is why they are willing to give you credit. If you make timely payments for a set amount of time, the deposit will be returned. Also, they report to the credit bureaus. So even though the cards are secured, they can improve your credit.

Unsecured credit cards are simply approved or not according to your previous credit, your ability to repay, and your promise to pay.

Hands holding plastic credit card and using laptop.

What is a Line of Credit?

A line of credit is slightly different from a credit card in how it works and is given. Let’s go back to the example of you and I being besties and you needing some money. You again ask me for money but this time you have different needs. Maybe you want to take some classes at the community college and you have to pay cash. We know that the classes will cost $1,000, but we have no idea what the materials and supplies you need will cost.

This time I say, “I am going to open a bank account and put $3,000 in it. You can borrow anything you need up to that amount. I will leave that money available to you to borrow as often as you need for the next three years as long as you pay the agreed upon interest.”

You take the $1,000 for the classes and register. Two days later, you receive a list of textbooks you need to purchase and find out the total of them is $600. When classes start, you learn that there are lab fees and other costs you had no idea about. Fortunately, it is not a big deal because you still have $2,000 in the account. You take the $800 you need and leave the rest for future use.

The following month, you pay the required interest on what you have borrowed plus $200 on the principle. Now, you still have $1,600 available when you need it. Every month you pay more than the interest, you are replenishing your line of credit. Though some variables may change, this example is the basic idea of a line of credit.

Benefits of a Line of Credit vs Credit Card

One of the major benefits of a line of credit is that you have access to cash. While you can get a cash advance on a credit card, it is generally not a high amount and the interest is often higher. Plus, there are often fees for getting a cash advance. With a line of credit, the expenses associated are often lower than that of a credit card.

You also have flexible repayment options, usually from one year to more than ten years, and the APR is most often lower than that with credit cards. Lastly, there are very few restrictions, and they are an open ended credit line.

Drawbacks of a Line of Credit

First, the interest rates are usually variable, so your interest may change from month to month unlike a fixed rate loan. Lines of credit generally require an account at the financial institution you are borrowing from and a very good credit score. Additionally, you will likely find yourself paying both monthly and yearly maintenance fees so long as the line of credit is open, even if you are not using it.

Secured VS Unsecured

Most lines of credit are unsecured. This means that you provide no collateral. However, as the lending institution assumes a higher risk, it is more difficult to get a line of credit vs credit card, personal installment loan, or other loan options. If you get approved, though, you have a revolving line of credit that can be handy when you are in need.

Similarities and Differences

Now that we have broken down each separately, let’s take a closer look at which is better between a line of credit vs credit card. The two are similar in the sense that in ways, they are both lines of credit. As you generally borrow, payback, and replenish your credit card funds, it is technically a line of credit.

However, a line of credit is often much higher than a credit card. Credit cards are generally a few hundred to a couple of thousand dollar limits, though some may go higher. Lines of credit can start as low as $1,000 and go as high as the institution allows, though most cap out by $100,000. The highest most go are $25,000.

Interest Rate Differences

You will also typically notice a difference in interest rates in a line of credit vs credit card. These differences can vary widely, as well. Some credit cards offer 0% APR for the first year. With lines of credit, you begin paying interest the moment you take out any of your available credit. However, when interest rates begin, lines of credit often run from 9% to 23%.

Credit card interest rates usually start at 23%, though you may find some a little higher or lower. It is also important to remember that with a line of credit, the interest rates- unless stated otherwise- are variable. You may find yourself paying 9% one month and jolting to 23% the next. This makes it rather difficult to budget your payment.

Also, as previously mentioned, most lines of credit require that you have an account with that institution. This is not always the case with credit cards. In fact, some credit card companies do not have other account types.

Lastly, consider the actual rewards when it comes to a line of credit vs credit card. Most credit cards offer some type of reward. It might come in the form of cashback, airline miles, or other rewards. I have yet to find a line of credit that offers any reward beyond borrowing the money and building your credit- if you pay on time.

An Invaluable Lesson

There is one major downside that comes with both options. Regardless of your choice between a line of credit vs credit card, both can impact your credit hugely. If you have never looked at your credit report or really paid attention to it, I am about to tell you something really important, so pay attention: the more you borrow, the lower your credit score. If you borrow more than 30% of your available credit, your credit score drops.

Wait- what? But doesn’t it look good if I can borrow a lot of money?

Yes, unless you are borrowing it. I know, it sounds crazy, but it is true. The percentage of your available credit that you use at a time is called “credit utilization”, and it is a big factor in your credit score. The lower your credit utilization, the better your score. At the same time, they want to see you use credit. There is just a fine line between using it and using it too much.

Let me help you draw that line

If you have a $200 credit limit, the maximum you use should be $60. If you borrow more, try your best to pay it down to 30% before the billing cycle closes. Keep the amount you borrow as low as possible. However, do not ignore your credit. Sadly, using no credit can hurt you about as bad as using too much.

Which Should I Get: Line of Credit vs Credit Card?

A major factor in this decision is what you need, or will use, the money for. Are you looking to make a large purchase? Paying ongoing extra expenses, like the college example? Or is it more for everyday expenses?

If you just need something to help you put gas in your car or to buy groceries and tissue between checks, a credit card should suffice. If you want to buy a car with cash, need to make repairs to your home, or something similar, you should probably go for a line of credit.

Then again, maybe it is best not to choose between a line of credit vs credit card. Consider applying for both. Just because you have them does not mean you have to use them. If you get approved for both, you can leave them alone until you need them. How much peace of mind would it give you to know that you have money to the side in case you need it? Everyone needs a rainy day fund. Perhaps these credit types can serve as a rainy day fund until you can save one separately.

Line of Credit for Planning Ahead Security

Also, it is likely a good idea to apply for a line of credit long before you actually need it. Let’s say your car breaks down- a common occurrence for the fortunate among us. If you have no money put to the side, or money available to you through credit, you will have to find a way to cover it. If you apply for a line of credit then, it may take a few days or more to be approved. That means you will be stuck worrying about how to get around until you find out if you were approved.

On the other hand, if you applied and got approved for a line of credit months in advance, the stress would lessen. After the initial shock, frustration, and, “What do I do?” reaction, you will remember that you have some money available. You just need to get to the bank to retrieve it. Before you know it, you are back on the road. The bottom line is that it is better to be safe than sorry, so applying for both a credit card and line of credit well before they are needed might turn out to be very beneficial to you.

Conclusion

As you can see, making a choice between a line of credit vs credit card is a personal and situational choice. However, you may find it helpful to have both available to use depending on the situation you face. Another similarity between the two is that lenders for both are widely available. When you are trying to decide where to get a loan or where to credit card shop, Loanry can help. Whether you are searching for a line of credit or a simple credit card, we can help you find a lender that may suit your needs.

Brandy Woodfolk

Brandy writes about smart money management and wealth building in simple and relatable ways so all who wish to can understand the world of finance.