DontSpendMore.com Blog

Category: Credit Cards

  • How To Maximize And Score Credit Card Rewards

    By David

    It is no secret, credit card companies have numerous ways to separate you from your money, but you can end up on top if you take advantage of reward programs and swipe responsibly. Almost all credit card companies offer some form of reward program, so it’s only a matter of finding what works best for you. Here are a few tips that will help you score card rewards and make the most out of them.

    Focus on programs that reward you for being yourself

    There’s no point getting a credit card that only rewards you for activities you never partake in, now is there? The way most reward programs work: the lending institution gives you points towards a reward when you make select purchases.  For some, it might be groceries, while others might reward you for making purchases at the hardware store.  Obviously, for example, if you’re a carpenter who frequently visits the hardware store to purchase tools and materials, it makes more sense to get a card that rewards you for that.

    When in doubt, go with cashback

    Even though most credit card companies have some sort of reward program that gives customers cash back, most people elect for other rewards. That’s because many feel there’s more value in the other alternatives, even though that isn’t always the case. For example, some lenders offer up to 3 percent cash back on all purchases, so if you typically spend $2,000 on monthly bills — which many people do — you’ll get back $60 every month.

    Use your primary card for all purchases

    There’s no point in having multiple reward cards, so focus on having a primary one. That way, you can accumulate rewards a lot faster, score credit card rewards, and also make it easier for yourself to keep track of your points. Sometimes, using one card isn’t a viable option. The main thing is to keep the number of credit cards you have to a minimum.

    Click here to compare cashback rewards credit cards

    Watch your rewards like investments

    The points are yours. You’ve scored card rewards with your hard earned money, so don’t let them go to waste. Rewards often expire after a specified period. Make sure you go over the terms and conditions of your lending institution, and always keep an eye on your points.  If you slip and let some points expire, no need to panic, as many credit card companies allow you to buy back your points after they expire.  Still, it never feels good to spend money on something you’ve already earned, so try not to be in that position in the first place.

    While credit cards can ruin an irresponsible person financially, they have a lot to offer those who are able to manage their finances properly. By following the above tips, you should be able to score card rewards, and maximize the number of points you earn. Don’t feel guilty about taking free stuff from the banks, if you weren’t responsible with your money, they wouldn’t hesitate to slam you with all sorts of fees and charges.

  • Cashback Cards Comparison: Get Paid to Shop!

    By Matt

    Credit card companies offer cashback cards which allow the user to accumulate cash as they make purchases with their credit card.  This is an alternative to traditional flight reward programs and is popular among consumers who do not travel.  Since credit cards vary in how cash rewards are calculated, the following cashback cards comparison offers tips on which credit card is right for you.

    Not all cashback cards are created equal

    There are as many formulas for calculating cashback rewards as there are credit cards.  Most offer a fixed percentage, usually one percent on all purchases, with up to five percent premium payout on purchases at specific categories of stores such as grocery stores and gas stations.  Some cards only offer the premium payout at their eligible partners.  In addition to the money back bonus, some credit cards will offer a sign up bonus, usually up to $100, that will be triggered when a   specified amount of purchases have been made on the card.  Still other cards allow the user to collect points which can be redeemed for cash.

    How do I get paid?

    Cashback cards allow you to accumulate rewards and be paid out either by check or by crediting the amount to your credit card. Some cards allow you to claim your reward at any time, while others require the cardholder to cross a threshold in accumulated cash, say $50 or $100, before a payout will be made.  Additionally, some cashback cards have a fixed limit on the amount that can be earned in a year, for example, after $500 has been paid out no more rewards will be earned.

    Cashback cards comparison: Three critical considerations

    1. APR. Many cards offer 0 percent on balance transfers and purchases for a limited time period.  After that, standard interest rates will kick in.  Since interest rates can vary significantly from card to card (anywhere from 10% to 22.9%, it is a good idea to read the fine print.
    2. Do you carry a balance? If so, you may want to reconsider a reward card in the first place.  Cashback cards typically carry higher interest rates and are therefore more lucrative for cardholders who pay off their balance monthly.  If you carry a balance you may want to opt for a lower interest rate in lieu of the bonuses.
    3. Restrictions! If a card limits your annual reward, or restricts where you earn rewards, then it might not be right for you.  Also consider whether there is an annual fee, and if sign up bonus thresholds are feasible.

    As you can see, there are many factors involved when making a cashback card comparison.  As with all contracts, make sure that you read the fine print and fully understand the terms of your cardholder agreement.

  • Four Credit Card Mistakes College Students Make

    “Yay, money!” If you are a student, that’s probably the first thought that crosses your mind when you see a student credit card with a generous spending limit. Unfortunately, credit cards match the proverbial “double-edged sword” cliché to the T. Used correctly, they can be great tools toward building a strong credit history and a powerful financial foundation; conversely, common mistakes could derail your future for a minimum of seven years.

    Here are some common credit card mistakes you must avoid:

    Spot and hop

    “Spot and hop behavior” refers to the habit of applying for the first credit card offer that comes your way. From annual fees to high APRs, you could end up spending a lot more than what you would want. Take your time to compare different credit card offers before zeroing in on one that best matches your needs.

    There are plenty of online tools that will allow you to compare offers and choose a credit card that is designed with you in mind.

    Applying for cards without ascertaining your needs first

    You must apply for a credit card that suits your lifestyle and personality. One size never fits all when it comes to credit cards. If you travel frequently, then a rewards credit card could be great for you, but if you are going to buy text books next month, a cashback credit card may be much better. On the other hand, if you drive every day to school, a gas rewards credit card could save you more money.

    If you are going to spend money, might as well get something in return. One caveat, though. Always try to repay the sum you spend on time. The slightest delay could cause you to lose all the benefits and cost you more instead.

    The “I will pay you later” strategy could backfire seriously

    Don’t fall for the minimum payment trap. Credit card companies stand to benefit from interest payments and other finance charges if you pay less than the full amount. If you are short of funds, try to pay off the full balance as quickly as possible. A small slip on your payment schedule could trap you in debt prison for many years to come.

    Always try to pay more than the minimum and whenever possible, in full. In addition to avoiding debts, you will also be building a healthy credit profile.

    The fine print is boring, but don’t sign up without understanding the terms

    Would you write out a blank check to a stranger? If you don’t read your credit card’s fine print that is exactly what you will be doing. From late payments to trigger points that could spike your interest rates, there are so many ways credit cards could levy penalties on your account. If you don’t understand your credit card provider’s terms and conditions, you will have agreed to all of their terms without your explicit consent. That could be dangerous.

    Nimish Thakkar is the CEO of DontSpendMore.com. The site allows you to compare student credit card offers from various companies.

  • Credit Cards Could Make You Money

    With some common sense precautions, you could earn a few extra bucks from your credit cards. Yes, the stack of plastic cards that you thought were money drainers could actually give you some extra cash every month, PROVIDED [caps intended] you approach the practice in a disciplined manner and exercise extreme due diligence all along. Done right, you could have some extra money every month but if you make mistakes you could end up losing a lot more money. Here are some ways your credit cards could make you extra money:

    Interest rate differentials could earn you extra cash

    If you have received an offer for a 0% APR credit card, that would be the perfect starting point. Generally, the way this process works is very simple. Let’s say you have a $5,000 credit line with 0% APR for six months. Some individuals deposit this money in an interest bearing account for the duration of six months and gain some additional cash due to the interest differential. Now, it is not as easy as it sounds.

    First, you have to read your credit card provider’s terms and conditions and your state and local laws to see if the practice is prohibited. Second, getting the $5,000 into your account may cost you some money in the form of transaction costs so you will have to do the math if the overall transaction is beneficial or otherwise. Finally, the 0% APR may not be availed of for certain transactions.

    You may want to read our article Credit Card Arbitrage Could Be Tricky for more details.

    Cashback percentage, rewards, bonus points, miles, travel rewards, and others

    Not much complexity here. In fact, this is very easy. Depending on the type of credit card you have signed up for, you could win various cashback incentives, rewards, and other bonuses. There is one catch, though, if you don’t repay your purchases in full (on time), you will incur the regular APR and that would nullify your earnings so the key is to repay in full whenever possible.

    The 0% APR on purchases offer could be a money maker

    If you have an introductory 0% APR on purchases credit card, it could be a source of additional income as well. Some individuals pay for their purchases using the credit card for the duration of the 0% APR offer and deposit a similar amount in their interest bearing account while repaying a minimum balance during the duration of the offer. Just before the expiration of the offer, they repay the entire amount in full to avoid incurring any interest rate charges.

    Again, the same precautions apply. You need to calculate all transaction costs meticulously in order to avoid incurring unreasonable fees.

    Note: If you do not adapt to the various parameters, you could end up losing much more money than you expect to make so be very careful. As always, you should seek the advice of an investment professional and an attorney.

  • Fight Debt Like A Warrior: Simple Tips To Become Debt Free

    How to become debt free

    Debt is a growing problem for millions of people and getting rid of debt is on the wish list of everyone. But it is an not easy thing to do and you need lot of sacrifice and commitment to do so.

    It is stated that the average American family caries a credit card debt of about $15,000 besides car and mortgage payments. With average 15% rate means that the debt of almost $15,000 will add up annually and the debt will keep on increasing if some drastic measures are not taken. If you choose to pay off minimum payments then it will take you almost ten years to clear the debts.

    The following steps will help you pay off the debts:

    The first step is to believe in yourself that you will pay all your debts. Once you have that belief then take a piece of paper and write down all the debts in the order of highest interest rates first.

    Then make another list which should include all your financial commitments and necessities like rent, gas, food, utilities, clothing, entertainment and all other expenses. Add all of these expenses.

    Next step is to calculate your net income from all sources. Deduct the expenses from the net income. The figure that comes out at the end is called discretionary income. This amount will be paid to pay your debt. If the figure is too small then what you will need to do is cut down on your expenses in order to generate funds to pay debts or secure a second source of income, if possible.

    You can also sell some of your assets and use their proceeds to pay the unsecured debt having the highest interest rate. We hate this, though.

    The unsecured debts with highest interest rates should be your priority and most of your discretionary income should be spent to get rid of them and use much smaller portion for all other debts. Keep doing this until all of your unsecured debts are paid off and then pay secured debts like car payments.

    Debt settlement

    If you have other investments in the shape of bonds and stocks, then decide which savings you are willing to sacrifice in order to pay down the debt. Add these proceeds with the sale of your unnecessary assets.

    Now the most important step is to contact your creditors with highest interest rates first. Then negotiate with their supervisor and ask him to give you a total which will be acceptable to you in order to make a full payment. Ask for a letter from your creditor mentioning that total payment after which you will be free of their debt. Remember that settling for less money than you owe is possible only if you are more than three months behind your payments. Furthermore, you should make certain that this step will benefit your credit score. Clarify this point. It is always preferred to seek legal counsel.

    Finally, pay your creditors as promised in full and ask for confirmation letter that all the debt has been paid in full.

    After paying off one creditor, use that payment to settle the debt from another creditor with highest interest rate and so on.

  • Highly Effective Ways To Improve Your Credit Score

    These days, credit score is of vital importance if you need to rent an apartment, buy a house, a car, or  even get a job. Yes, if you will be dealing with sensitive financial information or hold a position of accountability, your employer may check your credit score. Now the million dollar question is how can you improve your credit score? Although, there is no magic required to improve your credit score but some self-discipline, motivation and proper planning can help you raise your credit score.

    It’s a marathon, not a 100-meter race

    Just remember that you will be able to improve your credit score over a period of time. So be patient and start working gradually. You might be able to raise credit score up to 200 points within three years if you take the right steps. Of course, it is possible that some people will not achieve this number. It is entirely in your hands.

    Pay monthly bills on time

    In order to maintain a good credit score, what you need to do is pay monthly bills on time. Even a slight delay can cause a few points to be deducted from your credit score. That’s why it is important that as soon as your bill reaches your mailbox, pay it immediately. If possible, you can also register for automatic recurring payments.

    Don’t charge over 25% of your credit limit

    In case you are just about to start and have a meagre credit report, think about opening one or more credit accounts. Don’t go above 25% of the credit limit and always try to pay your balance in full, if possible. It is not required that you overdo it but it is a healthy habit to maintain accounts which will later on help you build a higher score.

    Keep balances low                                 

    Just keep your balances low at all times and keep within the 25% range, if possible. In case it goes over this limit, then stop charging and try to pay off your debt first.

    Negotiate a lower APR

    If you are a regular and a loyal customer for some time then you can ask the customer service to negotiate a lower APR. This may take some effort and persistence but is theoretically possible.

    Check your credit reports

    Carefully study the credit reports from Equifax, Experian, and Transunion and check each and every entry on the report. If you find any inconsistencies, then go ahead and dispute them. Once it gets fixed, you will be delivered an updated report.

    Don’t close all your paid accounts

    There is some debate on this one and we have heard different opinions. It is not necessary that you close all the accounts that you are not using. Keep the ones which you have had the longest. Its advantage is that it will make you more credit worthy because the duration of credit history plays an important role in credit score.

  • Innovative Ways To Lower Your Credit Card Interest Rates as Much as 50%

    How to lower your credit card interest rates

    The biggest fear for any debtor is the spiralling cost of interest rates by their credit card companies on their present debt balances. Sometimes, these rates can even rise to a massive 30% APR. All such companies take our signature on a legal document which authorises them to push increases in interest rates, subject, of course, to legal restrictions imposed by local, state, and federal governments.

    For those credit card users who wish to maintain a zero balance all the time will not be bothered by rate changes. But others who maintain a revolving balance will struggle to reduce their debt. For that reason, this article will focus on various techniques that will help with management of revolving debt and also lower card rates.

    Three effective techniques to lower your credit card interest rates

    1. Hardship Program

    If you are struggling with your debt then the best thing you can do is to ask your creditors whether they have any “hardship program”.  Not all the companies offer this option but many do. Usually these programs last no more than three to twelve months.

    Usually, for the first six months the creditor manages to cut down existing interest rates in half or even down to 0%. Its only disadvantage is that you won’t be able to use your credit card during that period. This is in fact a blessing in disguise if you want to get rid of your debt.

    2. Get used to cards that maintain relatively lower rates

    First step is to compare interest rates of various credit cards. Standard cards usually have basic features but offer lowest rates. People often buy them for their regular APR, which is considerably lower than those of rewards and travel cards. But lookout for the rates after the promotional period gets expired, anything below 10% is considered to be on the lower range.

    3. Transfer balance to a low interest rate credit card.

    There is another way to lower your credit rate. It can be done by transferring a balance transfer to a card which has low interest rate. For this reason choose 0% APR credit cards, such cards will help you reducing your debt.

    There are two key points which should be kept in mind while moving your balance successfully:

    a)      Stop racking up balance on cleared card

    Many people made the cardinal mistake of pilling up debt again on the cards whose debt have been shifted on to low interest rate card.

    b)      Read the fine Print

    Make it your habit to read all the terms and conditions and know well in advance the balance transfer fees on the new card. You should know how long will you be paying the low interest  rate and when that period expires what will be the regular rate applicable on your debt.

  • 0 Card Credit Introductory Offer

    It is evident that the modern day credit card companies and banks are taking this age-old adage to heart. Why else would they come up with something like a 0 card credit introductory offer?

    Introductory offers by these banks and companies are meant to make an excellent first impression upon the consumers. Who would be able to resist a tempting 0 card credit introductory offer, after all? Would you say no if you were offered an introductory offer of 0% interest rate on your new credit card?

    How does a “0 card credit introductory offer” work?

    0 card credit introductory offer is an unusual coinage of the term but denotes the fact that APR rates are 0% or nil on that credit card, at least for a specified period of time. Since it is an introductory offer, it implies that it is meant to promote the credit card and the offer will be for a short term. Usually, the duration of the offer is anywhere between six to eighteen months.

    The 0% interest is mostly limited to the balance amount transferred to the new credit card, which means that no interest will be charged if you want to repay the balance that is outstanding on the new credit card. But this does not apply to any new debt taken against the new credit card. Taking a cash advance on the new credit card will cost you very high interest rates and this will not be covered by the 0 card credit introductory offer.

    What is the best use of a 0 card credit introductory offer?

    Intelligent credit card consumers tend to look upon a 0 card credit introductory offer as a fabulous opportunity to repay their debts that are outstanding on their old credit cards. There are many savvy credit card users who are constantly on the lookout for such offers and will not waste any more money in paying interest on their old outstanding balances.

    For instance, let us suppose that the first credit card charges 18 % interest on the outstanding balance. Now if this credit card user comes across a 0 card credit introductory offer, he / she can save a lot of money that was supposed to be paid as interest in the process. This is the best way to make the most of such a magnificent offer. But this tactic will work only if the outstanding balance is paid before the 0 % interest offer ends.

    If you ever you come across a 0 card credit introductory offer you should not let it go, especially if you are carrying an outstanding balance on your old credit card. Credit card companies and banks use these kinds of offers to entice new customers and that is why they extend the 0% interest rate offers for six to eighteen months at a time. It is up to the consumers to make the best of such limited time duration offers and save a considerable amount of money in the process.

  • How To Make A List of Credit Cards And Get The Best Out Of It?

    With each day, newer banks and credit card companies are coming out with credit cards in the market. A person who wishes to apply for a credit card is often bewildered by the host of choices and fails to come to a conclusion when making a decision as to which credit card is the best for him/her.

    How to make a good list of credit cards?

    The best way to make a good choice when it comes to credit card selection is to prepare a list of credit cards. Instead of making a random list, you can use certain criteria to make this credit cards list. The criteria for selection should be according to your personal preference of credit cards. For instance, if you are interested in credit cards that give cash back, then you need to make a list of credit cards that belong to this category.

    Or if you want a credit card that will help you save some money on your balance transfer, you can make a list of credit cards that offer low or zero interest rates on balance transfer. Similarly, you could make lists of credit cards that offer air travel miles, bonuses or zero APR.

    How to use this list of credit cards?

    Making the list is the first step, and you can use the criteria mentioned in the previous section to prepare it. You can do some research online to find out which cards to include in your list. There is no need to include a lot of credit cards in each of your list of credit cards. The five topmost or five most popular credit cards are all that are needed.

    After the list prepared, you can use the information on the credit card review sites to compare between the cards and find out which one is the best suited for your needs.

    When to make a list of credit cards?

    You can make a list of credit cards whenever you want to make an informed decision between the numerous credit cards that are available in the market. This applies to people who are applying for credit cards for the first time and also for those who are trying for a second or the next credit card.

    It is better to make such a list every time you need to choose a new credit card. Credit card offers keep changing all the time and new banks and credit card companies keep entering the market regularly. So try to use an updated list of credit cards each time, no matter how recently you had created the previous list.

    A list of credit cards will always come in handy when choosing a good credit card for your needs. Just make sure that you use the right criteria to create this list. Also be prepared to do some amount of market research to find the best performing credit cards at that point of time.

  • What Criteria Are You Using To Find Credit Card Offers?

    Irrespective of whether you own a credit card already and are looking to find credit card offers to add to your list of cards in your wallet or are just looking for a new card, you have multiple choices. Finding offers on credit cards should not be a problem at all because credit card companies and banks are over vigorous when it comes to promotion and marketing of their cards. There are various criteria that you can use to find credit card offers that suit your needs. Let us go through a detailed overview.

    Find credit card offers by credit score

    If you have a lower than average credit score, you will be forced to find credit card offers that are meant for people with a bad credit or not so good credit score. Even if you have an excellent credit score, you might want to find special offers that are meant for good credit. Good credit holders enjoy a hoard of benefits like low or 0 % interest rates, access to high end spas and travel miles etc.

    Find credit card offers based on rewards

    These days, credit card consumers are on a roll because they are being pampered with umpteen numbers of rewards and bonuses. You might want to check out the credit card offers just for the rewards and bonuses that are on offer with the new credit cards. In case you are interested in finding some specific offer like travel miles, gas cash back or plain cash back offers, you will have to search for credit cards that are focused on each of these specific needs.

    Find credit cards based on your special needs

    If you are a student and have not yet established any credit score, you might be interested in student credit cards. Or if you are an entrepreneur, business credit cards will suit your needs best.

    Find credit cards for special offers

    Some credit card users are interested in cards that offer special benefits and there are quite a few people who use credit cards only for availing these special benefits. If you are one of them, then you have a variety of choices like cards that offer access to spas, concerts and posh restaurants.

    How to find credit card offers?

    Most of the credit card companies advertise about their latest offers online and offline as well. If you have already decided which kind of card you need, then finding offers is very easy. You can check out the company / bank website to know of their latest offers in detail. Or you can also check out credit card review websites as well. The benefit of checking out review websites for offers is that you can see all the best offers from all the top companies and banks in one place.

    There are various kinds of credit cards and you have to find out the best ones that are suited for your needs. Using credit card review websites is the best when you want to find the best of the available credit card offers.