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Credit Cards Articles

When to Use a Credit Card Vs. Debit Card

June 7, 2010 | Credit Cards | No Comments

Debit cards have taken over credit cards.  So when should you use your credit card vs. your debit card.  Like most things in life, it depends.

When to Use a Credit Card
You want to use a credit card when making big ticket purchases such as a HD TV or computer, especially if you are making the purchase online.  If there is a problem with your purchase, you can contact your credit card company to withhold payment. With a debit card, the money is deducted from your checking account immediately and it may take days or weeks to resolve the issue with the merchant.

Credit card companies such as American Express add up to 1 year to the manufacturer’s warranty on products you buy using their credit card.  You may also get additional protection from theft, damage and identity protection.  Many credit card companies also offer 24 hours roadside emergency assistance, travel insurance, car rental loss and damage insurance.

When using a debit card for some hotels, restaurants, car rental companies and gas stations, a hold maybe placed on money in your checking account until the debit transaction is processed.  This may take up to several days for signature-based payments.  The amount that’s held may be much more than the amount of your purchase.  The money held can prevent you from accessing the money in your account and could result in bounced checks, declined transactions or overdraft charges.

Earning Rewards
Very few debit cards offer reward programs and if they do, the reward programs are not as good as credit cards.  Using debit cards will not maximize your cash back or points you can earn.  However, credit card rewards tend to have the highest interest rates, so if you don’t payoff your balance in full each month, don’t use a reward credit card.

Your Liability

Per federal law, liability for fraudulent charges on debit cards can be greater than it is for credit cards.  You are responsible for up to $50 for fraudulent purchases on your credit card, however, for your debit card, you can lose up to $500 if you don’t report the loss or theft of your card or PIN with 2 business days of finding the problem.  Additionally, if you do not report the fraudulent charge within 60 days of the date of the statement that lists them, you maybe held liable for any unauthorized withdrawals after that date.

MasterCard and Visa offer “zero liability” policies that is beyond federal law by exempting debit cardholders from liability in most cases when a bank investigation confirms a transaction is fraudulent.  However, there are loopholes in those policies that may allow people who create fake ATM or debit cards by stealing your PIN and other account data to simply pull cash from your bank account. By using a scheme called “skimming”, they use equipment to capture the magnetic-stripe and keypad information when you enter your PIN at ATMs, gas pumps, restaurants, and retailers.

Save Money with Peer-to-Peer Personal Loans

May 18, 2010 | Credit Cards | No Comments

Below is a video of a recent news report from ABC KABC-TV in Los Angeles, CA, featuring a Lending Club borrower who took a personal loan to pay off her credit card debt which saved her money in the process.

The news report also featured a Lending Club investor who built a diversified portfolio, lending no more than $100 at a time to more than 200 loans with a return of over 10%.

Related Article: Need a Loan? Get a Low Interest Loan from Lending Club

Credit Card Profiling (Behavioral Modeling)

April 20, 2010 | Credit Cards | No Comments

Do you know your credit card company profile’s you to determine your future credit risk based on your current spending habits?  They called it behavioral modeling.  Using complicated formulas credit card insurers track and study your purchases to determine your credit risk and credit limits.

Purchases that can lower your credit score include:

  • Bar tabs – may indicate you enjoy the social scene or drowning your sorrows
  • Pawnshop, thrift store – may indicate your are experiencing financial problems
  • Casino or racetrack – may indicate you are a gambler and is at risk of missing payments
  • Marriage counseling – may indicate you are under domestic stress and possible future financial stress
  •  Doctor’s office – may indicate you are not in good health and therefore could be a credit risk

 

On the flip side purchases can increase your credit score which include:

  • Car maintenance and hardware store – may indicate you are responsible in taking care of your assets
  • Airplane tickets and hotel – may indicate you have money for extras like vacations
  • Doctor’s co-pays – may indicate you are still employed and have health insurance

 

Due to the recent recession with many people unemployed and/or facing foreclosures, credit card issuers are looking very closely at their customers to determine who is at risk to miss payments.  Residents of states with high foreclosures rates, such as Nevada, California and Texas are considered higher credit risks.

In May 2009 President Obama signed into law Credit Reform.  A part of the legislation directed federal regulators to examine how credit card issuers are using customer information to determine credit limits and credit scores.  Additionally, a report is due next month reporting the affect of credit profiling effect on minority and low-income credit card holders.

Experts believe that cardholders who want to avoid credit score declines should use prepaid debit cards, gift cards or cash.

Chase has introduced a unique cash back offer for home mortgage.  If you get a new Chase mortgage or refinance, you can choose either a 1% cash back or a 1% payment against your principal balance annually when you sign up for automatic payments on a new Chase Mortgage.  That’s not a bad deal!

 

 

 

 

 

 

 

 

 

The 1% Mortgage Cash Back works with any new Chase mortgage or refinance.  The cash back is deposited into your Chase checking account OR applied as a payment against your mortgage principal.

At your loan closing, complete your enrollment in our automatic mortgage payment service with your Chase personal checking account. Your monthly mortgage payment is automatically deducted from your checking account.

For more information visit https://www.chase.com/chf/mortgage/mortgage-cash-back.

Chase Sapphire Credit Card Offering $100 in Rewards

April 7, 2010 | Credit Cards | No Comments

Chase is offer 10,000 bonus points for getting the Chase Sapphire credit card.  The 10,000 bonus points equates to $100 in rewards.  The card comes with no annual fee with unrestricted rewards.  You can use the rewards for any airlines, hotels, rental cars, cruises and numerous gifts.  Best of all, your rewards never expire.

You will get 10,000 bonus points after first purchase.  First purchase includes purchases, balance transfers, or any checks that are used to access your account and excludes cash advances.  After qualifying the bonus will be posted to your account in 6 to 8 weeks.  This offer is only for first-time card members with new accounts.  Existing card members/accounts are not eligible for this offer.

For more information visit GetChaseSapphire.com.

Mango Free Prepaid MasterCard – A Very Good Deal!

March 8, 2010 | Credit Cards | No Comments

If you are looking for a very good prepaid debit card you should consider the Mango card.   Mango is a free prepaid MasterCard with $0 activation fee.  You can send money, check your balance or view transactions on your mobile or online.  Loading the card is easy.  You can load the card with your paycheck, transfer from a bank account or add cash at retailers nationwide.

The Mango free prepaid MasterCard features:

  • $0 Activation Fee
  • FREE Direct Deposit
  • FREE unlimited purchase / signature transactions
  • FREE account management online or with your mobile phone
  • FREE to check your balance with your mobile phone
  • No monthly fee when you load $500/month
  • Send money with your mobile phone
  • Load cash at tens of thousands of retailers nationwide
  • No credit check, no bank account needed, no overdraft fees

 

For more information visit MangoMoney.com.

Personal Finance Tools Offered by Credit Card Companies

November 5, 2009 | Credit Cards | 1 Comment

There are many financial tools on the Internet.  However, many major credit card companies offer financial management tools even if you are not a customer.  Some of the sites listed below are open to anyone:

  1. Chase Blueprint is a personal finance tool tied to select Chase cards that allows customers to determine how they want to apply payments across their statement balance.
  2. American Express Money Manager Tool is free to American Express cardholders. The newly-launched Money Manager Tool helps users stay on top of their finances by giving them a complete view of all their accounts, credit cards, and loans in detail and have a big picture view of your money management. Users can link all of their personal financial accounts in one place, and customize graphs and budgets so they can monitor their spending and budgeting the way you want to.
  3. Capital One MoneyWi$e is a partnership between Consumer Action, an advocacy group, and Capital One.  This website offers helpful tools and articles specific to your money goals, whether that is educating your teen on credit or learning how to build wealth.
  4. Wells Fargo Smarter Credit  is open to all anyone, and has learning tools, articles, tips, and information aimed at helping consumers establish/rebuild credit, reduce debt, get more credit, and manage and protect credit.
  5. Discover’s Spend Analyzer offers online tracking and spending of purchases for Discover customers. Users can categorizing spending, comparing spending patterns over time, and sorting transactions by detail so you can manage how you use your Discover Card.  Analyzer only tracks spending of Discover card, and not all of  financial accounts. One unique feature is the “Paydown Planner”, which helps create a plan for reducing your Discover card’s balance and get you out of debt.

CapitalOne Offering 0% APR on Transfers Until Sept. 2010

September 23, 2009 | Credit Cards | 1 Comment
capital-one

If you have excellent credit and carry a balance on your credit card, you may want to consider getting the Capital One Platinum Prestige Credit Card.  

The card offers 0% APR on transfers until September 2010 and 0% APR on purchases until September 2010 with no annual fee.  Transfers are processed in as little as 48 hours.

After September 2010, your variable rate will be about 8.75% plus prime and however, by then you maybe able to find another card with a similar offer.

As stated, this card is only for people with excellent credit which CapitalOne defines as people who had a credit card or loan for at least 5 years, a credit card with a limit greater than $10,000, never declared bankruptcy and never had more than 60 days late on a credit card, loan, or medical bill.

For more information visit CapitalOne.com.