Use Credit, not Debit, for your online shopping

The common wisdom is to spend money you have before you even consider spending money you don't. In other words, buying with a credit card is relatively expensive compared to using a debit card.

Although it seems sensible enough, there are other factors to consider. For example: what if your card details end up in the wrong hands? Fraudulent financial activities are always a grave concern, especially online where there is often a fear that hackers will intercept all the information you enter on a website.

Well the good news is that credit cards are protected against fraudulent activity. Your maximum liability for online purchases? Zero.

In truth, all transactions are protected somewhat by law, but experts reckon that for online purchases, credit cards offer the most protection. Read more at http://www.savvysugar.com/Should-I-Use-Credit-Debit-PayPal-When-Im-Shopping-Online-12126895

The return of the 0 APR balance transfer

Those with great credit scores present a bit of a dilemma to credit card issuers. On the one hand, they're pose much less of a risk than your average Joe, and are statistically unlikely to default. On the other hand, however, they're usually very well organised, and because they often clear their balance every month, they don't generate much profit for the card providers.

That probably explains why 0% APR balance transfer offers have been drying up a little in recent years, but the trend looks set to reverse again, according to SmartMoney.com

However, the terms of balance transfers will probably start to change. More people will pay a reduced introductory rate, rather than 0% APR, or perhaps a higher annual fee to help increase profits. On the positive side, other incentives will become more prominent, such as longer introductory rates and grace periods.

You can read the full article at: http://www.smartmoney.com/personal-finance/debt/the-return-of-0-percent-apr-credit-cards/

Roundup of 4 travel reward credit cards

As most travellers find out pretty quickly, credit card issuers love rewarding jetsetters. People rely on credit cards so much more when they're abroad, and card companies try and encourage this behavior every step of the way!

With all the options available, it's nice to get a shortlist once in a while outlining a small number of credit cards that reward travellers. Even better, if the same list includes a card that doesn't require a pristine credit score.

Well, I found this article today, and hopefully it will be of use to you: http://www.quizzle.com/blog/2010/10/4-best-credit-cards-for-travel-rewards/

Don't cancel that credit card!

When you consider the interest rates you're paying on your credit card debt, it's natural to think that the best financial decision you could make would be to simply cancel it (or them, if you've got several).

Don't be too hasty though!

Here's the thing: credit card debt is expensive, for sure, and paying off your balance is a good thing. In fact, it's better to pay off credit card debt than it is to save. But once you stop carrying a balance, there are some very good reasons to hold on to your card. For example, it shows commitment to banks and credit bureaus while keeping your debt to credit ratio low, both of which will improve your credit score.

That's not to say that owning 20 credit cards is a good thing: anything over 7 will probably start to hurt your score.

The Motley Fool have a great article about this subject that you really should read: http://www.fool.com/personal-finance/credit/dont-cancel-that-credit-card.aspx

How to Make Balance Transfers Work for You

If you've got a lot of credit card debt, and the high interest rates have you locked in a never-ending battle to clear your balance, perhaps a 0% APR balance transfer is the best reward you could ask for.

Be warned: shopaholics need not apply. If you're going to switch to a zero interest card, make sure you're serious about using this break (usually 6-12 months) to get your debt under control.

Watch out for the small print too. Some 'free' rates still apply a transfer fee, and there could be other charges that reduce your benefits significantly (annual fees, zero rate on transfers but not new purchases, introduction rate void on any late payment, and so on).

As ever, look beyond the initial offer, and make sure that the long term conditions offered by any credit card are good enough. For a great article on how to make the most of the balance transfers game, check out Motley Fool's tips:

http://www.fool.com/personal-finance/credit/how-to-win-the-balance-transfer-game.aspx

Can't understand your Credit Card agreement? Join the club...

It's shocking to think that credit card agreements are written at a level beyond what 4 out of 5 Americans can understand. Why? To protect the credit card providers against lawsuits. But there are some good starting points included in this video from CreditCards.com that will help you to level the playing field:

It's vital that you understand your credit card agreement. Usually, there are enough consumer laws out there to protect you from the excesses that have plagued the industry in the past. Even still, it's worth asking your provider to explain areas you have difficulty with. If nothing else, their willingness to cut through the legal and technical jargon should give you confidence that you're dealing with an open and trustworthy company.

A lovely, humane look at budgeting for generosity!

Most financial advice is introspective: making YOUR dollar go further, paying YOUR bills. Yet, whenever we help someone else out, we do feel good about it, don't we?

Now, this article isn't for everyone. If you're struggling to make your own budget cover your outgoings, it's going to be difficult to help anyone else out. But if you have a little spare change, what could be better than giving someone else a helping hand?

A controversial idea, perhaps, but certainly food for thought. Check out the article in full at: http://christianpf.com/how-to-build-generosity-into-your-budget/

Image Credit: http://www.sxc.hu/photo/1105757

How does cancelling your credit card affect your credit score?

Found this nice article today about the effects of cancelling your credit card on your credit score. As we've discussed previously on http://creditcards-withrewards.com, cancelling a credit card (for example, when your transferring to another card with a 0% APR intro rate) can actually damage your credit score, because your credit utilization ratio is changed, an important part of your overall credit score.

Think of it like this: you have $2,000 balance on a $4,000 limit card, and then you transfer the balance to a new card with the same limit. At that point, between the two cards, you are using $2,000 out of a total available credit of $8,000, so your credit utilization ratio is 25%. When you cancel the first card, you're now using $2,000 out of a possible $4,000, which means your credit utilization score has shot up to 50%. This doesn't look so good to the credit bureaus.

Jeremy Simon goes into more detail in this excellent, and very readable article at: http://www.creditcards.com/credit-card-news/faq-jeremy-simon-cancel-close-credit-card-score-fico-1508.php

Credit Cards Balance Transfers Advice

Credit cards balance transfers can be a great way to get out of debt, as long as you're sensible about it, and don't jump on the first offer that comes your way.

We found a nice little article about the subject at HealthyFinancialHabits.com, full of common sense advice on balance transfers. If you're considering a move, read this first so you can be sure to avoid any of the usual pitfalls that some people make.

Full article is at: http://www.healthyfinancialhabits.com/2010/08/12/no-interest-rate-balance-transfer-credit-cards-–-best-no-apr-0-credit-card-balance-transfer-deals-august-12-2010/

Can Credit Cards Balance Transfers Get You Out of Debt?

Found this interesting article about credit cards balance transfers. It reinforces the idea that, if you're disciplined enough, transferring your balance to a new card at a great introductory rate can actually help get you out of debt.

Opening a second account, while keeping the old account open, can certainly help your credit score, but with 0% APR rates available on balance transfers for up to 18 months, there's an added incentive to get your credit under control.

See http://www.jabberlounge.com/balance-transfer-cards-help-people-in-debt/222044/ for the full story.

Credit card satisfaction up

For many people, credit card providers can be a closed shop: they have marketing departments that will promise you lucrative rewards... and then there are legal departments that hide the bad news in the small print. Quick question, what interest rate are you paying on your plastic? What fees did you pay this year? Don't know? You're not alone.

That may be changing however. The Credit Card Act is a new disclosure law designed to protect credit card customers, and although it's probably too early to judge, early indications are that it seems to be working, with Amex customer satisfaction increasing by 0.9% from last year.

Read more at ABC News: http://abcnews.go.com/Business/wirestory?id=11434547&page=1

Students: Don't graduate in debt!

Amazing to think that 60% of students graduate in debt. It's not a great start to your working life, but with credit card companies throwing all sorts of rewards at you (and not particularly good ones either), students are seen by some providers as an easy sell.

If you're a student, and you need help with your finances, the best advice is not to jump on the first credit card offered to you. Perhaps a card isn't even appropriate - a loan might be better - but if you do need the convenience of plastic, do your homework first. Make sure that you're the one approaching them, not the other way around.

CTV.ca have a great article on this subject: see http://www.ctv.ca/generic/generated/static/business/article1677117.html to read more.

Credit cards with rewards keep people spending

http://www.dispatch.com/live/content/business/stories/2010/08/15/incentives-keep-wary-consumers-spending.html?sid=101

According to this article on dispatch.com, credit card debt is falling, which probably goes some way to explaining why credit cards with rewards are being ramped up, and being made more attractive to consumers.

After all, if you're being incentivized to use plastic with cash back and other rewards, then you're likely to use your card more often. On the other hand, if there are no rewards, you can be pretty sure that it would leave a lot of credit card companies in a dire situation.

We may be living in difficult economic times, but it's good to know that those that continue to spend will at least be rewarded a little for their efforts. If you can afford it, now is the best time to take advantage of the rewards being offered by credit card companies.

Credit Cards with Rewards

Credit cards with rewards seems a little contradictory: don't the credit card providers just charge high fees, and tell you that their token benefits are better than they really are?

It's true that there is a lot of money in credit cards, and yes, they do charge a lot of people a whole lot of money, in both interest and fees. But it's also true that if you pick the right card, with specific goals in mind, then the rewards can provide real benefits to you.

People forget just how convenient credit cards actually are, and to be able to order your shopping from the comfort of your own home could be seen as a wonderful benefit in itself. But naturally, in such a competitive market, you can, and should expect more than that.

Maybe your credit score is low, and you need a card to help you improve it. Try a 0% APR card with fixed fees and monthly reports to the major credit bureaus. With a little self discipline, they can help you build up your rating again and open a lot more doors for you over time.

Or perhaps you're paying too much in interest: see if another card provider will do a balance transfer at an introductory rate, to help you claw your way out of debt.

And if you already have a good credit rating, find a card that offers you miles for purchases, and use them for your next vacation.

These are just some simple examples, and over the coming posts, we'll discuss some more ways in which credit cards with rewards can benefit you!