The Charge-It Blog

  • Jeff Herman

    In this holiday season, give yourself some credit

    In this holiday season, give yourself some credit

    While you’re dashing to the malls or waiting to pounce on Cyber Monday deals to get gifts for friends and family, give yourself some credit. Here are four ways to do some good for yourself – and your wallet and credit score – while you’re trying to do so much for others.

    Check and track your credit scores.
    With card issuers increasingly offering free credit scores and scorecards, this costs you nothing but a quick check every few weeks to make sure your credit score is moving in the right direction.

    If your card issuer doesn’t offer free credit scores and trackers, Discover’s Credit Scorecard (FICO score) and Capital One’s CreditWise (VantageScore) are open to everyone.

    Always pay your bills on time – at least the minimum, but preferably in full – and you should see your scores climb.

    Save by using shopping portals.
    If you already have an idea what you’re getting folks, you can rack up rewards points, maybe get free shipping and avoid the crowds at stores by using your card issuer or airline card’s shopping portal.

    While card issuer shopping portals turbocharge miles, points and cash back through the year, the savings are especially great at the holidays. The same goes for airline shopping portals, where you can rack up miles without having an airline credit card (just enroll in the frequent flier program).

    Do some good.
    The holidays don’t have to be about splurging and spending. Studies have shown that giving – instead of gifting – can improve our spirits.

    Giving Tuesday, the day after Cyber Monday, is one way to do some good. My post on 4 ways you can make the most of Giving Tuesday shows how matching programs can double donations to your favorite causes. If you don’t have money to spare, you can donate your time as a volunteer.

    If you’re a Capital One cardholder, No Hassle Giving lets you donate to more than 1.2 million charities in the U.S. via Network for Good, and Capital One covers the transaction fees, so 100 percent of your donation reaches the charity.

    For a twist on giving gift cards, this is the second holiday season that Stockpile has made it possible to buy stock gift cards at your favorite retailer. This year, Stockpile gift cards are available in many more stores, including Target.

    Use sign-up bonuses to make the most of holiday spending.
    A cash sign-up bonus with a new rewards credit card might be especially appealing as you head into the final weeks of the year, especially since a National Retail Federation study projects the average American will spend an average total of $935.58 during the holiday shopping season.

    With that in mind, the Barclaycard CashForward World MasterCard’s $100 cash bonus after spending $500 in the first three months might be a big help with your shopping. Or maybe the Blue Cash Everyday Card from American Express’s $100 back after you spend $1,000 in purchases would be a better match for your spending.

    If a card might help with you rake in the miles, points or cash back this time of year but you don’t know which card is right for you, our CardMatch tool can help. CardMatch helped me to choose the Chase Freedom card, with its $150 bonus with $500 spending in the first three months, to add to my wallet months ago.

    Give yourself credit. The way I figure it, it just pays to get something back for your spending, to save as much as you can on gifts this time of year, to know and track your credit score, and to give whatever you’re able to a favorite cause at the holidays and beyond.

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  • Kayla Albert

    Bad credit? It will cost you thousands

    Bad credit will cost you thousands in interest

    You’ve heard that bad credit will cost you, but exactly how much?

    A 2016 study conducted by Syracuse University found a staggering difference in the interest paid on credit cards and student loans by a person with bad credit and another with good credit.

    For instance, a credit card issued to someone with bad credit (typically a score of 600 and below) has an average interest rate of 22.99 percent, the study finds. And a person with good credit? He or she would get an average interest rate of 9.99 percent.

    Using $7,813 as the average credit card debt for an American household and a minimum payment rate of 4 percent, the person with good credit would end up paying $1967.87 in interest. The person with bad credit would pay $6,841.18 in interest charges on that credit card debt. How much does bad credit cost? In this case, nearly $5,000 more.

    Now consider student loans. A person with good credit might secure a 10-year student loan with a 4.29 interest rate, while the student with bad credit might only be able to land a 10-year loan with a 10.29 percent interest rate.

    That means the student with good credit would pay $159,633.37 (with interest) for her degree. The student with bad credit would pay $208,058.61 to earn his degree. The result: Bad credit could cost you an additional $48,425.24 in interest charges.

    Non-financial costs of bad credit
    The costs of bad credit could be even larger than those out-of-pocket interest payments, says MaryAnn Monforte, professor of accounting practice at Syracuse University’s Whitman School of Management/Accounting@Syracuse.

    “When most people think about bad credit scores they think about their impact on the ability to borrow, but one thing they don’t think about is the impact on their careers,” she says. “Prospective employers will check credit history, particularly in the finance and insurance industries.”

    Yes, that’s right — would-be employers in certain industries can ask to check your credit report and may factor any credit hiccups you had in the past in the hiring decision. It’s important to note, though, that a potential employer first must get your authorization to pull your credit report.

    The bottom line: Whether you’re trying to get a credit card, secure a student loan or land a job, bad credit will cost you more.

    How to move from bad credit to good credit
    If you have a bad credit score, you can take steps to repair your credit. How do you do this?

    If you have credit cards, pay down card balances. Pay in full and on time every month. And keep your credit utilization low – the percentage of your credit limit that you are using. Many credit experts suggest keeping your credit utilization ratio under 30 percent. Do all of these things routinely and your credit score should rise.

    Monforte has another bit of advice for young people looking to create a positive credit outlook. “Be wary of having too many credit cards,” she says. “Too much open revolving credit does not look good on your credit report

    “Be selective of the cards you choose,” she says. “Use them, pay them off, and be timely with your payments and you will be on the road to establishing good credit and a good credit score.”

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  • Peter Fullam

    4 things cardholders can do to deal with rate hikes

    4 things cardholders can do to deal with rising interest rates

    For cardholders who carry balances and anyone battling credit card debt, rising interest rates mean higher monthly payments. And the odds of a federal funds rate hike in December are growing.

    According to CME Group, based on the 30-Day Fed Fund futures prices, as of Nov. 4, 2016, there is a 66.8 percent probability of a bump of 0.5-0.75 basis point when the Federal Open Markets Committee meets next month. The probability of an increase of 0.25 to 0.50 basis point increase is now at 33.2 percent.

    The 0.25 basis point boost in December 2015 was the first rate increase since June 2006.

    While that nudge has had little impact on card variable interest rates, a gradual uptick in interest rates “could be significant for somebody’s budget, especially somebody close to the edge,” says Bruce McClary, vice president of communications for the nonprofit National Foundation for Credit Counseling.

    Typically, credit card balances fall in the $5,000 to $10,000 range. That means an extra point added to an existing interest rate will cost an extra $20 a year, says Melinda Opperman, chief relationship officer at Springboard Nonprofit Consumer Credit Management.

    Note that card issuers don’t have to raise rates in lockstep with the benchmark fed funds rate, but many do. Average card interest currently is 15.18 percent, according to CreditCards.com’s Weekly Rate Report.

    While the effect of an expected December rate hike is not likely to cause a sweat for most people, if you’re looking for ways to minimize the impact, here are four things to do now:

    1. Pay down your balances: If you’re not carrying debt from month to month, you won’t feel any effect from an interest rate bump. Develop a plan now to whittle away at your debt, and then follow through.

    2. Seek out lower interest rates. Call your issuer and ask for a lower rate. Often that’s all it takes to get one. If that doesn’t work, consider a balance transfer to a card with a lower rate.

    3. Scout 0-interest credit card offers. If you can transfer the balance from your higher interest card to a card with no interest for a lengthy period of time, this will save you the interest charges and buy you time to pay down that balance. Some balance transfer cards are offering up to 21 months with no interest.

    4. Pay on time and pay in full. This keeps you out of debt and from ever having to fret about interest rates when using credit cards. It’s wise, though, to know what your card’s APR is in case there is an emergency expense you can’t cover with cash and have to put on your plastic. 

    Bottom line: “If consumers improve their personal savings habits, rely less on revolving credit and maintain a greater degree of flexibility in their household budgets, they will be able to easily make adjustments necessary to absorb increases,” says McClary.

    “Credit cards can take decades to pay off if you only pay the minimum monthly payment,” says Opperman. “And interest rates can change a lot in that time.”

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  • Jeff Herman

    4 credit card offers with big sign-up bonuses

    Credit card offers with big sign-up bonuses

    Those whopping credit card sign-up bonuses get a lot of attention, but often those cards come with sky-high annual fees. That’s not always the case, though. A big sign-up bonus can simply mean a large return for your money.

    In other words, sometimes cards offer a bounty of points and perks just for using the card for everyday purchases.

    Here are four credit cards that are at the top of my mind for their extraordinary sign-up bonuses and other perks:

    Chase Sapphire Reserve
    This credit card with an eye-popping 100,000-points sign-up bonus and $450 annual fee proved so popular that Chase ran out of the metal cards and was issuing plastic substitutes.

    What has made this card a runaway hit? That bonus, with an estimated value of around $1,500, has helped win over millennials, an age group that had been thought to be credit averse. Three millennials I spoke with this month already have big travel plans for that huge haul of points.

    The downside? To get those 100,000 points, cardholders must spend $4,000 in the first three months.

    Beyond the bonus, though, Reserve offers a cornucopia of benefits for travelers, including a $300 annual travel credit, $100 Global Entry or TSA PreCheck credit, no foreign transaction fees and access to more than 900 airport lounges.

    If I were more of a jet-setter and didn’t worry that I might not spend $4,000 in three months, this card would be perfect for me.

    Blue Cash for Business from American Express
    The no-annual-fee Blue Cash for Business Credit Card from American Express has a sign-up bonus of 10,000 Membership Rewards points. That’s a swell bonus for a no annual fee card. Maybe more notable than the sign-up bonus is how the cardholder is showered with points for everyday spending.

    For example, Blue Cash for Business cardholders can earn 10x points at U.S. restaurants for the first six months, 2x points on all qualifying purchases on the first $50,000 for the first year, and a 30 percent annual bonus based on the cardholder’s spending.

    For example, if a cardholder spends $50,000 in the first year, that would be a bonus of 15,000 points.

    The card also has a 0 percent interest rate for the first 12 months, then a variable rate based on creditworthiness at the account opening.

    The fine print: The 10x points at U.S. restaurants is good on up to $2,000 in purchases, and the offer expires Feb. 2, 2017.

    Note that you don’t have to be a business owner to get a business card. But there are differences between consumer cards and business cards, the biggest likely is that business cards don’t have the same consumer protections.

    As often as I eat out, this might be a good fit for me. I also like the idea of 2x Shop Small rewards for American Express purchases made at qualified small businesses through Dec. 31, 2016.

    Barclaycard Arrival Plus World Elite MasterCard
    For a traveler who would rather not pay a sky-high annual fee, the Barclaycard Arrival Plus World Elite MasterCard has a lofty sign-up bonus of 50,000 miles for a more down-to-Earth $89 annual fee that’s waived the first year.

    How much is 50,000 bonus miles worth? That’s enough to redeem for a $500 statement credit.

    Everyday purchases earn 2x miles, and there are no foreign transaction fees, which can save a cardholder traveling abroad.

    If only I traveled more! But then again, maybe this card’s sign-up bonus miles could help pay for my next vacation…

    Amazon.com Rewards Visa
    This is the card I most recently added to my own wallet. Why? The Amazon.com Rewards Visa sign-up bonus is a $50 Amazon gift card that’s loaded on your Amazon account. That’s nothing in comparison to many other offers, but big is in the eye of the cardholder.

    I’m increasingly using Amazon to buy books and even our dog’s Greenies treats (it’s cheaper to order them online and have them delivered than to buy them in pet stores), so why not get a bonus for getting the card and rewards on my spending?

    The no-annual-fee Amazon card’s rewards include 3 percent back at Amazon; 2 percent back at gas stations, restaurants and drugstores; and 1 percent back on all other purchases. And I like that when I order something on Amazon, at checkout I’m asked if I want to apply my rewards to that new purchase. No fuss with redeeming points or miles.

    For me, that $50 Amazon gift card meant about $100 for books for my summer reading and a birthday present cost me half of that.

    But maybe it’s time for me to add yet another card to my wallet. There are vacations to take in the months ahead. If I can save on some of the costs with a travel card’s sign-up bonus, that just makes sense.

    See related: Guide: How to choose the right credit card

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  • Jeff Herman

    Use your cards to rack up back-to-school savings

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    Back-to-school clothes, dress shoes, college textbooks and computers can take a big bite out of your family budget, but by smart shopping with your credit cards you can stack your savings.

    Total spending for back-to-school and back-to-college supplies will reach $75.8 billion in 2016, according to the National Retail Federation’s annual survey. That’s up from last year’s $68 billion.

    Back-to-school shoppers are more upbeat about their financial situation, a Synchrony Financial survey finds. And this is expected to increase back-to-school retail sales this year between 3.2 percent and 3.7 percent.

    You’re going to be making the back-to-school purchases anyway, so why not use your credit cards to get the most value — and rewards — for your dollars?

    Here are three ways to maximize your rewards and ring up back-to-school savings:

    1. Bonus cash-back categories: A handful of cards have 5 percent bonus categories that change every quarter. Check your card issuer’s cash back bonus categories to increase your back-to-school savings.

    For example:

    Discover: “If you have the Discover it Card and Amazon Prime, you might want to check Amazon.com for back-to-school supplies,” says Holly Johnson, a co-founder of ClubThrifty.com, a personal finance and savings site. “From July through September 2016, Amazon.com is one of Discover’s 5 percent cash back bonus categories. If you’re able to get a good deal on supplies, free shipping, and 5 percent back on your purchase, that’s a pretty sweet deal,” she says.

    “If you’re able to get a good deal on supplies, free shipping, and 5 percent back on your purchase, that’s a pretty sweet deal.”
    — Holly Johnson,
    ClubThrifty.com

    Chase: With the Chase Freedom card, purchases at wholesale clubs, such as Costco, Sam’s Club and BJ’s, are in the 5 percent category through the end of the year. And if you’re eating out in a college town while moving your child to campus, restaurants also are in this quarter’s 5 percent cash-back category.

    Citi: If you’re renting a vehicle to move a student to college and staying a night or two in that city, Citi’s 5 percent cash back quarterly category (currently Hilton and car rentals) may come in handy.

    U.S. Bank: If users of U.S. Bank’s new Cash+ card were really planning ahead, they could have selected two 5 percent cash back categories for the quarter – retailers, car rentals, whatever might help you save the most on your family’s spending ahead of the school year.

    2. Online shopping portals: Use your card issuer’s shopping portal to earn additional cash back, points or miles on the same school supplies and computers you’d purchase in stores. You may even get free shipping on your order.

    Johnson says: “If you have a Chase credit card that earns Ultimate Rewards, make sure to check in with the Chase shopping portal before you head out to stop for back to school.

    “The deals change all the time,  but you can frequently score an extra 2 to 5 points for every dollar you spend at certain office supply stores,” she says.

    “As of this writing, Staples, the Apple Store, and Office Depot are offering an extra 2x points,” adds the mom of two girls, ages 5 and 7. “Walmart is also offering an extra 2x points for every dollar you spend.”

    Matthew Coan, founder of Casavvy.com, also is a fan of playing one’s cards right for added back-to-school and year-round savings. There is also “savings you can ‘add’ to your cards,” he says, citing Amex Offers and BankAmeriDeals, which let cardholders select discounts from stores to add on their cards.

    For instance, American Express cardholders who’ve synced their cards with Twitter can get a one-time Amex Offers $30 statement credit by spending at least $150 at The Container Store through Aug. 31, 2016.

    3. Tax-free holidays: Several states have these holidays. During these “holidays,” you’ll save the cost of state sales tax on select back-to-school purchases. How much you can save varies by state (California has the highest state-level sales tax at 7.5 percent, and Oklahoma is lowest of states with a state sales tax at 4.28 percent, according to the Tax Foundation).

    Check if your state has a tax-free weekend (with dates and what’s covered) on our map, but note, too, that your city, county or district may not be participating. Make a list of your family’s back-to-school needs, and note what’s covered by your state’s program.

    Want to avoid a mob of moms and dads snapping up school uniforms, pens and notebooks at stores? Shop online. Stack your savings via your cash back cards and online shopping portals.

    An added bonus perk for new Discover cardholders: Discover will double cash back earned during the first year for new cardholders. How does this help cut your back-to-school bill?

    “Current card members can get the 5 percent cash back bonus while shopping for back-to-school items, and new cardholders would get 10 percent with the Match program,” says Derek Cuculich, Discover’s manager of public relations.

    Bottom line: Budget-minded moms and frugal fathers can use their cards to save on purchases for back to school and year-round. Making the most of tax-free holidays, online shopping portals, card-linked shopping discounts and cash-back bonus categories can add up the savings – and reduce the size of your back-to-school bill.

    SEE ALSO: How to make the most of your first rewards card

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  • Dawn Papandrea

    Facebook reactions for my credit status

    Looking at your credit card statements or your credit report can bring forth a froth of emotions. Hopefully they’re mostly of the positive variety, but everyone has been down in the dollar dumps at one point or another.

    Take a look at what sort of credit statuses might inspire me to click each of Facebook’s new reaction buttons: Facebook reactions for my credit status

    LIKE — I’m always happy to give a thumbs-up when I learn about a credit product’s cool perks and features. One of my issuers offers a free credit score each month, and another offers a transparent, confusion-free cash back rewards system.

    Other reasons to click “like”:
    — An easy-to-navigate website and app to set alerts, check balances, redeem rewards, and make payments.
    — A credit report without any errors.

    LOVE — After a couple of years of hard work and smarter choices, finally achieving a stellar FICO score was enough to make me swoon. I’ve always had decent credit, but moving into a higher tier gave me a level of satisfaction that my commitment to better financial health was paying off. I “heart” progress!

    Other reasons to click “love”:
    — Seeing a zero balance on all of your credit statements.
    — Cashing in on a free flight or hanging out in a cardholder VIP lounge.

    HAHA — Realizing I spend way too much money on Chinese takeout (and other silly things). If your credit issuer offers a breakdown of your spending, seeing it in pie chart form can be a real eye-opener.

    Other reasons to click “haha”:
    — When I fumble with a chip reader only to find out the merchant doesn’t support my more secure chipped card yet.
    — Randomly signing my maiden name on a credit slip despite being married for 13 years. Some habits die hard.

    WOW — Discovering that you’ve accumulated thousands of reward points. Before I was keen to all this credit card stuff, I didn’t pay much attention to my points balance until one day I noticed it was there. I was able to redeem them for a whole bunch of gift cards that powered my holiday gift shopping that year.

    Other reasons for a “wow” reaction:
    — The totality of a credit report – it’s amazing how big one’s financial footprint can be!
    — Looking at the pile of credit card offers in my “to shred” pile. Yikes!

    SAD — When you look at the box on your statement that tells you how long it will take to pay off your balance. Even a small debt can seem hopeless when looking at it from that perspective.

    Other reasons for a “sad” reaction:
    — Imagining a day in the not-so-far future when my kids ask to be added to my credit account as an authorized user (please stop growing already!).
    — Having no choice but to use plastic to pay for an unexpected expense. It happens to the best of us, despite our best efforts to build an emergency fund.

    ANGRY — Scanning your credit activity and noticing that someone tried charging on your account, and it wasn’t you! I’ve caught potential fraud on my accounts a couple of times, and it is infuriating to realize that it can happen no matter how careful you are.

    Other reasons for an “angry” reaction:
    — When your spouse charges something that’s beyond your agreed-upon spending limit and “forgets” to tell you.
    — Forgetting to take your card back from a cashier or restaurant server. Been there, done that.

    Paying attention to how you react to your own credit standing can alert you if you’re not using credit in the most responsible way. If you have a lot to be sad or angry about, look for strategies to help turn those frowns upside down so you can start “liking” and “loving” your financial status.

    SEE ALSO: Your guide to picking the right credit card

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  • Dawn Papandrea

    These motivational mantras can doom your credit

    Sometimes when people try to rationalize overspending, they do so almost in a defiant way by turning to inspirational quotes and Internet memes for support. For instance, how many times have you contemplated flying first class with the rationale that “you only live once?”

    If you’ve used any of these Instagram-worthy mantras to explain away your shopping habits, learn how to tone down the rhetoric to make better credit decisions:

    Carpe diem: This phrase made popular by English poets translates to “seize the day,” but I’m not sure how they would feel about it being used as a rallying cry to shop those “last chance” sales. Still, the notion that you’ll regret passing up a sale or missing a concert often is enough to get one to whip out the plastic. After all, you may never get such an opportunity again … or so the story goes.Motivational mantras that can doom your credit

    Tone it down: You can live a carpe diem lifestyle if you prepare for it. While that might sound counterintuitive, it’s not. Setting aside a fun budget will allow you to finance those once-in-a-lifetime or last-minute opportunities that come up, and you won’t have to think twice.

    FOMO: In the age of social media, it’s hard not to have anxiety or “fear of missing out” after scrolling through everyone’s amazing-looking social activities. We always want to give the appearance of doing exciting things, and seeing others taking part in events is enough to make us want to head straight to that new trendy restaurant, too.

    Tone it down: You don’t have to miss out, but you need to make modifications if something doesn’t fit your budget. If you can’t afford playoff tickets, get some friends together to watch the game at a local sports bar. Take advantage of happy hour prices, and check Groupon and other local deal sites for discounts at upscale restaurants. Oh, and stop comparing yourself to friends on social media — for all you know, they could be up to their eyeballs in debt on maxed-out credit cards.

    You can’t take it with you: You often hear people say this after an illness or tragedy, and while it is a true statement, blowing off your responsibilities will have both immediate and future consequences. Yes, we all want to enjoy life to the fullest and bad news can put that in perspective, but especially if you have children, think about the situation you’re creating for them if you leave behind piles of card debt.

    Tone it down: You don’t want to be so frugal that you never treat yourself, but be careful that you don’t go too far in the other direction when you decide to go on a rebellious streak. Make memories that matter, but not at the expense of your long-term financial health.

    Shopping is cheaper than therapy: Retail therapy might feel good in the moment, and well-meaning friends will even encourage a trip to the mall after a breakup or bad day at the office. And don’t think that this doesn’t apply to the guys as well, especially when it comes to their love of tech gadgets or cars.

    Tone it down: Shopping while emotional usually results in a whole new reason to feel down in the dumps — a large credit card balance after a spending spree. Instead, look for other less expensive activities when you need a pick-me-up. Maybe it’s going to a kickboxing class to punch out your frustrations, meeting a friend for coffee, or treating yourself to a giant ice cream sundae.

    When it comes to money choices, we can talk ourselves into anything, especially if we’ve got a cool mantra to quote. If you’ve gone into debt because of any of the above reasons, however, here’s a better mantra for you to remember for next time: The only place where success comes before work is in the dictionary.” Put some work into your finances and you can reap the rewards with no regrets.

    SEE ALSO: Can an app keep you from splurge spending?

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