Make a $1000 a Year with Reward Credit Cards? Yes!

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I'm a strong believer in disciplined personal finance. Part of that discipline is having the self control to avoid superfluous spending on credit cards and paying them off every month.

I believe everyone can develop this discipline. If you need a carrot stick for motivation, this post (and $1000 a year) is for you.

Let's start with what's in my wallet:

Reward Credit Cards in my Wallet

Reward Credit Cards in my Wallet

Here's a breakdown of each card and why I carry it. I'm going to put them order of awesomeness, which is different than the picture above.

  • Fidelity Retirement Rewards - This card gives me 2% rewards on everything I spend. For those who are math-challenged that's twice as good as what you get from most rewards cards. This is the catch-all card, which we found particularly great for things like daycare. Though this card is supposed to make it easy to put the rewards into your retirement plan, Fidelity couldn't figure it out for me. Instead, I use the rewards for statement credit. You need to get around 25,000 in rewards points ($12,500 spending) to redeem at the 2% level, but the $250 statement credit is very nice.
  • American Express Blue Preferred - This gives me 6% cash at grocery stores (not Wal-Mart or Target). It used to not give rewards for my local military commissary, but they've finally fixed that problem. Though it has an annual fee, the 6% rewards on groceries more than cover it.
  • Chase Ink Business - This gives 3% cash back at restaurants, office supply stores, and home improvement stores (Home Depot, Lowe's, Ace, etc.) I don't know if you actually need to have a business to take advantage of this. I'll leave that as an exercise for the reader. Even though we try to keep our restaurant expenses down, the extra 1% over the Fidelity Retirement Rewards card is nice.
  • USAA Rewards Plus American Express - This gives 5% back on gas and at military bases. With gas at around $3/gal, that 5% makes it effectively $2.85/gal. If you drive a lot, it adds up quickly. My wife recently learned about the military base rewards, which was news to me. The strange thing is that many places on military bases won't take American Express.

    Now for the sad part... you probably need a USAA account to get this. Unfortunately USAA accounts are typically limited to members of the military and their families. If you are limited by this, keep reading, I've got something for you later in the article.

  • Amazon Visa - This isn't pictured above. Why? Because I don't keep it in my wallet. I signed up for it just to get the 3% rewards at Amazon. I added it to my Amazon account and then hid it away. Unlike American Express, don't leave home WITH it. With the other cards, there's no value to it.
  • Chase Freedom - This card gives 5% cash back on categories that rotate every quarter. Sometimes it's restaurants and beats out my Chase Ink card for value. A couple of quarters ago it was gas, which is almost useless given my USAA card above. Because this card is very hit or miss, it is low on totem pole. I don't like having to think about how it saves me money this quarter. I also don't like having to "activate" the rewards, even if it is as easy as a click on the web. Big demerits for relying on breakage, Chase.

Here are cards that deserve mention. I would carry some of them myself, if it weren't for a specific situation to me that prevents it or limits the value.

  • Citi Double Cash (MasterCard) - This card gives you 1% when you spend and 1% again when you pay in full. Because the assumption is that we pay in full, this gives the equivalent rewards as the Fidelity Retirement Rewards card above. The difference is that this is MasterCard and is useful a few more places that American Express is not. If you had neither, I would suggest this over the Fidelity card that I use. Since I already have the Fidelity card, it isn't worth it to me to make the move.
  • PenFed Platinum Cash Rewards - If you aren't eligible for the 5% USAA card, you can get a PenFed membership (it's relatively cheap and easy, just do a search with your favorite search engine) and get nearly 5% cash back on gas with this.
  • BJ Perks Elite - We tried to get this card, but got rejected despite our nearly a perfect credit score. Their explanation? Our debt-to-income ratio was too high for their liking. Because the BJ Warehouse membership was in my wife's name, she had to be the one to apply. I wonder if she low-balled our income perhaps leaving off what our three investment properties bring in? It is a mistake that I often make, because the income balances off our expenses. A credit check would bring up the debt and our reported income would seem low if we don't include that income.
  • US Bank Cash Plus - This card allows you get 5% on categories that you choose. They used to have utilities, which made it the only card would give 5% on such things. It looks like they have some useful things such as electronic stores (5% Best Buy, Apple, etc.), gym memberships, and cell phone. This card may save some people $50-100 a year with some of those categories.

    Unfortunately, I have to pass because you can only apply in a branch and they don't have any in New England from what I can tell. True story... while on vacation I tried to apply in a branch, but they couldn't send the card to a state that they didn't have a branch in. So as my British friends might say, I will politely invite them to "get stuffed."

  • PenFed Premium Travel Rewards - This gives you 5% on airlines. What I like best is that it isn't limited to any particular airline. My wife books the majority of our travel (it's usually for her work). I think she might have this credit card, but I'm not 100% sure. If not, we should get it on our list. We used to not travel much, but we are traveling a little more of late.
  • Discover - I'm thinking about this one. Like the Chase Freedom above with rotating categories, it might prove useful some quarters. I'm still stuck in the 80's thinking of when my mother got one of these cards and couldn't use it anywhere. I think it is mostly taken everywhere now, so it may be one of the next credit cards on my list to get.
  • Sam's Card - Sam's Club has the cheapest gas around for us, but it is still 20 minutes away from our house. When we are going by there anyway, we fill-up, but it isn't worth the trip otherwise. The downside is that Sam's doesn't take the USAA gas card mentioned above since it's American Express. If you lived close to a Sam's Club and used it to fill up often enough, it would be worth it to get this 5% card.

You'll notice that I don't have a lot of travel cards here. Some people do very well with them. We don't travel enough to save up tons of rewards points on every airline. We could choose one airline to pile up points in, but what if another airline is offering a better deal? I'd rather have the George Washington Points (commonly referred to as "cash") that I can use everywhere.

Also, some people rotate through credit cards to get the sign-up rewards. With some of them, you might be able to make a few hundred dollars per card in just a few months. The returns on those can be upwards of 15%! It's not terrible plan, but I like to keep a core set of cards and have them on autopay. This way I never have to remember to write a check or put a stamp on a bill... and I never get charged a fee.

So How Do I Save More than $1000?

I don't subscribe to a system of meticulous budgeting, so I'm going to give you estimates based on our spending for a year. And yes, I realize I could sign into 6 accounts and get year-end statements for more exact numbers. There's two things stopping me from doing that 1) Laziness and 2) Really not wanting to look at our spending on that Fidelity Rewards card (ouch!).

Day Care - $12,500 - Fidelity Rewards (2%) - $250
Groceries - $4500 - American Express Blue Preferred (6%) - $270
Restaurants - $3600 - Chase Ink (3%) - $108
Gas - $2000 - USAA (5%) - $100
Amazon - $1200 - Amazon (3%) - $36
Office and Home Improvement * - $300 - Chase Ink (3%) - $9
Miscellaneous (not in a category above)** - $15,000 - Fidelity Rewards (2%) - $300

The grand (estimated) total is... $1073!

* I often buy Home Depot Gift Cards at a 10-12% discount on using my Fidelity Rewards (2%) card. The combination is a far better deal than Chase Ink's 3% cash back. The only reason I spend $300 in the first place is when I forget to bring my Home Depot cards or shop at Staples where I don't have a gift cards.

** This may be a very low estimate. We manage three rental properties. Buying new appliances, kitchen updates, HVAC units add up quickly. If we were to get the BJ's card and the travel card some of this spending would move from this category to one making 5% increasing our total rewards a bit... maybe enough to hit $1100.

Maximize Your Points

This may seem obvious, but I try to get the highest percentage reward cards for a category. The magic number for many categories is 5%. Sometimes you get a 6% and sometimes you have to settle for 3%.. I never think about cards that offer less than 3% because I've got my Fidelity that earns 2% on everything to fall back on.

I've had most of these cards for years and years now. Spending with them is second nature to me. My wife likes to put a sticker with a reminder of the category on her cards. As I mentioned above, all of these are on autopay, so I just need to make sure I have the money in the bank, and the rest is automated. Not everyone's spending is the same, but I think that nearly everyone could easily make at least $500 a year with no additional work, simply with rewards on credit cards.

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Credit Cards

Posted on June 8, 2015.

Using Credit Cards to Repair Your Credit

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[Editor's Note: Sometimes I forget some of the basic levels of financial trouble that some people have. Today's article fills a gap in addressing how people can get good credit when they don't have good credit.]

Credit cards can be useful, but they can also be dangerous. Because they make lines of credit readily available, if you don’t have strong spending habits, it’s easy to spend yourself into a deep financial hole that can take years to get out of. If the hole is deep enough it will not only impact your current finances, it can also affect your ability to get future credit, and even affect your job prospects.

Because of the risks associated with credit cards, it might seem odd that some financial experts recommend that people with credit problems use credit cards to rebuild their credit. As strange as it sounds, the practice can actually work quite well as long as you do it properly.

Get a Secured Card

There are two main types of credit cards: secured and unsecured.

With a secured card, you have to make a deposit to your card and all or part of the deposit applies toward your credit limit. The deposit acts as collateral against you defaulting on your balance. If you do default, then lender keeps the deposit.

With an unsecured card, the lender simply gives you a credit limit and expects you to pay it back if you use it to make purchases. If you have a spotty credit history, it can be very difficult to get an unsecured card because the lender would need to be able to trust you.

Secured cards function just like unsecured credit cards. You can make purchases, you have to make monthly payments on the balance, and you will also have interest and finance charges. The most important part is that, just like a regular card, the credit card company reports your payment and spending history to the credit reporting agencies.

Secured credit cards are not the same as pre-paid debit cards. Prepaid debit cards essentially function like electronic checks and withdraw money from your checking or savings account. There is no credit involved, you don’t have to make monthly payments on the balance, and the bank does not report anything to the credit agencies. Debit cards give you some of the convenience of credit cards, but they won’t improve your credit score.

Determine How You Will Use the Card

In order to build your credit, you have to actually use the card and make regular payments. If you just sit it, it won’t prove to the creditor that you can be responsible. However, you don’t want to go nuts with your spending either. The amount of your deposit will put some limits on your spending, but if you don’t have a clear plan for how you will use your card, you could end up back in the same boat.

One suggestion would be to designate that card for a specific expense, such as your cell phone bill or gas or groceries. You would use that card solely for that expense and stick within a budget.

The point of having the card is to rebuild your credit, not to spend, so it’s a good idea to use an expense that you would normally pay out of your checking account, and which is much less than the credit limit on your card.

Pay Off the Balance Each Month

Although secured credit cards give you the option of making a minimum payment each month, paying the balance in full will go a long way toward improving your credit rating. If you can’t pay the balance in full, then you should at least make more than the minimum payment each month; and make sure you make those payments on-time, or even early. Even one late or missing payment can undo all of your hard work.

If you find that you can’t keep up with the payments, or that you are not able to pay off the total balance within three months, stop using the card until you can catch up and zero out the balance.

Keeping a balance on the card for long periods of time can actually hurt your credit, and it will also cost you more money in interest and fees.

Keep Track of Your Credit Report

Credit card companies report to all of the agencies every month. Sign up with a credit monitoring service so that you can keep track of your rating and see what the credit companies are saying about you. There are free services like Credit Karma, which are pretty much do-it-yourself; there are also companies that offer a range of credit services for a fee.

Whether you decide to go with a free service or a paid service, you should always check the consumer reviews of credit repair companies to see what their customers think of them. You should also check industry rating sites to see how they rank against the competition.

You can also contact the companies directly to get their list of products and services, and to determine if they offer what you need; some companies just monitor your credit report while others can actually work with you to help rebuild your credit.

Switch to an Unsecured Card

Once you have gotten the hang of using your credit card responsibly, and making timely payments, you can then graduate to an unsecured card. Some companies might even allow you to convert your existing secured card to an unsecured card, and might even refund all or part of your deposit.

Switching to an unsecured card shows the credit reporting companies that the lender trust you, which can raise your credit score.

Don’t let yourself fall back into old habits, however. Once you switch, you need to maintain the momentum and keep making wise spending decisions and paying off the balance.

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Credit, Credit Cards

Last updated on March 10, 2015.

Are You Friends With Your Checkbook?

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Who couldn't be friends with this guy?

Most of us strive to try to keep a budget each month. Everyone has fixed costs that have to be covered, such as the rent or mortgage, insurance, and food. Some people call these a "monthly nut", but I'm not a squirrel. I like to call these "necessary expenses" and have tracked them over time. For many people keeping to a budget was easier years ago. Nowadays, are a ton of electronic payment methods available. Their convenience makes spending money we do not have that much more tempting. Impulse buying becomes easier - all you have to do is swipe either your debit card or your credit card.

This can result in a well-planned budget getting out of the water. Maybe I'm showing my age, but I remember when people would write checks at the grocery store. It slowed everything down. As one of those "quick swipe" credit card people I found this really annoying.

Looking back on it today, I have to respect it a bit. Those people actually spent time balancing a checkbook, so they knew exactly how much money they had. It was a great system for accountability reasons. With today's credit cards a lot of that accountability is gone.

I have to admit that I'm not very good friends with my checkbook nowadays. I thought about it for a bit and here are some of the reasons why:

  1. I'm Lazy - I type thousands of words a day. It may sound crazy, but I barely know how to use a pen anymore. Adding an item to a grocery list is comical.
  2. I Don't Need the Accountability - I spend more than enough time thinking about money by writing for this site. In return this website gives me accountability.
  3. Checks can be Expensive - Last year I switched bank accounts. It's a long story, but since my tenants wouldn't get out when the lease was over, I had to stop accepting payment from them in order to evict them. However, they had the ability to automatic deposit money in my bank account, which allowed them to stay indefinitely... unless I switched bank account numbers.

    So I switched, but that required getting all new checks. It was well over $25 for 120 checks of the very most basic design. That's almost half the cost of a stamp, simply to use my own money. I decided to go home and order cheap checks online. It was much, much cheaper. Not only that, but the bulk pricing was much better my bank's.

Sorry Mr. Checkbook, but for now we'll just have to be occasional acquaintances.

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... and focuses on:

Banking, Budgeting, Credit Cards

Last updated on August 20, 2014.

Fidelity, You Suck!

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I usually am not one to criticize in public, but sometimes trying to work behind the scenes simply doesn't produce an acceptable solution. When you are dealing with a big corporation, a single customer can't make a difference. They simply aren't going to change their system when one person encounters a problem. However, maybe, there's a chance this reaches enough people to make a difference.

Early in 2013, I got the Fidelity Retirement Rewards American Express credit card. As I always say about credit cards, they are a good tool if you use them right and avoid the fees and interest payments. This particular Fidelity card gives you 2% back on anything you buy if you cash the points into a Fidelity Retirement account. (I think they've also added a statement credit option if you do enough points, which is probably the better option.) Almost everyone give you 1% back, but 2% is pretty big, especially when we can use it to pay our day care bill. Some credit cards will give you more in certain situations, such as gas and grocery stores, but this is a great card, in theory, for all general purchases. Notice the emphasis on "in theory."

As it got to December, I decided it was time to cash in the points I had built up throughout the year to put in my Fidelity self-employed 401k plan. This is perhaps the most basic transaction one can do, except for the fact that Fidelity probably doesn't have too many self-employed 401k plan customers... at least in comparison to something like their Roth IRA ones.

The website made it very easy to redeem the rewards. I logged into my Fidelity account where I see my SEP-IRA, my self-employed 401k plan, and my Fidelity Retirement Rewards card. Clicking on the credit card brings you to a place where you can the usual stuff: statements, current balance, rewards, etc. I click on the manage rewards and redeem the points to go to my self-employed 401k plan. It's done in maybe 45 seconds... or so I thought.

Seven days later, I get an email:

"You are receiving this email notification because your recent request to redeem your WorldPoints® reward points and deposit them into an account of your choice could not be processed. As a result, the points you attempted to redeem have been reapplied to your WorldPoints® account.

We cannot guarantee that your selected financial institution will accept ACH or checks from FIA Card Services, N.A. on your behalf. It is your responsibility to ensure that deposits made do not violate the terms of your agreement with your financial institution. Following the transfer of your Cash Rewards from FIA Card Services, N.A. to your financial institution, FIA Card Services, N.A. will not be responsible or liable for the administration of this deposit."

Essentially this email is saying that it Fidelity can't guarantee that Fidelity will accept the transfer from Fidelity.

Wrap your head around that sentence for a minute. Done? Good.

I understand that the Fidelity credit card division is very different from Fidelity's brokerage division. In fact, Fidelity's credit card division could be run by American Express. However, from the customer's point of view, they've branded it all Fidelity and put them under the same website... it should work as one autonomous organization. If there's a problem doing the most basic thing, Fidelity should not try to intermingle these separate businesses.

The email continues stating that I shouldn't reply to it (thanks Fidelity for not giving me the easy option) and to call customer support.

I called customer support to try to find out what the problem is. At first they tried to tell me I was over 70 and half and thus they couldn't transfer money in. That was not only inconsistent with the response I received, but inconsistent with the date of birth they made me do at the beginning of the phone call. The person on the phone gave it another look and confirmed that it is true, it wasn't the problem.

He was stumped. He decided the best plan of action was to bring in the Fidelity Brokerage services on the line. That's where I was trying to transfer the money. That sounded like a great course of action because then we could look at the transaction from both sides. After an hour and half of back and forth, with me playing the middle-man, the two concluded that because I hadn't funded my self-employed 401k plan, the points couldn't be redeemed to that account.

They proposed a solution. I would need to deposit a single dollar into that account. I have thousands of dollars in my SEP-IRA, but I couldn't transfer from there because that's a different tax structure. This left me with two options:

  1. Drive 45 minutes to the nearest Fidelity office and give them a check to deposit. I would have to wait for the check to clear and then try again in a few days.
  2. Mail a check with a deposit slip. I would have to wait for the check to get there and be processed and then try again.

This seemed like a ridiculously ginormous roll of red tape. So I asked why they needed me to go through such lengths to give them a single dollar. Last I checked this is 2013 (well at the time I was trying to do it) and not 1983. This is really the best a huge company like Fidelity can do to satisfy it's own red tape? They couldn't tell me why.

I pressed the point multiple times. One of my biggest pet peeves is when people make up rules without a reason... or try to enforce rules without knowing why they are enforcing them. If they are going to make jump through hoops, I feel I deserve to know why. I'm not 5 and "just because" is not a valid reason.

You can't squeeze water from a stone, so I gave up looking for an answer from them. I went to Twitter to voice my dissatisfaction with their reasons. They responded back to me to direct message them. I replied that the problem was too long to explain over Twitter and that we should converse over email. They have a system set up for that, which was a pleasant surprise. Unfortunately they say that they'd respond in 24 hours and it's been more than two weeks. I tried to contact them and get their attention back to my question in case it slipped through the cracks, but still no response.

Twitter is another dead-end in getting an answer to why an account has to be funded and it was clear that I was simply just wasting more of my time.

I completed the deposit slip with my check for $1.00 and sent it off. (Between all the parties involved at this point, this policy has cost hundreds of dollars in lost productivity.)

Then I waited. About ten days later, I saw that my account had its shiny Washington in it. Also, the points that I tried to redeemed had worked their way back to my credit card. They said this could take 30 days, but I guess I was lucky to get happen to so quickly.

It was time to try again with a funded account. Online the redemption worked again... until 5 days later when I got the same email about it failing.

It was time for another call. This time Fidelity wouldn't have the excuse about the account not being funded. I knew I had my work cut out for me, so I took my card, my cell phone, and my dog for a walk. At least at the end of this, I'd be able to say we got some exercise.

After 48 minutes I got back home. We had walked through every side-street in my neighborhood. During that time, I explained the problem to the first tier of customer support, the second tier (a technician with more access) of customer support, and a third tier... who transferred me to a message saying that the party couldn't be reached, which resulted in Fidelity terminating my call. (Note to Fidelity: It is never a good idea to hang up on someone, especially with a message saying that's what you are going to do. At a minimum at least kick the call back to the person who tried to transfer it.) The hang-up coincided with me arriving at me door.

I called back to start from scratch yet again. In what was perhaps the most amazing string of luck in customer support history, I got the same first-tier customer support person I had talked to about an hour previously. He remember me and looked through the notes in my account (I had been telling the support people to take notes) and he saw that I had been transferred to dispute resolutions. I didn't know that... and he was amazed by it, because he knew this had nothing to do with a charge dispute.

With the help of his supervisor he looked into my account again, and found that there were two listings for my self-employed 401k account in their system. He said this is strange and in 5 years he's never seen it. He gave a suggestion of wiping both of them out and entering it fresh on his end. This, hopefully, would eliminate whatever the problem is with the transfer not going through. I explained that Fidelity shouldn't allow customers to create such problems and as a software engineer, I started to worry whether my money is really safe at an institution where the computer systems lack very basic error checking.

Nonetheless, we pushed forward with this solution. Will it work this time? I don't know. I have to wait up to 30 days for my credit card points to get credited back to my credit card to try again. One would think the points would be credited the moment they send the email about the transfer failure... I'll just chalk up to poor Fidelity software.

While I have resigned myself to letting this attempt play through, I feel compelled to mention that it is now December 26th and that it will be impossible for me now to get my points credited for the 2013 tax year. (I'm publishing this post well after I've written it. Due the upcoming birth of my son, I'm getting "ahead" of the game.) He apologizes for the delay and says that he understands it is inconvenient to not have points credited in a timely manner. I explain that it isn't a matter of convenience, but when you are dealing with adding funds to retirement accounts the dates that the deposits happen matter greatly for tax purposes. Such unnecessary long delays for points to be credited back to an account is yet issue that Fidelity needs to address.

Will I ever be able to redeem my Fidelity Retirement Reward points? Hopefully I'll have something positive to report around the time you are reading this.

Update: Well resetting the account didn't work. I got the same email back. Fortunately they've added an option that you can redeem for points for statement credit. The catch is that to get the 2% value, you have to cash in $50 at a time (I think, I don't have the chart handy). So rather than beat my head against Fidelity's terrible customer support for another 6 hours, I'm just going to use that. It's sad, because I'd really like to help Fidelity fix their system so that other customers don't have to go through what I went through.

Finally, I'd mention that the email support that they promised proved to be a dead end. They emailed me back once that they were looking into it, but never got back to me. I prodded them 3 or 4 times with return emails of "Hey how is this going?" Either their system isn't set up to take replies (or give me a link where I can reply on the web) or they've simply chosen to ignore me.

This post deals with: ... and focuses on:

Credit Cards

Last updated on January 25, 2014.

Credit Cards and Average Daily Balance Interest Calculation

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The following is a guest post from Bank Free Credit. Bank Free Credit provides tips, reviews, and information about banking, credit, and getting stuff for free. The site also has an extremely attractive WordPress theme that you may recognize.]

For over 20 years I've had credit cards... and I've never paid a fee. That statement was entirely true until this past month. I always use credit cards as a tool... a way to get a couple percent back on things that I would have bought anyway. Over the years, it's added up to thousands and thousands of dollars. This last month, I gave up some of that money, more than I expected.

Over the years, I've moved from a method of sending in a physical check to paying online. There are some pros such as saving the price of a stamp. The biggest pro though is setting up the credit card company to withdrawl money from my bank every month, so that I'm never late with a payment. I realize that it is potentially dangerous to give credit cards this kind of access to my bank, but I grant financial institutions some leeway on not robbing me blind. For the most part, the transactions are done by computers and they are infallible, right?

This has worked out extremely well and I highly recommend everyone automate their credit card payments this way. So how did I pay a fee? I signed up for two American Express cards around the same time, the AmEx Blue an AmEx Fidelity for their great rewards (that's a whole different article). I thought I had set up autopay on both cards, but it seems like one didn't fully go through. I firmly believe it was an error on my part where I probably set up the same card twice.

This lead to me to getting a bill with an interest charge on it. There was also the associated late fee (double jeopardy rules should apply). With a call, I was able to get AmEx to sympathize with me. They said they'd make it so that it never happened. My credit report wouldn't be dinged and the late fee would be taken away. I didn't realize until I looked at my next bill with an interest charge that interest charges weren't included in that. To get those removed, AmEx has to own up to making an error and they didn't.

The thing that I didn't understand is why I had an interest charge two credit card periods when I was about 3 days late in paying. When I discovered I was late, I even overpaid a small amount as a sign to AmEx that I was more than capable of paying. It turns out that there's a curious and unexpected thing that happens when you are late with a payment that spans over two billing cycles: both cycles are considered to be considered late. It doesn't matter that I paid off the balance in the cycle, by being late for one day it triggers the interest calculation. I would have thought that I'd have an interest charge for a pro-rated couple of days, but that's not the case.

The interest calculation is another curious and unexpected thing. The interest charged is based on the average daily balance of the bill. So even though I had paid in full, and even more than in full, future charges on that card for that billing cycle was raising my average daily balance and incurring interest on it. So if I had made a really big purchase like a $2000 laptop (to collect the reward points as I usually do) near the beginning of the cycle (after I had paid the balance down to zero) the interest calculation would use that daily balance and continue to penalize me. Doesn't seem to make sense that I could be penalized after paying balance in full, right? I guess some law-makers missed that one.

It makes me wonder if I can use this loophole to trigger and interest payment, give them so much money that I have a negative balance daily balance, and get the AmEx to give me a negative interest payment leading to a check in my favor. With my luck, they'll just consider a negative daily balance the same as zero (for that day) and I'll get charged the late fee, the interest for the day or two before the big payment to get negative took effect, and get my credit wrecked in the process.

Anyone else have a credit card, "A ha!" moment? Let me know in the comments.

This post deals with: ... and focuses on:

Credit Cards

Posted on August 21, 2013.

Choosing the Right Credit Card for Your Needs

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[Editor's Note: This article was written by Oliver Harding at providing the best voucher codes on the web.]

It really has never been easier for you to get your hands on a credit card; even those with the most embarrassing of credit histories can qualify for high-interest, small balance credit cards to help with rebuilding their rating.

With such a variety of cards on offer, how are you supposed to figure out which is the right one for you?

In this article we’re going to compile a checklist to help you choose the most suitable credit card, so grab some paper and a pen and prepare to take notes!

What Do You Want the Card for?

There are two questions to ask yourself initially:

  1. Do I really need a credit card?
  2. What do I want the card for?

Make sure you actually need a credit card before making than financial commitment, and from here, the card you decide on will depend largely upon what you plan on using it for.

Let’s say, for example, you want to carry your balances over from month to month; in this case you’d opt for a card with a low interest rate. On the other hand, if you’re confident you can clear the balance every month without fail, a charge card might be more suitable.

You should also think about interest rates applied to things like balance transfers as this can often differ from the rates applied to purchases.

Annual Percentage Rate (APR)

APR is simply the amount of interest which is applied to any balances you carry over beyond your grace period, which we will explore in a moment.

Again, make sure you’re aware of not just the APR as a whole but also how it may vary when applied to different things such as purchases and balance transfers; this can sometimes make or break the suitability of a card to your needs, so you should be very mindful of this.

Grace Periods

Grace periods are simple enough to understand; they refer to the time you’ll be given each month to pay off your balance in full before any interest or fees are applied.

The most common grace period is around one month but this can vary so be sure to check this with your lender before signing on the dotted line.

Credit Limits

Most of you are probably familiar with what a credit limit is, but there is a great deal of variance from lender to lender, and this can also be affected considerably by your credit score. This is why less solvent individuals are only able to gain access to limits of a few hundred dollars.

Make sure you maintain a full awareness of overlimit fees, which are the charges incurred when you spend beyond your credit limit. Some lenders with high overlimit fees will offer benefits in other areas, so be sure to weigh up the cost/benefit ratio and make sure you aren’t lumped with excessive hidden costs.

It’s best not to expect too much from your credit limit if this is to be your first credit card, but by settling your balance on time consistently, you’ll very quickly be able to up your limit to make larger purchases.

Go Compare

If all else fails and you’re still not sure where to find the best deal on a credit card, it’s always worth checking out one of the many comparison sites on the Web.

Pages such as and enable you to make a fair and objective analysis of each lender and the range of options they offer, and at the very least, this can be a great way of confirming your own decision before acting on it and signing up for a card.

This post deals with:


... and focuses on:

Credit, Credit Cards

Posted on August 13, 2013.

Committing to a Credit Card? Don’t Underestimate Annual Fees

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This guest post on credit cards was written by Jason Bushey. Jason is a full-time personal finance blogger and the Editor of, an online authority on credit cards and credit repair advice.

A lot of people don't realize that when they apply for a credit card, they're making a pretty serious financial commitment.

'Why so serious,' you ask? Because it's generally a bad idea to close a credit card account since it lowers your overall credit line and halts the payments history associated with that card – both of which can have a marginal negative impact on your credit score over time.

I'm in my mid-20's, and I've had my first credit card for nearly seven years; do you know how many girlfriends, apartments and jobs I've ripped through in that amount of time? Had I known that I was making what amounts to a semi-permanent commitment when I applied for that card (which has NO rewards and a steep ongoing APR), odds are I would've shopped around a little (or at all) before signing up for that first card.

That said, there's one thing I'm fortunate my first credit card does not have: an annual fee. In fact, this is the sole reason I've left this old credit card open all these years, and it's really the only thing it has going for it.

No annual fee credit cards are best for a long-term credit card commitment because they're low maintenance and essentially free to carry in your wallet. Once I paid off the balance on that first card, I just sort of set it aside and forgot it existed completely.

Granted, I'm leaving myself open to account closure based on inactivity (ideally I would make at least one purchase a month and pay it back on time), but the balance attached to the card still shows up on my credit report. Having a high credit limit lowers one's credit-utilization-ratio – which is essentially your available credit line (or all of your credit) in relation to the amount of credit you owe – and thus improves your credit score over time.

Long story short: it's best to keep that available credit line high for as long as you can. That's the basic reasoning behind keeping credit card accounts open, and since it's better to keep them open for free rather than pay a fee each year, credit cards that don't require annual fees are recommended in the long run.

Another reason you should hesitate from closing credit card accounts is your credit history. Again, the longer you leave an account open, the more significance it takes on in the eyes of creditors. It's like a relationship; your friends and family obviously take the partner you've been with for a longer term more seriously than a new fling. Showing a strong and positive commitment to a credit account over time goes a long way toward building your score.

OK, so are no annual fee credit cards always better to carry? Well, yes and no...

It used to be that cards that required an annual fee offered more rewards, cash back and points than the competition that didn't require these fees; American Express used to be the go-to example. Over the last several years however, the gap in quality between the two categories of cards has become less and less obvious. Today, there are some excellent cash back options available that require no annual fees for the duration of your cardmembership; so long as you're paying off your bill in full each month, these cards are essentially free to own.

That said, there's one category of cards – airline credit cards – that usually require an annual fee but offer some sweet perks you won't find on freebie cards. Airline miles, boarding privileges and companion tickets with your favorite airline all generally require an ongoing annual fee. However, you might find that the money saved with such a card far outweighs the annual fee you're paying each year, and suddenly that annual fee doesn't look like such a bad deal.

When it comes down to it, it's really up to the quality of the card and how you plan on using it to determine whether or not an annual fee is worth paying. But it's important to remember that credit cards aren't meant to be applied for on impulse (and yes, this includes retail credit cards) – they're actually a pretty serious financial commitment, especially if you value your long-term credit score (which of course you should).

So think twice about bonus miles and intro offers in the mail and consider the long-term benefit of a credit card BEFORE you apply for it, not after. Your credit score – and your wallet – will be better for it in the long run.

This post deals with:

... and focuses on:

Credit, Credit Cards

Last updated on July 3, 2013.

Get 3-6% Back at Supermarkets with Amex Blue Cash Everyday/Preferred

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I like these cards. I use these cards. The rewards are unparalleled in my opinion. I could make an awesome pitch on how great these cards are, but every time I try, I have to change the post because Amex changes the rules of what I can and can not say.

So I'll just leave you with this information:

The USDA says that the average couple spends around $7165 a year on groceries (get the latest numbers here). Saving 3% of the USDA average would be $215 and 6% of the USDA average would be $430.

Go get the Amex Blue Everyday or the Amex Blue Preferred card.

And here are the other details:

Blue Cash Everyday® Card from American Express

• Earn 100 Reward Dollars after you make $1,000 in purchases in the first three months of Cardmembership.
• Get 3% cash back at U.S. stand-alone supermarkets, 2% cash back on gasoline at U.S. stand-alone gas stations and select major department stores; 1% cash back on other purchases.
• The first $6,000 of purchases at U.S. stand-alone supermarkets in a calendar year qualifies for 3% cash back; 1% thereafter.
• Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. Cash back is earned only on eligible purchases.
• Simple and Straightforward: With the Blue Cash Everyday Card, you can start earning cash back. No rotating reward categories. No enrollment required.
• No annual fee, 0% intro APR on purchases for 12 months. After that, your APR will be a variable rate, currently 12.99%-21.99% with flexibility to pay over time.
• Terms and Restrictions Apply.

Blue Cash Preferred® Card from American Express

• Earn 150 Reward Dollars after you make $1,000 in purchases in the first three months of Cardmembership.
• Get 6% cash back at U.S. stand-alone supermarkets, 3% cash back on gasoline at U.S. stand-alone gas stations and select major department stores; 1% cash back on other purchases.
• Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. Cash back is earned only on eligible purchases.
• The first $6,000 of purchases at U.S. stand-alone supermarkets in a calendar year qualifies for 6% cash back; 1% thereafter.
• Simple and Straightforward: With the Blue Cash Preferred Card, you can start earning cash back. No rotating reward categories. No enrollment required.
• Terms and Restrictions Apply.

This post deals with:

... and focuses on:

Credit, Credit Cards

Last updated on December 22, 2012.

A Lazy Man’s Guide to Managing Credit Cards

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The following is a guest post from Martin of Studenomics. Martin has just released a super-helpful guide that shows you how to completely conquer credit before you hit 30. His theory is, "You can't leave your mark on the world if you spend your 20s paying off credit card debt. I did all of the boring research for you so that you can see how easy it is to figure out credit." [Editor's Note: Though Martin is portraying himself here as a lazy man, the reader should not confuse him with me, Lazy Man. Though I approve of all these ideas, regular readers will know that I have a few other tips that personally have helped me. Let's just let you absorb Martin's for now.]

The most intimidating thing with managing our own money is that we worry that it's going to be complex and time-consuming. None of us want to be "financially literate" nor do we want to spend all of our time on worrying about our finances. This is why most of us avoid managing our own money or trying to figure out our credit situation. We just don't know where to start. As with the paradox of choice, when one is faced with too many options they're likely to do nothing.

It doesn't have to be like that. You can manage your finances, your credit, or any other area of your life without much effort. You can be completely lazy in one area, while being completely active in another area of life.

I had the honor of meeting the author of this blog a few weeks ago. We got to chat many times and share laughs over a few drinks. We never got into money management because you can manage your money well without always talking about it. When it came to the weekend I certainly wasn't a lazy man when it came to dancing like a complete fool. On the bright side, I'm a lazy man when it comes to managing my credit cards.

Let's look at the lazy man's guide to managing credit cards in your 20s...

Get a credit card that you'll keep for a long time.

Don't sign up for every offer that comes in the mail and especially don't go chasing rates. When I was 18 years old I went to my local bank to setup a credit card and a retirement account. The bank teller laughed because I look like I'm 18 now so a few years ago I must have looked like I was 12. I ended up getting the credit card and the retirement account. I've been using both for the past 5 years. I find that for the lazy man inside all of us it makes perfect sense to get a basic no-fee credit card with our local bank that we trust. I also recommend that you keep this account open for a very long time. Switching accounts and chasing rates is far too time-consuming.

Don't get more credit cards than you need.

How many credit cards do you really need? You can argue that the more credit you have available the higher your credit utilization ratio will be. You can also find the occasional financial incentive to sign up for a new credit card because they'll throw you a few dollars. I'll argue by telling you that the more credit cards you have the more you have to worry about fraud, keeping track of your credit cards, and of spending money that you don't have. Get a credit card that you'll keep for a long time and don't worry about every new offer that comes your

Automate your payments to your credit card.

Over the years I've automated all of my payments to my credit card. This is actually really simple. You only have to do this once. When you get your first bill for the gym (a lazy man still needs to train, not a lot though), cell phone, utilities, insurance, or anything else, you need to get in touch with the billing department and attach your
main credit card to the account. This way your bills will get paid on time every single month. No late fees for this lazy man!

Quick note: You still need to go through your bills just because they're automated. Trust me you don't want to be a lazy man that gets ripped off! A lazy man is not a stupid man. Automating your payments just ensures that you never miss a payment so that your credit score doesn't take a hit for a small mistake.

Avoid balance transfers.

Balance transfers and other complex credit card tricks can be very beneficial. The problem is that the process is simply too easy to screw up. The process also takes an extensive amount of research and knowledge on credit cards. If you want to be a lazy man with your credit cards I highly recommend that you avoid these complex schemes. You don't want to lose money because you got caught up in the next big trend.

That's how you can manage your credit cards as a lazy man. I don't want you guys to think that personal finance always has to be complicating and boring. You can really keep it simple. The beauty about being lazy with your credit cards is that you can focus your energy on what really matters in life to you instead of worrying about
your financial system.

This post deals with:

... and focuses on:

Credit, Credit Cards, Great Articles

Posted on October 25, 2011.

Who Wants $500?

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That's essentially the question that Chase Cards asked a few months ago. They didn't word it exactly like that, but instead said that if got their credit card and spent $3000 in 3 months, I'd get the equivalent of $500 in points. I did a little math and found out that Chase Sapphire Preferred Card was Giving Me 17% Cash Back.

Today, was a joyous day as I saw those 50,000 bonus points roll in and I promptly converted all my points into a $550 statement credit.

Spending $3000 in 3 months was not as difficult as it seems. Of course, I don't want to encourage money to earn rewards points, but I found that cable and cell phone bills can run up to around $300. Then you start adding in gas, groceries, and other incidentals and the $3,000 was hit pretty easily.

I want to stress that these were purchases that I were going to make anyway. I am pretty disciplined with my spending and using a credit card doesn't make me spend more. You may be different. Part of me is torn between just suggesting that you do what works for you (a phrase that I attribute to J.D. from Get Rich Slowly), but the other half of me suggests that sometimes it is worth trying to change.

Sometimes change has its rewards. For me, those added up to extra $550 in my pocket in three months. Who wants $500? I do. If you want $500 as well, consider getting the Chase Sapphire Rewards card.


In addition to the $500 that Chase Sapphire gave me, I'm getting VIP early entry into San Francisco top 10 voted food trucks event this upcoming weekend. It will be one of the few times that I actually use one of those credit card perks.

This post deals with:

... and focuses on:

Credit, Credit Cards

Posted on October 12, 2011.

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