How to Compare Credit Cards

Nearly everyone knows the joy of credit card ownership. Credit cards are an easy, fast, and safe way to make purchases. All it takes is a swipe and a signature and voila! the purchase is made. But, which credit card is the best? Is there really such a difference between credit cards? How do I compare credit cards and what are some factors to consider? Aren't they all really just the same anyway?

The answer to that last question is "No." There is a variety of cards to choose from in the marketplace including, balance transfer, reward, airline, cash back, instant approval, business, student, and low interest credit cards when choosing a card here at CreditCardAssist.com. Credit cards are just as varied as the banks that issue them. In fact, even credit cards offered by the same bank can have different characteristics - including both perks and drawbacks. Finding the right card does require a little research and an understanding of your lifestyle. With this knowledge in hand, you can find the card that is right for you.

Balance Transfer Credit Cards

One type of credit card is the balance transfer credit card. Balance transfer credit cards are those that are ideal for moving a high interest card balance from one credit card to another with a lower interest rate. Generally speaking, cardholders make this move in order to save on finance charges. Therefore, at the very least, to be considered a balance transfer credit card, it should have a lower APR than your current card. In addition, there should be no fees associated with transferring the balance.

The APR of a credit card can come in two main forms: fixed or variable. The APR, or annual percentage rate, determines how much you will need to pay toward finance charges each month if you do not pay off your balance. The higher the APR, the more finance charges you will have to pay. A card with a variable APR may be low at first, but the APR will fluctuate during the life of the card. Generally, it changes in response to the Prime Rate.

A card with a fixed low APR, however, will never increase unless otherwise stated. Often, balance transfer cards will offer introductory fixed rates - even 0.00% - but the rate will become variable after the introductory period is complete. This introductory period generally ranges anywhere from three months to one year. Some credit cards offer a fixed APR after the introductory period, as well, but this fixed rate will be higher than the introductory offer. Sometimes, cheap credit cards with a lower APR do have an annual fee, which is a fee that must be paid once per year in order to keep the credit card account open.

Reward Credit Cards

Some credit cards also offer rewards to their users. Some of the best reward credit cards include airline credit cards and cash back credit cards. Yet others give the cardholders access to other rewards, such as gift certificates to restaurants or merchants for goods and services. Many times, rewards programs also have an annual fee. This is not, however, always the case. In fact, many of the best cash back credit cards do not have an annual fee. The long-term payout of these credit cards, however, can be well worth the annual fee. Reward credit cards also sometimes have a higher than average APR, though many still offer a low introductory rate and the higher APR is not a problem for those that do not intend to carry a balance on their credit card.

Credit Cards for College Students

Some credit cards are created specifically with college students in mind. These credit cards typically require little or no credit history in order to be obtained. Sometimes, these cards do have application fees and other costs associated with them. These cards can, however, go a long way toward establishing a student's credit history. Some of these cards are called secured credit cards. This means the student, or the student's parents, needs to send money to the credit card ahead of time. All of the money the student spends, therefore, is not borrowed. Rather, the money is just placed in safekeeping for the student to use. Instant approval credit cards are also attractive to college students because they do not require a credit history check. These cards can also help build a nonexistent credit history. Not all of these cards report to credit bureaus, however, so it is important to watch for this if the intent of the card is to help build credit history.

Business Credit Cards

Many business owners choose to apply for a business credit card. Often, these credit cards can be created to include the company logo, which adds to the professionalism of the company. In addition, a business credit card helps the business owner keep track of his or her business expenses. When looking to compare business credit cards, it is important to take several things into consideration. For example, will the expenses be paid at the end of each billing cycle, or will there be a need to carry a balance on the card?

Either way, the business owner needs to consider the card's Grace Period. A grace period is a set amount of time after purchases are made with the credit card during which the cardholder is free from paying finance charges. If the borrowed amount is paid within the grace period, no finance charges will be added to the account. A business owner may also want to watch out for cash advance fees. Most credit cards allow cardholders to withdraw money with their credit card, but convenience fees do apply. A business owner looking to have a credit card with which he or she can withdraw cash needs to find a card with no cash advance fee, or at least with a very small fee.

Other Features and Benefits


In addition to specializing in certain services, the added benefits also vary from card to card. These benefits may include purchase protection and extended warranties. Or, car rental insurance and travel insurance may be included in the card. Some cards even provide automatic discounts when they are used with participating merchants and retailers. All of these features also need to be taken into consideration when looking for a credit card, whether it is an airline credit card, business credit card, or a card for college students.
http://www.creditcardassist.com

Credit card interest rates rise to highest level since December

By Kelly Dilworth

Credit card interest rates rose slightly this week -- puncturing a multi-week lull in which all 30 credit card issuers that CreditCards.com tracks left interest rates alone.

CreditCards.com's Weekly Rate Report
Avg. APR Last week 6 months ago
National average 14.74%
14.73%
14.35%
Low interest 12.03%
12.03% 12.11%
Cash back 12.48%
12.48%
12.49%
Business 12.91%
12.91%
12.85%
Balance transfer 12.93%
12.93%
12.81%
Student
13.42%
13.42%
14.49%
Reward 14.36%
14.36%
14.40%
Airline 14.39%
14.30%
14.37%
Instant approval 15.99%
15.99%
15.99%
Bad credit 24.95%
24.95%
21.04%
Methodology: The national average credit card APR is comprised of about 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers and representing every card category listed above. (Introductory, or teaser, rates are not included in the calculation.)
Source: CreditCards.com
Updated: 02-23-2011
The national average annual percentage rate (APR) on new credit card offers climbed to 14.74 percent on Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report. The bump in the national average was small -- just a hundredth of a percentage point -- but it pushed the national average APR on new card offers to its highest level since Dec. 1.

It was the first movement in the national average in three weeks and only the second in the previous five.

This week's increase was spurred by a small rate hike by Chase on the United Mileage Plus Visa Signature card. Chase increased the credit card's APR by 1 percentage point from 13.74 percent to 14.74 percent -- making the card's APR exactly even with the national average. Chase didn't respond to a request for comment. However, this is the third time this year that the bank has adjusted interest rates on some of its cards.

No other card issuers that CreditCards.com tracks made APR moves this week, continuing a trend of non-movement for most banks. Of the 30 card issuers that CreditCards.com tracks, only four, including Chase, have adjusted standard purchase APRs since the beginning of 2011.

Experts attribute this year's stickiness in rates to a seasonal lull that occurs at the beginning of each year. As banks strategize for the new year, they tend to leave card offers alone until early March, experts say. As a result, the first two months of 2011 have been marked by multiple weeks of non-movement, as well as incremental rate increases that have barely made a dent in the national average. Since Jan. 4, the national average has increased four times -- but never by more than a hundredth of a percentage point -- held steady four times and decreased zero times.

Meanwhile, as banks re-evaluate their card offers, federal regulators and consumer groups observed an important anniversary on Tuesday. Exactly one year earlier, major provisions of the Credit CARD Act of 2009 took effect, leading to sweeping reforms in the industry. The anniversary prompted multiple reappraisals in recent weeks, with many observers giving the new law a mixed grade.

In a statement released on Tuesday, American Bankers Association vice president Kenneth J. Clayton offered faint praise for the new law, coupled with strong criticism. "It is clear the Act has ushered in a new era of empowerment for credit card customers," said Clayton in the statement. "It is also clear, however, that these benefits have not come without trade-offs, including a reduction in available credit for many consumers and increased prices."

Pamela Banks, a senior policy counsel for the consumer watchdog group Consumers Union, gave the law a mixed grade as well, but offered a much different perspective on how it could be improved. Banks praised the CARD Act for its extensive impact on consumers' ability to make sense of their credit cards -- then called on the new Consumer Financial Protection Bureau to enact even stronger reforms.

"The CARD Act has made a big difference by putting an end to some of the bait-and-switch tactics that unfairly trap credit card consumers in high interest debt," said Banks in a statement. "But consumers still need to be on the lookout for unfair credit card practices. The Consumer Financial Protection Bureau should finish the job of protecting consumers from abuses by big banks and their credit card programs."

The Consumer Financial Protection Bureau, in turn, marked the law's anniversary on Tuesday by holding a conference about the Credit CARD Act's performance. In opening remarks at the conference, White House adviser Elizabeth Warren applauded the credit card law's dramatic impact on industry behavior. Warren praised some credit card issuers for going above and beyond the law's requirements and criticized others for taking advantage of the law's loopholes.

"A year later, the CARD Act has brought about major changes in the way the industry operates," said Warren in the speech. "In part, this is attributable to the protections Congress enacted. But the data we have assembled indicate that much of the industry has gone further than the law requires ... Leaders in the industry deserve credit for moving in the right direction. [But] not everyone has embraced this approach."

The Consumer Financial Protection Bureau also released a study on Tuesday that found that the Credit CARD Act has been highly effective in reigning in lenders. But there is still work to be done, says the agency.

The study found that, despite this year's higher APR rates on new credit card offers, instances of repricing after a consumer has applied for a card have dropped dramatically, say researchers. "Prior to the CARD Act, approximately 15 percent of accounts were repriced over the course of a year," wrote researchers in a summary of the report. "Today, that number is under 2 percent."



http://www.creditcards.com

Back Cash Credit Cards: The Deal is in the Details

Cash back credit cards: do they really work? The simple answer is yes; the longer answer is that in order to make the most of them, you’ll have to pay attention to the details. If you can stay on top of your credit card payments, and use the card wisely, you will definitely benefit from a cash back credit card. The key is to look at the fine print. Here are some tips to help you get a good amount of cash back.

Check the Percentage Rates

When cash back cards first began, banks usually offered customers 1 percent back from the amount they spent. So if you spent $500, it seemed like you could expect to get $5 back. Many cardholders did not realize, however, that the full 1 percent usually did not start until a certain amount had been spent on the card. Many of these cards worked on a tiered basis, meaning that you would not actually receive the entire 1 percent cash back until you had piled a few thousand dollars on to the card.

Fast forward to today, and you’ll still find that many credit cards operate on this system. If you read through the fine print, you can find out the limits involved before applying. You can also check for special deals. Some cards will give you 5 percent cash back every time you use the card at the grocery store, or for gas, or for online shopping. So make sure you know what you really will be getting back in cash before you sign up.

Look for Fees

Many cash back credit cards do not come with an annual fee. Even so, you’ll want to check to see if there are any extra fees involved. Some of these cards come with a higher interest rate than most cards. If this is the case, check to see if you’ll be paying off the balance each month. If you can pay off the balance each month, you’ll greatly benefit from the card. If you can’t, you might want to look for a low interest card instead.

Set up a System

Using a cash back credit card works best when you keep track of your purchases, make sure you get the highest percent of cash back possible, and pay off the balance each month. To add one more step to your benefit plan, think about what you want to spend your rewards on. Check each month to see how much money you have accumulated, and plan what you will use those rewards for. Then when you receive a rebate check, you’ll know right where to put it.

For those that can carefully manage a credit card, the cash back system is a great find. It gives you all of the benefits of a regular card, and lets you get a little cash back at the same time. So if you apply for one, think about using the card, and the rewards that come from it, as best as you can. You’ll find that the deal with cash back credit cards is really in the details.
http://www.credit-card-surplus.com

Most common mistakes in using credit cards

Financial security is probably in the minds of most people. Although the majority of the adults realize that they should plan for their future many people do not know how. There are some common mistakes people make that have serious consequences in the long run. Here we cover the four most common mistakes that happen. The first mistake people make is that they fail to pay themselves first. As soon as you get your paycheck in your hand a minimum of ten percent should be put into savings. Regardless of the debt that you are financing, that ten percent savings is crucial to one day being solvent and on your way to a very healthy financial future. The next common mistake people make is carrying a credit card balance. Credit card debt typically comes with high interest and can quickly spiral out of control. It is essential to pay off all your debt starting with the highest interest bearing debt. In order to do this quickly you must pay down more than the minimum payment every month. Put as much money as possible into eliminating that debt and you will save yourself thousands of dollars in interest payments over the years. The third most common mistake people make is not having an emergency fund. An emergency fun is money that should be put away equivalent to at least three to six months worth of your cost of living. It is essential to be prepared for the loss of a job, medical expenses or major repairs to either a car or your home. The fourth most common mistake that people make is living beyond their means. Today people are told that their every desire should be gratified immediately. Unfortunately for most people this is not possible so they end up paying for vacations, cars and other big ticket items with credit. Except for a house and possibly a car there is nothing else that should ever be bought on credit. If you avoid making these four common mistakes, then your financial future should be very bright.
http://www.credit-cards-info.com