Credit

Credit Cards vs. Personal Loans: What is Right for You?

The decision for the best method of borrowing money when times are tough depends on a multitude of factors. For some people, getting emergency access to cash may be best done through a credit card, while for others; the best option would be to take out a personal loan. What constitutes the best criteria for this decision making process?

There are four main factors that you should consider before taking on such a decision: mobility, time, additional benefits, and access.

Mobility

Do you travel around often? People who travel need to worry about security and fraud. Using cash or debit at hotels or restaurants abroad, or even just having it on your person, could expose you to fraud and theft. This is obviously a worst-case scenario, but it is best to be prepared. For this reason, it would be recommended to use credit if you travel frequently. If you get your wallet stolen, canceling your card and getting reimbursed is just a phone call away. Furthermore, credit cards are much more cost when going abroad. You can use them basically anywhere and they will automatically do currency conversions for you. If you are searching for security and traveling cost reduction, than a credit card will be the right choice.

If you are not the traveling type, then this factor will have much less of an impact on your decision-making. Given this, credit cards will generally always be safer than having hard cash.

Time

How much time do you need to pay back your loan? Credit cards can be paid back immediately; you just have to balance the account to zero. Credit cards allow you flexibility when it comes to time. However, if you are intending to not be able to pay the debt back soon, then the interest you will accumulate on your credit card debt will not make credit cards a viable option. In situations where you know you will not be able to pay back the debt for a while, you may opt to take out a personal loan.

Bonus Benefits

What are the perks? A distinctive bonus to opting for a credit card over a personal loan is that you will potentially get access to rewards and discounts, in the form of airmiles, cash back and, promotions at certain stores.  So while you are spending money you would need to be spending regardless, you have the opportunity to get some of it back. This point is especially pertinent to travelers, as airmiles can really add up and save you a ton on airfare. Personal loans will be of no help in the rewards area. Their bonus benefits lie elsewhere.

online personal loanPersonal loans offer you something credit cards cannot: discretion. Once you get the money for your loan. You are free to use it as you please. Whether you want to pay off bills, start a business, or buy expensive jewelry, no one is going to object. Credit cards, however, are monitored by your bank and can therefore have a limited scope of spending diversity.

Access

How easily you can have access to the money? Personal Loans are relatively easy and fast to get. They have very little paperwork, and there is no need for collateral. This is providing that you have a good credit score. Because of how easy it is to get a personal loan, creditors want to be relatively sure you can pay it back. If you have a bad credit score, you can forget about getting a personal loan.  The prerequisites for applying are pretty strict and predetermined so there is very little wiggle room when it comes to qualifying. Personal loans will generally offer lower APR rates for the reason that you have to have a good credit standing to even qualify.  Credit cards are easier to get if you have bad credit, but you will be restricted financially in the form of a monthly credit limit.

Summary

Credit Card People

  • Travelers
  • Frequent Flyers
  • Small time frame for paying back
  • Bad credit rating

Personal Loan People

  • Good credit rating
  • Need for Discretion
  • Freedom to pay back debt over longer timeframe

Hugh Tyzack is Managing Director and founder of GBP Loans Limited, which was formed in 2008. GBP Loans specialises in no fee Guarantor Loans. GBP Loans has been a driving force in trying to eradicate bogus fee charging and is now one of the UK’s biggest providers. You can find more details here. When he is not writing the Blog, Hugh enjoys listening to music and playing the piano. Follow Hugh on Twitter @GBPLoans and also on Google+

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Tips on Building Your Credit Rating in College

Credit Rating in CollegeWhether you have just entered college or if you’re already enrolled and you’re seeking ways to secure your financial future, building your credit rating can help in many areas of life. When you’re in college, building your credit rating is possible regardless of your age with the proper support and the right opportunity. Before you begin to build your credit rating, it is important to determine your own personal goals for your financial future and your capabilities on affording your credit card bills each month once you’re approved.

Before Building Your Credit Rating in College

Review the budget you have available to spend each month based on your income, current bills, and tuition costs. Before you apply for a credit card, determine why you want the card and how much you plan to spend personally each month to help building your credit score.

By spending money using the credit card each month and paying the bill on time without any delay, your credit rating will improve regardless of what you’re using the card for when making a purchase. You should also plan on using your credit card for payments you already make such as paying your phone bill. So, you should create a plan on what things you’ll use your credit card for and what things you won’t.

It’s also ideal for you to get a steady source of income through employment as this would heavily benefit your credit card application. Even when going for the lowest credit limit, they could still deny you if you don’t have a source of income.

The Benefits of Building Your Credit Rating in College

Building your credit rating and overall score in college can help assist you if you want to take out a loan for a vehicle, home, or even a personal business investment once you have graduated. Having a higher credit rating means you’re also capable of being approved for loans that have lower interest rates, ultimately saving you more money as long as you’re capable of paying all of your bills on time. Investing in a home or launching a business is entirely possible if your credit rating is high enough by the time you graduate or receive your degree from college.

In addition, it can also theoretically be useful when applying for positions that conduct background and credit checks on potential employees.

Find a Student Credit Card

Applying for a credit card for students is often possible as long as you can provide proof that you’re a student. If you can provide proof of your income as well, searching for a student credit card is simple and does not require the signature of a parent or another guardian to have the card approved as long as you are over 18. Student credit card offers may be available on a college campus you’re attending as well, so make sure to inquire with your college. You can also visit a local bank or compare various types of student credit cards that are available to you right from home online.

Ask Your Parents to Co-Sign for a Credit Card

If you’re unable to sign for your own credit card, you have the ability to ask your parents to help by co-signing for the card with your name on it. Your parents must, of course, trust you to pay off the credit card bill each month before co-signing for the card, as the responsibility of the bill will be theirs if you’re unable or unwilling to pay for the charges yourself.

If you’ve shown financial responsibility while you were in high school, this shouldn’t be too much of a problem.

Use a Secured Credit Card

It is also possible to apply for a “secured credit card” if you’re not qualified for a traditional card and if you do not have relatives who will help to co-sign for a card in your name. A secured credit card is an option that allows you to invest a specific amount of money into an individual savings account in exchange for the card itself. By depositing a trusted amount of money, you’re able to use the card to help with improving your credit rating. A secured credit card can be applied for by using trusted banks and institutions online as well as by applying for the card in person at a local banking branch.

Comparing Credit Card Offers Online

Searching for the ideal credit card with the lowest interest rate for students is possible by browsing online to compare the available options. Looking for a credit card that is right for you online is a way to read and review all card terms and conditions while also comparing interest rates and credit limits, based on your qualifications, age and whether being a student gives you an advantage. Comparing credit cards online is ideal and can also save time regardless of the type of card you’re interested in and your purpose for applying for one.

Using Your Credit Card Responsibly Once you’re Approved

Once you have been approved for a credit card (co-signed or to you individually), it is essential to be responsible at all times regardless of how much the card is used. Any time you spend money on your credit card, be sure to pay the monthly bill in a timely manner. When you avoid paying your credit card bill on time, it may negatively impact your credit score and rating, causing it to drop. Ensuring you pay the bill on time every time will also help you boost your credit rating instead. Using the card for items you need to purchase is highly recommended, as it will allow you to stay within your budget so you’re never incapable of paying off your credit card bills.

This article was written by Donald Turner on behalf of Kanetix. When searching for a credit card, make sure to consider checking out Kanetix and see how they can help you find the right credit card.


3 Lesser Known Ways of Raising Cash

Raising your cashWhen a person wants to borrow money they will normally turn to their bank or other similar financial institution. Whilst this can represent some of the most affordable ways to finance, this type of funding will very often require an almost impeccable credit rating.  Sadly, this is something that an increasing number of people just don’t have.

This blog post will investigate three of the alternatives to traditional bank financing.

Credit Union Loans

One of the least known methods of funding comes in the form of a credit union loan. Essentially a credit union is formed when members pool their savings to provide other members with credit at a keen interest rate. Very often these rates will be lower than the likes of the banks and other financial institutions.

To enjoy the advantages of a credit union, an individual will normally be required to share a common bond with others. These can be things like:

  • Living or working in the same area
  • Employed by the same company
  • Belonging to a trade union, church or other organisation

Every credit union will have its own set of rules for joining; however, in the most part they will be based on the examples shown above. When one person is a member of a credit union, others in the same family can normally join; providing they live at the same address.

Most credit unions will be happy to organise funding for smaller loans; however, some will even allow financing for houses.

Sensible Alternative

Credit unions can be a sensible alternative to the more traditional forms of borrowing. Very often the people who make the decisions to lend or not will try to take a more sympathetic approach to their lending.

Typically a credit union will charge 1% interest on the reducing balance of a loan. In fact the maximum charge that is permitted in the UK is just 2% per month. Often this form of funding will work out better than the likes of credit cards.

Peer to Peer Lending

Peer to peer lending has become increasingly popular in recent times. Originating from America, this type of funding is often referred to as social lending. Unlike credit unions, peer to peer lending does not require any common bond or prior relationship between borrowers and investors.

It works by investors making their capital available for borrowers. In return for this they will then earn money from some of the interest that is charged. Most of these schemes allow the investor to choose who they will actually lend their money to; this is achieved via credit scoring and a profiling method.

For a greater return the investor will choose to lend to higher risk customers, equally when the same investor wants less risk they will also receive a smaller return. Many of the peer to peer lenders will allow for a portfolio of different investments to be made.

The entire transaction is carried out online, with the intermediary company earning their income from taking either a slice of the loan charges or a one of advance payment. Very often a setup fee is collected by taking it as a deduction from the initial advance. Borrowers who need an exact amount of money will do well to factor this into any loan calculations; otherwise they will run the risk of not borrowing enough money.

Payday Loans

Yet another alternative to bank lending comes in the form of the newer payday loans. Many people will refer to these as cash loans. Recent years have seen this type of unsecured borrowing grow to significant levels. Four times as many people used a payday loan in 2009 than did in 2006. In the UK there is no restriction on the interest rate that a payday loan company can charge; however, there is a requirement for them to disclose the annual percentage rate (APR).

As the name suggests, this borrowing is based on a very short period of time. Normally they will last from one payday to another. A great benefit to using a cash loan is that very often the approval process happens quickly. Sometimes it can be just a matter of a few short hours after an application is sent that the cash appears in the borrowers account.

Improved Credit Ratings

If an individual suffers from a poor credit rating the use of cash loans can overtime help to improve things. Credit reference agencies will often be involved, meaning that upon successful completion the individual’s credit score should rise.

Clint Hazard has a strong interest in financing and loans and has a wealth of knowledge on most things financial. If you require expert advice on cash loans follow him on Twitter and Google Plus.


Ways to Improve Your Financial Situation

financial adviceHow nice it would be if we could just have enough money to do exactly what we want, when we want? To not have to worry about any more debt?  We all dream of that financial freedom, but unfortunately it is very difficult for some of us to achieve.  But it can be done. Credit card debt consolidation is the perfect way to start reducing your credit card debt, for example.

Take a hard look at your Situation

The first thing you can do to improve your financial situation is figure out how much is going where.  Get your data together and figure out what items are producing income, and what items are draining income.  You want to see more production and less draining.  Positive income production items are:  Having an IRA, having a second job or home-based business, maximizing all tax deductions, having investments, stocks, bonds or mutual funds.

What can be a financial strain is:  Too much credit card debt, no emergency funds, high mortgage, casual spending, or no savings plans or investments.  After you have a good idea of what your financial strengths and weaknesses are it’s time to begin eliminating the burdens and increasing the cash flow.  You will need to know what works, and what doesn’t.

Take the Uphill Climb

There are so many things one can do to improve their savings and take care of what is financially draining.  For starters, if you are in any sort of credit card debt, look into joining a credit card debt consolidation program.  This is a good way to change the interest rate, or even reduce the overall debt that you have.  Credit card debt consolidation is not like bankruptcy and is better for your credit overall.    After you have an idea of what your monthly payments are going to be through the credit card debt consolidation program, you can take a look at what else you can do to save money.

Taking a look at your vehicle use is another potential way to save on money.  See if you can get better gas mileage, and make sure repairs are up to date.  If you are on medications, inquire about getting into a prescription drug program discount plan.  Many pharmacies offer these types of programs now.  You can look into your utility companies to see if you can save money, or switch satellite or cable providers.  For your banking needs, try not to use the ATM outside of your network.  That can easily save $3 a transaction. Hopefully these tips will help out your financial situation.

Featured images:
  •  License: Royalty Free or iStock source: http://office.microsoft.com/en-us/images/results.aspx?qu=hindred+dollar+bills&ex=1#ai:MP900433118|

Jake Alexander is a free lance writer who enjoys writing about finances. Follow him @JakeAlexander17.


The Changing Face of Payment Processing

It’s hard to believe that the modern credit card is, for all intents and purposes, less than 50 years old. Today, just about every business accepts credit cards, from department stores to fast food restaurants to gas stations. Over the past few decades, we’ve seen a relatively consistent path when it comes to payment processing.

The Internet, however, has dramatically changed the landscape. In the past 15 years, credit card companies have to find new ways to allow merchants to conduct transactions, with a large number of those transactions happening without a physical card swipe. And today, payment processing is still in a state of change.

Consider some of the following trends, and how they’re likely to change the face of payment processing over the next decade:

  • Fewer merchant accounts.

While more and more businesses are signing up for merchant accounts, today merchant accounts represent a decreasingly proportionate amount of credit card transactions. Many websites use credit card processing gateways, for example, rather than a merchant account with a bank.

This trend is likely to continue, especially as larger gateways are able to leverage their size into better rates for customers. Even brick and mortar stores are in many cases moving toward using gateways rather than having merchant accounts of their own.

  • Mobile payment processing.

Increasingly, businesses need to be agile. They need to be able to accept credit card payments remotely. Whether it’s a sales representative visiting client sites or whether it’s the pizza delivery guy, mobile payment processing is becoming increasingly in demand. This demand is only likely to grow.

Today, the technologies that support mobile payment processing are typically smartphone based. It’s hard to say whether that trend will continue, or whether we’ll see more mobile card-swiping devices pop up in the marketplace.

  • Increasing security.

The standards developed by the credit card industry have done a fair job of keeping financial information secure. However, the system isn’t perfect.

Over the next decade, we can expect even tighter security measures when it comes to the technology surrounding credit card processing. Major security breaches like those that have made it into the news recently are likely to increase, causing the industry to toughen up its security protocols.

  • The decline of physical cards.

For more than a decade, there are those who have predicted that the plastic/magnetic strip credit card would soon be a thing of the past. There are many other technologies that are cheaper and more efficient, and any one of them could replace physical cards.

Yet, this hasn’t happened and isn’t likely to. Instead, what we’ll see is more and more electronic use of credit cards via technologies like Google Wallet and others. Consumers will continue to be issued physical cards, but their use is likely to decline.

The credit card processing arena is in a state of flux, and likely will be for some time. What this means for businesses is that it’s essential to keep on top of your credit card processing contract, and make sure you’ve really got the best terms and rates for the type of business you run.

David Rodwell is an expert writer all subjects relating to payment processing and mobile payments technology. You can find many more of his articles at CreditCardProcessing.net.

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7 Ways in Which a Low Credit Score will Cost You Big-time!

Suffering from a Low Credit Score?

Credit ScoreAre you one of those people who can’t seem to track where their credit score is headed? If that really is the case then you may just be heading towards paving the way towards a financial disaster. In my four-and-a-half years of working as a financial expert, I cannot count the times I have stressed the importance of a good credit score to my clients.

The simple fact is that we are all hard working individuals, and in this staggering economy, making a living isn’t easy as it is. Then why would you want to pay more for those services that you can obtain by paying less?

This is exactly what a low credit score does. It forces you to pay more for the same services that others are paying less for. The reason: a low credit score will cost you more. When I say that it will cost you more, I am talking about real monetary terms, not just a bad reputation.

How Will a Low Credit Score Cost You?

This is a common question that people ask me when I tell them that their low-credit score is costing them in monetary terms. The answer to this is often obvious, but most of us are not able to see it. First, you need to know that FICO is the agency that assigns these credit ratings. These credit ratings fall in the range of 300 and 850. A low credit score simply means that your debt is badly managed, you are missing credit payment and your debt is mounting up. It also means that you are a credit risk.

Now that we have covered the basics about credit scores, let’s discuss how a bad credit score will end up costing you more. Here are seven ways in which a low credit score can cost you big-time.

1.  Home Loans

Your credit score determines the interest rates charged on a home mortgage. If your credit score is bad, then you will most likely be charged a higher interest rate. Since home loans are long term, you will be paying a higher interest over the entire period. You will end up paying thousands of dollars more for a house that is not worth it.

2.  Car Loans

Borrowers with great credit scores are the ones that qualify for the best interest rates on car loans. The ones that hold a bad score end up paying thousands of dollars more in interest.

3.  Credit Cards

A low credit score could even mean that your credit card applications will be denied. Even if your credit card application is approved, you will be paying an interest rate easily twice that of good credit score holders. Some credit cards companies may ask you keep a security deposit equal to your credit line to avail their services.

4.  Insurance

Credit scores matter to insurance companies as well. They need to safeguard their risk against the fact that you will make future payments. If you are a higher risk, then your insurance premium will be higher than that of low risk clients.

5.  Employment

Believe it or not, employers also check your credit ratings before they offer you a job. I have heard of numerous instances myself, when someone lost a great job opportunity because of a bad credit report.

6.  Utilities

Utility and cell phone providers will keep a check on your credit score. Individuals with low credit scores are asked to establish a security deposit. That means you will have hundreds of dollars trapped in security deposits.

7.  Tenant Applications

If you are living in rented premises, then you must know that a credit score is important to the landlord. It tells them if you will be able to pay them the rent on time. If your credit score is bad, your tenant application may be rejected unless you keep a hefty security deposit.

Revelations Indeed!

Some of these things were even revelations for me when I learned about them for the first time. Who knew that a low credit score would have an effect on your employment or residential status? However, a low credit score affects many things in our life and it should be maintained constantly. We really work hard for our wages, then why let them go to waste in higher interest because of a lower credit score?

Chris Holdheide has created http://stumbleforward.com/ as a way of letting people avoid stumbling into bad financial situations. He has more than four-and-a-half years of experience working as a financial advisor. He has created debt relief plans for many families. Living in Midwest, Ohio with his wife, he runs a small manufacturing business.


How to Take Control of your Credit Card Debt

How to Take Control of your Credit Card Debt

Credit card debt is one of the single biggest issues affecting people in the UK, as people are often tempted by the benefits of a credit card but then struggle to pay the necessary monthly repayments. From May 2012, the average amount of unsecured household debt in the UK was £7891, showing that there has been a substantial increase on the level of debt on 2011 and the 5 year period before 2008.

Usually it is the convenience of credit cards which makes them more appealing to use when the cash flow is running low. Unfortunately for those who use them, there is a high rate of interest associated with them that can be difficult to repay over time.

Not only do these reasons suggest why credit card debt is so high in the UK, they also make it extremely difficult for individuals to repay their liability. With many more people unemployed or being made redundant, it is clear that those in credit card debt don’t always have the disposable income to pay off the debt on a regular basis. It is only those with a proactive and determined approach to saving that will be able to overcome credit card debt in the future.

Consolidate your debt

If you are in debt with a number of credit cards, it can be even more difficult to accept more than one individual liability, and make multiple repayments when your money is tight. When managing your debt, try to pay off each credit card one at a time and once you have settled the account, close it down. Alternatively, you could also transfer your balance onto one credit card to ensure that you can manage your money in one place.

Try to shift your debts onto a 0% credit card and either pay it off before the 0% term expires, or shift the balance to another card before the interest kicks in. If you can’t get approved for a 0% card, a low-interest card (5-10%) will still be lower than the APR on most debts.This will help to create one clear goal for you as opposed to trying to pay off debt on many credit cards. By working out the APR of each credit card you will be able to see which card needs to be paid off first.

If you are struggling to pay off any of your debt you could always contact the CCCS (http://www.cccs.co.uk/) and see if they can help as they can sometimes arrange for debts to be frozen or consolidated into a single manageable monthly payment.

Only spend what you can afford

Although credit cards can offer financial support and tend to be convenient for the user, they can encourage you to spend money you don’t have. A more effective solution to the problem of limited cash flow is to budget your levels of disposable income, and ensure that every penny you spend is accounted for and necessary. If you commit to only keeping cash, you will know exactly how much you are spending as opposed to feeling like you have an endless amount of money to spend on your credit card.

Make sure you can afford your repayments

If you are trying to pay too much on your credit card monthly bill repayments, you will soon find that you may be getting yourself into further debt. By implementing a strict budget each month you will know how much disposable income you have each month, as well as how much you have to repay your debt. Make a list of your income outgoings as well as a list of essential and non essential spending in order to see how much you can pay each month towards your credit card debt.

If any creditors call to ask about your debt, you will then be able to explain what capacity you have to make the repayments each month. Committing to manageable repayments will help you to regain trust with your creditors and as well as helping yourself to feel more confident with your saving methods.

Obviously, it is great if you can pay more on your minimum monthly repayments as this will help you to reduce your credit card debt much quicker, helping you to feel more relaxed and carefree about your financial situation. By dealing with your debt in this logical way, it is likely that you will learn from your experience and be more careful next time you are tempted to open a credit card.

This article was written by Debt Free Me; specialists in debt consolidation and financial management. Visit www.debtfreeme.co.uk for free advice on managing credit card debt and your finances.

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What is the Future of my Debts if my IVA Fails?

What is the Future of my Debts if my IVA Fails?

If I may ask you, what is an IVA, and then the best answer for it would be, an IVA or individual voluntary arrangement is extensively used for resolving personal debt problems. It is a repayment plan (fixed term) that is designed especially to help someone who is facing a crucial debt problem. This repayment plan gives one the chance to repay the reduced payments to their creditors and protecting their own assets from serious threats of bankruptcy and legal action. This legal agreement came into being on 29th December in the year 1986 as a part of Insolvency Act and it brought major changes in UK as far as personal insolvency was concerned. Normally an IVA lasts for a 5 year fixed period. The term is fixed and once it is agreed upon even a creditor do not have the right to change it.

It has been seen that IVAs have mostly proved to be successful. But they have even failed during certain instances.  There are times when people go for an IVA but discover after a certain point of time that they won’t be able to afford their payments. However, as you cannot start an IVA unless it is actually proved that you are able to make your payments these situations do not usually arise.

In most cases people find it difficult to make their monthly payments when their income unexpectedly falls. This may result from loss of their jobs or new baby or even prolonged period of illness.

What are the options if an IVA fails?

If an IVA fails there are plenty of options that can come to your rescue. Let us have a look at few of them:

  • A Payment Holiday: The first and effective option is to go for a payment holiday. This gives you a break temporary for a period of 2-3 months from IVA payments. This gives you a chance to search any new job or even overtime for arranging the money required for your payments. The payments that you have missed are added to your IVA. The payment holiday option works only when the drop in your income is for a temporary basis. But the drop is permanent then you will have to think of any other variation to the IVA.
  • IVA variation: It refers to reducing your payments that you give for IVA after signing a formal agreement with creditors. You will then have to increase the number of your payments and compensate for your lower payments every month. For varying an IVA you will require the help of insolvency practitioner who will propose variations to the creditors. The proposal gets accepted id it seems to be reasonable.

Future of debts if IVA fails

If certain circumstances arises that you are not able to make payments to IVA then there are chances of its failure.  It may not fail even in such situation if and only the agreed payments have been made by you. But if you are in your earlier stages of payment then there are chances of failure.  It will result in huge debts that may become impossible to repay. In such a situation, the best options are starting a debt management or declaring bankruptcy.

You should go for any option depending on your personal circumstances and after taking advice from insolvency practitioner. However, bankruptcy option is considered better by most people as the payment that goes into any debt management plan is so less that it would literally take years for resolving the debt. It is always an intelligent decision if you do not consider an IVA unless being very confident of the fact that you can afford to maintain your payments.


Think Again About That StayCation, The Right Credit Card Could Make a Vacation Affordable

Think Again About That StayCation, The Right Credit Card Could Make a Vacation Affordable

This article comes from our friends at Card Hub, a website that helps consumers find the best credit cards for their needs.
The weather is hot, the kids are out of school, and for many of us the air conditioning is broken thanks to summer storms. In other words, it’s the perfect time for a vacation to a nice beach or lake somewhere. The only problem is many of us are still feeling the effects of the financial downturn and are leaning toward a staycation or have already exhausted our summer travel budgets. As it turns out, though, if you have excellent credit, a summer excursion doesn’t have to devastate your bank account, as the right credit card could help you save up to $500.

This might seem too good to be true, but pinch yourself and see – you’re not dreaming. Credit card companies have been offering increasingly lucrative initial rewards bonuses, which give you an infusion of points, miles or cash back simply for getting a new card and either making one purchase or spending a certain amount during the first few months. The best ones can therefore score you free flights, free hotel nights, extensive savings on gas, or just cash to replenish your savings.

Without further ado, here are these helpful credit card offers to which I have alluded:

  • Chase Sapphire Preferred Card – Spending at least $3,000 during the first three months with this card scores you either $500 to spend on travel accommodations or a $400 statement credit. It doesn’t charge an annual fee during the first year either ($95 thereafter).
  • Hilton HHonors Surpass Credit Card – The 60,000 bonus points that this card offers – 40,000 after first use and 20,000 after you spend $3,000 –is enough for 1 night at a Waldorf Astoria-type 5-star hotel or as many as 8 nights at the likes of the Hampton Inn. All it costs you is a $75 annual fee.
  • British Airways Credit Card – Everyone gets 50,000 bonus miles after they first use the British Airways Credit Card. Heavy spenders get up to 50,000 more depending on how much they charge during the first year – 25,000 miles if they charge $10,000 and 50,000 miles if they charge $20,000. Spending $30,000 within a year will also get you a voucher for a free companion ticket as well. It’s got a $95 annual fee.

Now, if you’re uncomfortable opening a credit card just for its initial bonus, there are a few cards that offer excellent ongoing rewards in addition to a bit extra up front, including the following offers:

  • PenFed Platinum Rewards – Not only does this card offer a $250 initial bonus, but it also gives you 5 points per dollar spent on gas, 3 points on supermarket purchases, and 1 point on everything else. Pentagon Federal Credit Union membership is required, but it’s open to everyone for a one-time $15 fee.
  • Capital One Venture Rewards Card – The Venture Card offers a $100 initial bonus as well as the equivalent of 2% cash back across all purchases, provided that you redeem the miles you earn for a travel-related expense. It doesn’t have an annual fee in the first year and only charges $59 per year after that.
  • Blue Cash Preferred from American Express – Though this card has a $75 annual fee, it’s one of the best everyday spending cards on the market, offering 6% cash back at supermarkets, 3% at gas stations and department stores, and 1% on everything else. It also gives you a $150 initial bonus if you spend $1,000 during the first three months, which effectively cancels out the initial fee.

It’s important to note that these cards will really only help folks with excellent credit. This shouldn’t come as too much of a surprise, however, given just how attractively lucrative they are. In fact, issuers are using the obvious appeal of these offers to draw in people with excellent credit so as to add some much-needed stability to their customer bases. What’s more, if you are planning to travel abroad, make sure to get a credit card with no international fees. All of the aforementioned cards fit the bill, with the exception of the Hilton Card and the Blue Cash Amex, which both charge 2.7% for transactions processed outside of the US. Happy travels!


CashBack Credit Cards – How do they Work?

CashBack Credit Cards – How do they Work?

Many credit cards these days have reward schemes in place that companies use to highlight themselves as the best credit card available. While most cards have frequent flyer points as the main reward there are some credit cards called cashback cards which work in a different way.

What is a cashback Credit Card?

Credit card companies are now starting to offer cashback credit cards to consumers. These cards work by offering a percentage
of your purchase back to you in the form of cash rather than reward points. You are then free to spend this cash on anything you wish. This
is often a much more attractive proposal for consumers because they are not limited to items only available from a point scheme.

The amount of cashback that the consumer receives can range from 0.5% up to a higher cash back of 5% which is usually set during a 6 month honeymoon period. These higher cashback rates are very attractive for consumers in the market for a new credit card.

While many people already have credit cards and are collecting points they may never use these points because they don’t travel or the points only allow them to buy certain items that they do not need. With a cash back card you get cash back every time you make a purchase. This is very simple and there is no hassle with having to claim or redeem points.

Some cashcards will only be valid when you use them at certain places or when buy certain items. For example some cash cards are only for use when buying gasoline because gas prices have risen so much in recent times. This has made these cards very popular. Other Cash back cards are only valid when used at grocery stores or pharmacies.

If you are applying for a cashback credit card you should be aware that
the higher rates of 5% will only be for a limited time and often fall back to around 0.5%-2% after this initial period.

When choosing a cashback credit card and you will not be paying the balance off every month you should try to choose one with a lower interest rate. The reason that credit card companies are offering these types of cashback cards is because of the interest they will make when you don’t pay your balance every month. The advantages of getting cash back will diminish if you are paying a high interest rate every month on the purchases you have made.

There are a few different companies that offer cashback cards and they have different rates. You will need to decide if you want an Amex, Visa or Mastercard, remembering that American Express is not always accepted at all places.

If you are going to apply for a new credit card and you are sure that you will be able to pay off your bill every month then it would be a good idea to apply for a cash back card. Unless you are travelling


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