The benefit of credit unions is that theoretically they work for the customers and therefor keep margins low and competitive. They also often are forced to be competitive just in order to survive against the increasingly growing big four banks.

Credit unions like Credit Union Australia offer their own credit cards which they strive to make as good value as possible for their customers. There are both advantages and disadvantages to credit union credit cards compared to traditional bank credit cards. For one, as the customers are also member in credit unions, credit union credit cards are generally more understanding of hard times in terms of missed repayments and because they’re not looking to make a profit, they won’t try to catch you with pitfalls and maximise their own profits.

On the other hand there are also certain disadvantages to credit union credit cards. For one, credit card debts are cross collateralised with your other credit union loans. This means that your house or car which you bought on loan could be tied as security to your credit union card loan.
At the end of the day, credit unions represents a drastically different alternative to banks and are worth your consideration when you apply for credit cards.

Its times like these you need a credit card consolidation loan. A credit card consolidation loan is a loan from a bank or financial and loan organisation which covers all your credit card debts. On the surface this seems to be re-arranging the deck chairs of the titanic – you still owe the same amount of money and have to repay the same amount, but there are several benefits to getting a credit card consolidation loan.

First of all you now just have one repayment date each month. One common reason people cannot manage their debts is just the complexity when multiple repayments are required each month at different times. That’s when your debt can slowly get away from you as you can’t budget and plan as effectively. With just one repayment period per month it will be much easier to plan your budget and make sure you can always make it.

Another advantage is that usually the minimum repayment for your consolidation loan is lower than the minimum repayment for your multiple loans put together. This way you can have more breathing room monthly.

But in reality, a credit card consolidation loan should affect not just changes in how easy it is for you to pay off your debt, but a way for you to become responsible in spending. It will be useless if you simply consolidate existing debts and then begin spending again on another credit card. A credit card consolidation loan should be a wakeup call, that you have a spending problem, and it should be part of a holistic approach to spending more responsibly.

A credit card cash advance works much like a purchase, in that it is essentially a cash loan from a credit card which you have to pay off. On the surface this is an optimal solution – consumers will have the convenience of credit cards with the flexibility of cash. However using credit card cash advance is one of the most notoriously dangerous ways you can use a credit card and carries many pitfalls.

The most important one to watch out for perhaps is that sometimes, credit card cash advance carries no interest free period in which you can pay off your balance without incurring interest rates. This means you start owing much more than your advanced the moment you borrow cash, and considering the high interest rates of credit cards, you will quickly find yourself owing a lot of money. Furthermore, on many credit cards the cash advance interest rate is different, and sometimes higher, than the purchase interest rate. This means one should really be wary when they are using cash advance, and know for sure how much they’ll really be paying.
Another pitfall is that most credit cards will generally charge you a fee for using credit card cash advance. Credit cards can generally charge a 3% or such fee for cash advances, driving up costs of credit card cash advances even more.

By all means, credit card cash advances have their uses, such as in emergencies when you desperately need some cash. But there are pitfalls which makes them undesirable to many consumers. For that reason perhaps, cash advance credit cards are seeing less use in Australia, and there’s only about half a dozen credit cards at most worth getting for the cash advance option.
 

Generally speaking, more minimalist low end cards, such as low annual fee cards and low interest rate cards, have a lower credit limit (usually about $10,000). Meanwhile premium cards have a higher credit limit (usually around $25,000). This is because banks assume premium cards are for more affluent heavier users who can afford a greater debt, and lower end card users to have a greater chance of default.

There are also another class of cards known as no limit credit cards. As the name implies, these cards have no credit limit. However the approval process for these cards is theoretically much more stringent. In Australia no limit credit cards (especially after the Global Financial Crisis) are quite rare. When they are offered, they are offered as charge cards, meaning the user has to pay the balance in full at the end of each month.

It should be said that for the average credit card user, the credit limit is definitely more than you need. Realistically, whilst each person’s spending habit is different and some may spend a lot on credit cards whilst still paying their debts with no problems, responsible credit card users who want to manage their debts should not be spending close to their credit limit each month let alone reaching it, lest they risk defaulting.

In these cases, you need a credit card payment calculator. Credit card payment calculators are very powerful tools which calculate exactly how long and how much money it takes to repay a credit card balance, and how much money you can save by making higher than minimum payments. Thus it also helps people visualise the most optimal way to repay their debts. There are many credit card payment calculators available for free use online. Some of these are offered by banks, such as the ANZ Credit Card Repayment Calculator, whilst others are offered by independent comparison and review sites, such as Home-Loan.com.au’s Credit Card Repayment Calculator. All these calculators are fairly easy and straight forward to use, you simply input all the information about your credit card debt, from interest to annual fee to the amount you’re willing to pay each month, and it gives you how much you are paying in total and how long it will take to repay it all.
Take control of your finances and really know the way to repay your debt giving yourself the most time whilst also paying the least money on interest.
 

Platinum credit card is a rather loose definition that describes top line cards designed and offered to heavy and usually affluent credit card users. Many banks and financial institutions offer platinum credit cards, under a range of names (sometimes actually called “platinum” and sometimes just with another name) and there is no strict set of features platinum credit cards have to have, but here is a list of features you’ll constantly see on platinum credit cards:
Credit Limit: Platinum Credit Cards have a very high (usually over $10,000) credit limit at least, sometimes; a platinum credit card simply has no limit
Annual Fee: Platinum Credit Cards usually have a very high annual fee (generally over $100, sometimes over $150) as a mark to their premium status. Sometimes this annual fee will be completely waived if a certain amount (say $10,000) is spent on the card each year.

Extra Features: Platinum Credit Cards will generally have the most features out of the range of credit cards offered by any single bank or business. Features such as 24/7 personal concierge service, travel insurance, stop theft measures, will generally be part of platinum credit cards.

Reward Schemes: Platinum Credit Cards will almost without exclusion carry reward schemes – schemes were every dollar you spend grants you points which can be used in exchange of bonuses. The type of bonus will depend on the specific bank and financial institution, but platinum cards will usually show their value in reward schemes. Where a normal reward card will offer 1 point per dollar of purchase, reward cards may offer anywhere from 1.5 points to 2.5 points for a dollar of purchase, not to mention that reward credit cards generally give you a lump sum (usually 10,000-20,000 points) when you apply.

As can be seen, Platinum Credit Cards are made for heavy credit card users, and also affluent users. Whilst they may not be for everybody, if you spend a lot on your credit card and want value for money and the best service, then perhaps a platinum credit card is what you’re after.
 

The cheque has long been seen as a great way to make payments securely, by post or in person, especially when the consumer needs to maintain a record. Their use in business was always very widespread and more recently individuals and small businesses have been able to accept them for payments when they are unable to take card payments. A change has come about, however, as have many changes to the way we live and work, due to the Internet.

In the early days of Internet commerce many retailers accepted cheques as payments. For many small retailers the costs of having a card terminal were simply too high. Cheques, of course, meant sending a cheque in the post and the merchant taking it to a bank and waiting for it to clear before sending items, which was not only time consuming but also took a lot of effort.

A major change came when eBay started to become popular. At first, most payments were by cheque, but soon Paypal became the payment method of choice, allowing anyone to receive payments made by card which would clear to a Paypal account instantly. There are now many online payment services like Paypal and their use isn’t limited to online purchases. Many businesses use such services to receive payments even from people buying in person. To pay with Paypal, consumers can even transfer directly from a bank account. Buying and selling a car privately was something that previously would have often been done with a cheque but not, through online services, the transaction can be made instantly, even via a mobile phone.

Credit and debit cards certainly started the decline of cheques but it was the point where anyone could receive a payment initially made via a card that really spelt the end for cheques. The Australian Payments Clearing Association (APAC) has asked for feedback from banks and merchants, as well as from individuals, as to whether they feel there is still a need for cheques. Although 75% of Australians don’t use cheques at all there are still many who rely on them, representing a significant 5% of the population. Those who are isolated from the advantages of the Internet, often the elderly and those in very rural locations, of course, still have no alternative to the cheque.

For first-time credit card applications it is important to be as proactive as possible. There are four elements that can always help when choosing a credit card:

1. Interest Rates
2. Credit Limit
3. Rewards Programs
4. Additional Features

These features, outlined in more detail below, are fundamental to any credit card and can make the difference between financial freedom and credit debt.

Interest Rates On Credit Cards

The first thing many people look for with a credit card is the interest rate because it can make a big difference to how much money needs to be paid off each month.

A lot of cards also offer a lower introductory interest rate, or an interest free period, like the Citibank Clear Platinum or Westpac 55 Day credit card. Just remember to consider what the interest rate will be after the introductory period has ended.

Credit Limits

Bigger might sound better when it comes to credit limits, but is important to be realistic about what limit is really needed. High credit limits can provide more financial flexibility, but often have higher interest rates as well.

A mistake like forgetting about a credit debt for a couple of months can mean a longer struggle to meet repayments on top of all this interest. Before deciding what the ideal limit is for a credit card, consider your income and spending habits, and how much you could reasonably pay each month to manage a credit card.

Rewards Programs

Rewards programs are designed to stand out against competition and often feature insurance deals, special offers and airline reward partners, like the Woolworths QANTAS credit card, which offers customers 1 Frequent Flyer point for every $1 spent.

The link between rewards and dollars spent encourages customers to use their cards as often as possible to get the most out of the rewards program. If the rewards are relevant then this type of program can make having a credit card a great benefit.

Additional Features

Every credit card is different and considering the features they offer can help make a final decision. Some of the most popular and useful features many credit cards offer are:

• Cash advances
• Balance transfers
• Annual fees; and
• Interest free days

One way to get the most out of a credit card is to list all the things you would want from it, and see which cards offer relevant features. If, for example, you want a card that you do not have to think about, perhaps one with 55 interest free days or a 10% p.a. interest rate would be a good choice.

Understanding how a credit card plan works will make finding the right credit card much easier.

Credit card companies offer regular increases to customers with high credit scores and a solid payment history, and this seems like a good idea at first.
One real advantage to a credit limit increase is that the debt ratio goes down immediately, and the credit score goes up. In addition, the consumer gains a certain amount of satisfaction in knowing that he has established a good credit history, which will go a long way towards future credit offers and lenders’ approval. However, there are several things to consider before accepting an increase in credit.

It is usually acceptable to request a credit limit increase after between 6 months and a year of history with the credit card issuer, if they haven’t offered one in the meantime. They will make a credit report inquiry to determine credit worthiness and current credit score. Customers should keep in mind that too many inquiries will reflect negatively on a credit report. If the credit score is good to excellent, and the account balance is no more than 30% of the available credit, there should be no problem in being approved. The consumer should be sure to read the terms carefully before accepting the offer, as the new credit limit may mean additional fees or a higher interest rate.

There are drawbacks to having more credit, however, as it can lead to more debt and more interest if the balance is not paid in full each month. As a result, consumers may find they are unable to make the higher payments and their spending habits are getting out of control. Other credit card companies make note of consumers with high credit scores, and are quick to send out new offers. It is very easy to end up with too many credit cards and too many credit lines, and there is always the chance of ending up totally dependent upon credit.

Credit limit increases are, for the most part, rewarding and beneficial for those consumers who are able to manage their finances responsibly. Credit is certainly a necessity for many consumers in today’s economy, but it does take time and effort to earn and keep a good credit standing.

After a few years with a credit card, interest rates often shoot up without the customer realising and they end up in a spiral, where even by paying off what seem like big amounts each month only just covers the interest. If a borrower is paying 25% APR then they are paying a quarter of what they owe each year. Over four years, they could pay the equivalent of their balance without paying any of it off.

How can a borrower get out of what may seem like such a hole though? One option is to use more credit cards. If the consumer is paying 25% APR on their balance now, switching to a cheaper card and doing a balance transfer can help them start making a dent into what they owe.

Also, with a new card there is no reason why the consumer should end up paying such a high rate of interest again, as long as they have a good credit rating. The borrower can take out a card, either with a low rate guaranteed for some time or with an introductory rate for a short time. They may well then also have a typical rate that they have to accept after a pre-specified period.

After this, though, all further increases are optional. The borrower only needs accept them if they want to borrow more money. When they receive a letter telling them of a rate increase, they should simply write back and reject it. They will not be able to borrow any further amounts, but they will keep the same rate while they repay their existing balance. All the borrower needs then is the discipline to keep making payments. If they do take out a new card they must try to keep paying what they were paying each month beforehand

1. Make More Monthly Payments
The fastest way to pay off credit card debts is to simply make more payments per month. This should only be done, however, with consideration for other necessary monthly expenses, however.

2. Cut Back on Unnecessary Purchases
Research has shown that a family of four can conveniently live on $2000 a month, with change to spare, if they cut back on all unnecessary expenses. All monies saved from cutting back can be put into paying off the credit card debts.

3. See if You Interest Rates Can Be Reduced
Most credit card companies are willing to reduce the interest rates on cardholders’ payments. However, the borrower will need to appeal to them by phone. While this may not be successful all the time, due to a myriad of factors, just trying can help knock off a point or two, which can amount to a substantial income when paid over years.

4. Withdraw the Kids’ Cards
If the money is there and things are financially secure, giving the child their own credit card can be a good thing. But people who are seeking to pay off their debts would do well to withdraw the cards from their children. This is also why it is good to sit the children down and talk to them about paying off the credit card before beginning the payments. This way, the children will understand and willingly make the required sacrifice.

To close a credit card, there are the necessary steps, which are outlined in the following paragraphs.
1. Pay off the Balance

To close a card, the very first thing to do is to clear the balance on the card, which can be done in two ways:
• Paying off the balance
• Parlaying or transferring the funds onto another card
Cardholders should opt for the second choice if they really need the money but want to consolidate their credit card debts. To gain more benefits from this, the balance should be transferred to a card with lower interest rates. Transferring funds typically costs anything from 1%-5% of the total amount transferred.

2. Find Out What the Rules Are
Cardholders should check out the terms of agreement to see if there are any clauses or particular requirements necessary for the closure of the card. For instance, new cards typically attract an early closure fee.

3. Contact the Credit Card Company
The easiest way to do this is to call the card company using the customer service number for account closures, which is often available on credit card statements. Before doing this however, it is important for cardholders to know that the customer service agents who are specifically designated to handle such calls are trained to try to talk them out of closing the accounts. Usually the agents will offer lower interest rates and attractive incentives just to get the cardholders to change their mind about closing the card.

4. Confirm Closure Date
After asking the agents to close the card, cardholders should find out when the closure will be effective. It is also a good thing to find out if there are any charges that may be required before the card becomes ineffective.

Making Minimum Payments
The first mistake that many cardholders make is paying just the minimum monthly balance. Unfortunately, making such small payments not only keeps them in debt, the interest rates and payment actually increase and build up over time. Cardholders who want to avoid being indebted for the rest of their lives can start by avoiding this mistake. Instead of making the minimum requirements, they should simply pay more than is required or expected. This way, all card debts will be paid off quickly.

Daily Purchases Using Cards
Most people are in the habit of paying for everyday purchases with their credit cards. Not only is this a bad idea, it is a sure way to quickly max out the cards and become even more indebted. Cardholders should only use credit cards to make purchases that are outside all daily needs and expenses.

Falling for Credit Card Incentives
There are many credit card reward programs available. While reward programs can be a useful incentive, the purchases required can soon outweigh the benefits of the reward program, resulting in even more expenses and further putting the cardholders in debt.

Cashing those Cheques
Credit card companies consistently send cheques in the mail as a means of encouraging cardholders to spend more. Unfortunately, what many people don’t understand is that these cheques are often considered by lenders to be cash advances, which attract higher interest rates, automatic setup fees and the absence of a period of grace. So, the deadline for the payment starts counting once the cheque is cleared. To avoid this, borrowers must not cash such cheques unless in an emergency.

Rewards have risen in frequency, primarily as a reaction to the rise in the popularity of debit cards. Many credit cards offer borrowers rewards for using them, mostly based on how much consumers spend on them.

Usually, if borrowers have money in their bank accounts there is very little advantage to paying by credit card instead of by debit card. If consumers use credit cards instead of debit cards to make purchases, though, they might receive rewards to make it worthwhile. These rewards often come in the form of points. Airmiles were the first of these kinds of rewards schemes. Consumers earned points for money spent, which were translated to the number of miles which could then be redeemed on flights. More recently, many other rewards are also available. Rewards for things such as flights and goods appeal to people because they get to enjoy a luxury that they otherwise could not afford or could not justify.

So, people pay by credit card instead, repaying the balance each month. The card companies know, however, that despite the borrower’s best intentions they are often unable to maintain their repayments.

Credit Card companies also see the cost of rewards, such as flights, as marketing costs. Rewards are good for getting someone to choose a card to begin with, when there are rewards that they want. It is also great for customer retention, as even when a card has its interest rate increased, the user will want to keep it to make sure that they save up the points for what they are aiming for.

These credit card companies, of course, still have to recoup the money that they spend. If a consumer is considering a card with rewards or already has one, they must think carefully about the cost that they are paying for these free rewards.

Credit card fraud is currently much more frequent than debit card fraud and there are several possible reasons for this. It could be that those individuals who are committing fraud are aware that consumers can conduct chargeback’s on credit cards, whereas their options are more limited with debit cards. It may be the case that thieves would rather steal from banks and other credit card issuers than from individuals. Another reason might be that people know that they are covered against credit card fraud so are more careless with their cards. Furthermore, credit cards have a much bigger available balance than the bank accounts linked to debit cards.

The fact that credit card interest rates are often higher than those on overdrafts or loans is, in part, because borrowers are paying for the peace of mind of being covered against fraud. In effect, borrowers are paying for an insurance policy hidden within their rates. Of course, consumers may be very careful with their credit card details, avoiding leaving their cards with the waiter in restaurants and only buying from well-known and trustworthy websites, but these things, of course, do not affect their rates. Borrowers are, in effect, paying more for those who aren’t as careful; who lend their cards to family and who don’t stop to check if websites even use a secure server. Having said this, fraud can of course happen to anyone. Devices can be attached to ATM and chip and pin machines which download the information needed to duplicate credit cards. Also, the fact that Sony had to admit that many of the customers on its Playstation 3 Network had had their details stolen, shows that even the largest and most secure companies may well have systems that are not foolproof.

It seems then that although borrowers do pay for it, using a credit card instead of a debit card could be the cheaper option if one becomes a victim of fraud. And, for this reason, many people do choose to use a credit card only for online transactions.

Although both contract workers and sub-contractors may work at different jobs and for different companies throughout an entire year, there may be no guarantee about next year’s employment. There is always the possibility of a company failing or having to reduce their work force. As a result, these workers do present a risk in the perceptions of the lenders. Since they are often considered to be self-employed by credit card companies, the workers may be required to provide a 2-year financial report, prepared by a professional, as proof of income.

Fortunately, there are some credit cards available to contract workers and the self-employed. There are a few companies which base their decision on other factors, such as positive previous credit history, personal references and positive employer recommendations. Even so, contract workers may have to pay a higher interest rate on their credit card than other credit card holders, simply because they are rated as higher risk. Once they have proven their ability to make regular payments and maintain an above average credit score, the credit card interest rate may be reduced.

The convenience of having a credit card will prove invaluable to contract workers when they find themselves unemployed. Having credit available will help carry them through until the next job comes around. While employed, however, they should make every effort to regularly set aside a certain amount from their earnings to build up some type of emergency fund to pay bills and cover household expenses. Borrowers should never take a chance on ruining their credit score, as it will just make it even more difficult to establish credibility as a good risk for credit card companies. As long as card holders pay at least the minimum on their credit cards, they will maintain a respectable credit rating. Then, when they find employment again, they can work on paying off those unpaid balances as their income returns.

1. Own No More than Two Cards
As a rule, no individual should own more than two credit cards; one for daily expenditures and the other for emergencies or bigger purchases. So, for those who own more than two credit cards, the first thing to do would be to consolidate their debt. To do this, they will have to first pay off the debt on the cards whose subscription they intend to cancel. If the money isn’t available, they can either save towards paying off the debt or use their other major cards to pay off the debt on the other cards.

2. Pay Cash All the Time
The temptation to always spend on credit cards can be huge. Nothing is easier than telling the salesperson to put the payment on the card. However, smart money managers consistently advise that cardholders hold off on using their cards unless it is unavoidable. So, cardholders who want to pay off their credit card debts will do well to make all payments in cash and hold off on using their cards until when absolutely necessary. The lesson here is to simply discipline oneself to spend only when necessary.

3. Talk to Financial Consultant
For most people, simply cutting back on their expenses will do the trick. However, this might be a difficult thing to do, particularly if the person a “shopaholic”. So, to come up with a decent, working blueprint that will help them pay off their credit card debts, individuals can hire financial consultants to help with it and help them follow through on the plan.

Consumers may find slight differences in merchant processing of their POS transactions, as terminals must be upgraded to accept chips. Rather than simply swiping your card and removing it, you may be required to leave your card in the terminal until the transaction is complete. This is fairly common at ATM machines, so the procedure should be familiar. In any event, both merchants and ATMs will still accept credit cards with magnetic stripes.

The addition of a PIN to be used with the card further enhances the security in chip technology and eliminates having to sign for transactions. With the security of having an individual PIN, there is less chance of counterfeit signatures and fraudulent charges on a credit card. Further innovations have been introduced by credit card companies, such as a requirement for cardholders to use a password issued by Visa or a secure code by MasterCard when shopping online. This security feature should be fully activated by 2012. Consumers are also reminded that Visa provides a zero liability plan to protect against unauthorised transactions.

Many financial institutions have already issued cards with embedded smart chips, and Visa® is expected to complete the transition within the next four years. Debit and prepaid credit cards will be upgraded, beginning this year. With an estimated 14 million cardholders and thousands of ATMs and POS terminals, this will take some time. But, once in place, signatures will no longer be required for most, if not all, Australian credit card transactions. Signatures will still be accepted, however, for transactions made with cards issued overseas. As current credit cards expire, if not before, they will be updated with the new chip technology; a welcome advancement in credit card security.

Paying for Transportation and Living Expenses

While it is not recommended to overuse credit cards, due to interest charges that ultimately increase the total cost of each purchase, in certain situations, when cash is not available to fund transportation and living expenses, student credit cards can provide crucial backup funding. Students can use the cards to purchase items such as food, clothing and hygiene products, and to pay for various forms of public transportation. Since student credit cards usually have lower credit limits, it is important to hold these types of purchases at the highest priority, rather than spending most of the available credit on leisurely expenses.

Academic Supplies and Fees

Although student loans are generally arranged to cover the cost of tuition, there are some unexpected fees that are charged intermittently during different parts of the year, and students may need to resort to using a credit card if their student loan has been exhausted or does not cover these expenses. Student credit cards can minimise the financial strain that such fees and unexpected expenses cause by reducing them to a minimum monthly payment of only 10% of the original cost. However, it is not recommended to retain only the minimum amount due, as this can have a negative effect on the credit score.

Leisurely Expenses

College can be one of the most enjoyable periods of an individual’s life, but not without the spending capital needed to participate in various recreational activities. Although it is important to maintain a strict budget and utilise the credit line for the most important purchases, if the student has not surpassed 50% of their available credit towards the end of the month, it would not hurt to utilise the credit card for leisurely expenses. Nonetheless, most experts recommend reserving credit for essential expenses and utilising cash for recreational activities and unnecessary purchases.

The first thing that a credit card holder needs to remember is that they should consistently use their card responsibly. The definition of “responsibly” may differ with each person, but for the credit card companies it means only one thing: pay the credit card minimum payment, or full amount, and pay it on time every month. A credit card customer may have to do this for several months before the lender will be convinced that they are responsible. At that point, they may raise the credit card limit automatically, or the customer may need to request it. A good waiting period is six months.

Another way that a consumer can increase their credit limit is by getting another credit card. This may seem counter-productive, but in fact, two credit cards mean that the credit score of the card holder will continue to rise, and at a higher rate than having just one card. Obviously, both cards will have to be used and paid off each month in order to get a report filed with the credit bureaus, but consumers can spend any amount that they want and then pay it off at the end of the month.

One thing that credit card holders should keep in mind is that any request for a credit limit increase could result in a credit check. This may add another enquiry to those that they already have on their report, which eventually will lower the credit score considerably, as well as disallow any future credit limit increases. However, one every six months should not be a problem, and if the credit card is used responsibly, it should only take one or two requests to the limit increase anyway.

• One of the most important pieces of information that a consumer must have before they start is their current address and contact information, as well as any addresses that they have lived at in the past five years. Many credit card applications will ask for this information.
• Another piece of information that credit card companies often ask for is employment information. They generally don’t just ask forthe name and address of an employer, but more specific details such as starting and ending dates of employment, when a promotion and pay raise was given, what the applicant’s current pay and position is, and details of past employers they have had. All of this information shows stability. If the person has had the same job for several years, they are a much lower risk than someone who switches from one job to another every few months.
• Credit card companies want to know about the applicant’s financial situation, such as what expenses they have, any other credit cards or revolving credit and what kind of assets the consumer currently has.
• The credit card company may also ask for information from the applicant regarding large loans that they are currently paying on such as a mortgage or car loans. This should be comprehensive information including dates and amount paid, because each credit card company will have different requirements for the information that they require.
• Obviously, credit card companies will also need to look at an applicant’s credit report, but in nearly all cases, the credit card provider will pull this information themselves for both accuracy and to get the most recent information possible, so the consumer will not need to provide copies of their credit report to apply. Instead, they will usually just have to sign a release to allow the credit card provider to pull the report.

Cash advances are much less necessary than they were in the past, because nearly every merchant is now able to accept credit cards. There may still be times, however, when cash is required for some reason, such as the credit card machine in a favourite store being broken. When cash is necessary, it can be borrowed from the line of credit attached to the credit card, usually up to the amount available or close to that amount. However, it may be in the consumer’s best interest to apply for a loan instead, depending upon the amount required and what the credit card cash advance fees are.

The funds for a cash advance from a credit card are obtained in the same way that someone would get cash from their cheque or savings account with a debit card. Card holders use a bank machine to obtain the cash that they need, and while the ATM fee may charge a fee of a few dollars, this is nothing compared to the fees that the credit card company will charge the consumer for the cash advance. Fees are usually a combination of a percentage of the cash advance and a flat fee, which can be as high as $40 or $50, depending upon the credit card provider.

The reason that cash advances are not recommended is that they end up costing the consumer a lot more than just using the credit card. Not only will the card holder have to repay the money which has been borrowed, plus any interest accrued, but they will have to pay a fee to receive the cash on top of that, plus an additional percentage ranging from one to three percent of the cash advance total. This usually comes out to be a much higher price for a loan than one would want to pay, and for that reason, consumers should consider carefully before they withdraw cash from an ATM using their credit cards.

More Information

The Citibank Gold Credit Card provides a superior rewards program, allowing you to earn a total of 4 rewards points at Citibank Bonus partners. Citi Gold also provides complimentary international travel insurance, purchase cover and optional credit card insurance.

With Citi Gold you can transfer your balance for 2.9% for 6 months with up to 55 days interest free and have a generous credit limit of up to $60,000.

Find out more about the Citibank Gold Credit Card

Type of Credit Card
Rewards Cards, Balance Transfer Card, Gold Card

Interest rates
Standard interest rate of 20.99% p.a., transfer your balance at 2.9% for 6 months and cash advances at 21.74% p.a.

Fees
Annual credit card fee of $149

Security
Fraudshield, Optional Credit Card Insurance, Purchase Cover up to $125,000, 24/7 Customer Service, Emergency Card Replacement

Additional Information
Citibank Gold Complimentary Rewards Program, Complimentary International Travel Insurance, Complimentary bottle of wine when you dine at participating restaurants with Citibank’s dining program

Application Requirements
You must have a good credit rating and be aged 18 years. You may be required to submit your gross annual, quarterly, monthly, fortnightly or weekly income. A minimum income requirement of $30,000 p.a. You must meet these requirements to be able to apply for this credit card.

Interest rates, annual fees, and other credit card details were taken from the most accurate data available at the time of writing (6 May 2011). All rates and fees are subject to change from the issuing bank, and their inclusion here in no way serves as a guarantee of rates. Please review rates and terms and conditions with the card issuer at the time of application.

• Multiple Credit Cards: While it is useful to have one or two credit cards, consumers should take a look at their spending habits if they have more than three cards, and use them regularly. Some credit card users have as many as twenty different cards, including store credit, which can be one of the signs of credit card addiction.
• Emotional Buying: Someone who purchases items, not because they need them, but simply because they are discounted or on sale, may suffer from buying addiction problems. Also, if a credit card customer finds that they buy to make themselves feel better and have many items in their closet or around the house which they have never used, they are almost certainly suffering from credit card addiction.
• Growing Balances: Borrowers with credit cards can take a look at their statements and determine if they have a spending problem with their credit. If their balance continues to increase and is not being paid down each month, they are in a potentially problematic situation. If they cannot curb their spending in order to pay down their credit card balances they may have a spending problem and might need to see a financial adviser.
• Maxed Out: One of the most common signs of someone with a spending addiction is that their cards are maxed out. Rather than paying off these cards, such borrowers opt instead to continually open new credit card accounts so that they can continue spending, which of course doesn’t solve the problem and only furthers the debt that they are in.
• Denial: Another way in which consumers who are addicted to credit card spending avoid the dealing with their problem is by denying that it exists. Such consumers often do not even know how much they owe on their credit cards and, most of the time, do not want to know.
• Arguments: Consumers who are addicted to spending often argue with their spouse over their habits. While many couples argue about money, those who have any of these warning signs should take an honest look at their credit card habits and consider the possibility that they might be addicted to credit cards.

Entertainment

Entertainment rewards range from common activities to those that most people don’t consider when thinking about entertainment. They can be used on vacations, or simply on evenings and weekends. Movie theatre reward points are common, but reward points can also be used for things like bike rides and hot air balloons or at zoos and aquariums, in some of Australian’s best known tourist attractions.

Gift Cards

Shopping rewards can often come from reward points. Choices include magazines or guide books or they can be spent on items like music, jewellery, house wares and clothing. These are extremely flexible reward points which can be used for a huge variety of different items, because the reward points are directly exchanged for a gift card from a particular shop or store.

Merchandise

Most of the time, merchandise which reward points can be used for come from a catalogue or some other type of circular in which the consumer can browse available items. They come in categories, such as appliances, electronics, toys, sporting equipment and perfumes. This is different from the gift card option because they are used to directly trade for merchandise.

Travel

Travel is a popular option for reward points. Often, the points can be traded for airline flights, both in Australia and international, but also for travel related expenses, such as hotels and other lodging, rental cars and sometimes even restaurants and entertainment. Many people prefer to use their reward points for travel, in order to save money on holidays.

Financial

Often, reward points can be used for financial benefits as well. Common examples include using reward points to make payments on home loans, or to redeem for a variety of insurance purposes. Furthermore, reward points can be used to make donations to a variety of charities. However, these financial uses are only for certain credit card reward points programs, and may not be available in every area.

Many credit cards offer promotional interest rates, such as introductory rates when someone first signs up. While these rates can be attractive, they’re usually not the rates that one will normally be charged for purchases. A fair interest rate for credit card is around thirteen percent. Any higher than that and it starts running into the sub-prime credit card range.

The rate may also go up if the card is used over the pre-established limit, if the payments are late or if certain facilities are activated. One variation of this is when a balance transfer is completed. Balance transfers follow whole new set of rules and will not have the same interest rates that regular purchases do. Often, credit card companies will offer a promotional rate for balance transfers which can be as low as zero percent. A fair rate for balance transfer is completely different then regular interest rates, and normally better interest rates can be negotiated simply because the credit card company is attempting to get new customers to sign up. So, the fairest rate for balance transfers is zero percent.

However, even for regular purchases, interest can start with a thirteen percent rate, but the consumer can often negotiate for a better interest rate after having established a credit history. In fact, a customer should continually try for a better interest rate on their credit cards because the credit card provider will often grant these requests to keep customers. If, however, the card company will not negotiate a better rate, it may be time for the customer to move onto a company which will give a lower rate. Another fact is that the better credit a consumer has, the more options will be open to them with regards to credit card approvals.

More Information

If you travel a lot and are looking for a rewarding card that gives you value for money while you shop, then then the Woolworths Qantas Frequent Flyer is for you.

The Woolworths Qantas Frequent Flyer allows you to earn 16,000 Rewards Points if you apply before 30 June 2011, and while you shop you earn 1 rewards point per $1, and 1 additional points if you shop at Woolworths, Big W or Dicksmith.

Find out more about the Woolworths Qantas Credit Card

Type of Credit Card
Rewards Cards, Frequent Flyer, Balance Transfer Card,

Interest rates
Standard interest rate of 19.99% p.a., transfer your balance at 5.99% for 6 months and cash advances at 20.99% p.a.

Fees
Annual credit card fee of $89

Security
Woolworths Credit Card Repayment Insurance, Chip Security

Additional Information
MasterCard World Wide Acceptance with MasterCard PayPass Technology and MasterCard Moments, Access to ePump, Qantas Frequent Flyer Rewards Program

Application Requirements
You must have a good credit rating and be aged 18 years. You may be required to submit your gross annual, quarterly, monthly, fortnightly or weekly income. A minimum income requirement of $50,000 p.a. You must meet these requirements to be able to apply for this credit card.

Interest rates, annual fees, and other credit card details were taken from the most accurate data available at the time of writing (4 May 2011). All rates and fees are subject to change from the issuing bank, and their inclusion here in no way serves as a guarantee of rates. Please review rates and terms with the card issuer at the time of application.

Once a person has successfully paid off a delinquent account, the listing on the credit report will reflect the paid status. This is good for a minor improvement on the score, but will still show all of the information from the account, including the number of payments made on time, as well as all of the delinquent payments. Usually, the late payments will outweigh the good credit history, as well as showing future creditors an account that was late for several weeks or months, which may make them think twice about approving the financing, even with a good credit score.

A consumer can, however, normally work out a deal with the credit card provider or finance company to remove the negative information completely if the bill is paid. To do this successfully, a letter stating that they will remove the entry when the negotiated amount has been paid is required, because not all finance companies will keep a verbal promise to remove the negative information. Generally, this process will take from several weeks to several months after the delinquent amount has been paid and may require disputing the charge to get it removed. This will have a very positive effect on credit history and a credit score.

One thing to keep in mind is that collection agencies buy debt for much less than the actual amount of the bill. For a delinquent account of around $1000 after fees, interest and the original balance, the collection agency may only pay $200 to $300. This allows them to keep any additional money that they collect on the debt. However, since they don’t collect most of the time, they will often be willing to negotiate a lower amount. This allows them to make a little bit of money and clear the collection account from their system.

That being said, there are some ways to ensure that the entire story is obtained when shopping for the perfect credit card. Below are some basic rules to follow when shopping for a credit card online.

• Borrowers should make sure that they don’t settle for a card that they don’t want simply because it is the best card listed on the website. If one doesn’t see a card that fits perfectly, they should simply move onto a different website.
• Customers should not apply for credit cards which supply very little information about their interest rates, fees or policies. It is important to particularly watch out for credit card websites that make the details of the credit card agreement extremely difficult to find, such as a tiny link that is hidden in the very corner of the page. If they don’t want shoppers to see their card holder agreement, it may be a sign that something is wrong.
• Potential applicants should not apply for credit cards on poorly built websites. If it is difficult to navigate a website easily and it is not neat and clean then consumers should be reluctant to provide them with personal information. There are some websites that offer to “choose the best card for you” but these should be avoided whenever possible, because they usually collect personal information and sell it to a variety of other financial services companies.
• Borrowers should also make sure that they check the URL of the application page when applying online. A secure connection should be confirmed by checking that the web protocol is https:// rather than http://.
• Finally, consumers should ensure that whatever card or financial organisation applied for has contact details that are easy to find, and that they can get in touch with the provider easily. It is important that they provide a telephone number at the very minimum, as well as an address. Some also provide a live chat function if customers have questions.

More Information

The Aussie credit card provides a low rate on purchases, combined with a low annual fee. Aussie’s current credit card special, offers a low 2.99% on balance transfer for 12 months and 9.99% on purchases for 12 months.

This card is a no-nonsense, on the spot card, removing all the unnecessary extras like expensive rewards and with a low ongoing rate of 13.29% p.a., this card has a great low rate on purchases.

Find out more about the Aussie Credit Card

Type of Credit Card
Low Interest Rate Credit Card, Low Annual Fee Credit Card, Low Balance Transfer

Interest rates
9.99% on purchases for 12 months with a low ongoing rate of 13.39%, balance transfer rate of 2.99% for 12 months and cash advances at 19.99%

Fees
Annual card fee of $49, Aussie Credit Cover costs $0.60 per $100 of your closing balance or part thereof

Security
Aussie CreditCover – (If your credit card is stolen, and you file a police report detailing the theft, you`ll receive $200 for your hassle) and pay 60 cents for every $100 of your closing balance,
Fraud Protection – the confidence of knowing we’ll call you if we spot any suspicious use of your credit card

Additional Information
24/7 Online Account Access or over the phone, MasterCard applause, eDine, Aussie Wine Club Cellar Masters,

Application Requirements
You must have a good credit rating and be aged 18 years. You may be required to submit your gross annual, quarterly, monthly, fortnightly or weekly income. A minimum income requirement of $15,000 p.a. You must meet these requirements to be able to apply for this credit card.

Interest rates, annual fees, and other credit card details were taken from the most accurate data available at the time of writing (3 May 2011). All rates and fees are subject to change from the issuing bank, and their inclusion here in no way serves as a guarantee of rates. Please review rates and terms with the card issuer at the time of application.

Utilization Rate Explained

If, for example, an individual has two credit accounts which each have a limit of $500 (a total credit limit of $1000), and each card has an outstanding balance of $100 (a total debt of $200), then the utilization rate would be 20%. Lenders and financial institutions use this statistics to determine an individual’s financial stability. Most experts recommend keeping the utilization rate below 50% but no lower than 10% on a continual basis to keep the credit score stable. Most people don’t know that underusing credit can be just as detrimental as overusing it. Since some credit card/accounts may be more valuable than others, it is important to choose the accounts that will be closed wisely based on the following factors.

Repayment History

Credit card accounts which have a positive long-term repayment history should not be closed, as these have a beneficial effect on the credit report. Eventually, after a credit card account has been closed the repayment history is removed from the credit report, thereby eliminating the beneficial reference that could possibly sway the decisions of prospective lenders. Even if the interest rate charged on the account was recently raised, it may be wise to leave the account open and use it minimally to retain the advantageous impact that the account has had on the credit report.

Interest Rates and Credit Limits

Credit card accounts with low interest rates are becoming increasingly difficult to find nowadays, and should therefore never be closed. After the credit score has been damaged it can also be very challenging to gain approval for an account that has a credit limit higher than $1000. Rather than leaving several low limit credit accounts opened, it may be wiser to keep a single account with a higher credit limit. Although high credit limits can provide the temptation of excessive spending, they also offer adequate funding for emergencies and other unexpected expenses, and should therefore be kept as long as possible. Of course, if the credit score is damaged the card issuer may reduce the credit score in time, so it is just as important to continually maintain conservative spending and responsible repayment habits.

The Pros of Prepaid Credit Cards

The primary advantage of prepaid credit cards is how easy they are to obtain, as most card issuers will not even conduct a credit check to grant approval. In fact, the application process can be completed in just minutes online, and virtually anyone with enough money to make a minimum deposit can be approved for prepaid credit card. Prepaid credit cards can be used at all of the same locations that conventional credit and debit cards are accepted. In addition, these cards can be used to sign up for online memberships or services that require a credit card number, such as payment processors and popular auction sites like eBay. Prepaid credit cards also are a suitable alternative to gift cards, as the recipient can spend as much money as has been deposited. Most card issuers provide free online banking with prepaid credit cards, making them a useful money management tool.

The Cons of Prepaid Credit Cards

Since companies which issue prepaid credit cards are lenient in their approval process, and do not require a lot of personal information or identity verification, the cardholder has very little protection if the card is stolen or lost. With so many companies offering prepaid Visa credit cards, many people have trouble even contacting their card issuer, so it is essential to write down the contact details of the issuing company. Prepaid credit cards also come with strict limitations, and it may not be possible to enrol in some services with a prepaid credit card, such as renting a vehicle. Prepaid cards also charge upfront fees, ranging from $5 to $10 when the card is purchased or reloaded, and some cards have additional fees, including usage fees which are charged each time the card is used.

More Information

The NAB Low Rate Credit Card offers a competitive balance transfer rate, with a low ongoing purchase rate and low annual card fee.

NAB’s Low Rate Card offers a low purchase rate of only 13.49% p.a. which is one of the lowest rates around and 55 day interest free period. Not only do you get a low rate with this card, you also get a low annual card fee of $49. You can also transfer your outstanding balance at 4.99% for the first 6 months, which then reverts to the cash advance rate.

Find out more about the NAB Low Rate Credit Card

Type of Credit Card
Low Interest Rate Credit Card, Low Annual Fee Credit Card

Interest rates
Low purchase rate of 13.49% p.a., balance transfer rate of 4.99% for 6 months and 21.74% p.a. on cash advances.

Fees
Annual card fee of $49, Additional Card Holders at No Extra Costs, Optional Lost Card Cover for $59

Security
Lost Card Cover, Secure Online Shopping with Verified by Visa

Additional Information
Global acceptance of Visa at over 22 Million Locations Worldwide, NAB Cellar Selections, VISA Entertainment Offers ranging from shows and events to lifetime experiences, Contactless Purchases with NAB Visa PayWave, Emergency Travel Assistance from Visa Global Customer Assistance Server – 24 hours, 7 days, Choice of Pink or Silver Card

Application Requirements
You must have a good credit rating and be aged 18 years. You may be required to submit your gross annual, quarterly, monthly, fortnightly or weekly income. A minimum income requirement set out by NAB will have to be met which is available at the time of application. You must meet these requirements to be able to apply for this credit card.

Interest rates, annual fees, and other credit card details were taken from the most accurate data available at the time of writing (28 April 2011). All rates and fees are subject to change from the issuing bank, and their inclusion here in no way serves as a guarantee of rates. Please review rates and terms with the card issuer at the time of application.

Unfortunately, according to recent reports issued by one of Australia’s three main credit reporting agencies, Dun & Bradstreet, only about 240,000 Australians inquire with the agency for a copy of their credit report each year, which equates to only about 1.5% of the population. This is a startling statistic, considering the fact that every citizen is legally entitled to at least one free copy of their credit report each year, and a request can easily be filed online in minutes.

In addition, Veda Advantage, another credit reporting agency in Australia, has also confirmed that Australian citizens are neglecting their credit report based on relative statistics within other developed countries like the United Kingdom and America. For example, in the United Kingdom about 3% of citizens request a copy of their credit report annually, and in the United States, a country which has been plagued by credit card debt, about 8% of citizens request a copy of their report.

Negative items remain on an individual’s credit report for five years, and bankruptcies remain on the report for seven years. While it may be discouraging to review outstanding debts and defaults, analysing the credit report annually should be an essential credit management practice, as it not only helps cardholders focus on important areas of improvement, it also helps them avoid identity theft and credit card fraud, which may be indicated by the erroneous items on their credit report. In fact, many cardholders don’t even realise that their credit score has been affected negatively because someone has used their personal information to apply for credit card and accumulate debt.

Although every Australian is entitled to at least one free copy of their credit report from Dun & Bradstreet or Veda Advantage, experts recommend checking the credit report quarterly, or utilizing Credit Monitoring which provides notifications about suspicious activity and recommendations for credit improvement. At the moment, Australians can enrol for a 12-month “My Veda Alert” service for only $46.95, a comprehensive credit monitoring service which automatically notifies the cardholder whenever any details change on their credit report.

Examine Standard Rates

The standard interest rate which will be applied to the account balance when the introductory period expires is far more important than the terms of the introductory offer itself. For example, a card with a promotional period which offers a 0% APR introductory rate for three months, but has a standard interest rate of 20%, could be viewed as nothing more than a gimmick. Ideally, it is best to apply for a card with an introductory period of at least 6 to 12 months, which reverts to a standard rate no higher than 18% APR. In addition, cards with fixed interest rates are much more desirable than those with variable rates, which are subject to change frequently.

Look for High Balance Transfer and Cash Advance Rates

It is also imperative to inquire about what type of transactions the introductory rate will be applied to, as some cards only apply this rate to specific types of purchases, charging a much higher rate for balance transfers and cash advances. One of the reasons why “balance transfer cards” are becoming so popular is because their counterparts typically charge balance transfer percentage fees as high as 3 to 5% of the total balance transfer. Of course, if the balance transfer is being used to consolidate and repay debts while minimising interest payments, such a hefty balance transfer fee could somewhat defeat the purpose. Unfortunately, avoiding high cash advance rates is nearly impossible, as cards with longer introductory periods usually have cash advance rates higher than 20%, even during the promotional period.

Examine All Fees

Waived fees are another benefit provided with introductory offers, but most card companies fail to mention the fees that are not waived, while highlighting those that are. Cards with a large number of “hidden” fees, or fees that are more expensive than average, may be using these fees to counteract the money lost in interest payments during the introductory period. Thus, it is important to examine the card agreement for all types of fees, including foreign transaction fees, rewards programme fees, balance transfer fees, activity fees and fraud protection fees.

Organisation

The first step in recovering from a large amount of credit card debt is to become organised and learn how to prioritise debts. The balance of each card should be written down or noted within a piece of accounting software, as well as other information pertaining to each debt, such as the minimum amounts due, annual fees and the interest rates of each card. By organising credit card payments and reviewing specific details related to each debt cardholders can effectively prepare for the debt prioritization process.

Prioritisation

Studies have shown that the human mind judges progress not on the total amount of work that has been done, but on the individual tasks that have been accomplished. Thus, in order to maintain motivation and remove some of the stress of repaying debts, most advisors recommend repaying the smallest card balances first. However, there are other factors to consider as well, such as interest rate and penalties. An alternative technique would be to repay debts that are incurring the highest interest, as these are ultimately responsible for the greatest debt.

Consolidation

Perhaps the easiest way to manage multiple credit card debts is to consolidate them to a single credit card which carries a promotional introductory interest rate of 0% APR. Many of these cards also waive balance transfer fees, and are therefore a suitable debt consolidation venue. By consolidating existing credit card debts to a card that does not charge interest for a period of 3 to 12 months, cardholders can use this period of time to repay debts with no additional interest incurred, while also simplifying the debt recovery process by centralising repayments.

Seeking Assistance

If after heeding the aforementioned tips the debt recovery process is still moving slowly or is too difficult to deal with alone, it may be best to seek the assistance of a debt counsellor or some form of low-interest loan. However, it is important to note that payday loans and other loans that charge higher interest rates than those being charged on the credit card debt would not be beneficial. In general, any loan or funding source that carries a lower interest rate than that being charged on the existing credit card debt could be used to repay debts in a lump sum and expedite the debt recovery process.

What Does ‘Chip and PIN’ Mean?

As the name implies, chip and PIN credit cards contain a microchip which stores all of the credit account information, whereas conventional credit cards store this information on a magnetic strip. These state-of-the-art microchips are only compatible with chip compliant point-of-sale terminals, which are becoming increasingly popular at retail outlets, and are expected to become the payment method of the future. In addition, cardholders no longer have to sign a signature, as they are able to input a four digit personal identification number (PIN), similar to the authorisation process for debit cards.

The Security Benefits of Chip and PIN Credit Cards

Since chip and PIN credit cards authorise purchases using a four-digit PIN rather than a signature, thieves will longer be able to forge signatures to commit fraud. Instead, they would need to have access to the PIN, which only the cardholder should know. On the other hand, conventional credit cards contain the cardholder’s signature right on the back of the card, where a photocopy of it can easily be obtained by a dishonest cashier or waiter. It should be noted that the new chip and PIN technology will not have an effect on online purchases, so cardholders will still need to be conscious about the physical location of their card and the usage of their card details online at all times. In addition, cardholders should never store their PIN on paper or in their mobile phone, and should instead rely on memory. Even if the PIN is forgotten, a new one can be assigned at a local branch with photo identification.

The Convenience Benefits of Chip and PIN Credit Cards

Many experts believe that the new chip and PIN credit cards will greatly reduce checkout times by allowing cardholders to skip the signing process. While this may seem like a trivial added convenience, it could actually boost the productivity of checkout lines in busy retail stores, while also accumulatively saving cardholders countless hours annually. Microchip technology is also being used by card issuers in the form of “wave and pay” cards, which allow the cardholder to simply wave the card over terminal, rather than sliding it.

Restrictions against Unreasonable Harassment

Debt collectors are forbidden from using obscene, inappropriate, hateful or demeaning language when attempting to recover debts. They are also not allowed to frequently contact debtors during off hours, and these hours are defined based on the time zone of the debtor, not the debt collector. In other words, a debt collector is not allowed to contact the debtor in the middle of the night, or in the early hours of the morning, especially repetitively. When a debt collector frequently contacts a debtor without success, and continues to call back regardless of multiple requests, it could be considered harassment, and should be reported to authorities.

Restrictions against Slander and Intimidation

Debt collectors are also forbidden from communicating with any party other than the cardholder or one of their chosen professional assistants, such as a lawyer or debt consolidator. This means that debt collectors are not allowed to disclose information or attempt to recover a debt from a business partner, spouse, family member, friend, neighbour, co-worker or any individual younger than 18 years of age. In fact, debt collectors that refuse to adhere to this restriction are actually violating privacy laws and could be subject to prosecution or legal liability. In general, debt collectors are strictly forbidden from mentioning personal or business debts to anyone other than the debtor.

Restrictions against False Statements

It is illegal for a debt collector to make misleading statements about the amount of debt owed, or the status of the debt. For example, the debt collector cannot claim that a debtor owes more than they actually do, or claim that a court judgment requires that a debt to be paid if no court judgment has actually been made. Debt collectors cannot make misleading comments about the repercussions that the debtor will have to face if they fail to repay the debt, such as falsely stating that they will face criminal prosecution or jail time. Any statements that are not 100% factual cannot be used by a debt collector in an attempt to recover credit card debts.

Any cardholder who feels they have been the victim of unfair debt collection practices and harassment should immediately report the situation to the Australian Competition and Consumer Commission and/or Australian Securities and Investments Commission.

Understanding the Universal Default Policy

It is important to note that, under the universal default policy, credit card companies can now raise interest rates based on defaults and late payments made for completely unrelated credit cards. In other words, when a cardholder defaults on a payment for a single credit card, this can be counted as a universal default that can be used by all card issuers to apply a penalty interest rate to all of the cardholder’s accounts.

Tips for Avoiding Late Payments

Late payments are not only the most common type of fees charged on credit cards, resulting in millions of dollars in profit for credit card companies each year, they are also the number one cause of penalty interest rates. While many people assume that it would take multiple late payments to cause a penalty interest rate to be applied, it really only takes one. Unfortunately, most cardholders are under the impression that if a payment is issued before the due date it is automatically considered to be on time, when in reality the date that the payment is posted is all that matters. Unless automated online payments are being used, it can take days for a payment to be posted, so it is important to ensure that manual payments are issued at least a week before the due date.

Choose Credit Cards Wisely

The easiest way to avoid unfair interest rate penalties is to thoroughly examine the terms and conditions of each card before applying. While some cards offer fixed interest rates that are less likely to change throughout the cards lifetime, others offer variable interest rates, which are almost guaranteed to fluctuate on a continual basis. Of course, obtaining a credit card with a fixed interest rate requires a better credit score, and the approval process is typically more difficult. It is also important to review the terms and conditions of promotional offers, and to only use cards that charge one-time late fees rather than ongoing penalty interest rates when late payments or other defaults are made.

All other credit cards charge a typical foreign transaction fee of 3 to 3.5%, in addition to the total purchase amount made with the foreign currency. Other credit cards also charge a $4-$5 fee for ATM withdrawals conducted overseas, in addition to a 2 to 3% withdrawal fee. Luckily, the GE Finance 28 Degrees credit card will charge no surcharges on international transactions, and is therefore a perfect card for travellers, international business people and individuals who frequently shop online with websites that only accept foreign currencies.

It should be noted, however, that the 28° card comes with a hefty interest rates of 20.24%, which is an indicator that GE Finance is attempting to recuperate the lost profits from international transaction fees by earning a higher profit through exuberant interest charges. Nonetheless, the card is also one of the only rewards cards in Australia that does not carry an annual fee. In fact, the only other credit card that does not have an annual fee is the NAB Gold Visa debit, however this card is not a credit card, and it does carry a $10 monthly fee for account holders that are not make a minimum deposit of $5000 each month.

To reap the full benefits of the new 28° MasterCard experts recommend depositing funds into the account and utilising it in a similar fashion to a travel money card. By doing this the cardholder can avoid unnecessary debt that will inevitably result from the high interest rate charges. It should be noted, however, that there are ATM fees associated with third-party ATMs which are charged by ATM providers on every debit card and credit card.

If the card is used as a travel money card it offers a number of benefits over conventional travel money cards, as the cardholder would not have to lose 1% of their deposit, as is the case with conventional travel money cards. However, if the card is used as a credit card, it could be more beneficial to simply utilise a card that has a lower interest rate, as the savings earned from not having to pay international transaction fees will ultimately be outweighed by the exuberant interest charges.

Interest rates, annual fees, and other credit card details were taken from the most accurate data available at the time of writing (19 April 2011). All rates and fees are subject to change from the issuing bank, and their inclusion here in no way serves as a guarantee of rates. Please review rates and terms with the card issuer at the time of application.

Frequent flyer rewards credit cards

Frequent flyer rewards credit cards are in high demand all over the globe. These cards provide credit card users with a fast and easy way to build up points for their next vacation or holiday travel, doing so through a host of double and triple point incentives as well as point-building initiatives with partner (or sister) stores. Card users often have the opportunity to open a rewards credit card account that ties in to their preferred airline, enabling them to synchronise their new frequent flier mileage with their existing mileage in order to accrue points even faster. Certain rewards cards are only good with specified airlines, however, so users must be careful to pick a rewards card that will match them to a carrier who will meet their travel needs. Frequent flier rewards credit cards are also great for business travellers who are looking for ways to cut costs out of their travel budgets.

Cash back rewards credit cards

Cash back cards are one of the few rewards cards that can meet nearly any lifestyle. This is because the vast majority of credit card holders can always use more cash, and the great thing about these cards is that they do not put restrictions on how that cash is used. Unlike co-branded credit cards, which require that purchases are made with partnering stores and whose points may sometimes be cashed in only at those merchants, cash back rewards credit cards simply forward the money to the card user and allow them to employ the funds as they see fit. These cards can be used to build up one’s emergency funds, help plan for a future trip that can be coordinated in conjunction with another frequent flier rewards card in the user’s portfolio, or be employed for everyday purchases such as groceries, petrol purchases or other supplies.

Co-branded rewards credit cards

Some experts would claim that a co-branded credit card is not a true rewards credit card, while others would argue that, since it grants the user the ability to save points towards a prize redemption with the co-branded merchant, it qualifies as a rewards card, however specialised. Either way, a co-branded rewards credit card will often feature a partnership between a major credit card company and a name brand merchant. Whenever the card is used for purchases at said merchant, the user earns points toward a reward that can be redeemed with the merchant as well. Because the card is co-branded, occasionally the agreement between the card company and the merchant will allow the card user to redeem prizes with the card company as well on products and merchandise that the merchant might not have been able to provide otherwise. While there is no one co-branded card that is more popular than the others, this suite of card remains a huge hit with the credit card holding public. Some favourites include co-branded credit cards with one’s preferred petrol station, electronics store, clothier or online merchant.

Examining the Standard Rate

Unless the applicant is planning on damaging their credit score and abandoning the use of credit cards in the near future, the standard rate is always more important than the introductory rate. As a general rule of thumb, cards that offer longer introductory periods usually have a higher standard rate once the promotional offer has expired, with the only exception being for applicants with exceptional credit scores. This is because financial institutions have to compensate for the amount of profit lost during the promotional period. While being able to make purchases for 6 to 12 months without paying interest is certainly appealing, the amount of debt that can accumulate afterwards due to interest rates as high as 15 – 20% APR may negate these benefits if the cardholder is not prepared.

Higher Minimum Payments and Interest Rate Hikes

A card company also compensates for the lack of interest charged by forcing cardholders to pay a higher minimum amount for every billing cycle. Therefore, it is best to inquire about what percentage of the card balance will be required to be paid as the minimum amount due for each cycle. It is also important to keep the payment due date in mind, as late payments during the introductory period could allow the card company to withdraw the introductory rate without notice, and instantly apply a much higher rate. Thus, to take full advantage of promotional offers it is important to be conscious about card terms and requirements, as the smallest mistake could negate introductory benefits.

Using the Card after the Introductory Rate Expires

Of course, some cardholders simply use promotional offers to consolidate the debts of several credit cards to a single account and then repay them without interest. If this is the intention it may be best to use the card minimally after the introductory rate has expired, and some experts even recommend applying for another card with an introductory rate to continue making repayments while incurring as little debt as possible. It should be noted, however, that there is a limit as to how many times this can be done before the credit score of the cardholder is negatively affected.

High interest rates are okay if spending limits are capped

When a parent wants to choose a credit card for their teenager, the situation presents some unique opportunities, ones that would be shunned in the world of adult credit card usage. For starters, because teenagers are unlikely to be given a credit card replete with a credit limit in the thousands of dollars, parents have the option of choosing a reasonable credit card that can serve the purpose of educating their children about credit and the value of money whilst carrying a higher-than-average rate of interest. With a capped spending limit, it does not much matter what the interest rate will be since the teenager using the card will not have a chance to carry over a balance. That said, for this scheme to work parents must ensure that the credit limits on their teenagers’ cards are both reasonable and firm lest their children fall into trouble via excess spending.

Low spending limits promote accountability

While capping spending limits on a teenager’s credit card is a very wise idea, keeping the spending limits low is another one that will reap substantial dividends in their development and appreciation of money. By allowing them a very limited line of credit, somewhere in the neighbourhood of a few hundred dollars is best, teenagers will learn there is only so much money available to them and that they must treat their credit ceilings with respect. Furthermore, by encouraging their children to adhere to the 30-50 per cent rule of credit cards (spending no more than 30 to 50 per cent of their available credit limit at any one time) parents will be taking the extra step of aiding their teenagers’ credit scores and overall creditworthiness.

Prepaid credit cards offer maximum control for parents

One type of card that can really help parents teach their kids all that they want them to learn is the prepaid credit card. These cards give parents the ultimate in control when it comes to determining certain credit card variables. For instance, on a prepaid credit card, parents can lock in the spending limit by downloading the amount of money they wish to bequeath their kids. Unlike a standard purchase credit card where the teenager might receive a higher spending limit than what the parent is comfortable with, a prepaid card puts the power back in parents’ hands. Additionally, prepaid cards allow parents access to the accounts in order to see just what their teenagers are buying.

Choosing a credit card provides a great lesson in budgeting

Any credit card user who employs their cards regularly already understands just how imperative a budget is to their sense of financial well-being. Budgets help the user to see what expenses they have leaving their accounts as well as the income they are bringing in to it, all of which combine to help preview disposable income for the month and keep the user on top of their bills. While teenagers may not have the slew of bills that their parents do, they will likely have some costs that can nonetheless be budgeted, such as petrol purchases, savings for university, an emergency fund and an entertainment fund.

A business credit card may be the right choice if a business has many accounts payable

For any business with a lot of accounts payable at any one time, a small business credit card or standard business credit card may be just the thing. In the world of business, accounts payable do not tend to match up to accounts receivable, to the liking of most business owners. Indeed, the influx of remitted bills paid to a company usually tends to be sluggish compared to the amount of bills being paid by that same business. This has the unwanted effect of stretching a company’s finances and making it difficult to keep their operations running smoothly. This is where a business credit card can step in and relieve some of the strain of the day-to-day machinations. Not only will a business credit card assist the business owner in meeting their obligations with accounts payable for those times when their own customers are not being timely with their payments, but it will also give them a leg up on buying supplies, paying for deliveries or expensing travel until their income stream can equalise.

A business credit card may be the right choice for the extended grace period it provides

Similar to the above point, business credit cards may also provide the business owner with an extended grace period in which a little longer than a standard purchase credit card will be allowed to pay their credit card bill. Most standard purchase credit cards carry a 30-day repayment schedule, also known as a grace period, and, before the completion of the 30 days, the card user must remit payment to avoid late payment fees. Certain cards shrink this grace period all the way down to 20 days while others may increase it to 35. The majority of business cards, however, will afford business owners with a grace period of up to 45 days or more. The extra 15 days can mean the difference between paying off their credit card balance entirely or being forced to carry a balance, accruing interest as a result.

A business credit card may be the right choice if employees could benefit from company cards

As companies expand, the roles and responsibilities of employees often expand with it. This means that, whereas in the beginning of a business’ life, the owner and other senior management are making the bulk of the decisions on their own, later on they will eventually need to delegate some of those tasks to their staff. While not all tasks will require access to the company credit card account, some certainly will. By signing up for a business credit card, owners give their employees the power to do their jobs well and with minimal, if any, supervision. This helps the company run more efficiently and frees up the owner to focus on more important decisions.

Watch out for penalty rates

Card users who think that it is no big deal to carry over a balance from month to month might want to think again. Many credit card issuers have taken up the practice of levying penalty rates against users who do not pay balances in full. A penalty rate is simply an increase in the existing interest rate applied to the leftover balance. Since credit card issuers are well within their rights to modify the terms and conditions of a credit card at any time, with or without notice, penalty rates are a legitimate practice. However, they can adversely affect the user’s finances, especially when the user continues to operate under the belief that they have a right to carry their balances. To avoid this penalty, users should strive to pay off their balances in full or seek a different card that will not charge penalty rates.

Watch out for bounced cheque fees

Certain credit card issuers will assess a fee on a borrower who remits payment for their monthly credit card bill with a cheque, if the cheque later bounces. This can be part of a bigger penalty as many banks will also charge customers a fee for writing a cheque against insufficient funds. If this happens when writing a cheque to a credit card issuer, the card holder may end up facing a fee from both their bank as well as their issuer. Put together, these fees can overwhelm certain card holders who do not have the money to cover extra costs, as evidenced by their empty bank accounts. One way to avoid this is for consumers to read the fine print of their card holder agreement before signing up for a card to see whether or not they will be charged a bounced cheque fee.

Watch out for overdraw fees

While every credit card on the market charges a fee against customers who overdraw on their credit limits, users nevertheless retain the ability to limit how much of a fee they must pay. By reading over the terms and conditions assigned to their credit cards, they can know ahead of time the amount of money they will pay should they ever overdraw on their accounts. While a large majority of credit cards assess an overdraw fee in the neighbourhood of $35 or more, it is possible to bring this number down into the $20 range through a bit of searching and comparison shopping.

Watch out for monthly minimums

Monthly minimums are a staple of all contemporary credit cards, but they are a danger to the borrower’s financial well-being. This is because payment in the form of a monthly minimum would carry over a balance that would then be assessed with an interest rate. The interest charged to the account would significantly inflate the costs of anything purchased during that billing cycle. A loaf of bread purchased at $3 on the credit card suddenly becomes a $5 to $6 loaf. Dinner for two at a nice restaurant balloons from $30 to $45 or more. In essence, monthly minimums make everything more expensive for the user, diminishing the value of their credit limit, and putting them in greater debt than before. To avoid them, users should remit their payments in full each month.

Avoid late payment fees by paying the monthly minimum

Satisfying a credit card balance each month can reap dividends for the credit card user later on. Not only will it preserve their credit score, but it will pave the way for future lines of credit with beneficial terms and conditions. On top of that, credit card users who remit payment in full on a consistent basis are often rewarded by their credit card issuer with offers to increase their credit limit or lower their interest rates, as well as to take advantage of interest-free days wherein standard purchases will have no interest levied against them. But as much as the average credit card user would like to pay off their credit card balances in full each and every month, sometimes this is simply not possible. In order to avoid late payment fees during these months, it is best for credit card users to pay at least the monthly minimum. This way, they will remain in good standing with the card issuer and their credit report will be left untouched.

Avoid late payment fees by saving at the beginning of the billing cycle

One way to avoid having to pay the monthly minimum in the first place is by saving for one’s credit card bill at the beginning of each billing cycle. Most credit card users will have an average of what they will be required to pay and can use that to calculate their payment when they send it in at the end of the month. Also, responsible credit card users will already be budgeting their expenses, allowing them to know ahead of time the charges that will be put on their cards and how much they will owe at month’s end. Saving this money at the start of each new billing cycle will guarantee that the money is there when the bill comes due, allowing the borrower to avoid both late fees as well as having to carry over a balance into the next month.

Avoid late payment fees by arranging for direct debits on a bank account

An even simpler method for avoiding late payment fees is to set up direct debits on a cheque or saving account. The direct debit will be authorised by the credit card user and put in place to automatically deduct the balance of their credit card from their bank account by the statement due date. In this way, direct debits are a hassle-free way of ensuring that one’s credit card account is paid in full every month. The user does not need to worry about mailing a payment on time nor that they have remitted an insufficient amount. To take advantage of this option, however, users must budget their expenses thoroughly and make sure that their bank account has enough money each month to cover the direct debit.

With the NAB Qantas credit card you can maximise the way you earn points with the benefits of two cards linked to one account. You get a NAB Qantas American Express Card allowing you to earn maximum points, with the benefits from American Express and a NAB Qantas MasterCard for added worldwide acceptance and special offers on shows, events, experiences and movies from MasterCard applause.

Find out more about the NAB Qantas Credit Card.

Type of Credit Card
Frequent Flyer Credit Card, Balance Transfer Credit Card, Low Annual Fee Credit Card,

Interest rates
Want to earn triple Qantas frequent flyer points but don’t want to pay a high balance transfer rate? The NAB Qantas Credit Card offers a low balance transfer of 4.99% for the first 6 months with a 20.24% p.a. interest rate on purchases and cash advances.

Fees
The NAB Qantas card offers a low annual fee of $65 with no costs for additional cardholders.

Security
Secure online shopping with MasterCard SecureCode, Emergency travel assistance from MasterCard Global Service, 24 hours, 7 days, Online fraud protection from American Express, Purchase Protection Insurance, Lost card cover.

Additional Information
The NAB Qantas Card offers complimentary Qantas Frequent Flyer membership (required to earn points) with access to NAB Cellar Selections – your gateway to 400+ Australian wine producers, brought to you by Wine Selectors. Also enjoy special savings, upgrades and amenities at luxury hotels, spas and resorts; offers on car rentals, cruises, exhilarating experiences and more with entreTM offer by American Express and special offers on shows, events, experiences and movies from MasterCard applause.

Application Requirements
You must have a good credit rating, be aged 18 years or over and have a minimum income requirement set out by the National Australian Bank (NAB)

Interest rates, annual fees, and other credit card details were taken from the most accurate data available at the time of writing (07 April 2011). All rates and fees are subject to change from the issuing bank, and their inclusion here in no way serves as a guarantee of rates. Please review rates and terms with the card issuer at the time of application.

Only Use Checkout Pages That Are Encrypted

Before entering card details online for any transaction it is imperative that consumers ensure that the checkout page is transferring information via a secured connection. To do this, the shopper simply needs to check that the beginning of the web address/URL contains the letters HTTPS. The ‘S’ on the end of this string of letters stands for secured, and indicates that all data being transferred from the cardholder’s computer to the merchant is fully encrypted, and therefore cannot be intercepted. As an additional precaution many experts recommend using trusted third party payment processors, such as PayPal, rather than giving credit card information directly to the merchant.

Utilize Instant Fraud Notifications and Alerts

The majority of card issuers offer various security features within the online banking interface which allow the cardholder to set up instant alerts when suspicious activity occurs. The cardholder is able to define specific criteria to trigger these alerts, and is able to receive instant notifications via e-mail, phone call and even mobile text message. By utilizing instant fraud notifications it is possible to catch and dispute suspicious activity before it has a negative effect on the credit score or the account balance. In addition to using the standard notifications provided by the card issuer, credit monitoring services are also recommended.

Maintain Computer Security

One way cyber criminals access login credentials and credit card information is by installing malicious software on a victim’s computer. For example, a hacker may forcefully install a key logger onto the victim’s computer, which records every keystroke made by the cardholder. Obviously, this then gives the hacker access to the credit card number and any other information which is typed into even the most secure checkout page. Since this information is being fed directly from the user’s hard drive to a web server which is controlled by the hacker, there is no need for them to intercept data, and even the most advanced encryption technology become useless. Thus, the first step in protecting credit card transactions online is to maintain computer security by continuously running proven antivirus software and conducting routine scans.

Credit card trap #1: Cash advances

Cash advances are a feature of modern credit cards that has the potential to greatly benefit the user if used appropriately or, alternatively, to greatly damage the card holder’s credit score if managed irresponsibly. With a cash advance, credit card users have the option to use their cards much like a debit card by swiping it through an ATM or cash machine and receiving a cash withdrawal. Credit card issuers continue to install this feature on their cards as a means of supplying users with an alternate payment method in the event that credit is not accepted by a particular merchant or if cash is needed for an emergency. The downside to cash advances, however, is that the credit card companies will charge the user a daily rate of interest until the cash is repaid. This is in addition to the regular interest rate that they will be charging on any card balance that may be outstanding. Not only that, but card issuers will flag the user’s account with a footnote indicating that they employed the cash advance feature, something that will affect their credit score unfavourably.

Credit card trap #2: Paying off medical bills

It can be tempting for credit card users to want to resolve all of their recent medical bills by employing their credit cards to absorb the costs. Indeed, if the bills are not very high, then the user may very well be able to charge them to their credit card and be able to repay them easily. However, if the medical costs incurred were substantial, then the card users should seriously reconsider paying them off with their credit cards. This is because the user will be hit with a much higher rate of interest on their bills. This can keep the user in debt and delay their overall repayment efforts quite considerably. Rather, the user should work out a repayment plan with their medical provider, which allows them to make comfortable monthly payments instead of being required to pay them off all at once.

Credit card trap #3: Paying late

Paying off a credit card bill every month is perhaps the trickiest of acts for credit card users. Some users seek to make only the minimum payment each month but soon find that such behaviour lands them in debt and maxes out their credit limits. Then there are those credit card holders who, feeling inundated with their credit card bills and the mounting debt that they have accrued on their accounts, simply resign themselves to paying off their bills past the statement due dates. It can be tempting for such borrowers to believe that next month they will have enough money to pay off a significant portion of their credit card balance, and that one or two missed payments every now and then is not a big deal. The truth is, however, that each missed payment negatively affects the user’s credit score, as well as their ability to secure future lines of credit and their current credit limit.

Joint Credit Application Process

Approval for a joint credit account depends on the average credit score of both parties, and is not based on the accumulative or combined credit score of the applicants. Thus, it is highly unlikely for two individuals with bad credit to be approved for a joint credit account. Likewise, if one partner has exceptional credit and the other partner has poor credit then the financial institution will provide an account credit limit and interest rate that would be offered to an individual with average credit. If both applicants have exceptional credit then a high credit limit and low interest rates can be obtained rather easily.

Joint Credit History

With a joint credit account, the account history is reflected on both of the borrower’s credit reports, so it is therefore possible for one account user to negatively affect the credit of their partner. If payments are defaulted on, the card issuer will attempt to collect the debt from both account holders. Nonetheless, after many divorces, one of the legal issues is the debate regarding who is responsible for repaying credit card debts. Regardless of the actions that caused the payment to be defaulted on, or the individual party responsible for the majority of the purchases, the ruling is almost always the same; both parties will be responsible for repaying an equal amount of the debt due. It is important to keep this in mind when partnering with another person to obtain a joint credit account, as it would not be wise to do so with someone who is financially unreliable.

Joint Credit Accounts Versus Authorized Users

One alternative to opening a joint credit account is to allow a partner to access funds within a credit account but signing them up as an authorized user. Authorized users can log into the online banking interface, receive their own card, and can be limited by certain restrictions set by the primary account holder. Ultimately, assigning authorized users is a much safer short-term solution than opening a joint credit account, as it is possible to remove and assign new authorized users at any time without closing the account.

Only Use Credit Cards for Essential Purchases

While credit cards provide the ongoing temptation of being able to conveniently make purchases with a single swipe, it is important to practice conservative spending habits and only use credit cards for essential purchases. By doing this card holders can limit the amount of debt and minimize the chances of being unable to repay such debt in the event of unemployment or other income-related problems. Not only does conservative spending prevent debt, it also proactively builds the credit score, so that it is able to withstand more damage without going below the “poor” bracket of <600.

Don’t Use Too Many Cards

While it can be beneficial to have multiple credit cards because of the different rewards programs offered with each card, it can also be fairly risky, as multiple card balances are difficult to juggle and repay without reliable income. Having multiple credit cards also provides the additional temptation of having a larger overall credit limit, which if abused, can lead to large amounts of debt rather quickly. Individuals who have lost their job or are unable to pay other bills may succumb to the temptation of using several credit lines to pay outstanding expenses. Not only is this counterproductive because it creates more debt, it is perhaps the quickest way to significantly damage the credit score.

Place Debt Repayments at the Highest Priority

Although it may seem counterintuitive to repay credit card debts and leave other monthly expenses unpaid, it would be wiser for a cardholder without any form of income to repay credit card debt before paying unnecessary bills like cable, Internet, monthly magazine subscriptions or any other unnecessary expenses. While this may result in a temporary reduction in comfort and enjoyment, it also ensures the security of the credit score, which will ultimately lead to financial stability in the future.

The annual percentage rate (APR) must be divided by the number of billing periods within a year (usually one for every month) to determine the periodic rate, which actually dictates the amount of interest charged each month. Thus, a 12% APR would have a periodic rate of 1%, (12% APR divided by 12 billing periods equals 1% periodic rate). The periodic rate is multiplied by the outstanding card balance to calculate the monthly periodic rate. Although this aspect of APR calculation is the same for all credit card companies, card issuers use different methods to determine how much of the outstanding balance will incur the monthly periodic interest.

One of the most appealing APR calculation methods is the ‘adjusted balance’ technique, which causes repayments made during the bill cycle to be posted immediately and applied to the account balance, while also disregarding additional purchases made during the same billing cycle. For example, a cardholder with an outstanding balance of $1000, who makes a repayment of $100, and then makes a purchase of $100 during the same cycle, would only be charged the monthly periodic rate on a $900 balance.

With the ‘average daily balance’ APR calculation method, card issuers add up the total monthly balance and then divide by the number of days within the billing cycle to obtain the average daily balance. Any repayments made are then subtracted from these balances, while purchases are added. Some card issuers use the average daily balance on a two cycle basis, performing the calculation technique two billing periods at a time.

Other card issuers use the ‘previous balance’ APR calculation method, which determines the periodic rate based on the balance that is posted at the beginning of each billing cycle. Repayments and purchases which take place during the current billing cycle will not affect the periodic rate when this calculation method is used.

The opposite of the ‘previous balance’ technique is the ‘ending balance’ method, in which the final balance on the last day of the billing cycle is used to calculate the periodic rate. Unfortunately, this APR calculation method can be confusing for cardholders, as different credit card companies have different billing cycle end dates.

But, rather than be put out to pasture, some credit card holders choose to cut their losses by deleting their credit card accounts altogether. Instead of simply severing ties with the card issuer, however, card holders should adhere to the following preparatory steps when closing any credit card account.

Before closing a credit card account, read the fine print

The fine print is crucial in a situation where the card holder wants to close their credit card account, because it can specify whether the user will be hit with a fee for doing so. This is especially appropriate for card accounts which have been open for only a year or two, as many issuers will charge an early closure fee. If such a fee will be assessed, the user must factor the cost into their budgets as well as their last credit card bill. In the event that the card user opts to keep their card account open but allow it to go dormant, the issuer may charge an inactivity fee for successive billing cycles in which the card is not employed. Certain issuers will even exact an inactivity fee if the card fails to reach a minimum balance several months in a row.

Before closing a credit card account, collect all remaining rewards

If a credit account was packaged with a rewards points programme, and the card user was actively building up their points totals for an eventual prize redemption, then closing the account prematurely before the points are redeemed will effectively result in lost value for the card holder. After all, they employed their credit card on qualifying purchases with the goal in mind of one day receiving a big payout, whether in the form of a free airline flight, cash back or entertainment tickets. Users should keep their accounts afloat for a little while longer, in order to fully take advantage of it. However, if many points remain until they can be put to good use, then the wait time may be outweighed by the convenience of simply cancelling the card account. Each user will need to determine which option is best for them.

Before closing a credit card account, consider a balance transfer credit card

If a credit card that a user has targeted for termination is carrying an outstanding balance, it may do the user well to transfer their debt to a balance transfer credit card. A balance transfer credit card will usually afford the user a very low interest rate, sometimes even eliminating the interest completely, for a promotional term of usually no more than 12 months. During this time, the user can pay down their balance without worrying about accruing interest and losing more of their money. This scenario plays out best for those card users who wish to employ another card other than the one that they are currently using. If a credit card user does not wish to maintain a relationship with any credit card whatsoever, then a balance transfer credit card should be avoided.

Pre-approved credit card offers usually come with a trade-off
Cards with unbeatable terms and benefits are almost exclusively reserved for prestige cards with spending limits into the hundreds of thousands of dollars. This is because people with the disposable income to afford such cards will spend much, much more than their middle-class counterparts. Such increased spending translates into a dramatic increase in credit network fees the company collects, which will make up for the looser terms. However, even these cards come with a trade-off, which is a very high annual fee. Again, this owes to the higher income of the prestige user. Pre-approved credit card offers, while advertised with similarly amazing terms, will never be approved with the advertised terms in place. Instead, the interest rate might be higher, the spending limit may be lower or the annual fee may be greater.

Pre-approved credit card offers do not mean that advertised terms have been guaranteed
The disparities between what has been marketed on a pre-approved credit card offer and the reality of what the user receives once the application has been processed does not end at a single trade-off. Rather, most credit card applicants who respond to pre-approved mailers find that the whole of their terms and conditions are drastically different than what they believed they might get. Not only will their credit limit be much lower than expected, but their interest rates will also be much higher. Furthermore, their annual fee will be higher than expected and they may be asked to pay a monthly processing fee as well.

Pre-approved credit card offers will still register as an inquiry on a credit report
The big downside to the pre-approved credit card enterprise is the way it can affect the applicant’s credit report. By registering an inquiry made on the report, the individual will carry around with them an additional mark, of which future lenders will take note. If the consumer does not like the terms and conditions they received after taking advantage of the pre-approved offer, they have the option of closing the account, but that will only result in a negative mark on their score. At that point, the user is better off keeping the account open and waiting a period of a year or two before attempting to better their terms to make the card more palatable.

Businesses have the right to expect other businesses to be on their best behaviour
The rights of businesses, with respect to how other businesses treat them, are very similar to how businesses are to govern interactions with their customers. For instance, businesses are expected to honour all contracts between companies. This includes any warranties or protection guarantees that a company may make on its product during shipping or delivery. Furthermore, all contracts must clearly state the details of the arrangement between the respective businesses, ruling out any ambiguous or misleading language, and they may not exclude important pertinent information. Business owners have the right to expect that other owners will process their payments at the set contract amount, applying discounts when agreed upon. One business owner may not make false or deceptive claims about their products or services to other business owners.

Businesses have the right to expect other businesses will deal in quality
The Australian Consumer Law also forbids one business owner from providing another business owner with damaged products. Any products which are exchanged must also be free of defect and safe to own, operate or resell. The law stipulates that the good or goods must live up to the claims and guarantees made by the seller and must match the description and appearance as advertised. Despite this, warranties may still be offered to the business owner who is buying the goods or services to further protect their purchases.

Businesses have the right to expect other businesses to treat their customers fairly
It is in a business owner’s best interests to deal only with other businesses that treat their own customers fairly. Not only will the business owner be rewarding a fellow owner for proper customer service, but they will also avoid the stigma and association that can befall them for transacting with a less than ethical company. Of course, the same holds for any business owner. By conducting dishonest or sub-par business with their customers, they run the risk of other companies dissolving their business relationship in order to avoid being tied together with them. This could result in a loss of customers, reduced cash flow and possible prosecution, if links can be made between the two companies. Therefore, it is best for companies to abide by the Australian Consumer Law with their own patrons while affiliating themselves exclusively with other companies that do the same.

Credit cards are not needed to build good credit
At first glance, the first step can seem self-contradictory: a credit card is not needed to establish or build good credit. It is true that for the past few decades credit cards have become the primary vehicle through which the consumer public has chosen to build credit. Credit cards are also the financial tools that are advertised by banks and lenders more than any other resource. However, credit cards are not needed at all. To this end, individuals should not take out a card if they do not need one. A host of other credit-building outlets are available, including personal loans, consolidation loans, home loans and bank accounts. Taking out a credit card when one is not needed opens up the door for the user to spend beyond their means and very quickly tarnish their credit score.

Do not settle for just any credit card
If an individual does want to open a credit card account, however, then the first rule by which they must abide is to not settle for just any offer that comes their way. Too often, people who have never previously owned a card get so excited at the prospect of a lender urging them to fill out a credit card application that they show little reserve. With guarantees about being “pre-approved” and claims of low interest rates and high credit limits, lenders make their offers sound too good to be true. As a result, the individual applies for the card only to find that they are straddled with a high annual fee, a high rate of interest, a low credit limit and a monthly service fee which takes even more of their money. It may be tedious work, but to avoid getting taken for a ride, consumers should always research their credit card options extensively before making a decision. This way they can be assured they are receiving terms that will not push them closer to debt.

Do not charge more than can be paid off on the next bill
Credit card issuers are not always very effective at communicating the need for responsible card handling, as they tend to highlight credit card perks that do not reflect the reality of what the card issuers themselves nor other creditors look for in a sound user. They will encourage card holders to use their cards for that dream vacation or to buy material goods until their heart is content. The truth, however, contradicts these adverts in that issuers do not look favourably upon card customers who do not pay off their bill in its entirety every month. While they are making money on the interest, they will flag the account for carrying a balance, especially if that balance exceeds 30 to 50 per cent of their total credit limit. For this reason, smart users should not fall for the high-sounding appeal of cards by refusing to charge more than they can comfortably pay off the very next month.

Consumers can keep their credit in shape by limiting their number of credit cards
As the old saying goes; in for a penny, in for a pound. For many credit card users, this adage proves true and results in a collection of credit cards from various issuers which effectively clog up the card holder’s cash flow. From there, the user’s ability to pay off any one card is nearly eliminated, and instead of drawing down steadily to zero balances on all of their cards, they instead are forced to pay the minimum or close to it on each one. Such behaviour results in the borrower watching their balances grow every month as their transactions continue and interest accrues. By deciding from the outset that they will stick to owning one or two cards, then users can avoid the trap of paying off multiple cards while remaining in overwhelming debt.

Consumers can keep their credit in shape by refusing offers to increase credit
If consumers are handling their credit well, they will receive a plethora of offers to add features to their accounts, decrease their interest rates, or, perhaps most popular of all, increase their credit limit. An increase in a credit limit is not necessarily a bad thing, and many credit card users will be able to take a measure of satisfaction in the fact that they have even more purchasing power all the while making sure that they respect it and do not get tripped up by excessive spending. For other card users, however, an augmented credit limit is a temptation to fall into debt and all the more reason why such offers should be spurned. Each card user will need to determine what is best for their own situation and gauge an offer according to what they feel they can handle. All users must keep in mind, however, that it is significantly easier to turn down an offer and not have as much credit to spend than it is to pay off mounting credit card bills and repair a bad credit score.

Consumers can keep their credit in shape by decreasing their credit limits
The reverse of the above point may also apply; namely that credit card users should seriously consider whether they are better off with a decreased credit limit. The notion might seem counter-intuitive to the vast majority of credit card holders, but the truth is that if a user is struggling with impulse purchases and running up their monthly credit card bills with needless spending, requesting a limit reduction may be the smartest financial move they make. Decreasing one’s limit represents a move towards greater accountability when it comes to one’s spending. If done before the user falls into debt, they can keep their credit score in top shape while learning better fiscal discipline.

Users should contact their biller to dispute the charge
This step is crucial because it will provide the foundation for possibly getting one’s money returned to them later on in the process. Credit card issuers will ask a card user if they contacted the biller with their concerns and they will also want to know the biller’s response. This is assuming that the biller was unco-operative or otherwise insistent that the debit was authorised. The issuer will want to know that the card user gave the biller a chance to clear up the mistake. If the user did not do this, then the issuer will be forced to do so and it could delay the refund. These early encounters with the biller will help inform the issuer’s decision on whether or not to issue a chargeback. More than that, however, it will also signal to the issuer whether the user is serious about settling the issue or if they are trying to get money returned for an illegitimate charge.

Users should contact their card issuer immediately after contacting the biller
After first contacting the biller about the incorrect charge, the next step is to notify the card issuer and apprise them of the situation. If the biller was cooperative, located the reason for the unauthorised debit, and agreed to a refund, then there is a chance that the user may not need to contact their issuer. However, if the unauthorised debit resulted in a credit card overdraw and associated penalties, then the user will definitely want to talk with the issuer and let them know that it was a mistake on the biller’s end. From there, they will need to petition the issuer to waive the fees as well as the report of an overdrawn account before it reaches the user’s credit score. In order to ensure that everything is rectified on the user’s account, the issuer may need to contact the biller themselves to verify that what the user says is true. The majority of issuers will then clean the account of the overdraw and the resultant fees.

Users should initiate chargeback proceedings with their issuer
It is vital that throughout the entire process that the credit card user makes a record of all the contact they have with both the biller and their credit card issuer. This information can go a long way to verifying the card user’s claims that the direct debit was unauthorised and thus warrants a chargeback. Providing that the user has sufficient information to give to their creditor, they can formally request a chargeback in the event that the biller refuses to refund the charge or is taking an inordinate amount of time in doing so. As long as the user is telling the truth and has maintained the paperwork to prove it, there chances of getting their money back are usually very good.

Business credit cards are not, however, without their pitfalls. These are usually the features which are glossed over in advertisements or personal mailers, in order to persuade small business owners to a particular business credit card. Below are some of the things that small business owners should watch out for in a business credit card.

Business credit cards lack some of the protections of personal cards
Surprisingly, many business credit cards do not carry the same card holder protections that a personal credit card could afford them. For instance, a business credit card may be subject to retroactive rate increases which are applied to past purchases. The reason for retroactive increases often stems from sending in a payment to a vendor beyond their bill due date, although credit card companies reserve the right to increase rates for whatever reason they deem appropriate. Business credit card holders may also be assessed a late fee if they send in a payment for a weekend due date. They may also have to deal with time-sensitive due dates, wherein repayment is owed by a certain time on the required date. Business owners should always compare business credit cards in order to avoid some of these conditions.

The owner who signs for business credit cards is responsible for all charges
Many issuers of business credit cards tout the convenience of giving employees a means to make necessary purchases for the company, in effect making it a streamlining tool that will help the business run more smoothly. There is a certain prestige that is marketed with business credit cards as well. By having one’s employees carry around a business credit card, the appearance can be that the company is doing quite well and that it is healthy and growing. The truth, however, is that the business owner remains responsible for all the authorised users on the credit card account. The business may actually be doing very well and the abundance of employees tapping into the company’s main account via company cards can reflect a growth in profit and spending. If, however, a rogue employee makes personal purchases or runs up the limit on their card, the owner will be responsible to repay the entire amount as well as take the hit to their personal credit score.

Business credit cards are often assigned very high rates of interest
One of the trade-offs for carrying a business credit card with a higher spending limit and extended grace period can be the exorbitantly high interest rate applied to carry-over balances. If a small business owner does not review their options thoroughly and make their selection wisely, it is possible for them to end up with an interest rate as high as 39 per cent. Business credit cards will usually always have higher interest rates, but it is possible for business owners to limit their rates by shopping around first.

Keep a record of all direct debits and associated accounts
When a credit card holder has arranged for direct debits for their merchant accounts, there is a very good chance that they will need to cancel those accounts at some distant point in the future. This can stem from the credit card holder’s needs, such as moving house and no longer needing a utility account, or wishing to close a charge account with a retailer with whom they no longer shop. Regardless of the motivation, when the time comes to close these accounts the credit card holder will do well to have a list of their direct debits and the accounts associated with them. This way, they can refer to their records and close any and all debits at the same time that they close the account. Many credit card holders assume that their direct debits are automatically cancelled if they end their accounts, and while this may be true for some merchants, it does not apply to all of them. As a result, a credit card holder may still be charged a direct debit even after their account is closed since a given merchant’s system will still have the direct debit scheduled independent of the account status.

Always leave a cushion for large direct debits
It is advisable for a credit card holder to always budget their expenses down to the last cent, including account fees and assorted peripheral costs. Included in this list should be one’s direct debits as well as fees for the direct debiting service, if applicable. This is the most sure-fire way of keeping one’s account out of overdraw and from the extra fees that would be generated from it. It is always sensible to leave some extra money in one’s credit card account in order to cushion the larger direct debits. It can be easy to overlook an expense here or there which leaves a credit card holder with a smaller balance than they had initially budgeted out. In such instances, ensuring that a cushion is in place can mean the difference between one’s account being in arrears or staying in the black.

Always double check that the correct amount has been debited
Many credit card holders feel that a direct debit is an excuse for forgetting about the charge beyond simply budgeting for it. Attempts at supervising direct debits, therefore, can be seen as counter to the very reason why they were instituted.

However, to make sure that money is not being lost during a transaction, credit card account holders should always double check their monthly statements. This way, they can see whether or not the correct amount was debited from their account. If not, they can petition the merchant for a refund. If the refund is not quickly granted or the merchant outright refuses, then the credit card holder can formally lodge a complaint with their card issuer and initiate a credit card chargeback. By simply “setting and forgetting” the direct debit, users risk more money being taken from their account than is warranted, something that they will not be aware of without a budget and regular account maintenance.

There can be times, however, when a credit card holder simply needs to cut loose from a direct debit. Sometimes they need to rework the days each month in which money is deducted from their account, or they want to end their relationship with a particular merchant. Below is a list of steps that card holders should follow to make sure that their debits are cancelled successfully.

The card holder must contact the biller first
Depending on who is dispensing the advice, some credit card experts will inform the card holder that they can notify their lender to cancel the direct debit first and the debit will no longer be authorised to be charged onto the account. Some even say that the biller never needs to be notified. While this can be true in certain cases, it is a dangerous practice to employ. Not only could the biller provide evidence that the debit is authorised but they could also assess extra fees for a missed debit once it is allowed to go through. Furthermore, the card holder’s relationship with the merchant may very well be strained because they were not contacted about the debit cancellation at all. Card holders would also be well-advised to get any cancellation arrangement in writing.

The card holder’s lender must be informed as well
Many credit card holders may think that once they have contacted their biller and the debit has been cancelled directly with them there is no further need to notify their lender. This, too, can be a risky financial move. By not informing one’s lender that a direct debit has been cancelled, card holders leave the door open for an accidental debit to be charged to their account. By letting their lender know that such debits have been eliminated, however, they can spot when a debit request is being made by the biller and deny it accordingly.

There should be a grace period of up to 4 weeks
Direct debits take a few weeks to process. The standard waiting period is between one to three pay periods. The same holds true for cancelling a direct debit. Card holders who want to rid their accounts of debits should plan to initiate the formal cancellation request at least four weeks before they wish them to stop. Waiting less than four weeks may mean that an extra debit is posted to their credit card account.

The card holder should always double check that the direct debit was cancelled
In the same vein as the grace period, card users should continue to balance their budgets and track their expenses for the three to four weeks that it will take to remove the direct debit. Continuing to budget and track in this way will ensure that they notice whether an extra debit has gone through when it should have been cancelled. It is also a good idea to check for the month after the grace period in the event that the cancellation request was never completely processed.

• The credit card holder’s children. Because they have very little, if any, experience handling money in the form of credit, the children of credit card holders do not make ideal co-signing candidates. Even if parents believe that their teenager or ‘young adult’ child is responsible beyond their years, they are still unproven in the realm of money management and remain an exceptionally high risk for the credit card holder. Being set free with what seems to them to be an unlimited supply of cash can quickly escalate and spell trouble for their parents, whose credit scores will be affected and who are ultimately responsible for making sure that the credit card bill is paid each month. For these reasons, it is better for the parent or parents to forgo co-signing on a credit card with their children. Instead, they should look into the possibility of giving them a prepaid credit or debit card. Prepaid cards can have smaller limits, limiting potential damage, and, because they are not tied to the parent’s account, they will not affect the parent’s credit score.
• Unmarried significant others. Two individuals who are in a romantic relationship, who move into the same residence, or who simply want to live more of their lives together than apart, may view a co-signed credit card as a way to further their relationship. The thought of sharing something can provide a boost to their emotional bond and is often taken as a good sign of their future with one another. However, co-signing on a credit card is one of the last things that these people should do. While it may be a great way to prove their love to and trust of the other person, there is very little legal recourse available to them should the relationship turn sour and they are forced to close their account. Because they are co-signers, they are both responsible for paying off the balance no matter the current state of their relationship. Plus, it can be too easy for a bitter ex-lover to charge up the card in an effort to get back at the other person.
• Anyone with a history of bad credit. Promises and declarations that they have cleaned up their act aside, the prospect of co-signing on a credit card with someone who has bad credit and/or a reputation for misusing money is never a good one. While the person may have indeed changes their money management ways for the better, the other co-signer can never truly be sure if the person with the bad credit has truly changed. The risk they would be taking by co-signing with such an individual is simply too great to proceed. Declining an offer to co-sign may hurt the other person’s feelings and may even terminate the friendship, but it is better to lose a friend than to let them wreck one’s credit score.

• Limits exposure of card balance vs. account balance. With a prepaid credit card, consumers can download whatever set amount of money onto the card that they would like to employ. This is a difference between the funds which are accessible by the card compares with the amount of money that remains on the credit card account. Therefore, when a credit card user is travelling overseas with a prepaid credit card, they are not carrying the full balance of their account but rather a limited amount of funds, which lowers their risk and their potential for financial loss should they misplace their prepaid credit card or have it stolen. Assuming that the credit card holder does not notify their bank in enough time to stop the thieves from making a purchase on the prepaid card, the criminals will not be able to access the account at the very least, only the funds on the card. In this way, the credit card account holder limits the exposure of their credit card account and protects what they are not using.
• Free emergency replacement cards. A useful feature of prepaid credit cards is the ability of banks to issue replacement cards in the event of an emergency. Waiting on a replacement for a standard purchase credit card can often take up to a week’s worth of time, and the longer the credit card holder goes without a means of getting around a foreign country, the greater the hardships they may experience. But the majority of prepaid credit cards carry an official credit card company logo, such as Visa, MasterCard or American Express. Because these card companies have officers all over the world, they are able to quickly ship a replacement card to the card holder at no extra cost. From there, the credit card holder can get on with their vacation knowing that their money is safe and their risk is minimised.
• Alternative to writing travellers cheques. Travellers cheques are also great tools which are readily available to any credit card holder who wishes to forgo the use of cash while they travel in a foreign country. By requiring a form of identification with each cheque, they come with a good barrier against fraud and theft. However, many travellers may find writing cheques for every expense to be tedious and unnecessary. For these individuals, the prepaid credit card can be a worthy stand-in. Prepaid credit cards come equipped with the standard levels of security that most credit cards employ, making them safer against fraud than most alternative forms of payment. They can also provide extra convenience by allowing credit card users to simply swipe their card wherever they go rather than carry the travellers cheques and pen throughout the day. In this way, they can also save time for each merchant that they patronise, and help them generally enjoy their trip just a little bit more than they would otherwise.
]]> http://creditcardrewards.com.au/why-a-prepaid-credit-card/feed/ 0 http://creditcardrewards.com.au/articles/steps-to-begin-a-do-it-yourself-credit-repair/ http://creditcardrewards.com.au/articles/steps-to-begin-a-do-it-yourself-credit-repair/#comments Fri, 04 Mar 2011 03:14:41 +0000 Tim Smith http://creditcardrewards.com.au/?p=4141 Most credit card users will know when they need credit repair. Perhaps, for example, their recent credit card application or other line of credit was denied, or perhaps the terms on their new credit includes higher interest or a lower loan amount. Knowing that a credit repair is needed can be as simple as checking one’s credit score and discovering that a repair is needed. No matter how one learns of their credit plight, there is a set process by which credit card users can attempt to boost their credit scores. Below is a list of steps that borrowers can take to begin a do-it-yourself credit repair.
• Perform a credit report check. A credit report check is vital for any credit card holder seeking to repair their credit by themselves. A copy of their recent credit report will arm credit card users with the knowledge necessary to make informed decisions on how to tackle their credit repair. Without a current credit report, they are at the mercy of the more powerful, more informed credit bureaus and lenders.
• Know what errors to look for. The primary factor that credit card users who are performing a do-it-yourself credit repair need to look for is a closed account which has been paid off. Unfortunately, it is too easy for lenders to indicate to the credit reporting agencies that a given client’s account was charged off or closed at the lender’s initiative. This is usually nothing more than a mistake which results from the lender merely trying to report that the account is no longer active, but somewhere in the reporting process it is marked incorrectly on the borrower’s credit history. Other false information can also show up on a credit report, such as late payments and debt collections. Borrowers must mark all such information that they believe is erroneous.
• Gather up every bit of proof. After users have footnoted which marks on their credit report they believe to be false, they need to gather proof that will counter the poor marks and back up their version of events. Proof that an account never received a late payment may include copies of every bill or statement that a borrower received for the account in question. Proof that an account was paid in full at the time it was closed should include a copy of the final bill, a receipt or follow-up bill, indicating that the current balance was zero, followed up by proof that the account was then closed shortly thereafter, as opposed to remaining open for a time and incurring another balance. Credit card users who are serious about repairing their credit must be thorough in the collection of evidence to support their claims or else it will merely be their word against the lenders, which will understandably, get them nowhere.
• Call, write, and mail. Once the proof has been assembled, the user should make a call to the credit reporting bureaus indicating that they have amassed the requisite proof to absolve them of the aforementioned inconsistencies. Afterwards, they should type up a detailed letter reminding the bureau contact of the date when they made their call, as well as the facts surrounding each item which is in dispute. Then, they need to mail the letter and the proof to the credit bureau, who will then take all of their information into account before deciding whether or not the item stays on the credit report.
]]> http://creditcardrewards.com.au/articles/steps-to-begin-a-do-it-yourself-credit-repair/feed/ 0 http://creditcardrewards.com.au/articles/how-to-manage-a-credit-card-rewards-programme/ http://creditcardrewards.com.au/articles/how-to-manage-a-credit-card-rewards-programme/#comments Thu, 03 Mar 2011 11:35:21 +0000 Tim Smith http://creditcardrewards.com.au/?p=4130 The lure of a credit card which comes with a fancy rewards points programme can be extremely strong. After all, the promise of a return on one’s annual fee as well as making one’s money work for them can give the whole rewards programme enterprise a feeling of entitlement and give extra meaning to each purchase. However, credit card rewards programmes are not suitable for everyone, and even those who would benefit from a rewards programme often do not know how best to handle it. Below is a list of ways that credit card users can manage their credit card rewards programmes.

Do not overspend for points.
The thought of using a rewards credit card on purchases that one would make on any given day, and earning points because of it, seems like a sensible proposition. If a credit card user is going to charge certain purchases to their credit card anyway, why not make it worth more? While this is both a reasonable way of handling a rewards programme and a sound money management plan, it is unfortunately the case that many credit card users start out with such a mentality but eventually revert to overspending. When a rewards credit card holder overspends, they do so in the majority of cases because they want to compile rewards points faster with the goal of redeeming the points and taking possession of whatever reward awaits them. The available balance quickly shrinks, however, while the user’s debt rises. To avoid this, card holders must remain accountable to their normal patterns of spending rather than excessively charging to their credit cards just to earn rewards points.

Get a program that fits.
Cash back rewards programmes are one of the most popular due to the fact that everyone likes cash. This is one programme that will be appropriate to with every credit card holder. However, there are some rewards programmes that specialise in certain rewards, while offering very insubstantial prizes. Frequent flyer rewards are another popular programme, as are travel-related rewards programmes, co-branded credit cards with programmes that award points for shopping at the partner store and petrol rewards programmes. Amidst the varied programmes, it can be easy for a consumer to become stuck, fixating on a credit card that is advertised with a rewards system. The consumer may never look deeply into the rewards being offered, however, and once they have the card they may learn that their rewards do not really match what they are after. For instance, someone who travels on business by car would benefit most from a petrol rewards programme, most likely in the form of a co-branded card with a national petrol chain. They would get considerably less use out of a frequent flyer rewards programme, or one that emphasises purchases at retailers.

Make sure points do not expire.
An unfortunate fact of the rewards programme culture is that some systems allow their rewards points to expire. This can mean that a consumer uses their credit card throughout the year to make purchases but finds that when the time has come to redeem them, most of their points have expired. To get the most out of a credit card rewards programme, consumers should read the fine print and see if their credit card will allow their points to be kept indefinitely. If not, and the user does not have plans to redeem their points any time soon, then they are better off holding out for a rewards programme that will let them keep their points for as long as they need.

]]> http://creditcardrewards.com.au/articles/how-to-manage-a-credit-card-rewards-programme/feed/ 0 http://creditcardrewards.com.au/articles/credit-repair-scams/ http://creditcardrewards.com.au/articles/credit-repair-scams/#comments Tue, 01 Mar 2011 00:30:07 +0000 Tim Smith http://creditcardrewards.com.au/?p=4078 Credit repair scams can trip up credit card users who are otherwise discerning and conscientious consumers. The reason that credit repair scams continue to thrive is that they often target the most desperate of consumers; individuals who have fair or poor credit score and want very much to escape the limiting financial potential it brings. Avoiding credit repair scams is not as difficult as it seems, however, and requires adherence to a few simple guidelines.

A reputable credit repair agency will not ask for money upfront.
Any credit repair agency worth its title will not demand an upfront payment for their services. Too many borrowers who consult with a credit repair agency do so with high hopes and dreams of erasing line after line of negative information from their credit score. They are often so excited, in fact, that they fail to display any caution or discernment and pay for the first promising credit repair agency they find. Little do they know that they have may have just fallen for a scam. A reputable credit repair agency will never push for an upfront payment from their customers. Instead, what they will do is provide an explanation of services as well as a user contract that the borrower can review with a full itemisation of products, services and goods being offered. From there, a good credit repair agency will not charge the consumer until the services have been rendered and done so according to the contract.

A reputable credit repair agency will not solicit via email.
Reputable credit repair agencies do not need to solicit new customers through email. They rely instead on the more traditional means of advertising, such as television commercials, billboards, radio commercials, fliers or advertisements in newspapers and magazines. While these means of broadcasting their services are still not a guarantee that their agency is reputable, they will increase the chances that the consumer has found an agency they can trust. Email solicitation, on the other hand, is nearly always guaranteed to be a scam perpetuated by people who only want to take the person’s money without delivering on their promises. To this end, if a credit card holder finds an email inside their inboxes that promises credit repair services, they should delete the email and keep looking elsewhere. Vetting credit repair agencies through friends and family who have used such companies in the past is a very good way for a card holder to ensure that they do not mistakenly employ a credit repair scam.

A reputable credit repair agency will not promise miracles.
With regard to the promises that a credit repair agency makes concerning the effectiveness of their services, the old adage most likely applies; “If it is too good to be true, then it probably is.” A reputable credit repair agency will not promise their customers miracles, such as a completely clean credit report, a repaired credit score in only a few days or special insider knowledge that no other credit repair agency has access to. All such promises are not only false but should clue the customer that that particular credit repair agency is to be avoided. Not only can no agency promise a 100% clean credit report or perfect credit score, but the process also requires much more time to complete than a few days or weeks. Often times, a reputable credit repair agency will need months to investigate and work on the contested items in a customer’s credit history. Furthermore, reputable credit repair agencies all have the same industry knowledge and cannot promise exclusive information.

]]> http://creditcardrewards.com.au/articles/credit-repair-scams/feed/ 0 http://creditcardrewards.com.au/articles/what-a-credit-repair-service-will-and-will-not-do/ http://creditcardrewards.com.au/articles/what-a-credit-repair-service-will-and-will-not-do/#comments Thu, 24 Feb 2011 23:50:13 +0000 Tim Smith http://creditcardrewards.com.au/?p=4009 Credit repair services can be a major benefit to consumers who feel like their credit history has been wrongly tarnished. But as with any user/provider agreement, there can be misconceptions and misunderstandings from the user’s end that will hinder their relationship with the provider. Below is a short list of what credit repair services will and will not do for consumers.
• Will not clear warranted items. In an event that is too common, many credit repair services will receive interest from a consumer who wants to clean their credit report of every damaging mark, including the ones that legitimately belong there. At some point they misunderstand the nature of credit repair and begin to believe that it translates into a clean slate void of any negative hit to their creditworthiness no matter justified they are. On the contrary, credit repair services exist to help consumers do as much as they legally can in order to get them back on more solid financial footing. To this end, credit repair companies will not attempt to erase any negative influence on the consumer’s credit score that was rightfully put there through negligence or irresponsible handling.
• Will challenge false or inaccurate statements. In a similar vein, however, credit repair services will investigate and challenge all false or inaccurate statements that have made their way onto the consumer’s credit report. Many credit card users may find it hard to believe that legitimate, reputable credit reporting agencies would be able to make such a mistake as assigning someone else’s account history to the wrong person or footnoting an account with incorrect data, but the truth is that such occurrences are relatively frequent. Researching and correcting false or inaccurate data on credit reports represents perhaps the most often utilised service of a credit repair agency. Unfortunately, in today’s electronic and digital age it is easy to mistakenly register a consumer’s credit report as having opened an account by someone with the same name. Even in cases of mistaken identity, it can still damage the consumer’s credit score by tacking an additional open line of credit onto an already cramped portfolio. But credit repair agencies are aware that these mishaps occur and know how to correct them. The same goes for comments on accounts that are not wholly accurate and thus damaging to the consumer’s credit.
• Will stand in for the consumer. When they first confront the task of cleaning up their credit scores, many consumers can feel overwhelmed at the thought of doing it all by themselves. Imagining how to deal with each merchant, each credit reporting firm, and each creditor can often dishearten consumers right out of doing anything at all. Credit repair services have special industry-insider knowledge, however, and they are well-equipped to do battle with the myriad forces that can often be involved in straightening out someone’s credit. This is not to say that the consumer will be completely absolved of all responsibility throughout the process; indeed, the consumer’s paperwork and personal documentation can often speed up the process for credit repair companies. But when it comes to the negotiation, the consumer can trust that the credit repair service has their back.
]]> http://creditcardrewards.com.au/articles/what-a-credit-repair-service-will-and-will-not-do/feed/ 0 http://creditcardrewards.com.au/articles/credit-cards-that-a-card-holder-should-always-keep-open/ http://creditcardrewards.com.au/articles/credit-cards-that-a-card-holder-should-always-keep-open/#comments Tue, 22 Feb 2011 07:04:12 +0000 Tim Smith http://creditcardrewards.com.au/?p=3974 It is common in today’s credit and debt-conscious world for both experts and consumers alike to advise credit card holders to close out their credit card accounts for a variety of reasons. Such reasons typically include overspending, burdensome debt and the impact of a credit card on one’s credit score. However, there are a few credit cards that users should strive to keep active if they can help it. Below is a list of the credit cards that a card holder should always keep open.

Credit cards with a balance.
One of the first and most important credit cards a user should always keep open is the one with a current balance. The danger in closing such a card lies mostly in how it appears on one’s credit report. When a user closes a card with a balance the total available credit shrinks to $0. Creditors and other lenders who look upon the card user’s credit report will see this and believe the card was maxed out. Creditors judge a card holder’s creditworthiness based in part on their credit utilisation ratio, that is, the percentage of debt to available credit. Any time that a card holder’s credit utilisation ratio goes above 50% for an extended period of time, the creditor will flag the user as a financial risk and will mark their credit report accordingly. Card holders who close out credit cards which have a balance on them are effectively telling creditors and lenders that they cannot be trusted with their money. Therefore, to save themselves the grief and the negative statements on their credit report, users should always keep a credit card open if it has a balance yet to be paid, no matter how small the amount.

The established credit card.
The longer the credit history, the more advantageous for the consumer. What this means is the further back that a consumer’s line of credit originates, the better it is for their credit report. Any consumer who has a bunch of closed accounts from over a decade ago coupled with accounts opened only in recent years will not fare as well as someone who kept their lines of credit open during the same span of time. One thing that assists in lengthening a consumer’s credit history is keeping their oldest credit card alive. This can seem to go against common sense as the oldest credit card is also likely to be the one that has experienced the most trouble, including missed payments, overdrafts and fluctuating interest rates, among other possible alterations. However, by keeping such an account open, credit card users demonstrate that they know how to handle their money for the long term. And, of course, it is still possible for users to demonstrate a growing sense of responsibility on such cards by keeping out of the aforementioned troubles. In this way, their oldest credit card not only expands their credit history but proves them more reliable than when the account was first opened.

Credit cards with a spotty history.
Similarly, credit card users would do well to keep open their most troubled credit cards. The primary idea behind such advice is that the user still has time to make good on their account by paying their balance in full and establishing routine and responsible repayment. Doing so will show future creditors and lenders that the user has matured and did not simply close their accounts and try to move along to something new, but rather stayed the course and found their financial footing.

]]> http://creditcardrewards.com.au/articles/credit-cards-that-a-card-holder-should-always-keep-open/feed/ 0 http://creditcardrewards.com.au/articles/signs-that-a-credit-card-might-not-be-a-wise-choice/ http://creditcardrewards.com.au/articles/signs-that-a-credit-card-might-not-be-a-wise-choice/#comments Sat, 19 Feb 2011 01:26:56 +0000 Tim Smith http://creditcardrewards.com.au/?p=3965 Some people can handle the sizeable responsibility that comes with owning a credit card without a hitch. Others, while mostly handling their credit card well, might experience a hiccup or two every now and then. And yet there are those individuals who display a pattern of behaviour prior to owning a credit card that should serve as a harbinger of future credit difficulties. But how can a potential customer know if they might fall into this trap? Below is a list of signs that a credit card might not be a wise choice.

Debt with friends and family.
If an individual wants to open a credit card account but they consistently go into debt with their friends and family members, they should seriously consider holding off on the credit card until they can learn how to better handle their money. Going into debt with such people does not bode well for dealing with a major credit card company or lender, who will not be as forgiving or nearly as flexible with repayment terms as a brother or best friend.

Late or missed bill payments.
Most often, a would-be credit card holder has other accounts in their name which function like a line of credit. Chief among these will be utility bills, but they may also include magazine subscriptions, medical bills and retail credit cards. If the person in question consistently misses payments, underpays on their billing statements, or keeps sending their payments late, then they should re-think their decision to apply for a credit card. They can move forward with the application process later on when they have established a timely and consistent pattern of paying their bills and meeting their miscellaneous financial obligations. If they cannot learn to be on time with their repayments and open a credit card account, they will quickly incur late fees and can face everything from a drastic rise in interest, a cut of their spending limit or a forced cancellation of their account by the lender.

Frivolous purchases.
Making purchases that they do not need is another big sign that a credit card might not be a wise choice. Luxury purchases are okay when the item is accounted for in the card holder’s budget and when they are rare or infrequent. But someone who is making a new luxury purchase every other week will probably not hold up beneath the temptation that a high spending limit on a credit card will supply. Impulse buying has ruined many a new credit card owner, and the allure of so much borrowed money just sitting on a card ready to be used can prove too much for some people. It is better, then, for them to open a debit card, savings or chequing account instead.

]]> http://creditcardrewards.com.au/articles/signs-that-a-credit-card-might-not-be-a-wise-choice/feed/ 0 http://creditcardrewards.com.au/articles/how-credit-cards-can-improve-a-credit-score/ http://creditcardrewards.com.au/articles/how-credit-cards-can-improve-a-credit-score/#comments Wed, 16 Feb 2011 23:35:17 +0000 Tim Smith http://creditcardrewards.com.au/?p=3952 Many borrowers mishandle their credit cards and end up damaging their credit score. This is one reason why some consumers choose to forgo the use of credit cards and rely instead on cash, cheques or debit card accounts. Credit cards can, however, be a force for good in helping consumers and existing credit card holders repair their credit scores, no matter how they were originally tarnished. To accomplish this effectively they must be aware of how to employ their cards in the proper manner. Below is a summary of how credit cards can improve a user’s credit score.

Model account.
Simply put, a credit card that is handled responsibly can be the bright spot in an otherwise fair or poor credit history. This means that if a credit card holder had opened credit card accounts or other lines of credit in the past and damaged their credit score through ill-use, then their current credit card can serve to display the account holder’s improved money management skills. Realistically, it will take more than a single well-handled credit card to repair one’s creditworthiness, but it is often the best place for such individuals to start. Their options include a prepaid credit card, a secured credit card or a specially-designed card for borrowers with poor credit. Regardless of which route they choose, these cards must be employed with the utmost care in order to begin reversing the trend of bad credit.

Consolidate credit debt.
A balance transfer credit card can assist users in improving their credit scores by consolidating many of their other credit card balances onto one with the aim of paying them off within a short period of time. The best scenario for users applying for a balance transfer credit card is to have clean credit, meaning no missed payments or overdrafts on spending limits with any of their cards. Short of that, however, a balance transfer credit card will usually assign a very low interest rate to their transfers for a limited introductory period, which can range between three to twelve months. Some balance transfer cards will not assign an interest rate at all. The card users can further improve their credit score by clearing their balances within the introductory period and garnering significantly less interest.

Closed at account holder’s request.
While it is advisable for credit card holders to keep their accounts open, even after paying off their balances, sometimes it is in the card holder’s best interest to cancel the card in order to avoid the temptation to overspend. If this is the case, it will be more advantageous for the customer to close their accounts with the addendum that it was done at their request and not the lender’s. To do this, card users need only to formally initiate an account closure by notifying their lender and requesting that they footnote the account with the words “Closed by consumer request.” This will be a note to future lenders that the credit card issuer did not deem the user unfit to continue their account, which will look better for the user than simply closing the account without the footnote.

]]> http://creditcardrewards.com.au/articles/how-credit-cards-can-improve-a-credit-score/feed/ 0 http://creditcardrewards.com.au/articles/how-to-increase-the-credit-limit-on-a-credit-card/ http://creditcardrewards.com.au/articles/how-to-increase-the-credit-limit-on-a-credit-card/#comments Tue, 15 Feb 2011 23:24:44 +0000 Tim Smith http://creditcardrewards.com.au/?p=3942 Every credit card holder would like to be able to spend more money on their cards. However, many card users believe that they must wait for their banks and lenders to initiate a spending limit increase. The truth is that card users themselves may request the increase, but their chances of being approved rise significantly only if they adhere to certain guidelines. Below is a run-down on how to increase the credit limit on a credit card.

Wait.
Most credit card issuers will not grant a credit limit increase until the card holder has owned their card for at least six months. Certain issuers will have longer length requirements, but six months is standard. If a card holder contacts their credit card company and requests a credit limit increase prior to the six month mark then they will be denied. It is better for card holders to wait patiently until well after the six month period is over and then make the credit limit request.

Use only 30-50% of your current limit.
During the time that the card holder is waiting to request a credit limit increase, they need to put their card into use, bot not too much use. The rule of thumb in the credit card business is that users should not exceed 30-50$ of their available spending limit. Contrary to the popular view of credit cards, spending limits are not free passes for a card holder to spend until their heart’s content. Rather, they serve as financial warning markers that flag the card user as a liability should they tie up more than half of their balance for long stretches of time. Going over that limit for the first six to nine months of a card will not work to the user’s advantage in receiving a credit increase later on. Nor will it work for the seasoned card holder who frequently maxes out their balance. For a credit limit increase to be successful, the user has to have demonstrated sound money management for a considerable period of time, and that starts with staying under 50% of the credit ceiling.

Check for automatic credit increases.
Certain creditors will allow their customers to apply for an automatic credit increase which their system will filter at the time of the request. What this means is that some credit card holders may be able to log on to their online accounts and submit a credit increase request from the user interface. These are called “automatic” credit increases because the user will receive a notification within seconds informing them whether their request was approved. If their request is granted, this notification will often tell the user the amount of their new credit limit. If denied, it may explain why it was denied, or advise the user to call their lender. Either way, if such a service is available to the card holder, it can be a very convenient way of immediately increasing their purchasing power.

Call.
If an automatic credit increase request is not an option, then card holders will have no other choice but to call their lender and make a formal request. While not as convenient as an online increase request, it usually does not take more than a minute or two for a bank representative to let the user know if they have been approved. The bonus to this method is that the representative can often explain to the user why they have been denied as well as when they might be eligible for a credit increase.

]]> http://creditcardrewards.com.au/articles/how-to-increase-the-credit-limit-on-a-credit-card/feed/ 0 http://creditcardrewards.com.au/articles/how-to-balance-a-credit-card-and-a-mortgage/ http://creditcardrewards.com.au/articles/how-to-balance-a-credit-card-and-a-mortgage/#comments Mon, 14 Feb 2011 22:11:18 +0000 Tim Smith http://creditcardrewards.com.au/?p=3936 The more lines of credit that an individual owns, the more trouble they risk getting into. This is because it is far too easy to lose track of spending which is processed to each account. Credit cards and mortgages are no different, and in today’s world many people own both and are finding themselves in debt because of their inherent complexities. Below is a list of how to balance a credit card and a mortgage.

Home equity can lead to debt consolidation.
After a certain amount of time has passed and a home owner has been consistently repaying their monthly mortgage amounts, that home owner may be able to receive an extension on their mortgage or otherwise refinance in order to withdraw the equity which has been built up in their home. This equity could then be applied towards their credit cards and the balances that they carry. In this way, a mortgage can help eliminate other forms of debt, especially if the debt is consolidated onto a balance transfer credit card with a low or zero interest rate. Balance transfer credit cards typically give card holders between 3 and 12 months to transfer balances and pay them off with extremely low interest. Mortgage refinance can be the key to getting this done and freeing up more of the card holder’s money. The only downside is that a refinance will probably mean that the user will have more years added to their mortgage repayment or higher monthly amounts in the future.

Credit cards can pay off mortgages faster.
Micropayments are a technique which has become increasingly popular within the last decade, and for good reason. When a home owner makes a micropayment, they are submitting half of their monthly mortgage amount every two weeks instead of paying the total in one lump sum at the end of the billing cycle. By taking this approach every two weeks, home owners end up making one additional payment every year, a process that, if repeated year to year, can result in the home owner paying off their mortgage 5-7 years sooner than they had planned. However, coming up with half of the monthly repayment every two weeks can sometimes be difficult. This is where credit cards come into play. By using their credit card for those micropayments that they cannot make with their own money because their next pay cheque is still days away, home owners can pave the way for satisfying the terms of their mortgage much quicker.

Overspending on one can hurt the other.
If an enterprising and motivated home owner is struck by the thought of overpaying on their bill for a given month, they could inadvertently be taking away money that they will need to pay off their credit card balance. The results of this can range from simply carrying a balance to the next month and collecting interest to being unable to make their payment at all and being hit with a late payment fee. While it is less likely that the home owner will shirk their credit card in favour of their mortgage, it is far more likely that they could accidentally risk their mortgage payment by spending too much on their credit card. If a credit card holder spends beyond their means in a given month and does not want to carry a balance, they may end up paying the balance in full and being left with insufficient funds to address their mortgage payment. This is easily solved by strict adherence to a budget which details the individual’s monthly expenses and accounts for every expenditure, mortgage included.

]]> http://creditcardrewards.com.au/articles/how-to-balance-a-credit-card-and-a-mortgage/feed/ 0 http://creditcardrewards.com.au/articles/tips-to-getting-more-spending-power-from-a-credit-card/ http://creditcardrewards.com.au/articles/tips-to-getting-more-spending-power-from-a-credit-card/#comments Mon, 14 Feb 2011 08:34:04 +0000 Tim Smith http://creditcardrewards.com.au/?p=3931 Card holders all over the world would like to be able to get more spending power from their credit cards, but the problem for many people is knowing exactly how to go about it. The truth is, there are some simple steps that card holders can take in an attempt to enhance their credit cards. Below is a list of tips to getting more spending power from a credit card.

Avoid fees.
One of the simplest ways to squeeze more spending power out of a credit card is to only apply for one that comes with minimal fees. Credit card companies can assign several different fees to a credit card at their own discretion, but certain cards from certain issuers will eliminate more fees than others. These fees can include such things as a monthly service fee, a transaction fee, an inactivity fee and a rewards redemption fee. Annual fees on credit cards are standard, but there are plenty of cards on the market which drastically reduce the annual fee amount that they charge and may even advertise according to their low annual fees. For the other fees and penalties involved, consumers must do their homework by talking to a bank representative and asking questions about the fee system they have in place as well as reading the fine print on all credit card applications.

Use no more than half of available credit.
A tip that many experienced credit card users know about is to prohibit employing more than half of one’s available spending limit. Some of the more conservative estimates place the threshold at 30% of the credit ceiling, but the generally accepted limit is 50%. By staying well under this percentage of one’s credit card spending allowance, card holders are paving the way for a credit limit increase in the future. This increase will greatly expand the user’s purchasing power beyond what they had previously enjoyed.

Request an interest rate decrease.
Many credit card holders simply wait for their issuer to make available an offer for an interest rate reduction. This is not necessary, however, as banks and credit card lenders are open to decreasing a card holder’s interest rate and may even do so upon request. Certain card holders will not qualify due to poor handling of their credit, but card users who have never missed a payment, have never maxed out their available balance and have never overdrafted on their cards stand a good chance of getting an interest point reduction. The decrease may be small at first, but the card user should keep in mind that every little bit helps in the end.

Request a spending limit increase.
Similar to the above two points, card holders may also initiate a spending limit increase request. This is perhaps more common than a request for an interest reduction, and also stands more of a chance of being approved than the former request as well. However, card holders must be patient in waiting to request the increase until they have established a reputable spending pattern, and they must be diligent in paying off their balances in full every month. A record of timely and consistent repayments for at least six months is required for a card holder to even be considered for an increase.

]]> http://creditcardrewards.com.au/articles/tips-to-getting-more-spending-power-from-a-credit-card/feed/ 0 http://creditcardrewards.com.au/articles/the-st-george-platinum-credit-card/ http://creditcardrewards.com.au/articles/the-st-george-platinum-credit-card/#comments Wed, 09 Feb 2011 02:16:22 +0000 Tim Smith http://creditcardrewards.com.au/?p=3909 Sometimes, consumers want a credit card which will be perfect for both regular shopping as well as international travel. They want a credit card that can do it all and do it better than their previous cards. For such people, who are both shoppers and travellers, the St. George Platinum Credit Card is the perfect choice to suit their lifestyle. Below is a list of the benefits to owning a St. George Platinum Credit Card.
• Low purchase rate. With the St. George Platinum Credit Card, card holders can take advantage of a relatively low 15.99% p.a. on all standard transactions.
• Higher credit limits. Spending limits on the St. George Platinum Credit Card are higher than most other cards with limits starting at $6,000.
• Low balance transfer rate. For those credit card users who want to bring all of their credit card balances onto one account, the St. George Platinum Credit Card offers them a low 3.99% rate on balance transfers for the first 6 months.
• Low annual fee. Consumers can have access to the St. George Platinum Credit Card and all of its many perks for as little as $89 per year.
• Low cash advance rate. Users of the St. George Platinum Credit Card will enjoy a low 21.49% p.a. on all cash advances.
• Personal concierge service. The personal concierge service offered in conjunction with the St. George Platinum Credit Card is operates on a 24/7 basis and will make dinner reservations, provide emergency aid, advice on shopping and business matters, as well as book travel arrangements and special events. The St. George Platinum Credit Card is available for both domestic and international travel.
• Insurance protection. The St. George Platinum Credit Card offers a host of complimentary insurances and protections for all of the card holder’s needs. This insurance package includes overseas travel insurance, domestic flight inconvenience insurance, transit accident insurance, purchase cover insurance, extended warranty insurance and a best price guarantee which allows the card holder to pay only the lowest available price on qualifying purchases.
• Extra benefits. With the St. George Platinum Credit Card, card holders will receive special offers and promotions through Visa’s Platinum credit card programmes.
• Extra security. Users of the St. George Platinum Credit Card will have 24/7 protection from fraud and theft, thanks to both the Falcon Fraud detection system and the Verified by Visa programme, at all participating merchants.
]]> http://creditcardrewards.com.au/articles/the-st-george-platinum-credit-card/feed/ 0 http://creditcardrewards.com.au/articles/what-makes-a-good-credit-card/ http://creditcardrewards.com.au/articles/what-makes-a-good-credit-card/#comments Mon, 07 Feb 2011 23:38:57 +0000 Tim Smith http://creditcardrewards.com.au/?p=3894 Not all credit cards are suitable for all people, and just because someone qualifies for a card does not mean that they should accept it. The standards for a good card vary from person to person and are dictated by each individual’s specific set of circumstances. Below is a list of some of the factors that constitute a good credit card.

Low interest.
Regarding interest, it is understood that every credit card holder benefits from a low rate. Consumers do not mindfully acquire a card with higher interest applied to their carry-over balances. Too many people, however, settle for a credit card with less than favourable rates. This can stem from the fact that the user is new to credit cards and does fully understand the value of comparison shopping. It can also because the borrower is blinded by the other attractive features of a certain credit card, such as desirable rewards programmes and a higher credit limit. Nevertheless, a card with a lower rate of interest is always more advantageous than one without. The best plan of action for any consumer who is looking for a new credit card is to always compare interest rates. Even if they must sacrifice another feature, carrying a low interest rate can potentially save them hundreds of dollars over the life of the card, assuming that they must carry a balance from month to month. And while it is always possible to have a high interest rate lowered later on, it is never guaranteed.

Rewards.
Credit card rewards programmes have grown in popularity over the last decade and will most likely continue to do so for years to come. They represent one small way that credit card users can make their purchases work for them, instead of mostly as a benefit to the credit card companies. While rewards programmes can be great tools to provide a credit card holder’s return on investment, they may be unnecessarily burdening the user. Credit card issuers like to use rewards programmes to entice customers toward a certain card without regard for whether an individual card user truly needs the rewards or not. Likewise, too many users see the attractive rewards programme being advertised and become hooked on all the great prizes they can earn through regular, everyday spending. However, not all rewards programmes benefit all card holders. Some programmes focus on airline frequent flyer miles or similar travel discounts. If a credit card user does not travel frequently, then the card is not nearly as advantageous as a cash back rewards programme, for instance. For this reason, consumers should always align a credit card rewards programme with their needs and reject the ones that do not match.

Repayment terms.
Certain credit cards, such as many products from American Express, function more like charge cards, wherein the card holder can charge as much as they want to their account as long as they pay off the balance in full every month. Obviously, this will not be feasible for every type of credit card holder, especially those who live on a fixed income. Other credit cards have shorter repayment terms which can prove detrimental to the user. For instance, while most credit cards require repayment within a 30-day grace period, certain products specify that payment must be made within 25 or even 20 days. Depending on the credit card holder’s income stream a 20-25 day repayment timeline may not work the best. For this reason, potential users must review the terms and conditions of their cards to ensure that they are applying for one that they can repay on time.

]]> http://creditcardrewards.com.au/articles/what-makes-a-good-credit-card/feed/ 1 http://creditcardrewards.com.au/articles/how-to-know-if-a-retail-credit-card-is-the-right-choice/ http://creditcardrewards.com.au/articles/how-to-know-if-a-retail-credit-card-is-the-right-choice/#comments Mon, 07 Feb 2011 05:35:53 +0000 Tim Smith http://creditcardrewards.com.au/?p=3887 Consumers can be dazzled into applying for a retail credit card without really stopping to think whether or not it is in their best interests. They see the promotions, how much a particular retail credit card will save them, and all the other great perks to owning the card that can be theirs in very little time. There are, however, ways of parsing out the retail credit card offers to pick out the best one. Below is a list of things for consumers to consider when determining if a retail credit card is the right choice.

Amount of shopping.
Does the consumer shop enough to justify applying for the card? If a customer is an infrequent shopper and rarely visits any major outlet, let alone the store that is offering a card, then the answer is probably no. This answer can vary depending on the type of store and the products being infrequently purchased. If it is an electronics outlet or similar store, specialising in big ticket items, then utilising their services a handful of times each year may be much more reasonable and may then warrant the merchant’s retail credit card. However, if the store in question is a clothing outlet, and not a high-end clothing outlet at that, then the consumer is better off not opening up an account. Every credit account a person opens affects their credit score, so by opening an unneeded account consumers risk compromising their creditworthiness. However, they can avoid this by first thinking mindfully about the matter and whether their spending habits truly make the card worth it.

Amount of shopping at the retailer.
Similar to the amount of shopping that consumers conduct within a given year, the question of how much the consumer intends to spend at a particular store or chain must also be a factor. It is common for a consumer to only visit a store once in a while for a single item which they cannot find elsewhere. This may contrast with their general spending habits, wherein they shop quite consistently at other, more comprehensive outlets. However, consumers who are always on the lookout to save money on their annual purchases can easily be swayed into applying for a retail credit card, even at a store that they are very unlikely to visit again for many months. Again, by steering clear of opening an unneeded credit account at a store that they pass over for the most part, these consumers will help their credit scores and their future purchasing power.

Amount of value from the rewards.
Depending on the retailer, the benefits of a given retail credit card may nullify the need to ever apply for it. Not all retail credit cards offer rewards that are suitable for every consumer’s lifestyle, and to that end each consumer must ultimately determine if the touted advantages of a retail card match up with their needs. For example, a consumer who applies for a retail credit card from their favourite electronics store will the enjoy perks of the electronics store’s credit card, which may include a cash back bonus for every $1,000 spent in the store. If the consumer shops for electronics-related accessories frequently enough to justify the credit card, as well as shopping at this particular retailer, then the retail card may seem like a good bargain. If, however, the same consumer typically only spends $20-30 per purchase on smaller-ticket items, it may take a few years for the retail credit card to benefit them. At that rate, they may be better off forgoing the retail credit card in order to preserve their credit score.

]]> http://creditcardrewards.com.au/articles/how-to-know-if-a-retail-credit-card-is-the-right-choice/feed/ 0 http://creditcardrewards.com.au/credit-cards/what-to-know-about-credit-card-debt-settlement/ http://creditcardrewards.com.au/credit-cards/what-to-know-about-credit-card-debt-settlement/#comments Thu, 03 Feb 2011 12:17:38 +0000 Anna Wong http://creditcardrewards.com.au/?p=3659 Occasionally, credit card users who have been trying to reduce or eliminate their debt seek to learn about debt settlement companies and the services they provide. These companies can give borrowers hope by representing themselves as working solely in the interests of the customer, willing to fight the credit card companies for them. Credit card debt settlement companies can be useful intermediaries that give users an advantage that others do not have.

Not every debt settlement company, however, is created equally! In order to find the right company, borrowers should know the facts about debt settlement and the companies who claim to specialise in it. Below is a list of what borrowers need to know:

• Credit card debt settlement companies are not necessary. Some card users feel as if they can do nothing on their own to settle their debit with creditors. Because of this, debt settlement companies can seem indispensable. These companies often convince consumers that they must hire them to handle the debt. The truth is, however, that the user is completely capable of settling their debt on their own, even obtaining the same deals that debt settlement companies can reach. Not only is the power always in the hands of the borrower to work out their own interests, but they will save money by not hiring a debt settlement company.
• Debt settlement damages credit scores. While debt settlement can be the only option left for certain consumers, the idea that resorting to this process will not harm the user’s credit is false. Debt settlement will show up on a credit report as an account that has been satisfied whilst in default. Future lenders will view this unfavourably, of course, and weigh it against the user when they are applying for a line of credit. For this reason, borrowers should make absolutely sure that debt settlement is their only remaining viable option.
• Debt settlement companies do not function as banks. Debt settlement companies are not insured nor protected under federal law. Because of this, any money paid to a settlement company is not guaranteed and can be lost forever in the event the company closes its doors or defrauds its customers. Only settlement companies with sterling reputations should be considered.
• Settlement companies may take the place of lenders. When borrowers hire a company to manage their debt, the company can often arrange a settlement by taking the user’s payments for their services and incorporating them into the settlement amount. If this happens, the debt settlement company essentially has not been paid and can require the user to pay them all over again in order to turn a profit. Often times, settlement companies will set up a payment schedule and a monthly minimum, in effect transforming them into another creditor, complete with interest and fees set at their own discretion.

]]> http://creditcardrewards.com.au/credit-cards/what-to-know-about-credit-card-debt-settlement/feed/ 0 http://creditcardrewards.com.au/credit-cards/what-to-watch-out-for-when-using-a-credit-card/ http://creditcardrewards.com.au/credit-cards/what-to-watch-out-for-when-using-a-credit-card/#comments Thu, 27 Jan 2011 00:12:50 +0000 Tim Smith http://creditcardrewards.com.au/?p=3531 Terms and conditions on credit cards often appear to be rather straightforward. The safest way to use them is simply to make payments on time, don’t go over the credit limit, avoid cash advances, and never going into debt. For most credit card users, this is enough to maintain a healthy credit score, steer clear of extra fees and avoid financial trouble.For other users, however, this will not be enough. Below is a list of what customers should watch out for when using a credit card.

Bill payment fees.
Credit card holders have many options through which to pay their card bills each month, such as paying by telephone, online, through the post or via automatic debit from a chequeing or savings account. What many credit card users do not know, however, is that some creditors impose extra fees on certain payment methods. These are known as bill payment fees and are usually charged for payments made over the phone or online. Card users who are not aware of these fees can end up paying $5-10 per month when they make a payment using one of these options. This can add up to anything from $60 – 120 per year, which is a sizeable amount that most consumers will wish to avoid. To avoid bill payment fees customers should simply make payments utilising the post or automatic debit. Automatic debits may, however, incur an electronic bill payment fee, which card users should be aware of.

Penalty rate clauses.
When a credit card user makes a late payment or exceeds their credit limit, they are assessed either a late fee or an overdraft fee, respectively. Often these card users pay the fees and then believe that they will face no further repercussions from their mistakes. But, when they receive their next credit card bill they may see that their interest rate has increased. This is due to what is known as the penalty rate clause which is written into the vast majority of card holder agreements. A penalty rate clause specifies that if a credit card holder violates any of the terms and conditions of the card holder agreement, then the issuer is within their rights to deem the card holder a financial risk and raise their interest rate as a result. Consumers are often shocked to learn that one isolated misstep is enough to invoke the penalty rate clause. It is a reality of carrying a credit card, however, and must be accounted for when deciding whether to open a credit card account.

Universal default clause.
Taking the above example even further, if a credit card user is never late on a payment and never exceeds more than half of their credit limit, they are likely to believe that they are a good credit card customer and that the terms and conditions on their credit card will remain favourable. The unfortunate truth is, however, that credit card companies have begun reviewing how card holders manage their separate, unrelated accounts as well. If the card holder from the above example were to miss a payment on a retail credit card, for instance, the card issuer has the right to know about it. As a result, they may take the late payment as a sign that the card holder is starting to neglect their financial responsibilities. They can proceed to raise the credit card holder’s interest rate, reduce their credit limit or alter any other conditions at their sole discretion.

]]> http://creditcardrewards.com.au/credit-cards/what-to-watch-out-for-when-using-a-credit-card/feed/ 0 http://creditcardrewards.com.au/article/are-airline-reward-cards-worth-it/ http://creditcardrewards.com.au/article/are-airline-reward-cards-worth-it/#comments Wed, 26 Jan 2011 05:01:42 +0000 Linda Schale http://creditcardrewards.com.au/?p=3525 Some of the most popular types of rewards cards are the products which offer air miles and airline rewards. There are a number of different varieties of these types of cards, although they do not suit every card user. Potential customers should be aware of a few quick and easy tests to see if a credit card holder should apply for such cards.

The first thing that a person should consider is whether they normally are in the habit of paying off their balance in full at the end of the month. If a credit card holder does pay off the credit card at the end of the month, to the full amount of the card balance, an airline card may well be worth applying for. If they do not do this they may find that they are better off looking for a card with a low interest rate, as they will usually spend more on the extra interest than they will be rewarded with in extra flights.

The second thing that a person should consider is if they are actually spending a large amount of money on their credit card. Airline rewards are granted on the basis of the amount of money that is being spent on the account. If the customer is, in fact, spending a small amount of money using credit cards, they would be better off with no annual fee credit cards which are more suitable for a person with a low amount of spending, as the value of the flights will probably be less than the annual fee.

If, however, a person is both not carrying a large balance over every month and spending a reasonable amount of money on a card, they may be well suited to a rewards card, but they may find that cash back credit cards, where a proportion of spending is simply given to them in cash, are also worth consideration. These are less generous than airline rewards programs, but they can be of better use if the customer rarely uses an airline.

If the person is a regular user of airlines they will need to consider whether it is better getting a generic card or a specific airline reward credit card. A generic airline reward credit card will be able to be used on a number of airlines, although the rewards will be less generous, while a specific card will be able to be used on one airline but with more significant rewards.

]]> http://creditcardrewards.com.au/article/are-airline-reward-cards-worth-it/feed/ 5 http://creditcardrewards.com.au/credit-cards/reasons-to-have-a-credit-card/ http://creditcardrewards.com.au/credit-cards/reasons-to-have-a-credit-card/#comments Tue, 25 Jan 2011 06:51:47 +0000 Carl Thomas http://creditcardrewards.com.au/?p=3514 Credit cards can be frightening financial instruments which appear imposing and intimidating to individuals who have never applied for one. There are plenty of horror stories about credit card users who have sunk into massive debt through their rampant credit spending and experienced hardships thereafter. Credit cards may certainly hold the potential for damaging the user’s financial standing if poorly managed, but there are, nonetheless, some very good reasons to have a credit card on hand.

Emergencies.
Having at least one credit card available can be very helpful in the event of an emergency. Occasionally, something will happen which will require a bigger line of credit. Whether an unexpected illness, damage to a car, or an urgent home repair, a credit card can come to the rescue for the card holder. Without a credit card readily available, these individuals may be stuck having to negotiate with vendors, merchants, or hospitals and clinics for financing. Depending on the vendor, financing can come at a steep price, due to interest rates which are significantly higher than prime.

Purchase protection.
When making a purchase with cash, the purchase is typically not guaranteed against damage or theft, unless an additional, costly warranty is purchased at the same time. This can move the consumer to reconsider their purchase altogether. The worst-case scenario is that the consumer will move forward with the purchase, have the item stolen or damaged, and be unable to be issued a replacement or cash for the value of the item. This would leave the consumer without any recourse to replace the item and potentially lose them all the money that they had spent on it. Credit cards, on the other hand, usually carry a built-in insurance protection which can prevent situations like these.

Credit scores.
While credit scores can be damaged by irresponsible use of a debit card or chequeing account, these means of payment can never really assist the account holder in building up their credit. If the user is concerned about maintaining the best credit profile that they can, or improving upon a previously low credit score, they should seriously consider applying for one credit card and keeping it on hand for at least small, controlled purchases. Assuming that they pay off the balance each month, these transactions can help build their creditworthiness over time and improve their credit score.

]]> http://creditcardrewards.com.au/credit-cards/reasons-to-have-a-credit-card/feed/ 0 http://creditcardrewards.com.au/credit-cards/how-to-protect-your-credit-cards/ http://creditcardrewards.com.au/credit-cards/how-to-protect-your-credit-cards/#comments Mon, 24 Jan 2011 00:39:28 +0000 Andy Pancott http://creditcardrewards.com.au/?p=3511 Credit card fraud is a significant danger from which no credit card holder is immune. Even the most responsible and diligent card users are subject to hackers and thieves. While it may not be possible to completely eradicate credit card fraud, there are some steps that consumers can take to significantly curtail the opportunities for it to be committed on an account. Below is a list of strategies that can be employed to protect credit cards.

Make more in-store purchases
One way that credit card holders can protect their credit card accounts is by making more in-store purchases rather than online. When completing a transaction over the internet, the chances for fraud to occur on a credit card account is greater due to the possibility that the merchant’s website has been hacked or a virus has been surreptitiously downloaded onto a computer. But by visiting the actual store and purchasing an item there, much of that risk is eliminated. This is not to say that a store clerk could not steal a card’s detail, but most of the time store personnel are linked to transactions, making it much easier to track down the culprit if this happens. If this remains a concern, however, consumers should consider paying by withdrawing cash from a checking or savings account.

Never leave a credit card unattended
In a similar vein, it is a very wise idea to never let a credit card go out of sight. This applies specifically to stores such as restaurants and other eateries, where customers are often asked for credit cards which are then taken away from the table to a computer in order to process the payment. To avoid having to give up a card even for this brief amount of time, it is advisable to withdraw enough cash before entering the restaurant. This way, customers will be able to pay for the meal and completely eliminate the chance that a member of the wait staff will commit fraud on the account.

Never click links in emails or text messages
A popular method of obtaining a credit card user’s account details is to forward an email or text message to the user posing as a lender or service provider. These messages typically alert the customer that an unauthorised user has recently tried to access their account. They then include a link that the credit card holder can click, which will take them to a website that looks exactly like their credit card company’s home page. Once there, they will be prompted to enter their card details and other sensitive personal information. This is known as ‘phishing’ and it is one of the surest ways to open up an account to fraud and theft. All that is required to dodge these attempts is to never click on any links that appear inside an email or text message. Banks have roundly asserted that they will never request personal information via text or email, so customers should be assured that any such communications comes only at the behest of potential thieves.

]]> http://creditcardrewards.com.au/credit-cards/how-to-protect-your-credit-cards/feed/ 0 http://creditcardrewards.com.au/article/myths-about-credit-card-debt-settlement/ http://creditcardrewards.com.au/article/myths-about-credit-card-debt-settlement/#comments Wed, 19 Jan 2011 23:38:36 +0000 Tim Smith http://creditcardrewards.com.au/?p=3505 Credit card debt settlement can seem like an excellent idea for those struggling with mounting credit card debt. And, if default is imminent, settlement can seem like the only viable choice available. Then there is the allure of the organisation which promises to settle the consumer’s debt for them. These companies appear to have both the necessary experience in dealing with creditors and the resources to truly fight for the little guy.

Unfortunately, many of the perceptions surrounding credit card debt settlement are built on common myths. Below is a list of myths that all borrowers should be aware of:

Debt settlement is preferred.
There are always options when it comes to paying down credit card debt and debt settlement need not be one of them. Whether it involves liquidating some of the borrower’s assets, better budgeting of income, a low rate balance transfer credit card, or a small personal loan, the options are many and more beneficial to the consumer and their credit score than a settlement. For some, the main difficulty with these options is the patience required and the time involved. Sticking with these alternatives, however, will prove worthwhile in the end and will save the borrower a significant amount of money.

Settlement is a right.
Credit card holders do not have a right towards a settlement with their lenders. Because concessions are often made when it comes to waiving fees and penalties, lowering interest rates, or increasing credit limits, consumers often get the false impression that they are entitled to such goodwill , including debt settlement. The ability to request a settlement is never restricted, of course, but neither is a credit card company’s freedom to deny the request.

Settlement companies are pro-consumer.
A settlement company is designed to help customers reach debt settlements with their credit card providers, but this does not necessarily mean they have their clients’ best interests at heart. Settlement companies can easily charge card holders’ exorbitant fees, all the while still reaching a settlement requiring the card user to pay a lump sum amount to the bank. In other instances, these companies can repay the banks with their own funds, only to turn around and levy a debt against the consumer for the amount remitted on their behalf. Settlement companies are well within their rights to set up a payment schedule and charge their own fees and interests, effectively turning them into a new, and even worse, lender.

]]> http://creditcardrewards.com.au/article/myths-about-credit-card-debt-settlement/feed/ 0 http://creditcardrewards.com.au/article/why-you-should-get-more-than-one-credit-card/ http://creditcardrewards.com.au/article/why-you-should-get-more-than-one-credit-card/#comments Wed, 19 Jan 2011 00:33:38 +0000 Linda Schale http://creditcardrewards.com.au/?p=3503 Traditionally, many people are used to only having one credit card and there are a number of reasons for this. For example, some people simply see no need for holding more than one card and some do not like the idea of paying more than one set of annual fees. But there are often good reasons to have more than one credit card, as explained below.

If a person has a job where work expenses are repaid after they are incurred, it can usually be a good idea to use a credit card, so that if the payments are within the card’s grace period the card holder will not have to pay any of the interest, or lose any interest, as would be the case if they had used funds from their own personal savings.

Placing any personal borrowing on a card that is also used for work expenses can cause difficulties. For example, the spending is likely to lead to an increase in borrowing, due to the fact that it can be quite hard to separate spending on credit cards and it can be quite tempting not to pay down the full amount immediately. Having separate credit cards can mean that it can be easier to track work related expenses to ensure that they are charged to the employer.

It is usually a good idea for someone who wants to use a card to deal with their work related expenses to look for a card that offers rewards, either in the form of points that are redeemable against goods in a catalogue, or for cash, otherwise known as cash back cards. These cards tend to have higher interest rates and so are not good for borrowing.

Small businesses also have good reasons to have at least two cards, partly to keep track of the amount of money that is being spent on the business and partly to ensure that all the interest and the annual fees that are taken out for business purposes remain tax deductible.

If a person is getting credit cards for low interest rates but is also still spending on a card, it can be a good idea to get two cards to allow them to take full advantage of the low interest rates on two balances, rather than diluting it with other higher interest balances from spending on one card.

]]> http://creditcardrewards.com.au/article/why-you-should-get-more-than-one-credit-card/feed/ 1 http://creditcardrewards.com.au/credit-cards/tips-for-setting-up-a-joint-account-credit-card/ http://creditcardrewards.com.au/credit-cards/tips-for-setting-up-a-joint-account-credit-card/#comments Tue, 18 Jan 2011 01:21:23 +0000 Anna Wong http://creditcardrewards.com.au/?p=3489 A joint account credit card can seem like a great idea, for two or more people who wish to streamline and consolidate their finances. Whilst a joint account credit card works exactly like a standard purchase credit card for all parties, it requires careful attention to certain facets that standard purchase credit card users have no need to consider. Below is a list of tips for setting up a joint account credit card that will make the process as smooth as possible, while ensuring a positive user experience.

Approval limit.
One of the most significant aspects to making a joint account credit card work, in the long term, is setting a purchase limit which applies to every purchase made all parties involved. The purchase limit should be agreed upon, prior to applying for the credit card, so that all parties will know what they are getting into before receiving their cards. Any item that would cost more than the purchase limit must be approved via consultation with the other parties. For example, if the card holders agree on a purchase limit of $50, and User A wants to buy an item that is $60, User A must get the purchase approved with User B before moving forward with the transaction. This will ensure that each party knows what to expect on the next credit card bill and will guard against overspending and mounting debt.

Maximum balance.
If the parties who are signing up for a joint account credit card are unsure whether or not they can withstand the temptation to overspend on a high limit credit card, they should set a maximum balance that is more comfortably within their means. The joint parties must know their limits and what they want out of a card for a maximum balance to be agreed and applied effectively. Users should keep in mind that it is better for everyone’s credit scores that they do not exceed 30-50% of their credit limit and set the maximum balance accordingly. If, however, the disparity in income between the parties is substantial they may be better off pursuing separate credit cards so that the party with greater disposable income will not feel tied down when it comes to getting the best terms and conditions on their card.

Agree on payment details.
One of the trickier aspects to a joint account credit card is the smaller details that require ownership on behalf of one of the joint account holders. Determining who will pay the bill each month is crucial to avoiding late fees on the account, which can produce further negative consequences such as an increased interest rate or a reduced credit limit. Also, the card users must decide how and when each month they will reimburse the account holder who makes the payments.

]]> http://creditcardrewards.com.au/credit-cards/tips-for-setting-up-a-joint-account-credit-card/feed/ 0 http://creditcardrewards.com.au/credit-cards/the-suze-orman-method-of-paying-off-credit-card-debt/ http://creditcardrewards.com.au/credit-cards/the-suze-orman-method-of-paying-off-credit-card-debt/#comments Sun, 16 Jan 2011 22:16:47 +0000 Linda Schale http://creditcardrewards.com.au/?p=3477 Suze Orman, a well-known financial analyst and advisor, has devised a credit card debt repayment strategy which differs slightly from the popular snowball method of paying off credit card debt. Whereas the snowball method aims at paying down the smallest balances first, with the aim of cutting down on the number of outstanding balances, without regard to interest rates, the Suze Orman method focuses on paying off the credit card debts with the higher interest rates first, in order to save paying extra from month to month. Below is a step-by-step guide on the Suze Orman method of paying off credit card debt.

The first step that the credit card holder must take is to calculate how much they can afford to pay on all of their credit card debts each month. This is usually best determined by first budgeting necessary expenses from their monthly pay cheques and seeing how much money is left over. Card holders should note this amount and save it for attention later in the process.

Credit card users should next add ten dollars to each minimum monthly credit card payment. Then they need to add all of the minimums together, making sure to include all of the additional ten dollar payments. This can seem daunting at first, to many customers, as the minimum monthly payments themselves can feel like a lot of money to remit, whereas adding an additional ten dollars can make them feel as if they will never be able to clear their debt. Credit card holders should not fear, however, as this is only an exercise that will be of benefit in a later stage of the process.

Next, credit card holders should compare the sums of the minimum monthly payments, plus the ten dollar totals, to the amount calculated from the first step. If the user is fortunate enough, the amount that they have left over after necessary expenses will be greater than the amount of the monthly minimums, plus all of the ten dollars that were added together. If the sum from the first step is indeed higher, then they should subtract the total from the minimum monthly payments. The difference should be added to the credit card debt that is carrying the highest interest rate.

An example should make the process clear: a credit card user has determined that they can allocate $200 each month, after expenses, to repaying their credit cards. Their credit cards debts are in the amount of $400, $300, $200, and $100, each with a $40, $30, $20, and $10 monthly minimum payment, respectively. With an extra ten dollars added to each minimum, the new minimums would become $50, $40, $30, and $20. Added together, these minimums would total $140. When the credit card holder subtracts the revised total monthly minimums, which come to $140, from the amount of $200 which they have allocated after budgeting their monthly expenses, the difference will be $60. This difference, according to Suze Orman’s method of paying off credit card debt, should then be applied to the monthly payment on the card with the highest interest rate. If the highest interest rate is on the card with the $400 balance, then the extra $60 will be applied to the minimum required plus ten dollars, which would work out to $50 plus $60, equalling $110 each month to the $400 balance.

]]> http://creditcardrewards.com.au/credit-cards/the-suze-orman-method-of-paying-off-credit-card-debt/feed/ 0 http://creditcardrewards.com.au/article/the-snowball-method-of-paying-off-credit-card-debt/ http://creditcardrewards.com.au/article/the-snowball-method-of-paying-off-credit-card-debt/#comments Fri, 14 Jan 2011 11:05:35 +0000 Tim Smith http://creditcardrewards.com.au/?p=3472 The snowball method of paying off credit card debt is a guaranteed way for credit card users to extricate themselves from their debt in a shorter period of time than simply paying off the minimum monthly payments. It also helps them apply realistic amounts to their credit card bills instead of liquidating their entire pay cheque just to pay off one or two cards, only to end up with no money at their disposal for the rest of the month. Below is a step-by-step explanation on how to use the snowball method to pay off credit card debts.

Firstly, credit card holders should make a list of all of their credit card debts. This list should rank the debts from the smallest outstanding balance to the largest outstanding balance. For example, if a card holder has four credit cards with amounts of $400, $200, $100, and $300 dollars, then the amounts should be listed in order, starting with $100 and ending with $400.

If, however, there are two credit card debts that are nearly equal in amount, the credit card debt with the higher interest should be ranked higher on the list. For instance, is the aforementioned card holder had credit card debts in the amounts of $400, $200, $100 and $102, then they must look at the interest rates between the $100 and $102 amounts. If the $102 amount carries a 15% interest rate whereas the $100 amount has an 11% rate, then the $102 amount should be placed above the $100 amount, even though it is technically the bigger amount. This technique will save the card holder an extra sum of money by preventing additional months of interest from accruing on the $102 credit card balance.

After ranking the credit card debts from smallest to largest, the credit card holder should then budget out the minimum monthly payments on all debts. This will ensure that at least part of the principal is being paid down on each debt while a larger amount is being paid against at least one credit card balance.

The credit card user must then determine how much extra they can pay toward the smallest debt each month. To use the first example again, if the smallest debt is $100, and the credit card holder can allocate an extra $20 per month on top of the minimum monthly payment of $10, then the user should pay $30 per month on the smallest credit card debt, all the while remembering to pay at least the monthly minimum on the remaining three accounts.

Once the smallest credit card debt is satisfied, the snowball method suggests the credit card holder applies what they had been previously paying on the smallest debt to the next smallest debt. This means that if the credit card holder in the above example was paying $30 each month toward the $100 debt, then they should add that amount to the minimum monthly payment of $20 for the $200 debt.

All totalled, this means that once the $100 credit card debt has been satisfied, the card user will be paying $50 per month toward the $200 credit card debt. This process repeats until all debts are repaid. The $50 extra, applied towards the $200 debt, is then added to the $30 minimum monthly payment on the $300 debt, equalling $80 each month, and so on, until the $400 debt is paid in full and the card holder is free from debt.

]]> http://creditcardrewards.com.au/article/the-snowball-method-of-paying-off-credit-card-debt/feed/ 0 http://creditcardrewards.com.au/article/how-to-be-removed-from-a-joint-account-credit-card/ http://creditcardrewards.com.au/article/how-to-be-removed-from-a-joint-account-credit-card/#comments Thu, 13 Jan 2011 00:10:13 +0000 Card Guru http://creditcardrewards.com.au/?p=3462 While there are many benefits, as well as many risks, to opening a joint account credit card, there may come a time when it is better for the card to be transferred to a single account holder. Because of the intertwined nature of a joint account credit card, having an account holder removed is neither an attractive, nor easy process, especially if the account holders are not on good terms with each other. There is a way to accomplish this, however. Below is a list of steps for being removed from a joint account credit card.

Prohibit new purchases.
One of the account holders can make a call to their bank and request that the joint account credit card be frozen until further notice. A freeze will prohibit any of the other card holders from making new purchases on the card, and such a hold will usually only be lifted once the matter of removing an account holder from a joint account credit card has been resolved. Freezing the account in this way also prevents the account holder who wants to be removed from the account from being burdened with the other account holder’s debt while undergoing the removal process.

Clear the balance.
Many card companies will not lift the freeze, or absolve an account holder of their partnership in the credit card, until the credit card balance is completely satisfied. If the account holders are in good stead with each other, the terms of paying down the remaining debt can be worked out amicably. If, however, the partnership has turned hostile, it will only make the work of clearing the balance more difficult. Unfortunately, this must be done, and the account holder cannot be removed from the joint account credit card until it happens. One option is that the account holder who is requesting to opt out makes the final payments on their own, especially if the other parties are not cooperating.

Contact the bank.
Once the account has been frozen and the balance has been eliminated, the adjourning account holder can finally contact the bank and request an official separation from the joint account credit card. Depending on the creditor and the type of joint credit card, this process can take anywhere from a couple of weeks to a month or more.

]]> http://creditcardrewards.com.au/article/how-to-be-removed-from-a-joint-account-credit-card/feed/ 0 http://creditcardrewards.com.au/article/good-credit-card-habits/ http://creditcardrewards.com.au/article/good-credit-card-habits/#comments Wed, 12 Jan 2011 02:35:55 +0000 Tim Smith http://creditcardrewards.com.au/?p=3456 Mounting consumer debt has revealed that it is all too easy for credit card users to dig themselves into a deep financial hole. Unfortunately, too many of these card holders were never versed in proper credit card etiquette and severely damaged their credit scores and their future opportunities as a result. It is important, therefore, that good credit card habits begin early, to avoid the many complications that debt creates. Below is a list of steps that new credit card customers can follow to build good credit card habits.

Start small.
It is best for new credit card users to break in their new lines of credit by making only a few small purchases in the beginning. This can help them get a feel for their own needs and how their new cards can best address them. Too many credit card users rush out to charge multiple higher priced items to their account, under the erroneous belief that this is what a credit card is for. All too quickly, they can run into mounting debt and begin carrying over a balance month to month, racking up interest charges on top of their irresponsible purchases. The user who starts small learns early to respect a credit card’s power and to use it in such a way that it does not come back to harm them.

Pay the balance.
The balance on a credit card should be paid in full every single month. It may occasionally be necessary for card users to carry a balance into the next month, but these instances must be few and far between. By paying off the balance on time and in full during each billing cycle, new card users avoid throwing away extra money on interest that could have been avoided. Not only that, but they will establish a habit that will result in future credit limit increases and lower interest rates.

Never go above 30-50%.
One way that new card users can ensure they will almost never need to carry a balance is by charging no more than 30-50% of their available credit limit. Credit card companies do not view credit limits as lines that the card user should ever approach. Instead, they are seen more as a danger zone that signals to the card companies that the user is in danger of not being able to pay their balance. If a company senses this from a user’s pattern of usage, they will not hesitate to raise the user’s interest rates or reduce their credit limits if they feel it will mitigate their potential losses. To avoid this, new credit card users should get into the habit of never breaching 30-50% of their spending limit. 30% is preferred and will keep the user well out of trouble, while 50% is the absolute maximum that should ever be tied up at any one time.

]]> http://creditcardrewards.com.au/article/good-credit-card-habits/feed/ 0 http://creditcardrewards.com.au/article/benefits-to-authorised-users-on-credit-cards/ http://creditcardrewards.com.au/article/benefits-to-authorised-users-on-credit-cards/#comments Mon, 10 Jan 2011 12:37:15 +0000 Tim Smith http://creditcardrewards.com.au/?p=3433 The time may come when a credit card holder will need to decide if they want to venture into a joint account credit card with a friend, family member, spouse, or child. But due to the relative complexities of a joint account credit card, the user may feel apprehensive about blending accounts whilst still wishing to assist the other party. Such people have the option of adding an authorised user to their already existing card, enabling them to avoid some of the more worrisome aspects of a joint account credit card. Below is a list of benefits to authorised users on credit cards.

• Learn money management. By being added to an existing credit card account, authorised users can be exposed to credit for the first time, while learning money management skills under the supervision of the primary account holder. This process can ease inexperienced users into the huge, daunting world of personal finance and teach them about debt, credit limits, interest rates, scheduling payments, transfers and budgeting. This is why adding an authorised user on an account is a popular option with parents who wish to guide their teenage children’s foray into independent and responsible money handling. The same can apply to young couples or husband and wife teams, in which one of the spouses has little to no credit experience.
• Access to emergency funds. Whether the authorised user is a teenager on his or her parent’s credit card account, a husband enjoying his wife’s card, or two friends who have agreed to share finances, signing on an authorised user can grant them immediate access to emergency funds. This is especially helpful if the authorised user requires urgent car repair or medical attention, for example, as well as covering other everyday needs that are otherwise unforeseen.
• Faster rewards accruals. If the credit card in question has a rewards program, adding one or more authorised users can help build rewards points without needlessly charging big ticket items or several smaller, unneeded purchases. By agreeing beforehand with the secondary users, on such things as purchase limits and repayment schedules, all parties involved can ensure that the card does not breach its spending limit and that the balance can be paid in full each month. This protects the rewards that have accrued without forming reckless spending habits.

]]> http://creditcardrewards.com.au/article/benefits-to-authorised-users-on-credit-cards/feed/ 1 http://creditcardrewards.com.au/article/advantages-of-a-joint-account-credit-card-2/ http://creditcardrewards.com.au/article/advantages-of-a-joint-account-credit-card-2/#comments Mon, 10 Jan 2011 05:07:04 +0000 Tim Smith http://creditcardrewards.com.au/?p=3431 Joint account credit cards can prove disastrous for all parties involved if even one of the account holders mishandles the account. Negative effects on credit scores, reduced spending limits and higher interest rates are only a sample of the undesirable results that may confront joint account customers. There are, however, several significant advantages to a joint account credit card that users can claim, as well.

• Improved credit. Joint account credit card holders can support each other in building their respective credit scores, provided the credit card balance is paid off in a timely and consistent manner. This can be especially helpful if one of the account holders has not established any credit, or has fair to poor credit. By consolidating accounts, the account holder with damaged credit can get a boost in their credit score, possibly paving the way to the increased independence of applying for their own credit card in the future.
• Improved terms and conditions. Person A might not be able to get a low interest rate on their own, while Person B may be offered a very attractive rate, commensurate with their personal credit history. By teaming up on a joint account credit card, Person A can be afforded improved terms and conditions that they otherwise would not have been able to enjoy. Much like improving their credit, being a party to higher limits and better rates can assist the user with the lower credit score to one day achieving their own card with similar terms.
• Fewer bills. This is particularly helpful for couples who share a joint account credit card, but it can be beneficial for other partnerships as well. By taking part in a credit card together, the card holders eliminate the number of bills that are to be sent and remitted each month. While every credit card user struggles with keeping up with their bills from time to time, even reducing that total by one can make the difference between paying all their credit card bills on time or missing a payment and reaping the consequences.
• Greater accountability. When only one person is in charge of a credit card, the temptation to spend needlessly, max out the credit limit, or withdraw a cash advance can, at times, be overwhelming. By taking part in a joint account credit card, however, each user will possess an accountability factor that they otherwise would have lacked. Each card user can hold the other to mutually-agreed upon standards for card usage, whilst appreciating the luxuries that expanded purchasing power can afford.

]]> http://creditcardrewards.com.au/article/advantages-of-a-joint-account-credit-card-2/feed/ 0 http://creditcardrewards.com.au/article/what-makes-a-good-lifetime-balance-transfer-credit-card/ http://creditcardrewards.com.au/article/what-makes-a-good-lifetime-balance-transfer-credit-card/#comments Mon, 10 Jan 2011 05:02:45 +0000 Tim Smith http://creditcardrewards.com.au/?p=3429 When consumers begin looking for ways to repay their credit card debt, they will find few avenues that are as user-friendly as balance transfer credit cards. These cards are designed to consolidate large and small sums of debt, all the while providing the user with either a low or zero interest rate on balances carried over month to month. Small personal loans can be effective in consolidating personal debt, but they do come attached with an interest rate that can leave the user paying significantly more by the end of the loan, especially if the interest rate is a high one.

Standard balance transfer cards can help consumers with small to moderate amounts of debt and typically only offer low or no interest for the introductory period, which is usually around 6-12 months. A lifetime balance transfer card, however, is best for those consumers who have a lot of credit card debt to pay over a much longer period of time. For anyone applying for a lifetime balance transfer credit card, there are certain terms and conditions that the borrower must lookout for to ensure they get the most suitable card.

Firstly, a low interest rate is a must. Lifetime balance transfer card holders will not be able to escape interest since their usage term will be significantly longer. This does not mean, however, that they should settle for an interest rate simply because it is lower than what they paid on their previous cards. It is advisable to hold out for the lowest rate on the market, especially considering that this is the rate that will most probably be associated with the card for the duration of its use.

A low fixed-interest rate is even better than a low interest rate on a lifetime balance transfer credit card. Some of the advertised rates on lifetime balance transfer cards are actually variable and can change on the user without notice. But, by locking in a true fixed rate, the card holder will not need to worry about their rates spiking and increasing their overall debt. In this way, the right lifetime balance transfer card can increase the user’s peace of mind, all the while keeping their total debt in check.

Sometimes the advertised rates on credit products can be deceiving. Certain interest rates are advertised as lifetime, but are in reality just a sizeable period of time in the view of the credit card company, for example, 4-5 years. This means they are not truly for life, and the inevitable increase in interest can come back to haunt the borrower in the future. Potential card holders should investigate the terms and conditions carefully to make sure the rates are truly fixed for life. If they are not, it is best to continue shopping until they find the right card.

]]> http://creditcardrewards.com.au/article/what-makes-a-good-lifetime-balance-transfer-credit-card/feed/ 0 http://creditcardrewards.com.au/article/myths-about-business-credit-cards/ http://creditcardrewards.com.au/article/myths-about-business-credit-cards/#comments Mon, 10 Jan 2011 00:49:54 +0000 Tim Smith http://creditcardrewards.com.au/?p=3427 Entrepreneurs often find themselves financing their fledgling business by supporting each expense on their personal credit cards. Most of the time this is unavoidable as the business has not yet established an income stream. An income stream, however, is vital in proving to creditors that the business owner can make consistent and timely payments. When the company has reached a sustained cash flow, it is an appropriate time for the owner to apply for a business card and enjoy the many perks and freedoms afforded by it. There are, however, certain myths about business cards that can prove detrimental if not understood and debunked.

• The card holder is not responsible for default. This applies mostly to small and moderate-sized businesses and is perhaps the most damaging myth. It can encourage card users to spend beyond their means, albeit on business-related expenditures, all the while falsely believing that because it is a business card they will not take a hit on their personal credit report. The truth is, however, that business cards issued to any employee can damage their own personal credit. The same applies to the owner.
• Business cards are not issued based on personal credit. While it is true that the business needs an established income in order to qualify for a business card, an owner’s fair to poor credit history can threaten the business’ chances of obtaining a business card. When applying for a business card, personal info makes up the bulk of the requested information. An owner is essentially putting up his or her personal creditworthiness as an assurance for the business itself. This is done despite the fact that the business is likely to make a lot more money that can cover its debts, but, because the owner is in control, their ability to manage money is called into account and a business card is granted or denied accordingly.
• Business cards are only for businesses. An income stream for a business goes a long way towards guaranteeing that a business card is granted for any new business. It is not, however, a requirement. Since business cards rely on the owner’s personal creditworthiness for approval, business cards can be applied for by any individual at any time. The user’s credit score, if good enough, can be all that a creditor needs before issuing a business card, even if the business is not yet turning a sizeable profit.

]]> http://creditcardrewards.com.au/article/myths-about-business-credit-cards/feed/ 0 http://creditcardrewards.com.au/article/myths-about-balance-transfer-credit-cards/ http://creditcardrewards.com.au/article/myths-about-balance-transfer-credit-cards/#comments Mon, 10 Jan 2011 00:05:34 +0000 Tim Smith http://creditcardrewards.com.au/?p=3425 Consumers with outstanding debt on their credit cards often look to balance transfer cards to help them satisfy their debts more quickly and easily. Balance transfer cards accomplish this by consolidating card debt and assigning either a zero interest or an interest rate that is much lower than any of the debts being consolidated. Whilst these cards have helped many people escape mounting debt, there are several myths associated with them that can lead to irresponsible management and further damage the user’s credit.

Below is a list of myths about balance transfer credit cards of which all users should be aware:

• Myth #1: Balance transfers are free. Because the card is described as a balance transfer product, many applicants erroneously believe that their transfers will not cost them anything more than their annual fee, if applicable. The truth is, however, that there can be fees levied on the user for every transfer, which can be an unexpected expense and further the user’s debt. This varies between creditors and between balance transfer cards, so it is in the customer’s best interests to research which cards offer free transfers and which require fees.
• Myth #2: Users can transfer any balance. Balance transfer credit cards have credit limits just like standard cards. Because of this, the overwhelming majority of banks will not allow balances that exceed a certain percentage of the user’s total credit limit. This can disqualify borrowers who have immense outstanding balances and force them to seek alternatives for consolidating and paying down the debt. Card holders should inquire as to how much debt is allowed on an account before applying, in order to keep a needless inquiry from registering on their credit report.
• Myth #3: No interest on transfers. Card companies heavily promote balance transfers, doing so by offering users a plethora of enticing incentives for an introductory period. Introductory periods involve the first 6-12 months of a card’s term and often feature no fees and do not incur interest on transfers. The public’s mistaken belief that there is no interest on transfers stems from a misunderstanding of the initial promotional period wherein card companies suspend interest until the period expires. Users who believe they will not have to pay interest on a balance transfer credit card will be in for a rude awakening in the future, not to mention extra debt.
• Myth #4: Transfers are immediate. Owing to the process involved, transfers most often take anywhere from one to two weeks before completion. Applicants who expect transfers to happen immediately, or within days of being approved, can be unprepared when they find that it is taking longer than expected. This means that the user is still responsible for their old credit cards if the due dates occur while the transfer is in process. Consumers who apply for a balance transfer credit card need to be prepared for this so they do not miss payments and get hit with additional penalties.

]]> http://creditcardrewards.com.au/article/myths-about-balance-transfer-credit-cards/feed/ 0 http://creditcardrewards.com.au/article/how-to-avoid-credit-card-debt-settlement-scams/ http://creditcardrewards.com.au/article/how-to-avoid-credit-card-debt-settlement-scams/#comments Sun, 09 Jan 2011 12:18:23 +0000 Tim Smith http://creditcardrewards.com.au/?p=3423 Debt settlement companies can represent powerful allies to the credit card users, when dealing with their lenders. Reputable companies will know how to manoeuvre around the negotiation process and can fight for the consumer in ways that they cannot on their own. But, because this is a valuable resource, there are several debt settlement companies, in the market, who seek to defraud credit card user’s and take advantage of their desperation.

Below are some suggestions on how to avoid credit card debt settlement scams:

• Research. The onus for ensuring that the debt settlement company is a reputable one falls squarely on the consumer’s shoulders. Verifying a company’s credentials is much easier to do since the advent of the internet, so it is advisable that card users begin there. Reviews, blog postings, financial websites; everything at the consumer’s disposal should be employed to make sure that the debt settlement company in which they are interested is one that does not have a history of short changing its clients or attempting to defraud them.
• Do not provide sensitive financial info. Debt settlement companies do not need certain pieces of the consumer’s financial information in order to attempt a settlement. Generally, all they need is the client’s name, lending institution, and amount of debt they owe. If a settlement company requests information such as account, card, or PIN numbers, it is best for the card user to immediately take their business elsewhere. These are signs that a scam is under way and the user could pay heavily for it later.
• Get everything in writing. Oral agreements are the stock and trade of fraudulent business, and debt settlement companies are no different. To combat this, it is essential that customers get everything in writing. Whether the company is pressing for a contribution toward a settlement or willing to pay off the user’s debt and set up their own repayments, all terms and conditions should be received in writing. If the company is not prepared to do this, or does not have forms with such templates in stock, it should be a warning to the user that the company may not be legitimate.
• Do not neglect the agreement. Similar to obtaining all agreements in writing, consumers must read through their contracts, line by line. This will mean taking the forms home and reviewing them before signing, but if the settlement company truly wants the user’s business and is not out to defraud them, they will encourage such prudent behaviour. From the agreement, the credit card user will be able to parse out the elements that are not favourable toward them, ultimately helping them decide whether the company is running a scam.

]]> http://creditcardrewards.com.au/article/how-to-avoid-credit-card-debt-settlement-scams/feed/ 0 http://creditcardrewards.com.au/article/fine-print-on-lifetime-balance-transfer-credit-cards/ http://creditcardrewards.com.au/article/fine-print-on-lifetime-balance-transfer-credit-cards/#comments Sun, 09 Jan 2011 02:50:23 +0000 Tim Smith http://creditcardrewards.com.au/?p=3417 Balance transfer credit cards are great ways for consumers to quickly satisfy their credit card debt and with little to no interest during the initial promotional periods. Likewise, lifetime balance transfer cards can come to the aid of a consumer who is struggling with overwhelming debt and requires more than the 6-12 months allowed by standard introductory periods to pay back their creditors. While these can be indispensable financial tools, consumers who want to apply for a lifetime balance transfer card must be very careful to read the fine print of the card’s terms and conditions. The difference this makes can result in getting a card that allows the user the most freedom to pay off their debt, versus obtaining a card that will cost them extra in the end.

Below is a list of things for which consumers should look when applying for a lifetime balance transfer credit card:

• Fees. If a consumer has found a card that carries the lowest interest rate on the market and is locked in for life, they may think that they can stop there and sign on the dotted line. The truth is, however, that they can still end up paying more in fees and penalties. Transfer fees are one of the downsides to lifetime balance transfer cards, but that downside can be minimised by selecting the card with the lowest transfer fee. Certain cards can be void of fees altogether, although these are rare and tend to make up the expense elsewhere.
• No transfers in-bank. The majority of credit card issuers do not permit balance transfers on their own cards. Because of this, users will need to apply for another issuer’s card and transfer the balances from their old cards instead of completing the process all within the same company. Time, energy, and even money can be saved if the applicant researches this in the fine print before going through with the application.
• Qualifying. The consumer must meet the terms and conditions of the lifetime balance transfer credit card to be eligible and therefore qualify for the account. Because debts on a lifetime balance transfer card tend to be significantly higher than standard balance transfer cards, the issuer will have to ensure that the user can make the monthly repayments on time and according to the specifications that they set forth in the fine print. If the user fails to qualify, they will be rejected and must begin the process anew. By reading the fine print and making sure they meet the issuer’s demands, users can prevent the headache of further comparison shopping as well as the inquiry on their credit report.

]]> http://creditcardrewards.com.au/article/fine-print-on-lifetime-balance-transfer-credit-cards/feed/ 0 http://creditcardrewards.com.au/article/benefits-to-eliminating-credit-card-debt/ http://creditcardrewards.com.au/article/benefits-to-eliminating-credit-card-debt/#comments Sun, 09 Jan 2011 01:18:16 +0000 Tim Smith http://creditcardrewards.com.au/?p=3414 Too many credit card holders resign themselves to continually carrying credit card debt. Some believe it is a necessity if they want to build creditworthiness for future purchases such as a home, student loan, or a business loan. Others see debt as unavoidable, due to the changing economy, reduction or loss of income, or unexpected expenses that appear and demand immediate attention. There are still others who think that credit card debt is no big deal, so long as they do not breach their spending limits and make at least the minimum payments each month.

No matter how consumers approach it, the facts prove that there are many benefits to eliminating credit card debt. A few of the more important ones are listed below:

• Increased spending limits. Credit cards are great tools for big ticket purchases or unforeseen expenses, such as home or car damage, illness or injury. But sometimes a card user cannot afford to charge these items because they surpass the spending limits available on their credit product. By eliminating their credit card debt and keeping it down, however, consumers signal to their lending institutions that they are handling their money responsibly. When lenders see that a customer is practising sound money management, they are more inclined to grant a raise in the user’s credit ceiling. Conversely, when a customer stagnates in debt, the lenders are forced to believe that they are having trouble paying down their balance. This could have the counter effect of decreasing spending limits and severely hampering the user’s purchasing power.
• More lines of credit. When creditors review a card holder’s credit score and find credit card accounts carrying over high balances each month, they worry that the customer will not have the ability to pay off a new line of credit. This will result in the user’s application being declined and their credit score taking a hit because of the inquiry. By paying off their debt and removing it completely, users will be able to present a clean, responsible pattern of borrowing that only serves to increase their chances of opening future lines of credit.
• Better credit score. Not only does eliminating credit card debt improve one’s odds of opening better lines of credit in the future, it also improves one’s credit score. Being diligent with each month’s balance by paying it on time, and in full, establishes solvency and responsibility. This, in turn, contributes to a higher credit score and more opportunities for expanding purchasing power.
• Savings on interest. Many credit card customers chalk interest up to the cost of doing business with the card companies. While it may be true that interest is unavoidable, it is not true that card holders have to lose money on it. By eliminating credit card debt, card users do not pay the additional money to interest each month. This can add up to significant savings, as many card users carry double digit interest. By paying off their debt and stopping the balance carryovers each month, users increase the value of their card at the same time they increase the money in their bank accounts.

]]> http://creditcardrewards.com.au/article/benefits-to-eliminating-credit-card-debt/feed/ 0 http://creditcardrewards.com.au/article/are-credit-cards-the-best-option-for-holiday-spending/ http://creditcardrewards.com.au/article/are-credit-cards-the-best-option-for-holiday-spending/#comments Sat, 08 Jan 2011 03:53:00 +0000 Tim Smith http://creditcardrewards.com.au/?p=3412 Many consumers believe that if they do not own a credit card, they do not have the purchasing power necessary to be able to give their loved ones the gifts that they want. While it is true that credit cards expand a consumer’s ability to spend beyond their means, it is not the only option available to them. Many stores can offer assistance through lay-by programs, which put the power in the consumer’s hands to make the holidays everything they can be. With lay-by, a shopper can put an item on reserve, months before the holiday season, and then make smaller monthly payments until it is totally paid off.

Below is a list of reasons why lay-by may be a better option over credit cards for holiday spending:

Lay-by charges no interest.
If a credit card user were to charge the gifts they wanted to buy for the holidays, the purchase total for the combined gifts would most likely exceed what they could satisfy in one month’s pay cycle. Because of this, users are more able to pay interest on their gifts for carrying over their balance from month to month. Lay-by, on the other hand, will not accrue interest at any point, while the products are held for the consumer. This saves the consumer money and debt over the long term.

Lay-by does not encourage overspending.
Credit cards, by their very nature of how they are designed and promoted, encourage overspending. It is too easy for a card user to rack up multiple charges for holiday gifts instead of weeding out gifts that are not necessary. On the other end of the spectrum, lay-by promotes financial restraint by not giving consumers the tools to spend beyond their means. As a result, lay-by users save even more money and do not run the risk of damaging their credit scores by overtaxing their spending limits.

Lay-by can be done by anyone.
Not every consumer can qualify for a credit card. For those shoppers, lay-by is the perfect answer to buying the gifts that they want, on a limited budget. In this way, lay-by works as a kind of reverse credit line: the purchases the user wishes to make are granted, but they do not take possession of them until they pay them off in monthly instalments.

]]> http://creditcardrewards.com.au/article/are-credit-cards-the-best-option-for-holiday-spending/feed/ 0 http://creditcardrewards.com.au/article/what-makes-a-visa-different-from-a-mastercard/ http://creditcardrewards.com.au/article/what-makes-a-visa-different-from-a-mastercard/#comments Sat, 08 Jan 2011 01:38:05 +0000 Tim Smith http://creditcardrewards.com.au/?p=3410 Consumers may wonder what makes Visa and MasterCard different from one another. To many people, a credit card is simply a credit card, and other than the perks offered through their rewards programs, whether it is a Visa, MasterCard, or AMEX matters little. While there is not necessarily a lot that separates these cards, there are indeed important differences between each company, however, that help shape how each card operates.

Strictly speaking, both Visa and MasterCard, are what is known as payment networks, which are systems whose sole function is to further communications between various financial institutions. Everything from credit unions, local banks, and major brand-name creditors are included in these networks. Within these networks, financial institutions are connected to merchants, which are the outlets at which consumers charge their purchases of food, entertainment, clothing, and so on.

This helps explain how a consumer can present their Visa at a certain merchant, only to be told that their card is not accepted. Visa, as an intermediary, does not do business with that particular merchant because that merchant has not optioned themselves into Visa’s network. If they attempted to charge the consumer’s purchase to their Visa, it would decline because that merchant has no access to the Visa network and cannot acquire funds from participating banks. This process is the same for MasterCard, who operate only within their specific network.

Both banks and merchants must pay to use the Visa or MasterCard networks, doing so through fees that are deducted from purchase receipts. When a user swipes their card at a merchant’s establishment, for example, the merchant’s point-of-sale system asks for approval from the merchant’s bank. But, because the user’s card was issued from a different bank, the merchant’s bank must attempt to debit the issuing bank. The issuing bank is the one who processed the user’s application and holds their available credit. If the user’s account is carrying enough funds to cover the purchase, the issuing bank will signal to the merchant’s bank that the purchase can proceed. The merchant’s bank will then approve the purchase and a receipt will be printed for the consumer. If the account has insufficient funds, then the issuing bank will inform the merchant’s bank and the purchase is declined.

Overall, it sounds very complicated and time-consuming, however, it usually takes no more than a few seconds from when the customer swipes their card until they are approved or declined. At the close of a business day, the merchant will hand over receipts to its bank, who then forwards them to the banks that issued the various cards that were swiped through their point-of-sale systems during a given day. The issuing bank deducts a fee that it pays to Visa or MasterCard, who in turn forward the charged amount to the merchant’s bank. The merchant’s bank withholds its own fee before turning over the remaining money to the merchant.

It is a common misconception among consumers, when they apply for a card, that they are applying directly to one of these two companies. In truth, they are applying to a bank and the bank has paid for the right to put the Visa or MasterCard logo on their cards. This is why these banks are called issuing banks.

]]> http://creditcardrewards.com.au/article/what-makes-a-visa-different-from-a-mastercard/feed/ 5 http://creditcardrewards.com.au/article/types-of-credit-cards/ http://creditcardrewards.com.au/article/types-of-credit-cards/#comments Sat, 08 Jan 2011 01:05:33 +0000 Tim Smith http://creditcardrewards.com.au/?p=3406 Credit card companies have mastered the art of appealing to the many subsets of the consumer population by marketing several unique and distinct cards. These cards highlight different advantages and perks from one another and do not serve each consumer equally. Each card, however, augments the purchasing power of the user and enables them to meet their personal goals.

Standard credit cards.
These are the most basic type of credit cards on the market. They tend to offer very little in the way of perks or rewards and feature average credit limits. Credit limits can very between issuers, however, as can the other variables, such as interest rates, grace periods, and annual fees.

Rewards credit cards.
There are several different rewards credit cards to appeal to the spending habits of today’s consumer. Whether the user’s interest is in travel rewards, retail rewards, petrol rewards, or even cash back rewards, they can find a credit card with a niche rewards program that will grant them the incentives that they specifically desire. Most rewards cards operate by accruing points on qualified purchases, which can vary between lenders and rewards programs.

Frequent flier credit cards.
These cards are associated with a specialised rewards program and are one of the most popular products in the market. Frequent flier credit cards can enable users to build mileage points much more rapidly than they would in a generic mileage points program. Frequent flier cards can be designed to earn points only on certain airlines, however, so consumers should investigate which card offers points for their carrier of preference.

Balance transfer cards.
If a consumer is burdened with a lot of debt from another card, they can apply for a balance transfer card. These are specifically designed to attract consumers who wish to consolidate their balances onto a low or zero interest card. Most of the low or no interest rates on balance transfer cards expire at the conclusion of a promotional period, which can be anywhere between the first 6-12 months after the card is issued. Once the introductory phase is over, the interest rate increases.

Credit repair cards.
Also known as bad-credit credit cards, these cards are designed to help the user repair their poor credit scores by establishing a line of credit. These often take the form of a secured credit card, which requires a sizeable deposit as collateral to offset the risk of loss on behalf of the issuing bank. Consumers also have the option of a prepaid credit card, with which the user can spend no more than the amount they put into the card, much like a debit card.

]]> http://creditcardrewards.com.au/article/types-of-credit-cards/feed/ 1 http://creditcardrewards.com.au/article/rewards-credit-cards/ http://creditcardrewards.com.au/article/rewards-credit-cards/#comments Fri, 07 Jan 2011 12:19:54 +0000 Tim Smith http://creditcardrewards.com.au/?p=3404 Rewards credit cards provide extra incentives for customers to make purchases with their credit cards. The types of rewards offered can vary greatly between lenders and between programs, leading to points for some very specialised consumer interests. While what constitutes a qualified purchase is determined by the issuing bank, there is no denying that rewards credit cards equip consumers with the ability to get more out of their everyday purchases than ever before.

Below is a list of some of the most sought-after rewards credit cards. Exclusions may apply, so consumers are advised to read the fine print before selecting which rewards card is most suitable for them.

• Travel rewards cards. Most of the points accrued with travel rewards credit cards are designated for free nights and stays at hotel chains across the globe. Programs do exist, however, that enable users to build points for general travel and tourism, such as theme park admissions, cruises, and rental cards, to name just a few. Travel rewards credit cards are ideal for frequent travellers or simply for users who want to save money on a single annual trip.
• Retail rewards cards. Retail rewards credit cards are associated with a specific retailer and require the user to redeem their points specifically and exclusively with that retailer. Users can often earn points on everyday purchases at other vendors while earning double or triple points when making a purchase at the retailer associated with the card. Retail rewards credit cards are a great way for users to build points that can later be redeemed for products on special occasions, such as birthdays, holidays, anniversaries and Christmas.
• Petrol rewards cards. Like reward programs themselves, petrol rewards cards can be generic in nature or specific to one brand. If the consumer chooses a generic petrol rewards card, they will earn points on their purchases that can be redeemed toward petrol rebates at all petrol stations. If, however, they select a brand-specific card, they can only earn points when charging for gas at that particular company’s stations. The positive side to brand-specific petrol cards is that their rate of return is often higher than with generic petrol cards.
• Cash back rewards cards. One of the most popular types of cards in the industry is the cash back card which earns points towards a cash rebate, to be redeemed after a purchase threshold has been reached. Some cash back cards earn points only when used at certain merchants or for particular categories of purchases, such as groceries, clothes, or entertainment. While the standard rate at which points are earned is 1% of each total purchase, some issuers will increase that percentage with consistent use

]]> http://creditcardrewards.com.au/article/rewards-credit-cards/feed/ 0 http://creditcardrewards.com.au/article/instant-approval-credit-cards/ http://creditcardrewards.com.au/article/instant-approval-credit-cards/#comments Fri, 07 Jan 2011 07:15:39 +0000 Tim Smith http://creditcardrewards.com.au/?p=3401 One misconception that potential credit card owners commonly have about instant approval credit cards is that they are automatically granted to the applicant. The truth is that instant approval stands for the speed of the process that the credit provider uses to determine credit eligibility. Contrary to many consumers’ erroneous beliefs, this means that applicants can indeed be turned down for an instant approval credit card.

When a potential borrower submits their application, creditors who advertise instant approval cards move to review the applicant’s information much more quickly than a standard credit card application. Most instant approval processes take no more than a few days before the applicant is notified. This is in the creditor’s best interest as they can attract many new customers in this fashion and proceed to profit from the new card holder that much quicker.

Lenders also know that if an applicant is granted instant approval, it can result in a positive response from the borrower and increase the allure of the card for which they applied. Creditors hope that this allure will encourage applicants to accept their cards on the spot rather than comparison-shop with their competitors. To further entice card users, some credit providers furnish temporary cards that can be used immediately for purchases, mostly online.

Instant approval applications on the internet, which stem from reputable credit card organisations, are safe and secure to use. Credit companies encrypt their sign-up pages to protect against fraud and hacking, signifying this with a lock icon in either the lower-right or upper-left of most web browsers. If ever a lock icon does not appear, the applicant is better off navigating to another credit card company to avoid risking their personal info.

The excitement of an instant approval card can lead many new card holders to believe that they are free from repayment until 30 days from the day they receive their physical card in the mail. Consumers should take note, however, that all of the terms and conditions of the card apply from the moment the application has been approved. This applies even if the user is given a temporary card while they await their real one.

]]> http://creditcardrewards.com.au/article/instant-approval-credit-cards/feed/ 0 http://creditcardrewards.com.au/joint-account-credit-card http://creditcardrewards.com.au/joint-account-credit-card#comments Thu, 06 Jan 2011 23:21:37 +0000 Tim Smith http://creditcardrewards.com.au/?p=3397 Joint account credit cards can prove disastrous for all parties involved if even one of the account holders mishandles the account. Negative effects on credit scores, reduced spending limits and higher interest rates are only a sample of the undesirable results that may confront joint account customers. There are, however, several significant advantages to a joint account credit card that users can claim, as well.

• Improved credit. Joint account credit card holders can support each other in building their respective credit scores, provided the credit card balance is paid off in a timely and consistent manner. This can be especially helpful if one of the account holders has not established any credit, or has fair to poor credit. By consolidating accounts, the account holder with damaged credit can get a boost in their credit score, possibly paving the way to the increased independence of applying for their own credit card in the future.
• Improved terms and conditions. Person A might not be able to get a low interest rate on their own, while Person B may be offered a very attractive rate, commensurate with their personal credit history. By teaming up on a joint account credit card, Person A can be afforded improved terms and conditions that they otherwise would not have been able to enjoy. Much like improving their credit, being a party to higher limits and better rates can assist the user with the lower credit score to one day achieving their own card with similar terms.
• Fewer bills. This is particularly helpful for couples who share a joint account credit card, but it can be beneficial for other partnerships as well. By taking part in a credit card together, the card holders eliminate the number of bills that are to be sent and remitted each month. While every credit card user struggles with keeping up with their bills from time to time, even reducing that total by one can make the difference between paying all their credit card bills on time or missing a payment and reaping the consequences.
• Greater accountability. When only one person is in charge of a credit card, the temptation to spend needlessly, max out the credit limit, or withdraw a cash advance can, at times, be overwhelming. By taking part in a joint account credit card, however, each user will possess an accountability factor that they otherwise would have lacked. Each card user can hold the other to mutually-agreed upon standards for card usage, whilst appreciating the luxuries that expanded purchasing power can afford.

]]> http://creditcardrewards.com.au/joint-account-credit-card/feed/ 0 http://creditcardrewards.com.au/how-to-avoid-credit-card-traps http://creditcardrewards.com.au/how-to-avoid-credit-card-traps#comments Tue, 21 Dec 2010 00:08:09 +0000 Tim Smith http://creditcardrewards.com.au/?p=3377 Credit cards are an essential part of the financial portfolios of many consumers. Without them, purchasing power would be severely diminished while local, regional, and global economies would be negatively impacted. If handled responsibly and researched diligently, credit cards can provide users with tremendous benefits, whilst avoiding some of the traps inherent in credit cards that do not always favour the consumer.

Below is a list of credit card traps to avoid:

• Shorter grace periods. The standard grace period may be 30 days, but some credit card companies can shorten the grace period to as low as 20-25 days. This can be a disadvantage to the user, of course, since most budgets relegate payment of certain bills and expenses at certain times every month as determined by the frequency and amount of the card user’s income cheques. Whereas 30 days easily encompasses two bi-weekly pay periods and a single monthly pay period, 20 or 25 days can often not be enough time for the card holder to amass the funds necessary for full or even partial repayment. To avoid this, consumers should read the fine print on their credit card applications and forgo the card if the standard 30 day period is not in place. If the consumer does accept a shorter grace period, it is best not to rely on the company to notify them when their payment is due. Online bill pay is prevalent among credit providers and a great way to keep informed on due dates.

• Foreign transaction fees. When a card holder uses their card to make a purchase overseas or over the internet on a foreign website, they are often charged foreign transaction fees. These fees can also be levied if the purchase is made in Australian dollars, but the payments are processed outside of Australia. There is no easy way to avoid this, especially if the card holder is making purchases online or over the telephone, but one solution is to write a cheque. It may be slower and consume more time, but the card holder will not lose money through currency conversion.

• Variable interest rates. Variable interest rates are common, but it is the variable rates that are connected to an advertised minimum that become a trap for the consumer. A variable rate fluctuates based on the prime rate, meaning that card holders stand a good chance of getting a lower interest rate at some point, while they employ their card. Banks and creditors, however, can sometimes assign a base rate beneath which card holders with minimum variable rates cannot fall. While other consumers might be enjoying lower rates, these card users have no choice but to accept a rate that is prevented from lowering any further. Consumers should always double check their terms and conditions before signing the dotted line to ensure that they are not applying for such a card.

• Decreased credit limits. Credit card holders know that they should not exceed their credit limit, and responsible users strive to stay under that threshold. Sometimes, however, diligence and responsibility are not enough. While a user may never max out their credit limit, they can nevertheless employ enough of it that, should the creditor decide to lower their ceiling, the user’s outstanding balance might suddenly exceed their limit. In turn, this incurs an overdraft fee, which can bump up the user’s interest rate, and can result in a further reduction of spending limits. The only viable solution is for card holders to pay off their balances each month and stay well clear of their limit instead of simply making the monthly minimum.

• Time restrictions on due dates. Many users believe that if they get their payment into their provider by the date listed on the remittance stub then they are in the clear. However, the truth is that some companies specify the times by which payments are due in addition to the printed due dates, such as by 12:00 P.M. on the 24th, for example. This information is usually found in the fine print, and card holders who do not read it may be disappointed when they are charged a late fee in the following month despite their payment having been posted to their account on the due date. To avoid this, users should strive to mail their payments an extra day or two earlier than planned, or use their provider’s online bill pay option before the due date.

• Universal default clause. Credit card providers often assess the risk that a card holder poses by examining their credit scores and history with several other vendors and creditors. If the provider learns that a user has missed even one payment on their heating or electric bill, for example, the provider can deem them to be a risk and proceed to raise the user’s interest rate in response. This action is known as the universal default clause and can negatively impact on a card holder’s purchasing power and credit score. This is one reason why card holders are encouraged to stay on top of all of their lines of credit, whether utility, magazine subscriptions, retail credit cards, personal loans, mortgages, and so on. Lines of credit are becoming more interconnected than ever, and failure to responsibly maintain one can affect them all.

• Zero introductory rates. The appeal of zero introductory rates is obvious; the ability to expand purchasing power without paying anything extra. While this can represent a good deal for the consumer, what is often misunderstood about introductory rates is that they are subject to change if the card holder misses a payment or exceeds their spending limit. Card holders must pay strict attention to such clauses and make sure that they are not in violation of their card’s terms. Otherwise, they will lose what drew them to the card in the first place.

]]> http://creditcardrewards.com.au/how-to-avoid-credit-card-traps/feed/ 0 http://creditcardrewards.com.au/credit-cards-for-people-wth-bad-credit http://creditcardrewards.com.au/credit-cards-for-people-wth-bad-credit#comments Sun, 19 Dec 2010 23:21:15 +0000 Tim Smith http://creditcardrewards.com.au/?p=3374 When a consumer has tarnished credit, it can often seem next to impossible for them to obtain a new line of credit that might help repair their credit score and get them on the road to complete financial recovery. Many of these consumers can be overcome by the hopelessness of their situation and determine that they will never be able to improve their circumstances. Fortunately for them, however, there are some viable options that can put them on the right path, if used correctly. These are known as bad-credit credit cards or repair credit cards.

The first avenue for repairing broken credit is with a prepaid credit card. These generally function like normal debit cards, in that the user posts a specific money amount that can be accessed with the repair card. Because the user supplies the actual spending limit, the balance is not subject to interest or reduction. Many prepaid credit cards do require annual fees, however, and can still levy overdraft fees should the user exceed the prepaid amount. While not a standard credit card, these can, nonetheless, help the user demonstrate a pattern of responsible money management that might later encourage credit providers to open an unsecured line for the user.

If the user has neither excellent nor poor credit, another avenue for rebuilding their credit-worthiness is by obtaining a secured credit card. While traditional credit cards are unsecured and do not require deposits, secured card accounts are only opened when the user puts up a significant down payment as collateral. This differs from prepaid cards in that the user is not posting their entire credit limit, but rather a sum of money that helps ease the creditor’s fears in the event of a failure to repay. From there, the creditor grants a line of credit to the user, usually with high interest rates and low credit ceilings. This is, however, an important first step toward improving the user’s credit score and the possibility of future cards with better terms.

]]> http://creditcardrewards.com.au/credit-cards-for-people-wth-bad-credit/feed/ 2 http://creditcardrewards.com.au/pre-screened-credit-card-offers http://creditcardrewards.com.au/pre-screened-credit-card-offers#comments Thu, 16 Dec 2010 22:16:12 +0000 Tim Smith http://creditcardrewards.com.au/?p=3364 Based on credit history and related borrowing, many credit card companies will solicit consumers with pre-screened credit card offers. These offers are designed to appeal to their lifestyle and spending habits and often come with targeted incentives that would not necessarily attract other consumers. While they may clutter consumers’ mailboxes, pre-screened offers can be a great way of learning what cards are on the market and the new and cutting-edge features that companies have begun implementing into them.

It is believed by many consumers that pre-screened offers are simply sent out in bulk to attract the widest net of new customers possible. In reality, however, the stream of card offers a consumer can receive, which they will often view as junk mail, has been specifically tailored for them based on the consumer’s available details. Details that creditors take into consideration include everything from age, income, region, civic involvement, employment, and more.

This means that a credit card company has viewed some very personal and sensitive info about the consumer, and, because of these extensive background checks, the pre-screened offers that creditors make are generally approved almost immediately when the solicited consumer moves forward with the application process. This can make it easier for the consumer if they were thinking about applying for a card or need to obtain one quickly.

All is not always as it appears on pre-screened offers, however. On many occasions, the card company will seduce consumers with a low interest rate or a high credit limit. These figures can appear prominently on the outside of the envelope and are enlarged and highlighted on the offer sheet. The consumer can be lead to believe that these numbers are locked when they apply, but the fine print indicates that the creditor has the right to change the terms of the card at their own discretion.

Creditors will do this if the consumer provides them with additional information to which they previously had no access and which negatively affects the consumer’s credit profile. As a result, consumers are well advised to treat the low rates and high limits of pre-screened credit card offers to be what the creditor has deemed as possible instead of what is guaranteed. Keeping this in mind will alleviate the consumer’s disappointment if they are not granted the advertised figures.

]]> http://creditcardrewards.com.au/pre-screened-credit-card-offers/feed/ 0 http://creditcardrewards.com.au/cash-back-credit-cards http://creditcardrewards.com.au/cash-back-credit-cards#comments Thu, 16 Dec 2010 03:12:32 +0000 Tim Smith http://creditcardrewards.com.au/?p=3362 When a consumer is looking to apply for a cash back credit card, there are certain questions they must ask before signing their name to the agreement. Questions such as, “What is the percentage of return?” “What amount must I spend, if any, before the percentage is applied to my purchases?” “What purchases qualify toward the cash back?” While all of these are excellent questions, and cannot be avoided in order to ensure that the consumer makes a fully informed decision, there are other actions they can take to further insulate themselves against future difficulties.

Annual fees are not a feature of most cash back credit cards, but it is still good practice for a potential card holder make sure anyway. There are a host of other standard fees that can be associated with a cash back credit card, such as reward redemption fees, which are paid whenever the user decides to withdraw their cash rewards. Reward recovery fees may also apply and are paid whenever a lender reinstates rewards that were lost after the user made a late payment. There are several other fees that can be written into the user agreement, to which a new rewards card user may be ignorant and which may come back later to wreak havoc on that user’s finances.

Potential card holders must be aware of the interest rate as well. Many cash back cards charge higher interest rates than other cards because cash rewards are at a premium among rewards card users. These sought after cards give providers leverage to assign slightly higher interest, knowing that most consumers are willing to pay extra in order to make a decent return in cash back. If, however, the interest rate is too high, the card holder is essentially paying for their cash back rewards rather than accumulating them with needed purchases.

To avoid throwing away money, the consumer should determine which card has the best percentage, the best tier system, and the most applicable qualifying purchases for the lowest possible rate they can obtain. They can further their return by keeping track of their qualifying purchases as well as the card’s fees, being diligent in refraining from incurring any penalties. In these ways, card holders can earn rebates that give them increased purchasing power beyond simply owning a credit card.

]]> http://creditcardrewards.com.au/cash-back-credit-cards/feed/ 0 http://creditcardrewards.com.au/raising-credit-limits http://creditcardrewards.com.au/raising-credit-limits#comments Thu, 16 Dec 2010 02:45:53 +0000 Carl Thomas http://creditcardrewards.com.au/?p=3359 Many credit card holders believe that the higher the spending limit on their cards, the better. After all, that’s the point of applying for a new card: for a card holder to possess expanded purchasing power beyond their immediate capabilities. But raising credit limits has hidden dangers that are not as apparent.

While smaller credit limits can keep a card holder’s spending in check, the bigger the limit, the more tempting it can be for the same user to spend more than before. This can be a dangerous move given that most card holders’ incomes do not grow commensurate with their credit limits. While the holder may not fall into unmanageable debt, they nevertheless lose some financial manoeuvrability and must keep a tight budget to make their monthly payments.

However, higher credit limits can very easily lead to out-of-control debt. Automatic credit limit increases are a feature for certain card providers as part of a loyalty incentive program. But they’re also seeking to subtly increase the holder’s outstanding balance by affording them more freedom. Too many credit card holders don’t pay attention to their finances due to the erroneous belief that they’re okay since they’re far from reaching their credit ceilings. As long as their balances are growing, however, then the provider is happy, knowing the chances that the user will continue paying on credit will increase.

Another hidden danger is the possibility that a card provider can actually decrease a user’s credit limit. If a user misses a payment on their card, a utility, or another line of credit, or if they write a bad check, the provider may get nervous about the user’s ability to continue making consistent and timely payments.

One way to cushion themselves against potential loss is by lowering credit limits in order to discourage the user from spending more and putting them at increased risk. Providers will do this even if they have previously increased the credit limit. Credit card holders in this situation will find their freedom taken away and their purchasing power suddenly and severely restricted. Not only that, but the user may be assigned a higher interest rate on top of the decreased spending limit, furthering the restriction on their spending.

]]> http://creditcardrewards.com.au/raising-credit-limits/feed/ 0 http://creditcardrewards.com.au/automatic-credit-card-payments-1 http://creditcardrewards.com.au/automatic-credit-card-payments-1#comments Mon, 13 Dec 2010 23:36:05 +0000 Tim Smith http://creditcardrewards.com.au/?p=3356 For decades, consumers had no choice but to pay their bills by filling out a remittance stub and then mailing it with payment for the billed amount. Many people continue this tradition, despite the availability of online or automatic bill payment systems, provided by most credit card companies. For some, writing a physical cheque is simply a habit that is hard to break. For others, privacy concerns around online payments make consumers fear that their information is too vulnerable to theft. And, for others, there is a sense of control around determining when their credit card statements get paid as opposed to the provider debiting their bank accounts on their terms.

But there are many benefits to setting up automatic credit card payments. Many card holders, for example, employ their card’s automatic debit features and testify to the fact that the convenience far outweighs the risks. Yet many consumers do not stop to think about just how much automatic credit card payments can help their lives.

The most obvious benefit is the time that can be saved. Customers don’t have to keep a stack of bills every month and search them for their credit card statement. Nor must they fill out a cheque, find a stamp, and make an extra trip to the Post Office. By establishing automatic credit card payments to debit from their transaction or savings account, card holders can be assured that there won’t be any extra trips required or resources to be purchased in order to pay their credit card bill.

To ensure the payments have gone through, most providers offer the option of sending payment confirmations to the customer once the transaction has been completed. This is an extra advantage to automatic payments since the user can see that no extra money has been transferred and that it was done on time. Many providers also allow their customers to tailor the specifics of their automatic debiting, such as the date, each month, that a payment be made, whether the full amount is to be paid or just the monthly minimum, and if the customer should receive an email reminder in the days leading up to the charge. The reminders give the user a little bit more control, in case they decide at the last minute that they want to alter the charge amount for that given month.

Because the card holder is making payments on time with automatic debiting, there is a much greater peace of mind because they don’t have to be concerned with incurring late fees. By paying late, users not only must pay extra for late fees, but they also run the risk of the credit card provider raising their interest rate. Automatic payments prevent both of these undesirable consequences and allow the user to keep more of their money for themselves.

]]> http://creditcardrewards.com.au/automatic-credit-card-payments-1/feed/ 0 http://creditcardrewards.com.au/article/credit-card-late-payment-fees/ http://creditcardrewards.com.au/article/credit-card-late-payment-fees/#comments Mon, 13 Dec 2010 00:07:06 +0000 Tim Smith http://creditcardrewards.com.au/?p=3353 Credit card companies levy fees against card holders who fail to pay their monthly statement by the required date. Card companies view late-paying customers as a financial risk and they lose money if a card holder is late. In order to offset some of the risk and recoup their losses, providers will charge late-fees. If they are too lax with the enforcement of these fees, they will be forced to deal with chronically late-paying customers which will result in loses of significant amounts of money.

While many people suspect that card companies are charging higher late-payment penalties as a way to make money, in truth it is illegal for them to do so. In Australia, no credit card company can earn a profit through late-fees, as determined by the Reserve Bank of Australia. Only losses are allowed to be returned via late-fees, ensuring that the credit card companies have enough funds to remain in business for the longer term.

Several options exist for customers who are habitual late-payers. If a business owner is consistently waiting for accounts to be paid and find that their monthly credit card bill falls on a date that is not compatible with their influx of cash, serious consideration should be given to obtaining a small business credit card. Not only do these cards offer many perks to the card holder, but they typically employ a protracted grace period. Sometimes even a matter of an extra week or two can be enough to make good on monthly payments.

For consumers, however, who are using a personal credit card which doesn’t offer the luxury of an extended grace period, a few alternatives are available. While it is advisable to satisfy the outstanding balance on a credit card each month, sometimes this is not possible due to unexpected loss of income, several bills due in close proximity, or poor planning. In these situations, making the minimum payment is the best practice. There will still be an outstanding balance in the following month and interest will be charged on that balance, but the card holder now has another month to satisfy it. This is much more preferable than skipping the payment altogether.

In extreme cases of repeated late-payment, establishing a direct deposit each month for the minimum payment is an effective fail-safe. Most credit card companies allow card holders to set up a minimum payment from the holder’s cheque account. If the consumer is worried about spending the money prior to the debit, they can open a savings account and debit their cheque account for the monthly minimum whenever a pay cheque is deposited.

]]> http://creditcardrewards.com.au/article/credit-card-late-payment-fees/feed/ 3 http://creditcardrewards.com.au/small-business-credit-cards/ http://creditcardrewards.com.au/small-business-credit-cards/#comments Thu, 09 Dec 2010 01:27:31 +0000 Tim Smith http://creditcardrewards.com.au/?p=3330 The evolution of the credit card industry has included the development of a niche market targeted at small business owners. Gone are the days when business owners were required to support their enterprises with their own savings, or by the strength of their personal credit history. Funds are now much more readily available to those businesses that qualify for a small business credit card, helping owners to meet financial obligations much more expediently and securely.

Small business credit cards are ideal for shorter term standard business loans, rather than longer terms loans. As business resources are often obtained first and paid for later, a line of easily available credit assists business owners in keeping their operations running smoothly.

When it comes to acquiring credit for the long term, however, small business credit cards are a very weak option for the business owner. Not only do longer term financial needs tend to require a large sum of money that many small business credit cards will not be able to fund, the interest rates for credit cards are much higher than regular long-term business loans.

Furthermore, by using a small business credit card and thereby establishing a credit history, a business owner increases the chances of better long-term loans becoming available in the future. In this way, business owners can strengthen both their immediate and extended purchasing power. This two-pronged approach can be a great tool for the owners to expand and enrich their businesses.

The benefits that come with a small business card can, however, easily be negated with improper usage. Neither business owners nor employees with access to the company credit card should ever employ it to make personal purchases. Not only will it add to the outstanding balance every month, but the company will lose money via the interest rate on such purchases. Even if the owner or employee repays the entire purchase amount, the company will still be accountable for the high interest, leaving them at a loss. Personal credit cards must always be used for personal shopping.

]]> http://creditcardrewards.com.au/small-business-credit-cards/feed/ 0 http://creditcardrewards.com.au/shopping-with-low-interest-credit-cards http://creditcardrewards.com.au/shopping-with-low-interest-credit-cards#comments Mon, 22 Nov 2010 22:14:04 +0000 Carl Thomas http://creditcardrewards.com.au/?p=3294 That beautiful, sparkling necklace in January. A new diamond-encrusted watch in February. A dreamy, flat screen television in March. That spontaneous trip to an enchanting island in April. They say the best things in life are free, however, you beg to disagree. There’s no better feeling in the world than the sound of your latest purchase put in a box or that luxurious bag.

With this kind of shopping behaviour, it will come as no surprise that you’d incur that much-dreaded credit card debt. With some credit card companies offering sky-high interest rates, it will be more difficult than ever to pay those credit card debts.

However, thank goodness for low interest credit cards. Nowadays, various credit card companies offer low interest credit cards that provide you with more breathing room to pay your credit card debt. High interest credit cards are now a thing of the past, low interest credit cards are here to help you pay your credit card debt and satisfy your need for some needed shopping.

Since high interest credit cards make items you purchased cost three or four times more, low interest credit cards are here to soften the blow on your pockets once you pay for that priced possession. Primarily, low interest credit cards are suitable for people who have credit card balance every month. Low interest credit cards are very much recommended for shopaholic’s since the low interest rates assure you that the cost of the items you purchased won’t balloon to epic proportions. Indeed, low interest credit cards can save you thousands and thousands of bucks in the long run.

If you stumble upon a low interest credit card offer, make sure to not let the offer pass you by. These low interest credit cards have the lowest interest rates for your monthly purchases and even for balance transfers. Low interest credit cards can have either a low fixed rate APR or a low introductory APR.

Once you considered getting yourself a low interest credit card, it is always recommended to compare the said APR or annual percentage rate of different low interest credit card offers as this would facilitate a better decision on what low interest credit card you should get for yourself. The said annual percentage rate will determine the amount of interest you will owe your credit card company in a year and is seen as a percentage of your balance from the purchases that you made.

Moreover, low interest credit cards offer other perks such as no annual fees. With this already a considerable saving, think about the very small 6.99%-9.99% interest you have to pay compared to other high interests offered by the high interest credit cards. With low interest credit cards, shopping takes a whole new meaning.

So the next time you make that purchase, you’ll no longer have to think about the item costing three or four times more than what you actually paid for. With low interest credit cards at hand, you can shop til you drop!

]]> http://creditcardrewards.com.au/shopping-with-low-interest-credit-cards/feed/ 0 http://creditcardrewards.com.au/recapping-on-rewards-credit-cards http://creditcardrewards.com.au/recapping-on-rewards-credit-cards#comments Sun, 21 Nov 2010 16:09:24 +0000 Carl Thomas http://creditcardrewards.com.au/?p=3292 When you look for rewards credit cards, you might be wondering exactly what kind of rewards will work best for your situation. Rewards credit cards come in many different types, ranging from traveler rewards to cash back rewards for monthly purchases made with your credit card. The best way to determine what reward credit cards will work best for you is to analyze your lifestyle, what kind of purchases you make, and how often you make them with regard to your current or previous credit card plans.

If you travel a great deal, whether by plane or by car, you’ll often find that you have airfare charges or gas charges that take a significant portion of your credit card bill. In many cases, it makes sense to sign up for a traveler’s reward card which will give you money back on your traveling charges, or award you with rewards points as you continue to buy lodgings, gas, and air miles. Rewards credit cards that award air miles are in fact a great way to save money as you fly, especially when you do it a lot.

Other types of rewards credit cards include those that give you a more general type of reward in the form of cash back at the end of the year or on each credit card statement. If you just want discounts on your grocery, gas, and other shopping bills, there are certain rewards plans out there that will give you just that. The key is to shop around and compare a bit until you find the rewards credit cards that work best for your buying habits and situation.

Remember that travelers get special discounts and there are numerous cards available that give you traveling rewards. However, no matter what kind of buying habits you have when it comes to your credit card, there will undoubtedly be a credit card out there that gives you money back or rewards in the form of points that you can use towards your most common purchases. It is important to look at basic factors like interest rates and security as well, but rewards should be your primary concern when you are seeking out rewards credit cards.

Do take time to find the right card for your situation so that you get the best deal and end up saving the most money. It is important not to rush the process of finding rewards credit cards, as this is an important decision that will affect you and your finances for the rest of your life. Ultimately, you can save a lot of money with good credit card rewards, so you should be sure to find a plan that will give you the best rewards for your typical buying habits. There are rewards for every situation and lifestyle, so there’s no reason you can’t find one that will benefit you in terms of cash back and discounts for whatever kinds of purchases you most commonly make.

]]> http://creditcardrewards.com.au/recapping-on-rewards-credit-cards/feed/ 0 http://creditcardrewards.com.au/shoppers-look-at-balance-transfer-credit-cards http://creditcardrewards.com.au/shoppers-look-at-balance-transfer-credit-cards#comments Sun, 21 Nov 2010 02:15:01 +0000 Tim Smith http://creditcardrewards.com.au/?p=3290 You were born to shop. Perhaps you love spending money on the latest fashion trends; purchasing that fabulous frock for a party you’ve been waiting to attend. Or perhaps you just bought that Loubutin heels you’ve been eying forever. It could also be that you love spending money for your sports equipment. New golf clubs, perhaps? Or that cool pair of Nike trainers you’ve wanted since you first saw them.

Come to think of it, we all have our own shopping escapades once in a while. This has effectively promoted the concept of retail therapy as an effective way of coping with our worries and problems. Although inevitably, this practice has brought with it some consequences. Admit it, the continuous swiping of that credit card in your favorite retail store hasn’t always been a happy ride.

The onset of credit card debt will always be a shopper’s nightmare. You can no longer shop as confidently and as peacefully and you start to worry about your debt while you lust after that latest gadget in your favorite tech store. However, there’s no need to fret because a lot of credit card companies now offer balance transfer credit cards.

Which brings us to ask, what exactly are balance transfer credit cards?

Balance transfer credit cards are credit cards offered by credit card companies which carry on your outstanding balance from a previous credit card to the new one you’ll be using. Balance transfer credit cards are usually offered to credit card users who jump ship after their contract with their previous credit card company expires.

So to transfer your balance means to open a new account. Now most people would say that this isn’t the best thing to do especially when you have a considerable amount of debt but in reality, balance transfer credit cards might lead you to save money in the long run.

16% – this is the annual percentage rate of most credit cards. With this rate, it will be a daunting task to pay (and even think about paying) your credit card debt. This is the reason why a lot of companies now offer free balance transfers from your previous credit card to the current one.

When you acquire a balance transfer credit card, companies usually offer teaser rates – or the lowest possible interest rates so that you could pay your credit card debt more easily. Balance transfer credit cards usually offer 0% interest rates which is definitely a great score. Moreover, balance transfer credit cards offered by companies also have grace periods where they charge a lot less than the transferred balance.

Truly, balance transfer credit cards are a great means to make paying your credit card debt a breeze. You get to transfer your outstanding balance to a balance transfer credit card which then provides more convenient options for you to pay your credit card debt. However, as with most things, the key ingredient to making this set-up work is to be a diligent debt payer and responsible credit card user. Balance transfer credit cards are there to help you in your credit card debt so the next time you use that card to buy a much-wanted item, you’ll never have to feel guilty.

]]> http://creditcardrewards.com.au/shoppers-look-at-balance-transfer-credit-cards/feed/ 0 http://creditcardrewards.com.au/debt-free-christmas-tips http://creditcardrewards.com.au/debt-free-christmas-tips#comments Mon, 08 Nov 2010 12:41:53 +0000 Anna Wong http://creditcardrewards.com.au/?p=3154 Christmas may not be a long way to come and you therefore need to prepare yourself well in advance. The truth of the matter is that many people enjoy Christmas to the core and they end up deep in debt. You can plan well in advance and avoid getting yourself into debt that may take you a long time to clear. Here is a simple guide on how to create a Christmas Budget that will help you have a hassle free Christmas. Avoid the after christmas credit card headache with these tips:

1. Create a list of people you intend to give gifts to this Christmas

Christmas is one of those times when we exchange gifts with family and friends. You want to avoid missing out some significant people in your life and you therefore need to create a list of people you intend to give. The first category is of course family where parents, aunties, uncles, siblings, in-laws and all other relatives come in. Then think about co-workers, church friends as well as community friends who include neighbors, and even the clerk at the mall.

2. Fix the amount of money you will spend

Determine how much you are going to spend every month towards Christmas spending and out of the amount you will have saved up, determine how much of it will towards Christmas gifts. The purpose of the gifts is to express love and appreciation and it is therefore not about the size of the gift but the thought of remembering someone. Some gifts can even be done without the involvement of money.

3. Prioritize the gift list and make it shorter

Take time to work out with your spouse who among your long list of relatives and friends take priority and work together as a team. It is wise to create separate those names into groups such as paid gifts, made gifts and no gift. This can be a challenging thing to do but if you are going to avoid falling into debt, then you just must do it wisely. The people in the last group of ‘no gift’ can be given a Christmas card each.

4. Complete all the necessary preparations

Once you have the funds ready assign the moneys according to lists you prepared making sure you do not fall into the temptation of overstepping the assigned amount. For the gifts you plan to make determine what you are going to do and buy all the supplies just before the rush begins. Whether you make cookies, homemade cards or stuffed animals, the rule is that you thought about the recipient.

5. Stick to your budget

Your budget may be a little tight but then it is important for you to stick on your budget no matter what. You can make things work out by being creative and shore up some resources that can become very valuable Christmas presents. Remember that Christmas comes and goes and there is no justification why you should get into debt just to make it work. So how soon you start budgeting for Christmas is ideally as soon as you finish celebrations because the next Christmas will surely come.


]]> http://creditcardrewards.com.au/debt-free-christmas-tips/feed/ 0 http://creditcardrewards.com.au/a-simple-guideline-on-a-budget http://creditcardrewards.com.au/a-simple-guideline-on-a-budget#comments Mon, 08 Nov 2010 12:31:49 +0000 Carl Thomas http://creditcardrewards.com.au/?p=3151 The verdict is on the table! Developing and sticking to a working budget is not your every day affair and many people cannot just bring themselves together to do one. The few who do try following some vague percentages through a lot of trial and error ending up very frustrated; if you have no idea how to really develop a practical working budget, you are not alone. The first step in manageable credit card debt starts with good budgeting

Starting a budget

Just like the advice you will be given when starting an exercise regime, you need to begin slowly by taking it easy at first. Doing it any other way will lead to obvious discouragement before you get ahead, just like in exercise. The first thing therefore will be for you to analyze your current spending habits for the past few months as this will show you exactly where your money has been gong consistently. You will need to categorize your transactions and then see if you can cut down through the categories by 5-10% monthly.

Build an Equivalent of One Months Spending In Your Spending Account

The one thing that you must learn is how to live within your means. When one is tempted to spend the entire paycheck there is always the possibility that you will get into an overdraft which will finally mess you up financially. When you manage to build a one month’s buffer and spend this month’s income next month you will be on your way to a financial breakthrough because you will be least worried about money issues. The secret again is to take your time to get to this point without ruffling any feathers.

Avoid Using Your Emergency Savings for Long Term Expenses

After you have cut down your expenses and began saving, you may fall into the temptation of using this emergency fund for long term expenses. This is an emergency fund and because these expenses are predictable, you can actually plan to factor them into your budget. This is achieved by saving up a little cash each month to work towards occasional replacements and repairs. The things to include in this part of your budget are those that happen occasionally such as auto insurance premiums which happen every year. Others will include stuff such as purchasing Christmas gifts, etc. even occasional home repairs do not need to be retrieved from your emergency fund because they really are not. Remember; no spontaneous credit card spending.

Start Somewhere and Get Going

You need to create time to put some serious thought into budgeting instead of scribbling somewhere as soon as you have your paycheck. Since it’s such an important issue you can take a day off and sit down to give it serious thought. You will think about your daily expenses as well as your short term and long term goals. Once you write down your budget then do your best to work it out consistently. You will also need to make sure you have room to clear your debts, build an emergency fund, and create an investment and even plan for retirement. Finally make sure that you leave some room for flexibility in between some of your categories.

]]> http://creditcardrewards.com.au/a-simple-guideline-on-a-budget/feed/ 0 http://creditcardrewards.com.au/things-to-consider-before-a-balance-transfer http://creditcardrewards.com.au/things-to-consider-before-a-balance-transfer#comments Mon, 08 Nov 2010 10:48:02 +0000 Tim Smith http://creditcardrewards.com.au/?p=3148 Today many credit card holders have taken advantage of balance transfers which allows them to shift to where interest rates may be lower. But like every financial step to be taken there needs to be a careful balancing in order for one to be sure they know all the pros and cons involved in this step. There are a few important considerations that those intending to do this must have in mind in order to maximize the benefits. The first and most important is of course to make sure that you have a credit card with available credit so that you do not hit the limit that could easily trigger the higher default interest rate.

For anyone to qualify and benefit from a credit balance transfer program is to double check that they actually qualify for the promotional offer. There are people who have receive pre-approvals and they thought that that alone was sufficient to qualify them for a lower rate only to discover later that it was not the case. Instead of making assumptions that all is okay it will cost you nothing to find out from the card issuer what you exactly need in order for you to get a good interest rate.

With most promotional offers lasting something like 6 months on the highest side, it is also important for you to know the exact date the promotion ends because that is when the rates also end. You do not want to get surprised that just a few weeks or a month after you moved on the promotion ended and the normal rates began to prevail. Together with that information it is also prudent for you to find exactly what the post promotional rates are going to be. The reason is that with the expiry of the promotional period the normal rates will come into force immediately and this may actually destabilize your financial plans.

The safe assumption for any one to make is that by seeking for a balance transfer you actually intend to pay off your balance transfer. Whereas other people may seek a balance transfer in order to enjoy low interest rates for a few months, it would be prudent to transfer your balance when you are sure that you will be able to clear your balance within the promotional period. You may as well try to clear it up as soon as the promotional period is over or soon thereafter. The truth of the matter is that the longer it takes you to pay off the balance the higher you will pay in interest rates.

Most important is the six million dollar question. Are you saving any money with the balance transfer credit card and if so how much is it? You must remember that there is a balance transfer fee that you must pay and of course the annual fee charged by your new card. These are some of the things you will use to make calculations to determine whether the balance transfer you are considering is going to make any financial sense at all.

]]> http://creditcardrewards.com.au/things-to-consider-before-a-balance-transfer/feed/ 0 http://creditcardrewards.com.au/identifying-credit-card-debt-problems http://creditcardrewards.com.au/identifying-credit-card-debt-problems#comments Sun, 07 Nov 2010 17:48:37 +0000 Andy Pancott http://creditcardrewards.com.au/?p=3141 Identifying the early signs of debt trouble can save you from a financial disaster. Recognising the problem as soon as possible will keep it from getting worse. There are many people who shrug off debts until they become unmanageable. Being buried deep in debt can take its toll on your health, your relationship with others and even your career. Debts will not go away in an instant, and denial only makes it worse. As cliché as it sounds, acknowledging that you have a problem is the first step in saving yourself from a financial crisis.

Cash Advances

Taking cash advances to pay your other debts is a definite sign of problems looming. Simply put, it would be like borrowing money to pay off borrowed money. It may feel like you paid the amount you owe to one bank, but it actually reflects negatively on you. Cash advances carry higher interest rates and upfront fees, which means that you actually end up with higher expenses without any long term benefit. If you find yourself doing this more than once (emergencies do happen) it may be time to seek help.

Paying the Minimum Charge

Another sign is regularly paying the minimum charges on credit cards. These are mostly interest charges, which mean that the principal amount is left unpaid. A few people would turn to overdraft facilities or bank transfers to cover basic expenses and avoid paying high interest rates. Transferring funds to cards with lower interest rates may seem like the best solution. However, relying on overdraft facilities and bank transfers are also an early sign, refrain from doing these, unless you want your bills to grow.

Accepting Too Many Credit Card Offers

Not having enough savings and constantly worrying about money are early signs of debt trouble. Your monthly salary goes to pay your debts with various creditors, which leaves you with a small amount of disposable income. In turn, you rely on cash advances to cover daily expenses like gas and food. Those convenient checks and credit card offers become even more tempting to accept. Using another credit card to pay off your debts might seem practical, but is actually a serious spiral unless you are taking advantage of a balance transfer credit card promotion. They may get you out of a financial crisis temporarily, but will definitely pull you deeper in debt.

Pay your bills on time and in full.

Losing track of your debts with various lenders is among the early signs. Unless you want your account to go into collection, make sure you pay in a timely manner. Being delinquent for a few months is enough to get you in trouble, and damage your credit rating. This tactic may save you some cash for the meantime, but poor paying habits can do you more harm than good.

Be Prepared (I don’t mean to sound like a scout)

Consider getting a cash buffer together for emergencies. This will take some discipline, especially when times get a little tough but it can be a lifeline if things start to get out of control. Compare savings accounts to make sure your money is working for you, most online saver accounts offer easy access enabling you to use the money in an emergency.

]]> http://creditcardrewards.com.au/identifying-credit-card-debt-problems/feed/ 0 http://creditcardrewards.com.au/getting-a-credit-card-limit-increase http://creditcardrewards.com.au/getting-a-credit-card-limit-increase#comments Thu, 04 Nov 2010 21:19:57 +0000 Tim Smith http://creditcardrewards.com.au/?p=3134 Getting a credit limit increase can be very tempting. It lets you make higher purchases, and allows you to buy things that you normally couldn’t afford. Aside from letting your spend more, a higher credit limit proves your financial worth. Despite its advantages, limit increases entail more responsibility.

A higher limit means a higher probability of spending more than you can afford to pay off. Larger interest rates are also coupled with higher credit limits. Spending should be kept under control; otherwise you’ll end up sinking deeper in unpaid debts.

There are many ways to get a credit limit increase in case you decide to do so. Clearly, you must boost your financial worth in order to improve your chances of getting a credit limit increase. Otherwise, you have to show lenders that you can manage your debts wisely. Prove yourself worthy by paying your bills on time and in full. Constantly paying your outstanding balance gives lenders the impression that you are financially capable of remaining solvent. On the other hand, habitually paying the minimum amount shows that you cannot pay your debts for a higher credit limit.

Always pay your bills on time. Timely payments show that you are a responsible borrower, thus improving your chances of being offered a limit increase.

Lenders are more likely to grant a spending increase to a low-risk borrower. Try to maintain a healthy credit card debt by spending way below your limit. Doing so proves that you are able to control your expenses. Lower debts also earn less interest, which saves you money in the long run.

A predictable spending pattern improves your chance of being offered an increase. Use your card regularly. Lenders monitor your usage and spending habits. They are bound to notice any irregularities, like swiping your card only during emergencies. Banks and lenders might be reluctant to lend money to someone with an erratic spending behavior. Banks and lenders earn income when you pay for these charges. However, this should only be done as your last option.

Resist the urge to overspend once you succeed in getting a credit limit increase. Spend within your means and think twice before swiping your credit card.

Remember buying something on credit is exactly like spending money which you haven’t earned yet, always think of something as ‘hours of work’ before making a purchase on your credit card.

]]> http://creditcardrewards.com.au/getting-a-credit-card-limit-increase/feed/ 0 http://creditcardrewards.com.au/too-many-credit-card-applications http://creditcardrewards.com.au/too-many-credit-card-applications#comments Thu, 04 Nov 2010 20:18:35 +0000 Carl Thomas http://creditcardrewards.com.au/?p=3139 A potential lender will always check your financial capacity and credit history before approving your credit card application. To do this, they need to make an inquiry on your credit file, usually with Veda Advantage or Dunn & Bradstreet. Every time a lender checks your credit file this is recorded. Therefore, too many credit applications can hurt your credit file, as this may indicate desperation for money – as ironic as that seems. Not all inquiries, however, have a negative impact on your credit report. Inquiries made for personal, promotional and procedural reasons are not recorded as credit applications and are only viewable to you in most cases.

When applying for any kind of credit product, you should shop around for the best deal prior to applying, making sure you are committed to the product, rather than putting in application for many products at once. At the time of writing this, credit applications are recorded on your credit file for a period of five years.

Once you consider that things like mobile phone applications, energy accounts, debit cards, internet service providers, car loans, home loans, credit cards and personal loans all check your credit file – it’s easy to see how your number of applications can add up quickly, especially in a 5 year period.

Lenders never reveal the complete picture of their credit criteria for a particular product, mainly because this can be manipulated or taken advantage of by less than honest applicants. You can however view the general credit criteria, this is generally displayed just before the application commencement containing things like minimum age, income required and that you should have a good credit rating.

It’s important to always check your credit file regularly. Veda Advantage offers a credit alert product that will alert you via email when changes are made to your credit file allowing you to be vigilant with harmful activities such as identity theft. More recently American Express has offered this same service as an offering to their cardholders.

If you see credit applications on your file that you did not make you should contact the respective institution in the first instance and if the response is not adequate contact Veda directly.

Remember most credit problems arise when you over commit on your credit obligations. With credit cards always try and pay your balance out each month or more than the minimum due. If you find yourself with a large balance you may consider a balance transfer deal so you can have a period of lower interest while you get your amount owing under control.

]]> http://creditcardrewards.com.au/too-many-credit-card-applications/feed/ 0 http://creditcardrewards.com.au/5-killer-tips-to-pay-off-your-credit-card http://creditcardrewards.com.au/5-killer-tips-to-pay-off-your-credit-card#comments Wed, 03 Nov 2010 07:13:33 +0000 Anna Wong http://creditcardrewards.com.au/?p=3126 Paying your credit card balance is simple to but not easy to do. The hardest part is making sacrifices and committing to an action plan. Paying out your debts requires discipline and effort to save money. Here are 5 quick tips to lowering your credit card balance.

These practical tips are a good start to help you recover from a personal financial crisis.

1. Prioritise
The first thing that you need to do when setting out to slashing your balance is to set a goal. Committing to an objective makes it easier to set your priorities straight. Interest rates alone can eat up a huge amount of your monthly income. The only way to end this cycle is by paying your outstanding debt.

2. Maintain a Tight Budget
This may be the most difficult to achieve. Resist the urge to spend on things that you can do without. Living on a tight budget for a few months will be worth the sacrifice. Once you have paid off all your debts, you can enjoy little luxuries again without feeling guilty.

3. Use Your Savings
If you have money to spare, establish a fund to pay off your debts. Just be sure to leave enough money to cover daily expenses and other emergencies. This strategy is probably the most effective, then re-establish your savings with a high interest savings account this will maximise the interest you receive, allowing you to save faster.

4. Obtain a Balance Transfer Credit Card
Search for a better deal – simple as that. Australian banks have some great balance transfer deals, which can give you a head start on clearing that nasty balance.

5. Pay Your Debts On The Highest Interest Rate Credit Card-
If you have several credit cards, prioritize paying your debts on cards with higher interest rates. Pay as much as you can on high interest rate cards, and then pay the minimum amount for the rest until the balance is clear, then start compounding that amount onto the next card.

Following these 5 steps may not be easy, but you’ll be thankful that you did, once you succeed in wiping out your debt, and the worry that comes with it. Remember if you think you are in over your head you can seek help from a financial counsellor in your state. Good luck!

]]> http://creditcardrewards.com.au/5-killer-tips-to-pay-off-your-credit-card/feed/ 0 http://creditcardrewards.com.au/comparing-credit-cards http://creditcardrewards.com.au/comparing-credit-cards#comments Tue, 02 Nov 2010 21:41:53 +0000 Carl Thomas http://creditcardrewards.com.au/?p=3117 There are many credit cards on the market today and when choosing a credit card it is in the consumer’s best interest to compare credit cards to be sure of getting the card that is best for you. Know your credit score before submitting an application submitting an application for a credit card. Advertised interest rates are usually for those with excellent credit scores. Those with less than excellent credit may only qualify for an interest rate higher than advertised.

The first thing to check is interest rates. Credit card companies offer different rates depending on your credit score. Find the credit cards you qualify for to avoid wasting time applying for credit cards you have no chance of being approved for. There are a number of online sites that compare credit cards and find the ones you qualify for and are best for you. This is completed by filling out an application with information that will only match you with credit cards you will qualify for. It is not a credit card approval site.

Credit cards can also be compared by different categories. Those categories include type of rewards, instant approval, prepaid and debit cards, credit cards for bad credit, student credit cards, airline rewards, business credit cards or those with no or low annual percentage rate (APR). Choose the category desired and the credit card checker will sort through all the credit cards available, and deliver the ones that match your criteria.
Other important pieces of criteria to compare is the annual percentage rate, annual fee, late fees, cash advance APR, reward points, cash back, reward combinations and travel rewards including gas rewards, hotel, car rental and airline flight rewards. The card chosen depends on your criteria for a credit card. There are certain reasons why someone wants a credit card and those reasons should be reflected in the card chosen.

Regardless of what kind of reward program you may want choosing the card with the lowest interest rate or annual percentage rate will save you money in the long run. It is better to put money into your own pocket rather than someone else.

No matter what credit card you choose, be sure to be responsible with the card and make payments promptly. It will keep your excellent credit score in tact or it will help rebuild credit if that is an issue. Do not loan your card to anyone else, especially if they are going to use it out of sight.

]]> http://creditcardrewards.com.au/comparing-credit-cards/feed/ 0 http://creditcardrewards.com.au/balance-transfer-deal-advantages http://creditcardrewards.com.au/balance-transfer-deal-advantages#comments Mon, 01 Nov 2010 22:06:19 +0000 Tim Smith http://creditcardrewards.com.au/?p=3115 When a consumer transfers the credit card balance from one credit card to another is called a credit card balance transfer. A credit card company will sometimes offer such a feature at a low-interest rate for a certain time frame. It is one of many marketing methods credit card companies use to attract new customers. Their main interest is to attract consumers with large-card balances who will maintain large balances despite their plan to pay it down.

The consumer can save a significant amount of money by paying down the credit card balance while the interest rate is low. Remember, the low-interest rate is just an introductory rate that will return to the going rate once the introductory time frame is over. If paying off the entire balance is not possible during the predefined time frame, look for another credit card balance transfer with a low-interest rate. This can be a viable method to pay off a credit card, as long there are no strings attached or the consumer knows what the strings are. Ask your existing credit card company if they have a similar deal for existing customers.

Before transferring credit card balances, the consumer has to know and understand the rules and regulations involved. If there are transfer fees or joining fees, understand what the fees are and if they are within your budget. Usually, any fees are a percentage of the balance but they may end up more than the normal yearly fee. Credit card companies are in business to make money, like everyone else.

Understanding the time frames for a low-interest rate is crucial. The rate may be good for six months or a year or anywhere in between. Check the fine print carefully for who may qualify for a low rate when transferring balances. Credit rating may dictate who will qualify for the low-introductory rate or a rate a little bit higher. Arrival of the bill is not the time for a surprise.

Be sure payments are made on time, especially during the introductory period. A missed or late payment could trigger an automatic increase in interest rate to the current rate. Also check if a certain amount has to be charged before a higher rate kicks in. Keep in mind credit card balance transfers take time to complete. Keep payments on your old card current until the transfer is complete.

Do your homework and look around and you will find some generous credit card balance transfer deals. Be sure to read and understand all the fine print. One final thought is, do not forget to close your old account as soon as you have transferred funds to a new account.

]]> http://creditcardrewards.com.au/balance-transfer-deal-advantages/feed/ 0 http://creditcardrewards.com.au/redeeming-rewards-programs-for-flights http://creditcardrewards.com.au/redeeming-rewards-programs-for-flights#comments Mon, 01 Nov 2010 12:55:53 +0000 Linda Schale http://creditcardrewards.com.au/?p=3113 Most credit card companies offer rewards programs as an incentive to use their card. One of the rewards is points towards airline flights. If you are interested in collecting points to use as flights, take a look at the program and what flights and destinations are included. The number of points required for a flight is an important consideration. It will give you an idea of how much money you will need to spend to accrue enough points. If you use a credit card all the time, points for flights will be an economical option, but if you do not use a credit card through usual practice, collecting points for flights might not be worth it. You may be better off just buying airline tickets without accruing points from a credit card.

Other considerations before booking a flight with credit card points is travel time. Are certain flights during certain travel times excluded from flights booked with credit card points? Are reservations required a certain time frame in advance? Are flights booked with credit card points subject to stand by? Can flights be canceled or postponed if they are purchased with credit card points? Are tickets transferrable? If so, is there a fee involved? Are available flights just domestic or can international flights be booked? Are certain cities considered destinations or can flights be booked to any place desired? When booking a flight are certain areas of the plane subject to booking or can points only be used for business or second class? Can first-class tickets be booked with credit card points? Does the reservation include connecting flights or will a fee apply to continue the trip beyond the first stop?

If the rules and regulations of purchasing airline flights with credit card points are agreeable to you, choose a destination and plan your trip. Book your flight as far in advance as possible to be assured of getting the desired reservation. To claim your flight, log into the appropriate web page and fill out the necessary information. There will be a section for payment with accrued points. If making a flight reservation over the telephone, you will need a customer number that is noted in your account, either online or in the paper work. After receiving your tickets, or picking them up at the airport check them carefully to be sure all the information is correct. If they are not, contact the reservation clerk immediately.

Using online credit card comparison can ensure you leverage as much as possible from your rewards program, remember to always check the PDS before applying to consider if the product is right for you.

]]> http://creditcardrewards.com.au/redeeming-rewards-programs-for-flights/feed/ 0 http://creditcardrewards.com.au/cut-credit-card-spending http://creditcardrewards.com.au/cut-credit-card-spending#comments Tue, 12 Oct 2010 18:02:39 +0000 Linda Schale http://creditcardrewards.com.au/?p=3080 Present day recession forces us to cut back on excessive spending. Though it is most often times easier said than done, the reduction of expenses is relatively easy. This article aims to look at certain factors that will help influence your way of spending, loosening the loan on your credit cards.

The easiest way to do it is to cut back on your lifestyle. One way of doing this is not going out often as before. Try not eating out regularly and partying every night and you will see a difference in saved up money. To illustrate: going out two times a week and spending an average of $150 every time translates to a monthly spend of $1,200. Try to cut back just once a week or even less and you can save almost as much as $600 a month. Also, try avoiding the mentality that making these small changes will not help you save enough money. You must realize that little things grow. Though insignificant now, these little saved up money will multiply and will eventually add up. Another way of saving is by planning your week way ahead of time. Use discount coupons at grocery stores. Scan the newspapers every now and then for advertisements that have promos and for sale schedules. When you need to buy something, watch out for sales. The regular flyers which you don’t pay much attention to might even help out a bit. With this approach, you are able to save on last minute deals. Should shopping be your thing, why not try visiting the discount racks or waiting it out until sale season begins? Being consistent with this kind of habit will, in the long run, help you save as much as ninety percent on your clothes bills. Another thing to consider is that never buy clothes or accessories on impulse. Buy only what you need and forego all those flashy, unnecessary things that might last for even just one season then eventually go out of style. Lastly, instead of hiring house help, why not try doing things on your own. Mopping the floor is not as hard as washing the dishes. You can also ask family members to pitch in with some household chores. With this method, you are able to save hundreds of dollars. Another benefit with this is that you actually get to do a little bit of exercise. You are hitting two birds with one stone by getting the house clean while at the same time keeping yourself fit and healthy, thus saving you from medical bills too!

It is a general rule that before you buy something, you should first ask yourself if you really need and if you do, will you be using it for a very long time. During hard times like this, it really is difficult to cut back from your regular spending habits, but you do not have any other choice. When buying, look at what you really need and purchase only the essentials.

]]> http://creditcardrewards.com.au/cut-credit-card-spending/feed/ 0 http://creditcardrewards.com.au/kids-saving-money-is-simple http://creditcardrewards.com.au/kids-saving-money-is-simple#comments Tue, 12 Oct 2010 11:09:21 +0000 Linda Schale http://creditcardrewards.com.au/?p=3075 When your kid is big enough to understand the basic mathematical skills like addition and subtraction and counting, then he or she is now ready to learn the basic concepts of how to save money. It is certainly a challenge to get kids to save money since they are used to asking for it, not earning it. However, teaching kids early is one of the best gifts we can give them in life. It will prepare them to be wise in making important financial decisions. Here then are some simple tips on how to get kids to save money.
A very easy way on how to teach the concept of money is to give your kid the opportunity to use money. For example, whenever you are out dining in fast food restaurant, let your kid have the freedom to pick is own food and pay for it. Give him some loose change and guide him on how much the food costs and how much to pay for it. Let him go to the cashier himself and order the food then pay for it. If you are out shopping for groceries, then you may give him the opportunity to choose some essential items he needs. Then you can compare the price of what he chose to the price of another similar item. Explain to him why some items are more expensive than others. Not only will he feel a sense of pride, satisfaction, and confidence in getting to use money on his own, but he will also learn the value of money.
Giving your kid a coin bank will also be helpful to get him to save money. Giving him an attractive coin bank would help, such as choosing a coin bank with his favorite cartoon character. You may also open a bank account for him. Almost all banks have a savings program designed for kids. Seeing that he actually has money in the bank will motivate him to deposit his savings.
Speaking of savings, in order for him to save he will need an allowance. Therefore this would be the time that you should start giving him an allowance. The amount really depends on how much you are willing to risk, and on how much you think he needs. Whatever the amount, the point is that he will learn the concept of responsibility with money. Giving a weekly allowance instead of a daily allowance will let him be able to learn the concept of setting a budget and prioritizing.
Of course, setting a good example will be the best tip on how to get kids to save money. Your kids look up to you and they will definitely follow your lead when it comes to money. When out grocery shopping, for instance, you may explain how some items are less expensive than others but how the quality may be the same, or how you can only afford a certain item and must save to buy a more expensive one. By being open and always patient in explaining to him everyday things concerning money, you kid will learn how to save money for the future.
]]> http://creditcardrewards.com.au/kids-saving-money-is-simple/feed/ 0 http://creditcardrewards.com.au/fast-ways-to-build-credit-card-rewards http://creditcardrewards.com.au/fast-ways-to-build-credit-card-rewards#comments Tue, 12 Oct 2010 09:27:50 +0000 Carl Thomas http://creditcardrewards.com.au/?p=3073 Many people are familiar with the reward points program offered by their credit cards. However, there aren’t many that truly take advantage of the reward points offered. This might be due to a lack of discipline in paying their credit card bills or fear of going into debt. Many blogs and columns have been written about the tragedies of people who overuse credit cards and then advise people to cut up their own credit cards with a pair of scissors in order to avoid similar problems. The truth is most people have the ability to use their credit cards within reason. Most of the horror stories talked about result from people getting carried away. Here are some ways you can safely use your credit card to build reward points faster.

Monthly Expenditures

A monthly expenditure that nearly everyone has in common is their rent or mortgage. It is an important expense that most people place at the top of their priority list. If you already have the money in your bank account to pay the mortgage, why not charge it to your credit card and reap the reward points from it? Then simply pay that amount off before it starts to compound interest.
The same thing can be done with other monthly expenses. Utility bills must be paid to keep the lights and water functioning. Use your credit card to pay the utility company and then pay it off prior to interest charges. If you keep track of your reward points earned in this fashion you will find you are actually reducing your monthly expenses when you finally redeem your reward points.

Business Expenses

Even if you don’t own your own business you can charge your standard business expenses to your credit card in order to gain rewards points. If your company doesn’t have a policy requiring you to use a company credit card, then use your own. The company will reimburse you for your expenses and you get free reward points.
For those who own their own business, utilizing a credit card to pay business expenses is smart business. The amount of money and time you can save by gaining reward points can greatly reduce the amount of overhead for your business. If you have employees that will incur business expenses, give them company credit cards and have the reward points total on the business credit card account. You will have your employees gaining reward points for you as well.

Daily Usage

Finally, the ability to use a credit card wisely is paramount. Don’t start charging things you can’t afford to pay off at month’s end. However, if you can pay off your purchases, then daily expenses such as breakfast, lunch, or dinner can be charged to your card in order to increase your reward points quickly. Fuel costs for your automobile and travel expenses add up quickly as well. Just be intentional about the use of your card and you will not see your reward points increase quickly.

]]> http://creditcardrewards.com.au/fast-ways-to-build-credit-card-rewards/feed/ 0 http://creditcardrewards.com.au/choosing-savings-accounts http://creditcardrewards.com.au/choosing-savings-accounts#comments Tue, 12 Oct 2010 04:16:13 +0000 Tim Smith http://creditcardrewards.com.au/?p=3068 Choosing a savings account should not be as simple as entering a bank and putting in money in any offered account. If you want to maximize not just the opportunity to save up for the future but also to make your money earn interest over time, it would be a wise move to actually take the time to evaluate the different types of savings accounts you can open. Gathering the needed information from banks as well as other financial institutions so that you can compare accounts and terms to get you well informed about your options can do this.
Different banks and financial institutions offer different types of savings accounts. It is, therefore, smart for an individual to carefully tread choosing a savings account so he can choose which one is best for is lifestyle, for his earnings or financial sources, for his saving habits as well as for the amount of yields projected. Below are examples of various savings accounts. Note that these saving account types can be called differently by different institutions and can overlap in terms of features. To help you in choosing a savings account, it would be best to first inquire directly from banks so you can determine what exactly they offer for individual savings accounts.

Passbook Savings Account

This is a common savings account wherein the individual has the freedom to dip in and out of his saved money at any time he chooses to. Most banks set a minimum amount for opening a passbook savings account. There is also a minimum amount to meet in order to earn interest per annum. The account holder would keep his savings record in the passbook given to him upon account opening.

High Interest Yield Savings Account
If an individual wants to save money not just so he can have the needed funds for future use but also to make his money grow over the months or years, a high yield interest savings account is one good option. The best feature of this type of savings account is the higher interest rate. Also, the interest rate usually goes higher, when the amount you put in the account is big.

Easy Access Account
The easy access account is one of the most common forms of savings accounts offered by banks. An account holder has the freedom to take money from the account as well as deposit money into it. Most banks offer this type of account with an ATM card for easy withdrawal or deposit access.

Regular Savings Account
This type of savings account is best for those who are more consistent with their saving habits. A regular savers or savings account usually accepts fixed amounts of deposits each month. The great quality of this type of account is that an individual can open one in low amounts (even with $25) and can accept this amount monthly. While this type of account offers low opening amounts and low maintaining balances, there is a limit to the maximum amount saved so as to encourage low and middle-income individuals with regular saving habits.
Based on these account examples, you can easily be guided in choosing a savings account.

]]> http://creditcardrewards.com.au/choosing-savings-accounts/feed/ 0 http://creditcardrewards.com.au/becoming-debt-free-faster http://creditcardrewards.com.au/becoming-debt-free-faster#comments Sat, 09 Oct 2010 18:19:46 +0000 Andy Pancott http://creditcardrewards.com.au/?p=3032

Your home mortgage is in all probability your biggest loan. Most borrowers select a longer term to pay their mortgage to avail of lower amortizations. But many do not know that in a typical 30 year mortgage, the borrower is going to pay more than double the original loan in principal and interest payments. A good financial plan should include a system to becoming debt free. It will not take a rocket scientist to figure out that paying your mortgage loan in a shorter time will save you a lot of money.

If you compare payment schedules between the 30 year and 20 year term loan, you will notice that there is not much difference on the amortization payments. The 20 year loan can get you a lower interest rate and the monthly amortizations will not be too much more. You can therefore refinance your mortgage to a lower interest rate and a shorter term if you have the funds for the bigger payment.

You can also pay an extra amount on top of your regular monthly amortizations and then give instruction to the bank to charge it against the principal loan amount. This can be any amount that you can afford. Each extra payment that you make will reduce the principal and will eventually reduce the amount of interest that you are going to pay.

You can also pay your amortization in bi-weekly term or every two weeks instead of paying it on a monthly basis. Each bi-weekly payment should be half of the monthly payments. If you sum up your payments, you will notice that you have made a full extra month of payment at the end of the year. There is no magic to it; you are making a full monthly amortization every 28 days instead of the usual 30 days. But you can become debt free in a shorter time and the total loan payment will be much lesser.

You can use a credit software program together with a home equity line to reduce your loan. This strategy is being used by an increasing number of people in America and has been proven by effective in Europe and also here in Australia.

Some home owners applying these methods were able to pay their mortgage obligations in a third of the time, without changing their lifestyles too much.  That means you can pay your 30 year mortgage in 10 years in some instances. This is a big difference and can save you hundreds of thousands of dollars in interest payments.

Since there is only a small difference in the monthly payments, the sacrifice will not be too big but the benefits in the end will be huge. You will be able to get your family out of debt in a much shorter time.

Start right now. You do not need to wait 30 years to pay off your home mortgage. Stop from getting the banks richer and keep it for your family instead. A little discipline and determination is all it takes.

]]> http://creditcardrewards.com.au/becoming-debt-free-faster/feed/ 0 http://creditcardrewards.com.au/important-credit-card-safety-tips http://creditcardrewards.com.au/important-credit-card-safety-tips#comments Sat, 09 Oct 2010 13:14:00 +0000 Andy Pancott http://creditcardrewards.com.au/?p=3025 The following article will let you know the different ways of keeping your credit card details safe. People have the fear of using their credit cards due to card fraud and identity theft.  Anytime a person uses his credit card, there is always the fear that somebody out there might steal it and use it to their own advantage. Fear in this context is good as it allows the person to be watchful of his every move.

However, being just careful isn’t enough when one is not equipped with the full knowledge on how to protect himself. He has to outsmart the fraudsters or succumb to the consequences of becoming a victim. Here are some important and useful things to remember for your own credit card safety:

1. Affix your signature at the back of your credit card right after you receive it. A unique signature that is not easy to duplicate is best. Many credit card thieves have gotten away with the crime by signing purchase slips with a signature that was an exact replica of the one on the card which could have been avoided if the signature was a bit complicated for others to follow.

2. Always keep your credit card in your wallet and don’t place it in your back pocket as this exposes you to theft.

3. For a physical purchase or when buying at a store, always be watchful and make sure you have the card with you before leaving the store.

4. Never use your credit card as an I.D. Certain places require you to leave some identification before letting you in, use a different I.D. never the credit card.

Here are tips that will help you avoid credit card problems when buying online:

1. Make sure that the site has a Secure Socket Layer or SSL. It has the ability to translate the data that is exchanged between the buyer and seller in such a way that it is distorted, making it impossible for anyone who intercepts to obtain sensitive information. You will know if the site is equipped with SSL if you see https:// on the URL address bar. If it’s just http://, it’s not protected.

2. Don’t send your credit card details through email.

3. Verifications are done by both Visa and Mastercard to protect their cardholders who buy online. Look for the logo that says SecureCode if you have a Mastercard and Verified by Visa for Visa your card.

4. Paying with Paypal is the best way to keep your information secure. You can use your credit card to pay for online purchases through Paypal without disclosing any account information as you just need to key in the email address of the recipient to send the payment.

Before making any purchase, check if an online store is safe to transact with by searching its website through Google. From the available reviews, you will be able to assess if it is safe to continue your purchase or not.

]]> http://creditcardrewards.com.au/important-credit-card-safety-tips/feed/ 0 http://creditcardrewards.com.au/tips-for-culling-your-credit-card-balance http://creditcardrewards.com.au/tips-for-culling-your-credit-card-balance#comments Fri, 08 Oct 2010 20:46:18 +0000 Andy Pancott http://creditcardrewards.com.au/?p=3029 The credit card may be one of the things that makes our life so much easier, but it may also give us a lot of problems when not used in the right way.  High interest rates may cause us to have higher balances and causes us to have a hard time paying them off. This makes us a slave to our credit cards.  There are many ways to avoid falling into this credit card trap.  Following these few simple tips for paying off your credit card balances will save you a lot of agony and make your life financially easier and more secure for the future.

First and foremost, don’t buy more than you can afford.  This is easier said than done, though.  A credit card makes it too easy for us to buy things which we later on realize we cannot afford.  But if the damage is done and you have already chalked up a high balance to pay off, then the best solution would be to get organized.  Look at all your card statements and take note of all balances, interest rates and due dates.  It may be that you have been missing payments simply by being careless in organizing your statements.

Now assess whether you can afford to pay more than the minimum payment for each card.  If you can, then you must see to it that you prioritize these payments every month until your balance significantly lowers to a comfortable level.  When paying for your credit cards, see which card has the highest APR or Annual Percentage Rate.  You must pay more higher than the minimum on this card while paying just the minimum on the others.  Then when you have finished paying off