Details, Details
by Jason SteeleIn understanding credit cards, the big picture is always important, but the details are sometimes at least as critical. Today’s news seems to highlight that.
Bonus Details From Priority Club Hotels Visa
The signup bonus is a key feature of any credit card. That is why a dramatic increase in the signup bonus for the Priority Club Hotel Visa is worth mentioning. Priority Club is the frequent guest program for Intercontinental Hotel Group which includes such brands as Holiday Inn, Crowne Plaza and, of course, Intercontinental. Their new offer includes a relatively impressive sign up bonus. You get 45,000 points for your first purchase, plus 15,000 points after spending a mere $3000. Finally, you get another 10,000 points after spending $15,000. To put it another way, $3,000 spend = 63,000 points. That sounds like a lot, and it is, but it is not as much as you might think. If you look at their hotel rewards chart, you will see that you can earn the equivalent of two nights in an Intercontinental or Crowne Plaza hotel, or several more nights in a lower end “Holiday Inn Express”. I would say this is a more generous signup bonus than the Starwood Preferred Guest card, but the card itself isn’t nearly as good after you have the bonus. For example, you can transfer points to many airline programs, but only at a 5 to 1 ratio. Starwood, for example, has the same feature, but it is essentially 1.25 to 1, a huge difference. Nevertheless, if you stay at their hotels frequently, now is the time to get the card.
Foreign Transaction Fees Hit You At Home
These transaction fees are some of the most sneaky and least justified credit card fees in existence. Any savvy credit card holder should know to be aware of them whenever you leave the country. The problem is that credit card companies, in their infinite greed, have taken to redefining the word foreign. It used to be that when the transaction took place in a foreign country and/or a foreign currency, the fees were included. Now, many banks have shifted to charging these fees on transactions with foreign companies, even when the transaction occurs in the United States, and the price is in dollars! Case in point is this article in the Consumerist where a reader got hit with the forex fee for purchasing a flight to Ireland on Aer Lingus. The flight was purchased in the United States and the currency was listed in dollars.
The moral of the story is to always have a forex fee free credit card, like Capitol One, when you making purchases from any company not headquartered in the United States.
Limiting Over The Limit Fees
Right behind forex fees in the credit card fees hall of shame is “over the limit fees”. This article points out that at least one company, Chase, will allow you to block over the limit transactions. The feature is not publicized, you have to ask for it. It also appears it doesn’t always work. Nevertheless, you should request this feature be activated if you have a Chase card. It is also a good idea to ask your other banks if they will support this feature.
Realistically, you should have enough credit cards, with high enough limits, that going over is almost never a concern. Which brings us to our next important detail…
Understanding Credit Utilization
Credit utilization is becoming a more important factor in your credit score, yet it is one of the least well understood. I often hear people saying that they do not want to have too many credit cards, as it will hurt their credit score. I try to explain to these people that they have it all wrong. Additional credit cards, or a higher credit limit will help your credit by reducing your credit utilization ratio. This article from the Consumerist goes into greater detail. Credit utilization is not a huge factor in determining you credit score, but if you understand how it works, you will understand why higher credit limits and higher availible equals a higher credit score in the end.
It’s all in the details.