Ask Mr Credit Card's Blog

What You Need To Know About The SPIC Phishing Scam

Jenna — Thu, 07 Aug 2008 17:24:18 +0000

On July 21, 2008 the Securities Investor Protection Corporation (SIPC) issued a warning on their website about a known phishing scam.

Here’s the lowdown:

Would-be identity thieves are sending out emails claiming to be from a brokerage firm working on behalf of the SPIC. The firm is supposedly handling the liquidation of an SPIC account and trying to “return money” to you - the investor.

Here’s a quote from the SPIC press release:

The scheme involves an “insurance investment claim” supposedly to be made through the brokerage firm on behalf of SIPC.

In order to get the information needed to “file the claim”, the would-be thief includes a fake SIPC “Beneficiary Information for Automatic Deposit of Payment” form that requires information that could be used to directly withdraw funds from an investor’s accounts.

The phony form even includes a false detailed form routing number: “SIPC 4531/09 (4-00).”

The brokerage firm mentioned is legitimate, but is not involved in the scheme. This is just one in a list of schemes that have targeted the SIPC in recent years.

If you receive this email, the SIPC is asking that you forward it to them at this address:vdrew@sipc.org

For more information on how SPIC brokerage accounts are actually liquidated, you can download their PDF here.

Please pass this on to anyone you think might be affected!

Over 40 Million Credit Card Numbers Stolen - Ringleaders Exposed!

Jenna — Thu, 07 Aug 2008 09:14:33 +0000

Federal prosecutors have uncovered what could turn out to be the largest hacking and identity theft ring to date. Over 40 million credit card numbers are believed to have been compromised.

The credit card numbers were stolen from large department stores including:

Barnes and Noble
T.J. Maxx
Office Max
The Sports Authority
BJ’s Wholesale

There were 11 people charged from as many as five different countries including the United States, China, Estonia and Belarus. Investigators know that at least one of the eleven ringleaders still at large.

Police believe the hackers drove around looking for loopholes in wireless security networks. When they found one, they installed a “sniffer program” - a program that taps into the merchant’s credit card system and steals their customer’s credit card and pin numbers.

The thieves took it a step further though. They chose some of the credit card numbers and had the numbers imprinted on new, blank credit cards. That way they could withdraw cash at ATM’s, or shop anywhere they wanted to. Right now authorities believe that they sold the rest of the numbers on the black market, as well as selling them on underground internet trading sites.

The head of the identity theft ring is believed to be a man named Albert Gonzalez from Miami. He was indicted Wednesday on enough charges to earn him life in prison (identity theft, computer fraud, wire fraud and conspiracy to name only a few).

Apparently, Mr. Gonzalez had previously worked for the FBI as an informant - that’s after he got his hand caught in the cookie jar the first time. That’s how the whole thing went down. The Secret Service got wise to Gonzalez, and they traced him to his accomplices.

So, what can you do if you are worried that your credit card accounts have been compromised?

Start by checking your credit report, and your credit card statements carefully. If you have reason to suspect fraudulent activity, then make sure you freeze your credit reports until you get things straightened out.

For more information on how to combat identity theft, you can click here.
For more information on the identity theft crime ring you can click here.

What do you think about all this mess? Have you ever shopped at any of these stores?

Does Having A Checking or Savings Account Affect Your Credit Score?

Jenna — Wed, 06 Aug 2008 09:37:54 +0000

It’s a standard question on credit applications: Do you have a checking or savings account?

But how much does having (or not having) those accounts really affect your credit score?

The surprising answer is: Not at all.

It makes no difference to FICO or the credit bureaus whether you have seven checking and savings accounts or none at all. The only time that your checking account will affect your credit score is if you bounce checks and do not pay the money back. If the balance you owe your bank gets turned over to a collection agency, then that information will show up on your credit report.

The checking and savings accounts themselves do not show up on your credit report. When you bounce a check it only shows up on your credit report if it goes to collections. When that happens, your credit score will drop.

One warning: If you bounce checks and do not repay your bank, you will not be able to open a checking account at another bank for five to seven years. When you open a checking or savings account most banks use the CHEX System to see how you have treated other banks in the past. If your name comes up on that list, no account for you.

So, if having a checking or savings account has no bearing on your credit scores, why do lenders ask that question when you fill out a credit application?

An open checking account is a mark in your favor – if it’s open, with a positive balance, then it shows that you have the basics of managing your money under control. If you have a savings account then presumably, it shows you are planning for your future.

Other reasons lenders want to know you have a checking and savings account:

So that you can pay them easily with a check or electronic draft.
It helps verify your income since all of your deposits are recorded.
If you regularly use checks to pay your bills, then you can show them to a prospective lender. This is especially important if you have bad credit. Being able to take in a year’s worth of checks showing on-time payments on your car or mortgage will help you get a loan.

So, in conclusion, having a checking account or savings account does not affect your credit score – but it could still help get you a loan if you can use it to show that you have made regular, on time payments to your lenders.

Can You Keep Your Credit Cards When You Declare Bankruptcy?

Jenna — Mon, 04 Aug 2008 10:45:23 +0000

When you declare bankruptcy you are expected to turn in a list of all your debt - credit cards, medical bills, mortgage, everything. But what happens if you want to hang on to a credit card and use it after you declare bankruptcy? Is it legal?

Technically you can hang onto a credit card or two when you file bankruptcy, but you have to handle it carefully.

The correct way to keep a credit card through bankruptcy:

6 to 12 months before you plan to declare bankruptcy, you have to pay the balance off on the card. Zero balance - no money owed.
You will have to keep the card at zero balance throughout your bankruptcy proceedings. Keep a zero balance on your credit card until your bankruptcy is discharged.
When you make up the list of everything you owe, do not list the card. Bankruptcy gets rid of your debt, and you will not have any debt on that card.

Now, the main reason for keeping a credit card active is simple. You will not be able to get anything but a secured card (or a card with $250 in up front fees) right after you declare bankruptcy. Being able to keep a card with a decent interest rate through your bankruptcy will help you repair your credit that much faster.

The risks:

If you pay down that credit card less than 6 months in advance it could cause your other creditors to challenge the legitimacy of your bankruptcy. After all, you had they money to pay down that debt, why couldn’t you pay theirs? That could actually cause your bankruptcy to fall through. If that happens you will be out the money for your lawyer, and still owe on all the debt you were trying to wipe out.
Even if you don’t list the credit card when you declare bankruptcy, the bank that issued your card could still cancel it when your bankruptcy goes through. If that happens, you have wasted the money you used to pay down the debt you had on that credit card.

If you can’t pay down your credit card balance at least six months prior to your bankruptcy, there is still one way you might be able to keep your credit account.

You can do what is called “re-affirming the debt.” This basically means that you call your credit card company, explain that you are filing bankruptcy, and that you would like to keep your card. It’s sketchy territory.

Your lender will want you to keep the debt and pay them back, but you are going to have to convince them that you really can do it. Otherwise they will close out your account. If that happens you will be stuck with the debt after your bankruptcy, and you still won’t have an open credit account.

Is there a better option?

There might be. Look at it this way: If you owe $12,000 on a card - even if it has an excellent interest rate, you are going to run into a lot of problems trying to keep it open throughout the bankruptcy proceedings. Financially, it makes more sense to include the card in your bankruptcy. Take the $1200 (or $600 or $300) you would have used to pay down that card and put it into a secured card after your bankruptcy is discharged.

Cards like the Orchard Bank Secured Credit Card have very low interest rates, are easy to get, and you even earn a tiny rate of interest on the money in your savings account. This acts as a failsafe too. If something bad happened and you got behind on that card after bankruptcy, then at least you know the savings account will cover your balance in the event of a default.

Have a question for us? Leave a comment below!

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American Express to Discontinue IN:LA, IN:Chicago and IN: NY cards

Mr Credit Card — Sun, 03 Aug 2008 05:31:44 +0000

American Express is going to discontinue their IN:NY, IN:Chicago and IN:LA cards. These cards were originally targeted at a younger segment of the market.

These cards had a different program from the Membership Rewards Program. The program had partners that were local to the cards. For example, New York cardholders had different partners in their program compared to other cardholders from LA or Chicago. From November 1st, these three cards will be discontinued.

This episode reminds me of the the Classic Coke versus the New Coke experiment a while back. American Express wanted to reach out to the younger segment as their traditional client base has been wealthier and older individuals. But I guess looking back, the reason they had an older consumer base is because their charge cards required cardholders to pay in full every month. American Express has over the years got into the regular credit card segment by coming up with a series of no annual fee credit cards.

But with the recent credit crisis, and rise in delinquency rates, I guess it wasn’t a surprise that they are closing unprofitable credit cards. The true lesson is that while American Express’ traditional high end clients may not be growing as fast as one would like, they are still a better segment because they will be less affected by the economy than us regular folks.

But at the end of the day, these cards were discontinued simply because there was not enough demand. The design of the card looked really nice. But there just weren’t enough cardholders to make them viable. Existing cardholders will have their cards replaced by the Blue Card - which frankly has a much better reward program. Gone is the slick black design and in is the clear card design that the Blue series has.

Best of the Web: Debt and Savings Edition

Jenna — Sat, 02 Aug 2008 10:36:18 +0000

Happy Saturday everyone!

Gas and food prices are on the rise, lenders are cracking down, and the stock market may be starting to see a slight upswing, but we aren’t out of the woods yet.

With all these things in mind, I decided that I wanted to link to some of the very best articles on the web this week - the ones that dealt with real-world, everyday issues.

The articles below cover paying down your debt, setting up your emergency savings funds, and managing your everyday financial challenges. All good advice in any economy, but very relevant given the current state of the nation. Enjoy!

My Two Dollars presents: Paying Off Debt And Saving Money Can Be Done At The Same Time. Hooray to David at MTD for this post! I have believed this for years. If you don’t start that emergency account while you pay down your debt, then all of your hard work will be undone with the very first emergency. When you choose not to have an emergency fund you are making your credit cards your emergency fund by default.
Money Ning has a guest post that reveals how you can Possibly Avoid Bankruptcy with Debt Consolidation. You’ve got to be careful about this though, because not all debt consolidation companies are created equal. You can check out our post on selecting a counseling agency here.
Frugal Dad has a guest post from the Happy Rock. This is a must read article. This is the lowdown on what an emergency fund really is - and why you absolutely need to have one to protect your family.
The Simple Dollar wrote a down-to-earth post on how to quit lying to yourself about your money. I am guilty of this one on occasion!
Blunt Money has my favorite post of the week. It’s a quick article on the fine art of putting things into perspective. Anything that makes me realize just how blessed I really am is worth noting.
Moolanomy rounds things out this week with a series on managing personal finance risks. These topics are all things that most of us regularly ignore - even if we manage the rest of our finances perfectly. Definitely worth a read.

We were featured in several carnivals last week. Thanks to these sites:

The Finance Fiesta! @ Counting My Pennies
The Money Hacks Carnival #19 at Sound Money Matters
The Carnival or 20 Something Finances @ Dollar Frugal
Carnival of Personal Finance #163 - “Quotable Quotes” at You Need A Budget

That’s it for this weekend’s Best of the Web Roundup. Wishing you peace, prosperity, and a well balanced portfolio. Have a good weekend!

How Does Paying Off A Credit Card Affect Your Credit Score?

Jenna — Fri, 01 Aug 2008 09:52:28 +0000

One of our readers, Sergio, sent us this question:

Hello,
I have a credit card with a limit of $3,000.00, my balance as of today is $2,100.00, I also have a line of credit of $9,000.00. As of yesterday my balance in my line of credit was $6,935.70, what I did today was pay the $6,935.70 out of my own pocket (without getting another loan) and zeroed out the line of credit without closing it. The balance is now $0.00. Give or take, how will it affect my credit in terms of points and how long do you think it will take for my credit score to raise. My credit score is about 650 (not the greatest) and am working on getting it better.
Thanks for the advice and help,
Sergio

Thanks for your question Sergio!

Congratulations! Paying off that card was a huge accomplishment – and it put you under 20% of your total available credit.

The credit bureaus (and FICO) do not publish the exact formulas that they use to compute your score. Because of that, I can’t tell you exactly how much it will raise your score, but I can tell you that it will definitely raise it. The amount you owe makes up 30% of your credit score.

You will be able to check your new improved score the month following the payoff. If you keep the balance low on that card, pay on time, and continue paying down the card with the $2,100 balance, you will see your score continue to go up, and up, and up.

You are right to keep the paid off account open – don’t close that one whatever you do or you will see your score drop instead.

You should probably pick up a cheap credit monitoring service for a little while. Right now, I think that True Credit is letting you monitor all three of your reports and scores for about $30 a month. Once you see your scores hit over 700 try applying for a new credit card. Don’t charge on that one either. Just put it back for emergencies. Better yet, if you can get a rewards card, you could use it just for gas and utilities, and then pay it off at the end of every month.

The important thing to understand is that you are making all the right moves, taking all the right steps, to repair your credit. As long as you keep on doing what you are doing you could well see your score in the high 700s within the next couple of years. Probably even sooner than that if you open a third card.

Be aware that when you do open that third card your score will temporarily drop a few points (because of the inquiry.) As long as you keep your balance under about 20% of your total available credit your score will go right back up even faster than before.

Also, when you monitor your reports, look at them carefully. If your score is at 650 now it’s probably safe to assume you may have had some late payments, or gone over the limit a couple of times. See if there is anything on your existing reports you can challenge. Any negative information that you can remove will raise your score that much quicker.

One warning: Don’t challenge too many things at once or you will get your score frozen until the disputes are resolved. It does not hurt your score if that happens, but you will not be able to get a loan or a new credit card as long as it is going on.

Thanks for your question!

Have a question for us Leave a comment below!

Does Having Too Many Credit Cards Hurt Your Score?

Jenna — Thu, 31 Jul 2008 09:00:21 +0000

One of our readers, A. Brown, sent us this question:

Hello - I recently requested and received my credit report and score from Equifax. I was happy that it came back at 792. However, it stated that I have too many open accounts and too many recently opened accounts. Over the years I have had my fair share of credit cards, car loans, lines of credit. But I have always had a plan, and currently I have a $0 balance on most all of these open lines of credit. I do have one credit card with 6k on it, plus I have two mortgages. Will simply waiting until the accounts are no longer considered “new/recently opened” help me? I know my score is good, but I want it up over 800. Thanks.

A. Brown, Thanks for your question!

Let’s cover the basics first: The credit score you received might not actually be your FICO score. Check your report carefully to verify this.

Equifax itself might penalize your “score” for having too many open accounts, that does not mean that FICO does. Also, when you decide to borrow money each lender has a different set of qualifications you have to meet. Some lenders will reject you on the basis of having too many open accounts, but it is not a majority.

Lenders are usually far more concerned with how you are using the accounts you have open. When you apply for a line of credit, most lenders will check your FICO score, and not the scores from the individual bureaus. That is why it’s so important to make sure that the score you received was actually your FICO score, and not a score based off of another model.

Experian in particular is bad about this, but I have had it happen at TransUnion too. I am not assuming that Equifax is above passing off a FAKO score either. Just be sure to read your fine print before you make any decisions about what to do with your credit cards.

As far as Equifax goes, yes they do penalize your score based upon the number of accounts you have open. However, the reality is that closing those accounts out will penalize your FICO score more than having too many of them open. If you absolutely, positively feel you must close some of them out, then close your youngest cards, and not more than one account every three to six months.

You mentioned that you wanted to get your credit score up over 800. The best way to do that is actually to leave these accounts open and not borrow against them. You are exactly right to just let them age.

Statistically speaking, people with credit scores over 800 only use about 7% of their available credit. Start by figuring up the amount you have available to borrow vs. the amount you owe. If you can get that figure under ten percent then your scores will go up regardless of the number of accounts you have open.

Believe it or not there are some people out there carrying as many as 50 different credit cards. Yes, how many accounts you have matters and can slightly lower your score. How well you manage those accounts, and how much you owe on them matters far, far more.

If you give your accounts time to age, get your total debt to under 10 percent of your available credit, and you still do not see an improvement in your score, then I would wait a few months and try closing a low-limit, younger account out. Those with the smallest credit lines, and the shortest history should be the only ones you cut.

Thanks again for your question!

~Jenna

Have a question for us? Leave a comment below!

Ultimate Collection of Credit Card Posts

Mr Credit Card — Wed, 30 Jul 2008 08:00:14 +0000

Once again, I want to thank all the bloggers who participated in the credit card survey. My natural response as a fellow pf blogger is to link back to them. However, they were 40+ of them and simply listing them on a post would add no value. It would be like a carnival without post!

So in the spirit of this credit card survey, I decided to highlight the participants, and also highlight their best post about credit cards on their blogs (my opinion of what is best off course). Hence, I would say this is a thank you post but also a collection of really great credit card articles from the pf bloggers. I would like to consider this the Mother of all Credit Card Carnivals!. Bear in mind that some of the bloggers that participated in the survey did not really have any credit card posts on their sites. In those cases, I justed highlighted their blogs. So without wasting any more time, let’s begin (in no particular order of preference or any criteria) :

SVB from The Digerati Life is my good friend and probably has the blog with the best pictures and captions. You will love her rant about money, life, work and other stuff on her blog. Plus the great pictures too. One of my favorite post on her blog about credit is 4 methods she has used to reduce credit card debt

JD from Get Rich Slowly is arguably the granddaddy of all PF blogs with over 50,000 rss subscribers! And JD has just been around for over a year. JD has written quite a bit on credit cards and one of the better posts that I liked was a quick trick for tracking credit card expenses in Quicken

Trent from The Simple Dollar is another big hitter in the pf space. Trent has written quite a few post on credit cards. The one I like best is his take on seven nifty tactics credit card companies use to get into your pocket.

Cathy from Chief Family Officer is an attorney and mother of two. She is also (obviously) the CFO of her household. This is one of the more personal finance blog that I enjoy reading (it’s not often you get an attorney who blogs about finances!). She recently wrote a credit card post explaining that merchants cannot set a minimum or maximum on the amount where they will or will not accept credit cards. Definitely check out this post.

You should check out the about us page to find out why Aryn from Sound Money Matters started her blog. She has a very interesting credit card post on how the purchase protection feature in credit cards saved her friend $800.

Tricia from Blogging Away Debt - When I started reading Tricia’s blog, she had over $30,000 in credit card debt. That figure is now slightly over $8,000. If you are struggling with your credit card debt, Tricia will be an inspiration to you. Tricia wrote about the one charge that started her journey to racking up $37,000 in credit card debt.

Free From Broke is married with 2 kids, both himself and his wife work full time in NY and finds it challenging to save (hey what do expect if you live in NY!). He has written a very interesting experience about lowering his credit card interest rate. I won’t reveal the ending, but you’ve got to read this one.

Poorer Than You is a blog written by a student. I saw a few credit card posts that I really enjoyed reading. One of them is about her application hell when applying for a student credit card.

Kimberly from Alpha Consumer is actually one of the blogs of US News. She is one of the “corporate bloggers” who has taken the time to get involve in our “mom and pop” finance world. One of her recent credit card post that caught my attention was about the latest credit card scam. You should definitely be aware of this.

Lynae from Being Frugal will tell you ways to save money and be frugal that you would never dream of. You will learn how to save money by reading what she has to say. Check out her credit card story.

Mrs Micah is only 22, just got married (starting early?), has student loan debt and is documenting her journey to financial freedom. She is pretty entrepreneurial as well, having started Finwikian, a finance wiki. Way to go Mrs Micah. By the way, she has just got her very first credit card.

Single Ma of Fabulous Financials Fabulous Financials belongs to ’single ma’ who is a 30 something with a little ‘Diva” (kid) as she calls it. Earlier this year, she reviewed her annual credit card limits.

David from Money Ning has a Masters in Computer Engineering and has had lots of interesting jobs and also a very interesting background. He just got married also. His blog is interesting as he has a couple of calculators . Check out his post about credit card payments in self service kiosk

Saving Advice is a blog about savings and frugality. It has several authors and the person who responded to my survey was Jeffrey Strain. There were over 90+ credit card posts on their blog. After going through the whole lot, I decided to highlight this post which is about one of the authors (not Jeffrey) true experience of having 7 unauthorized credit cards opened in his name. What a massive identity theft.

Emily Gerson writes for Taking Charge of Credit Cards. Her post (as with most of her colleagues) are mainly news, announcements oriented. I’ve picked this post because I’ve never seen this advice given anywhere. It is about how our soldiers who work or fight abroad can take measures to protect themselves from identity theft.

Paid Twice gave the title of his blog “I’ve paid for this twice already”, because he or she (can’t assume can you?) figured that he probably paid twice for everything that was charged to the credit card when you factor in the interest rate! This is another blog journey from debt to hopefully (more wealth - financial freedom is getting a little stale!). One of the credit card posts l like is him telling us about his son wanting a BlueSky Amex!.

Blunt Money is a remarried mom who has been through quite a bit (given what she wrote in her about me page). Presently, she only has her mortgage as her debt. Her blog is very personal as she documents her financial and other life. Recently, she has written a post on why putting your credit cards on ice is not the way to go.

RC from Think Your Way to Wealth is married with 2 kids. I though that his post about creating an aggressive credit card debt elimination plan was worth highlighting here.

Trees Full of Money is a blog by Benjamin and he has actually quite a few very good credit card posts. He once had over $90,000 in credit card debt and he paid them off after a couple of years following a plan. In my opinion, one of his best post is The complete guide to protecting your identity, which is one of the best post that I’ve seen written on this topic.

Kevin from No Debt Plan is a blog about debt free life. He has a great advice: Only buy appreciating assets on credit. Can’t agree more - that means pay in full for your car and electronic gadgets. (perhaps maybe even for a home right now?)

Nina Smith and Andrea Cecile from Queer Cents are two of many authors from Queer Cents that participated in this survey. There are quite a few credit card posts on that blog. I’ve picked this one from Nina to highlight here : How to prevent identity theft?

David from Money under 30 used to write for SmartMoney even though (in his own words) ” I was still as dumb about my own money as could be. Each day, however, I interviewed somebody who was, in fact, smart with money, and lessons I learned about 401ks and bonds and insurance and mutual funds I filed away for a rainy afternoon.”! I want to highlight a post on his blog where he gave an advice of also considering a personal loan as an alternative to a credit card.

Debt Free Revolution is an Army wife, an Iraq veteran, a college student, a mom, family CFO, and a Domino’s pizza delivery driver to get her family out of the chain of debt! In February this year, she was debt free except for her house. She has written a thought provoking post on kids and credit cards and wonders who is to blame

Madison Dupaix from My Dollar Plan helps start and participate in investment clubs. She also “loosely manages” money for 4 relatives! Her post on 7 ways to pay off credit card debt is one of her more popular post on her site.

Andy from Money Walks is a 20 something year old student from Maryland whose goal is not only to retire early but to retire rich enough to where money is no longer a burden. He loves credit cards and in this post, he gives his reasons why

Melissa from A Penny Closer loves to cook! (well, that was what she said in her about me page). She also has a business degree and has worked in the technology and consulting business. She wrote a post a while back on how she chose her credit card.

Mr DebtBeater from Debt Beater has six kids! His blog is a about his journey to be debt free. In fact, DebtBeater is not a fan of credit cards and has even cut up his credit cards.

Clever Dude says he both makes and spends money (do’t we all) and wrote a post about credit card skimming at Redbox Stations that is worth reading.

All Financial Matters is a personal finance blog by JLP. His about me page is one of the longest I’ve seen (really personal - so check it out when you head over to his site). My post pick from his blog is about consolidating credit cards.

James & Miel from Dinks Finance have a really cool blog which is very personal indeed. I wanted to highlight this post about how to be savvy about the way you use your credit card

Ryan from Debt Reduction Formula had one of his readers write a post about whether credit cards were good or bad. Age old topic - it’s like fire - it has good uses but can be abused or cause damage when not used with care.

Finance Girl from Finance Gets Personal is twenty something and is looking to get out of debt in a few years (as claimed in her about me page). She and her husband bought their home in 2005 (at the highs?), but has since reduced $50,000 in debt (way to go). Well, she recently finally got out of her credit card debt and is now debt free. For those who still have credit card debt, this should serve as an inspiration.

John from the Mighty Bargain Hunter - John has a great blog with lots of money saving tips and lots of deals on his home page! John also started the Carnival of Debt Reduction. John clearly loves his credit card but hates credit card debt, and in this post, he clarifies that you can makes use of he perks of credit cards and yet not get into debt.

Millionaire Money Habits is a blog by Ryan Taylor and though there aren’t any credit card related posts, I found his blog pretty interesting. It is more about becoming a millionaire (as the blog implies).

Frugal Trader from Million Dollar Journey is from Canada and it is interesting to read about finance in Canada and from their perspective.

Living off Dividends is a blog more about investing. The author recently made the trip to Berkshire Hathaway’s annual meeting (which tells me that he or she is a real student in investing).

Father Sez is a father of 4 girls and a boy. He blogs about personal finance and hopes to pass on some of his wisdom.

Investor Blogger is more of an investor blog that focuses on investing. There aren’t really any credit card related posts on the blog.

Dan from Everyday Finance is more of an investing blog. He even lists his personal holdings and measures himself versus the S&P 500.

Not The Jetset is a fan of Dave Ramsey and thinks Suze Orman is a shill. Actually, I don’t disagree with him. I can’t seem to find any credit card post here but it has some creative posts.

Four Pillars is a Canadian PF blog written by Mike and Mr Cheap. It’s really Canadian focused and it does not really have any credit card topics.

The Great Loan Blog is run by Mr Mortgage and though there are no credit card posts on the blog, it actually has great posts on the economy and mortgages (which I think are relevant to many of us these days).

Bryce from Save and Conquer started his blog because his friends requested that he posts his thoughts on a blog. So he started one! He hardly has any credit card post (except for a couple written by guests).

Personal Finance Bloggers Credit Card Survey

Mr Credit Card — Tue, 29 Jul 2008 08:00:13 +0000

Having been writing about credit cards and blogging for a while, I was very interested to find out how other personal finance bloggers have been using credit cards. So back in March, I came up with a list of questions that I decided to ask other bloggers.

I started contacting people for a couple of months and finally am able to put the finishing touches to this. In total I sent out about 150 emails to various personal finance bloggers. I have tried to reach out to as many bloggers as I can, but I am sure I have missed a few of you. If I have, please send me an email through my contact form.

Methodology

First, a brief word on how I contacted the all my fellow peer bloggers. I first started with bloggers who were on my yahoo rss feeds. I started with the Money Blog Network which was started by 8 very high profile bloggers who I must say were pioneers in the personal finance space. I then followed, the blogrolls from the various bloggers. I also checked out recent participants of the Carnival of Personal Finance, the Carnival of Debt Reduction, and the Festival of Frugality.

What gives this survey credibility is the fact that many prominent pf bloggers have responded to my survey questions, folks like JD Roth from Get Rich Slowly, Trent from The Simple Dollar. In total, 45 bloggers responded though not all answered every question.

Questions

1. How many credit cards do you have?
2. Which credit cards do you have?
3. Do you have any credit card debt? If yes, how much?
4. What rate are you paying on your credit card?
5. What is your credit score?
6. Have you got any credit cards solely for balance transfers?
7. If yes, what are the balance transfer credit cards you chose?
8. Do you charge your utilities, cable bills and internet bills etc to your credit card?
9. Is your credit card bills set up such that it is automatically paid every month?
10. Do you use your credit cards at gas stations and supermarkets?
11. Which is your favorite credit card? (be specific, not visa or mastercard as an answer pls)
12. Which is your favorite credit card issuer? (banks, not visa or mastercard)

But before I go on, here is an executive summary for those who just want to get some conclusions out of this survey.

Executive Summary
The main conclusion from this survey is that most pf bloggers make good use of their credit cards and could teach us a thing or two about credit cards.

Firstly, most (50%) only carry two or three credit cards and do not go crazy over having many credit cards. The majority of pf bloggers do not have credit card debt and also have credit scores over 700 (which is good). They also make use of their credit cards to get rebates or earn reward points by using them at places like gas stations.

Most PF bloggers who carry a balance and have credit card debt take advantage of 0% APR teaser deals to help them lower their interest cost.

Most carry credit cards from well establish credit card issuers and cite Citibank and American Express as their two favorite credit card issuers.

Below are the analysis and answers to the questions that I asked in the credit card survey.

How Many Credit Cards do you have?

The first question I asked was how many credit cards you do have? Before I present my findings, here is my answer. I have 4 credit cards, the Blue Cash (mainly for my personal spending), Amex Platinum Card (out of my ego and to see how great this card really is and for our business), the Chase Flexible Rewards Card (because Chase does not publish their reward program on their site!) and most recently the Merrill Lynch Plus Visa (once again to check out the reward program).

One caveat is that I asked “how many credit cards do you have?” to my participants. Some had many but only used (for example) two of them. For the purpose of this question, I took the number of credit cards they had and not how many were they actually using. (Perhaps, in future, it would be better to ask how many credit cards one has and how many do they actively use)

So here are the key findings. 34% of those who took part in the survey carried 2 credit cards . 16% had 3 credit cards. 14% had 4 credit cards. What is more interesting is that 7% had 10 or more credit cards! There were 2 bloggers who did not carry any credit cards.

The Pie Chart Below gives a different view.

Which Credit Cards Do You Have?

When I first thought about the questions that I thought I should ask, I obviously thought about asking which credit cards do people have. Well, most listed all the credit cards they have, some did not and some were vague (like Amex or Visa). Then, when I listed all the credit cards that bloggers told me they had, I realized that it was just not feasible to list every card. So instead, I have decided to list the cards that most of the survey participants had (compiling this list was a nightmare to say the least!).

1. Discover More Card
2. Bank of America Visa or Mastercard
3. AT&T Universal Credit Card
4. USAA Platinum Card
5. WAMU Mastercard
6. Amazon.com Visa
7. Amex Blue Credit Card
8. Amex Blue Cash
9. Citibank Visa
10. Gold Delta Skymiles Credit Card

Do you have any credit card debt? If yes, how much?

41 bloggers responded to this question. 31 do not carry any debt (that’s a whopping 76%). 1 bloggers have credit card debt that was less than $5,000. 7 bloggers had credit card debt between $5,000 and $9,999. One bloggers had credit card debt between $10,000 and $20,000.

To be honest, I’m not sure that this is exactly indicative of the universe of personal finance bloggers since not every person that I sent an email to responded. But nevertheless, I think it is great news that the majority of the bloggers that responded do not have any credit card debt.

What Rate Are You Paying On Your Card?

For this question, I have decided to list the APR of those who actually carry a balance (ie have credit card debt).

7 bloggers are presently now paying 0% APR on their credit card/s or at least on one of their cards. 4 bloggers were paying single digit APR. 4 bloggers were paying rates above 10%.

What is Your Credit Score?

Of the bloggers that responded to the survey, 4 had credit scores of 800 and above. 12 had scores between 750 and 799. 14 had scores between 700 and 749. 3 had scores between 600 and 700. 5 did not know their credit scores! 5 bloggers were either overseas bloggers (or who had lived outside the US for a long time that they either do not have or have not checked their credit scores).

It is good to know that at least three-quarters of the those surveyed had credit scores of 700 and above.

6. Have you got any credit cards solely for balance transfer?

15 of the out 40 bloggers had got credit cards solely for balance transfer purposes while 29 have not got any credit cards solely for balance transfer deal.

Of the 15 that had actually got balance transfer credit cards, 10 carried a credit card balance (to put it another way, have credit card debt). The other 5 who took out 0% balance transfer deals paid in full (and hence simply took advantage of such offers)

Balance Transfer Credit Cards that were chosen

Here are the list of credit cards that these bloggers used for their balance transfer.

AT&T Universal Credit Card
Bank of America Visa
WAMU Visa
Citi® Professional Card
Chase Visa
Citi Visa

Note : with many issuers now lifting the cap on balance transfer fees, most of the above cards are not the best cards to get a 0% deal. You can check our section on for our recommended balance transfer credit cards

8. Do you charge your utilities, cable bills and internet bills etc to your credit card?

For this question, I got 45 responses. And it was evenly split. 22 bloggers did not pay their utilities, cable bills or internet bills with their credit card, while 23 actually did use their credit cards to pay all of the above or at least some items like cell phone bills etc.

9. Is your credit card bills set up such that it is automatically paid every month?

Only 10 bloggers who participated in the survey have their credit card bills set up such that their bills are automatically paid every month from their bank account. 32 bloggers do not have their credit card bill payment automatically set up with their bank account. One blogger (who obviously carries more than one credit card) has some but not all credit cards set up for automatic payment.

The most common reason given was that they would personally like to check their statements and make sure it is correct (can’t argue with that one).

10. Do you use your credit cards at gas stations and supermarkets?

30 bloggers responded yes to this question (which I expected). Of the 30 that said yes, 3 said they specifically used it for gasoline purchases. 13 bloggers responded no to this question and do not use their credit cards at the gas station and supermarket.

2 bloggers said they used their debit cards for gasoline and supermarket purchases. I am inclined to classify that as a “No” simply because the purpose of this question was to see if people took advantage of using credit cards to earn rewards or rebates since credit card issuers tend to give more rewards or rebates when you use your cards for gas or grocery shopping.

11. Which is your favorite credit card? (be specific, not visa or mastercard as an answer
pls)

Not everyone answered this question. There were also no clear favorites here. This is understandable given that we have so many credit card choices. Below are some cards mentioned as favorites.

1. Blue from Amex
2. Blue Cash from Amex
3. Discover More Card
4. USAA Platinum
5. Citi Drivers Edge

12. Which is your favorite credit card issuer? (banks, not visa or mastercard)

Here is the list of bloggers most favored credit card issuer ranked according to the number of votes. Some did not answer this question (either have no opinion or hate credit cards?).

1. Citicards - We have 8 votes for Citibank which makes it the most popular among the pf bloggers that participated in this survey.

2. American Express - Second was Amex with 6 votes

3. USAA - This one caught me by surprise, but with 4 votes, USAA takes 3rd place.

4. Chase - 4th was Chase with 4 votes.

5. Discover - in 5th place is Discover with 2 votes also.

6. Bank of America (FIA) - with 2 votes.

I’ve left the rest out the ones with only one vote.

13. When did you get your first credit card? What was the card?

On hindsight, I should not have asked this question because most of the bloggers cannot really remember. Most got them in college (they think) and cannot remember the exact card. So I will not actually tally up the answers here (bad question on my part! - but how I am to know in advance?).