How I utilize Credit Cards in My Life

By: Mr Credit Card

02/13/2010

This guest post is written by Kevin who writes for 20smoney.com, a personal finance blog geared towards young people, and Financial Freedom, a blog dedicated to the pursuit of financial independence.

I do not have any credit card debt, nor do I intend on accumulating any. This doesn’t mean I don’t utilize credit cards. I do and very frequently. My credit card strategy can be simplified into two principles: pay for as much as possible on my credit cards and pay off the balance every single month. Allow me to explain further…

Using Plastic As Much As Possible

I have two main credit cards that I use frequently. An American Express green card and a Starwood American Express card. I use these cards for only one reason: rewards points. With the green card, I earn the American Express Membership Rewards points and with the Starwood card, I earn points to be used for fantastic hotel properties such as W Hotels, Westins, Sheratons, etc.

I attempt to use these cards for everything I . Whether it is a cup of coffee or a major purchase, my AMEX card will be uutilized. Thankfully, I’m also able to put on average several thousand dollars in business expenses every month on my credit cards. This allows the points to add up pretty quickly.

Interestingly, I’m also now able to do my regular tithing to my local church through their online system which accepts American Express. I gladly accept the rewards points for my charitable donations.

By building up my rewards points, I’m able to purchase items that I would otherwise not purchase. For example, I recently bought a piece of Apple hardware and a very nice toolchest for my garage through the American Express shopping. These purchases are deemed “nice-to-haves” not necessities; therefore, i wouldn’t be spending my regular cash on such items. The Starwood points make travel possible for my family and allow us to stay in spectacular hotels for free. My most recent stay: The brand new Ft Lauderdale W.

Paying Off The Balance Every Month

I refuse to carry a balance on my credit card. I do not want to pay a single cent in interest because that is money that I essentially lose. By paying off my American Express cards every month, I have a strong credit record with a reputable company and pay zero financing charges. I do pay a membership / maintenance fee annually, however. If you don’t utilize your American Express frequently, it might not be worth the membership fees, but since I’m able to put business expenses and more on them, it makes it definitely worth it for me.

My only concern with allocating all spending onto my credit card is that it can be easier to spend money when you rely on plastic. It results in a feeling of easy money where you might be less likely to part with cold hard cash. If you implement a spending strategy similar to what I’ve described, make sure you’re still being smart with your money and not overspending. The credit card rewards will never make up for the overspending.

What Is Up With This Anti-Credit Card Rant?

By: Jason Steele

02/11/2010

I like to think of myself as a pretty big consumer advocate. I can and do call out banks on their outrageous credit card practices. I strongly supported the CARD act and would have supported an even tougher law. You know that someone is taking their feelings too far when even I start to roll my eyes.

Credit Card Protester Takes Campaign To MSNBC

The story in the Huffington Post wasn’t too bad, but watching the video was downright painful. I don’t know who was worse, the protesting consumer or the sycophantic TV personality and his terrible questions. Where do I begin? For one, why would you protest credit cards at ATMs? I have never, in my entire life, used a credit card at an ATM. Check cards and debit cards, sure, but you get the worst possible rate when you withdraw cash with a credit card from an ATM. Secondly, most of my credit cards come from banks who don’t have ATMs. I suppose there might be an American Express ATM or a Capitol One ATM somewhere, but I haven’t seen it. The stupid stickers that these people are putting up are, at best, a minor nuisance to remove for the people who service the machines. At worst, they are probably just going to end up as litter in the parking lot. Finally, the entire interview is devoid of any mention of the CARD act, which takes effect in just a few days! How could you possibly talk about this subject, at this moment in history, and not even mention CARD?

What Does This Guy Want?

Amazingly, he is able to articulate five demands. Let’s take a look:

1) Print the interest rate on each card. I don’t know how this would work. Do you get a new card if your rate goes down? Do they cancel your card if you pay late and get kicked to a default rate? What if you have a promotional rate that is different from the regular rate? If you have so many cards, that you can’t remember what your rate is, maybe you need to have fewer cards.

2) The contract should be less than one page. This might be his best idea, yet it would hardly make a difference compared to the meaningful regulations contained in the CARD act.

3) Cap interest rates at 15% Fantastic idea, except that credit cards will only be issued to a small minority of people if this were to ever happened. Why don’t we just make interest 0% as long as we are bending the laws of economics.

4) Show transaction fees on sales receipts. Ethically, cash ers should pay 2% less. This is the worst idea ever. Basically, he would like to shift transaction fees away from merchants to consumers. Brilliant, because what we need now are additional fees tacked on to every transaction we make. Merchants don’t have to accept credit cards, but they do because handling cash is more expensive and risky.

5) Require online calculators so consumers can easily check statements for accuracy. I just don’t get this one. I have never found a math error in a statement. Banks are failing consumers in many different ways, but math just isn’t one of them. There are plenty of calculators he can use if wants to check his bank’s math. Many credit card companies will allow you to download your statements from their web site, or you could just cut and paste them into Excel and do your own calculations. Personally, I have better things to do with my time than duplicate a 4th grader’s homework assignments.

In Conclusion

I have just about had it with all the phony populism going on today. Congress passed and the President signed a credit card reform law that is pretty damn strong. They did it early last year, during a time of record low public opinion of the banks, and record high gains in Congress for the Democrats, the only party that would ever consider stronger regulation of the banking industry. The worst part of the law is that it took so long to become effective. Now, we are only 11 days away from it’s implementation, and we have to listen to this crank come up with some silly videos and some truly stupid ideas. If you don’t like your credit cards, cut them up and carry cash with you every where you go.

Until then, just grow up.

True Credit 3-1 Monitoring Review

By: Mr Credit Card

02/10/2010

True Credit is a subsidiary of TransUnion. Like the other two credit bureaus Experian and Equifax, TransUnion also provides their suite of “credit monitoring services”. So how good is this service? Let’s find out.

A quick background – First a quick background about consumer rights and your credit reports. Each individual is allowed to get a free credit report from each credit bureau once a year (note that you only get your report and not your credit score). Credit Monitoring services gives you continuous access to your credit reports.

True Credit from TransUnion is no different. You get access to your three credit reports in a nice format. And you also get alerts if there are any changes to your credit report.

Access to credit scores – This is the area where this review gets interesting. True Credit claims to be able to give you access to all three credit scores. Hmmm! I was a little suspicious about this claim because there are hardly (actually just one) any products (especially from the credit bureaus) that give you access to all three credit scores from the credit bureaus. You can see your reports but not your score. So if you get a similar product from Experian, you can only see your Experian score and not the other two. So how did TransUnion manage to negotiate this deal with Experian or Equifax?

It’s actually your Vantage Score! – Upon looking at the fineprint, I realize that you will not get your FICO scores but rather your Vantage Score! What is the Vantage score? Vantage score is a new credit score developed by the three credit bureaus to provide what they deem is a more consistent and better scoring method than FICO. The score ranges from 501 to 990.

$25,000 ID theft insurance True Credit also provides up to $25,000 in ID theft insurance.

Fees – This service has a monthly cost of $14.95.

Verdict and Opinion – A service like this is going to appeal to folks who want to monitor their credit reports and scores for about a year or two ahead of a planned mortgage or auto loan. It is also useful to folks who have been discharged from bankruptcy because very often, your old loans and debts gets sold and it was never stated as discharged and gets reported in the credit bureaus (you really want to catch this).

They key selling point of True Credit’s monitoring service from TransUnion is that they provide you access to “all 3 credit scores”!. However, they do not say explicitly that it is the Vantage Score you get. The six million dollar question is this : Do lenders consider your FICO score more important? or the Vantage score? Or do they look at both? To be honest, I do not know. There are simply so many lenders around. You also have to consider that the Vantage Score is relatively new and I suspect that lenders and creditors would refer more to your FICO score. Having said that, if you have a good FICO score, that should be reflected in your vantage score as well. If that is how you feel, then the TrueCredit.com 3-Bureau Monitoring would be the service to get.

However, if you insist that you want access to all three FICO credit score plus a credit monitoring system, then the service from Identity Guard® Total Protection is actually a better service to get because it provides the same credit report monitoring service, has the same ID theft insurance, and it also gives you updates to your FICO scores quarterly. Plus the monthly fee is the same as True Credit. Ironically, Identity Guard markets itself as a ID theft protection service though I think it is better as a credit monitoring service!

How I utilize Credit Cards in My Life

What Is Up With This Anti-Credit Card Rant?

True Credit 3-1 Monitoring Review

Discover IT Card

American Express Plum Card

Amex Simply Cash

Barclays Arrival – No annual fee

Barclays Arrival Calculator

Amex Costco TrueEarnings Calculator

Blue Cash Preferred from American Express Calculator