The Ultimate Guide to Credit Cards
Saturday, February 24, 2024

All articles tagged Lessons (page 2)

How to Read a Credit Card Agreement

How to Read a Credit Card Agreement

Credit cards can be hard to resist, thanks to enticing sign-up offers from free cash back to zero-percent interest for the first year on purchases to enough miles that could cover a couple of roundtrip tickets to an exotic destination. Some even extend a one-time discount off your store purchase or may provide a rebate when booking a hotel. Though all these rewards and promotions seem great on the surface, spending time to understand a credit card’s terms and conditions is more... read more »

6 Steps for Graduating From Secured to Unsecured Credit (Feb. 2024)

6 Steps for Graduating From Secured to Unsecured Credit (Feb. 2024)

A secured credit card can be a terrific option when your credit rating isn’t high enough to qualify for a traditional unsecured credit card. To get a secured card, you put down a cash deposit that acts as collateral, and the issuer provides you with a credit line equal to -- or perhaps even greater than -- your deposit. This deposit is kept in a separate custodial account. All parties come out ahead with these tools. The issuer assumes little risk in lending you money because, if... read more »

How Long Does It Take to Build a Credit Score?

How Long Does It Take to Build a Credit Score?

Credit scores are the go-to tool used by lenders to assess the risk of doing business with you. Good credit scores mean good financing deals. Poor credit scores mean less attractive offers and terms. And while many consumers focus, rightly, on building a credit history, it’s also important to focus on building a credit score at the same time. There’s no universal answer to the question, “How long does it take to build a credit score?” Instead, the time frame is going to be... read more »

What is a Credit Card Grace Period?

What is a Credit Card Grace Period?

Credit cards come with many pros and cons that can positively or negatively shape your financial situation. On one hand, credit cards provide many benefits, such as extra layers of purchase and fraud protection, and the ability to earn valuable rewards in the form of cash back, gift cards or even free flights and hotel stays. On the flip side, those who aren’t paying attention to what they’re charging can easily rack up a credit card balance that’s too high to pay off and end up... read more »

Can My Card Issuer Change the Terms of My Account?

Can My Card Issuer Change the Terms of My Account?

In the United States, some 220 million consumers have a credit report with one or more of the credit reporting agencies. Of those 220 million, around 170 million consumers have one or more credit card accounts, according to the Consumer Financial Protection Bureau. These common financial tools can make your life easier in many ways: portable capacity, iron-clad fraud protection, rewards programs, credit building capabilities, the list of benefits just seems to go on and on. When... read more »

9 Ways to Make Money Using Credit Cards (Feb. 2024)

9 Ways to Make Money Using Credit Cards (Feb. 2024)

It’s amazing to discover how many ways you can make money using credit cards. We think of credit cards primarily as a convenient alternative to cash when we shop in stores, in apps, and online. But these nifty plastic rectangles can actually help you earn and save money without creating credit card debt, as long as you pay your full balance each billing cycle and only charge what you can afford. Earn a Signup Bonus Earn Cash Back Convert Points to Cash Plan Purchases ... read more »

10 Things Your Credit Card Issuer Reports to the Credit Bureaus

10 Things Your Credit Card Issuer Reports to the Credit Bureaus

When you open a credit card, you are required to agree to certain terms and conditions associated with the account. Somewhere among all that fine print, there’s a section that addresses credit reporting. Essentially, your credit cardholder agreement discloses that the card issuer will report information about you and your account to the credit reporting agencies. This process is formally referred to in credit reporting nomenclature as furnishing. If you want a credit card from... read more »

Are Credit Card Signup Bonuses Taxable? (Feb. 2024)

Are Credit Card Signup Bonuses Taxable? (Feb. 2024)

Credit card reward programs have come a long way over the past decade, offering more opportunities than ever before to earn miles, points, and cash back on a variety of purchases. In fact, one study by ValuePenguin found that three of the biggest credit card issuers -- American Express, Discover, and Capital One -- issued a combined $12.9 billion in rewards to cardholders in 2017. This is a 59% increase from what these companies spent on rewards just six years earlier in 2011. ... read more »

What is Deferred Interest & How Does it Work? (Feb. 2024)

What is Deferred Interest & How Does it Work? (Feb. 2024)

Nothing in this world is free, especially when it comes to borrowing money. Although some credit card companies and retailers want you to believe you’re getting a loan or making a purchase sans fees by waiving interest for a promotional period, it comes with a catch -- and one that many people are unaware of. Deferred interest doesn’t mean you’re off the hook for paying interest. On the contrary, deferred interest means that interest charges will be postponed for a certain... read more »

Why Some Accounts Appear On Your Credit Reports And Others Don’t

Why Some Accounts Appear On Your Credit Reports And Others Don’t

Your credit reports are filled with information about your financial experiences. But have you ever wondered how all that highly sensitive information about your personal accounts end up on your credit reports in the first place? You certainly didn’t give anyone explicit permission to share your information. None of us did. Add to that the fact that some of your accounts appear on your credit reports and others do not. It can all be very confusing. The good news is that the... read more »

The History of Credit Cards: 2000 B.C. – 2024 A.D.

The History of Credit Cards: 2000 B.C. – 2024 A.D.

Credit cards -- or at least the concept of them -- are not 20th-century payment tools. In fact, the ability to purchase what you want or need and then be presented with a bill for what you bought later has deep roots in the past. Here is a brief history of credit arrangements and instruments — and a little taste of what the future will bring. 2000 BC: Clay Tablets Roughly 5,000 years ago, trade in Mesopotamia (today Iraq, Syria, and Turkey) and the Harappan civilization (present-day... read more »

The 3 Credit Bureaus: How and Why to Contact Them

The 3 Credit Bureaus: How and Why to Contact Them

The three most recognized credit reporting agencies or credit bureaus in the United States are Experian, TransUnion, and Equifax. Each of these companies maintains credit report information on over 200 million Americans. The amount of information these companies collectively house is staggering, and, as such, errors can occur. In fact, according to a 2013 credit file accuracy study performed by the Federal Trade Commission, the most recent study of its type, 1 in 5 people have errors... read more »

The FICO Credit Score Range and How It Applies to Your Credit Cards

The FICO Credit Score Range and How It Applies to Your Credit Cards

From the moment you apply for your first apartment lease, loan, cellphone, or utility account, you will start to understand the importance of your credit scores, especially their importance to your lenders and service providers. Solid credit scores lead to more opportunities from mainstream lenders and can help you save money on fees and interest. Poor credit, on the other hand, can make it harder to qualify for the financing and services you want and will make your options less... read more »

How Many Credit Cards Does the Average American Have?

How Many Credit Cards Does the Average American Have?

Even in the era of touchless pay, the credit card remains one of the most popular methods of payment in the United States consumer credit environment. In fact, many, if not most, touchless pay options are tied to a credit card account. So, while there is no physical plastic being exchanged, a credit card is still being used to buy goods and services. You're not at all atypical if you use several credit cards. In fact, you should consider yourself to be an average Joe. Credit card... read more »

How the CARES Act Impacts How Credit Cards Are Reported

How the CARES Act Impacts How Credit Cards Are Reported

The Coronavirus pandemic and subsequent nationwide containment efforts have affected the livelihoods of millions of Americans. In fact, it would be hard to say that anyone has been spared some form of disruption to their lives as a result of the global pandemic. At the beginning of June 2020, the number of unemployed workers in the country exceeded 20 million, according to the Bureau of Labor Statistics. In response to the pandemic, Congress passed the Coronavirus Aid, Relief and... read more »

4 Misconceptions About Credit Card Rates

4 Misconceptions About Credit Card Rates

Misconceptions can be maddening. You think you know something, but it turns out that what you thought you knew wasn't true. In the case of credit card rates, misconceptions can not only be maddening, but they can also be costly. What you think you know isn't just wrong — it's also potentially expensive. With that in mind, here are four misconceptions about credit card rates and the facts you should know instead. Misconception #1: The Federal Reserve Sets Card Rates The... read more »

How to Check Your Credit Reports

How to Check Your Credit Reports

Your credit reports and credit scores have a tremendous influence over your financial life. Good credit can open doors to competitive financing, inexpensive insurance premiums, and even job opportunities. Bad credit, on the other hand, can make it difficult for you to qualify for even the most expensive extensions of credit. Even if you do qualify for financing or services with existing credit problems, you’re going to pay more. It is critical that you check all three of your... read more »

8 Credit Mistakes You Should Always Avoid

8 Credit Mistakes You Should Always Avoid

No one is born knowing how to manage credit, and the topic is rarely taught in high schools and colleges. If you didn’t learn about it at home, odds are you did through trial and error. But why not avoid problems before they happen? Here are eight of the most common credit mistakes that you should — and can — avoid. 1. Pursuing the Wrong Account Excellent credit use begins with getting the right card for your circumstances, but many people apply for credit cards randomly. If... read more »

3 Ways to Protect Your Credit Scores

3 Ways to Protect Your Credit Scores

Lower interest rates, better loan terms, and more affordable insurance premiums — these are just a few of the perks you may earn when you have good or great credit scores. A solid credit score can save you money and simplify your financial life in many other ways, in addition to paying less to finance your purchases. If you have put in the effort to earn good credit, kudos on a job well done. But your work certainly isn’t done yet. In addition to earning good credit scores,... read more »

Soft Inquiry vs. Hard Inquiry — What is the Difference?

Soft Inquiry vs. Hard Inquiry — What is the Difference?

When you apply for credit, a lender is almost always going to access one or more of your credit reports. Lenders do this as part of their risk assessment and underwriting procedures. This process is formally referred to as a credit inquiry, which is actually both a noun and a verb. Differences | Exceptions | Credit Score Impacts What is a Credit Inquiry? Before we dive into the specifics of the different types of credit inquiries, it helps to understand more about them. A credit... read more »

How Credit Card Companies Make Money

How Credit Card Companies Make Money

Americans love credit cards — why pay now if you can pay later and earn rewards for doing so? Unfortunately, poorly managed accounts can quickly deflate your bank account and end up costing you more than you charged to the card in the first place. That’s because credit card companies charge interest on the balance you carry every month. But this isn’t the only way card companies make money. In addition to the fee you pay for borrowing their digital dollars, you may be on the... read more »

How to Build Credit as an Authorized User

How to Build Credit as an Authorized User

Wouldn’t it be nice if people were just born with excellent credit?  Unfortunately, credit is something you must establish, build, and maintain over time. And, if you believe you don’t need credit, think again. A healthy credit score is your ticket to reaching many life goals — whether that’s buying your dream home or starting a business. Even if you just want to rent an apartment, own and insure a car, or open a credit card that offers a cool travel rewards program, you... read more »

Variable APR vs. Fixed APR — What’s the Difference?

Variable APR vs. Fixed APR — What’s the Difference?

When you’re shopping for a new credit card, you probably pay close attention to the annual percentage rates (APR) of the cards you’re considering. The APR is important because if you choose to carry a balance from one month to the next, the APR is used to determine the cost of servicing your debt. What you may not realize, however, is that your APR can possibly change over time. Whether your credit card features a fixed APR, meaning it likely won’t change, or a variable APR,... read more »

APR vs. Interest Rate: Is There a Difference? (Feb. 2024)

APR vs. Interest Rate: Is There a Difference? (Feb. 2024)

Borrowing money often involves fees. One such fee is interest, which is calculated as a percentage of the amount you owe. The percentage is the interest rate. For example, if you borrowed $1,000 for one year with an interest rate of 4%, you'd owe $40 of interest. An interest rate that's calculated on a yearly basis is known as an annualized percentage rate (APR). An APR always includes interest. It may also include other fees related to the loan. For example, if you applied for a... read more »

Understanding Credit Cards: A Beginner’s Guide (Feb. 2024)

Understanding Credit Cards: A Beginner’s Guide (Feb. 2024)

Similar to your first job, car or apartment, your first credit card is an important milestone on your journey from youth into adulthood. To do adulting right, you'll want at least one card in your own name. While you can manage your personal finances without any cards, you'll find life in the grownup world is much easier with them. Cards can help you shop online, rent a car, book an airline ticket, reserve a hotel room, set up cellphone service, and more. Cards for beginners usually... read more »

123