Credit cards can be both a curse and a blessing. If you don’t use them wisely they can lead you into debt and exhaust your monthly income. On the other hand, if you do use them wisely then you can improve your credit rating and improve your monthly cash flow.
Create a Strong Credit History
Using credit cards is a great way to develop a positive credit history. To create a strong credit history you will need to make periodic purchases, and you will need to make on time payments. The best way to do this is to use the credit card to pay for purchases that you would normally make during the month using cash. Then at the end of the month pay off the balance completely. This way you build a positive credit history without accumulating interest charges.
I follow this strategy with my CIBC Visa Aeroplan card. I put everything on it and then pay it off in full at the end of the month. I'm averaging several free flights with Air Canada each year.
Using Credit Cards to Grow Your Business
If you own a business then you can use credit cards to increase your purchase power and improve your company’s cash flow. Credit cards can be used to purchase equipment and supplies when you need them, and then allow you to pay for these items over time. To maximize the benefit of your business credit cards you will want to find credit cards with low interest rates and you will want to pay off the balances as quickly as possible. This will help you keep your line of credit open for business purchases.
This would be an ideal scenario for a low interest rate credit card. I have a Scotiabank Cash Back Visa credit card. I get a small percentage back on my purchases. It's not much but the main point is that the interest rate is very low.
When Not to Use Credit Cards
In addition to knowing when to use your credit cards, you should also learn when you shouldn’t use your credit cards. Credit cards shouldn’t be used when you are emotionally unstable. Impulse buying can be very addictive, and it can lead to serious debt problems. Credit card purchases should optimally be strategically selected. You will also not want to give out your credit card number to unsolicited telemarketers. There are many scams circulating that involve asking for credit card numbers over the phone.
Finally, you don’t want to use your credit card in a country that is known for credit card scams and identity theft. If you will be traveling abroad make sure that you check with the Canadian Consulate in that country about how safe it is to use your credit card in that country.
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Showing posts with label Credit Cards. Show all posts
Showing posts with label Credit Cards. Show all posts
9.27.2011
9.20.2010
Credit cards and low interest
Sent wirelessly from my BlackBerry device on the Bell network.Envoyé sans fil par mon terminal mobile BlackBerry sur le réseau de Bell.
9.06.2010
Should you carry multiple credit cards?
Consumers may be dialing back on their credit card usage, but there are still plenty of good reasons to carry multiple credit cards.
Although there's no one-size-fits-all answer as to how many credit cards consumers should have, taking a good look at your own financial situation and spending patterns can help determine what's best for you.
Here are a few reasons to consider having several credit cards:
Sense of security
Having more than one major credit card can help you feel more secure. Carrying multiple credit cards in your wallet means that if something goes awry, like a credit card purchase won't go through or an ATM eats your card, you have another one to fall back on. In addition, not all retailers and service providers accept all credit cards, and you don't want to be stuck somewhere without a way to pay for a purchase.
Some consumers use a dedicated credit card for online shopping. It can make it easier to keep track of fraudulent activity or limit damage if you become a victim of identity theft.
Or you might want to keep a spare card tucked away safely at home or in a bank safe-deposit box in case your wallet gets stolen or you lose your main card.
Rewards and discounts
Some consumers want a wallet full of credit cards that offer rewards for purchases. These can include perks for travel, entertainment, shopping and services.
Gasoline station credit cards often offer lower gas prices for those who use their card for gas purchases. And many retailers offer percentage discounts off purchases or coupons to entice consumers to use a particular store's credit card.
Boost credit score
While people may fear having several credit cards looks bad to lenders, managing several cards responsibly helps show you're a good credit risk. Lenders look at your debt-to-limit ratio, or the proportion of your available credit you actually use.
Paying your bills on time or paying off your credit cards can bolster your credit score.
Although there's no one-size-fits-all answer as to how many credit cards consumers should have, taking a good look at your own financial situation and spending patterns can help determine what's best for you.
Here are a few reasons to consider having several credit cards:
Sense of security
Having more than one major credit card can help you feel more secure. Carrying multiple credit cards in your wallet means that if something goes awry, like a credit card purchase won't go through or an ATM eats your card, you have another one to fall back on. In addition, not all retailers and service providers accept all credit cards, and you don't want to be stuck somewhere without a way to pay for a purchase.
Some consumers use a dedicated credit card for online shopping. It can make it easier to keep track of fraudulent activity or limit damage if you become a victim of identity theft.
Or you might want to keep a spare card tucked away safely at home or in a bank safe-deposit box in case your wallet gets stolen or you lose your main card.
Rewards and discounts
Some consumers want a wallet full of credit cards that offer rewards for purchases. These can include perks for travel, entertainment, shopping and services.
Gasoline station credit cards often offer lower gas prices for those who use their card for gas purchases. And many retailers offer percentage discounts off purchases or coupons to entice consumers to use a particular store's credit card.
Boost credit score
While people may fear having several credit cards looks bad to lenders, managing several cards responsibly helps show you're a good credit risk. Lenders look at your debt-to-limit ratio, or the proportion of your available credit you actually use.
Paying your bills on time or paying off your credit cards can bolster your credit score.
8.23.2010
Credit cards unauthorized transactions
I haven't been able to find as much information about how to proceed with unauthorized credit card access within Canada. However, there is a lot of information about credit card abuse within the US. Read through the summary below if you need some background on credit card abuse and invalid transactions for credit cards.
In the case of unauthorized use of your credit card, the Truth in Lending Act limits personal liability to $50. There is no time limit to report a card lost or stolen, but if you alert the issuer before someone else goes shopping with your card, you aren't on the hook for the charges.
In the case of unauthorized use of your credit card, the Truth in Lending Act limits personal liability to $50. There is no time limit to report a card lost or stolen, but if you alert the issuer before someone else goes shopping with your card, you aren't on the hook for the charges.
Debit cards don't get the same treatment. You have to report a lost or stolen debit card within two business days to limit personal liability for fraudulent charges to $50. If the thief says "credit" at the register, it still doesn't transform the purchase into a credit card transaction.
"It just means you're processing it through the Visa and MasterCard payment networks as opposed to the other ATM networks when you use a PIN debit transaction," says Chi Chi Wu, a staff attorney with the National Consumer Law Center in Boston.
Billing errors
The Fair Credit Billing Act gives consumers the right to dispute "billing errors" on their credit card statements. Examples of billing mistakes include situations where you purchased goods online that were never delivered, the issuer didn't credit a payment or return of goods, or your statement contained duplicate charges for the same transaction.The law gives consumers a limited amount of time to catch such errors and take action. You must send a dispute letter within 60 days of the first statement that contained the mistake to the address for billing inquiries. Then the creditor must do an investigation and resolve it within two billing cycles or 90 days, whichever comes first.
The letter must provide your name and account number, a statement that the bill contains an error, the dollar amount in question and the reason for the dispute.
You can withhold payment on the portion of the bill in dispute, but are still obligated to pay at least the minimum due if a balance remains. The card issuer can still report late payments for undisputed debt.
Claims about the quality of goods and services
If your problem concerns the quality of goods or services purchased on your credit card, a section of the Fair Credit Billing Act gives you the right to dispute the charge and stop payment on that portion of the bill until the matter is resolved by the issuer."It's basically the right to raise claims and defenses that you have with respect to the merchant to raise them against the credit card company," says Wu.
The law has some important restrictions: The goods must have cost at least $50 and the purchase had to have been made in your home state or within 100 miles of your mailing address. Wu says to check with the card issuer if you completed the purchase online or over the phone.
These restrictions don't apply if the merchant is also the card issuer, or the seller mailed you an ad for the item you bought. The law also requires that you attempt to resolve the issue with the seller first. Individual issuers may not demand proof, but direct dealings with the retailer may save the trouble of filing a dispute through the card company. To withhold payment, Wu recommends sending a letter to create an evidence trail, but says you can file a claim over the phone. Payment processors American Express, Discover, MasterCard and Visa all offer purchase protection on some cards for damage or theft of goods up to 90 days after purchase. Customers with a legitimate claim could receive a repaired or replacement item, or reimbursement for the cost. Restrictions and benefits vary by program and card. For instance, American Express caps coverage at $1,000 per incident and $50,000 per policy year. Visa limits coverage to $500 per claim of theft or damage due to "fire, vandalism, accidentally discharged water, or certain weather conditions," according to its website. Check with your issuer or benefits guide to see if your card offers this perk.Check with the issuer for other claims
Maybe the quality of the high-definition TV you bought is fine, but somebody steals it from your house the following week. Take it up with the issuer. Major credit cards may cover such losses.
7.21.2010
Breaking down the various types of credit cards
Breaking down the various types of credit cards
In the early days of credit cards, things were simple and standard: Each issuer produced one card with one set of features. Today, credit cards come in multiple levels with ranging interest rates, fees and reward programs, so before you fill out an application, it's important to know which will best suit your financial situation and lifestyle.
The following is a brief description of the most common types of credit cards available.
Types of credit cards
Standard credit cards
Balance transfer credit cards
Low interest credit cards
Credit cards with rewards programs
Cash back credit cards
General reward points credit cards
Hotel/travel points credit cards
Retail reward credit cards
Gasoline points / rebates credit cards
Automobile manufacturer reward credit cards
Home improvement rewards credit cards
Airline miles / frequent flier credit cards
Airline-specific credit cards
Generic airline miles cards
Credit cards for bad credit
Secured credit cards
Prepaid debit cards
Specialty credit cards
Business credit cards
Student credit cards
Standard credit cards
These credit cards are the most common and are readily available from most banks and financial groups. They are unsecured, which means you do not have to put down a security deposit to prove the money can be repaid. The way the annual percentage rate is offered or calculated for these cards can vary. Here are two examples:
* Balance transfer credit cards
Balance transfer credit cards allow consumers to transfer a high interest credit card balance onto a credit card with a low interest rate. Typical in the market today are balance transfer credit cards with an introductory annual percentage rate (APR) of 0 percent, with that introductory or "teaser" rate lasting several months up to a year. The terms of balance transfer credit cards varies between offers, so be sure to thoroughly read the terms and conditions for each card.
* Low interest credit cards
Low interest credit cards offer either a low introductory APR that jumps to a higher rate after a certain period, or a single low fixed-rate APR. Low interest cards can be very useful when consumers need make a large purchase because it allows several months to a year to pay it off with very low or no interest. Before using a low interest card, read all the terms and conditions of the introductory rate so you will not be surprised by fees or accumulated interest.
Credit cards with rewards programs
Reward credit cards allow users to earn incentives for making purchases with their credit card. Points accumulate for each dollar charged on the card, and cardholders can redeem these points for various rewards. Reward cards usually require better-than-average credit for approval. There are seven major types (not including airline miles / frequent flier cards, which we'll discuss a bit later).
* Cash back credit cards
This type of credit card allows you to earn cash rewards for making purchases. The more the card is used, the more cash rewards you receive. Most cash back cards earn users around 1 percent of total purchases, excluding interest and finance charges. Some cards offer a higher cash back percentage with increased usage; others offer a higher cash back percentage at select merchants or for particular types of purchases. Since cash back programs are costly to credit card companies, some of these cards have an annual fee that can vary from $50 to $100. This type of card is best for people who are faithful about paying off their balances each month. If used appropriately, a cash back credit card can earn the cardholder a significant amount of money over time.
* General reward points credit cards
Reward credit cards are similar to cash back cards in that cardholders can accumulate points toward a reward structure, which is based on how much the card is used over time. General reward cards offer cardholders a variety of items to cash points in for: gift cards, electronics, hotel stays, plane tickets, jewelry, pet supplies and more. Some rewards can be attained for 1,500 points; others cost 200,000 points. Reward programs and promotional offers often change; thoroughly review a card's terms and conditions before applying. Some general reward credit cards come with an annual fee ranging from $50 to $100, although most have no annual fee. Reward cards are best for people who regularly pay off their balances each month. By minimizing their finance charges, individuals will reap greater benefits from the associated rewards credit card.
* Hotel or travel points credit cards
This is a genre of credit cards specific to hotels and travel. Some cards are co-branded with hotels. These credit cards allow you to earn points for all purchases, in addition to bonus points for dollars spent on stays at the respective hotel chain. You can redeem your points for free nights and upgrades at the hotel chain your card is co-branded with.Then there are broader hotel and travel cards, with which points can be redeemed for travel, theme park admission, stays at major hotel chains and more. Because these reward programs can be costly for credit card companies, many of these cards come with an annual fee. If you are not a frequent traveller, the annual fee may negate the benefit of the rewards earned. .
* Retail rewards credit cards
These credit cards are co-branded with a major retailer, such as Hudson's Bay Company or Sears Canada. Points are accumulated by making everyday purchases, though cardholders are awarded with double or triple points for making purchases from the co-branded retailer. Reward points must be redeemed for products or services from that specific retailer.
* Gas cards with points or rebates
Gas cards come in two species: general and brand-specific. General cards treat all gas companies equally, while brand-specific cards favor one gas company. If you tend to be loyal to a certain gas company, a brand-specific card may benefit you, but if you tend to just stop at whichever station is closest, you may be best with a general gas rebate card. Additionally, it's important to remember that a gas company may be very popular in one state, but uncommon or nonexistent in other states, making brand-specific credit cards less than ideal for long road trips.
* Automobile manufacturer rewards cards
Auto rewards cards allow consumers to earn points that can be redeemed toward the purchase of a new or used car, auto-related expenses or merchandise. This card is most beneficial to those looking to purchase a vehicle in the near future.
* Home improvement rewards credit cards
These credit cards allow consumers to earn reward points for all purchases, while earning extra points for home-related expenditures.
Airline mile / frequent flier credit cards
While certain general reward credit cards allow points to be redeemed for plane tickets among other things, there is a subset of reward cards specifically for air travel. This type of card allows consumers to earn airline mile credits whenever they make purchases. Some cards are co-branded with a specific airline, while some are generic and can be redeemed for tickets with a variety of airlines. Points can be redeemed for airline travel, much like frequent flier miles.
* Airline-specific credit cards
These cards are associated with one airline. Typically, the cardholder accumulates points from both making purchases with the card and by flying on the specified airline. These cards come with other perks -- for example, some allow you to earn double points when you use the card to purchase plane tickets with that airline.
* Generic airline miles cards
Credit cards like these allow you to redeem your reward points for air travel through any airline, travel agent or online travel site. This is a great option for people who aren't involved in a frequent flier program and aren't loyal to any particular airline. It allows you the flexibility of redeeming your miles for whichever airline best suits the needs of your trip. With a generic airline card, you gain points for every dollar spent on the card, but because it is not associated with a particular airline, you can't gain additional points by flying.
Each airline credit card is a bit different, so be sure to read the card's terms and conditions to find out how many miles you gain for every dollar spent. Other things to look for are how many miles you need before you qualify for a free plane ticket, if there is a cap on points that can be earned annually and whether or not unused airline miles expire. Some expire in five years while others do not expire at all. Airline mile reward programs can be costly for credit card companies, so many of these cards come with an annual fee. This type of reward program is beneficial for frequent travellers or those who want to use their card to plan vacations, but the associated fee might make them impractical for other cardholders.
Bad credit and/or credit repair cards
Credit can easily go from good to bad due to poor budgeting or simply by an overlap between jobs. If your credit score is less than satisfactory, it does not mean you cannot qualify for a credit card. There are several options available to those who have had bad credit in the past and for those who are currently trying to repair their credit.
Depending on your specific situation, debt consolidation or use of introductory APRs on balance transfers may be wise choices. If you still need credit or want to start repairing your credit by proof of action, there are several credit cards designed to help rebuild poor credit histories.
* Secured credit cards
Secured credit cards require collateral for approval. A security deposit of a predetermined amount is needed in order to secure the credit card, and the security deposit generally needs to be of equal or greater value than the credit amount. Collateral can come in the form of a car, boat, jewelry, stocks or anything else of monetary value. Secured credit cards are for people with either no credit or poor credit who are trying to build or rebuild their credit history.
Cards that help rebuild credit often come with low credit lines (such as $250) and additional fees, such as an application fee, may apply. Be sure to read over any terms and conditions for these add-on services before applying. If you use the card responsibly and pay all your bills on time, you can ask for a credit line increase down the road. The extra fees and low credit lines will be worth it if a secured credit card helps you get your overall credit back on track.
* Prepaid credit cards
Prepaid cards are not credit cards at all, but are used and accepted just like them. The advantages of prepaid cards is that there are no finance charges and they help you avoid debt since all purchases are paid for beforehand. With these cards you determine the credit line by transferring however much money you'd like to have available to spend to the card. This eliminates the risk of running up credit card debt and makes the budgeting process much easier.
Although most prepaid cards do not charge finance fees, other fees may apply, including monthly fees, startup or application fees, over-limit fees, ATM fees, reload fees and more. Be sure to thoroughly look over the terms and conditions for each specific card before applying.
Specialty credit cards
These types of cards are for consumers with unique needs for their credit use, such as business professionals and students. These credit card programs are designed specifically to meet the needs of those individuals.
* Business credit cards
These cards are available for business owners and executives and have many of the same features as traditional credit cards: low introductory rates, cash back programs and airline rewards. The difference is these cards come with many additional benefits and perks exclusively for those in the business world.
Some of these bonuses include: Business expenses kept separate from personal expenses; special business rewards and savings; expense management reports; additional cards for employees; and higher credit limits.
Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.
* Student credit cards
Many college students need a credit card, but they generally have little or no credit history, which makes it difficult to get approved for a traditional card. Student credit cards are specifically designed for those enrolled in accredited four-year colleges and universities to help them build a credit history from the ground up.
Compared to consumer credit cards, student credit cards are often scaled back somewhat in terms of rewards, features and other benefits, but they can still be a valuable commodity. If used wisely, a student can take the first step towards building a solid credit history with this type of credit card. Once they've proven financial responsibility, it will be much easier to qualify for reward cards and higher credit lines.
Updated: April 14, 2009
In the early days of credit cards, things were simple and standard: Each issuer produced one card with one set of features. Today, credit cards come in multiple levels with ranging interest rates, fees and reward programs, so before you fill out an application, it's important to know which will best suit your financial situation and lifestyle.
The following is a brief description of the most common types of credit cards available.
Types of credit cards
Standard credit cards
Balance transfer credit cards
Low interest credit cards
Credit cards with rewards programs
Cash back credit cards
General reward points credit cards
Hotel/travel points credit cards
Retail reward credit cards
Gasoline points / rebates credit cards
Automobile manufacturer reward credit cards
Home improvement rewards credit cards
Airline miles / frequent flier credit cards
Airline-specific credit cards
Generic airline miles cards
Credit cards for bad credit
Secured credit cards
Prepaid debit cards
Specialty credit cards
Business credit cards
Student credit cards
Standard credit cards
These credit cards are the most common and are readily available from most banks and financial groups. They are unsecured, which means you do not have to put down a security deposit to prove the money can be repaid. The way the annual percentage rate is offered or calculated for these cards can vary. Here are two examples:
* Balance transfer credit cards
Balance transfer credit cards allow consumers to transfer a high interest credit card balance onto a credit card with a low interest rate. Typical in the market today are balance transfer credit cards with an introductory annual percentage rate (APR) of 0 percent, with that introductory or "teaser" rate lasting several months up to a year. The terms of balance transfer credit cards varies between offers, so be sure to thoroughly read the terms and conditions for each card.
* Low interest credit cards
Low interest credit cards offer either a low introductory APR that jumps to a higher rate after a certain period, or a single low fixed-rate APR. Low interest cards can be very useful when consumers need make a large purchase because it allows several months to a year to pay it off with very low or no interest. Before using a low interest card, read all the terms and conditions of the introductory rate so you will not be surprised by fees or accumulated interest.
Credit cards with rewards programs
Reward credit cards allow users to earn incentives for making purchases with their credit card. Points accumulate for each dollar charged on the card, and cardholders can redeem these points for various rewards. Reward cards usually require better-than-average credit for approval. There are seven major types (not including airline miles / frequent flier cards, which we'll discuss a bit later).
* Cash back credit cards
This type of credit card allows you to earn cash rewards for making purchases. The more the card is used, the more cash rewards you receive. Most cash back cards earn users around 1 percent of total purchases, excluding interest and finance charges. Some cards offer a higher cash back percentage with increased usage; others offer a higher cash back percentage at select merchants or for particular types of purchases. Since cash back programs are costly to credit card companies, some of these cards have an annual fee that can vary from $50 to $100. This type of card is best for people who are faithful about paying off their balances each month. If used appropriately, a cash back credit card can earn the cardholder a significant amount of money over time.
* General reward points credit cards
Reward credit cards are similar to cash back cards in that cardholders can accumulate points toward a reward structure, which is based on how much the card is used over time. General reward cards offer cardholders a variety of items to cash points in for: gift cards, electronics, hotel stays, plane tickets, jewelry, pet supplies and more. Some rewards can be attained for 1,500 points; others cost 200,000 points. Reward programs and promotional offers often change; thoroughly review a card's terms and conditions before applying. Some general reward credit cards come with an annual fee ranging from $50 to $100, although most have no annual fee. Reward cards are best for people who regularly pay off their balances each month. By minimizing their finance charges, individuals will reap greater benefits from the associated rewards credit card.
* Hotel or travel points credit cards
This is a genre of credit cards specific to hotels and travel. Some cards are co-branded with hotels. These credit cards allow you to earn points for all purchases, in addition to bonus points for dollars spent on stays at the respective hotel chain. You can redeem your points for free nights and upgrades at the hotel chain your card is co-branded with.Then there are broader hotel and travel cards, with which points can be redeemed for travel, theme park admission, stays at major hotel chains and more. Because these reward programs can be costly for credit card companies, many of these cards come with an annual fee. If you are not a frequent traveller, the annual fee may negate the benefit of the rewards earned. .
* Retail rewards credit cards
These credit cards are co-branded with a major retailer, such as Hudson's Bay Company or Sears Canada. Points are accumulated by making everyday purchases, though cardholders are awarded with double or triple points for making purchases from the co-branded retailer. Reward points must be redeemed for products or services from that specific retailer.
* Gas cards with points or rebates
Gas cards come in two species: general and brand-specific. General cards treat all gas companies equally, while brand-specific cards favor one gas company. If you tend to be loyal to a certain gas company, a brand-specific card may benefit you, but if you tend to just stop at whichever station is closest, you may be best with a general gas rebate card. Additionally, it's important to remember that a gas company may be very popular in one state, but uncommon or nonexistent in other states, making brand-specific credit cards less than ideal for long road trips.
* Automobile manufacturer rewards cards
Auto rewards cards allow consumers to earn points that can be redeemed toward the purchase of a new or used car, auto-related expenses or merchandise. This card is most beneficial to those looking to purchase a vehicle in the near future.
* Home improvement rewards credit cards
These credit cards allow consumers to earn reward points for all purchases, while earning extra points for home-related expenditures.
Airline mile / frequent flier credit cards
While certain general reward credit cards allow points to be redeemed for plane tickets among other things, there is a subset of reward cards specifically for air travel. This type of card allows consumers to earn airline mile credits whenever they make purchases. Some cards are co-branded with a specific airline, while some are generic and can be redeemed for tickets with a variety of airlines. Points can be redeemed for airline travel, much like frequent flier miles.
* Airline-specific credit cards
These cards are associated with one airline. Typically, the cardholder accumulates points from both making purchases with the card and by flying on the specified airline. These cards come with other perks -- for example, some allow you to earn double points when you use the card to purchase plane tickets with that airline.
* Generic airline miles cards
Credit cards like these allow you to redeem your reward points for air travel through any airline, travel agent or online travel site. This is a great option for people who aren't involved in a frequent flier program and aren't loyal to any particular airline. It allows you the flexibility of redeeming your miles for whichever airline best suits the needs of your trip. With a generic airline card, you gain points for every dollar spent on the card, but because it is not associated with a particular airline, you can't gain additional points by flying.
Each airline credit card is a bit different, so be sure to read the card's terms and conditions to find out how many miles you gain for every dollar spent. Other things to look for are how many miles you need before you qualify for a free plane ticket, if there is a cap on points that can be earned annually and whether or not unused airline miles expire. Some expire in five years while others do not expire at all. Airline mile reward programs can be costly for credit card companies, so many of these cards come with an annual fee. This type of reward program is beneficial for frequent travellers or those who want to use their card to plan vacations, but the associated fee might make them impractical for other cardholders.
Bad credit and/or credit repair cards
Credit can easily go from good to bad due to poor budgeting or simply by an overlap between jobs. If your credit score is less than satisfactory, it does not mean you cannot qualify for a credit card. There are several options available to those who have had bad credit in the past and for those who are currently trying to repair their credit.
Depending on your specific situation, debt consolidation or use of introductory APRs on balance transfers may be wise choices. If you still need credit or want to start repairing your credit by proof of action, there are several credit cards designed to help rebuild poor credit histories.
* Secured credit cards
Secured credit cards require collateral for approval. A security deposit of a predetermined amount is needed in order to secure the credit card, and the security deposit generally needs to be of equal or greater value than the credit amount. Collateral can come in the form of a car, boat, jewelry, stocks or anything else of monetary value. Secured credit cards are for people with either no credit or poor credit who are trying to build or rebuild their credit history.
Cards that help rebuild credit often come with low credit lines (such as $250) and additional fees, such as an application fee, may apply. Be sure to read over any terms and conditions for these add-on services before applying. If you use the card responsibly and pay all your bills on time, you can ask for a credit line increase down the road. The extra fees and low credit lines will be worth it if a secured credit card helps you get your overall credit back on track.
* Prepaid credit cards
Prepaid cards are not credit cards at all, but are used and accepted just like them. The advantages of prepaid cards is that there are no finance charges and they help you avoid debt since all purchases are paid for beforehand. With these cards you determine the credit line by transferring however much money you'd like to have available to spend to the card. This eliminates the risk of running up credit card debt and makes the budgeting process much easier.
Although most prepaid cards do not charge finance fees, other fees may apply, including monthly fees, startup or application fees, over-limit fees, ATM fees, reload fees and more. Be sure to thoroughly look over the terms and conditions for each specific card before applying.
Specialty credit cards
These types of cards are for consumers with unique needs for their credit use, such as business professionals and students. These credit card programs are designed specifically to meet the needs of those individuals.
* Business credit cards
These cards are available for business owners and executives and have many of the same features as traditional credit cards: low introductory rates, cash back programs and airline rewards. The difference is these cards come with many additional benefits and perks exclusively for those in the business world.
Some of these bonuses include: Business expenses kept separate from personal expenses; special business rewards and savings; expense management reports; additional cards for employees; and higher credit limits.
Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.
* Student credit cards
Many college students need a credit card, but they generally have little or no credit history, which makes it difficult to get approved for a traditional card. Student credit cards are specifically designed for those enrolled in accredited four-year colleges and universities to help them build a credit history from the ground up.
Compared to consumer credit cards, student credit cards are often scaled back somewhat in terms of rewards, features and other benefits, but they can still be a valuable commodity. If used wisely, a student can take the first step towards building a solid credit history with this type of credit card. Once they've proven financial responsibility, it will be much easier to qualify for reward cards and higher credit lines.
Updated: April 14, 2009
How travellers maximise rewards card deals
How travellers maximise rewards card deals
Canadians can repack their beach bags for a soggy spring tour of London, if a great deal is on the table. Travellers aren't as concerned about where they are going, what time of year it is or how they are getting there if it means saving money.
According to a recent TD Canada Trust Poll, 99 per cent of Canadians look for a deal when they are booking their vacation.
Travellers love to stretch their dollars with not only travel deals, but also by cashing in points for travel packages. Special rewards credit cards can be used for everyday purchases to collect points faster, which in turn can be cashed in for a flight, hotel or a travel package.
Sixty-seven per cent of travelling cardholders consciously collect extra travel rewards in advance of booking a trip. This means using the same card for collecting travel rewards for each and every purchase to reach a points goal.
Forty per cent of collectors have used or redeemed their rewards points for travel over the past year. Twenty-three per cent have felt that their travel rewards helped them to afford their trip. One in five (19 per cent) say the reason they took advantage of the travel points was because of the lagging economy.
According to the poll:
* 23 percent of Canadians said they would not travel if they were not able to get the deal they wanted. They would prefer to stay at home rather than paying full price.
* 60 per cent of travellers would consider changing the dates of their vacation if they could save on travel.
* 42 per cent would even consider changing their vacation destination to get a better deal.
* 62 per cent of Canadians are willing to plan far enough in advance to save money on early booking discounts.
* 55 per cent of travellers will avoid peak travel seasons when prices are overinflated due to demand.
* 54 per cent of Canadians will search for the best package deal before booking a trip, and 35 per cent of them will wait until the last minute to get vacation sell-off deals.
Season, mode of transportation and travel destination can all be switched as quickly as it takes to repack the swimsuit for a brolly in order for Canadians to maximize their spending power.
Written by Melanie Dixon.
Canadians can repack their beach bags for a soggy spring tour of London, if a great deal is on the table. Travellers aren't as concerned about where they are going, what time of year it is or how they are getting there if it means saving money.
According to a recent TD Canada Trust Poll, 99 per cent of Canadians look for a deal when they are booking their vacation.
Travellers love to stretch their dollars with not only travel deals, but also by cashing in points for travel packages. Special rewards credit cards can be used for everyday purchases to collect points faster, which in turn can be cashed in for a flight, hotel or a travel package.
Sixty-seven per cent of travelling cardholders consciously collect extra travel rewards in advance of booking a trip. This means using the same card for collecting travel rewards for each and every purchase to reach a points goal.
Forty per cent of collectors have used or redeemed their rewards points for travel over the past year. Twenty-three per cent have felt that their travel rewards helped them to afford their trip. One in five (19 per cent) say the reason they took advantage of the travel points was because of the lagging economy.
According to the poll:
* 23 percent of Canadians said they would not travel if they were not able to get the deal they wanted. They would prefer to stay at home rather than paying full price.
* 60 per cent of travellers would consider changing the dates of their vacation if they could save on travel.
* 42 per cent would even consider changing their vacation destination to get a better deal.
* 62 per cent of Canadians are willing to plan far enough in advance to save money on early booking discounts.
* 55 per cent of travellers will avoid peak travel seasons when prices are overinflated due to demand.
* 54 per cent of Canadians will search for the best package deal before booking a trip, and 35 per cent of them will wait until the last minute to get vacation sell-off deals.
Season, mode of transportation and travel destination can all be switched as quickly as it takes to repack the swimsuit for a brolly in order for Canadians to maximize their spending power.
Written by Melanie Dixon.
7.16.2010
Credit card payment calculator added!
http://multipleeggbaskets.blogspot.com/p/tools.html
Use this calculator to determine how you can pay off your credit card debt.
Use this calculator to determine how you can pay off your credit card debt.
Preventing credit card fraud
You can avoid credit card fraud if you know how to detect it. There are several different types of credit card fraud to avoid:
* Card not present fraud: fraudsters can obtain your credit card details from such things as discarded receipts. They can then use this information to purchase high value or desirable goods online, by phone or mail order. For transactions online or by phone the retailer does not need to see the card (or require the PIN), hence the name "card not present fraud".
* Identity theft/account takeover fraud: fraudsters can obtain your personal details from various sources including: discarded mail, intercepted post, phishing, vishing, smishing, spoofing, hoax calls, social networking websites, public records, hacking genuine websites and listening in on telephone calls. Once they have your personal details they can use this to access your account, order cards, change your address, complete a balance transfer and assume the identity of a genuine customer in order to purchase goods or obtain funds fraudulently.
* Application fraud: this is another form of identity theft. In this case, the fraudster uses your personal details to apply for a brand new credit card or bank account rather than taking over an existing account. This often happens when the genuine customer has moved from their previous address.
* Counterfeit fraud: this is the manufacture of a fake credit card using genuine card details. The card details are copied from the magnetic strip of the genuine card using a device called a skimmer. This information is then transferred to the magnetic strip on a fake credit card that can be used to purchase goods online or in countries where Chip & PIN has not yet been introduced.
* Malware fraud: short for "malicious software", malware refers to software programs that are distributed in the form of innocent-looking popups, emails or spam but are designed to damage, capture information or do other unwanted actions to your computer. Common examples include viruses, worms, trojan horses, adware and spyware.
Be sure that you're protected. I always lift and move the PIN machine when entering the PIN number for my credit card and debit cards. You never know if there is a spy cam above!
* Card not present fraud: fraudsters can obtain your credit card details from such things as discarded receipts. They can then use this information to purchase high value or desirable goods online, by phone or mail order. For transactions online or by phone the retailer does not need to see the card (or require the PIN), hence the name "card not present fraud".
* Identity theft/account takeover fraud: fraudsters can obtain your personal details from various sources including: discarded mail, intercepted post, phishing, vishing, smishing, spoofing, hoax calls, social networking websites, public records, hacking genuine websites and listening in on telephone calls. Once they have your personal details they can use this to access your account, order cards, change your address, complete a balance transfer and assume the identity of a genuine customer in order to purchase goods or obtain funds fraudulently.
* Application fraud: this is another form of identity theft. In this case, the fraudster uses your personal details to apply for a brand new credit card or bank account rather than taking over an existing account. This often happens when the genuine customer has moved from their previous address.
* Counterfeit fraud: this is the manufacture of a fake credit card using genuine card details. The card details are copied from the magnetic strip of the genuine card using a device called a skimmer. This information is then transferred to the magnetic strip on a fake credit card that can be used to purchase goods online or in countries where Chip & PIN has not yet been introduced.
* Malware fraud: short for "malicious software", malware refers to software programs that are distributed in the form of innocent-looking popups, emails or spam but are designed to damage, capture information or do other unwanted actions to your computer. Common examples include viruses, worms, trojan horses, adware and spyware.
Be sure that you're protected. I always lift and move the PIN machine when entering the PIN number for my credit card and debit cards. You never know if there is a spy cam above!
6.26.2010
Is that really your bank offering you a new credit card?
http://www.phonebusters.com/english/recognizeit.html
Identity Theft: Could it Happen to You?
Maybe you never opened that account, or ordered an additional card, but someone else did....someone who used your name and personal information to commit fraud. When an imposter co-opts your name, your Social Insurance Number (SIN), your credit card number, or some other piece of your personal information for their use - short when someone appropriates your personal information without your knowledge - it's a crime, pure and simple.
Are you a Victim?
The signs can be many, but typical indicators that your identity is being used include:
* A creditor informs you that an application for credit was received with your name and address, which you did not apply for.
* Telephone calls or letters state that you have been approved or denied by a creditor that you never applied to.
* You receive credit card statements or other bills in your name, which you did not apply for.
* You no longer receive credit card statements or you notice that not all of your mail is delivered.
* A collection agency informs you they are collecting for a defaulted account established with your identity and you never opened the account.
Identity Theft Statement - What is it?
If you have been a victim of identity theft, the Identity Theft Statement helps you notify financial institutions, credit card issuers and other companies that the identity theft occurred, tell them that you did not create the debt or charges, and give them information they need to begin an investigation. Make as many copies of the Statement as you will need to notify all affected companies. You will need Acrobat Reader to view the statement. Acrobat Reader download
To print a copy of the Identity Theft Statement click here.
It you suspect that your personal information has been hijacked and misappropriated to commit fraud or theft, take action immediately and keep a record of your conversations and correspondence. The following basic actions are appropriate in almost every case.
* Start a log of dates, person(s) that you spoke with and exactly what they said.
* Contact the fraud departments of each of the three major credit bureaus. Equifax: (866) 828-5961, for lost or stolen identification press 1, if you are a victim of identity theft press 2.
Trans Union: (800) 663-9980 except
Quebec residents (877) 713-3393.
* Request that a "Fraud Alert" be placed in your files. At the same time order copies of your credit reports.
* Contact the fraud department of creditors for any accounts that have been opened or tampered with fraudulently. This may include credit card companies, phone companies, banks and other lenders.
* File a report with your local Police or the Police in the community where the identity theft took place.
* Contact PhoneBusters National Call Centre. PhoneBusters is currently central sourcing all pertinent information on Identity Theft to identity trends and patterns, information is also used to assist law enforcement agencies in possible investigations.
Remember: There is no reason to be paranoid; there's just reason to be careful. If someone wants desperately to target you, they can probably get a lot of information about you -- so you just need to minimize the criminal's opportunities to get that information. You can make yourself a harder target and that the best defense. If you are a victim, do not panic, you will not be out any money. The losses will be attributed to the banks and or companies associated with the fraud.
Minimize The Risk
While you probably can't prevent identity theft entirely, you can minimize your risk. Identity theft is on the rise and it can happen to anyone. It can happen to you. By managing your personal information wisely, cautiously and with an awareness of the issue, you can help guard against identity theft.
* Tips on how to minimize your risk.
Identity Theft: Could it Happen to You?
Maybe you never opened that account, or ordered an additional card, but someone else did....someone who used your name and personal information to commit fraud. When an imposter co-opts your name, your Social Insurance Number (SIN), your credit card number, or some other piece of your personal information for their use - short when someone appropriates your personal information without your knowledge - it's a crime, pure and simple.
Are you a Victim?
The signs can be many, but typical indicators that your identity is being used include:
* A creditor informs you that an application for credit was received with your name and address, which you did not apply for.
* Telephone calls or letters state that you have been approved or denied by a creditor that you never applied to.
* You receive credit card statements or other bills in your name, which you did not apply for.
* You no longer receive credit card statements or you notice that not all of your mail is delivered.
* A collection agency informs you they are collecting for a defaulted account established with your identity and you never opened the account.
Identity Theft Statement - What is it?
If you have been a victim of identity theft, the Identity Theft Statement helps you notify financial institutions, credit card issuers and other companies that the identity theft occurred, tell them that you did not create the debt or charges, and give them information they need to begin an investigation. Make as many copies of the Statement as you will need to notify all affected companies. You will need Acrobat Reader to view the statement. Acrobat Reader download
To print a copy of the Identity Theft Statement click here.
It you suspect that your personal information has been hijacked and misappropriated to commit fraud or theft, take action immediately and keep a record of your conversations and correspondence. The following basic actions are appropriate in almost every case.
* Start a log of dates, person(s) that you spoke with and exactly what they said.
* Contact the fraud departments of each of the three major credit bureaus. Equifax: (866) 828-5961, for lost or stolen identification press 1, if you are a victim of identity theft press 2.
Trans Union: (800) 663-9980 except
Quebec residents (877) 713-3393.
* Request that a "Fraud Alert" be placed in your files. At the same time order copies of your credit reports.
* Contact the fraud department of creditors for any accounts that have been opened or tampered with fraudulently. This may include credit card companies, phone companies, banks and other lenders.
* File a report with your local Police or the Police in the community where the identity theft took place.
* Contact PhoneBusters National Call Centre. PhoneBusters is currently central sourcing all pertinent information on Identity Theft to identity trends and patterns, information is also used to assist law enforcement agencies in possible investigations.
Remember: There is no reason to be paranoid; there's just reason to be careful. If someone wants desperately to target you, they can probably get a lot of information about you -- so you just need to minimize the criminal's opportunities to get that information. You can make yourself a harder target and that the best defense. If you are a victim, do not panic, you will not be out any money. The losses will be attributed to the banks and or companies associated with the fraud.
Minimize The Risk
While you probably can't prevent identity theft entirely, you can minimize your risk. Identity theft is on the rise and it can happen to anyone. It can happen to you. By managing your personal information wisely, cautiously and with an awareness of the issue, you can help guard against identity theft.
* Tips on how to minimize your risk.
6.24.2010
How does the credit card issuer calculate exchange rates for purchases outside of Canada?
VISA International converts all foreign transactions to Canadian funds at a preferred rate. This rate also includes a conversion fee, presently at 2.5%, which offsets the costs incurred by VISA International and CIBC in offering a comprehensive worldwide VISA service, as international transactions are more expensive to process than domestic transactions. The exchange rate is set at the time of purchase, and it will vary according to the date and time of the transaction.
Below is an example of the conversion calculation:
Amount of purchase is $50.00 USD
The rate of exchange is @ 1.54
Canadian amount = $77.00 CAD
+2.5% conversion fee = $1.93
-----------
$78.93 CAD
The total amount recorded on your statement would be $78.93 CAD
Below is an example of the conversion calculation:
Amount of purchase is $50.00 USD
The rate of exchange is @ 1.54
Canadian amount = $77.00 CAD
+2.5% conversion fee = $1.93
-----------
$78.93 CAD
The total amount recorded on your statement would be $78.93 CAD
6.22.2010
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