Virtually all consumers will have a credit card at some point in their lives. Is this an understatement? Probably, as most consumers carry multiple credit cards. Selecting a credit card should not be something taken lightly; card companies are constantly looking for new consumers, but only after wisely comparing offers should you select a provider. Pick a company that will give to you a reasonable rate and one that “incentivizes” their program with some type of reward for using their card.

So, how do rewards cards work? Almost without fail, rewards cards typically give consumers money back on their purchases [usually 1-2%] or allow you to accumulate points toward prizes or discounts on future purchases. If you charge $10,000. per year [not hard to do if you charge your groceries] and your rewards card pays you a 2% reward on purchases, you will receive $200. from the company. Usually you will gain the funds in the form of several credits to your account spread out over the course of a year, but in some cases you will receive the rewards in the form of a check.

Rewards cards are free money, right? Only if you do not have to pay an annual fee and you pay your credit card off every month. If you do not pay your card off every month, your reward could easily be overshadowed by monthly interest payments, especially if your interest rate is high. Not too many companies pay rewards and give you a low rate at the same time. In theory, even if you carry balances for as little as 2-3 months before paying your card off you could find your rewards for the entire year outweighed by finance charges.

When rewards are given in the form of points that you later can redeem for prizes or take discounts on future purchases, you need to consider the following when selecting your card:

1. Is the reward program for something you know you will use? For example, if you are a member of GM’s rewards program, are you certain that you will be purchasing a GM product in the future? If so, go with this card as the return can be as high as 5%.

2. Is there an annual cap on purchases? Many rewards cards will limit to you the amount of cash back funds or rewards points you can accumulate in one year. Most people never come close to the figure, but if you are a business traveler you can quickly approach and pass these limitations within the year.

3. Do points eventually drop off? The majority of rewards cards only allow you to accumulate points for three years before they begin to drop off. If your next car purchase is five years away and you have a program that drops off points, you could find the first two years of card usage to be a waste as those points would vanish. If you still want that particular rewards card, only use it in years 3, 4, and 5 so that when it comes time to purchase your new car you will not have lost any points. You could consider getting and using another rewards card for a different rewards system to cover years 1 and 2.

All in all, rewards cards can be a useful option for the savvy consumer. Remember, points do fall off and carrying balances from month to month will wipe out the value of the card in short order. By showing plenty of discipline you can make rewards cards work well for you.

Matt Keegan is a freelance writer who resides in North Carolina, USA. Matt writes on a variety of subjections related to business, travel, and Christian themes.

Congress passed and the president signed legislation earlier this year that made filing for personal bankruptcy a much more difficult proposition. At the urging of the financial industry – particularly credit card providers and banks – the new legislation was drafted and approved setting the stage for stricter requirements governing personal bankruptcy. There is a flip side to the new law, one that is actually hurting creditors more than they ever expected; please chuckle with me as you learn just what that other side is.

When President Bush signed legislation making personal bankruptcy a more difficult proposition, credit card providers and banks hailed it as a significant move to reduce the number of deadbeats skirting their financial obligations by filing for personal bankruptcy. The mood, however, has quickly shifted for creditors as an ugly flip side to the new bankruptcy law has reared its head: people are paying off their debt faster than ever before! Realizing that there is no second chance with the new law, consumers are reacting in fear and paying off their debts. So, why is this ugly for creditors? For two reasons:

1. Consumers are not using their credit cards as much, therefore their debt levels are now lower.

2. Consumers are paying off existing debt at faster rates than have ever been seen before.

The result? Less income for the creditors as consumers have wised up. MBNA and Capital One, two huge credit card providers, are seeing their profits sink. Other credit card providers are reporting similar results. Highly dependent on your desire to run up debt, these companies are now seeing their profit margins drop sharply. In a nutshell: high consumer debt equals big profits; low consumer debt levels equals low profits.

I am sure by now you are having the same chuckles as I am. Keep on laughing by paying down your debt and by purchasing what you want with cash. Oh, by the way, ignore the increased flood in your mailbox of credit card solicitations: you don’t want to change the mood of the financial community, do you?

Matthew C. Keegan is the owner of a successful article writing, web design, and marketing business based in North Carolina, USA. He manages several sites including the CabinManagers. Please visit The Article Writer to review selections from his portfolio and his The Article Writer blog for more information.

I wrote previously urging anyone who still has a credit card that does not give them a “reward” for using that card to convert to a rewards card or switch to a credit card provider that has a rewards program. The reason? If you are going to use a credit card you might as well get something out of the experience. Of course, a rewards card makes no sense for the person who doesn’t pay off their card every month as the interest on the card will likely offset any points accumulated. So, if you are a savvy consumer who lives debt free you can accumulate points quickly and get some nifty stuff. Let’s take a look at one plan and how to make it work for you.

Alright, I am not going to reveal this particular provider’s name. However, I will tell you something about the program. If you spend a dollar on mostly anything, you accumulate a point. It is that easy. Moreover, this particular provider is automatically bestowing 500 points on new users for just using the card once within the first 90 days. Not bad, especially when you only need 2000 points to qualify for merchandise, cash credit, or travel.

I realize rewards programs vary and this particular one allows for users to accumulate an unlimited amount of points per year. You must, however, redeem them within five years or start to watch points drop off.

So, just what can you get with only 2000 points? Here are some examples:

Life’s little and big emergencies often require that you have cash on hand or at least enough credit to give the contractor who is to fix your leaking roof the peace of mind that you have the funds available to pay for the job. It could take days for the insurance adjuster to arrive and process your claim, even longer if you live in an area where most of the homes were damaged by a hurricane, tornado, etc. You lined up a building contractor but he wants a down payment now, but you are short on funds. What can you do? Apply for an instant approval credit card!

We live in a society where many decisions must be made almost immediately. Creditors know this and have developed a way for you to apply for a credit card online and receive approval within one or two minutes. This method is accomplished quickly because computers do much of the legwork by pulling up your FICO score to measure your creditworthiness. The higher your score, the more likely you’ll be rapidly approved.

One thing to note is that not every “instant approval” credit card will allow you to access your credit line right away. If there is a “flag” in your credit file, you’ll be conditionally approved until a human worker can access your credit reports for further information. You may still receive conditional approval, but it could take a few more days for a professional to review your information and to approve your new credit card.

If you do receive instant approval for your credit card application then you could be granted limited access to your credit line until the actual credit card arrives in the mail. This may be all that your contractor needs to know before beginning repairs. Once the credit card is in your possession you’ll then have full access to the line of credit determined by the credit card company.

Instant approval credit cards can ease your burdens and strengthen your hand in a difficult situation. Find the Discover, MasterCard, Visa, or American Express card that fits your needs and put your worries behind you.

(c) 2006; You may republish this article to your website with the following author resource information and link left in place.

Matthew C. Keegan is a freelance writer who manages a variety of blogs including PrivateFA and TravelDuties.

If you are in debt, you have several options available to you in your quest to consolidate your balances and thereby reducing your monthly payments or paying off your loan faster. Let’s look at 7 of the most popular and effective ways for you to consolidate your debt.

1. Life Insurance. Yes, many life insurance policies have a cash pay out [loan] provision. If you have held the policy for quite some time, the amount of equity built up in it can be quite large. What if you can’t pay the insurer back? Good question! In many cases the amount you owe will be deducted from what your beneficiaries would receive upon your death.

2. Your Retirement Plan. If you have a 401(k) plan at work, you can usually borrow from the account and use these funds to pay off debt. Caution: if you do not pay back the loan within a certain specified time or you leave your job, you could be faced with penalties and tax charges from the Internal Revenue Service.

3. Credit Card Transfers. Chances are some of your outstanding loans are for double digit rates. Shop around and see if a credit card company will allow for you to transfer your outstanding balance over to them and at a significantly lower interest rate. Make sure that the cash transfer fees are low [better yet, see if you can have this fee waived] and that your interest rate remains fixed.

4. Home Equity Loans/Lines of Credit. If you own your own home, it is likely that you have built up equity in your home especially if you have lived there for several years and you live in an area of rapidly appreciating home values. If this is the case, lenders will be glad to offer to you a loan or line of credit based on your home’s value. You can use the loan/line of credit to pay off debt; in many cases the interest rate for the loan/line of credit is tax deductible too, whereas for a credit card debt it is not.

5. Renegotiate Your Loan. Some lenders will be all too happy to lower your outstanding interest rate, especially if in doing so they get to keep you as a customer. Sure, your 19.8% rate may only drop to 14 or 15%, but that may be all you need to get a handle on your debt.

6. Your Savings Institution. Banks, savings and loan associations, and credit unions may be able to help you consolidate debt by offering to you one loan that will pay off all your debt and allow for you to have a low, fixed-rate payment instead. Shop around, the rates vary!

7. Go to Mama! Family loans are a popular way to get rid of debt. Still, if you can’t pay them back, what effect will that “non-payment” have on your relationship with your family member? Sure, it may not effect your credit standing, but it certainly could have a negative effect on your family standing!

Naturally, you will want to explore each of these options and see which ones are the most feasible for you. Read the fine print and make sure you understand the terms of any debt consolidation loans. You want to reduce your debt, not create an avenue for further trouble.

Copyright 2006-2008 — Matt Keegan is The Article Writer who writes on subjects from Aviation to Zoos. Please check out his CabinManagers and TravelDuties blogs for job career information.

If you think that you know everything there is to know about your credit card, then you could be in for a rude awakening. Credit card providers make untold billions of dollars annually because of several closely guarded secrets that they won’t easily share with you. By keeping you in the dark they can make money at your expense. Don’t be beaten down as I am about to shine the light in the darkness to expose trade secrets that they hope you will never learn about.

Congratulations, you have been approved for a new major credit card! However, do not let the headiness of having a better than average credit rating skew your judgment: now is the time to get very familiar with the credit card agreement that came along with your new card.

Firstly, are you being charged an annual fee? If so, you are paying for the privilege of using a card that should not cost you one red cent until you actually buy something. The prestige of that platinum card is all smoke and mirrors; chances are the same card you are holding in your hands didn’t cost your neighbor anything. Contact the credit card company and ask them to waive their annual fee.

Secondly, an introductory annual percentage rate [APR] of 0% sound great on the surface. However, how long will that low introductory rate last? Will your new purchases automatically climb to the inflated regular rate once the honeymoon period is over? Or, will the initial APR stay the same until your balance is paid off?

Thirdly, balance transfers are a great thing to have but only if the credit card company offers to you two things:

1. No transfer fees on balance transfers. Look closely at your statement and you could discover that a 3% transfer fee has been charged on your $5000 transfer — that’s an extra $150 you must shell out for the privilege of moving your money from one credit card to another one!

2. Low APR, but for how long? If you transfer your funds to the new card will the transferred balance stay at the fixed rate or evaporate once the introductory period has ended? On the surface, a 2.9% APR on balance transfers sounds good, but if that rate jumps up to 17.49% once the introductory period is over it becomes a good deal that has gone bad. Unless, of course, you pay off the debt before the jump in the card’s interest rate occurs.

Fourthly, you do have a grace period with your card don’t you? If you purchase something today will interest begin to accumulate immediately or will you get up to 25 days to pay off your balance interest free? Some credit card offers are reducing or even eliminating the grace period.

Fifthly, what sort of rewards program is attached with the card? What, you didn’t know that they offered to you a rewards program? Chances are you may have to sign up for this program separately. Big note: no rewards program is worth it if you run a monthly balance, which is how the credit card companies make big money off of you. The value of your rewards will quickly be cancelled out if you don’t pay off your card every month.

Sixthly, are you paying your card through online banking? If so, make sure that the funds are paid to your credit card company several days in advance of the due date. Otherwise a $39 penalty charge could be assessed to your account. If paying by mail, send out payment 7-10 days before the due date. You may think that your payment is going to your Virginia bank’s local payment center when it will, instead, be sent to a South Dakota post office box. The two day difference in mailing time could spell the difference between your card getting their on time or being late.

Seventhly, will one late payment to your account change the original terms of your agreement? That 11.9% interest rate you enjoyed could suddenly jump to 23% even 30% or more if you are late just once with a payment. Don’t take a penalty APR lying down; contact the credit card company and politely insist that they remove the penalty interest rate at once.

No credit card is worth it to you if the credit card company socks you with a huge APR, annual fees, penalty fees, and the like. Read the updated terms of agreement that will come in the mail with your card from time to time to learn what terms they changed unilaterally. If something has been changed that works against you, contact the credit card company and tell them that you reject their changes. They may threaten to close your account, but if they do simply move on to another hungry credit card provider as there are thousands of them out there.

Finally, pull your free copies of your annual credit reports at AnnualCreditReport.com. Take care of the errors and make certain that no unwarranted negative reports are included with your report. Pay a few extra dollars and you can obtain your credit scores too. Your credit score is the ultimate number that determines the interest rate you will pay on every loan.

You don’t have to let industry secrets cause you financial hardship; fight back by becoming a fully informed consumer today!

(c) 2006; You may republish this article to your website with the following author resource information and link left intact.

Matthew C. Keegan invites you to discover some additional articles he has written by visiting his blog today!

Don’t let them fool you. All those solicitations you receive in the mail for credit card applications are meant to reel you in and hook you. Big time. In addition, new bankruptcy laws in the US and higher monthly minimum payment requirements are in place to help stem defaults on loans and to force consumers to pay down debt quicker. All of this sounds great, but credit card companies want to keep you in debt as long as possible. Please read on for all the stimulating details.

If you have had problems in the past paying down debt, do not think for a moment that you will have it any easier in the future. Thanks to legislation introduced by Congress and signed by the president earlier in 2005, filing for bankruptcy to escape debt has become more difficult. Much more so. In addition, credit card companies have raised your monthly minimum payment levels, in some cases doubling the minimum amount you must pay. Consider this last step a side issue related to the new bankruptcy legislation; the credit card companies are not legally obligated to raise minimums but they were pressured into doing so in exchange for passage of the new bankruptcy law.

Do not even think for a moment that credit card companies want you to get out of debt.

For starters, credit card rates have been rising steadily for over two years. As the prime rate goes up, your credit card interest rate goes up. Unless, of course, you have a fixed rate and you have been paying your bills on time. However, one late payment and, uh oh, you are in big trouble.

If you are late making a payment, even just once, you will likely be hit with a one time late fee charge of $29 or $39. In addition, that “sweet rate” you negotiated last year may automatically disappear. Zero percent financing can quickly turn into an 18.9% interest rate in no time and enforced retroactively too. Even “lower rate” cards with annual percentage rates of 10%, 12%, or more, can suddenly reflect rates of 24.9%, 29%, 35%, or even higher!

This is all perfectly legal too!

Read your credit card disclosure agreement – as if anyone even bothers to do so – for all the boring details. Exceptions and rules are the name of the game; there is a trap laying wide open for you to step on.

The next area of socking it to you is an old one: annual fees. Yes, they are back; for years, credit card companies — in order to remain competitive — waived annual fees. Originally, it was one small way for them to extract some cash from you: you paid them something every year even if you paid off your card monthly.

If you are like me, the whole concept of charging someone to access credit is absurd. Companies make a mint off of high interest rates as it is; throwing another fee on top of things is both apparent and transparent! Now, annual fees are back. Oh, sure, credit card companies must notify you in writing of these changes before they are put in place, but they certainly hope you won’t cancel your account in response to the “new” fee or that you will forget the notice completely and simply pay the fee. Do they think that we are stupid? I believe so!

There are two other areas where credit card companies attempt to pull a fast one on consumers: your payment due date and payment mailing address.

Your payment due date, which may have been “static” for years, could suddenly have been moved up. This means that if you are used to paying off your Visa card on the 24th of the month, it may suddenly have been moved to the 16th the following month. Without notifying you of the change either!

The address where you send your money may have changed too. Is this a big deal? It certainly is if you mail your payments in. Let’s say that you live in New Jersey and your XYZ Bank card payment goes to a South Hackensack post office. If you mail your payment in five days before the due date, you probably allowed enough time for your payment to get to the bank. Warning: Watch out that their payment address hasn’t suddenly been moved to Ohio. Your next payment will likely end up being late.

Oh, so you pay online? Don’t think that the bank credits your money immediately either. I have seen it take five days for money to electronically leave my checking account and be wired to another bank’s account. The post office moves a live check faster than that!

A moved payment due date and a changed payment address are designed to make your payments late so that the credit card company can charge you a late fee and raise your rates.

This is perfectly legal as well. Is it ethical? Hey, we’re talking about the financial services industry. What else do you expect?

Financial institutions make money off of consumers through interest rates and fee services. Please do not think for a moment that any credit card company has your best interests at heart. They don’t; they are in business to please their shareholders. Get informed and take action when one of these “perfectly legal” practices is pulled on you. You can get fees canceled and have your credit card rate lowered if you complain; back it all up in writing in order to preserve your rights.

A savvy consumer is an informed consumer; learn what tricks credit card companies use and fight back. Annually order free credit reports from Experian, TransUnion, and Equifax to make sure that unfavorable reports from creditors have not been unfairly tagged to your record. Visit the Federal Trade Commission’s site at http://www.ftc.gov/bcp/conline/pubs/credit/freereports.htm for the best way to obtain credit reports.

Copyright 2005-2008 — Matthew Keegan is The Article Writer who writes on a variety of topics including: advocacy, automobiles, aviation, business, Christian themes, family, news, product reviews, travel, writing, and more. Samples from his portfolio are available right online.