credit card fees http://www.wisebread.com/taxonomy/term/8376/all en-US Are You Getting All the Credit Card Rewards You've Earned? http://www.wisebread.com/are-you-getting-all-the-credit-card-rewards-youve-earned <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-you-getting-all-the-credit-card-rewards-youve-earned" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/shopaholic-credit-card-474216695-small.jpg" alt="shopaholic" title="shopaholic" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Littered throughout the personal finance blogosphere are tips, tricks, and success stories on using rewards credit cards. If you play the rewards card game right, you can earn <a href="http://www.wisebread.com/get-20-percent-cashback-on-nearly-everything?ref=inarticle">some cool cash back</a>, <a href="http://www.wisebread.com/6-ways-my-family-scores-free-travel-with-credit-cards?ref=inarticle">free flights</a>, or money for college. Provided you are paying off your balance each month and avoiding any fees or interest charges, a credit card rewards program is a fun game that the money nerds will always win. (See also: <a href="http://www.wisebread.com/6-awesome-credit-card-tricks-that-will-save-you-money?ref=seealso">Money-Saving Credit Card Tricks</a>)</p> <p>Unfortunately, it's not as simple as that.</p> <p>Not only do nearly <a href="http://colloquy.com/press_release_view.asp?xd=95">one-third of credit card rewards go unclaimed</a> every year &mdash; to the tune of $16 billion just left on the table &mdash; but the psychology and terms of credit card rewards mean that even the responsible card users who game the system end up spending more than they intend. After all, the banks wouldn't offer rewards cards if they didn't make money from them.</p> <p>Here are the facts about rewards cards that never seem to make it into the cheery commercials starring celebrities.</p> <h2>You Spend More When You Pay With Credit</h2> <p>The mere fact that you <a href="http://www.wisebread.com/why-we-spend-more-when-we-pay-with-credit-cards">plan to pay with a credit card</a> is enough to make you spend more money. Whipping out your credit card simply does not hurt as much as counting out cash, meaning you are more likely to overindulge.</p> <p>In addition, researchers have found that the <a href="http://www.wisebread.com/how-rewards-cards-make-money">prospect of earning rewards with a credit card</a> will cause your spending to go up &mdash; and <a href="http://www.chicagofed.org/digital_assets/publications/working_papers/2010/wp2010_19.pdf">the increase is more pronounced</a> in cardholders who would not otherwise use credit. This means that even responsible credit card holders are enticed into more spending (and debt!) because of the motivation of rewards.</p> <p>As if that is not distressing enough, a study from 1986 (which has recently been tested and proven again) has shown that <a href="http://www.jstor.org/discover/10.2307/2489426?uid=3739664&amp;uid=2&amp;uid=4&amp;uid=3739256&amp;sid=21104426031757">just seeing a credit card logo is enough to increase spending</a>. In the original experiment, psychologist Richard Feinberg asked subjects to flip through images of items from mail order catalogs (with the prices removed) and write down how much they would be willing to pay for them. For half of the subjects, the table on which they were working was strewn with MasterCard paraphernalia, left lying there to suggest that the researcher simply had not cleaned up from a prior experiment. The other half of the subjects sat at an empty table. Those subjects sitting with a pile of MasterCard logos were willing to spend more on <em>every single item</em>, and they were willing to <a href="http://pocketmint.net/2012/10/the-credit-card-rewards-system-is-gaming-you/">spend up to three times as much</a> on some items.</p> <p>Since that original experiment, further studies have shown that the logo effect works on &quot;associative conditioning.&quot; That is, those individuals who have positive associations with credit cards will spend more with plastic, while those who have negative associations will not.</p> <p>In particular, those individuals who game the rewards programs will have very positive associations with credit cards.</p> <p>That means the banks are seeing increased spending (and debt) from the &quot;responsible&quot; cardholders, as well as those who struggle with credit. All for the low, low price of a few rewards. (See also: <a href="http://www.wisebread.com/5-ways-to-earn-cashback-rewards-without-extra-spending?ref=seealso">How to Win Cash Back Rewards Without Extra Spending</a>)</p> <h2>The Lake Wobegon Effect</h2> <p>What is even more pernicious about the previous information is the fact that I would be willing to bet that nearly every Wise Bread reader with a rewards card is right now shaking his or her head and saying, &quot;It doesn't affect me!&quot;</p> <p>That's because of a cognitive bias known as the <a href="http://en.wikipedia.org/wiki/Lake_Wobegon#The_Lake_Wobegon_effect">Lake Wobegon Effect</a>, named for the fictional town in Garrison Keillor's radio show, where &quot;all the children are above average.&quot;</p> <p>Basically, every individual truly believes that he or she is better than most people at everything from driving to managing money. In the book <a href="http://www.amazon.com/gp/product/1592407366/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=1592407366&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=G7GVUHHQPYCNKKID">You Are Not So Smart</a>, David McRaney writes, &quot;No one, it seems, believes he or she is part of the population contributing to the statistics generating averages.&quot;</p> <p>Banks are counting on that illusion of superiority, since it snags rewards card customers who would otherwise pay with cash.</p> <h2>You Can Only Opt Out of the Benefits, Not the Costs</h2> <p>You might be thinking right now that it would make more sense to simply get rid of your rewards credit card and carry cash. That will certainly ensure that you are not affected by credit's destructive pull on your better impulses. However, that does not entirely solve the problem of the costs of rewards cards.</p> <p>That's because even though banks earn a great deal of money through their rewards cards programs, they still find ways to pay for those rewards without having to eat into their profit. They do this by charging fees to merchants for accepting their cards.</p> <p>According to Ron Lieber of the New York Times,</p> <p style="margin-left: 40px;">Rewards-earning credit cards with the Visa and MasterCard logo <a href="http://www.nytimes.com/2010/01/09/your-money/credit-and-debit-cards/09money.html?_r=2&amp;pagewanted=all&amp;">often cost merchants more than plain-vanilla ones</a>, which hints at the card companies' laser-like focus on subsidizing rewards for the affluent customers who are still spending, even if they are paying their bills off each month and thus paying no interest.</p> <p>To protect their own bottom line, merchants build the credit card fees they pay into higher prices for their goods &mdash; which customers pay whether they use cash or credit.</p> <p>In fact, the National Retail Federation estimates that the fees their members pay to accept just Visa and MasterCard <a href="http://www.nytimes.com/2010/01/09/your-money/credit-and-debit-cards/09money.html?_r=2&amp;pagewanted=all&amp;">cost an average of $427 per American household</a> in 2008.&nbsp;</p> <h2>Disappearing Rewards</h2> <p>Finally, there is the problem of unclaimed rewards. As I mentioned above, nearly one-third of the $48 billion worth of value in rewards go unclaimed and unredeemed.</p> <p>According to that study, &quot;[To] put [this] in perspective, the average household that is active in loyalty programs earns $622 a year, but does not redeem $205 of those rewards.&quot;</p> <p>It's certainly understandable how this can happen. Unless you are inhumanly organized, it can be very easy to lose track of various rewards or forget to account for expiration dates and the like. (See also: <a href="http://www.wisebread.com/7-credit-card-reward-tips-many-people-dont-follow?ref=seealso">Credit Card Reward Tips Most People Don't Follow</a>)</p> <p>The good news is that the average household is still raking in $417 worth of rewards ($622 - $205 = $417) each year. Sadly, you'll notice that's $10 less than the average cost per household because of merchant fees that I mentioned above.</p> <p>So, even if you are successfully gaming the system, it's likely that you're still paying for it somehow.</p> <h2>Using Rewards Cards Rationally</h2> <p>The best way to avoid the psychological pitfalls of rewards credit cards is to use your card sparingly, pay off the balance every month, and schedule regular check-ins on your rewards, but otherwise <a href="http://www.wisebread.com/how-rewards-cards-make-money">ignore how your spending is tied to your rewards</a>. These things will help you to sidestep spending traps and the possibility of forgetting about your rewards.</p> <p><em>Do you use a rewards credit card? Do you redeem all of your rewards and perks?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/are-you-getting-all-the-credit-card-rewards-youve-earned">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-ways-your-credit-card-will-save-you-money-while-holiday-shopping">11 Ways Your Credit Card Will Save You Money While Holiday Shopping</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-my-family-scores-free-travel-with-credit-cards">6 Ways My Family Scores Free Travel With Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/travel-perks-you-didnt-know-your-credit-card-had">12 Travel Perks You Didn&#039;t Know Your Credit Card Had</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/comparing-miles-which-airline-loyalty-program-is-better">Which Airline Loyalty Program Has the Best Value for Their Miles?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/which-type-of-rewards-credit-card-is-right-for-you">Which Type of Rewards Credit Card is Right for You?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards credit card fees discounts rewards rewards cards Fri, 15 Aug 2014 13:00:03 +0000 Emily Guy Birken 1184356 at http://www.wisebread.com 6 Credit Card Services You Don’t (Usually) Need http://www.wisebread.com/6-credit-card-services-you-don-t-usually-need <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-credit-card-services-you-don-t-usually-need" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/3728145.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Everyone who has opened up a credit card in the last five years has been pitched on various supplementary &ldquo;services&rdquo; from the company in question. The offers sound enticing and even logical at times, but are they really justified from a hard dollars-and-cents standpoint?</p> <p>Everyone&rsquo;s financial situation is different, but generally speaking, the answer is NO.</p> <p>Here are six credit card services that you (usually) do not need. (See also:&nbsp;<a href="http://www.wisebread.com/the-best-credit-card-perks-beyond-points-and-miles">Best Credit Card Perks</a>)</p> <h2>1. Identity Theft Coverage</h2> <p>This is typically framed as a way to avoid liability for fraudulent charges made after your credit card is stolen. It sounds appealing, but many consumers fail to realize they are essentially ALREADY covered from this by <a href="http://www.fdic.gov/regulations/laws/rules/6500-200.html">1968&rsquo;s Truth in Lending Act</a>. This law states that if you report the stolen card immediately, your maximum liability for fraudulent charges is $50. As such, it makes zero sense to pay $5 per month (or anything) when, even in the worst case scenario, you are only out $50.</p> <p>While some identity theft plans offer coverage for more extreme circumstances (such as losing other cards or your Social Security number), you would generally be better served investing in a paper shredder and monitoring your credit report than paying the fees your credit card company would charge.</p> <h2>2. Missed Payment Insurance</h2> <p>This was actually offered to me a few days ago while activating a credit card. The salesperson gleefully exclaimed how I could &ldquo;put my payments on hold for up to two years&rdquo; in case I lost my job or ran out of money. The cost? Something like $5 per every $100 on my outstanding balance. It actually sounded moderately appealing at first, until I paused and thought about it.</p> <p>&ldquo;Why would I ever be unemployed or unable to make credit card payments for<em> two years</em>?&rdquo;</p> <p>For one thing, I (like many credit card holders) rarely carry balances month-to-month. It might make sense if you carry huge balances, but even in that case, you probably ought to ask WHY you&rsquo;re carrying those balances. Furthermore, a modest savings account would seemingly provide all the missed payment insurance you would need in a cash crunch.</p> <h2>3. Credit Score Tracking</h2> <p>Given the overall importance of your credit score, this is definitely a number worth knowing. Do you really need 24/7 access to it, as many credit card companies now offer in exchange for additional fees? It&rsquo;s debatable (and there are definitely circumstances where it COULD make sense), but probably not.</p> <p>Although credit scores do change dynamically to reflect your most up-to-date activity, obsessively monitoring it every single day is unlikely to reveal anything of importance. You would be much better off simply getting your free yearly credit score and report from <a href="http://www.annualcreditreport.com/">AnnualCreditReport.com</a> in the beginning of the year, and then perhaps paying one of the major credit bureaus (Experian, Equifax, and Trans-Union) for second and third peeks later on. Experian, for instance, offers <a href="http://www.experian.com/credit-report-partner/index-g.html?WT.srch=ECDG1">$1 access to your score</a> in connection with an easy-to-cancel trial.</p> <h2>4. Debt Consolidation</h2> <p>Typically offered by third-party organizations rather than credit card companies themselves, debt consolidation is far from the silver bullet its supporters make it out to be. Consolidating debt lowers your immediate monthly payment (which we always hear), but it also lengthens the amount of time you stay in debt and enlarges the total amount that you pay (which we almost never hear.)</p> <p>Think about it &mdash; what creditor would voluntarily rewrite debt if it only benefited the borrower? No one would. Taking this into account, you should realize that debt consolidation doesn&rsquo;t lower your debt. It simply moves it around and makes it (temporarily) more comfortable. Approach debt consolidation with caution.</p> <h2>5. Credit Score Repair</h2> <p>A number of credit card companies (sensing that many consumers have low credit scores) are beginning to offer credit score repair services. The offer is appealing to people who don&rsquo;t understand credit and thus believe &ldquo;the experts&rdquo; can push a few buttons to raise their score overnight.</p> <p>Yet in truth, credit scores are no mystery. As <a href="http://www.myfico.com/crediteducation/whatsinyourscore.aspx">myFICO explains</a>, your credit score is comprised of five things and five things only:</p> <ul> <li>Payment history (35%)</li> <li>Amounts owed (30%)</li> <li>Length of credit history (15%)</li> <li>New credit (10%)</li> <li><span> </span>Types of credit used (10%)</li> </ul> <p>Repair services don&rsquo;t have any shortcuts or special tricks. All they can do are the same common-sense things you could do yourself by consulting the list above (paying your bills on time, repaying outstanding balances, ceasing to apply for new credit for a while, etc.)</p> <h2>6. Balance Transfers</h2> <p>Before someone rushes to say how insane I am for calling <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">balance transfers</a> unnecessary, let me state that I do find them worthwhile sometimes. More often than not, however, they amount to little more than a band-aid on a bullet wound.</p> <p>Because those highly sought 0% &ldquo;teaser periods&rdquo; often last just 3-6 months (and most borrowers will not pay off their entire balance that quickly), credit card holders might be left to either stick with the astronomical new APR or &ldquo;rate-chase&rdquo; by balance transferring to a new 0% card. This can actually compound your credit problems because constantly applying for new credit reflects poorly on your score.</p> <p>If you can pay off a balance IN FULL during the teaser period, it can be a smart move. If not, it&rsquo;s likely a waste of time and money.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jay-cross">Jay Cross</a> of <a href="http://www.wisebread.com/6-credit-card-services-you-don-t-usually-need">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-benefit-from-your-credit-card">6 Ways to Benefit From Your Credit Card</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-avoid-rewards-cards-with-annual-fees">Should You Avoid Rewards Cards With Annual Fees?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dealing-with-post-holiday-credit-card-debt">Dealing with Post-Holiday Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/credit-card-fees-hidden-and-otherwise">Credit Card Fees: Hidden and Otherwise</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards balance transfer cards credit card fees upsell Mon, 16 Jan 2012 11:36:09 +0000 Jay Cross 864196 at http://www.wisebread.com Should You Avoid Rewards Cards With Annual Fees? http://www.wisebread.com/should-you-avoid-rewards-cards-with-annual-fees <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-you-avoid-rewards-cards-with-annual-fees" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_shopping_with_credit.jpg" alt="Woman shopping with credit card" title="Woman shopping with credit card" class="imagecache imagecache-250w" width="250" height="144" /></a> </div> </div> </div> <p>For years, personal finance experts have exhorted consumers to avoid credit cards with annual fees. (See also: <a href="http://www.wisebread.com/avoid-bank-fees">Avoid Bank Fees</a>)</p> <p>The anti-fee mentality is captured in a <a href="http://finance.yahoo.com/news/First-Person-Why-I-Avoid-ac-3631563727.html">Yahoo! Finance</a> article called, appropriately, &ldquo;Why I Avoid Credit Cards With Annual Fees.&rdquo;</p> <blockquote><p>I always avoid credit cards with annual fees because they are rarely worth the extra cost. Many companies try to compensate for high fees with reward programs, but there are cards that offer the same benefits without fees. I never use credit cards that have annual fees.</p> <p>The offers of cash back, gift cards, merchandise and travel packages are alluring, but they are not worth the additional cost of paying an annual fee for the credit card.</p> </blockquote> <p>In many cases, the author is correct. Many (perhaps most) consumers do not use their <a href="http://www.wisebread.com/credit-card-guide">credit cards</a> enough to justify the fees. Yet the author is wrong to make &ldquo;avoid annual fees&rdquo; a rigid, black-and-white rule.</p> <p>For one thing, it is often possible to negotiate your annual fee down to a lower amount or get it waived entirely. One reader emailed Ramit Sethi of <a href="http://www.iwillteachyoutoberich.com/blog/get-your-credit-cards-annual-fee-waived/">I Will Teach You to Be Rich</a> to note that she got rid of the $95 fee on her American Express card simply by asking for it. (Half of life is just showing up, right?) When I worked with Ramit, we saw at least a handful of emails like that per week.</p> <h3>Running the Numbers: When It Makes Sense to Pay Annual Fees</h3> <p>Of course, not every company will agree to this, and you cannot count on it definitely happening. Even still, there are circumstances where it makes complete logical and financial sense to pay an annual fee.</p> <p><span style="font-size: 13px; line-height: 22.1000003814697px;">It would be easy to scoff at a seemingly astronomical fee like $450 (the actual yearly fee charged to some premium credit cards). But the decision of whether to use this card doesn&rsquo;t come down to gut feelings. It&rsquo;s strictly a numbers game.&nbsp;</span></p> <p><span style="font-size: 13px; line-height: 1.7em;">For example, let&rsquo;s say you&rsquo;re an extensive business traveler, in and out of new cities four to five times per month.&nbsp;</span><span style="font-size: 13px; line-height: 1.7em;">The stomach-churning pain of forking over $450 is quickly erased by the massive pile of perks you'd receive. The same is frequently true of other rewards cards with smaller fees. A single </span><a href="http://www.wisebread.com/top-5-travel-reward-credit-cards" style="font-size: 13px; line-height: 1.7em;">free flight</a><span style="font-size: 13px; line-height: 1.7em;"> can easily, by itself, justify a $50-$100 fee. The more perks you get, the better a deal the annual fee becomes.</span></p> <h3>&ldquo;But I Don&rsquo;t Want the Credit Card Companies Making Money Off of Me!&rdquo;</h3> <p>Even after seeing these examples where it plainly makes sense to pay a fee, you might still be reluctant. Something about paying to use a credit card just seems inherently unfair &mdash; like you&rsquo;re being exploited by &ldquo;the system&rdquo; or &ldquo;the banks.&rdquo;</p> <p>If so, I would encourage you to look at the bigger picture.</p> <p>What matters more: achieving your financial goals, or spiting the credit card companies? If it can be factually proven that paying an annual fee makes you better off, it doesn&rsquo;t matter that the credit card company also benefits from the arrangement. To place resentment of their profits above your own financial well-being would be doing yourself a huge disservice.</p> <p>Having said all of this, I still advise all consumers to run the numbers. Do you spend a lot on your credit cards? Are you willing to <a href="http://www.wisebread.com/5-ways-to-earn-cashback-rewards-without-extra-spending">put all or most of your personal spending on credit</a> to maximize rewards? If so, you might be surprised to learn that annual fees aren&rsquo;t the deal-breaker they are made out to be.</p> <p>For consumers who don&rsquo;t spend much on their credit cards, the fees probably WILL be a bad deal. If you only spend $50 per month on credit, and only get a 1% cash back reward, then of course you&rsquo;re losing money with a $100 annual fee. That&rsquo;s why it&rsquo;s so important to run the numbers rather than assuming fees are good or bad.</p> <p>There are often no-fee versions of <a href="http://www.wisebread.com/5-best-cash-back-credit-cards">popular rewards cards</a> with similarly or equally compelling benefits. If so, it obviously makes sense to go with the no-fee option. My point is just that blindly avoiding ALL annual fees in knee-jerk fashion could deprive you of some terrific rewards!</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jay-cross">Jay Cross</a> of <a href="http://www.wisebread.com/should-you-avoid-rewards-cards-with-annual-fees">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/top-5-travel-reward-credit-cards">5 Best Travel Reward Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-cash-back-credit-cards">5 Best Cash Back Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-5-credit-cards-for-groceries">The Best 5 Credit Cards for Groceries</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-dining-out">The 5 Best Credit Cards for Dining Out</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-sign-up-bonuses-for-airline-miles-credit-cards">5 Best Sign-up Bonuses for Airline Miles Credit Cards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards business traveler credit card fees credit card rewards Mon, 05 Dec 2011 11:24:10 +0000 Jay Cross 809143 at http://www.wisebread.com Fee Fighters: Fighting for Low Credit Card Processing Fees http://www.wisebread.com/fee-fighters-fighting-for-low-credit-card-processing-fees <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/fee-fighters-fighting-for-low-credit-card-processing-fees" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/boxer_painting.jpg" alt="Painting of a boxer" title="Painting of a boxer" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Does your freelance business (or eBay or Etsy account, etc.) accept credit cards, or are you looking to incorporate credit card processing into your business practice soon? Have you turned selling stuff into a viable business that's ready to go to the next level? If so, <a target="_blank" href="http://www.feefighters.com/">Fee Fighters</a> is a free service you might want to know about that can advocate for you and get you the best deal with credit card processors. (See also: <a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a>)</p> <h3>How Fee Fighters Works</h3> <p>After inputting some basic information about your business and credit card processing needs, Fee Fighters presents you with a list of competitive &ldquo;bids&rdquo; on their auction marketplace from their roster of vetted credit card processors vying for your business.</p> <p>And the bid price is the final price, so you can safely compare apples to apples without worrying about statement fees or other extras after the fact. You can also scour the fine print by viewing contracts, and you can anonymously ask questions of the bidders to clarify your needs and terms. The idea is to keep high-pressuring salespeople out of the picture so you can make a decision on your own time.</p> <p>Fee Fighters claims that their comparison search engine can save businesses an average of 40% on credit card processing fees, and they&rsquo;ve helped over 15,000 businesses compare their credit card processing rates so far this year.</p> <p>Although you can find reviews of credit card processors at sites like <a href="http://credit-card-processing-review.toptenreviews.com/">Top Ten Reviews</a> and <a href="http://www.3rdpartyprocessors.com/third-party-processors5.shtml">Third Party Processors</a>, Fee Fighters is the only service of its kind.</p> <p>&quot;There aren't any that do quite what we do. There are some others that take your information and immediately sell it to credit card processing companies that pester the crap out of you. What we do is very different and was very hard to build... We don't expect any competition to arise in the near term,&quot; says Sheel Mohnot, VP of Marketing at Fee Fighters.</p> <h3>Processor Vetting</h3> <p>Fee Fighters requires credit card processors to become <a href="http://feefighters.com/feefighters-certified/">certified to their standards</a> before they allow them on the marketplace to bid for your business. The terms include no hidden fees, rate hikes, or cancelation fees, and they&rsquo;re audited monthly for compliance.</p> <h3>They&rsquo;ll Advocate For You</h3> <p>A very powerful example of how the folks at Fee Fighters are willing to go above and beyond the call of duty for businesses is in how they helped a coffee shop owner navigate a very sticky situation with a few credit card processors and shady salespeople, and set her up with a new processor that saved her $7,000 in expenses and over 40% off her credit card processing fees. They even helped her recover an unexpected $1,000 termination fee from her old processor. The story is very compelling and can be read in full on the <a href="http://feefighters.com/blog/case-study-coffeeshop-owner-says-feefighters-is-amazing/">Fee Fighters site</a>.</p> <p>From a business standpoint, this speaks well to me. So many online services begin and end with the online experience, but Fee Fighters has live chat available, as well as a phone number you can call that a real person will answer. And in chatting with the folks at Fee Fighters, they assured me that the level of service they extended to the coffee shop owner above is available to anybody who needs it.</p> <p>Why does Fee Fighters go above and beyond to advocate strongly for business owners? Partly because they only get paid once a deal is struck between the business owner and credit card processor. (It's like a finder's fee payable by the processor.) When pressed for reasons why they will help even beyond brokering a deal, Mohnot implied that we're all the same boat. &quot;Frankly, we know what it's like to be a small business. We try to save any place we can and we know merchants...do the same.&quot;</p> <p>Credit card processing is increasingly important for businesses to offer, especially if they&rsquo;re location independent, since it increases options for receiving online payments. (Check out other <a target="_blank" href="http://www.wisebread.com/small-business/tools-for-running-your-location-independent-business">tools for running your location-independent business</a>, as well as these <a target="_blank" href="http://www.wisebread.com/small-business/essential-services-for-the-road">essential services for the road</a>.) Heck &mdash; as a consumer <a target="_blank" href="http://www.wisebread.com/top-seven-reasons-why-i-use-my-credit-card-for-everything">I use my credit card for everything</a>, so I&rsquo;m much happier if I&rsquo;m dealing with a happy vendor who isn&rsquo;t being fleeced with credit card usage fees.</p> <p>So if you&rsquo;re new to the business of offering credit card processing, if you want to cross-check the fees and service you are receiving against what&rsquo;s out there, or if you&rsquo;re in a bind with your credit card processing and need help, Fee Fighters could be just the thing you need. Oh yeah &mdash; and it&rsquo;s free.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/fee-fighters-fighting-for-low-credit-card-processing-fees">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-inspiring-stories-of-normal-people-building-a-thriving-online-store">4 Inspiring Stories of Normal People Building a Thriving Online Store</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-i-got-over-the-hump-and-sold-my-blog-for-3-million">How I Got Over the Hump and Sold My Blog for $3 Million</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-all-successful-freelancers-do">10 Things All Successful Freelancers Do</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/coworking-spaces-the-office-alternative">Coworking Spaces: The Office Alternative</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship credit card fees credit card processing small business Fri, 01 Jul 2011 09:48:15 +0000 Nora Dunn 574952 at http://www.wisebread.com 6 Ways to Benefit From Your Credit Card http://www.wisebread.com/6-ways-to-benefit-from-your-credit-card <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-benefit-from-your-credit-card" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000007864786Small.jpg" alt="Woman with credit card at computer" title="Woman with credit card at computer" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>No amount of credit card reform is going to help if you don't spend the time to make your credit cards benefit you. As with many things, credit cards can be wonderful if you are disciplined, but they can also backfire and create a huge financial hole for you to dig out of. (If the latter is more likely for you, may I suggest measures such as freezing your credit card?) Here are six ideas for how to benefit from your credit card.</p> <h3>1. Eliminate Annual Fees</h3> <p>You likely looked into this before you applied to your current card of choice, but is your credit card still free to own? Many institutions started charging annual fees, and there's a chance that yours does now as well. With companies likely adding the annual fee as a line item on one of your monthly bills, it may go unnoticed &mdash; so double check to make sure. (See also: <a href="http://www.wisebread.com/credit-card-fees-hidden-and-otherwise">Credit Card Fees: Hidden and Otherwise</a>)</p> <h3>2. Pay Your Balances Off Each Month</h3> <p>I contemplated whether to put this one in, because it's obvious. But it's so important that everyone needs to hear this again and again. Don't use a credit card unless you can pay it off each month. Got it? Now go read it again, and follow the rules.</p> <p>If you don't believe that it's possible to live without borrowing, just remember that people were fine before the invention of debt! If you can't afford it, just don't buy it. (See also: <a href="http://www.wisebread.com/how-much-does-your-credit-card-debt-cost-you">How Much Does Your Credit Card Debt Cost You</a>)</p> <h3>3. Stick With Cash-Back Rewards</h3> <p>There are zillion different ways to redeem your credit card rewards, but it's probably best to stick with getting cash (or perhaps a statement credit) unless you were going to need to use it anyway. For example, getting a free airline ticket is good if you were going to buy the exact same ticket for the exact same price, but getting a $50 gift card and ending up buying $73.28 worth of useless junk is not worth it.</p> <h3>4. Know All the Benefits You Are Getting</h3> <p>It's always a good idea to know every benefit that your card is providing. In addition to reward points, some cards get you into airport lounges, while others will double the warranty of a product. By knowing all the benefits, you won't be paying extra for something that you can get for free. For example, one of my credit cards provides rental car insurance.</p> <h3>5. Write Down Why You Applied for the Card in the First Place</h3> <p>A good way to remember all those benefits is to actually write them down in simplified form somewhere, so you can look at it once in a while to <a href="http://www.wisebread.com/perform-a-credit-card-rewards-annual-review">refresh your memory</a>. I know it is a bit of work, but I applied for one of my cards eight years ago. Would you remember all the details from eight years ago? Or let's say you applied for a 0% balance transfer credit card. Now that the introductory 0% APR period is over, do you still need to keep it?</p> <h3>6. Use Credit Cards Whenever Possible</h3> <p>This is only for those who can pay off the balance of course, but remember to use your credit card every chance you get! I know there are many people who like to make fun of those who use credit cards for the smallest purchases, but did you know that it is actually easier (and faster) for both the buyer AND the seller when small purchases are paid using a credit card? When you don't even need to sign for a purchase at some of these stores, using a credit card is a no-brainer.</p> <p>There are many more ways you can save with a credit card, but if your credit card isn't working for you yet, start with the tips up above.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/david-ning">David Ning</a> of <a href="http://www.wisebread.com/6-ways-to-benefit-from-your-credit-card">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-credit-card-services-you-don-t-usually-need">6 Credit Card Services You Don’t (Usually) Need</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-cash-back-credit-cards">5 Best Cash Back Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/calling-bs-on-5-rewards-advertising">How to Decipher Credit Card Advertising</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/using-airline-credit-cards-to-score-premium-travel-awards">Using Airline Credit Cards to Score Premium Travel Awards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards balance transfer cards cash back rewards credit card benefits credit card fees Wed, 23 Mar 2011 11:00:08 +0000 David Ning 508477 at http://www.wisebread.com Credit Card Fees: Hidden and Otherwise http://www.wisebread.com/credit-card-fees-hidden-and-otherwise <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/credit-card-fees-hidden-and-otherwise" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/credit card fees.JPG" alt="please dip your credit card" title="please dip your credit card" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p class="MsoPlainText"><span>Annual fees, grace periods, balance transfer options&hellip;it's a wonderful world of <a href="http://www.wisebread.com/credit-card-guide" title="Guide to Using Credit Cards Wisely">credit card jargon</a> out there, and depending on your needs and planned uses for credit cards, it pays to look at your options. </span></p> <p class="MsoPlainText"><span>Following are the various ways in which credit card companies can get some money out of you: </span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>Interest Rates</span></h2> <p class="MsoPlainText"><span>All credit cards levy an interest rate, the main difference being the percentage charged. Obviously you want to choose the card with the lowest rate. If you already have a card with a higher interest rate but that <a href="/credit-card-rewards-programs" target="_blank">you like for other reasons</a>, then try calling and asking for an interest rate reduction. According to a 2002 Public Interest Research Group study, 56% of people who called their credit card issuer and asked for a reduction were successful. </span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>Early Interest Posting Dates</span></h2> <p class="MsoPlainText"><span>If you are in the market for a new card, find out if interest is charged from the date the charge is posted, or the date of purchase. Most will now charge from the date of purchase (which is usually a few days earlier than the posting date), but if you can find one of the other kind, it may be worthwhile. </span></p> <p><span>This is only really an issue if you plan to carry a balance on your credit card at any time, which <a href="/call-your-credit-card-a-plastic-check" target="_blank">if it can be avoided</a>, would be preferable. </span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>How Interest is Calculated</span></h2> <p class="MsoPlainText"><span>Some cards will charge interest on the balance owing at the month or billing cycle's end. Makes sense, right? </span></p> <p class="MsoPlainText"><span>Well, there is a growing trend now to charge interest instead on the average daily balance. So if you charge $1,500 in September, and pay $1,000 of it off on the due date, the following month you will actually be charged interest on the $1,500 average daily balance instead of the actual $500 left owing. </span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>Grace Periods - or Lack Thereof</span></h2> <p class="MsoPlainText"><span>Usually, a grace period will allow for a responsible credit card user to pay off all their purchases within 24-30 days without paying any interest. </span></p> <p class="MsoPlainText"><span>But as some readers pointed out in the comments on <a href="/top-seven-reasons-why-i-use-my-credit-card-for-everything" target="_blank">another article</a>, even those dutiful credit card users who pay off their balance in full each month can sometimes get duped by circumstance (like the bank processing a transfer late) and miss the payment due date by a sliver. </span></p> <p class="MsoPlainText"><span>For those people above and for those who regularly carry balances, even grace periods won't save you: if you have an outstanding balance, you are charged interest on new charges from the date of purchase. (All the more reason not to carry a balance)!</span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>Nuisance Fees</span></h2> <p class="MsoPlainText"><span>In a world of increasing fees for every little thing from booking airline tickets to doing your banking, credit cards are no exception to this bandwagon. The latest in nuisance fees can include: </span></p> <ul> <li><span>Late payment fees (as high as $40)</span></li> <li><span>Over-the-limit fees (as high as $25)</span></li> <li><span>Inactive account fees</span></li> <li><span>Not carrying a balance fees (or carrying a balance under a certain amount)</span></li> <li><span>Monthly fees that are a percentage of your credit limit</span></li> <li><span>Annual flat fees</span></li> <li><span>Balance transfer fees</span></li> <li><span>Credit limit increase fees</span></li> <li><span>Set-up fees</span></li> <li><span>Return item fees</span></li> <li><span>Fees for paying by telephone</span></li> </ul> <p class="MsoPlainText"><span>&hellip;and on it goes. </span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>Cash Advance Interest Charges</span></h2> <p class="MsoPlainText"><span>Many cards charge higher interest rates on cash advances in addition to transaction fees. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>What They Have to Tell You About</span></h2> <p class="MsoPlainText"><span>When you are searching for a new credit card, the following items are required by law to be disclosed:</span></p> <ul> <li><span>Annual Interest Rate (also called annual percentage rate or APR)</span></li> <li><span>The teaser or introductory rate, along with the details of when and how the regular rate kicks in</span></li> <li><span>How the variable rate is determined (if applicable)</span></li> <li><span>Penalties for late payments</span></li> <li><span>Annual, periodic, or membership fees</span></li> <li><span>How the balance is computed for interest purposes (ie: average daily balance or balance owing methods)</span></li> <li><span>Minimum charge</span></li> <li><span>Grace period (the period of time you have to pay off the balance without incurring interest)</span></li> </ul> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>My Card Sucks! I Want To Cancel</span></h2> <p class="MsoPlainText"><span>If after reading this you think you have one of those cards with too many fees, you can cancel it. However, there is a chance that it may reduce your credit score. Check out <a href="http://www.myfico.com" target="_blank">FICO</a> to find out what FICO scores consider, as well as how best to understand your credit score. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span><br /> To that end, you should be aware of <strong>soft and hard closes</strong>, and how they affect you. </span></p> <p class="MsoPlainText"><span> </span></p> <h3><span>Soft Closes</span></h3> <p class="MsoPlainText"><span>With a soft close, the credit card company will acknowledge that you want to close out the card, but they will automatically reactivate it if charges go through. Their rationale is that they are saving you embarrassment of the card being rejected if you happen to be out shopping and inadvertently whip their card out! </span></p> <p class="MsoPlainText"><span>Hence, a soft close will also often affect your credit score and ability to qualify for large loans later on if the lender does a credit check and sees that you have all sorts of credit available to you, but doesn't see that the credit is soft closed. </span></p> <p class="MsoPlainText"><span>It also makes you vulnerable to fraud, since if a professional steals your identity, they can order another card from a soft-closed account and start charging. </span></p> <p><span> </span></p> <h3><span>Hard Closes</span></h3> <p class="MsoPlainText"><span>Ensuring your account is hard closed entails a little more follow-up work, but can pay off in the end. You must first request a hard close when you are cancelling the card, and follow up with a confirming letter. In your letter, tell the credit company to report &quot;closed by consumer&quot; to the credit bureaus as well, and keep copies of everything. </span></p> <p class="MsoPlainText"><span>Some issuers will refuse to do this: their policy might instead be to process a soft close first and a prescribed time period, at which point it reverts to a hard close. Find out how long that period of time is, and ensure that the account is hard closed with a letter at the end of that time. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span> </span></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/credit-card-fees-hidden-and-otherwise">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-does-your-credit-card-debt-cost-you">How Much Does Your Credit Card Debt Cost You?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/i-dont-love-capital-one-how-to-get-a-lower-apr-or-possibly-not">I Don&#039;t Love Capital One - How to Get a Lower APR, or Possibly Not</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-with-no-annual-fees">The Best Credit Cards With No Annual Fees</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards annual fees APR balance transfer credit card fees grace periods interest calculation interest posting dates interest rates nuisance fees Sun, 23 Dec 2007 23:14:26 +0000 Nora Dunn 1535 at http://www.wisebread.com