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Get more from your credit cards Thursday, March 28, 2013

With credit cards, you pay to play. There are rewards, promotions and other perks for the taking, but you have to use them to reap any benefits. Minimizing fees and finance charges are just part of the game.

So how can you get the most from your cards while avoiding all the pitfalls?

The good news is there's plenty you can do to make your credit cards work for you. By utilizing little-known perks, taking advantage of lower interest rates and using other strategies, you can get control of your plastic and actually profit from it.

Here are five tips for getting the most bang for your hard-earned bucks.

Posted by at 13:43:10

Use credit cards to pay down student loan? Thursday, March 21, 2013

Currently, I have a $22,000 outstanding student loan with a 6.6 percent interest rate. I need advice on how I should repay the loan. In the past, I've paid more than $2,000 in interest each year. Do you think it is best to pay off the loan or sign up for credit cards to pay it off? That would mean I'd have to apply for several credit cards, hopefully at low rates of interest. I also worry that if I pay off the student loan, then I might not have any money set aside for a rainy day. Please tell me what you think is best. How much is tax deductible if I continue to make payments each month, as I am doing right now? What is the best way to do this to maximize any potential financial benefits?

Ignoring any payment of principal over the year, your annual interest expense on a $22,000 loan balance at 6.6 percent is $1,452. Unless you're making interest-only payments, your interest expense for the coming year should be even less than that because you're paying down principal over time.

Managing a collection of credit cards to reduce your interest expense has its own set of additional risks. You're not transferring credit card balances from another credit card, so you have to find a card that has a teaser rate on a cash advance. Multiple credit card applications over a short period of time will negatively impact your credit score, making it even harder to qualify for that great credit card offer. You also give up any of the loan payment options available with your student loans, including any tax deductibility of the interest payments.

I understand students and graduates complaining about the high interest rates associated with student loans. Comparing student loan rates to mortgage rates isn't a fair comparison, however, because a mortgage is secured by the house as collateral. You've borrowing money unsecured at a fixed 6.6 percent. That's not a bad deal. Bankrate's latest national average for a fixed-rate credit card is 13.02 percent. It's 15.15 percent for variable-rate credit cards. The cards are unsecured debt, too.

In an ideal world, you could use your emergency fund to pay down your student loan, and then replenish the fund over time and come out ahead. But to do that means you've lost the potential protection the fund offers.

The value of a tax deduction depends on your income level and marginal federal income tax bracket. Don't let taxes be the guiding force or the tail wagging the dog here. I'd argue that you should be making additional principal payments each month to chip away at the outstanding loan balance, and set a target date for paying off the debt. Do that, and I'll give you an A for the day!

Posted by at 13:16:08

Credit score myth persists Wednesday, March 06, 2013

The myth that employers will review your credit score when you apply for a job is one that just won't die. Within the last few weeks I've seen TV commercials and articles still claiming that a low credit score can sink your job prospects. Watch this video from to see how widespread this falsehood is.

Misinformation mayhem

Confusion seems to be at work. Employers may check your "credit" -- as in, report, but a score doesn't come with it. Representatives from the three major credit-reporting agencies confirmed with me that don't they release scores to employers for employment screening purposes.

"There's a misconception that scores are used, and scores are not used," says Steven R. Katz, spokesman for Chicago-based agency TransUnion.

He lays some blame on the way people use the terms "credit report" and "credit score" interchangeably. "You see people do it all the time by accident," Katz says. "It sometimes gets jumbled and then it gets perpetuated."

Katz notes a score doesn't come with the report because there's no scoring model designed to predict employee behaviors based on credit attributes. "We don't offer a scoring model for employment, so there's no score to provide."

Representatives for the credit reporting agencies say they do provide credit reports, with permissible purpose, for job applicant screening. The Fair Credit Reporting Act requires employers to first obtain written permission from the consumer to in order to pull a credit report.

Around 60 percent of employers have checked the credit reports for some or all job applicants, according to a 2010 survey from the Society of Human Resource Management.

An employment credit report doesn't contain account numbers, the year of your birth or references to your spouse in the identification section of the report. Otherwise, the report is mostly a summary of what you find in your consumer credit report -- identifying information, public records, employment information and credit history.

Most important, the report doesn't include a credit score. Spread the word.


Posted by at 14:00:48

Shoppers Using Plastic to Shop Sunday, December 23, 2012

Americans are ready to shop again this holiday season. A new survey from the National Retail Federation shows consumers are preparing to spend an average of $749.51 on gifts, up from $740.57 last year. Overall holiday spending is expected to rise 4.1 percent to $586.1 billion. And online shopping revenue could reach $68.4 billion, up 15 percent, according to Forrester Research.

Deal hunters will be out in force next week, when retailers kick off the season with huge discounts for Black Friday and its online cousin, Cyber Monday. (AMZN) has a full list of current, upcoming, and expired deals available at its site. Meanwhile, Target (TGT) and Walmart (WMT) both plan to start offering deals before the Thanksgiving turkey even has a chance to digest.

Posted by at 23:47:09

Advanta raised my Mastercard rate to 37 Percent Sunday, December 21, 2008

Stay away from Advanta business cards. I think they are probably going to go out of business because of this irrational behavior. I have great credit, have been a customer for 10+ years and never paid them late. Advanta notes and redireserve notes are probably not a good bet either right now. The comapnies stok price is under 3 dollars. My prediction is this ship is going down. Dennis alter has run Advanta into the ground.
Posted by Saul at 15:17:50

Frontier Airlines Mileage Card Tuesday, May 06, 2008

What is going to happen to the miles I have accrued now that they are in Bankruptcy? Anyone?
Posted by Marcie at 01:36:50


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