What are the Top 10 Best Balance Transfer Credit Cards for 2012?

Balance transfer cards, in order to be considered as great, should provide excellent additional features, rates, and 0% introductory APR on balance transfers. Consumers today are now searching for ways on how they can save money while eliminating their credit card debt. A good method is through the use of these cards. If you are still seeking for a balance transfer card, here are the top 10 choices to select from:

·         Slate®from Chase – For a limited time, you can enjoy no balance transfer fees with this card. You can also use this card for purchases and there’s no interest on such transaction as well. Unlike other cards, this has no annual fee, plus it offers a $0 balance transfer fee indefinitely.

·         Citi®Diamond Preferred® Card – For over a year, there’s no APR on balance transfers and on purchases. After that, the interest rate will depend on your creditworthiness but you can be assured that Citi® offers one of the most favorable variable APRs today.

·         Citi Simplicity® Card – If you want a straightforward balance transfer card, this is the card to get For nearly two years, there is no APR on balance transfers and in purchases as well. The best thing about this card is that you are not obliged to pay over the limit fees or late payment charges unlike other credit cards out there.

·         Discover®More® Card – This card is mostly for balance transfers as it provides a longer introductory period on the said transaction than in purchases. Regardless, this card does not have an annual fee and also has cash back rewards. There are rotating categories that you can sign up for. If you are not able to sign up for the specific purchase groups for the quarter, all of your purchases will still be rewarded.

·         ChaseFreedom® Visa – New applicants are awarded with bonus cash back. Just like the cards mentioned above, this comes with a 0% interest rate on balance transfers and on purchases as well. This no annual fee card has a balance transfer fee, though, which will take into account the total amount that you will be shifting from one card to another.

·         CapitalOne® Platinum Prestige Credit Card – If you get this card now, you can enjoy more than a year of interest free transfers and purchases. This card has favorable interest rates once the intro offer expires.

·         Capital One® Cash Rewards – You can apply online for this card which will give you a bonus cash back after you spend enough credits within the first three months. Every year, you can earn as much as 50% of the total amount that you have purchased. This has no annual fee and you can transfer your balance without interest until August 2013.

·         Citi ThankYou® Card – For over 12 months, there are no worries about interest rates with this card but there are rewards provided. The most notable is the yearly bonus to celebrate your account opening.

·         Barclaycard® Rewards MasterCard® - If you have excellent credit, you can qualify for this low interest balance transfer card. This also lets you earn points on daily purchases and utility bills.

·         Discover®Open Road Card – If you spend your credits mostly on restaurants and gas, this is a good card to get especially if you wish to transfer balances. Shop online and you can earn a really huge percentage based on your purchase.

These are only some of the best balance transfer cards that you can choose from this 2012. You can find more choices at sites offering great credit cards, such as Cardrewards.net.

Credit Card Tips for College Students

Entering college with a credit card in your wallet can make you exult. Most rich kids in your school have them, which is why it may be a moment of pride for you as well. Having a credit card is also a great tool in building your history. This can benefit you greatly once you step out of your student life.

You may have probably heard about a number of offers from various companies, which they claim to be the best deals ever. It is important that you can handle your card well to avoid falling into the credit trap that has the power to ruin your finances for a very long time.

Good Credit Matters

Once you get your card, you should not only use it for purchases, but to build good credit as well. Paying off debt is seriously difficult. The money you owe can multiply quickly before you know it. When things get out of hand, you will find it much harder to get out of debt. However, if you are able to establish good credit, this can open doors of opportunity. It can be your key to renting a nice apartment or even buying a home for yourself. You can also use it to attract lenders, so they will lend you money to buy a car.

Building and maintaining your credit can be simple if you are devoted to becoming a responsible card user. Here are some tips that you can use to make sure your credit rating remains safe at all times:

• Beware of “too good to be true” promotions. Freebies and fast approval make it seem that getting a student credit card is as easy as 1-2-3. Do not just sign up for a card, especially when you have one already. College students should not carry more than one card in their wallet unless they can afford the payment. Always think twice before you submit an application for a new card. Freebies are also great but if you are not a responsible cardholder, you may end up paying a lot more than the free stuff that you received. 
• Contemplate and do your homework before making the big decision. Credit cards are pretty little plastics that might make your friends envious. However, before you sign up for one, ask yourself whether you really need it. If you can pay for your purchases with cash or even a check, you probably do not require the plastic, especially if you have a debit card already. Nevertheless, a card can be helpful in times of emergencies and can be great for online purchases. This can also be good for your credit history. Again, if you cannot pay your bills in full and on time, you might want to skip the credit  block for now.

When looking for a student card, go for one that has no annual fee. Often, card issuers do not offer students good rates, especially if they are first time cardholders.  Instead, there will be higher APRs and low credit limit. You can save a lot more if you have a card that does not charge a fee annually.

Travel Rewards Cards for Free Air Tickets

You already know that you can get a point or a mile for every dollar’s worth of purchase using a credit card. But did you know that you can actually use travel rewards cards for free air tickets? This is one of the biggest freebies every card holder wants to receive. If you earn enough miles, you just might be one of the lucky people who can claim their next flight ticket for free.

Solve Your Overpriced Airline Ticket Woes

Most of the airlines have hiked up on their fees but you can sign up for a credit card that gives you miles for every purchase. Accumulate enough miles and you can redeem them for free air tickets. Although the days of reasonably priced airfare are long gone, you do not have to worry about such problem if you have the right card.

Picking Your Card

There are many credit card offers today but not all of them are competitive. It is important that you review all your available options before you hurry and sign up for a travel rewards card. One great trick here is to shop online and compare your top three options side by side. The good news is that many creditors have their own website where you can read the terms and conditions of the card. If it has too many restrictions, it will be impossible for you to claim your free ticket. Look for a card that comes with a straightforward program – one that is easy to grasp that you can already envision yourself holding your free ticket.

One thing that you have to remember, though, is that with a travel rewards card, you may be obliged to pay taxes and higher fees. These charges include security fee, federal segment fees, and other facility costs. Unfortunately, you cannot bypass these fees even if you pay for a ticket the regular way.

Added Benefits

Aside from awarding the credit spenders with complimentary air tickets, you can also redeem free hotel stays with your card. There are cards that are specifically created to please travelers like you. You can save a lot of money when you book a room using your credit card. There are even a few cards that let you upgrade your room to a more sophisticated suite when available. Luggage checking is also expensive but your card can help you get away with that. Some travel rewards cards will pay for your first bag so you do not have to worry about checked luggage costs.

Top Travel Rewards Cards

• United Airlines Mileage Plus VISA – Thousands of bonus miles awarded plus thousands more if you add an authorized user. All points are more than enough for two tickets.
• JetBlue Airways from AMEX – Get thousands of TrueBlue points for your first purchase. Add more when you spend the required amount within the first three months. Redeem your free tickets anytime you want.
• Delta SkyMiles Gold Card – Add more bonus miles when you submit applications for additional card users on your account. No annual fee for the first year and gives you flight tickets with the miles you earned.

You can find more of these types of cards at cardrewards.net.

Chase Credit Cards

Chase is one of the most recognizable credit card issuers today. They are best known for producing consumer-friendly cards, which usually have better rates than most of their competitors. They also offer a variety of products that are rich in rewards and exclusive perks. From sign up bonuses to earning extra points, Chase is pretty much at the top of the credit card game.

There are many Chase credit cards that you can choose from today. In order for you to get the best for your needs (and your wants), you should consider the reason why you require a credit card first.

Are You a Frequent Traveler?

If your answer is yes, one card that you can turn to is the Chase Sapphire PreferredSM Card. As soon as you sign up for the card, you are eligible to get 40,000 bonus points. The huge number of points is courtesy of Chase’s Ultimate Rewards program, which you can redeem for a travel ticket instantly. The truth is that it is 25% more than a plane ticket so you can keep the rest of the bonus points for your next flight.

The Chase Sapphire PreferredSM Card is a great card if you frequently book your flights through your card. Starting from the time you get the credit card, make it a habit to utilize it whenever you reserve a seat at an airplane. Aside from travel rewards, you also get discounts on dining and entertainment. All other purchases will give you a point depending on how much you spend.

Do You Hate Annual Fees?

Most consumers do and if you are one of them, go for the Chase Freedom® Visa or Chase Freedom® MasterCard. Both are generally the same except for the network. Nevertheless, they offer rewards without requiring you to pay the annual fee. Most credit cards that dole out cash rebates or miles and points demand an annual charge but not this card.

You can sign up for different purchase categories which rotate regularly. The categories are usually relevant to the time of year such as restaurants and gas purchases during the driving season. Meanwhile, during the holidays, Chase offers hotels and airfare categories that you can sign up for. This card is named Freedom® for a reason: it provides consumers with the most flexible options.

Are You a Businessman?

If you own a company and you are looking for a card that will help you finance your business supplies and other expenses, apply for the Ink cards. There are four types of Ink cards namely the Ink Cash(SM) Business Card, Ink BoldSM with Ultimate Rewards, Ink PlusSM Business Card, and the InkSM Classic Business. They all have their own unique offers and rewards but all of them provide instant sign up bonuses.

The cards also come with a grace period so you can enjoy purchasing big and perhaps expensive items without paying any interest. The Chase Ink cards also let you obtain bigger rewards than other business cards today. They pay you with cash rebates for all of the items you buy. You can gain more rewards if you use the cards for your office purchases, which makes sense since they are business credit cards.

Instant Approval Student Credit Cards

Obtaining your first ever credit card can be liberating. A few years back, you had to wait for weeks up to a full month to find out if you have been approved or not. Now, you can expect the answer in just a few minutes when you apply for instant approval student credit cards. There are several creditors today that promote such type of card, including American Express, Discover, and Capital One.

Misinterpreted Term

If you have received an email with a list of instant approval cards for students like you, don't get too excited. Instant approval does not necessarily mean that you will get the card that you applied for. It actually denotes "instant response" since you frequently have to wait 60 seconds. Many applicants find the term misleading.
Most of the time, student cards that approve instantly have credit rating requirement. If you wish to increase your chances of getting approved, you need to build your credit history first. Ninety nine percent of applicants with excellent credit get a nod from the creditors. Those that have bad credit or limited history may find it difficult to get accepted. Hence, the misconception occurs.

Successful Application

There are a number of individuals that get turned down even when they have excellent credit. One common reason is that they have carelessly filled out their application form. It is essential that you complete your form with all the right details to secure your credit line request. When applying for a student card, the process is pretty much the same with traditional cards. The requirements include:

• Your age - You should be at least 21 years old with a Social Security Number.
• Age exception - Those who are 18 years old can also get a card provided that they have a co-signer or that they are able to prove that they can pay their balances monthly.
• Personal information - Aside from your age, you should give your full name, your address, contact details, and information about your school.
• Financial details - You also need to provide your income information (if available), your bank accounts list, and the type of credit lines you have.

Choosing the Best Student Credit Card

At present, you have plenty of choices, which may make it a bit confusing for you to select the best out of the best. The general rule here is to find a card that comes with the lowest interest rate possible and with high credit limit. Unfortunately, not all creditors are willing to take the risk since you are still a student with limited or no income. In addition, an account with high credit limit can be too tempting because you are given more than enough credits to spend.

The good thing about high interest rates is that they teach you how to become a good card holder. If your card has high APR, you will be forced to repay your balances to avoid incurring interest. Make sure that you compare all the available options, including their rewards, grace periods, and intro APR. It is best to go for a student card that comes with low to zero annual fee.

Small Business Credit Cards with Big Rewards

Small businesses require money in order to thrive. You can multiply your earnings by means of using a credit card. To begin increasing your revenue, you need to become a smart card user. To get the most out of your money, use a card that will give you rewards for your purchases.

There are many available options for small business cards. Each may allow you to earn points, miles, and even cash rebates every time you use it. The best cards, however, require that the proprietor has excellent credit. Since these cards have rewards, you can expect that you will be paying huge annual fees and interest rates. If you think you can handle the costs, you are ready to sign up for a small business card with lucrative rewards. Among them are the following:

PenFed Premium Travel Rewards American Express® Card

If you are a frequent traveler or your business requires you to visit some places out of the country, this is one of your best options. You get to earn points each time you use this for your airfare. You also get points when you use it for purchasing other items other than airline tickets. The interest rate is highly affordable, making it a good choice for business use. The rewards you earn will not expire and there is no cap on the total rewards you accrue. Unlike other cards for small businesses, this has no annual fee.

Blue Cash PreferredSM Card from American Express

This is one of the most recommended for businesspeople looking for huge rewards. It is easy to get cashbacks with this card. There are  revolving categories, which you can sign up for to earn greater rewards. One enrollment is enough so if the categories change, you are still eligible for the bonus points. This has an annual fee but is not as steep as other business cards.

Capital One® SparkSM Miles Select for Business

Use this for a year and you can get back half of all your travel expenses. Each spending earns you miles with this card. It does not have an annual fee and has no interest on purchases for several months. This is a great financial tool for your business as it provides you with reports on your expenses on a quarterly basis or at the year’s end. There is no restriction on the airline you choose and there are no blackout dates as well. You can check out this card here.

Starwood Preferred Guest® Business Credit Card from American Express OPEN

As soon as you make your first purchase, your account will be granted with free Starpoints. This card has an annual fee, which is waived for the first year. To speed up the process of accumulating points, you can add employee credit cards into your account. Your business account will automatically earn points for every purchase charged. This is your key to gaining free hotel stays, discounted airfare, and ultimate luggage protection. This also offers car rental insurance on loss or theft and damage.

These are only some of the small business credit cards that offer big rewards. You can find more of these cards at cardrewards.net.

Best Cash Back Credit Cards - A Comparison

Most credit card holders prefer cash back rewards than any other perks. If you are not a frequent traveler, it does not make sense to get an airline card. However, if you like to go shopping, you can never go wrong with a card that gives back in the form of cold, hard cash. Unlike points and miles, cash is readily usable so you can spend it for your next purchases. There are even credit cards that let you earn interest if you do not use the cash rebate.

If you have decided that you will get a card that offers cash back, here are the best cards that feature money back rewards:

Capital One® Cash Rewards

This card lets you earn up to $100 bonus cash if you spend the required amount for the first three months of card use. Each year, you are guaranteed that you can receive 50% total bonus cash on all your purchases. The rewards that you can accumulate will not expire and you can easily redeem money anytime you wish. You can even arrange automatic redemption when you reach a certain amount. This card does not require you to pay for an annual fee.

You can find more information about Capital One® Cash Rewards here.

Chase Freedom® Visa

This Visa credit card from Chase Freedom® also frees you from annual fees. As you sign up for this card, you can get $50 cash back for two straight years if you purchase a total of $500 for the first 3 months. Your net rewards each year can amount to almost $400. You can get huge cash back if you pay for your hotel accommodations using your card. This is also applicable to air ticket and partner merchant purchases. Every penny that you spend is equal to 1% cash back. Aside from that, you do not have to worry about interest rates on balance transfers and purchases.

Blue Cash EverydaySM Card from American Express

This is one of the most popular credit cards today that offer cash back rewards. If you have good to excellent credit, you should seriously consider getting this card. The cash back system is straightforward and gives you higher bonuses than the other regular rewards cards. You do not have to enroll for rotating categories since all purchases will be awarded with cash rebates. This also has a referral program where you and your friend can enjoy cash back once he or she gets approved.

Citi® Dividend Platinum Select® Visa® Card

This card comes with revolving categories which you need to sign up for every quarter. In so doing, you can earn huge cash back percentage on top of the 1% cash back on every purchase you make. This card however limits your cash back redemption to $300 each year. Nevertheless, this has no annual fee and you will instantly be rewarded with a hundred dollar bonus upon opening an account.

If you shop regularly, you can save a lot if you use your cash back rewards card. Choose the best card that gives you the maximum money back for each purchase you make.

Master the Art of Saving with Rewards Credit Cards

Saving money should be one of your financial goals. Many people do not know this but you can use your rewards credit card to actually increase your savings. You need to maximize your hard earned points so that you can accumulate more rewards. Become a savvy card holder to positively influence your financial future. In order to achieve this, you need to perform the following:

Have the Most Appropriate Card

At the moment, there are probably thousands of credit cards available. Because of this, you can easily be lost in the sea of options laid out in front of you. The most important step that you need to take to save efficiently is to have the best card. Do not blame yourself if you find this quite difficult to accomplish. Credit card companies spend huge amounts of cash to advertise their products in hopes that they can effectively convince consumers to sign up for their card.

You will most likely find 1% cash back for every dollar you spend. Basically, that is just worth a cent as creditors change it to another name (i.e. miles, points, travel rewards, and so on). To have the best card, go for the one that gives you more than 1%. You might be surprised that there are cards that can let you earn up to 50% more than other regular rewards cards.

Don’t Fall for the “Special Offer” Trap

Some cards will let you earn up to 5% cash back for each purchase you make. There is a catch, however—you can enjoy this offer for a limited time only. Afterwards, the rate will drop to 1%. There may also be spending limits that will make it more difficult for you to receive the 5% cash back. Instead of going for a card that gives you a promo offer on rebates, why not opt for one that gives 1.5% cash back permanently?

Choose Cards with Cash Back Rewards

Points and miles are great if you are a huge spender or a frequent traveler. However, if you are an average person who uses his or her card for weekly purchases, go for a card that gives cash back. Most point systems have restrictions and requisites in redeeming the rewards. With cash back, the prize is pretty much straightforward.

Pay Your Balances in Full Each Month

You can only benefit from a rewards card if you do not carry a balance. Oftentimes, a rewards card comes with higher APR than those that do not have incentives programs. If you do not pay in full, the interest rate will instantly dominate the rewards that you can get.

Don’t Overspend Just to Gain Rewards

This is a universal blunder committed by card holders. The logic goes that if they spend more, they can earn more rewards. Chasing the cash returns or the points can eventually lead to financial trouble. Oftentimes, those who do this often encounter problems with paying their balance in full because their funds could not cover the charges they have made to the card.

Rewards credit cards, when used properly, can significantly help you save money. However, if you mismanage your account, this can lead to financial distress and, eventually, extreme debt.

Rewards Credit Cards for People with Poor Rating

Generally, if you have poor credit, you will not qualify for a rewards credit card. To be considered as part of the poor credit rating group, you should have a score of 549 or below. However, there are creditors that tag those who have a score of 600 to 649 as poor rating as well. This makes it even more difficult for you to get a card that comes with rewards.

Although quite rare, there are still a few cards that are willing to dole out rewards points, airline miles, or cash backs to people with poor credit. If you are on the market for a new credit card and you cannot boast about your current rating, brace yourself. You are going to be attacked with absurd and demanding offers if you have not been turned down.

Rewards Cards for People with Bad Rating – Are They Real?

If you find a great deal for your score at present and it seems too good to be true, it probably is. There are several misleading adverts on cards for people regardless of their credit scores. You should be able to tell whether they are scams and deceptive offers. Before you do anything, you should check your credit rating first. This way, you will only apply for the card that will accept you as you are. You not only get a new card but you also spare yourself from agonizing applications.

One of the most unbelievable offers for people with bad credit is no APR. Even if it is introductory, credit cards for those who have misbehaved on their credit usage will not be presented with favorable offers on APR. You may need to double check on the deal before you sign up for it. This is especially required if you only received the invitation through email. Several fraudsters are now using this kind of scheme to obtain important information such as your name, Social Security Number, and address.

Selecting the Best Rewards Card

Since you have poor rating, do not expect that you will get great proposals from a potential creditor. Some may only give you rewards if you show them that you can manage your account well. The first reward that you may get is a credit limit extension. Later on, you can qualify for a rewards card that can give your airfare discounts and free hotel stays. For now, you should focus on getting the most suitable card for your situation.

Decide whether you should go for a card with low interest rate or a card that has low fees. Those with low recurring fees, such as penalty and late charges may be beneficial for you if you carry a balance. Low APR or interest rate can provide you with many advantages if you often use your card for purchases or balance transfers. It is recommended, though, that you do not carry a balance to avoid paying the interest rate.

A good rule of thumb when it comes to selecting a card based on its APR is to go for one with an APR lower than 30%. The total fees that you should pay in your first year should not go over 25% of your current credit limit.

Instant Approval Credit Cards

No one wants to wait anymore these days, which is why instant approval credit cards are created. It can be disheartening to find that your application has been denied after waiting for several weeks. Thanks to this type of card, you can get the answer in just a few hours. There are even some that will tell you your application status in 60 seconds.

If you have been turned down by an issuer, you have an option to apply for another card from another creditor. Note that you should not send more than two applications at once. Otherwise, this can tremendously hurt your FICO score.

Such type of card requires that you sign up online. You will find a form on the creditor’s website which you need to fill out. The form is similar to the paper when you apply in person where your personal and financial information will be disclosed. After filing out the form, you can submit it and wait for a while to know the creditor’s response.

Choosing the Best Instant Approval Card

One of the first things that you should look out for is the credit rating requirement. Some instant approval credit cards only allow applicants that have at least good credit. You will only waste your time and effort if you submit an application for such a card if you have bad or limited credit history. Likewise, if you have excellent credit, it does not make sense to go for a card that is designed for people with poor rating.

Compare your options first before you sign up. You can find those that have low interest rates but they can come with low credit limit and high annual fees. The agreement or the card terms are plainly laid out to consumers online so that it will be much easier for you to decide. If you can, choose a card that comes with bonus packages or perks. You can choose from the different types of cards here.

Common Misconception

If you have bad credit rating, there are card options for you as well. However, instant approval credit cards do not imply guaranteed approval. Many applicants share the belief that instant approval means that they can be approved instantly – even if they have damaged credit. The truth is that no lender will be interested in making deals with you if you have poor rating. What you need to do before you sign up for a new card is to rectify your situation.

You will need your credit report as your guide. Order your free copy from any of the three major credit bureaus. Then, look at what your report tells you about your spending and payment habits. Put yourself in your potential lender’s shoes. If you were a creditor, would you lend yourself money based on what the report states? Boost your chances of getting approved by repaying your debt as soon as you can.

Instant approval credit cards offer immediate results. In general, they are best for people who wish to get a secured card. Since this a secured card does not require credit check, you can speed up the entire process by applying online.

Secret Perks Offered by Rewards Credit Cards

Miles, cash back, and points are often associated with rewards credit cards. However, this type of credit card has more valuable benefits that you may not know about. With these perks, you can save yourself from stress and get extra cash as well.

The trick to knowing and taking full advantage of the secret credit card perks is to familiarize yourself with the card agreement. You can also make a quick phone call to your creditor to discover the benefits your rewards card offers you.

Concierge Service

If you have platinum or a premium MasterCard and Visa card, this may be available for you. A team of professionally trained concierge will be willing to help you with your reservation needs. It will be much easier for a businessman with a very hectic schedule to secure a hotel room, a seat at sporting events, and gain assistance for party planning. Make sure you know about the additional charge you should pay for the concierge service. Typically, this will cost you $25 for each hour.

Roadside Help

If you are several miles away from home and your car suddenly stops working, your issuer will come to the rescue. What you need to do is call them and inform them of your situation. Someone or a team will be sent over as immediately as possible to help you with your dilemma. Towing, gas delivery, and car repairs may be charged individually against your credits.

Lost Luggage Protection

If a plane, train, ship, or bus damages or loses your luggage contents or the luggage itself, you are entitled for a reimbursement. This is not applied to all rewards credit cards, though. You should first note the restrictions that are imposed by your creditor. You can also purchase more coverage for your luggage from specific carriers.

Purchase Warranty Extension

The free repair period is a great gift to consumers. You can double this through the use of your rewards card. Typically, you may be given an extra year for the warranty period. This helps you save a lot when it comes to repair and other services from the manufacturer. It is important to remember that not all items are covered by this perk. For instance, cars and boats as well as other motorized automobiles are not eligible for a warranty extension. Their accessories may not also be recognized. Real estate properties and parts of real estate, such as ceiling fans and garage doors, may not be covered as well.

Collision Damage Waiver for Rented Vehicles

Many rewards credit cards offer insurance in case of auto impairment. This is particularly useful if you are driving a rental car. Collision damage and other types of car rental accidents may be covered by your insurance. You can save a hefty sum with the insurance since the rewards credit card can cover for a deductible portion of your own auto insurance policy. If you do not have auto insurance, your card can cover both theft and damage.

There may be a number of limitations on the collision damage waiver. Guarantee that you read and understand the fine print especially the section that explains the auto rental insurance.

Understanding Debt to Income Ratio

Debt to income ratio is one of the most significant indicators that define your financial health. Simply put, this denotes how much you can afford. This tells you the percentage that goes to your monthly debts or payments against your monthly income. Financial experts agree that the debt to income ratio should be below 36%, ideally at 30%.

Calculating Debt to Income Ratio

There is an easy way to figure out your debt to income ratio. What you need to do is to take your total income for one month and multiply it by 36%. For instance, your monthly gross income is $2,500. You will have to multiply this amount by .36 to get the debt to income ratio. Using the given equation, $2,500 x .36 is equal to $900. What this means is that your debt repayments should not go beyond $900 every month. As you can see, the amount that you get or the ratio will serve as your guide in determining your comfortable debt repayment capacity.

Two Types of Debt to Income Ratio

Knowing your debt to income ratio allows you to define how much of your income should go to your PITIA. PITIA stands for principal, insurance, taxes, interest rates, and (homeowner) association fees. Debt to income ratio generally comes in two different forms:

•  Front End – This denotes that your debt to income (DTI) ratio is based on your first mortgage payment. President Obama has set a foreclosure prevention program that states that the front end debt to income ratio should only be 31%.
• Back End – All your other month debt payments are included in the back end DTI ratio. These include your home equity credit line or your second mortgage, your credit card payments, and other loan payments.

Back end debt to income ratio is a huge determinant of your monthly repayment capability. To get your percentage in this category, you will need to add up all your monthly debt statements. Then you will need to divide the sum by your monthly gross income. If your debt to income ratio is too high, there are a few things that you can do to improve it. Basically, you have two options:

• You can either lower your expenses, or
• You can increase your monthly revenues.

Having a much better salary can be hard. However, this does not mean that this is impossible to achieve. There are several ways to obtain this goal, including taking a part time job and asking for a raise if you qualify for it.

Why You Should Improve Your DTI

Lenders take a look at your debt to income ratio. Therefore, if you are planning to get a loan, a credit card, or other credit line, this will be considered in determining whether you are approved or not. If you have high DTI, this means that you are overburdened with loans or debt. This can also be a signal of debt evasion. Although your debt to income ratio is not the only thing that lenders examine for your application, this is a crucial factor in loan approval.

Making Your Credit Card Application Work

Getting denied for a new credit card can be discouraging. Certainly, you would want to get approved the next time you send out another application. Before you apply for another card, bear in mind that too many applications can hurt your score. Rejections can be caused by a number of reasons and one of them is your credit rating. If you really want to get your credit card application approved, here are some easy things that you can do:

Examine Your Rejection Letter

Once you get the rejection letter, do not throw it away. Instead, read it and understand the reasons why you have been denied. You can use the letter to your advantage by not making the same mistakes that you did before. Some of the reasons why you may have been rejected include:

• You did not completely fill out the application form. 
• There are conflicting details in your application form.
• Your credit report contains errors (i.e. common name and unauthorized opened accounts).
• Work history or current income does not satisfy the requirements of the credit card.
• Your credit rating is not favorable.
• You have financial problems at the moment.

Improve on Your Credit

If you wish to reapply for the same credit card, you may have to wait a few months before you can do that again. It is recommended to wait at least six months to make it seem that you are not “too desperate” for credit. There are several things that you can do to improve your chances of getting a card. Some of them are listed below:

• Start paying your bills on time. If you can, do this at an earlier time of the month. This way, you will never miss a repayment schedule ever again.
• Don’t carry balances as much as possible. In these tough economic times, it is understandable that you may find it difficult to pay off your loans and debts. However, you can resolve this issue by means of saving enough money to make more than the minimum required monthly payments. If you do not carry balances, you save yourself money since you do not have to pay the interest fees. 
• Don’t close your other credit cards. You may have already considered closing other accounts that you have. Perhaps you can no longer pay the annual fees or other charges so you might as well say goodbye to them. This is actually a wrong practice because this can hurt your score. Poor rating will cause the creditors to deny your application. Have a good strategy that will help you keep your score untouched even if you close some of your accounts.

If this is the first time that you will be getting a credit card, many issuers might deny your application. This is the reality that you have to face. It is significant that you only choose those that are suitable for your credit history so you will have higher chances of approval. Good examples are credit cards for college students and secured credit cards. Both can be obtained by people who are starting to build credit history. 

Disadvantages of Having Low Credit Rating

Your credit rating is highly important because it determines your overall credit worthiness. Depending on your score, you can either get that loan you have so desired—be it a house loan or car loan—or get denied by lenders. As such, it is a must that you take good care of it and keep it a high level as much as possible. Low credit rating can have an adverse effect on you and you will definitely miss a lot of luxuries in life if this is your case. Below are some of the disadvantages of having low credit rating:

• Creditors see you as a risk. The lower your score is, the higher you will be considered a risk. When creditors look at your credit report and they see a low score, they may deny your application for loans or credit cards. If they do, they will most likely give you high interest rates, which will not be of help to you. 
• It will be extremely hard for you to get your loan or credit card applications approved. It is easy for those with excellent credit to find and get a new credit card. Most companies are willing to dole out new accounts to people with reliable payment history. This is not the case for people with low credit scores. If you have a low score, lenders may not be willing to take a risk on you. As such, they will likely deny your application.
• A lot of landlords will turn their backs from you. Some landlords may ask to see your credit history to check if you could be trusted to pay your lease on time. As such, with a low rating, you may find it hard to find landlords that will take you in. Therefore, finding an apartment will definitely be a big challenge for you unless you have good credit history. Fortunately, there are still some landlords that may not ask about your credit standing, but it may be hard to find them nowadays.  
• Your prospective employer may not hire you. Even if you have a fantastic resume, some employers may consider your credit history before they hire you. If they find that your score is less than favorable, they may view you as a risk as well. There are employers that base their decisions on how an individual handles his credit. For them, if you can’t manage your credit, how much more your job? 
• You may be compelled to place a security deposit on utilities. Many electric and phone companies are now taking credit history into account. People with bad credit rating may be obliged to pay a deposit so that they can use the service. This is applicable even if you pay all your utility bills on time. 
• Cell phone companies will turn you down. Cell phone companies use credit history to determine whether they can rely on you to make payments. If you have bad rating, you may have to use a prepaid phone, look for another company that may consider your situation, or live without a cell phone. 
• You will receive nonstop calls from debt collectors. People with bad credit may have past due bills. If you do, there is a huge chance that debt collectors will call your home and office phones day and night to get the money you owe.

The good news here is that these difficulties can be avoided. The key is to keep your rating high. Don’t ignore your bills and make it a point to pay them on time to never incur interest. Your good credit behavior will pay off in the long run. If it can't be helped and you are already finding it hard to pay all your bills, you might want to consider getting some help, like getting a secured balance transfer card, which you can use to slowly establish a good credit score. 

Why You Should Keep Tab of Your Credit Report

Planning to buy a new house or get that much desired platinum credit card? For most people, these can be easily achieved through loans and by sending applications to platinum card issuers. However, contrary to what some people may believe, buying a new house and getting that dream credit card may not be that simple at all for average Joes. It needs a lot of money, luck, and discipline. Especially with the plunging economy, it can be very hard to get that dream house or even that dream card. But “hard” doesn’t mean “impossible”, right? Therefore, no matter how hard it may be, you may still have a chance to achieve what you desire.

Do you know that keeping tab of your credit report can help you achieve these dreams? Yes, you get it right. I do mean your credit report. What does it have to do with getting a new house or a new credit line?—you may ask. Well, your credit report plays a big part because it is what creditors use to assess your credit worthiness. When you have good credit, your creditors may take this as a sign that you have good money management skills, prompting them to provide you with higher chances of getting approved for house loans or credit applications. It is for these reasons why you should review your credit report regularly.

Understanding Credit Report

Your credit report is similar to your monthly credit statement, except that it contains your personal credit history instead of your bills. There are credit bureaus that your issuer reports to. They compile information about your credit behavior according to the data they receive from your creditor and from public records as well. 

Your credit report has four sections, each describing your personal details, your present and previous credit accounts, your tax liens and other public information, and inquiries made by companies to access your report.

Why Review Your Credit Report

This type of document is created by humans. This means that it may not be free from mistakes. As a matter of fact, several credit cardholders have complained about errors in their reports over the past few years. Some protest that their records are not 100% accurate while others complain about omitted information. You have every right to contest erroneous data on your report. Here are some reasons why you should review your credit report on a regular basis:

• Identity Theft Prevention – Most, if not all cardholders, are susceptible to identity theft. If you make it a habit to check your credit report, you can easily spot discrepancies in your account. You can spot whether there are new accounts added to your name or whether there are unauthorized transactions on your credit cards. This way, you can prevent yourself from falling victim to identity theft.
• Monitor Spending Habits – Not everyone has impeccable reputation when it comes to purchases and budgeting. If you are always running out of cash, you can use your credit report to examine your monthly purchases. This can help you keep tab of your monthly budget and even helps keep track of all your current debts. 
• Error Identification – Machines do not fill out your credit report; humans do. There are times when it might contain mistakes on a number, character, or any other element. A flawed transcript can make a huge transformation on your credit score, affecting your present and future in terms of finances.
• Complete Information – Consumers have at least three credit reports. These come from the three main credit agencies, namely TransUnion, Equifax, and Experian. If you find missing information even on just one of these credit bureaus, you should recount it right away. This way, your report will be updated immediately and will have complete data. Consequently, your credit rating will be taken care off as well.

Discovering mistakes in your credit report can be disheartening, but it can greatly make a huge difference if you make it a point to spot them as soon as possible. You are encouraged to question every piece of information you find inaccurate to rectify the circumstance. Be ready to supply documents that they may ask when contesting the items in the report, such as canceled checks and credit card statements. These documents may be needed to rectify the report. 

Tips for Choosing the Right Credit Card for Your College Student

Choosing the right credit card for your college student is both challenging and exciting. As a parent, you need to assist your child in understanding the fundamentals of credit accounts. Before a young adult enters the campus, plastic offers may already be pouring in. Your guidance is required so that your teen can select his or her first card wisely.

The ultimate goal for choosing the perfect credit card for your college student is to establish positive credit history as early as possible. Here are the important things to examine so that you can achieve that goal:

Annual Percentage Rate

Also known as the APR, this is the amount of interest where the card holder will be charged every month based on the remaining balance of the account. Credit cards today have an average APR of 14.9%. Since your child is practically a novice when it comes to this, expect that the APR is higher than the mentioned percentage.

Help your young adult understand that the APR is the easiest way to accumulate debt. If they carry a balance of $100 for one month, he or she will have to pay an interest of $14.90 on top of the balance. It is smart to find a low APR credit card for college students.

Credit Limit

This denotes the maximum amount of credit that a student can borrow. First-time card holders are usually given a low limit to begin with—usually around $300 to $500. While this is quite a small amount, it will be easier for him or her to defy the appeal of spending thousands of dollars.

Rewards

A credit card for college students that offers rewards gives an additional advantage. Some cards give back cash after spending enough credits. Others can be redeemed for gift certificates and merchandise. Ensure though that you discuss with your teen about the dangers of spending more just to get the rewards. Teach him or her to be strategic in using the card to avoid debt.

Fees

As much as possible, go for a college card that does not have an annual fee. Most cards, however, require late payment and over-the-limit fees. It is significant that your child understands the fee structure thoroughly.

Credit Card Options

Although the Credit Card Act of 2009 imposed a few restrictions on student cards, there are still a number of options for your teen including:

• Co-signed Credit Cards – Students that are below 21 years old can have a co-signer to get a credit card. Note that when the student cannot pay, the co-signer will be responsible for all the bills.
• Secured Credit Card – A deposit is required to start using the account. This is a good choice for beginners and is usually easier to obtain than standard cards. Plus, this can be used to build credit history since all activities will be reported to credit agencies.

The bottom line in choosing the right credit card for your college student is to be very cautious. Parents’ supervision is required so that students will understand that this positive tool can turn into a vicious financial instrument when used improperly.

Steps to Creating a Debt Reduction Plan

A debt reduction plan is usually generated by debt settlement firms. They work with credit card issuers and collection agencies so that they can help reduce your debt balance. This does not mean that you cannot do this by yourself, however. As a matter of fact, you can create your own debt reduction plan if you are not ready to get outside help from professionals.

Here are simple steps that you can follow to trim down your financial liabilities and eventually get rid of debt:

Step 1

Before you begin creating your debt reduction program, make sure that your bills, your bank statements, your paycheck records, and your budget plan are with you.

Step 2

Know how much you really owe. Do not rely on your memory or even make an estimate about your debt. Calculate how much you need to pay each month. You also have to examine the interest, penalties, and other fees that you are currently facing.

Step 3

If you do not have a budget yet, this is the time that you create one. Your financial plan should include your household budget which covers your income and all outgoing cash. You can only reduce debt if you know how much money you have in your wallet or savings account. To do this, you need to subtract all your expenses from your remaining cash. The higher the number, the better your situation is.

Step 4

Find out the magnitude of your problem. Taking into account the number you got in step 3, you will know whether you can easily get out of your debt or not. If you have enough money, it is time to repay your bills.

Step 5

Look at your bills and determine which debt has the highest interest rate. This is the credit card or the loan that you will need to pay first. This is important since the longer you prolong the repayment, the higher the debt becomes due to the interest rate.

In some cases particularly when you do not have enough money for the time being, choose the account that has the lowest balance. Some people need motivation to keep going with their debt repayment. If you pay off the account with the lowest balance, you will quickly see that you are progressing towards your goal.

Step 6

Quit spending too much. You are in financial crisis and it makes no sense to keep on spending more cash. Aside from that, you may want to take a look into your items. If there are products that you no longer use, you can put them up for sale online or at a yard sale. You can also look for coupons and discount vouchers. These small things can actually help you a lot especially on your everyday purchases.

Step 7

Consider debt consolidation procedures. There are some ways that you can perform yourself without the help of experts. These include applying for a new credit card that offers balance transfers. Make sure the balance transfer rate is zero percent and has a long introductory period. This will be useful if you have many debts to cover. Bear in mind that the purpose of the card is to reduce the interest rates of your previous accounts. Therefore, it is not advised that you use it for purchases.

Types of Credit Cards

Why are there different types of credit cards available for consumers? The answer to this is simple: financial requirements differ from one person to another and creditors understand this fact. Thus, they created different credit card products to meet the needs of each consumer. This is the reason why there is now a wide assortment of credit card products available. Consumers enjoy the great number of options, but selection should be based upon the pros and cons along with the qualities of the credit card type.

If you want to get hold of the right credit card, take a look at the choices presented to you:

Standard Cards

This type of credit card is the most common. It allows you to possess a revolving balance, which can reach up to a particular credit limit. You can use this card to make purchases and each time you do so, credits are subtracted from your available balance. They will be accessible again once you make your payment. Whenever you don’t pay your balances, you will mostly be charged a late fee at the end of each month. There is also a minimum monthly payment which is required to avoid penalty fees.

Instant Approval Credit Cards

The principle of this kind of credit card is to have the consumers fill out the form and learn the decision within minutes. If you apply at banks, you may have to wait a few weeks before you will know whether you have been approved or not. With instant approval credit cards, the waiting process is a lot shorter, especially if you have good or excellent credit. This is quite popular nowadays since you can apply online and over the phone.

Premium Credit Cards

Unlike standard cards, which have no frills, premium cards have benefits and incentives. They often come in Gold and Platinum types where you can get cash back, miles or travel points, upgrades, and many other rewards. Note that premium credit cards charge higher fees plus there are credit score and minimum income requirements.

Balance Transfer Credit Cards

Not everyone has excellent credit. In fact, there are more people that have fair to poor credit score. Most that are graded as such suffer from credit card debt. One way to relieve themselves out of that situation is to use a balance transfer card. This offers low interest for a given period of time so you can consolidate your debt. If you have a credit card with a balance, transferring the balance to this type of card may be a good idea. Since this has lower interest, it is easier to repay the bills.

Charge Credit Cards

With these credit cards, you don’t have to worry about spending limits. However, you should be able to pay off your balances in full each month. Typically, there is no minimum payment and no finance charge. Depending upon the agreement, delayed payments can result to charge restrictions, fees, or even card cancellation.

Secured Cards

These are for those who do not have credit history yet or are planning to reestablish their credit. A secured card requires security deposit in which the credit limit will be based upon. In some cases, companies may grant limits that are a bit higher than the deposit. Nevertheless, you still have to pay for the card monthly.

Learn the difference between a secured card and a non-secured card here.

With the different types of credit cards available in the market these days, you may find it a little hard to choose the right one for you. The key is to choose based on your preferences, lifestyle, your needs, and your financial capacity, and your present financial situation.