Choose a program that fits your lifestyle.  Should you get a cash back credit card, an airline miles reward card, or a gas reward credit card?  The right answer depends on your spending habits and lifestyle.  An airline miles card or a frequent flyer credit card may not be suited for everyone since these credit cards are especially designed for frequent travelers.  In the same way, gas reward cards are especially created for drivers or car owners.

A credit card with cash back rewards is the safest choice for many people because it offers a simple reward system.  However, the specific rules vary from one issuer to another which is why it’s important to evaluate your options and compare.  The bottom line is, you should only get a reward credit card that matches your individual needs.

Choose a card with minimal costs.  Some credit cards may offer attractive rewards but you might discover that it carries too many fees as well.  If you have to spend a large sum of money to maintain a reward credit card, is it really worth keeping?  You should carefully ponder if the fees offset the value of rewards you can earn.

For instance, annual fees can range anywhere from $50 to as high as $100, especially with travel reward credit cards.  If you must pay this much each year to keep your account active, you need to make sure that the reward program is truly an amazing one or else, you might end up wasting money on fees and getting very little in return.

Watch out for the interest rate.  Generally, reward credit cards carry higher rates compared with non-reward cards. Many issuers impose steep APR and penalty charges to ensure that cardholders will be paying close attention to their duties.

It’s best to choose a reward credit card with a reasonable interest rate just in case you might need to leave a balance in your account.  However, a much better strategy is avoid APR charges altogether by paying off your full balance each month.  Skip penalty fees by submitting your payments on time and staying within your credit limit.

You might also come across credit cards with rewards that offer a low introductory rate or 0% introductory APR.  While you can take advantage of such offers, be careful that you do not incur a very large balance that will be difficult for you to pay down.

Promotional rates usually last for 6 months before the regular rate takes over.  Before signing up, check the fine print and see to it the regular rate will be reasonable when the introductory period ends.

Review the prerequisites.  Some reward credit cards are exclusively offered for customers with good credit while others strictly require excellent rating.  Before submitting an application, see to it that you meet the issuer’s requirements to avoid rejection.

Indeed, reward credit cards offer consumers the opportunity to get more from their spending.  However, how you benefit from a reward credit card largely depends on how well you manage your account.  On this post, we discuss some useful tips on how you can use your credit card with rewards to your benefit:

Pay in full monthly.   Don’t forget that reward credit cards typically carry higher APR than their non-reward counterparts.  Thus, monthly charges should be paid in full as this is the only way you can avoid interest rate fees.  Do you have any doubts as to whether you can pay off your bill in full by the month’s end?  If yes, better use your cash than charge it to your reward.

Seize the chance to earn more.  Most reward credit cards offer 1% rebate for every dollar spent but sometimes you can earn “up to” 5% per dollar on certain types of transactions.  When you see the phrase “up to”, keep in mind that you can only earn the maximum number of points on ‘qualifying purchases’.   For instance, you can earn 5% if you used the card to purchase from an affiliate shop or from selected categories.  Take advantage of the opportunity to earn more rewards by understanding the rules of the reward program.

Watch out for credit cards with high annual fees.  See to it that the value of rewards you earn each year far exceeds the annual costs.  If you have to pay anywhere from $50 to $100 a year to keep your credit card active, is the card still worth keeping?   Better yet, look for a reward credit card with a reasonable interest rate and does not carry an annual fee at all.

Know your limits.  All issuers of reward credit cards impose limits and restrictions.  For example, there might be a cap on the value of rewards you can earn in a month or a year.  Once you reach the maximum number of points, you will stop earning points even if you keep spending with your credit card.

What about the rules in redeeming rewards?  If you own an airline miles reward credit card, can you exchange your points for other types of rewards in case you cannot go on a travel?  The best type of travel reward credit card should offer flexible redemption options.

Some issuers of reward credit cards penalize cardholders by forfeiting their points.  If you miss your due date of payment, you may lose all the points you collected within that billing period.  Sometimes, the points will expire if you fail to exchange them within a specified period.  Clearly, it’s very important to be aware of your reward credit card issuer’s terms and conditions, particularly when it comes to your limitations as card holder.

There are also credit cards that offer special programs such as hotel reward credit cards and credit cards that donate rewards to charitable organizations.  If you are a home owner, you may also look for a credit card that offers home improvement rewards.

What are credit cards with home improvement rewards?  As the name suggests, these reward cards are especially created to attract home owners.  These cards give a reward each time you use your credit card for repairs, renovation, upgrades, and other expenses associated with the maintenance of your home.  How can this type of reward credit card help you?

If you frequently spend on home repairs and maintenance, charging these expenses to your reward credit card can help you earn points which can be exchanged for cash or mortgage payment. Yes, a home improvement reward credit card can actually be a tool to help you pay down your mortgage at a sooner time.

For example, the Citi Home Rebate Platinum Select Mastercard allows you to use your rebates to pay down your mortgage.  Upon signing up, you can enjoy 6% rebated on utility services for the first six months.  Utility services include cable, satellite, internet, telephone, and pay TV bills.  After the introductory period, the cardholders can earn 1% rebate for every dollar spent on general purchases.  There is no limit to the value of reward you can earn and the points never expire.

The Discover More Card is a type of cash back reward credit card that offers its holders 5% cash back on selected categories including home.  This means, you can earn more points if you will use your card for purchases from home improvement shops and merchants.

The Chase Home Improvement Rewards Card offers twelve months of 0% introductory rate. Cardholders can earn 1 point per dollar on general purchases, and 3 points per dollar on home improvement purchases home improvement stores. Points do not expire but there is a limit of 30,000 home improvement points per year.

Do you plan to add a room in your house, redecorate your living room or to create an extension? Are you planning to buy a new household appliance? If yes, this may be the perfect time for you to consider acquiring a reward credit card with home improvement rewards.

Before signing up, check out the interest rate and the fees associated with the card.  If the home improvement reward credit card offers an introductory rate, make sure that the regular APR will still be reasonable when the introductory period ends.  Also, check out the home improvement stores affiliated with the credit card and make sure that these are shops that you purchase from.

Reward Credit Cards – What to Look For

Great reward system.  The ideal reward credit card should offer an attractive reward program.  As a card holder, you should be given the chance to get more out of your spending.  Of course, the right reward program depends on your personal spending style and needs.  So when comparing credit cards with rewards, don’t forget to consider if the credit card complements your lifestyle.

A low rate.  Reward credit cards usually carry higher interest rates than non-reward cards but this does not mean you should not compare at all.  The rates vary depending on the type of reward offered and the issuer.  By doing comparison, you will be able to find a credit card with a reasonable APR.  You might even come across reward cards that offer 0% APR or a low introductory rate.  You can take advantage of this offer but first, make sure that the regular interest rate will still be reasonable once the introductory period ends.

Minimal fees.  If you will need to spend a lot of fees to keep your card active, it will defeat your purpose of getting a reward credit card.  Choose a reward credit card that has a reasonable rate and a minimal set of fees as well.

Reward Credit Cards – What to Avoid

Low reward caps.  Some reward credit cards impose a limit on the number of points you can earn per month or annually.  For example, you may only be limited to earn 300 points per month, regardless of your spending.  This means, you stop earning points once you have reached the cap even if you continue to use your reward credit card for payment.

Unreasonable restrictions. Can you carry over unredeemed points or will these points be wasted?  It’s best to choose a reward credit card that allows you to carry over your points until you earn enough to claim a reward.  This way, you can be sure that none of your points will be wasted.

Complicated reward program.  Some reward credit cards have a very complex reward system making it difficult for the card holder to get points or redeem rewards.  For instance, you may only be able to earn points on “qualifying purchases” or selected transactions.  You might also get disqualified from earning points if you commit a violation.

At first glance, a reward program might seem attractive but upon closer look; you will be able to see whether or not the program will work for you.  Avoid credit cards that offer reward points that are subject to too many conditions. If this will be your first time to use a reward credit card, it’s best to choose one that has a simple, easy-to-follow reward system.

Read the fine print.  The advertisements can be enticing but never sign up for a credit card without scrutinizing the Terms and Conditions.  The interest rate, fees, and the rules vary from one credit card issuer to another.  Some reward cards may offer an attractive reward program but the APR can prove to be stiff.  If you will not take the time to read the fine print, you could be stuck with a reward credit card that carries excessive fees.

Typically, credit cards with rewards carry higher interest rates than credit cards without rewards.  This is why you want to make sure that the reward credit card you choose not only offers a great program but reasonable rates and fees as well.

Understand the rules of the reward program.  How can you earn points from your credit card purchases?  It is very important to be clear about the reward system and make sure that it is suited to your spending style.  Some reward credit cards which are sponsored by certain merchants or companies may offer big rewards but you must use your card to buy the merchant’s products or buy from selected shops in order to earn points.  If you will use your credit card on general purchases, you may not be able to earn points at all.

What about restrictions and limits?  Some reward credit cards impose a cap on the value of rewards you can earn per month or per year.  Once you have reached the limit, you will stop earning points even as you continue to use your reward credit card for payment.

You should also clearly understand the redemption options.  There are travel reward credit cards that impose blackout dates so you will not be able to claim your free flight during these dates.  Will your points expire if you fail to redeem them within the specified period?  Can you carry over unused points? Can you exchange your points for different types of rewards?

Choose reward credit cards with the right rewards.  Some reward credit cards are especially designed for frequent travelers while others offer gas rebates and cash back.  It’s important to choose a credit card that complements your lifestyle to make sure that you can get the most out of the reward program.

Some people take out two credit cards with different rewards such as travel and cash back. However, if this will be your first time to get one, it’s a good idea to stick with just one reward credit card.  This way, you can plan your strategy and focus on just one program.

There are different types of reward programs available to business credit cards. The most popular ones are travel rewards, gas rewards and cash back.  If you are an entrepreneur, you want to look for a business reward credit card that complements the needs of your company.

What makes a business reward credit card different from ordinary credit cards with rewards?  Consider the following aspects:

Credit line.  Generally, business owners are confronted with bigger expenses.  If you’re going to use your personal credit card to finance your company, your credit line may not be sufficient.  On the other hand, business credit cards offer a higher limit which makes them an ideal choice for business financing.

Quick approval.  Will this be your first time to apply for a business credit card?  If yes, you’ll glad to know that it is easy to acquire a business reward credit card.  However, some issuers may require good personal credit, especially if you own a start-up business.

Account summary reports.  Issuers of business credit cards offer quarterly or yearly summary reports of your account so you can review all your previous transactions.  These reports can be downloaded from the internet and can be integrated with a business accounting software such as QuickBooks, making it a valuable reference for bookkeeping and accounting.  A detailed and accurate report is indispensable when preparing your business tax files.

Credit reporting.  To establish and build business credit, your account activities must be reported to a major business credit bureau like Dun & Bradstreet. Take note that a business credit bureau is different from a consumer credit reporting agency.  Therefore, it is important to choose a business reward credit card that reports to a business credit bureau.  By using your business credit card regularly for payment and by paying off your charges on time, you will be able to build a solid business credit history as well.

Bigger rewards. Business credit cardholders typically spend more than personal cardholders.  This is why issuers usually offer bigger rewards to business credit cardholders as they usually use their cards to pay for a large bulk of purchase.

If your business requires you to go on frequent trips to purchase supplies or meet clients, you can certainly save more from your travel expenses if you will use a travel reward credit card for business.  Do you use your own delivery trucks to run a company?  If yes, consider a gas reward business credit card to cut down your transportation costs and earn incentives as well.

A business credit card with cash back rewards is also a great choice especially if you plan to use your credit card for purchasing stocks on a regular basis.  You can even choose a business reward card sponsored by your preferred supplier to get even more points from your spending.

Don’t carry a balance.  Since reward credit cards usually carry higher APRs than regular cards, the best way you can benefit is to avoid the interest rate charges as much as you can. How is this possible?  All you need to do is pay your full balance on time each month and you should be worry free about APRs.

Choose a card that fits your needs. Individuals have different lifestyles so it’s important to consider your personal spending style and choose a reward credit card that fits well with it.  What types of purchases do you plan to use the credit card for?  How often do you plan to use it?  Which stores do you frequently purchase from?

These are questions that can help you determine what your personal spending style is.  Afterwards, look for a reward program that complements your lifestyle.  The ideal reward credit card should not force you to go out of your way or spend more than what you can afford just to earn rewards.

A simple program is best.  Some reward credit cards have very complicated reward systems which can be difficult to understand and remember.  Unless you have experience in handling reward credit cards, it’s best to stick with a simple program.  Will this be your first time to use a reward program?  If yes, avoid reward credit cards with too many rules and conditions.

Plan your spending.  Although you want to use your reward credit card as often as you can, you should avoid unplanned purchases.  Don’t forget rule number one which is to avoid carrying a balance.  If you’re not sure whether you can pay off the full amount by your due date, forget the purchase. Do not put yourself at risk of bad debt just to earn rewards.

Buy from affiliates.  Find out which shops and establishments are affiliated with your reward credit card.  Patronizing affiliate merchants will enable you to earn bigger points from your spending.

Charge utility bills to your reward card. Here is a reward credit card strategy to help you rack up points without buying anything:  use your reward credit card to pay monthly utility bills such as electricity, cable, internet, etc. First, check the fine print and make sure that you will be able to get points for these transactions.  Next, pay off your credit card balance immediately to avoid interest rate charges.

Avoid violations.  Some reward credit card issuers penalize their cardholders by imposing fees but you might also lose your points if you’re not careful.  For example, if you miss your due date of payment, you could lose all the points you collected within that billing cycle aside from incurring the late fee. Familiarize yourself with your credit card’s rules to avoid committing a violation.

In order to enjoy the best of what your reward credit card has to offer, start with making the right choice. Determining whether a reward credit card is right for you or not would depend on your lifestyle and needs.

Making the right decision is all about being aware of your choices. Here are some valuable tips on choosing the reward credit card that’s right for you:

Know the type of reward you want. Reward credit cards are categorized based on the rewards they offer.

Frequent Flyer Miles Reward Cards are best for frequent travelers to get more discounts from their ticket purchases and earn free trips. Gas Reward Cards are for vehicle owners who usually drive out of town or long distances.

On the other hand, Cash Back Reward Cards and Rebate Cards are the most common choice since these cards give more flexibility in both collecting and redeeming rewards. In any case, consider carefully which type of reward you prefer and if it is suitable to your spending habits.

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Pay attention to the APR. Most reward credit cards impose high interest rates on their holders. Still, if you do your research well, you can find ones that has a 0% APR introductory offer. Take advantage of this limited time period and start collecting your points early on.

Take note that the zero interest may apply only for purchases or balance transfers. If you’re lucky, the 0% APR may apply for both. If that is the case, make the most out of your reward card by transferring over your high-rate balances from your other credit cards.

Be warned though, that introductory rate will not last. Some cards have only 6-month introductory period while others extend up to 12 months or longer. Choose one that will give you a reasonable rate even after the introductory period is over.

Check your credit report. You don’t want to go shopping around for reward credit cards only to be disappointed. Remember that reward credit cards usually require excellent credit rating from their applicants. Have you checked on your credit report yet?

If you have a low credit score, work on improving that score first before applying for a reward credit card. The best deals are often extended only for those who enjoy outstanding credit scores.

Study the terms carefully. If you have already narrowed down your choices of reward credit cards, take time in studying the terms and conditions that each card offers. You don’t want to get stuck with reward credit card that doesn’t deliver your expectations.

Check if there are blackout dates or limits on earning your rewards. Check the restrictions on earning or redeeming points. What about the fees? Will it cost you a lot just to maintain your membership with the reward program? What are the exact procedures on collecting your reward points? Make sure that each statement in the contract is clear to you before signing up and sending your application.

]]> http://www.creditcreators.com/on-choosing-the-reward-credit-card-for-you/feed/ 0 http://www.creditcreators.com/what-must-be-avoided-from-reward-credit-cards/ http://www.creditcreators.com/what-must-be-avoided-from-reward-credit-cards/#comments Mon, 01 Sep 2008 01:19:04 +0000 Allison May http://www.creditcreators.com/?p=72 When it comes to reward credit cards, choices abound and each one may claim to the best for you. Nevertheless, only you can decide whether a particular credit card will match your needs or not.

Remember that advertisements often present the Best of what the credit card has to offer. The weakest points about it could be hidden from your view.

When considering your options, don’t forget to steer clear from the worst features that may come with a credit card. Here are some things to watch out for:

High Annual Fees. Reward credit cards often charge a yearly fee from its holders. Of course, it’s best to look for a credit card with no annual fees. But if your preferred reward credit card does carry an annual fee, make sure it’s reasonable. Or else you could end up paying more on annual fees alone than what you get from your rewards.

High Interest Rates. The interest rates on reward credit cards are often higher than non-reward cards but it doesn’t mean you should settle for excessive rates. Watch out for reward cards with low variable interest rates. Your rate may start out low but it can balloon unexpectedly as the Prime Rate in the market changes.

It’s best to look for a reasonable fixed-rate reward credit card so you’ll know exactly what you’re getting into. Remember, you can avoid paying the interest rates by paying your entire balance on time.

Skip the minimum due payments. Every credit card holder should aim to settle their monthly balances in full whether they own a reward credit card or just a regular credit card.

Blackout Dates. Blackout dates are bane for reward credit cards. Why? You could lose your hard-earned points just because you failed to collect the minimum required points on time. To avoid such possibilities, go for a reward credit card that doesn’t impose blackout dates or time limits.

Maximum rewards limit. You’ll also want to stay away from reward credit cards that limit your chances of earning. For instance, some reward cards may disqualify you from its reward program after redeeming your maximum reward value- for instance, when you reached your $1,000 reward.

This means, upon reaching your 1,000 dollar reward points, your privilege for getting rewards also ends. The best reward credit card should give you the chance to unlimited rewards from your purchases or card usage.

Vague Clauses. Are the rules of earning and redeeming your reward points clearly explained by your reward credit card? Watch out! Some cards may trick you into believing you can earn huge points when in fact, it is only the maximum possible points you can earn.

If you take a closer look, you may be surprised to find that it is actually very difficult to earn the maximum points and you’ll have to settle for a much lower reward. To avoid disappointments, always check the clarity of your credit card’s terms and conditions.

]]> http://www.creditcreators.com/what-must-be-avoided-from-reward-credit-cards/feed/ 0 http://www.creditcreators.com/building-corporate-credit-for-your-business/ http://www.creditcreators.com/building-corporate-credit-for-your-business/#comments Fri, 22 Aug 2008 04:03:01 +0000 Allison May http://www.creditcreators.com/building-corporate-credit-for-your-business/ If you own a business, then you’ll be interested to learn how to build a corporate credit. What are the steps you need to take to build a corporate credit? Why is it important to establish your company’s credit? Let’s discuss these two questions more closely.

What is corporate credit?

Corporate credit is used to define the credit history of a business, a company or a corporation. As the term implies, a sole proprietorship cannot apply for a corporate credit since it would too easy for anyone to declare that he/she is operating a business. To qualify for a corporate credit, a business needs to prove that it is a partnership, a Limited Liability Corporation (LLC) or a corporation.

Why is it important to have corporate credit?

As an individual, no doubt you are aware about the status of your personal credit history. Your credit history shows your track record in dealing with different creditors.

Obviously, an excellent credit rating would make you an impressive candidate for all lenders. On the other hand, a poor credit score would make you a high-risk borrower in the eyes of lenders. A poor credit would make it more difficult for you to get approved for new accounts or demand lower rates.

The same principles apply to businesses. By establishing a separate credit history for your company, you are building a solid foundation for your business. Thus, any time you need to get a business loan or a business credit card, it would be easier for you to get approved and choose lenders with the best deals.

Furthermore, having corporate credit protects your personal credit history from debt or damages in case the business doesn’t go as expected. Without corporate credit, you- the business owner- would be solely liable for all debts incurred in your business account. Failing to keep up with your payments would also affect your personal credit score. For this reason, entrepreneurs are advised to establish a separate business and personal credit history as early as possible.

How do you establish corporate credit?

Before applying for corporate credit, your business must have a valid physical address and a business telephone line. Secure all business licensing and permit requirements in your State or local region. Next, register your business with Dun & Bradstreet – a leading credit tracking agency for businesses.

See to it that all lenders and suppliers you deal with report your payments to the business credit bureaus as this is the only way to build up your corporate credit. You can also apply for a business credit card to build up your credit history more quickly. Again, make sure that your business credit card issuer regularly reports to the business credit bureaus.

Take note that your personal credit history would be checked when you apply for a business credit card. However, after a year or two, when you have built a separate credit history for your company, your corporate credit would be used for all your business dealings with lenders.

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