The idiot s guide to selecting a credit card part ii

There are literally hundreds - possibly thousands - of credit card offers available to consumers these days. And these days there are more things to compare than just interest rates and fees. Now, credit card holders can be rewarded for their using credit cards. Or, if you’re a business owner, you might find extra features and perks with a business credit card. In this article we’ll go over the basics of some of these above-and-beyond features of credit cards. Whenever you’re thinking of applying for a credit card, it’s always best to compare all of their features so you get the best credit card that matches your financial lifestyle.

Rewards Programs

Probably one of the most attractive features of credit cards these days is the rewards programs that they sometimes offer. Credit card companies will often reward their cardholders for making purchases with the cards. Rewards can range from airline tickets to cash back to hotel discounts, depending on which credit card you apply for. The rewards are usually based on a point system – with each dollar you spend using your credit card, you are rewarded a certain number of points that are collected in your account. When you have a certain number of points, you are able to redeem them for the reward that your credit card offers.

How can you use these types of cards to your best advantage? Think about what you do the most – do you travel? Do you drive a lot and use a lot of gasoline? Do you shop at a particular store a lot? Consumers usually choose rewards credit cards that match their spending habits the best. If you travel a lot, it would be best to get a credit card that offers airline rewards. If you’re on the road a lot, try finding an offer that gives you a discount on gasoline, or cash back for gasoline purchases. One thing to remember when selecting a rewards program – make sure that once you choose it, it fits your needs exactly. For instance, if you fly frequently but usually fly on Midwest Express, make sure your credit card offers rewards for Midwest Express and not American Airlines. If you’re a big driver, make sure you’re getting rewarded for using the gasoline that’s most available to you – BP, Amoco, etc. There are some rewards cards that allow you a choice, but it’s always important to make sure you’re going to get what you expect!

Business Features

If you are a business owner, using a business credit card can help you with things like payroll, managing expenses, and managing employee spending. Business credit cards now offer features like:

• Detailed expense reporting – allowing you to see very clearly where your hard earned business dollars are being spent.

• Online account management – allowing you to view and manage your credit accounts via the internet for added convenience

• Customized cards and employee cards – allowing you as the business owner to receive cards for your employees

• Increased credit limits - allowing you to make the business purchases you need to keep your business running.

• Rewards – either travel, cash back, or other discounts, rewards allow you to enjoy a little bit of what you’re spending

Make sure when you’re applying for a business credit card that you compare these types of features and make sure your business card will meet the needs of you, your business, and your employees.

Online Access

It’s not news anymore – online access to bank accounts and credit accounts is just about standard these days. If you’re a high powered geek, though, you might want to check out the interface and features of the online access that your credit card allows you. Online access offers you 24x7 access to your statements, transactions, customer support and billing – making it much easier for you to monitor your credit expenses and pay your bills.

Security & Protection

Another feature of credit cards that is just about standard these days is the protection that credit card issuers offer you for things like identity theft and fraudulent use of your credit card. Unfortunately, there are still people out there who can acquire your credit card numbers – usually by finding a receipt with your credit card number on it, getting the number through hacking online, etc.

Consumers should always keep credit card receipts in a safe place, shred them, or at the very least make sure that the credit card number and expiration date is not shown on the receipt before you throw it out. The good news is that if you notice a fraudulent charge on your credit card, it’s usually as easy as calling up your credit card company and reporting it. 9 times out of 10, it’s easy enough to prove that you didn’t make the charge, and your credit card company will remove that charge from your account. With some of the higher end cards – platinum cards, etc. – the credit card companies actively monitor your account and will personally call you if they notice unusual activity on your credit card. In some cases, they do not authorize payments until they get approval from the card holder. These types of features add safety and security for consumers.

Small business credit card

It has only been recently that the larger credit card companies began aggressively marketing small business credit cards. If you are a new entrepreneur and have decided it’s time to get a small business credit card, you are in luck!

Most new businesses are sole proprietorships and credit is an important part of growing your business. The credit card issuers look at your personal credit history to see how you’ve managed your personal debt. A good personal credit report can prove that you take your obligations seriously.

As with any credit decision, you need to review what your requirements are before you apply for a small business credit card. The financial institutions are offering numerous incentives for your loyalty such as rewards, cash back, airline miles, high credit limit, and an option to pay over time or in full.

A small business credit card can assist with your cash flow. If you purchase supplies to do a job and bill the client upon completion, a small business credit card allows you that needed extension of time. You should keep this in mind and perhaps apply for a higher limit credit card. Consider the invoicing cycle. If you think it may run over thirty days, you would want to apply for a card that offers the option to pay over time. Look at a lower interest rate small business credit card.

If you have been in business for at least two years and just want to add to your cash flow. The Small Business Capital Line offered by American Express may be what your looking for. This offer includes an unsecured line of credit with a minimum of $10,000. Their easy application process doesn't require any supporting forms for most applications and gives you 100% access to your cash. This offer includes a competitive APR.

If your new commercial endeavor includes travel, a small business credit card with rewards that offers savings for airline miles, hotel and car rental would be ideal. An added advantage is you can keep track, remotely, of an employee‘s expenses through online viewing of your account. This is a big plus when on a tight budget!

The SkyPoints Business Credit Card from Delta and American Express, lets you earn double SkyPoints for everyday purchases and Delta purchases too. You can receive up to 75% discount on airfare when you redeem your SkyPoints. There is a small yearly fee for this program, but the first year fee is waived, offering an immediate savings of $49.

Credit card companies have formed alliances with a number of retailers, both online and off line. Some rewards perks are discounts when using your small business credit card at specified locations.

The Chase Platinum Business Card offers additional savings through their Visa Business partner Advantage. Receive savings of up to 20% from leading retailers with special offers on computer equipment, office supplies, and many other items.

Choosing a small business credit card is made easier by the internet where you can compare offers side by side. Each of the small business credit card programs offer extra value. It’s your choice which program fits with your financial needs.

Toss your credit card debt and add real alternatives

Did you get an easy credit card in college? Or, are you someone who got one for the convenience of being able to pay without cash? Not aware of other easy ways to borrow money?

Millions of us do this thanks to the unavoidable advertising of the credit card industry. Few people realize just how many alternatives to credit cards there are. There are others ways of using credit without finding yourself swimming in credit card debt.

Let’s take a look at a few.

Debit Cards.

Debit cards are often used in many European countries but are relatively unheard of elsewhere. Basically, they’re just like credit cards and are accepted everywhere credit cards are accepted. The only (and big) difference is that they take any money you spend directly from your bank account instead of you getting a bill at the end of the month. You also avoid the accumulation of credit card debt using these types of cards. Be aware though, that you aren’t as well-protected from fraud with a debit card as you would be with a credit card.

Pre-Paid Credit Cards.

These are cards that work just like credit cards except that you can’t have a negative balance and you have to put money on the card before you can spend it. This card is great if you want to know how much you are spending not to mention that you have no recurring credit card debt each month. They’re also safer than debit cards since someone who stole the card can only spend whatever money is on it at the time.

Bank Overdrafts.

A good bank overdraft, used together with a credit card, can be a far better way of borrowing money than using a credit card alone. Your overdraft limit is set by the bank according to how much you deposit into your account each month plus you don’t need to pay it off until you want to.

Basically, it just gives your account the ability to go into negative numbers. Many banks charge relatively high interest rates for overdrafts but rarely are these rates as high as a credit card. They will give much better rates for good customers.

Real Loans.

When you’re buying one big item at a fixed price (like a car) or spend all your money on one type of thing (home improvements, for example), it’s worth budgeting it all out and going to a bank or a loan company. They’ll be able to lend you the money at a much better rate than a credit card would simply because they know why you’re taking the loan. They can set regular monthly payments for you to repay it.

Credit Unions.

Credit unions are like banks, only more local. They are cooperatives, that is, owned by their members and run by the community. They are a great place to borrow money because there are limits in law on how much interest credit unions can charge. They also don’t need it to make a profit for owners or shareholders, because they don’t have any. They are well worth checking out if there is one in your area.

Small business credit card benefits business owners

If you own a small business, you might just have significant monthly expenses that are required in its operation. But in many cases you may not yet have sufficient cash on hand to pay for those expenses. For those reasons, a business credit card or a small business credit card can come in handy, given the benefits offered for business owners in particular. It is a temptation indeed to spend more than one should with a credit card. This lack of control, however, is the primary source of the profits in the credit card industry. If you have the financial insight to manage your money as a business owner, business credit cards could give you the flexibility you need to manage day to day expenses. Business credit cards used with care could be just the thing you need to help you manage your growing business.

One difference between personal and business credit cards is the operation of purchase tracking. Your purchases are tracked under your company name, not your name, and so the marketing offers that you receive for your business would be based on what you have purchased with your business credit cards, not your personal cards. A benefit of this tracking would be that your company would have a business history which may prove to be a great asset.

Another difference is the way expenses are tracked. Your business credit card statement should come with a detailed list of transactions, broken down by type of expense. When you are arranging your monthly budgeting, or your yearly or quarterly financial projections for tax payments, these statements would come in handy when figuring out which expenses should be charged to which accounts, and which expenses are tax-deductible. This will be of significant use when you are managing your money, because you can trace individual transactions, and assign them to various parts of your budget.

Almost 75% of business experts surveyed have asserted that business credit cards and small business credit cards prove to be an easier way to manage expenses than a checking account. Checking accounts require the manual recording of transactions, and when people make mistakes or even forget to record those transactions, unpleasant surprises can turn up in the form of overdrafts. Your monthly statement will include every expense in detail.

Business credit card accounts also have some fringe benefits that personal credit cards do not always have. Your account should include extra cards, if necessary, for additional (trusted) employees, and it may even include travel insurance, both for travel cancellations, and even for accidents that happen to your employees (or to you!) while on business travel. These extra cards will really come in handy once your business starts to grow. If you are the primary decision maker, you often have several crucial decisions to make at once, and you are often involved in many elements of your business at one time. If you have purchases that are routine, having other employees who are authorized to make those purchases will free up a lot of your spare time. Since your business credit card would come with detailed expense tracking, you would feel the comfort of delegating these sorts of purchase decisions to others, leaving you more time to focus on growing your business.

As we progress into the information age, these detailed statements are now available online for your use in the comfort of your own office or home. Using the right accounting software, you could merge your online statements with your existing account files to automatically match expenses with budgeted accounts. Why pay an accountant to sit and match those expenses up when you can use a software package would do the same job at half the time and cost probably a lot less than the salary of an accountant? All you need to do is monitor the online merge process periodically.

And so we see how simple it can be for any small business to streamline its financial operations overnight. A small business credit card could end up being not just a source of financial flexibility, but also a surrogate accountant. Why not let the credit card company cover the overhead associated with tracking and sorting financial expenses? When you figure in the other benefits of a business credit card, such as bonus frequent flyer miles for airlines, or from rewards that come with cash rebates for purchases, the advantages of business credit cards begin to standout substantially. These benefits are available to any small business owner. The key is to remember to pay your balance and your fees in a timely manner, so that your credit rating as a business remains strong.

Comparing credit card offers

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How do you start to compare credit cards? Finding out the best credit card to suit your needs can be a very time consuming process but one which can save you money and bring you more benefits than just choosing a credit card at random or the one which accepts your application first.

There are many different types of credit cards on the market but knowing which way you are going to deal with your finances before you apply for one could help you choose the best credit card for you.

If you pay off the total amount of your credit card bill every month then you would benefit from a reward credit card. Reward credit cards can offer cash back if you prefer or if you are a traveler then a credit card that offers air miles would benefit you.

If you already have a credit card, with a big balance, and are looking to switch to another then you may want to take advantage of a 0% balance transfer deal where the balance on your current credit card can be transferred without interest being added for an introductory period. Ultimately this will cost you less and gives you the opportunity to pay off your balance a little quicker. Before choosing your 0% balance transfer credit card be aware of the interest rate after your initial interest free period as some cards can have a high interest rate so look around.

For the more extravagant spender, a 0% purchase credit card could be right up your street. In the first several months as an introductory offer there will be 0% interest on what you spend on your credit card meaning you may afford that little luxury item as you won't be paying interest on your payment.

If you have a bad credit history and are worried whether you would be able to obtain a credit card or not, don't worry, as there are lenders that will deal with your case, although you will most probably be charged a higher interest rate. Credit cards can benefit you if you have had previous bad debt to rebuild yourself a good credit history.

All of these different types of credit cards also have other added benefits included and you should look at them more in depth. You can save a lot of money by comparing credit cards and the hard work of choosing the best credit card will pay off, right into your back pocket.

How to avoid credit card pitfalls

Seeing people buying food or shopping clothes using credit cards has been commonplace these days. The phrase "Charge it!" has become a favorite expression of card users, and has been commonly heard in shops, dining places, and elsewhere.

After all, who does not want to use these credit cards? Easy to use, these sleekly-designed cards can be used to buy practically everything in commercial establishments regardless of how much (or less) money does one carry money in his wallet. Short of cash and hungry? No grocery supplies? Going to a party but no money to buy that dress you've been drooling for? No problem! Your good ol' credit can care of that for you. No worries.

Credit Cards: Not Free Money

But wait. A credit card spree may be fun, but that doesn't free you from responsibilities in paying the expenses you incurred from using your credit card. Credit cards, after all, are interest loans in disguise. Typical credit cards ask for a number of charges, including:

" A finance charge, which is an interest charge for the unpaid portion of your monthly bill;

" An annual membership fee;

" Or if you're paying after the deadline, there is also a late payment fee which could have a higher interest rate.

In fact, many credit-card holders face credit-related problems. Poor purchasing decisions, lack of information on credit card fees, and disregard for upcoming credit payments are among the reasons why many credit-card users are often hard-pressed in paying their debts. Some are not even able to pay for the actual purchases they made, just barely managing to pay credit card company charges.

Before you get drowned in a sea of debt, here are some tips to help you manage your credit-related expenses:

" Be credit smart. Applying for a credit card application means you are ready to assume the responsibility for paying your credit. You and only you - not your parents, spouse, or whoever - is responsible for that.

" Use your credit cards wisely and sparingly. Remember: Paying goods and services using credit cards are more expensive than using cash or checks. Credit payments include interest and other fees. Use credit cards as sparingly as possible. If you really need to use credit cards, carry only the cards that you will actually use.

" Use credit only if you are sure you can repay it. Paying your debt on a credit card using another does not count.

" Avoid impulse shopping on your credit card.

" Use credit for money emergency only.

" Seek credit counseling as soon you see financial problems on the horizon.

The right way to get a credit card

If you are like the rest of us, you are probably bombarded on a daily basis with credit card offers. Most are from Visa, Master Card, American Express, or Discover, and, often times two or three from the same company. I’m sure you have even heard the stories of dogs getting credit card offers.

So how do you know which one to choose from? Are they all bad? Is there ever a time when a credit card is actually a good thing?

Well, the answer to all of the questions above, like most things in the financial world, is that it depends completely on your financial situation and what you intend to use the card for. Since no two people are alike and it would be impossible to go over every situation, lets stick to the basics and then you can take these principles and apply them to your life.

INTRODUCTORY OFFER

I am sure it is no surprise that this is both a good thing and a bad thing. Most cards today are offering 0% for a certain period of time. This 0% offer is usually on Balance Transfers, existing credit card debt you want to move to the new card and new purchases during the introductory time frame.

After the introductory period is over, the credit card charges you the interest rate that they want. The ‘real’ interest rate, the one that takes effect after the introductory period, is not a fixed rate unless it explicitly says so. The majority of the time it is a variable rate that changes over time. The ‘real’ interest rate will be located on the back in the fine print. Paying careful attention to this can cost you thousands of dollars.

WHAT BANK IS MAKING THE OFFER

The credit card that you are applying for is a Visa, Master Card, etc., but it is issued by a bank. The bank is the company that is actually giving you the loan. After all, a credit card is only a loan that you can choose to use or not at your discretion. When you use the card, you owe the bank the money, not Visa.

Get online and check out the bank that is issuing the card. Are they a big bank? Do they have a history of quality service? Can you get a live person, one that you can understand, on the phone? These are important things consider because if you have a problem, you will have to take care of it with the bank.

THE FINE PRINT

Be sure to read the fine print,” it’s a clichй for a reason. What you are signing when you apply for a credit card is a legal document. You are agreeing to the terms and conditions of the issuer, the bank. By signing, you are stating that you are responsible for the card. The issuer can take you to court if necessary.

I don’t know is not an excuse or a defense. Read everything before you sign the agree and get the card. If you don’t understand something, ask a friend to read it. If they don’t understand it then talk to a paralegal or a lawyer. DO NOT disregard the fine print.

SUMMARY

Credit cards are not bad; they can actually be a very powerful financial tool. The problem is that people don’t use them properly, and this starts when you sign-up for the card. Always read the fine print, know who you are getting the card from, and double check the facts like the introductory offer and the ‘real’ interest rate. Never sign-up for a card without knowing exactly what you are getting yourself into.