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Credit Card Balance Transfers

January 24, 2021

Credit card balances are crippling households across the United States, giving them insurmountable debts that just keep on growing and never seem to go away. But there is some good news, as this problem has spawned a multitude of debt relief options, one of which is a credit card balance transfer.

Balance transfers are a similar and widely available option for all debtors to clear their credit card balances, reduce their interest rate, and potentially save thousands of dollars.

How Credit Card Balance Transfers Work

A balance transfer credit card allows you to transfer a balance from one or more cards to another, reducing credit card debt and all its obligations. These cards are offered by most credit card companies and come with a 0% APR on balance transfers for the first 6, 12 or 18 months.

Consumers can use this balance transfer offer to reduce interest payments, and if they continue to pay the same sum every month, all of it will go towards the principal. Without interest to eat into their monthly payment, the balance will clear quickly and cheaply.

There are a few downsides to transferring a balance, including late fees, a transfer fee and, in some cases, an annual fee.

What Happens When You Transfer a Balance on Credit Cards?

When you transfer a balance, your new lender repays your credit card debt and moves the funds onto a new card. You may incur a transfer fee and pay an annual fee, which can increase the total debt, but transferring a balance in this way allows you to take advantage of a 0% introductory APR. While this introductory period lasts, you won’t pay any interest on your debt and can focus on clearing your credit card debt step by step.

Why are Balance Transfers Beneficial?

A little later, we’ll discuss some alternatives to a balance transfer offer, all of which can help you clear your debt. However, the majority of these methods will increase your debt in the short term, prolong the time it takes to repay it or reduce your credit score. 

A balance transfer credit card does none of these things. As soon as you accept the transfer offer, you’ll have a 0% introductory APR that you can use to eliminate your debt. The balance transfer may increase your debt liabilities slightly by adding a transfer fee and an annual fee, but generally speaking, this is one of the best ways to clear your debt.

To understand why this is the case, you need to know how credit card interest works. If you have a debt of $20,000 with a variable APR rate of 20% and a minimum monthly payment of $500, you’ll repay the debt in 67 months at a cost of over $13,000 in interest.

If you move that debt to a card with a balance transfer offer of 0% APR for 12 months, and you continue to meet the $500 minimum payment, you’ll repay $5,000 and reduce the debt to $15,000. From that point on, you’ll have a smaller balance to clear, less interest to worry about, and can clear the debt completely in just a few more years.

Of course, the transfer fee will increase your balance somewhat, but this fee is minimal when compared to the money you can save. The same applies to the annual fee that these cards charge and, in many cases, you can find cards that don’t charge an annual fee at all. 

You can even find no-fee balance transfer cards, although these are rare. The BankAmericard credit card once provided a no fee transfer offer to all applicants, in addition to a $0 annual fee. However, they changed their rules in 2018 and made the card much less appealing to the average user.

Pros and Cons of Credit Card Balance Transfers

From credit score and credit limit issues to a high variable APR, late fees, and cash advance fees, there are numerous issues with these cards. However, there are just as many pros as there are cons, including the fact that they can be one of the cheapest and fastest ways to clear debt.

Pro: 0% Introductory APR

The 0% APR on balance transfers is the best thing about these credit cards and the reason they are so beneficial. However, many cards also offer 0% APR on purchases. This means that if you continue to use your card after the transfer has taken place, you won’t be charged any interest on the new credit.

With most cards, the 0% APR on purchases runs for the same length of time as the balance transfer offer. This ensures that all credit you accumulate upon opening the account will be subject to the same benefits. Of course, accumulating additional credit is not wise as it will prolong the time it takes you to repay the debt.

Pro: Can Still Get Cash Rewards

While cash rewards are rare on balance transfer cards, some of the better cards still offer them. Discover It is a great example of this. You can earn cash back every time you spend, even after initiating a balance transfer. The cash rewards scheme is one of the best in the industry and there is also a 0% APR on balance transfers during an introductory period that lasts up to 18 months.

Pro: High Credit Limit

A balance transfer card may offer you a high credit limit, one that is large enough to cover your credit card debt. You will need a good credit score to get this rate, of course, but once you do your credit card debt will clear, you can repay it, and then you’ll have a card with a high credit limit and no balance.

Throw a rewards scheme into the mix (as with the Discover It rewards card) and you’ll have turned a dire situation into a great one.

Con: Will Reduce Credit Score

A new account opening won’t impact your credit score as heavily as you may have been led to believe. In fact, the impact of a new credit card or loan is minimal at best and any effects usually disappear after just a few months. However, a balance transfer card is a different story and there are a few ways it can impact your score.

Firstly, it could reduce your credit utilization ratio. This is the amount of credit you have compared to the amount of debt you have. If you have four credit cards each with a credit limit of $20,000 and a debt of $10,000 then your score will be 50%. If you close all of these and swap them for a single card where your credit limit matches your debt, your score will be 100%.

Your credit utilization ratio points for 30% of your total FICO score and can, therefore, do some serious damage to your credit score.

Secondly, although FICO has yet to disclose specifics, a maxed-out credit card can also reduce your score. By its very nature, a balance transfer card will be maxed out or close to being maxed out, as it’s a card opened with the sole purpose of covering this debt.

Finally, if you close multiple accounts and open a new one, your account age will decrease, thus reduce your credit score further.

Con: Transfer Free

The transfer fee is a small issue, but one worth mentioning, nonetheless. This is often charged at between 3% and 5% of the total balance, but there are also minimum amounts of between $5 and $10, and you will pay the greater of the two.

This can sound like a lot. After all, for a balance transfer of $10,000, 5% will be $500. However, when you consider how much you can save over the course of the introductory period, that fee begins to look nominal.

There may also be an annual fee to consider, but if your score is high enough and you choose one of the cards listed in this guide, you can avoid this fee.

Con: Late Fees and Other Penalties

In truth, all credit cards will charge you a fee if you’re late and you will also be charged a fee every time you make a cash advance. However, the fees may be higher with balance transfer cards, especially if those cards offer generous benefits and rewards elsewhere. It’s a balancing act for the provider—an advantage here means a disadvantage there.

Con: High APR on Purchases

While many balance transfer cards offer a 0% APR on purchases for a fixed period, this rate may increase when the introductory period ends. The resulting variable APR will often be a lot larger than what you were paying before the transfer, with many credit cards charging over 25% or more on purchases.

Which Credit Cards are Best for Clearing Credit Card Debt?

Many credit card issuers have some kind of balance transfer card, but it’s worth remembering that credit card companies aren’t interested in offering these cards to current customers. You’ll need to find a new provider and if you have multiple cards with multiple providers, that can be tricky. 

Run some comparisons, check the offers against your financial situation, and pay close attention to late fees, APR on purchases, cash rewards, and the length of the 0% introductory APR rate. 

You’ll also need to find a card with a credit limit high enough to cover your current debt, and one that accepts customers with your credit score. This can be tricky, but if you shop around, you should find something. If not, focus on increasing your credit score before seeking to apply again.

Here are a few options to help you begin your search for the most suitable balance transfer card:

Discover It

  • Balance Transfer Offer: 18 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 6 months
  • Annual Fee: $0
  • Rate: Up To 24.49% Variable APR
  • Rewards: Yes

Chase Freedom Unlimited

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 5% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.24% Variable APR
  • Rewards: Yes

Citi Simplicity

  • Balance Transfer Offer: 21 Months
  • Transfer Fee: 5% on transfers
  • Purchases APR: 0% for 12 months
  • Annual Fee: $0
  • Rate: Up To 26.24% Variable APR
  • Rewards: No

Bank of America Cash Rewards

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.49% Variable APR
  • Rewards: No

Capital One Quicksilver

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.49% Variable APR
  • Rewards: No

Blue Cash Everyday Card from American Express

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.49% Variable APR
  • Rewards: No

Capital One SavorOne

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.49% Variable APR
  • Rewards: Yes

How to Clear Debt with a Balance Transfer Card

From the point of the account opening to the point that the introductory period ends, you need to focus on clearing as much of the balance as possible. Don’t concern yourself with a variable APR rate, annual fee or other issues and avoid additional APR on purchases by not using the card. Just put all extra cash you have towards the debt and reduce it one step at a time.

Here are a few tips to help you clear debt after you transfer a balance:

Meet the Monthly Payment

First things first, always meet your minimum payment obligations. The 0% APR on balance transfers protects you against additional interest, but it doesn’t eliminate your repayments altogether. If you fail to meet these payments, you could find yourself in some serious hot water and may negate the balance transfer offer.

Increase Payment Frequency

It may be easier for you to repay $250 every two weeks as opposed to $500 every month. This will also allow you to use any extra funds when you have them, thus preventing you from wasting cash on luxury purchases and ensuring it goes towards your debt.

Earn More

Ask for a pay rise, take on a part-time job, work as a freelancer—do whatever it takes to earn extra cash during this period. If you commit everything you have for just 12 to 18 months you can get your troublesome debt cleared and start looking forward to a future without debt and complications, one where you have more money and more freedom.

Sell Up

It has never been easier to sell your unwanted belongings. Many apps can help you with this and you can also sell on big platforms like Facebook, eBay, and Amazon. 

Sell clothes, electronics, books, games, music—anything you no longer need that could earn you a few extra dollars. It all goes towards your debt and can help you to clear it while your introductory APR is active.

Don’t Take out a Personal Loan

While you might be tempted to use a loan to cover your debt, this is never a good idea. You should avoid using low-interest debt to replace high-interest debt, even if the latter is currently under a 0% introductory APR. 

It’s easy to get trapped in a cycle of swapping one debt for another, and it’s a cycle that ultimately leads to some high fees and even higher interest rates.

Focus on the Bigger Picture

Debt exists because we focus too much on the short-term. Rather than dismissing the idea of buying a brand-new computer we can’t afford, we fool ourselves into believing we can deal with it later and then pay for it with a credit card. This attitude can lead to persistent debt and trap you in an inescapable cycle and it’s one you need to shed if you’re going to transfer a balance.

Instead of focusing on the short term, take a look at the bigger picture. If you can’t afford it now, you probably can’t afford it later; if you can’t repay $10,000 worth of debt this year, you probably can’t handle $20,000 next year.

Alternatives to Credit Card Balance Transfers

If you have the cash and the commitment to pay your credit card debt, a balance transfer card is perfect. However, if you have a low credit score and use the card just to accumulate additional debt and buy yourself more time, it will do more harm than good. In that case, debt relief may be the better option.

These programs are designed to help you pay your debt through any means possible. There are several options available and all these are offered by specialist companies and providers, including banks and credit unions. As with balance transfer cards, however, you should do your research in advance and consider your options carefully before making a decision.

Pay More Than the Minimum

It’s an obvious and perhaps even redundant solution, but it’s one that needs to be mentioned, nonetheless. We live in a credit hungry society, one built on impulsive purchases and a buy-now-care-later attitude. A balance transfer card, in many ways, is part of this, as it’s a quick and easy solution to a long and difficult problem. And like all quick patches, it can burst at the seams if the problem isn’t controlled.

The best option, therefore, is to try and clear your debts without creating any new accounts. Do everything you can to increase your minimum payment every month. This will ensure that you pay more of the principal, with the minimum payment covering your interest obligations and everything else going towards the actual balance.

Only when this fails, when you genuinely can’t cover more than the minimum, should you look into opening a new card.

Debt Consolidation

Balance transfers are actually a form of debt consolidation, but ones that are specifically tailored to credit card debt. If you have multiple types of debt, including medical bills, student loans, and personal loans, you can use a consolidation loan to clear it.

This loan will pay off all of your debts and then give you a new one with a new provider. The provider will reduce your monthly payment and may even reduce your interest rate, allowing you to pay less and to feel like you’re getting a good deal. However, this is at the expense of a greatly increased loan term, which means you will pay considerably more over the duration of the loan.

As with everything else, a debt consolidation loan is dependent on you having a good credit score and the better your financial situation is, the better the loan rates will be.

Debt Management

Debt management can help if you don’t have the credit history required for debt consolidation. Debt management plans are provided by companies that work with your creditors to repay your debts in a way that suits you and them. You pay the debt management company, they pass your money on, and in return, they request that you abide by many strict terms and conditions, including not using your credit cards.

Many debt management programs will actually request that you close all but one of your credit cards and only use that one card in emergencies. This can greatly reduce your credit score by impacting your credit utilization ratio. What’s more, if you miss any payments your creditors may renege on their promises and revert back to the original monthly payments.

Debt Settlement

The more extreme and cheaper option of the three, but also the riskiest. Debt settlement works well with sizeable credit card debt and is even more effective if you have a history of missed payments, defaults or collections. A debt specialist may request that you stop making payments on your accounts and instead put your money into a secured account run by a third-party provider.

They will then contact your creditors and negotiate a settlement amount. This process can take several years as they’re not always successful on the first attempt but the longer they wait, the more desperate your creditors will become and the more likely they will be to accept a settlement.

Debt settlement is one of the few options that allows you to pay all your debt for much less than the original balance. However, it can harm your credit score while these debts are being repaid and this may impact your chances of getting a mortgage or a car loan for a few years.

Credit Card Balance Transfers is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

[Targeted] Best Buy Credit Card: Spend $1,500+ Outside Best Buy & Get A $75 Reward Certificate

January 24, 2021

Update 1/18/21: Some people also have an offer for 11% back on rewards on a single purchase by 1/31/21. Hat tip to reader JJ

The Offer

Offer sent out via e-mail, unknown subject line

  • Some Best Buy credit cardholders are being offered a $75 reward certificate when you spend $1,500 or more outside of Best Buy by 2/28/21.

Our Verdict

High spend requirement.

Hat tip to reader JJ

Source: doctorofcredit.com

Which cards earn American Express rewards points?

January 24, 2021

Information about the Amex Everyday Preferred Card and American Express Blue Card has been collected independently by CreditCards.com. The issuer did not provide the content, nor is it responsible for its accuracy.

#American Express offers a large array of cards – including everyday spending cards, travel cards, business cards and co-branded cards – that let you earn Membership Rewards points. It can be confusing to try to sift through all the offerings and figure out where all the bonuses lie, so we’ve sorted it out for you.

Here’s a breakdown of the cards:

American Express Membership Rewards consumer credit cards

Rewards rate Introductory bonus Annual fee

Blue from American Express card
  • 2 points per dollar for eligible travel purchases booked through AmexTravel.com
  • 1 point per dollar on every purchase (Terms apply)
None
 $0

Amex Everyday Preferred card
  • 3 points per dollar at U.S. supermarket purchases ($6,000 yearly purchase limit)
  • 2 points per dollar U.S. gas stations
  • 1 point per dollar other purchases
  • 50% bonus points when you make 30+ purchases per month
  • Terms apply
15,000 points if you spend $1,000 in first 3 months (Terms apply)
 $95

American Express® Green Card
  • 3 points per dollar on travel, transit and restaurants worldwide
  • 1 point per dollar on other purchases
  • Terms apply
 30,000 points if you spend $2,000 in first 3 months (Terms apply) $150

American Express® Gold Card
  • 4 points per dollar at restaurants worldwide
  • 4 points per dollar at U.S. supermarkets (up to $25,000 in purchases per year, then 1x)
  • 3 points per dollar on directly booked flights
  • 1 point per dollar other purchases
  • Terms apply
 60,000 points if you spend $4,000 in first 6 months (Terms apply) $250

The Platinum Card® from American Express
  • 5 points per dollar on flights booked directly with airlines or with American Express Travel
  • 5 points per dollar on eligible hotels booked with American Express Travel
  • 1 point per dollar other purchases
  • Terms apply
  • 75,000 points if you spend $5,000 in first 6 months (Terms apply)
  • 10 points per dollar on eligible purchases at U.S. gas stations and U.S. supermarkets (on up to $15,000 in combined purchases) in first 6 months
 $550

American Express Membership Rewards business credit cards

Rewards rate Introductory bonus Annual fee

The Blue Business® Plus Credit Card from American Express
  • 2 points per dollar on first $50,000 in purchases each year
  • 1 point per dollar thereafter
  • Terms apply
 None $0

Business Green Rewards Card from American Express
  • 2 points per dollar on travel booked through American Express Travel
  • 1 point per dollar on other purchases
  • Terms apply
 15,000 Membership Rewards points after you spend $3,000 in eligible purchases within the first 3 months (Terms apply) $0 intro first year, then $95

American Express® Business Gold Card
  • 4 points per dollar on two categories where your business spends the most ($150,000 yearly purchase limit)
  • 1 point per dollar other purchases
  • Terms apply
 35,000 Membership Rewards points after you spend $5,000 on eligible purchases with the Business Gold Card within the first 3 months. (Terms apply) $295

The Business Platinum Card® from American Express
  • 5 points per dollar on directly booked flights and prepaid hotels through Amextravel.com
  • 2 points per dollar on travel booked through American Express travel
  • 1.5 points per dollar on qualifying purchases of $5,000 or more
  • 1 point per dollar on other purchases
  • Terms apply
 85,000 Membership Rewards points after you spend $15,000 on qualifying purchases within your first 3 months (Terms apply) $595

Entry-level cards

The Blue from American Express card is an entry-level card for newbies with less-than-stellar credit scores. The card offers a paltry rate of 1 point per dollar of spending and 2 points per dollar on American Express Travel purchases and no introductory bonus. Plus, unlike other Membership Rewards cards, it doesn’t allow you to transfer points to an outside loyalty program. But you can qualify for the card with a merely average credit score, so it may be a good starting point if you can’t qualify for any other American Express card.

Everyday spending cards

Everyday spending is not a strong point in the Membership Rewards program, but Amex does offer a card that lets you earn bonus points on everyday purchases.

The American Express Everyday Preferred card gives you 3% back on U.S. supermarket purchases (up to $6,000 in purchases per year), 2% back on U.S. gas station purchases and 1% back on other purchases, plus a 50% point bonus whenever you use your card at least 30 times in a month, for a $95 annual fee (waived the first year). That’s a very generous grocery bonus – amounting to 4.5% back if you trigger the bonus every month – but it’s unfortunately capped at $6,000 in purchases, and the requirement to use the card 30 times each month is onerous.

In fact, the requirements to earn the full bonus are stringent. Unless you use the card for most of your spending, you probably will have a difficult time mustering 30 separate purchases on a single card each month. In other words – if you’re not all about earning Membership Rewards points – this is probably not the card for you.

Travel cards

American Express is the pioneer of travel rewards cards, and its offerings are strongest in this category. You have three levels of card to choose from – all of which offer extensive travel perks, bonuses focused on travel purchases and high annual fees.

The American Express Green card – the lowest tier card – is a good introduction to American Express travel benefits. The card offers a good earning rate on travel, transit and dining purchases: You earn 3x points on a wide array of travel and transit purchases, including airfare, hotel stays, subways, tolls and more. You also earn 3x points on purchases at restaurants worldwide. The remainder of your purchases earn 1 point per dollar. The card also offers a couple of fairly valuable credits, including up to $100 toward CLEAR membership and up to $100 for LoungeBuddy lounge access each year.

The card comes with a lower $150 annual fee. Altogether, it’s not a bad deal, though can find other starter travel cards with lower fees and better rewards, such as the Chase Sapphire Preferred® Card*. Also, if you’re able to foot a $150 fee, you should ask yourself whether it’s worth doling out a little extra to get much better rewards and benefits with Amex’s higher tier travel cards.

The American Express® Gold Card is a good value for middle-of-the road cardholders and comes with a $250 annual fee that’s relatively affordable, though on the high side for the level of rewards that it offers. You earn bonus points on both travel and everyday purchases – 4x at restaurants worldwide and on the first $25,000 in U.S. supermarket purchases each year, 3x on flights booked directly with the airlines and 1x on other purchases. You also get a decent 60,000-point bonus for spending $4,000 in the first six months.

And then comes the king of travel cards – the American Express Platinum card – offering a stellar 75,000-point introductory bonus (after spending $5,000 in the first six months), a litany of travel benefits and an outsized $550 annual fee. The Platinum card is squarely aimed at heavy travelers – you earn a massive 5% bonus on flights and hotels and you get some very generous travel credits, including a $200 airline fee credit, a $100 credit every four years for Global Entry, a $100 hotel fee credit and up to $200 worth of Uber credits. Also, the card grants you free lounge access – probably the most extensive lounge access package that any credit card has to offer – including Priority Pass lounges and ultra-posh Centurion lounges. The Platinum card is not for the casual traveler; however, if you travel frequently you can get more than $550 of value out of the Platinum card.

Business cards

American Express also has several business card offerings that offer American Express benefits for business owners and bonus points on business purchases. These cards are a great opportunity to earn additional introductory bonuses for cardholders who have exhausted the introductory bonuses on Amex’s consumer line of cards.

Note, too, that you don’t have to be the owner of a brick-and-mortar business to qualify for a business card; independent contractors of all sorts may qualify.

The Blue Business Plus card is an excellent option for earning bonus points on everyday purchases – you get a 2x point bonus on your purchases, up to $50,000 each year (1x thereafter). Moreover, the card doesn’t charge an annual fee.

Like the consumer version of the card, the Business Green Rewards Card offers an insipid rewards rate of 2x points on eligible American Express Travel purchases and 1 point on the rest of your purchases, for a $95 fee. On the plus side, the annual fee is waived for the first year, and it currently comes with an offer of 15,000 Membership Rewards points after you spend $3,000 in eligible purchases within the first three months.

The Business Gold Card rewards your highest spend in two 4x bonus categories – which can include dining, gas, travel and common business purchases.

The American Express Business Platinum card offers many of the same benefits – including lounge access – as the regular Platinum card. Unforutnately, the card doesn’t offer a $200 credit for Uber rides. However, it does have one feature to its advantage: You can earn 35% of your points back when you use them for flights on a qualifying airline that you designate at the beginning of each year (when flight is booked on amextravel.com).

Essentially, you can boost the value of your points to 1.35 cents per point if you use them the right way – that’s a much better value than the consumer version of the card. Also, the card offers several generous credits targeted to business professionals: You get up to $200 each year on Dell purchases, and up to $200 in statement credits each calendar year for baggage fees and other incidentals at one selected qualifying airline. The value of the added perks can help to outweigh the card’s $595 annual fee.

Co-branded Membership Rewards cards

If the above list of Membership Rewards cards hasn’t already boggled your mind, American Express offers several co-branded cards that give you additional options for category bonuses and – most notably – additional options for earning introductory bonuses.

American Express Membership Rewards co-branded credit cards

Rewards rate Introductory bonus Annual fee
Mercedes Benz card

Mercedes-Benz card
  • 5% select Mercedes-Benz purchases
  • 1% other purchases
  • Terms apply
 10,000 points if you spend $100 in first 3 months (Terms apply) $95
Ameriprise gold card

Ameriprise Financial Gold card
  • 2% U.S. restaurants and flights booked directly with airlines
  • 1% other purchases
  • Terms apply
 25,000 points if you spend $1,000 in first 3 months (Terms apply) $160, $0 first year
Ameriprise platinum card

Ameriprise Financial Platinum card
  • 5% flights booked directly with airlines or with American Express Travel
  • 5% eligible hotels booked with American Express Travel
  • 1% other purchases
  • 5,000 points for every 20,000 in purchases, up to 30,000 points each year
  • Terms apply
 None $550, $0 first year
Morgan Stanley card

Morgan Stanley card
  • 2% U.S. restaurants, select U.S. department stores, select car rental companies and directly purchased airfare
  • 1% other purchases
  • Terms apply
 10,000 points if you spend $1,000 in first 3 months (Terms apply) $0
Chase Ink Business Preferred card

Morgan Stanley Platinum card
  • 5% flights booked directly with airlines or with American Express Travel
  • 5% eligible hotels booked with American Express Travel
  • 1% other purchases
  • Terms apply
 60,000 points if you spend $5,000 in first 3 months (Terms apply) $550
Schwab Platinum card

Schwab Platinum card
  • 5% flights booked directly with airlines or with American Express Travel
  • 5% eligible hotels booked with American Express Travel
  • 1% other purchases
  • Terms apply
 60,000 points if you spend $5,000 in first 3 months (Terms apply) $550

Outside of its Mercedes-Benz card – which offers a bonus on Mercedes-Benz purchases – most of these cards are tied to financial institutions and require that you have a qualifying account to apply for the card. If you can pass that hurdle, there’s a major plus to qualifying for one of these cards: They’re all considered to be separate cards from American Express’s consumer and business line of cards, which means – if you’ve already earned the bonuses on the Gold and Platinum cards – you have additional options for earning a 50,000- to 60,000-point bonus.

Which American Express card should you apply for?

Membership Rewards cards aren’t for everyone. The rewards are focused on travel purchases and the best asset of the American Express travel rewards program is its travel perks – including lounge access – rather than travel rewards. In other words, you need to be a frequent traveler to really reap the benefits of the Membership Rewards program. That said, if you fit the bill and want to maximize your points, you should consider signing up for the following:

An everyday spending card – Membership Rewards cards are not the strongest candidates for maximizing rewards on everyday spending, but if you are trying to rack up Membership Rewards points, you’ll probably want to sign up for the Amex Preferred Everyday card. If you don’t mind the $95 annual fee and you are able to use the card 30-plus times each month, the Amex Everyday Preferred card may be your best bet – with its 50% bonus, you can earn up to 4.5% back on your first $6,000 in grocery purchases and 3% back on gas purchases.

A travel card – If you travel frequently enough to use all of its credits and travel perks, the Platinum card is an exceptional value, even with its $550 annual fee. Or, if you qualify as a business owner, you might want to go with the Business Platinum card, since it’s possible to get a 35% bonus on all your redemptions for airfare with your selected, qualifying airline – you’ll need to do some math to decide which card offers the better value for you.

Note, if you don’t want to dole out the high annual fee for either of the Platinum cards, you might go with the American Express Gold Card instead – it can serve as both a travel and everyday card since it offers bonuses on flights, restaurants and U.S. supermarket purchases.

A flat-rate spending card – You should also consider adding the Blue Business Plus card to your wallet. You can rotate it with your other cards to earn a 2x point bonus on the purchases that don’t fit under any other bonus category.

One other very important consideration is timing. American Express has a very strict policy on earning introductory bonuses, only allowing you to earn the bonus on a particular card once in your lifetime. This means if you want to earn the most bonus points possible, you’ll want to keep a close eye on the value of the introductory bonus for each card and apply when the bonus is higher than average.

See related: Best ways to spend American Express points

*All information about the Chase Sapphire Preferred Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. This offer is no longer available on our site.

Source: creditcards.com

Learning How To Survive On A College Budget

January 23, 2021

Find out how to survive on a college budget here. This is a great list!College is expensive and everyone knows that.

Between paying for tuition, parking, textbooks, extra fees, and everything else, you also have basic living expenses to pay for as well.

All of these costs are either brand new or somewhat new to you most likely as well, so you might not even know how to survive on a budget, let alone a college budget.

Don’t worry, though, surviving on a college budget is possible. Learning how to save money in college is possible!

Related post: How I Paid Off $40,000 In Student Loans In 7 Months

Whether you are trying to survive the whole year off of what you made over the summer or if you have a steady job throughout the school year, there are ways to budget your money and not fall into any extra debt. Plus, you can still enjoy your college years on a low budget as well!

Below are my tips on how to survive on a college budget.

 

Use your student ID.

Your student ID is good at many places beyond just your college campus. Before you buy anything, I highly recommend seeing if a company offers a student discount.

Your student ID can be used to save money at restaurants, clothing stores, electronics (such as laptops!), at the movies, and more. You may receive a discount, free items, and more all just by flashing your student ID.

After all, you are paying to go to college and you are paying a lot. You might as well reap one benefit of paying all of those high college costs.

 

Make extra money.

You may need to look into making extra money if you just don’t have enough to survive on. I am a firm believer in making extra money and I think extra time can be wisely spent doing this.

Some online side gigs with flexible schedules include:

  • Blogging is how I make a living and just a few years ago I never thought it would be possible. I made over $150,000 last year by blogging and will make more than that in 2015. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
  • Survey companies I recommend include Survey Junkie, American Consumer Opinion, Product Report Card, Pinecone Research, Opinion Outpost, and Harris Poll Online. They’re free to join and free to use! It’s best to sign up for as many as you can because that way you can receive the most surveys and make the most money.
  • InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming coupons, and more. Also, by signing up through my link, you will receive $5.00 for free!
  • Swagbucks is something I don’t use as much, but I do earn Amazon gift cards with very little work. Swagbucks is just like using Google to do your online searches, except you get rewarded points called “SB” for the things you do through their website. Then, when you have enough points, you can redeem them for cash, gift cards, and more. You’ll receive a free $5 bonus just for signing up today!
  • Check out 75 Ways To Make Extra Money for more ideas.
  • Read Best Online Jobs For College Students

 

Use coupons to stay on a college budget.

Just like with the above, you may want to start using coupons.

By doing so, you can save money on nearly everything. You can find coupons in newspapers, online, and in the mail. They are everywhere so you should have no problem finding them and saving money today.

Related post: How To Live On One Income

 

Learn how to correctly use a credit card or don’t have one at all.

Many college students fall into credit card debt, but I don’t want you to be one of them.

Many college students will start relying on their credit cards in order to get them through their low college budget, but this can lead to thousands of dollars of credit card debt which will eventually seem impossible to get out of due to significant interest charges that keep building up.

In order to never get into this situation, you should avoid credit cards at all costs if you think you will rely on them too heavily.

You should think long and hard about whether you should have one or not. Just because many others have them doesn’t mean they know what they’re doing! However, if you think you will be good at using them, then there are many advantages of doing so.

Related post: Credit Card Mistakes That Can Lead To Debt

 

Only take out what you need in student loans.

Many students take out the full amount in student loans that they are approved for even if they only need half.

This is a HUGE mistake. You should only take out what you truly need, as you will need to pay back your student loans one day and you will most likely regret it later.

I know someone who would take out the max amount each semester and buy timeshares, go on expensive vacations, and more. It was a huge waste of money and I’m still not even sure why they thought it was a good idea.

Just think about it – If you take out an extra $2,000 a semester, that means you will most likely take out almost $20,000 over the time period that you are in college.

Do you really want to owe THAT much more in student loans?

 

Skip having a car.

Most campuses have everything you need in order to survive – food, stores, and jobs. In many cases, you do not need to have a car whatsoever.

By foregoing a car, you may save money on monthly payments, maintenance costs, car insurance, gas, and more.

Related post: Should We Get Rid Of A Car And Just Have One?

 

Eat out less.

Now, I’m not saying you should stop eating out entirely if you are trying to survive on a college budget. I know how it is to be in college and to want to hang out with everyone. These are your college years after all.

However, you should try to eat in as much as you can, make your own meals, and try to eat out only during happy hours or when food is cheaper, such as during lunch time. Eating out can ruin your college budget!

 

Have a roommate.

The more people you live with, generally the less you will pay when it comes to rent and utilities. If you are living on your own, then you may want to find roommates so that you can split the costs with them.

This will help you to lower your college budget and you may even find some awesome friends.

Related post: What I Learned Having Roommates

What college budget tips do you have?

 

The post Learning How To Survive On A College Budget appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

Best cards for food delivery and meal kit subscriptions

January 23, 2021

Credit cards for foodies are the latest trend, with more and more rewards programs and additional card benefits catering to both dining in and eating out. Restaurant and grocery bonus categories are becoming commonplace – letting cardholders rack up a few extra points or cash back on those purchases.

But what about those who prefer to order delivery? If you like to take advantage of popular food delivery services like DoorDash or Uber Eats or simplify cooking with a meal kit subscription, there are plenty of credit card rewards and benefits you can leverage to save a little money.

Finding the best card for your favorite services

Finding the best card for your favorite food delivery or meal kit service depends on a variety of factors, including the card’s yearly credits, special perks or rewards rate. For example, many dining cards offer bonuses that are tailored to a specific delivery service, as a monthly Uber credit.

See Related: Food delivery perks on luxury travel cards

For meal kit services, matching rewards is a little more complicated. You could opt for a rewarding grocery card, as many meal kit brands are now partnered with major supermarkets – so you can buy them in the store.

merchant category code that qualifies for a point or cash back bonus. You can test it by making a small charge to your card and seeing what rewards you earn.

Online shopping rewards, on the other hand, are much more flexible. They apply to both web and app purchases, so whether your order from your phone or computer, you can rack up bonus points or cash back.

See Related: Make the most of an online shopping bonus category

Best cards by delivery service or meal kit subscription

With all this in mind, here are some of our favorite cards for some of the most popular food delivery and meal kit subscription services.

Delivery service Card Rewards rate Why we like it
DoorDash Chase Sapphire Reserve
  • 10 points per dollar on Lyft purchases (through March 2022)
  • 3 points per dollar on travel and restaurants (excluding purchases covered by $300 travel credit)
  • 1 point per dollar on general purchases
  • Generous rate on dining purchases
  • Receive a yearly statement credit for DoorDash purchases ($60 in 2020 and $60 in 2021)
  • Get at least one free year of DashPass when you enroll with your card (activate by Dec. 31, 2021)
Uber Eats The Platinum Card® from American Express
  • 10 points per dollar on eligible purchases at U.S. gas stations and U.S. supermarkets, on up to $15,000 in combined purchases, during the first 6 months of card membership
  • 5 points per dollar on flights booked directly with airlines or with American Express Travel (starting January 1, 2021, earn 5X points on up to $500,000 on these purchases per calendar year)
  • 5 points per dollar on eligible hotels booked with amextravel.com (starting January 1, 2021, earn 5X points on up to $500,000 on these purchases per calendar year)
  • 1 point per dollar on general purchases
  • Terms apply
  • Get up to $200 in Uber credits per year ($15 per month, plus an extra $20 in December), which can be applied to Uber Eats
  • Automatic Uber VIP membership (where available) without ride requirements
Instacart Capital One Savor Cash Rewards Credit Card
  • 8% cash back on Vivid Seats tickets (through Jan. 2022)
  • 4% cash back on dining and entertainment
  • 2% cash back at grocery stores
  • 1% cash back on all other purchases
  • Top-tier cash back on restaurant delivery, including most delivery services
  • Grocery bonus category includes eligible grocery delivery services, including Instacart
  • As a Mastercard, offers complimentary a 2-month Instacart Express membership if enrolled before Mar. 31, 2021
Grubhub/Seamless/Boxed/Instacart American Express® Gold Card
  • 4 points per dollar at restaurants worldwide
  • 4 points per dollar at U.S. supermarkets (on up to $25,000 in purchases per year, then 1 point)
  • 3 points per dollar on flights booked directly with airlines or amextravel.com
  • 1 point per dollar on other purchases
  • Terms apply
  • Enroll to receive up to $10 in statement credits per month (up to $120 per year) to use at participating restaurants, including Grubhub, Seamless and Boxed
  • Excellent rewards on grocery delivery services, such as Instacart
HelloFresh Blue Cash Preferred® Card from American Express
  • 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%)
  • 6% cash back on select U.S. streaming subscriptions
  • 3% cash back at U.S. gas stations and on transit purchases
  • 1% cash back on general purchases
  • Terms apply
  • Generous rate on U.S. supermarket purchases (HelloFresh meal kits are sold in supermarkets such as H-E-B and Giant Food) and eligible grocery delivery services, such as Instacart
  • Unlimited 3% cash back on delivery purchases from ride-share services, like Uber and Lyft
Home Chef Blue Cash Everyday® Card from American Express
  • 3% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%)
  • 2% cash back at U.S. gas stations and select U.S. department stores
  • 1% cash back general purchases
  • Terms apply
  • Generous rate on U.S. supermarket purchases (Home Chef meal kits are sold in select Kroger locations)
Other delivery services Bank of America® Cash Rewards credit card
  • 3% cash back on a category of choice (gas, online shopping, dining, travel, drugstores or home improvements and furnishings)
  • 2% cash back at grocery stores and wholesale clubs
  • $2,500 combined limit on 2% and 3% categories each quarter
  • 1% cash back on other purchases
  • Generous rate on online shopping purchases (if you select it as your 3% category) and good rate at grocery stores
  • Can swap choice 3% category monthly to account for different delivery services. For instance, the dining category rewards Grubhub purchases and the travel category rewards ride share purchases from services like Uber

If you don’t have a delivery service you prefer – or if you like to switch back and forth based on restaurant availability – a card with rewards on online shopping is your best bet.

Bottom line

Ordering food can be expensive, but using the right rewards card can help you alleviate some of that cost by racking up points or cash back. With some cards, you might even get a few extras that cover your next couple of meals.

Source: creditcards.com

Business credit cards

If you are a small-business owner and cash is not flowing and bills are piling up, the most important thing to do is contact your card issuer.

Some banks are also providing assistance in case you can’t pay your business credit card bill.

Another coronavirus complication: Scams

As consumers wrestle with the impact of the coronavirus, scammers are trying to take advantage of the situation.

In a June 2020 public service announcement, the FBI warned that the increasing use of banking apps could open doors to exploitation.

“With city, state and local governments urging or mandating social distancing, Americans have become more willing to use mobile banking as an alternative to physically visiting branch locations. The FBI expects cyber actors to attempt to exploit new mobile banking customers using a variety of techniques, including app-based banking trojans and fake banking apps,” the PSA warns.

Scammers might also be capitalizing on health and economic uncertainties during this time. In one such scam, cybercriminals are sending emails claiming to contain updates about the coronavirus. But if a consumer clicks on the links, they are redirected to a website that steals their personal information, according to the Identity Theft Resource Center (ITRC).

Identity theft in 2020: What you need to know about common techniques

Bottom line

The outbreak of a disease can upset daily life in many ways, and the ripple effects go beyond our physical health. Thankfully, many card issuers are offering relief. If you’re feeling financially vulnerable, contact your credit card issuer and find out what assistance is available. And while data security may seem like a secondary consideration, it’s still important to be vigilant when conducting business or seeking information about the coronavirus online.

Source: creditcards.com

4 Questions to Ask Before Choosing a Checking Account

January 23, 2021

You’ve probably had a checking account for most of your life and never gave it much thought. It’s just there to store your everyday cash, right? Not necessarily.

If you’re considering questions about checking accounts as you take a closer look at your current setup and explore opening a new one, it’s important to note that checking accounts are designed with different and unique features. Some may even be more beneficial to you than you realize.

For starters, most checking accounts offer a host of conveniences, providing customers the ability to set up automatic payments for routine bills, schedule electronic transfers and make all deposits and transfers via a smartphone app. Some accounts even allow you to earn cash back on your debit card purchases.

“A checking account can have a long-term impact on your financial well-being, so it’s worth taking the time to figure everything out,” says Jeff Kreisler, money expert and author of the personal finance book “Dollars and Sense.”

You may not even think you have questions about checking accounts if you've had your account for a while—but reviewing your account features can help you decide if you need to switch.

At this point, you might be thinking, “What questions should I ask before opening a checking account?” To help you decide which account is right for you, here are four key questions to ask yourself:

1. What types of checking accounts should I consider?

Before you open a new checking account, do a little homework to learn about the different types of checking accounts offered by banks, Kreisler says. There’s the standard personal checking account that allows you to write checks and make payments with your debit card or electronically. But when thinking about questions to ask when opening a checking account, go beyond the basic features to find an account that best fits your lifestyle and financial goals. Here are some examples:

  • Online checking account: Ready to bypass the teller lines with the benefits of an online bank? Then this is the checking account for you. Doing your banking from any computer or mobile device is sweet—and since online banks don’t have brick-and-mortar locations, they can often pass their savings from overhead down to you. Just verify that the online bank or credit union supplying the checking account is backed by the FDIC or the National Credit Union Administration.
  • Rewards checking account: One question to ask before choosing a checking account is if you can earn rewards or incentives for certain activity. Discover Cashback Debit, for example, lets you earn 1% cash back on up to $3,000 in debit card purchases each month.1 That means your monthly cashback earnings could yield $360 in total rewards each year (finally, dinner and drinks at that new French bistro in town!). Some banks may also offer a checking account bonus just for opening a new account, while others have a variety of reward options based on certain qualifying purchases. A rewards checking account works for almost anyone looking to maximize their debit spend or a balance they regularly hold in their checking account.

Say hello to
cash back on debit
card purchases.

No monthly fees.
No balance requirements.
No, really.

See Details

Discover Bank, Member FDIC

  • Joint checking account: Most checking accounts can be opened as a joint checking account, which is an account held by two or more people. This can be a convenient solution for couples, minors and their parents and even seniors and their caregivers who are trying to manage a household budget. It does require good record keeping and communication, so make sure you understand the ins and outs of joint accounts before choosing this option.

The above checking accounts are the most standard and usually have appealing benefits. But if you have more questions about checking accounts, there are options that can cater to more specific needs. However, they often have less flexibility. For instance:

  • Interest-bearing checking accounts are available for those who want to earn some money while their cash is parked in the account. The rate of return is usually low and minimum balance requirements high.
  • Student checking accounts are often low-cost, but they could come with limitations. Whether or not a student account is available may be a good question to ask before choosing a checking account if you’re looking for a starter account for yourself or your child.
  • Second-chance checking accounts could be a fit for those who may not be able to get a standard checking account due to their banking or credit history; however, they often have higher fees.

“A checking account can have a long-term impact on your financial well-being, so it’s worth taking the time to figure everything out.”

– Jeff Kreisler, money expert and author of Dollars and Sense

2. Are there fees associated with the checking account?

This is one of the most commonly asked questions about checking accounts. Before choosing a checking account, be sure to research its fees, says Marc Bernstein, financial planner and strategist for MWealth Advisors. Types of fees and fee amounts can vary greatly from bank to bank, and even among accounts at the same bank.

A question to ask when opening a checking account is if the account charges fees for ATM use, automatic bill pay, monthly maintenance, ordering checks, replacing a debit card or ordering official bank checks. Banks may charge any combination of these fees—or none. Discover Cashback Debit comes with no fees. Period.2 That means you won’t be charged a fee for any of these services.

Asking about fees is one of the most important questions to ask before choosing a checking account.

Along with including the fee topic on your list of questions to ask before choosing a checking account, you should also consider obtaining “a document outlining the fees you’ll be paying, in case you have any questions, and check the fine print,” Bernstein says. You can also typically find a list of fees (if any) on the bank’s website or in the account agreement.

3. Is there a minimum balance requirement?

According to Bernstein, among the questions to ask when opening a checking account is if it requires an initial minimum balance to open. You’ll also want to know if a minimum balance needs to be maintained to avoid a fee.

Bernstein suggests looking for an account with no minimum balance requirement if you tend to keep less than $1,000 in your account or like to have flexibility when making large withdrawals.

If you’ve asked this question about checking accounts and are still comparing accounts that have a minimum balance requirement, realistically determine how much you can keep in your account per month and what you will be charged if you can’t keep that balance.

Even if your account falls below a minimum requirement, there could be a way to save on fees. If you have multiple accounts at one bank, the bank may allow you to combine the balances to waive checking fees.

The total average cost of withdrawing cash from an out-of-network ATM is $4.68. That’s 36 percent higher than it was 10 years prior, with no signs of decreasing.

– Bankrate’s 2018 checking account and ATM fee study

4. What ATM fees could I incur?

If you frequent the ATM to take out cash, a good question to ask before choosing a checking account is: Where are the bank’s ATMs located in relation to your home and work?

Availability of ATMs is an important question to ask when opening a checking account that can really affect your wallet. For instance, if you decide to withdraw money from an ATM that’s not in your bank’s network, you can get hit with two separate charges: a surcharge from the ATM owner (since you’re not a customer) and a fee from your own bank.

And those fees can really add up. According to Bankrate’s 2018 checking account and ATM fee study, the total average cost of withdrawing cash from an out-of-network ATM is $4.68. That’s 36 percent higher than it was 10 years prior, with no signs of decreasing.

One way to get cash without paying an ATM fee is to use your own bank’s ATMs. The more ATM locations that your bank offers that are conveniently located, the less likely you are to use one that’s out-of-network and rack up unnecessary charges. If you can’t always use your own bank’s ATM, one of the questions to ask when opening a checking account is whether your bank allows you to use a broader ATM network for no-fee transactions.

Find the best checking account for you

Opening a new checking account is an important step toward establishing, or rebuilding, your financial foundation.

Now that you can ask the right questions about checking accounts, you’re one step closer to choosing an account that fits your individual needs. And that feels like money in the bank.

1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, which also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.

2 Outgoing wire transfers are subject to a service charge. You may be charged a fee by a non-Discover ATM if it is not part of the 60,000+ ATMs in our no-fee network.

The post 4 Questions to Ask Before Choosing a Checking Account appeared first on Discover Bank – Banking Topics Blog.

Source: discover.com

Can you send money with a credit card?

January 23, 2021

Sending cash to friends and family? Before you reach for that credit card, grab a calculator. It’s time to do a little math.

With most everything you purchase online or through apps, credit cards have the edge. With plastic, you have chargeback rights. If you’re overcharged or receive the wrong item, broken merchandise or nothing at all, your card issuer will make it right. And if you use a rewards card, you collect points or miles, too. Win-win.

But it’s different story when you’re sending money through peer-to-peer platforms. Many of them (like Google Pay, Popmoney and Zelle), don’t allow consumers to use a credit card to send cash.

Others (like Cash App, PayPal and Venmo), allow credit cards but also charge a fee for the privilege – often about 3%.

See related: How to choose a P2P payment service

The hidden costs of using credit cards to send money

Choose a credit card to send money and you might also end up paying additional fees to your card issuer. That’s because the combination of some peer-to-peer apps with certain cards are coded as cash advances, rather than purchases.

For many cards, that cash advance code triggers a higher interest rate that kicks in the moment you make the transaction, as well as a separate cash advance fee that’s often $10 or 5% of the transaction – whichever is higher. (Currently, the average interest rate for cash advances is 24.8%, while the average APR for purchases is 16.05%.)

So the combination of peer-to-peer service fees, credit card cash advance fees and that higher interest rate (with no grace period) could make sending a few hundred dollars a bit more costly than you’d planned.

No chargeback rights with credit cards

The real kicker: Unlike other venues, you don’t have chargeback rights when you use credit cards to make peer-to-peer money transfers.

When you present your credit card in an online or brick-and-mortar store, there’s a merchant involved – and the law provides chargeback rights for your protection in case you don’t get what you were promised in the deal. But in a peer-to-peer money transfer, there’s no merchant, so currently the laws don’t give consumers any chargeback rights, says Christina Tetreault, manager of financial policy for Consumer Reports.

“The chargeback right requires a merchant,” says Tetreault. “One of the hoops a consumer has to jump through is to try and work it out with the merchant.”

If you use a peer-to-peer service and send the wrong amount or send the money to the wrong person, most platforms advise that the only way to get it back is to contact the recipient and ask them to return it. And that’s often the same whether you use a credit card, debit card, bank account or funded account on the platform.

“Be doubly sure when you’re sending the money that you’re putting in the correct information,” says John Breyault, vice president of public policy, telecommunications and fraud for the National Consumers League. “It’s still a buyer beware world when it comes to peer-to-peer.”

The solution

If you’re sending money and want to use a credit card, it pays to do a little sleuthing first. Check out the peer-to-peer site. Does it allow users to send money with a credit card? If so what, if any, fees does it charge?

On some platforms (PayPal is one), you could see similar fees for using a debit card – while sending from a bank account or funded account on the platform is free.

The good news is that many peer-to-peer platforms clearly disclose it when there’s an extra charge to use a credit card, says Tetreault. With Venmo, for example, you’ll get a pop-up message.

Harder to decipher: Will credit card transactions on the platform be treated as a cash advance? If your preferred platform doesn’t post this information, you might need to contact customer service. (And how quickly and easily you get an answer can tell you a lot, too.)

Ask your card issuer the same question: Are peer-to-peer money transfers on the platform you’ve chosen treated as a cash advance? If they are, what’s the interest rate, and what’s the cash advance fee?

“What I would suggest is to ask that question, via email, of your financial institution,” says Tetreault. “It may be in their FAQs. And you want to save that email. If you have it in writing, if there’s an issue later, you’re better positioned to contest that fee.”

But “the hard truth is you may not be able to find out ahead of time,” she says.

Another solution: Opt to use a credit card issued by a credit union.

“With credit unions, the APR is usually the same” for purchases and cash advances, says John Bratsakis, president and CEO of the Maryland and District of Columbia Credit Union Association.

Likewise, with American Express cards you pay your regular interest rate and no cash advance fees on peer-to-peer transfers, says Elizabeth Crosta, vice president of public affairs for American Express.

And credit cards from U.S. Bank register peer-to-peer money transfers as regular purchases – with no cash advance fees or cash advance APRs, says Rick Rothacker, spokesperson for the bank.

See related: How do credit card APRs work?

What’s your reason for using a credit card?

Take a good look at the reason you’re using a credit card, too. If you want chargeback rights, that’s not an option. If you’re doing it for the rewards, will the value of those points or miles be eaten up by extra fees or a higher interest rate you have to pay to use the card?

And if you’re using a card because you don’t have the cash, that might be a good reason to rethink the idea of sending money in the first place.

That’s a huge red flag, says Bruce McClary, vice president of public relations at the National Foundation for Credit Counseling.

“The need to convert credit into cash is what really gets my attention – because that hints at a lack of savings,” he said. “It’s a reality a lot of people are facing, especially now.”

Cash advances aren’t as expensive or risky as payday loans and car title loans, but they should be among your last resorts. If you’re looking for short-term relief, you could ask your credit card issuer for help, or find out if you qualify for a personal loan. You could also borrow from a family member or trusted friend, but be wary of the potential relationship toll if you can’t pay them back.

Getting cash from credit cards

Fifty-two percent of Americans report that the pandemic has damaged their finances, according to a recent survey by the NFCC. More than a fifth of those had to tap savings for everyday expenses, while 16% increased their credit card spending.

And that’s a sign of financial stress, says McClary. “It means that, in some situations, they have run out of savings.”

There are ways you can use your card to get cash, though.

Cashing in rewards

Some rewards cards from issuers such as Chase, Bank of America and US Bank let you deposit cash-back rewards directly to your bank account.

And Wells Fargo also will let you deposit its Go Far Rewards directly into another Wells Fargo customer’s account, says Sarah DuBois, spokesperson for the bank.

Gift cards

Many credit cards let you convert rewards into retail gift cards. So a pile of points can help a friend or family member buy much-needed groceries or a few holiday presents.

Or simply “buy a gift card for someone,” says Bratsakis.

Retailer-specific gift cards and gift cards issued through local and regional retail associations and malls often come with no fees – meaning every dollar you spend goes toward your gift.

Convenience checks

While you can get a cash advance or use convenience checks from your card issuer, both those options often come with fees and higher interest rates. Not a smart money move, especially in the current economy.

While some lenders may offer convenience checks with deferred interest, that’s not the same as “no interest,” says Bratsakis. Also, if you don’t pay the loan in full, will you owe the full interest retroactively?

“That’s where consumers have to be careful,” he says. With a convenience check or even a cash advance, “that’s usually where consumers can get themselves into trouble if they can’t pay it off and get hit with deferred interest.”

See related: What is deferred interest?

Bottom line

When it comes to peer-to-peer payments, cash really is king. You can then put it into a funded account with the money transfer platform or your bank account. And most peer-to-peer platforms let you do this for free.

“The safest way to use these services is to send money person-to-person and be diligent about getting all the details correct so it doesn’t go to the wrong person,” says Tetreault.

Only send to people you trust and know in real life, she says. “And before sending money make sure you understand what, if any, fees you might incur.”

Source: creditcards.com

Best Checking Accounts 2020

January 20, 2021

Sound money management is an important part of a solid financial strategy. You’ll want to have some of your money set for retirement in a traditional or Roth IRA. Still, other money might be saved for your kids’ college, a down payment on a house or other longer-term goals. And then you might have an emergency fund as well as a checking account that you use to pay your monthly bills and expenses. Each of these buckets of money can be in a different kind of account. In this article, we’ll look at some of the best checking accounts.

What makes a good checking account

Before we look at some of the best checking accounts, it’s a good idea to talk about what makes for a good checking account. A checking account is an account that you would typically use to pay your ongoing monthly expenses. It is more and more rare to actually write paper checks, and instead, you would typically use a debit card or cashless payment account linked to your checking account. 

With a checking account, some features to look for include no monthly or maintenance fees, a low minimum amount to open an account, the rate at which they pay interest, and any account opening bonus they might offer. The interest rate that checking and savings accounts pay is tied to the federal funds rate and usually varies over time. As of 2020, the interest rates are quite low, and many checking and savings accounts do not pay any interest at all. Also keep in mind that even if your account pays you 1% interest, you’re still losing money to inflation. So you wouldn’t want to keep any long-term investment money in a checking or savings account.

With all that being said, let’s take a look at some of the top checking accounts available.

Discover Cashback Debit

Discover’s checking account offers 1% cash back on up to $3,000 in debit card purchases each month, which is one of the few debit cards that offer a reward on ongoing purchases. The Discover Cashback Debit account also comes with no monthly maintenance or other fees, no fees to withdraw at over 60,000 ATMs worldwide and no fees for insufficient funds.

CapitalOne 360 Checking

The CapitalOne 360 Checking account has no account minimums or fees. It currently offers a 0.10% APY on balances, though you can also open a no-fee CapitalOne 360 Performance Savings account which offers 0.65% APY as of the time of this writing. CapitalOne also has thousands of branch offices nationwide, so you can do your banking online or in-person. The CapitalOne 360 Checking account offers three different options if you happen to overdraft your account – Auto-Decline, Next Day Grace and Free Savings Transfer.

Fidelity Cash Management Account

Fidelity’s Cash Management Account also offers no account fees or minimum balances. It also reimburses ATM fees nationwide, though only offers 0.01% APY on account balances. Fidelity makes it easy to transfer money between your checking account, savings accounts and any retirement accounts you have with Fidelity. Plus, the Fidelity Rewards Visa offers 2% cash back on all purchases, which you can redeem into your Fidelity Cash Management Account or any other Fidelity account.

Wealthfront Cash Account

Wealthfront’s Cash Account offers a high-interest checking account (0.35% APY as of this writing) with no fees. And Wealthfront’s convenient account dashboard lets you easily move money between your checking account and any investment or retirement accounts that you have with them. They also offer a service where you can get access to your paycheck up to two days early if you direct deposit into your Wealthfront Cash Account

HSBC Premier Checking

HSBC’s Premier Checking account also offers no fee on ATMs nationwide or for everyday banking transactions, but does charge a monthly maintenance fee if you don’t have at least $75,000 in combined accounts or direct deposits of at least $5,000 monthly. They are currently offering a promotion where you can earn 3% as a welcome bonus, up to $600. You’ll get 3% on qualifying direct deposits, up to $100 per month, for the first six months of having your account.

Chase Total Checking

Chase Total Checking is currently offering a welcome bonus of $200 when you open a new account and have a direct deposit made to your account in the first 90 days. Also, there is a $12 monthly maintenance fee which can be avoided if you either:

The post Best Checking Accounts 2020 appeared first on MintLife Blog.

Source: mint.intuit.com

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