Low Interest vs. Cash Back: Credit Card Questions Answered

Ahh, credit cards. All those offers, tons of fine print... what does it all mean? Whether you're applying for your first credit card or are a long-time cardholder investigating alternate options, it's wise to get the facts before moving ahead with a new plan of action. Read on for anwers to commonly asked questions.

What's a low interest credit card?

A low interest credit card offers reduced APR (annual percentage rate) for cardholders with an excellent payment history. If you consistently pay your total monthly balance, or if you at least pay the minimum payment due on time, you may be eligible for a low interest credit card. Look into money-saving options with a low interest credit card!

Exactly how low are we talking?

First-time credit card holders may be required to pay anywhere from 17.999%-23.99% interest on your balance per month. If you've maintained good standing with your credit card company for at least a year, you may be able to have your interest lowered to 12.9% or even 10.24%. Click here to view the many Low Interest Credit Card Offers currently available.

Are the offers for 0% APR too good to be true?

0% APR Credit Card Offers are real and legitimate promotions that can save you a ton of cash in the long run. All it takes is a balance transfer from your existing credit card. Depending on the promotional details, you can enjoy exceptionally low rates for as long as a full year. Smart consumers know that offers like these are a great way to start chipping away at that outstanding debt and get back on track toward financial freedom!

What's a cash back credit card?

A cash back credit card affords solid value to cardholders who pay their balance every month. Interest rates are typically the highest, but that's not a concern for a customer who incurs little or no debt. With this type of credit card, you'll earn rebate dollars which arrive in the form of mailed checks. Free money back on purchases you'd be making anyway... now that's a wise move.
How much money can I earn with a cash back card?
For every supermarket, gas station or drugstore purchase, typical cash back credit cards reward 5%. For most other purchases, 1% is given. To put this in perspective: if you spend $2,000 on merchandise that yields a 5% return, you'll earn $100 cash back.

When can I expect to be paid?

Credit card companies have now put the ownes on their customers to request payouts for cash rebates. So make that call or put in that online request during the time that the card is active, and reap the rewards of a credit card that just keeps on giving. No matter which offer you're considering, read the Terms and Conditions and keep a copy of this information handy. This way, you can take advantage of every opportunity to save money while building your credit. Before you know it, you'll be making informed credit card decisions with confidence!

Financing with Business Credit Cards

You've heard the saying, "You've got to spend money to make money!" This couldn't be more true, especially in business. If you want to grow your business, you're going to need a source of funds and access to cash flow - particularly when things are moving slowly.

At one time, owners of businesses had to get business credit against the things that they owned personally and based on their personal credit score. This is a major liability because if your business doesn't make it, you could lose your personal assets, too! Thankfully, there are now ways to obtain business credit that is not just an extension of what you owe personally.

If you set the business up as an official entity- separate from yourself, you can apply for various business funding, including loans or credit cards. When a business is just starting out, it hasn't had the opportunity to establish it's own credit rating yet and so lenders will have to use your personal credit report to determine the level of risk in lending to a business you own. What happens if your personal credit score is not-so-good?

You can take some steps to increase your chances of getting a business credit card (or some other form of business funding) by doing the following:
• Take steps to increase your personal score. Before you go any further looking for business credit cards or other sources of funding, do you know what your score is? Is your credit score below 640? If it is, it is recommended that you attempt to increase the score first. Often, making all of your payments on time for 3 consecutive months will pull your score up 2 to 4 points. Check with a financial advisor for some ways of increasing your credit score as it will only serve to help you personally as well as in business.
• Create an LLC or Corporation. This type of business structure automatically means the business is separate, and not just an extension of you. If you are operating a business under your name, and have not filed any official paperwork with the government or with lawyers and accountants- your business finances are no different than your personal finances.
• Have a physical address. Believe it or not, using a PO Box can hinder your ability to get a business credit card or loan! If you operate out of your home, you might consider getting a business mailbox from Mailboxes Etc, or UPS, as both offer a physical mailing address rather than a PO Box. Having a business phone line also will increase the way the business is looked at by lenders, and ensures the business is reachable.


If you are still unable to obtain business credit cards or financing on your first try, perhaps you know someone with a strong credit rating who would be willing to co-sign an application for you. You may not be able to have a business application for credit co-signed, but you can as an individual. Get a credit card in your name and then use it only for the business. Be sure to make the payments on time, and keep the balance manageable. Over time, you'll build up your personal credit score, which is seen as a boost for the business validity- and eventually you'll be able to obtain funding and credit cards under the business name.

Getting business credit cards and financing is a necessity that all businesses will face from time to time. There is a need for cash flow in order to grow and increase the business. With some careful planning and preparation, most businesses will be approved for a business credit card even if the owner has personal credit that is slightly less-than-perfect.

Glossary of Credit Card Terms

Credit card issuers are required by law to disclose certain key information to consumers. These terms are important when you want to compare credit card plans between several credit card companies. Here are some of the more important credit card terms:
APR: (Annual percentage rate) for purchases: The annual percentage rate (as a percent, divide by 12 to get monthly rate) you will be charged if you carry a balance month-to-month. If your card has an introductory rate, you will see both the introductory rate and the rate that will apply after the introductory rate expires. A credit card may have several different APR’s, many introductory plans have 0 APR credit cards.
Other APR’s: These APR’s are charged if you get a cash advance on your card, transfer a balance from another card, or are late making a payment. Additional information may be posted as a footnote, for example, if you make two consecutive payments late the credit card company may change the APR to a higher rate.
Grace period for repayment of balances (or) purchases: The number of days you’ll have to pay your credit card bill in full without triggering a finance charge. The grace period usually only applies to any new purchases you have made. Most credit cards do not offer grace periods for cash advances or balance transfers; interest charges start right away.
Method of computing the balance (or) purchases: This is your average daily balance calculated over the billing period. If you carry an outstanding balance this is your daily balance that will apply to the finance charge. The amount usually depends upon your outstanding balance and the credit card’s current APR.
Annual fee: This is the charge a credit card company imposes for using the card for a 12-month period. Other fees may also apply, such as:
*Cash advance fee: Charged when you use the card to get cash. This may be a flat fee or a percentage of the cash advance, and sometimes both.
*Balance transfer fee: When you transfer a balance from one card to the next, usually by using the ‘convenience’ checks credit cards send you. This is usually a flat fee or processing fee.
*Late payment fee: Charged if the payment is received late. (Be sure to check out the credit card’s online payment system; this feature can save a hefty late payment charge on your account).
*Over-the-credit-limit-fee: This charge is triggered if you exceed your credit limit. (Most checkout counters with swipe authorizations will not allow you to exceed your credit card limit. Be careful when using those ‘convenience checks’ to make purchases, or snail mail purchases).
*Credit-limit-increase-fee: Charged by some credit card companies if you request an increase in your credit limit.
*Returned items fee: This is basically a returned check fee (for non-sufficient funds).
*Other fees regarding online payment: Some credit card companies charge a processing fee if you pay online or by phone. Be sure to check out the payment options that the credit card company offers you.
Minimum finance charge: The minimum finance charge you ‘ll have to pay during a billing cycle (usually 30 days). A minimum finance charge usually occurs only when a finance charge is imposed, such as when you carry over a balance from a previous month. You will be charged the minimum even if the amount of your finance charge is less. For example, your finance charge may be calculated to be 35 cents, but if the company’s minimum finance charge is $1.00, you’ll still be charged $1.00.
Know what your options are with your credit cards. Reading the fine print may be a headache at first, but it will save you money and worry later.

Five Factors to Consider When Selecting a Personal Credit Card

Nowadays many credit card companies offer perks to lure new customers ranging from introductory offers with zero percent interest for transferred balances, Reward Programs offering airline mileage and cash back, and discount programs with select merchants. While these offers may be very enticing, there are five key factors, none of which include perks, that you should consider when choosing a credit card.

FEES
One of the first factors to consider when selecting a credit card is the number of fees associated with using the card and the totality of all of them if incurred. Companies can charge a variety of fees with the most common being annual, closure, over-the-limit and late fees. Because, not all companies charge the same fees and the level of the fees can also differ, it is important to read all of the fine print and details that accompany any credit card offer.

Annual Fee
An annual fee is a membership or participation fee that is charged for having a card. An annual fee can range from $25 to $50.

Closure Fee
Some companies also charge a closure fee when an account is closed. This fee also falls within the $25 to $50 range.

Over-the-Limit Fee
An over the limit fee is assessed when the sum of your purchases and fees exceed the amount of credit you have available for new charges. Generally speaking, this fee is around $25.

Late Fee
Late fees are charged when payments are past due. Some companies assess late fees as early as one day after the payment due date. Late payments can also trigger an increase in your annual percentage rate.

ANNUAL PERCENTAGE RATE
The annual percentage rate (APR) is by far one of the most important, if not the most important factor to consider when selecting a credit card. The APR, which is stated as a yearly rate, is the interest rate applied to outstanding balances. Low rates are preferable since this means you will be paying less to use a credit card. One single credit card can apply a different APR for balance transfers, cash advances and purchases.

CREDIT LIMIT
You should also consider the level of credit that is being offered when selecting a credit card. A credit limit is the amount of money that is available for purchases, cash advances, balance transfers, fees and finance charges. Credit limits can start as low as $200 for department store credit cards and go into the thousands for major credit cards (Visa and MasterCard) depending on your credit rating and income.

SECURED VERSES UNSECURED CARDS
Another factor to consider when selecting a credit card is whether the card is secured or unsecured. Users of secured credit cards pay a deposit to obtain credit. These offers often appeal to two classes of individuals, those who are very young and are having a difficult time establishing credit and those who have blemishes on their credit reports that prevent them from obtaining unsecured credit. The credit limit for secured credit cards is usually determined by the amount of your deposit.

Unsecured credit cards are by far the most widely held cards and tend to have higher credit limits.

GRACE PERIOD
The final factor to consider, the grace period, is the length of time you have to pay your credit card balance in full without accruing interest charges. The ideal card will have a grace period of 25 days or longer. If you carry a balance from month to month you will pay interest regardless of how many days are in a grace period with only new purchases being exempt for 25 days. The grace period is usually not applicable to cash advances and balance transfers.

PERKS AND REWARDS
While not one of the five key factors, I still felt it necessary to write a blurb on perks. Many credit card companies offer perks as an incentive to lure new customers and reward loyal ones. Perks can include a Rewards Program that awards you with airline mileage and cash back on your purchases. Some cards also offer discounts at select merchants and credit card registration, which protects you if your card is lost or stolen. Unless you are a frequent user of credit, perks should be the last item you consider when selecting a credit card because the biggest payoffs tend to go to the biggest spenders.