Debt

“There are no shortcuts when it comes to getting out of debt.” ~ Dave Ramsey

“We all think we’re going to get out of debt.” ~ Louie Anderson

“The whole point of credit cards, the way they are rendered most profitable, is that we dig ourselves into debt and stay trapped there forever.” ~ Brett Williams

“When I was young, people lived paycheck to paycheck. Today, it seems like they live from credit card payment to credit card payment.” ~ Robert Kiyosaki

“The average American is nearly $7,000 in debt.” ~ RamitSethi

“The fact is, nearly 75 percent of Americans who use credit cards make only the minimum payment each month. At that rate (minimum payments) you could spend the next thirty years paying back a $3,000 credit card debt and give the financial institution $8,000 worth of interest. It’s the principle of compound interest in reverse.” ~ Raymond McHenry
“The only man who sticks closer to you in adversity than a friend is a creditor.” ~ Anonymous

“One of the greatest disservices you can do to a man is to lend him money that he can’t pay back.” ~ Jesse H. Jones

“It is imperative that we make consumers more aware of the long-term effects of their financial decisions, particularly in managing their credit card debt, so that they can avoid financial pitfalls that may lead to bankruptcy.” ~ Daniel Akaka

“The minute a Wall Street firm purchases your debt, your bank no longer has it on its financial statement, which then allows the bank to look for more credit card customers. That’s one reason why you get so many credit card offers.” Robert Kiyosaki

Students and Debt

“Debt is a trap, especially student debt, which is enormous, far larger than credit card debt. It’s a trap for the rest of your life because the laws are designed so that you can’t get out of it. If a business, say, gets in too much debt, it can declare bankruptcy, but individuals can almost never be relieved of student debt through bankruptcy.” ~ Noam Chomsky

“Many kids come out of college, they have a credit card and a diploma. They don’t know how to buy a house or a car or health insurance or life insurance. They do not know basic microeconomics.” ~ Jesse Jackson

“Typically, students slide into debt through the extension (by credit card companies) of unaffordable credit lines.” ~ Robert Manning

Good Intentions

“In January we start saving money, getting out of credit card debt, funding our retirement accounts, and we’re doing wonderful. Then, every single year like clockwork, starting in November, all of you fall into this trap that says, ‘I have to buy this gift. . .  I can’t show up at this party and not have something for everybody.’” ~ Suze Orman

“You goal should be to pay off your credit card bills in full at the end of each month and set aside money toward your emergency savings.” ~ Suze Orman

Credit Advice

“If you don’t have the money management skills yet, using a debit card will ensure you don’t overspend and rack up debt on a credit card.” ~ T. HarvEker

“I don’t use a debit card. The safest thing is a credit card because you’re using the bank’s money. If someone accesses your information, they are stealing the bank’s money, not yours.” ~ Frank Abagnale

“You have two pages, that’s the whole credit card agreement. The terms are clear and flat and easy to see so anyone can read them. So you could lay four credit cards in front of you and say, ‘Oh, that’s the one that has the highest rate, that’s the one that has the really scary provision that could hurt me.’” ~ Elizabeth Warren

“I have always advocated doing everything possible to pay off credit card balances; it’s good financial management and the ticket to a strong FICO credit score.” ~ Suze Orman

“High bankruptcy rates, increased credit card debt, and identity theft make it imperative that all of us take an active role in providing financial and economic education during all stages of one’s life.” ~ Ruben Hinojosa

“If you have a debt issue or credit card issue, start dealing with it. If you have a tax issue, don’t just say, ‘I’m not going to file.’ There are ways to deal with these things, but you must communicate with your creditors, whether it’s a credit card company or tax department.” ~ Hill Harper

“A cash advance on a credit card is one of the worst types of borrowing because the interest rate is typically 21 percent or more.” ~ Suze Orman

Privacy Issues

“Oh, I think there are a lot of people who would be buying and selling online today that go up there and they get the information, but then when it comes time to type in their credit card they think twice because they’re not sure about how that might get out and what that might mean for them.” ~ Bill Gates

“Everything we do in the digital realm – from surfing the Web to sending an e-mail to conducting a credit card transaction to, yes, making a phone call – creates a data trail. And if that trail exists, chances are someone is using it – or will be soon enough.” ~ Douglas Rushkoff

“Social security, bank account, and credit card numbers aren’t just data. In the wrong hands they can wipe out someone’s life savings, wreck their credit and cause financial ruin.” ~ Melissa Bean

“All they need to do is to set up some website somewhere selling some bogus product at twenty percent of the normal market prices and people are going to be tricked into providing their credit card numbers.” ~ Kevin Mitnick

“I trust online banking. You know why? Because if somebody hacks into my account and defrauds my credit card company, or my online bank account, guess who takes the loss? The bank, not me.” ~ Kevin Mitnick

“There are many random, unprotected sites online that appear safe to use and are ready to accept credit card information. You wouldn’t give a stranger off the street your credit card information, so be extra cautious about who you are sharing it with online.” ~ Alexa Von Tobel

Credit Repair

“If repairing one’s credit is as easy as sending some dispute letters to the credit bureaus then why doesn’t everyone have good credit?” ~ Tyler Gregory

Miscellaneous

“Americans used to be ‘citizens.’ Now we are ‘consumers.’” ~ Vicki Robin

“You don’t realize how much you use your credit card not even to buy things. It’s a card you get so you can navigate society.” ~ Adam Carolla

“A budget is telling your money where to go, instead of wondering where it went.” ~ John C. Maxwell

“The thing about credit cards is that they assume an importance in our lives that takes them far beyond an innocuous piece of plastic in our wallet, directly to the heart of the way we live. For some of us, they’re all about convenience; just another way to conduct financial transactions. These convenience-seekers use credit cards at will, pay them off each month and reap the rewards points. For these people, plastic is fantastic. For a large proportion of us, however, credit cards are the way we fill the gap between the lifestyle we can afford and the lifestyle we actually live. To these people, a credit card is a ‘frenemy’, loved and hated in equal measure. The trouble is that once you get used to the idea of supplementing your income with someone else’s cash, it becomes a difficult habit to break. So we love the card for its access to what we think of as ‘life’, but hate it because those bills roll around with monotonous regularity, reminding us of our excesses.” ~ Allison Tait

“You don’t build wealth with credit card rewards and airline miles. You can’t beat the credit card companies at their own game.” ~ Dave Ramsey

“In childhood, a library card take you to exotic, faraway places; in adulthood, a credit card does.” ~ Evan Esar

“In 1973, a woman could not get a credit card without her husband or father or a male signing off on it.” ~ Billie Jean King

Humorous quotes just for fun

“Act your wage.” ~ Dave Ramsey

“A bank is a place that will lend you money if you can prove that you don’t need it.” ~ Bob Hope

“If you think nobody cares if you’re alive, try missing a couple of car payments.” ~ Earl Wilson

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” ~ Will Smith

“We didn’t actually overspend our budget. The allocation simply fell short of our expenditure.” ~ JP Getty

“Someone stole all my credit cards, but I won’t be reporting it. The thief spends less than my wife did.” ~ Henny Youngman

“It’s amazing how fast later comes when you buy now!” ~ Milton Berle

“It’s easy to meet expense – everywhere you go, there they are.” ~ Anonymous

“Christmas is the season when you buy this year’s gifts with next year’s money.” ~ Anonymous

“Stores are never nice to people. They’re nice to credit cards.” ~ J.F. Lawton

“Today, there are three kinds of people: the have’s, the have-not’s, and the have-not-paid-for-what-they-have’s.” ~ Earl Wilson

“The best protection against identity theft is bad credit.” ~ Johnny Corn

Though you have reached the end of our series, we would like to remind you credit card aficionados that CREDIT CARD IDEAS provides many, many articles, reviews, tips and just about any information and resources you need to make an informed decision about credit cards. We hope you have found our “Tips and Info from the Experts” series helpful and informative, but please don’t stop there. We invite you to explore our site further to enjoy all that we have to offer.

1. Cardratings.com founder Curtis Arnold examines The Quickest Way to Build Credit Using a Secured Credit Card.
   • Look for the AmEx, MasterCard, Visa or Discover logo to besure the card you get is accepted most places, and find one that reports your credit usage to all three main credit card bureaus.
   • Compare the deposit requirements to select the card best suited for your budget.
   • Do your utmost to pay your full credit bill every month so that you don’t carry a balance. But in the event that a carry-over balance cannot be avoided, it’s important to compare APRs before choosing your secured credit card. Interest rates for secured cards are typically higher than other credit card offerings.Try to go no higher than 15 percent. Be sure to read all the terms before committing to a card.
   • Whether or not your secured card will have pre-qualifications depends largely on just how bad or non-existent your credit is. No pre-qualifications equals extremely bad credit terms.
   • Set a goal to graduate to a regular credit card within 12 to 18 months. If your secured card issuer doesn’t provide this option, go looking on your own once your credit score is higher than 650.
2. In 3 Ways to Increase Your Credit Score in 2015, Matthew Frankel gives you detailed information about repairing damaged credit with specific examples and tips.
   • If your problem is bad credit, assess your negative credit items to determine which information can be removed or minimized.
   • Pay as much as possible on your debt so that your available credit is a much higher percentage than the amount you have used. This helps your credit utilization ratio, which is an important part of your credit score.
   • Apply for a new credit card or request an increase on your existing credit line. Do not use the new available credit. This is another method of improving your credit utilization ratio.
3. If you have not yet established a credit history, Credit Karma’s Build Your Credit from Scratch offers some helpful tips for your situation.
   • Qualifying for and using a credit card responsibly will help you build credit. Because you don’t yet have credit, it will be difficult to get approved. However, you may be able to qualify for a retail credit card. If you’re a student with an income, a student credit card is a good option. If neither of these options apply, try a secured credit card.
   • Being added as an authorized user on the account of a close friend or family member with good credit is a great way to jump start your credit score.
4. On nerdwallet, AnishaSekar also discusses Building a Credit Score from Scratch: 4 Easy Steps for consumers and students who don’t have a credit record yet.
   • The first step is to learn the basics of FICO and how your credit score is determined, which the article concisely covers. Seker explains the contribution that payment history, debt, length of credit history, new credit and types of credit make toward your score.
   • You will then need to follow the guidelines for levelheaded credit use to establish your credit worthiness over time. These include paying on time, keeping your debt low, monitoring your credit report and other practices that make you a good risk to lenders.
   • You’ll need to know what your score is and what appears on your report.Seker steers you towards some sites that can help you with this.
   • After you have educated yourself, work on getting a credit card to start building your credit and actually putting into practice what you have learned. Your available options are likely a student card or a secured card.
5. In 7 simple ways to improve your credit scoreon Bankrate.com, Dana Dratch walks you through some tried and true methods for establishing a good credit history to boost your credit score.
   • Dratch advises you on how to keep a good debt-to-credit ratio and explains in detail the best way to shop for large ticket items on credit so that the multiple inquiries don’t affect your credit too detrimentally.
   • You should eliminate unnecessary cards, and adaptwise financial habits.
   • Don’t make the mistake of trying to eliminate old debt because it’s paid off, since this is good debt and it helps your credit score.
   • Avoid risky behavior, such as taking out cash advances, missing payments or suddenly decreasing the amounts you’re paying.
   • Find out what your credit score is and monitor it regularly.
6. If you’re a student looking to establish a credit history, Jeremy Simon of CreditCards.com offers some good advice with 10 ways students can build good credit.
   • Becoming an authorized user on your parents’ accounts is a popular method for establishing credit.
   • If you’re working, you may be able to qualify for a credit card in your own name, but do your research and select a card that is suited to your needs. For many, a secured card may be your only option at first.
   • Use your card for inexpensive, regular purchases. Avoid large expenditures. This keeps your debt-to-credit ratio low and allows you to pay your balance every month, which is a must.
   • Don’t slack off on any of your other bills, and make sensible decisions with your finances. Don’t co-sign for anyone else to help them get credit, and stick to just one credit card for yourself. Applying for multiple cards will negatively impact your credit.
   • Student loans are meant solely for your educational needs. Use the funds wisely and make timely payments.
7. On Forbes.com, 11 Ways To Raise Your Credit Score, Fast provides some excellent techniques and tips that can yield results over 30 to 60 days.
   • Start with a copy of your credit report and dispute any errors you find. Be sure to check for accuracy in your credit limit amounts. Attempt to negotiate with creditors over negative items.
   • Obtaining and using a credit card shrewdly is a good credit-building tool. Never max out your card. It’s much better if you keep your credit utilization ratio below 30 percent. If you already have a card and you’re close to the limit, ask for an increase, but do not use the additional credit line.
   • Work on getting any high balances down. It helps if you pay on them twice a month. Regardless, always pay all of your bills on time.
   • If you don’t have a balance on a card, that’s great, but do not close the card out. And don’t rely on just credit cards for a good FICO score. Different types of credit helps. Just be sure to pay on time with any other loans.
   • If you are unable to qualify for a normal credit card, a secured card is a decent option. You can also look into having someone close to you with good credit add you to his account as an authorized user.
8. Credit Sesame offers a thorough overview on secured credit cards in Build Your Credit With a Secured Credit Card. This is an accepted credit building tool for many, and this article covers all the basics well, from what a secured card is and where to get one, to what it will cost and how it works.
9. On the Simple Dollar, Trent Ham gives students some good tips in How to Safely Build Your Credit History. He counsels you on getting a card and using it wisely for specific purchases, such as textbooks. It’s essential that you pay on time and don’t use too much of your credit line. A good trick is to lock your card up so you’re not tempted to use it rashly. Once you’ve established that you can be dependable with credit, venture into other types of credit like a car loan.
10. In How to build credit if you have a small income, nerdwallet’s Lindsay Konsko assures you of your ability to have good credit even if you don’t have a fat wallet. Even with a small income, you can follow all the tips and guidelines for most consumers who are working on building a good credit history. The key is living within your means and paying all of your bills responsibly.

Before moving on to the final selection in our “Tips and Info from the Experts” series, we suggest that you make sure you haven’t missed any valuable information in the series:

• Great Benefits for Credit Card Holders: Get Tips from Ten Top Sites
• Top Fifteen Resource Sites for Researching and Comparing Credit Cards
• Top Credit Card Tips and Trends for 2015 from Those Who Know
• Authorities on Credit Cards Help you Avoid Potential Pitfalls first.
• Building Credit: Advice from 10 Experts in the Financial and Credit Card Field.

Avoiding Pitfalls in General

Avoid These 7 Pitfalls When Choosing a Credit Card on the NEA Member Benefits site is an in-depth, no-nonsense approach to selecting the right credit card for the best reasons, and provides some great pointers for avoiding some potential hazards. You need to analyze rewards programs carefully, avoid the “shiny” offers with no real substance and pay attention to fees, interest rates and introductory offer periods.

Susan Johnston delivers some helpful tips on U.S. News Money with 8 Potential Pitfalls of Credit Cards. She offers some sage advice about avoiding marketing hype when selecting your card and resisting the lure of spending just to earn points and miles. Responsibility and sound financial choices are key, from educating yourself about your card by reading all the terms and conditions carefully and paying close attention to details on your credit card statement to paying more than the minimum on time and avoiding the urge to max out your cards.

Consumers on the other side of the pond who are new to credit cards can benefit from the information offered by Kate Palmer in Pitfalls every first-time credit card applicant should know. This guide opens your eyes to some negative aspects of applying for the first time, such as higher APRs, lower card limits and dings on your credit for application rejections, but offers possible solutions for tackling these problems.

Rewards Credit Cards

In Avoid the pitfalls of rewards credit cards, Miranda Marquit identifies some common dangers associated with rewards cards programs. Some consumers can get carried away with the idea of earning points, miles or cash back through credit card spending. So it’s important to approach your rewards with a spending plan that maximizes your earnings without carrying a balance.

Jeremy Simon contributes some additional pointers to Avoid rewards credit card pitfalls on CreditCards.com. He recommends that you consider the higher APRs and annuals fees that often accompany a rewards program, and warns you about term changes down the road by your card issuers that detract from your potential rewards.

Once you understand the basics, move on toin-depth guidance in Credit Card Rewards Guide: The Basics, Pitfalls & Tips to Maximize Earnings written by Cardhub CEO Odysseas Papadimitriou. This detailed guide provides an enlightening rewards card overview and informative FAQ about selecting the right card, and alerts you to common drawbacks associated with these programs. Learn the essentials on handling earning limits, rotating categories, rewards versatility, devaluation and expiration, and rewards-based overspending.

Student Credit Cards

The University of Alabama at Birmingham wants students to avoid The Pitfalls of Credit Cards that can set a young person on the wrong financial path for many years to com. UAB counsels caution and advises students to carefully review their credit card contract. Most importantly, be aware that the credit provided is not money, but rather, a loan.

If you’re a parent considering getting your child a credit card, don’t miss Pitfalls of getting your child a credit card. Ray Martin counsels you on the safeguards you can put in place to protect yourself, such as daily spending limits. Helping your child establish a good credit record through responsible credit card usage is a worthy goal.

IRS Payments

You may be aware that the U.S. government allows you to pay your federal income taxes by credit card online, over the phone or by way of an e-filing system, but are you familiar with the downsides? Though this payment method may sound pretty convenient to a lot of taxpayers, before you commit to this option, read Should You Pay Taxes With a Credit Card? by Gail Cunningham of National Foundation for Credit Counseling, to assess the pros and cons of this option. The transaction fee can be quite costly, and a big tax bill may put your credit card provider on alert, resulting in negative changes to your terms and conditions in the future. Cunningham further cautions the impact a big tax payment charge may have on your credit, your budget and your ability to pay.

Prepaid Debit/“Credit” Cards

While these are not credit cards, in the interest of offering comprehensive information for everyone, we are including these tips from Bankrate for the many, many consumers who choose to use prepaid debit cards in lieu of cash or credit to spend billions of dollars with U.S. merchants. If you’re one of these consumers, 5 prepaid debit card pitfalls to avoid is a valuable resource with some excellent advice:

• Choose your prepaid card provider carefully. Many of these cards lack consumer protections, such as FDIC insurance.
• Be wary of unregistered debit cards. If the card is stolen or lost, you’re out the funds loaded on it.
• Look out for inactivity fees and overdraft fees.
• Being a responsible prepaid debit card user won’t help your credit score since your usage is not reported. If you need to build or repair credit, a secured card is a better option.

Trends

Technology Advances – EMV Chips and Mobile Wallets

CNBC’s Kelli Grant spoke with Matt Shultz from CreditCards.com about changes for credit cards in 2015. Shultz spoke of EMV technology as one of the biggest impending changes, and explained that a side effect of the new technology may well be more potential for use of mobile wallets.

Mike Jelenik also discusses chip technology when revealing his picks for Best Rewards Credit Cards of 2015. Visa and MasterCard are on track to bring the new technology to U.S. shores by October this year. Apple Pay and other mobile wallet services are encroaching as well.

2015 Credit Guide’s General Credit Card Guidance for the New Year offers an easy to understand breakdown on the new technology. With some history, an explanation of the change and how the chip and pin tech will be used, you’ll be much better informed about this important development in the credit card world after this quick read.

Secure credit cards coming in 2015 by Gregory Bresiger further educates the consumer about chip technology for credit cards in the U.S.

For a more in-depth view of chip and pin cards and how they’ll heighten security, read Tom Gara’s Wall Street Journal article, October 2015: The End of the Swipe-and-Sign Credit Card. He speaks with Carolyn Balfany from MasterCard to get some enlightening answers on the switch-over.

More Security Features

In 5 Credit Card Predictions for 2015, Susan Johnston notes that heightened credit card security isn’t limited to EMV and Chip technology, citing Capital One Second Look as one example of this.

Interest Rate Hike

Curtis Arnold, founder of BestPrepaidDebitCards.com and CardRatings.com , told Grant he predicts higher interest rates in 2015 and suggests that consumers start looking for fixed rate cards if they are currently carrying a balance on their credit card. Another good option would be advantageous balance transfer offers with fixed rates set over a finite time period.

Enhanced Rewards and Benefits

Grant says NerdWallet’sDirector of Credit Cards Kevin Yuann urges consumers to take advantage of more enticing benefits this year, specifically the regular review of your credit score, extended manufacturers’ warranties and price adjustments.

Johnston discusses enhanced card benefits on U.S. News Money, such as free credit scores and better rewards offers for points and cash back credit cards.

Increase in Credit Access and Balance Transfer Offers

Johnston predicts good news for consumers looking for credit in 2015. She says the evidence points to lenders relaxing their credit standards and offering more no interest or low interest balance transfer offers.

Changes to Airline Miles/Points Programs

In Delta Pay With Miles Tickets Will Now Earn SkyMiles in 2015, the Points Guy Brian Kelly finds a silver lining amongst the largely negative changes to the Delta SkyMiles program.

Tips

• Jeanine Skowronski at Bankrate.com offers 10 tips for managing credit cards in 2015. From suggestions to be more vigilant about your credit, card security and your contract terms and conditions to making sure that you are reaping all the benefits available to you, Skowronski covers some important guidelines for the credit card consumer.
• If you enjoy traveling and use a rewards card to earn miles or points for your passion, Kelly’s Best Ways to Earn Travel Points: Get The Points Guy’s Top Tips provides some quick tips for how you can easily earn more points/miles in 2015.
• If you’re wondering whether you should get a new card in 2015, Nerdwallet’s contributor Erin El Issa has you covered in Should You Apply for a Credit Card in 2015? where she weighs the pros and cons of applying for a credit card for those without and replacing an old card for those with.
• Tasha Lockyer of NextAdvisor gets a jump on the New Year with her picks for the Best Credit Cards for 2015. Credit card issuers are poised to get in on the spirit of new beginnings with consumers looking for new cards. If you’re in the market, don’t miss this great wrap up on some top card offers.
• Business in 2015 also jumps in with a list of The Best Cards for 2015, with an informative forward about the new chip technology. The article spotlights a top card for each of seven different categories.
• If your interest is Rewards Cards, check out 10 best rewards credit cards of 2014 to review how they have performed over the past year and get the main pros and cons of each.
• The Small Business owner can benefit from Best Credit and Charge Cards for Small Businesses and Startups – Winter 2015 by Brendan Harkness. With information about business cards in general and very detailed information about Credit Card Insider’s top picks, this is a valuable resource.

1. CompareCards

This is a leading credit card resource website that believes in educating the public about finances and credit cards in a single location. The site’s comparison tool for card research uses the popular search options of card categories, issuer and level of credit and helps you choose a card based on a number of important factors.

There are some really great features that make CompareCards stand out:

• Credit Concierge – Register to access this free tool and get completely free TransUnion credit scores, tailored advice to maximize your savings and support from a dedicated credit specialist.
• The Education Center fulfills their commitment to starting financial education early with essential information targeted at our youth.
• Exceptional User Experience – The site’s comparison tool is extremely user friendly. You can easily research a specific card by selecting it from a drop down menu. Another valuable benefit is easy access to expert and consumer reviews about each card in your search results via a review link. Indeed, the entire site is focused on helping consumers in the financial and credit card arenas. The information presented is current and useful, with new articles being added on a regular basis to their blog CompareWallet. And the LiveChat feature goes the extra mile to offer excellent customer support and help you with any questions and concerns.

 

2. nerdwallet

Everything you need to make an informed decision. Nerdwallet boasts the ability to compare up to 1,714 cards. Choose what type of card you are interested in, be it Rewards, Business, Student or something else. Narrow down your choices with options such asannual fee, network preference, balance transfer fee and your credit score range. Select how you wish to sort your results and compare the available cards.

 

3. CreditCards.com

Choose from a tailored card match service that reviews your credit profile to identify cards you qualify for, or a more generic search option. To compare cards generically, search by card type, card issuer or credit quality. CreditCards.com displays information about credit cards offered by the site’s many partners, and the site seeks to offer consumers choices and variety with the right tools to make knowledgeable decisions.

 

4. CardHub

Start your search with popular category options, such as rewards, interest rates, card type and credit rating. The site offers sorting options for most results. You can also compare specific cards within category results, and review cards targeted to the business owner or college student. Additionally, CardHubgoes the extra mile and gives you a more personalized option with its Credit Card Advisor feature: answer a few questions and get a customized credit card recommendation.

 

5. Bankrate

Choose to search by issuer, card type or credit score. Your results page lets you change your options to review other card results. The site’s informative interest rates tool gives you a barometer to measure available cards against. The information provided in the card search results is concise, informative and easy to understand.

 

6. Credit.com

Credit.com offers three different search approaches for ease of use. Bear in mind, the cards displayed are limited to the website’s partners, numbering around 120. However, when used with other credit card search tool sites, it’s a helpful resource, and also offers articles, tools and other valuable information in the field of credit and credit cards.

 

7. Confused.com

Confused.com launched the UK’s first online comparison tool for insurance coverage. The website has branched out to other areas since 2002, and offers a very user-friendly credit-card comparison search engine for consumers in the UK.

 

8. Credit Card Guide

This website features comparisons of top rated credit cards offered by popular card issuers. Search by issuer, category or credit type. There’s even an “Instant Approval” category, not typically available on other search sites.

 

8. Credit Karma

Credit Karma provides information about cards offered by their partners and includes a dollar amount of your average savings with each card over a year. It also offers review links. You can search by card category, priority reason for needing a card, your credit score and certain card options. You may then further filter your results by features, reward types, network, card holder type and more.

 

10. Google – Credit Card Comparisons

Google currently compares over 200 credit cards. Search options on this search engine leader include credit rating, card category, annual fee, card issuer and card network. Access via link to terms and conditions is not available for all cards in the results. However, this tool is a good “jumping off spot,” and if you are interested in learning more about those offerings, you can review them by searching the card on other sites.

 

11. Card Ratings

If you already have any credit cards, you can look up your card and its features and see how it compares to other offerings on this website. You can also research a variety of different credit cards using the site’s comparison tool. Search by category, rating and issuer.

 

12. Get.com – Credit Cards

Search credit cards on Get.com using their many search options. Then click each card you wish to compare to use the site’s informative card comparison feature. The tool also suggests cards that may work for you based upon your search criteria.

 

13. Lowcards.com

This site has been a helpful resource, recognized by a large number of news sources and media, since July, 2000. LowCards evaluates more than 1000 credit cards regularly, and prides its team on providing objective opinions about cards available on the market to consumers in the U.S. and Canada. Information about the cards in the results is succinct, but full details are available on the site at the click of a mouse.

 

14. My Rate Plan

MyRatePlan is another veteran, launched in late 1999. The credit card section and comparison tool is one of the nine service categories covered on the site. It allows consumers to evaluate more than 100 popular cards offered by top credit card providers. Search by a several different options and narrow your results with many other choices.

 

15. CreditCards.org

This consumer-created website strives to educate in an easy to understand manner. It provides a comprehensive search tool and reviews, and edits the available card offers regularly to ensure the information is accurate and up to date.

 

16. The Points Guy

This website is an excellent resource for consumers and small business owners who use and are in the market for rewards credit cards. Research rewards cards offered by the site’s partners in different categories, such as business, airline, hotel and cash back. Each offering is given a star rating, ranging from one to five stars, and each card’s significant features are presented in an easy to read and understand format.

1. 360 degrees of Financial Literacy offers advice from certified public accountants to help consumers with their finances. Advantages and Disadvantages of Credit Cards details some helpful tips about credit card benefits and perks.
   • Credit cards are a convenient time-saver, offering purchase accessibility.
   • These are great tools for expense tracking and record-keeping.
   • Short term loans allow you to take advantage of sales when you don’t have cash available at the time
   • Cash advances provide easy cash accessibility.
   • Credit card incentive programs offer numerous perks.
   • Credit cards are a means to build or rebuild your credit.
   • Many credit card companies will advocate for you when you have a purchase dispute over a faulty product.
   • Surfing your balance to a lower interest card or one with a low intro rate saves money.
2. Information on Moneycrashers runs the gamut for all money matters, from personal money management and small business finances to the economy and economic policy.14 Best Credit Card Perks & Benefits You Never Knew You Had is a comprehensive list that covers a wide array of first-rate benefits and advantages you can enjoy with various credit cards.
   • Entertainment incentives are wide-ranging, from presale promos to elusive event tickets. Citi Private Pass offers perks in live music, family entertainment, sporting events, dining and more.
   • Purchase presale event tickets with your credit card and enjoy preferred seating at the show/game/concert. Gold Card Events is key to some exclusive offers for American Express Gold and Platinum card holders.
   • Following in the entertainment vein, you can enjoy great discounts on popular attractions, such as theme and amusement parks, museums, aquariums and zoos through your credit card programs. Bank of America is a good example of this with its Museums on Us
   • Enjoy exclusive retail store discounts made possible through the relationship your card issuer has established with some popular retailers.
   • Additional shopping benefits: price, return and fraud protection, and dispute resolution.
   • Travel benefits: car rental insurance; baggage protection; roadside assistance; trip cancellation insurance; hotel room burglary insurance; and reasonable exchange rates with set foreign transaction fees.
3. Investopedia is full of valuable information on money matters. Surprising Credit Card Benefitsby Amy Fontinellefurther enlightens credit card users to beneficial ways to use their cards, highlighting some features specific to different card providers.
   • Get protection for orders that aren’t fulfilled through chargebacks. Your credit card company will reimburse you and go after the company that failed to deliver.
   • Get more time to obtain a refund with extended return policies.
   • Visa and MasterCard double the manufacturer warranty (up to a year) on products you purchase with your card.
   • Save time and effort with price protection. This feature gives you the benefit of comparison shopping without the added hassle. Visa and MasterCard give you 60 days to find the same product at a substantially lower price.
   • There are no cash advance fees with Discover through their Cash Over program – up to $120 cash back per day.
   • More price protection with the ever fluctuating airline ticket prices can make a big difference for your wallet.
   • AmEx, Visa, M/C and Discover all have various damage and theft protection coverage options in place.
4. Creditcards.com offers an astounding amount of useful information to the consumer about most credit cards offerings. Benefits of using a credit cardby Jeremy Simon gives users more insight on this topic.
   • Credit cards offer convenience over cash or checks.
   • Unlike debit cards, you won’t be hindered by a daily “charging” limit.
   • They’re an excellent budgeting tool.
   • Credit cards are good for credit building.
   • Grace periods give you additional time to pay off your debt.
   • Purchase protection and extended warranties give added protection.
   • Theft protection against charges made on your card if it’s stolen is a valuable feature.
5. Money Supermarket, a UK website, is a great resource for finance and savings in a wide range of spending areas, from travel to shopping, insurance and financial instruments. Clare Francis is the Editor-in-chief and her article, The advantages and disadvantages of credit cards gives you some concise and helpful information.
   • Credit cards allow you to pay for large purchases over time, a method of quickly borrowing so that you can acquire something you need right away. For example, if a large appliance stops working, you may not have the funds to replace this vital item, but a credit card can save the day.
   • Many new offers support free borrowing for a limited time. Credit cards often offer no interest charges on your purchases over an introductory time period.
   • Pay down balances. Transfer a balance from your high interest credit card to a new card with a 0% introductory interest rate and use the intro period to pay down your balance without incurring interest.
   • Purchases you make with your card typically come with additional consumer protections.
6. Practical Money Skills seeks to help students and consumers understand personal finance, through information, articles, games and teaching tools. Credit Pros and Cons is a brief look at a few benefits and detriments of credit card use.
   • Get immediate access to necessities you might not otherwise be able to purchase.
   • Credit card security features far outweigh carrying and using cash.
   • Checks are less acceptable and more time consuming.
   • Paying with a credit card lets you consolidate your bills.
   • Loyalty and rewards programs offer additional benefits, such as free travel.
7. Go Banking Rates focuses on financial services interest rates, personal finance news, tools and other useful content. This national site for financial news spotlights a small sampling of popular credit card advantages with 3 Credit Card Benefits You’re Paying For But Not Using by Luke Landes.
   • Some credit cards help ensure you never pay too much for an item through purchase price protection. Get a refund if you find the item for a lower price later, typically within about one or two months.
   • Many American Express cards will cover a product purchased with their card for 90 days against theft and accidental damage. Check with your card provider to find out if any of your card purchases come with automatic purchase protection.
   • Manufacture warranties are fairly limited, but several card providers will extend or even double these when the product is purchased with your credit card. Moreover, it’s often easier to submit a warranty repair through your card provider than through the product manufacturer.
8. Free FromBroke is the brainchild of Glen Craig, who once struggled every paycheck. Craig turned around his financial situation and now helps others do the same.Credit Card Benefits joins our list with some tried and true benefits, as well as some additional helpful hidden nuggets.
   • As noted on other sites, popular credit card benefits include convenience, a means to help build your credit score, good tool for tracking your spending, and they often come with consumer tools like price protection, car rental insurance and extended warranties.
   • Paying for your purchases is a breeze when you set up a dedicated bank account for this purpose. This also helps with budgeting.
   • Earn money with zero interest rate credit card offers. Use what you save on your no-interest payments to open a high yield savings account and deposit these savings every month while the 0% rate applies.
   • Rewards points and cash back can be transferred to savings and additional purchasing power with gift certificates and travel rewards.
   • Travelers can reap additional rewards with airline miles.
   • Many card providers work harder to stand out by offering exclusive programs for their cardholders. Examples include steep discounts on things like products, highly sought after concert tickets and free magazine offers.
   • Concierge service is a nice perk for some of the higher fee, high-status credit cards.
9. RamitSethi is a leading author in the field of personal finance. He describes Credit Card Perks and Benefits that consumers should be aware of. He explains that credit cards should offer benefits worth about $1,000. These include the following:
   • Extended warranties at no cost,
   • Car Rental and Collision insurance, and
   • Trip cancellation insurance.
10. Wisebread targets wise spending, good financial decisions and living on a budget, while still enjoying life. A community of writers contribute a number of helpful blogs on several money topics like life hacks and best deals. 5 Credit Card Benefits Every College Student Must Have by Christa Avampado offers some good credit card information targeted at students.
    • A card with a small credit line that allows for future increases is a good start for the novice credit card user.
    • A card offering fraud protection that is step above the typical coverage is a valuable tool for students. Some cards offer programs that monitor your card activity to identify suspicious and fraudulent purchases in real time.
    • Get text or email alerts regarding your balance limit and due date.
    • Roadside assistance is a great advantage when you’re far from home or your vehicle is a later model.
    • Flexible cash back rewards allow you to access money more easily when you really need it.

Earning and Redeeming

Let’s assume you have spent $10,000 with your Barclaycard Arrival credit card within the last 120 days.That means you have earned 20,000 redeemable miles to offset your travel purchases on your next credit card statement. Each reward mile is equal to 1 cent in travel rewards credit. So, for example, if you charged a $125 hotel stay to your Barclaycard Arrival credit card, you can log in to your account and apply 12,500 of your rewards points toward that purchase to receive a $125 statement credit for that purchase. You would pay nothing out of pocket for the hotel stay, and you’ll even earn an additional 10% in bonus rewards miles (1,250 miles) leaving you with 8,750 miles to apply towards future travel expenses.

Barclaycard Bank makes the process simple and quick. Your redeemable purchases are automatically categorized online. And your redemption values are calculated for you. Just select the amount you wish to redeem. It’s really that easy!

Step by Step

This YouTube video provides step by step instructions for redeeming your Barclaycard Arrival Miles for statement credits.

1. Log in to your account

2. Click Manage Rewards

>

3. Click on Redeem now under Travel statement credits.

4. The miles you have earned and the travel purchases you have made that are eligible for travel statement credits are easily identifiable.

5. Select the purchase to which you wish to apply your statement credit and click on Redeem now.

6. Select the amount you wish to redeem with a statement credit.

7. After you’ve made your selection, click the checkout button.

8. Check your transaction information for accuracy before selecting the Place your order button.
   In this example, the credit card user applied 100,000 miles against his eligible travel purchase of $1,122.22, thereby receiving a $1,000 statement credit. He will only pay $122.22 for that travel purchase!

9. As an added bonus, this transaction earns you even more Arrival Miles! 10% of the 100,000 mile purchase equals an additional 10,000 miles. Our credit card holder now has 60,000 miles left for future eligible travel purchase redemption.

Recent changes to the law on reporting income on credit card applications have made credit card household income okay again for individuals 21 and older.

Credit Card Accountability Responsibility and Disclosure Act (CARD) and reporting income

In 2009, the CARD Act changed the way credit card applicants reported income. Prior to this law, card issuers asked for an applicant’s “total household income” when completing a credit card application. At that time, young adults with no income of their own yet could include parents’ income on credit card applications if they still lived at home. Spouses and partners who didn’t work outside the home were able to report the income of the employed household member in order to qualify for credit. Another difference was a sole reliance on the consumer’s credit history to extend credit.

The CARD Act changed all that. One issue the new regulations specifically targeted was student credit cards. Banks had gotten into the habit of handing out credit cards to young adults with no personal income of their own, instead allowing them to report credit card household income. Many of these students would start using their cards indiscriminately and quickly build a balance they had no means of paying, either leaving their parents saddled with the bill or defaulting on the card and damaging their credit right out the gate.

The CARD Act established a requirement for young adults to have their own personal income to qualify for a credit card, demonstrating their ability to pay the bills for their credit card without the assistance of their parents’ income. This was referred to as the Ability to Pay (ATP) rules. Card issuers started using complicated mathematical formulas to determine whether applicants would be able to make their minimum credit card payments.

The downside to the ATP rules was their impact on stay-at-home spouses and partners. With no personal income of their own, suddenly these consumers were unable to qualify for a credit card. Finally, in the spring of 2013, the Consumer Financial Protection Bureau (CFPB) made some changes to the CARD Act regulations that addressed this problem.

The new rules allow an applicant who is at least 21 to report the income of his spouse or partner when applying for a credit card. Card issuers may consider this shared income for new applicants and for customers requesting a higher credit limit. This allows stay-at-home spouses 21 and older to use their spouse’s eligible income on their credit card application.

Therefore, these government mandated income credit card requirements now allow you to include third-party income as long as you are at least 21 years old and you have a reasonable expectation of access to this income. This could be demonstrated by having a joint checking account, because that means you have access to those funds. This includes adult children or students over 21. They may report the part of their parents’ income that they have access to. This too could be via a bank account, or through a monthly stipend. The important factor is that they have an actual expectation of access to the income they are reporting on their application.

Young adults between the ages of 18 and 21, however must still have their own income in order to qualify for a card. There is no longer credit card household income for these applicants. Their parents’ income is not eligible. Because card issuers are not legally required to verify the reported income, these young applicants typically do not have to provide proof of their income though. Instead, most issuers apply an income estimation model.

Income Estimation Models

When you apply for a credit card, the credit agency takes the information you provide, such as self-reported annual income, your social security number, birthday, and your address, and submits it to a credit reporting agency. This credit bureau uses the income models to generate an estimated income. The goal is to come within $1,000 of the applicant’s actual income.

If the estimate is off significantly, an alert is triggered and the applicant may then be required to provide proof of income.

What is it? Does it increase credit scores? How does it work? Is it Effective?

The practice of adding an authorized user to your credit card to help someone build his credit or increase her credit score has been around for a long time. It was originally most prevalent with parents trying to help their children with their credit history. This is also very common among spouses, for both convenience and for one spouse to help the other with their credit worthiness. Even partners, other family members and close friends frequently made use of this valuable arrangement.

Though adding an authorized user to the card of an individual with great credit can be an excellent method for building credit and increasing the authorized user’s credit scores, it isn’t always effective, and it shouldn’t be used in every situation.

When the practice moved into a profit making endeavor, the term piggybacking began to crop up. This is very borderline activity and greatly frowned upon by lenders. Moreover, FICO and most card issuers began taking steps a few years ago to discourage and invalidate this practice for non-legitimate authorized users seeking to defraud the card issuers with artificially elevated credit scores.

This is a very involved subject and to best explain all the ins and outs, and the pros and cons, it’s necessary to first explain some basics.

Joint Accounts vs. Authorized Users

A Joint Account and an individual account with an authorized user are two entirely different credit card arrangements. Both set-ups can help build credit in a very similar manner, but the legal liabilities are quite different. This impacts how both parties’ credit may be impacted.

Joint Account

Both individuals on a joint account are responsible for the debt incurred. When applying for the card account, the credit of both parties is evaluated to determine eligibility, annual percentage rate, credit limit and other account terms and conditions. Both card holders are owners of the credit card account. They share the legal responsibility, privileges and accessibility. Any late payments, defaults and other card activity is shared by both individuals. Either cardholder can make changes to the account without the permission of the other. However, both parties are still legally obligated to fulfill the terms and conditions of the card and any changes made by either party.

Authorized User

If you have a credit card and add someone as an authorized user, you are and will remain the primary card holder. The privileges and responsibilities of your authorized user are limited – though this limitation does vary from one card issuer to another. Ultimately, as the primary card holder, you are the responsible party and the owner of the account. Only your credit history is reviewed when your card issuer determines your account terms and conditions, to include the APR, credit limit and any special offers. Your credit card issuer will turn to only you to pay your card bills and hold you accountable for any account activity. If your authorized user runs up your card limit, the issuer will not require him to pay the bill. That falls to you. On the other hand, as the primary card holder, only you can make changes to your account, which, dependent upon the card issuer, includes limiting the amount of credit available to your authorized user and removing him from your card should you choose.

More on Joint Accounts

Joint accounts have various benefits, and building credit is definitely one of them. Though this method is more difficult than simply adding an authorized user to the account of someone with an excellent credit history.

You can create a joint account in one of two ways:

1. Apply together at the origination of the credit card account. This is fairly common with spouses and couples who have merged their finances and wish to apply for a new credit card. Another popular motivation for this is to help someone you trust get a better rate, build their credit and increase their credit score.

• For example, a college student may need a credit card for school expenses and has limited or no credit history. A parent or grandparent may be willing to apply for the card jointly so that the good credit history of the older individual has a positive impact on the card terms. And by allowing the younger family member to be an actual account holder, rather than merely an authorized user, he understands that he is responsible for paying the bills and hopefully learns good credit habits from this experience.

2. Change your individual account to a joint account by “re-applying” as joint account holders. If you already have had a credit card for a period of time and you wish to add another account holder, you will need to seek the approval of your card issuer. At that time, the credit histories of both of you will be reviewed to determine acceptance. Again, this would be typical when you marry or merge your finances with your significant other. The benefit to the new account holder is an automatic credit history based upon your prior card history and usage.

• For example, a woman has had a credit card for five years with an excellent credit and payment history, a $10,000 card limit and a balance of only $1,000. She marries and her spouse has no credit history. They re-apply as joint applicants on the card. They are approved because the husband has nothing negative, just no history. But once he is approved, he has an instant history – the same as his wife’s. Now his credit report shows that he has had a credit card for five years with a low balance and a great utilization rate. Voila! Instant credit history.

Bear in mind that there are potential downsides for the original card holder. The most obvious one is the possibility of default or poor payment habits by your new joint account holder. This activity will significantly impact your credit score in a negative manner. A second, less obvious, problem can occur if your relationship ends. Once your spouse or partner is on the card, he’s essentially on there for good. If the relationship is over, who’s to say your joint account holder won’t start running up the balance and failing to pay? Even if he maintains the card in good standing, if his other credit activity starts declining, this can impact your joint account – the card issuer may decrease your credit limit or cancel the account altogether. Even if you both agree to close the joint account when the relationship ends to avoid these issues, the loss of this credit line will hurt your credit score, especially if you had a high credit limit – say $20,000 – and low utilization rate.

Despite its popularity among many couples, joint card accounts are to be discouraged. Your credit score is a valuable commodity. In spite of all your best efforts, the actions of another individual can send it crashing down. The smart option is to remain in control of your own credit, on your own.

Becoming a Guarantor

Please note that there is a difference between a guarantor and a co-signer or joint account holder. A guarantor agrees to take over the card holder’s debt if she fails to pay. With this arrangement, the guarantor usually does not have charging privileges on the account. This is often the case when a parent becomes a guarantor for a child under 21 who has limited or no income, but the parent wants the child to have a card for emergencies and/or to build individual credit. Many card issuers do not offer this option. Some banks prohibit joint accounts and co-signers as well.

• Bank of America allows guarantors for applicants between the ages of 18 and 21. The card issuer also allows co-signers/joint accounts.
• Discover and Wells Fargo allow co-signers/joint accounts for card holders.

After the card holder has established a sufficient credit history and reliable income, you can both request that you be removed from the card account as its guarantor. The card issuer will run a credit check to ascertain if the card holder qualifies to continue with the card account without a guarantor.

See Rules on Reporting Credit Card Household Income on Applications to learn more about how income affects applicants between 18 and 21 and those over 21.

How Being Added as an Authorized User May Increase Your Credit Score

Let’s assume you have either no credit history or some dings on your credit report that have lowered your credit score. If you have a significant other, spouse, other family member or close friend with excellent credit and at least one long term credit card, you may be able to increase your credit score by becoming an authorized user on their card account. You actually get to “piggyback” on the credit of this primary account holder. In this way the good credit history for the primary card holder’s account is added to the credit history of the authorized user. Once this information is added to the AU’s credit report, it has the desired effect of building credit or increasing the AU’s credit score.
To understand how this works, let’s explain a bit about credit scores.

Fair Isaac & Company – FICO Scores

Fair Isaac & Co. (FICO) analyzes the credit history of consumers to determine credit scores identifying what type of “risk” they would be to lenders. Your credit worthiness is tied to your FICO credit scores, ranging between 300 and 850. The company looks at a wide range of criteria to compute your FICO scores for mortgage lenders, automobile financing companies and consumer credit card issuers:

• Your payment history
• Debt – How much you owe and how much credit is available to you (your utilization rate)
• How long you’ve had credit
• Types of credit and lending accounts
• New credit/inquiries

This information is obtained from the three major credit reporting bureaus – Experian, Trans Union and Equifax.

FICO-08 Scores and Authorized User Accounts

Originally, FICO used authorized user accounts when calculating your credit score. The account histories of these credit cards were reported on the credit reports of both the primary card holder and the AU, and FICO made no distinction between whether you were the authorized user or the primary owner on the reports. But with the increased popularity of “credit card piggybacking” and the outraged outcry from the lending community, FICO decided to make some drastic changes. With the introduction of FICO 08, the company announced they were going to stop including authorized user accounts altogether.

However, this too caused an uproar. This time from legitimate authorized users, like children, partners, spouses and other authentic individuals who stood to lose out with their credit scoring due to the removal of their authorized user status from their credit history. For many this would send their credit score plummeting or even eliminate it completely.

In response, FICO compromised and devised a computation method that uses authorized user accounts in its scoring analysis, but devised in such a manner that helps control credit score tampering. The company is very hush-hush about this exact formulation. However, reports show that this practice still helps the credit scores of most legitimate authorized users.

Raising Your FICO Credit Score as an Authorized User

When you become an authorized user on your spouse’s account, it’s added to your credit card report. If you are added to the account of someone else, like a parent or significant other, this credit card account may or may not be added to your credit reports*.

When the card issuer does report authorized users, it typically reports the card usage, past payments and all aspects of the card history by the primary account holder on your credit report as though this history is part of your credit history. Your score is recalculated to reflect this “new” credit history and activity. This is how your credit score gets boosted.

1. Credit History and back dating
   • If the “new” card was opened far earlier than any you own, this gives you a much more established credit history. This is due to how the card history appears on the credit report of the AU. Typically, it shows up as though the AU has had the card for many years (showing the origination date that the primary card holder opened the account instead of when the AU was added.) This is called back dating and it is the desired method of reporting when you are an AU.
   • Not all card issuers back date AU accounts. Some report the history only from the date the AU was added to the card account. This will not have the desired effect on your credit history.
2. Average age of your cards
   • If you already have two or three credit cards that are only a year or two old, adding this “new” card with a much older history will improve your average age.
3. Utilization rate
   • If your credit cards have low credit lines and you have used most of your available credit, your utilization rate will be fairly high – not a good thing. Now you add the “new” card to your credit history. Ideally it has a much higher credit line and a very low balance. This lowers your utilization rate immensely.
   • When optimized, all three of these factors can increase your credit score by 100 points or more.
   • Simply boosting your credit score is not always sufficient to qualify for other credit on your own. Card issuers will often look at additional factors as well to determine whether your score reflects your real credit history. In these situations, they typically like to see that you have other cards on your own.

Bear in mind, only the information about the card account that you are now on as an authorized user is reported on your credit history. No other credit information or history of the primary cardholder is added to yours. Likewise, none of your credit history is added to your primary cardholder’s credit report. Only the activity reflected on the card you have been added to will be added to both your credit reports – good and/or bad.

*The Equal Credit Opportunity Act of 1974 requires card issuers to report a spouse’s authorized user information. For other authorized users, reporting is at the discretion of the issuer. If you aren’t the primary account holder’s spouse, he should contact his card issuer before adding you to learn whether they will report your information as an authorized user to the credit agencies. See Credit Score Boosting Tips for helpful information on ensuring this information will be added to your credit report as an authorized user.

VantageScore

Though not the only game in town FICO has such a dominance in the market, at this point, it may as well be. Its only competitor at this time is VantageScore. This credit scoring model is a venture created in 2006 by the three main credit reporting agencies. It too uses a scale ranging from 300 to 850. VantageScore doesn’t use authorized user accounts in its credit scoring calculations and never has. Because creditors and lenders still don’t rely on a VantageScore when issuing credit, how AU accounts are dealt with here is inconsequential. We only mention it in case you have heard of VantageScore and wonder about its impact – NONE.

Some of the Good and the Bad with adding an Authorized User to a Credit Card Account

Clearly, there are two viewpoints on this topic: the card holder contemplating adding an authorized user and the individual seeking authorized user status. Essentially, you could divide these points as the Pros and the Cons. But in all honesty, there are good and bad effects for both the primary and the AU, as you can see here:

1. For the Primary Account Holder – the Cons
   • Legal responsibility – As the owner of the account, you are liable for any charges on the card. This includes those made by your authorized user.
   • Impact on your Credit Score – Any activity on your “shared” credit card account impacts the credit scores of both you and your authorized user. Therefore, if your authorized user behaves irresponsibly and you are unable to stay current on your bill due to this, your credit will suffer along with his. Additionally, running up a large balance damages your FICO score as well, increasing your utilization rate.
   • Personal relationship issues – Money issues have destroyed many a relationship, be they with family members, friends, or lovers. Keep this in mind when contemplating adding an authorized user to a credit card. If things go wrong, the ensuing fallout may ruin your relationship.
2. For the Primary Account Holder – the Pros
   • Control– As the primary card holder, you maintain control of your account. You can limit the card usage of the AU, and even have her removed from your account if and when you choose. As a matter of fact, you don’t even have to provide your AU with a card. You can make her an AU “in name only” and allow her to do no more than merely reap the benefits of your good card credit history.
3. For the Authorized User – the Pros
   • Increased credit score – Being added as an authorized user to the credit card of someone with excellent credit and a long history with the card can increase your credit score by 50 points or more.
   • Experience as a card holder – Used correctly, authorized user status on the credit card of someone with good credit can teach you how to be a responsible account holder, to budget wisely and to experience the good habits of that individual – essentially, the reason she has excellent credit.
   • Emergencies – This provides you with assistance should you experience an emergency, such as a break-down or being stranded somewhere.
   • Convenience – A credit card means you don’t have to carry around large amounts of cash, it allows you to keep track of your spending, and it gives you and your loved ones piece of mind.
4. For the Authorized User – the Cons
   • Negative impact to your credit – If the primary card holder doesn’t pay on the card, makes late payments, maxes out the card or behaves in any other negative manner with this credit card, it will directly impact your credit. You would need to remove yourself from the card immediately. And since you don’t have any control over the account, this could pose a problem.

Credit Score Boosting Tips

When adding your spouse, partner, family member or friend as an authorized user to credit card accounts, there are some tips to help ensure your AU is maximizing the opportunity to increase his/her credit score.

1. Check whether your card issuer will be reporting the card on your authorized user’s credit report.
   • All major card issuers have some type of reporting procedure – you need to determine what it is. If you have a card through a very small bank, you need to confirm that the account will be reported for your authorized user.
2. Does your card issuer require your AU’s social security number?
   • This is a sign that this info will be reported on the AU’s credit history. Without an SSN, the information may still be reported if the AU has other cards and the same address as you, the primary. If not, the credit agency probably won’t be able to locate your AU and therefore, nothing will be reported.
   • If your AU has no credit history at all, taking his SSN is very important. Reporting this information allows the credit agencies to open a new credit file for your AU. And if the issuer backdates the information, your AU has an instant impressive credit history.Remember, you want your card issuer to back date on the AU’s credit report.
3. Does the issuer ask for the AU’s address?
   • Without this information, the issuer will report the card tied to the primary card holder’s address, even on the AU’s credit report. If it’s different from your AU, such as your child living away from home, two addresses will appear on the AU’s credit report. This can be a problem if your AU doesn’t have any credit history of his own because when your AU tries to apply for a card of his own, there will be a conflict with the addresses. This leads to a non-instant approval application and a subsequent review by an actual person, who will look much more carefully at the history than a computer, and will likely determine that difference between your history as a primary and your AU’s non-existent history.
4. When the issuer reports the card, does it do so by back-dating to when you originally opened the card account or as a new card for the AU?
   • The card issuer that back-dates offers the best credit boosting option for your AU.
   • The policy of American Express is no back-dating. Instead, the age of your AU’s account reflects when he was added to your card.

Piggybacking – Aggressive non-approved method of selling authorized user spots to boost credit scores

When discussing the practice of adding an authorized user to a credit card to increase credit scores and help build credit, the discussion wouldn’t be complete without a description of the more aggressive, piggybacking practice.

Piggybacking credit uses the process of adding someone as an authorized user on the credit card account of a primary cardholder with excellent credit for the sole reason of building credit or increasing the AU’s credit score. Another distinction is that the authorized user and the primary cardholder frequently don’t even know each other, let alone have a personal relationship.The entire “transaction” is one of profit.

Prior to 2007, this practice became a popular scheme for credit repair companies. They capitalized on the loopholes available at the time to artificially boost the credit scores of consumers with bad credit. They charged these consumers fees to add them as authorized users to the credit cards of strangers who were purported to have excellent credit scores and a great credit history on the cards to which they were added. Once their credit scores were falsely elevated, these individuals were then able to apply for and qualify for loans and credit, with interest rates they previously would have been ineligible for.

The consumer AUs never actually received or used the credit cards for the accounts they were added to. Cards for authorized users are sent to the address of the primary card holders and AU’s don’t have privileges on the accounts to change the shipping addresses.But access to the card account was never the motive anyway. “Fixing” their credit through this temporary arrangement was the only motivation.

After the housing crisis, lenders expressed outrage at the practice, complaining that many of their loans were the result of these fraudulently inflated credit scores. In response to the ensuing uproar, Fair Isaacs & Co. proposed a change to the way FICO scores dealt with authorized user accounts. They initially proposed a change through FICO 08 wherein no authorized user accounts would be included on credit reports and the resulting credit scores.

However, the Equal Credit Opportunity Act requires lenders to consider all accounts that spouses are permitted to use together when determining the credit worthiness of an applicant. Additionally, the card issuers don’t actually frown on legitimate authorized user accounts – where the primary cardholder has a personal relationship with the AU, nor did they wish to penalize these individuals by removing years of good credit history with the removal of their AU accounts from their credit reports.

So Fair Isaacs went back to the drawing board and came up with a mostly secret algorithm devised to identify and reject fraudulent, for-profit AU accounts, while allowing legitimate AU accounts to remain on the user’s credit report, which is essentially where we still stand today.

Piggybacking Credit 2014

Many consumers wonder whether becoming a piggybacking credit card authorized user will still work to fix credit, and if piggybacking to improve a credit score is even still legal. Certainly, piggybacking credit repair has fallen out of vogue and it has become far more difficult for piggybacking credit card companies and consumers to use this tactic as they used to. However, where there’s a will, there’s a way. In many instances, a consumer with bad credit probably has a girlfriend or boyfriend, or at least one personal friend who would be willing to help by allowing his friend to piggyback on his credit card account as an authorized user, thereby helping improve his friend’s credit.

There are still companies offering piggybacking to raise your credit scores and many consumers are still actively piggybacking for better credit. Though results are usually disappointing and short-lived at best. The practice itself is borderline illegal. The clearest evidence of this gray area is the following statute from the Credit Repair Organization Act:

No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed.

So a credit repair company charging a consumer to add him to someone’s card account as an authorized user in order to “repair” his credit would be in violation of this statute.

Mortgage lenders have also strenuously expressed the belief that piggybacking to increase credit scores is a form of fraud, which is defined as follows:

To obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of a financial institutions by means of a false of fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned not more than 30 years or both.

Though obviously not clear cut, there’s enough evidence to suggest that piggybacking to falsely hike up your credit score through a for-profit credit repair company isn’t a practice totally above board. Moreover, with the changes FICO 08 has made in respect to “non-legitimate” authorized user accounts, it hardly seems worth the effort to even risk it.

Adding an Authorized User for Credit Building FAQ

The following information is not provided by the banks and card issuers, but through personal user reports.

What is an authorized user on a credit card?

An authorized user has the ability to charge on the credit card, but cannot make changes to the account, nor is the AU legally responsible for paying the balance.

Does adding an authorized user affect credit scores?

The credit score of the AU will most likely be affected if the card issuer reports the card history to the credit reporting agency. When this is the case, the payment history, balance, age and all other information regarding the card are added to the AU’s credit history as if were his/her own. It does not impact the primary cardholder’s credit score.

Does adding an authorized user build their credit?

When the current credit card account and its history reflects good to excellent credit habits and activity, being added as an authorized user can help build the AU’s credit.

What are the rules when adding an authorized user to Chase Credit Card Accounts?

Chase does not collect the SSN of the AU, nor the AU’s individual address. If the addresses of both the primary card holder and the AU are the same, the card history of the primary will be reported on the AU’s credit report. When this is the case, Chase does back date the “new” card to the original date the primary cardholder opened the account.

How does Chase view AU account credit history for its card applicants?

Despite an elevated credit score, Chase will usually decline an applicant if his credit history doesn’t reveal other cards of his/her own. One tip to help overcome this hurdle is an established relationship with Chase, such as a savings and checking account.

What are the rules when adding an authorized user to American Express Credit Card Accounts?

AmEx collects the SSN of the AU, but doesn’t collect the AU’s individual address, nor does this card issuer back date.

How does American Express view AU account credit history for its card applicants?

AmEx will approve newbies with no more than an AU account on their credit report, but only for their lower end cards. Additionally, the AU account must have a good history and a low utilization rate.

What are the rules when adding an authorized user to Discover Card Accounts?

Discover collects the AU’s SSN, but not his/her individual address. Discover back dates the history of the “new” card on the AU’s credit report.

How does Discover view AU account credit history for its card applicants?

Discover usually allows AUs with no cards of their own to easily qualify for their low end cards.

What are the rules when adding an authorized user to Capital One Credit Card Accounts?

Capital One is a yes all across the board: the issuer collects the SSN and the address of the AU and back dates.

How does Capital One view AU account credit history for its card applicants?

It’s fairly easy to qualify for a low end Capital One card with a high credit score from an AU account, even when the AU has no individually owned cards.

What are the rules when adding an authorized user to Citi Credit Card Accounts?

Reporting an AU’s SSN is optional with Citi, so be sure to request this when you add an AU to your primary card account.Citi does not report the individual address of an AU. Citi also backdates for AU accounts.

How does Citi view AU account credit history for its card applicants?

It’s difficult to qualify for a Citi Card based solely on an AU account. But if the AU has as least one individually owned credit card as well, this makes a big difference in qualifying for even Citi’s higher end cards. This is the case even if the AU’s individual card is fairly new.

What are the rules when adding an authorized user to Barclaycard Credit Card Accounts?

Barclaycard collects the AU’s SSN, but not his/her individual address. Barclaycard back dates AU accounts.

How does Barclaycard view AU account credit history for its card applicants?

Barclaycard is pretty good about approving AUs just based on their improved score via their AU history. This is the case with even their high end cards, such as the Barclaycard Arrival Plus.

What are the rules when adding an authorized user to Bank of America Credit Card Accounts?

BOA acquires the AU’s SSN, but not his/her individual address. BOA back dates.

How does adding an authorized user affect my credit, as a primary card holder?

When you add an authorized user to your credit card, simply adding this person onto your account in this manner will not affect your credit. The AU’s credit history is not added to your credit history at all. The main way this practice would affect your credit is if your AU ran up a high balance on the card that you were unable to pay. This bad credit activity would then negatively impact your credit worthiness and your utilization rate.

How can I lessen the impact to my credit as a primary card holder if my AU acts irresponsibly?

The best way to tackle this problem is before it happens. If you are simply trying to help your AU boost his credit, it’s not necessary to even provide him with a credit card. However, if you want him to have charging privileges, check whether your card issuer allows you to set specific limitations for your AU, and then use these safeguards. This may include setting a smaller credit line for your authorized user. The actual larger card limit is what will be shown on his credit report, so setting a smaller charging limit won’t impact his credit score. Finally, if you do see any problems beginning to crop up, remove your AU from your credit card immediately.

Does adding an authorized user affect their credit?

This depends on whether the card issuer reports authorized user accounts to the credit agencies and how.

Can I add anyone as an authorized user?

Though you may add whomever you wish to your credit card account as an authorized user, because of the importance of a good credit history, this decision should be carefully reviewed and well-though out. Make sure you have a closely established relationship with your AU and that you trust the person implicitly.

How can I remove an authorized user from my credit card account?

This is usually fairly easy, requiring no more than a phone call to your card issuer to instruct them to remove your AU. Some card issuers even allow you to take care of this online.

As a primary card holder, how can I remove an authorized user from my credit report?

This is kind of a trick question since your AU and his credit history is never actually on your credit report. Your card history may be added to your AU’s credit report as though it were his/her own, but the reverse is not true, nor is any reference made on your credit report that you have an authorized user. Once you remove the AU from your card, no future card activity will be reported to their credit history .

As an authorized user, how can I remove the primary card history from my credit report?

If you become an unauthorized user on someone else’s credit card because they have a good credit history with the card, but then they started paying late, defaulted or maxed out the card, this will mess up your credit score. When this happens, you want to have yourself removed from the card as soon as possible. It’s also a good idea to have the card removed from your credit report. To accomplish this, contact the card issuer and then the credit reporting agencies to explain that you were an authorized user and the you want the card history removed.

Does adding an authorized user to a business credit card help the user’s credit?

Business card issuers do not report business AU accounts to credit agencies. Therefore, this practice will not be helpful or useful for credit building or to increase a credit score.

1. Consumers use credit. This is a lucrative market and there is no shortage of customers.
2. Rewards are an excellent incentive. With so many choices, card issuers must be competitive. As a consumer, when you apply for a credit card, it just makes sense to select one that will reward you when you make your purchases. It’s no accident that the better your credit score, the better the offer. If you have a record of good credit, card issuers want your business. You are a much lower risk and these issuers are eager to make a profit off of your credit card usage. They know you have more choices than consumers with a challenging credit history, so they continually offer new loyalty reward cards to top themselves and their competitors.
3. You have to spend to earn rewards. Card issuers make money off of their interest rate charges. The more you charge, the more you pay. Your rewards – be they points, miles or cash back – are determined by the amount of money you spend using your card. Rewards often serve to drive you to spend more. This is good business for credit card issuers. Annual percentage rates are always much higher than the percentages they offer you for rewards. Essentially, you have to spend money to make money. Despite your best effort to carry no balances, the result is more frequently the opposite. So, for most credit card issuers, the rewards only serve to offset your APR charges by a minuscule amount.
4. Co-branded loyalty reward cards generate more revenue for specific companies. They encourage brand loyalty and establish a relationship between merchant and consumer. Department stores, gas stations, airlines, hotels and a plethora of other businesses are increasingly partnering with Visa, MasterCard, and American Express to reap these advantages. Consumers who already shop with a specific merchant can realize better rewards and incentives by using these co-branded cards.

Despite these facts, you CAN come out ahead with loyalty reward cards. To accomplish this however, you must live within your means. Don’t carry a balance. Don’t max out your card. And don’t buy things simply to earn rewards. It’s just that simple.

Earning, Redeeming and Receiving Your Rewards

You earn credit card rewards two main ways:

• Signing Bonuses

  In a bid to garner your business, most loyalty reward cards now offer a large initial reward when you open a credit card account and spend a specified amount during a finite time-frame. This is in the form of cash back, miles or points. For example a travel rewards card may credit your account 40,000 miles once you purchase $3,000 on their credit card during the first three months that you own the card.

• Everyday Spending

  You must continue making purchases with your card to continue earning rewards. With cash back cards this translates to a percentage of the dollar amount you spend on purchases. For cards that offer points/miles, you earn a set number of points for each dollar you spend. Most points/miles rewards cards offer a 1:1 ratio at a minimum. They also typically offer multiple points for specific categories. For example, you may earn 3 points/miles for all of your travel purchases and 1 point for all other purchases.

Some cards also offer Anniversary Bonuses. At the anniversary of your account opening, they will credit you with a bonus number of points/miles, or reward you with some type of perk, like a free night at a hotel or complimentary tickets to a sporting event. These cards usually charge an annual fee.

Once you earn your rewards, you want to reap the benefits, right? Some cards set thresholds that you must meet before you can redeem your rewards. For example, you may not be able to use your points/miles until you have accumulated 2,500. However, many cards now allow you to redeem their rewards as soon as you earn them. These cards typically let you offset the cost of your purchases with your rewards when you pay your monthly bill.

This brings us to HOW you redeem your rewards. The following options are typical for rewards redemption.

• Statement Credit

• Check

• Merchandise

• Gift Cards

• Charity

• Special Perks

What You Need to Know About Loyalty Reward Cards

Card issuers are in the business of making money. Rewards are set up to further this goal. You can realize lucrative savings, discounts and freebies with rewards cards with dedication and discipline. Awareness of the traps issuers set to make a profit off of you is the first step. Select the card best suited to your buying needs as the best reward cards are the ones suited for you. Use restraint and only purchase what you can afford. And, finally, never carry a balance, as this will inevitably wipe out the savings you earn with your rewards.