Should You Have More Than One Credit Card?

Some people argue that having multiple credit cards is a sign of financial well-being. Others argue it’s a sign of poor money management. There’s no golden rule as to how much plastic you should carry, but before you apply for your second, third, or umpteenth credit card, you’ll want to read this article.

There are varying opinions about having multiple credit cards. Here are some advantages and disadvantages to consider:

Advantages of Having Multiple Credit Cards

Lower Credit Utilization Ratio = Higher Credit Score

As you know, there are five things that make up your credit score: new credit, credit mix, length of credit history, amounts owed, and payment history. Having a low amounts owed in comparison to your total credit available — or having a low credit utilization ratio — is associated with a higher credit score.

You’ll have a higher total amount of credit available when you have multiple credit cards, thus making your credit utilization ratio go down. In this way, you could experience an increase in your credit score. The key here is not to let your spending creep up along with your available credit.

Specialized Rewards Programs

If you have one credit card, you are limited to the rewards that come with that specific card. There isn’t one card that offers top-notch rewards in every category. For this reason, it’s beneficial to have multiple credit cards if you want to maximize your rewards.

You can sign up for different credit cards that offer specialized rewards programs. Want 3% cash back on gas purchases? There’s a card for that. Want higher-percentage rotating rewards categories? There’s a card for that, too. You can choose as many cards as you’d like to mix and match your spending habits with the best rewards programs.

Financial Security

If you have one credit card that you use for absolutely everything, an act of fraud could be devastating. The perpetrator would have access to all your accounts. When you place a freeze on your credit card, you’ll be without that method of payment until a new one gets issued.

If you have multiple credit cards that you use for multiple purposes, an act of fraud becomes less devastating. You can simply change your information on the affected accounts to one of your other credit cards, while the one that was compromised gets replaced.

Disadvantages of Having Multiple Credit Cards

Potential For Overspending

When you have multiple credit cards, the potential for overspending is real. This seemingly obvious point really shouldn’t be overlooked.

If you have four cards with credit limits of $2, 000, $5, 000, $10, 000, and $15, 000, you have the potential to spend $32, 000! Although purchasing power is good, it can get you in real hot water if you take advantage of it and don’t have the money to pay your balances. Credit card debt is something you want to avoid if possible because interest rates can be very high.

Difficult to Manage

Managing different statement due dates can be a task on its own. Let alone keeping track of balances, and making sure you don’t spend too much on any one card. That’s why some argue against having multiple credit cards — it can become complicated!

When you have just one credit card, you know when the bill is due each month. You know exactly what your credit limit is and how much you spend on it. It’s just easier to manage overall.

Higher Risk of Fraud

Generally speaking, the more places you have your personal information, the higher your risk of identity theft. Having your information with three credit card issuers instead of one, for example, can put your information in greater danger of being hacked.

In addition, the more credit cards you have, the more chances there are for one of them to go missing and be used by an unauthorized user. Credit card companies are pretty good about not leaving you liable for unauthorized purchases. But the headache that comes with fraud is enough to make one steer away from having multiple credit cards.

Final Thoughts

How many credit cards you have will ultimately come down to personal preference. If you’re excellent at managing bills and sticking to a budget, having multiple credit cards to take advantage of specialized rewards programs may be the way to go. If you’re new to credit or haven’t had the best history with spending, you may want to stick with having a single credit card. Just make sure you take into consideration the pros and cons mentioned here.


How Much Is Your Busy Lifestyle Costing You?

I have not met anyone who is not busy anymore,  including kids and retired folks. The always-on-the-run lifestyle has provided increased incomes and career growth for a lot of people. For many of us, though, it has also cost a lot of money.

When I was super busy, I didn’t have the time or the energy to deal with anything other than my demanding office work. We think as long as we are being productive instead of being lazy, it should work out in our favor. Realistically though, how much is being so busy costing us? And how much of it is worth it?

High cost of being too busy

A lot of businesses make good money by counting on us being busy and not following up. Here is a list of things that I am guilty of, just due to being too busy:

  • Home/car maintenance: We are new homeowners. I can see how demanding maintaining a home can be. It is so easy to postpone the maintenance because we don’t get any immediate benefits. Delaying/skipping maintenance can cost quite a bit of money. I know this personally from experiences with my car’s maintenance. My car has this stupid design where the glove box has an open back, where it opens into the car hood. I had a pencil in the glove box that fell into the hood. I didn’t notice it until it started making a rattling noise. I meant to take it to the shop to get the car checked. But I was too busy. By the time I got my car to the repair shop, the little pencil had already damaged my AC fan and some other components. Cost: $900.
  • Not exploring other opportunities: How many of us have time to look for better career opportunities while we are working a demanding job? Even if we are unhappy,  we are frequently too tired to do anything about it. It might not be always about a higher-paying job, but how many of us explored other hobbies or other business ventures that would have been more fulfilling?
  • Not cancelling unnecessary subscriptions: I am sure I am not alone in this. I had a couple of magazine subscriptions for much longer than I wanted only because it auto-renewed, and I didn’t take the time to call to cancel or look for the login information to do it online.
  • Not shopping around: These days it has become a routine every six months to check whether I am getting the best rates for my car insurance, home insurance, cable/internet and phone. If not,  negotiate with the current company or switch to a new one. It will take only 10-15 minutes for each one and as a recurring expense can save a lot of money.
  • Not asking: This might not be just being busy, but a combination of lack of time to research what is the fair price for a product or service, fear or embarrassment to enter into a negotiation and procrastination. We can save a lot of money by simple asking for a better price. We don’t do that because we never have the time to research prices and are never confident when we ask.
  • Not paying attention to deadlines (Zero-percent financing expiration, credit card bill due date, etc.): Zero-percent financing sounds like a sweet deal when we get it, but the company is counting on us to get on with life and forget about it when the deal expires or not paying attention to the fine print that says “if you miss the payment one month, the 0 percent will become 25 percent”. Missing the payment for just one month will negate any and all benefits of a zero-percent deal. My personal guilt is mail-in-rebates. An estimated 60 percent of the rebates go unfulfilled. And then there are people who forget to deposit the check. Mail-in-rebates are a marketing tactic that relies purely on people being busy, unorganized or lazy.
  • Not planning properly: Another one of my failures — we eat out more due to being too busy to cook rather than enjoying a restaurant. We are trying to change this now, but still have a long way to go. Buying a plane ticket or booking a hotel during the peak season at the last minute due to lack of planning can also cost a pretty penny.
  • Not taking care of our health: Quite a few of us are too busy to exercise. So we pay for a gym or buy the latest model treadmill to workout at home, we try it out for a few days/weeks, and then life happens. We let the gym membership continue or the treadmill add to our clutter because we don’t want to accept any sunk cost or we are too busy to put it up for sale.
  • Not trying to understand retirement/investing: One of my friends didn’t sign up for his 401k for three whole years — a fund which gave a 5 percent match — because he didn’t “have time to read up on that stuff”. We choose the wrong investments or pay someone hefty fees to tell us what to invest in, all because we lack the time to educate ourselves on what is right for us.
  • Not looking for the best ways to make our money work for us: I am not talking about the rate chasers but there are still a lot of people who pay a high fee for a simple checking account just because they have not done the research to see if there is any better option out there. Are you paying for your checking account when there are free alternatives? Are you getting the best rate for your savings?
  • Not taking time to understand all the benefits that we are eligible for: We get a LOT of free benefits from places that we already pay for — like city parks, libraries,  credit card benefits, workplace benefits and insurance company benefits. My credit card company and insurance company both offer a lot of discounts for places that I use regularly. My library provides free access to quite a few magazines. Lot of companies these days are providing perks like free/discounted gym membership, spa access, commuting benefits, etc. We have to take some time to see what we are eligible for and make the most of it.
  • Wasting money due to disorganization: When we moved recently I found two or three of the same item not because we merged households but when we really needed something we couldn’t find it, so we went ahead and bought another one!

Most of these things can be fixed by spending a little time organizing and planning. Some areas might be costing you more than others. You can prioritize, outsource or skip stuff that is not worth much to you. The main point is to evaluate and make a conscious decision on what is best for your family.

What about you? How has your busy lifestyle affected your finances? How do you handle these “holes” in your wallet when you are too busy?


The Four Types of Savings Accounts That Everyone Should Have

When it comes to finances, it’s important to be organized. Organization keeps you on track with your goals, makes it easier to budget, and helps you stay sane during tax time.

One part of your finances that can messy,  if not organized properly, is your savings. With so many different things to set money aside for, it’s best to split it up. My favorite approach is having multiple accounts for various purposes. Here are four types of savings accounts that I think everyone should have:

Emergency Savings

An emergency savings account, or “emergency fund”, is the most important savings account you should have. It’s meant to bail you out of tight situations, in which you would’ve otherwise needed to go into debt.

There are countless circumstances where emergency savings come in handy. Here are a few examples:

  • Job loss
  • Home repairs
  • Car repairs
  • Natural disaster
  • Death in the family
  • Large medical bill

It’s recommended that you have three to six months of expenses in your emergency savings account. If you live in a dual-income household and have no dependents, you won’t need as big of an emergency fund as someone who lives in a one-income household and has dependents.

The best place to keep your emergency savings is in a high-yield savings account. This is liquid enough for easy access and still earns you a little bit of interest while you’re not using it. There are quite a few online banks that offer high-yield savings accounts, including Synchrony Bank, GS Bank, Ally Bank, and Capital One 360. As of November 2016, their rates ranged from 1.05% down to 0.75%.

Short-Term Savings

Once you’ve saved enough in your emergency savings account, it’s time to establish your short-term and long-term savings goals. Short-term savings goals are meant for things you plan to purchase/spend money on within the next five years. For some, that might be a vacation, a wedding, a car, a house, a new TV, or new furniture.

Money for short-term goals shouldn’t be invested in the stock market. It’s too volatile for a period of savings under five years. Instead, consider saving your money in a high-yield savings account, a certificate of deposit (CD), or money market account. All three of these options offer you a small return on your money but the security that your money will not lose value in such a short amount of time.

One note about CDs: your money is tied up in the account for a period of time, and usually can’t be touched without incurring a penalty fee. (Ally Bank offers a No Penalty CD option, but it includes a lower interest rate.) Only choose a CD if you’re sure you won’t need to dip into the money for anything during the length of time you have your money in the account.

Long-Term Savings

You can save for short-term goals and long-term goals at the same time. Two examples of typical long-term goals are college and retirement. Saving for long-term goals usually involves investing your money in the stock market, since you have more time to ride out the volatility.

Saving for a child’s college education can be done in many forms. One way is through a 529 plan. A 529 is a tax-advantaged savings plan, which is meant to encourage parents (or grandparents, extended family, etc) to save for their children’s future college costs. Returns on money in 529 plans are not subject to federal tax, as long as you use the money for college expenses. All states offer 529 plans, and you aren’t restricted to enrolling in the one that’s offered by your state.

Another way to save for a child’s college education is through a regular investment account. This may be a good idea if you’re not sure your child plans to go to college. You can simply invest money in an index fund with any brokerage.

Learn More: 7 Clever Ways to Pay For Your Kid’s College

Saving for retirement can be done in many forms as well. One of the easiest ways is to put money in an employer-sponsored retirement account. This will either be a 401(k) or 403(b) plan. Money is contributed to these plans pre-tax, which lowers your taxable income.

Another way to save for retirement is through an individual retirement account, whether that be a traditional IRA or a Roth IRA. These are good options if your employer doesn’t offer a retirement plan and you want to save on your own.

One Perspective: Save for Retirement Before You Save for College

Health Savings

The last type of savings account everyone should have is a health savings account. This doesn’t necessarily have to be an HSA, which you’re eligible for when you have a high-deductible health insurance plan. It can also be an FSA (Flexible Spending Account), which you typically get when you have a regular health insurance plan.

It’s important to have some type of health savings account because medical expenses are virtually unavoidable. Between co-pays and deductibles, medical bills can easily add up and cost you a lot. Having a dedicated account for medical expenses will be useful in helping you stay on budget and not dip into your emergency savings.

Learn More About Using an HSA to Save For Retirement

There’s no magic number as to the amount of money you should save each year for medical expenses. That will depend on how healthy you are, any medical conditions you have, and how much protection you feel comfortable having.

Final Thoughts

We all have different goals in life, some short-term and some long-term. It’s important to have savings accounts that match those goals. In addition, having an emergency savings account is crucial to making sure you stay on track with those goals and making sure that an unexpected expenses doesn’t impede your progress.

A health savings account may not be something we all think about, but it’s important to have one. If you use an HSA or FSA, those accounts come with tax benefits. If you don’t have access to either of those accounts, it’s still important to save for medical expenses, even if it’s just in a regular savings account.

No matter where you choose to tuck your money away or what you allocate it for, one important point remains across the board: save as much as you possibly can. It’s better to have it waiting there when, and if, you need it than to rack up debt for extra expenses.


Barclaycard Arrival Plus™ World MasterCard® Review

Frequent travelers looking to cash in rewards for their travel purchases may want to check out the Barclaycard Arrival Plus™ World Elite MasterCard®. This card offers great miles, which can be easily redeemed for travel statement credits. It also has a great bonus offer going on right now, making it even more enticing for new cardholders.

Barclaycard Arrival Plus™ World MasterCard® Basics

This is a card geared for travelers, especially those who don’t want to mess with bonus or rotating categories. Unlike many travel credit cards, it doesn’t give you extra rewards for travel-related purchases. Instead, it simply lets you use the rewards you earn on everyday purchases towards travel-related expenses.

So, how does it work? Well, with this card, you get 2 miles for every $1 spent on any purchase. There are no expirations or caps. You can then redeem those miles for credits towards qualifying travel purchases made on your card within the past 120 days.

Your miles can also be used for a generic cash back statement credit or gift cards, but their redemption value plummets when used in this way. You can redeem miles for statement credits and gift cards starting with 5, 000 miles for $25. Or you can redeem 10, 000 miles for $100 toward a qualifying travel purchase. Essentially, miles are worth twice as much when redeemed for travel-related purchases.

Luckily, Barclaycard defines “travel” pretty broadly. As long as the merchant in question is using the right code, you can redeem your points at full value for purchases from airlines, hotels and motels, timeshares, campgrounds, car rental agencies, cruise lines, travel agencies, discount travel sites, trains, buses, taxis, limousines, and ferries.

To summarize: Spend on the card. Get 2 miles for every $1 spent. Make travel-related purchases. Cash in your miles for credit on those travel-related purchases.

Bonus Miles

When you spend at least $3, 000 on this card in the first 90 days after opening, you’ll get 40, 000 bonus miles. That’s enough for a $400 travel statement credit. Plus, when you redeem your miles for travel-related purchases, you’ll get 5% miles back to use on your next purchase.

In other words, when you cash in those 40, 000 bonus miles, you’ll get 2, 000 bonus miles back to use towards your next travel redemption. This makes it easier to keep a bank of miles going continuously, which you can use each time you travel.

Other Fees and Benefits

This card comes with an $89 annual fee, which is waived the first year. It carries additional benefits, including:

  • 0% Introductory APR: This introductory APR applies to any balance transfers made within 45 days of account opening. You’ll pay no APR on these balance transfers for 12 months. Balance transfers carry a fee of 3% or $5, whichever is greater.
  • Chip Technology: Keep your purchase more secure at terminals around the world with chip technology.
  • Free FICO® Score: Log into your Barclaycard account, and you can get access to your current FICO score for free. You’ll also get email alerts when your FICO® score changes.
  • MasterCard® World Elite Services: This concierge service gives you personal assistance with travel-related needs, and offers access to luxury travel benefits.
  • No Foreign Transaction Fees: A must-have any time you travel internationally, this card offers no foreign transaction fees on any purchases made while you’re in another country.
  • Travel Accident and Trip Cancellation Insurance: This service will reimburse any nonrefundable fees if your trip is interrupted or cancelled for a covered reason, and if your tickets were purchased with your Barclaycard Arrival Plus™.

Who is it for?

The Barclaycard Arrival Plus™ World Elite MasterCard® is for those with great credit and frequent travel plans. While it doesn’t offer 5+ miles per $1 spent, like some cards, it also doesn’t have caps or category restrictions to worry about. The 2X miles back rewards on all purchases make it easy to rack up rewards without thinking about it. And the redemption process lets you shop for the best travel deal while making the most of the rewards that you have earned.

If your goal is to squeeze the most rewards out of every single purchase, this card may not be for you. Or it may be your go-to backup card when making purchases that fall outside of other cards’ bonus categories. But if you’re looking for a no-brainer way to earn rewards that you can easily redeem for any type of travel, the Arrival Plus may be the card you need.

This card’s balance transfer offer shouldn’t be ignored, either. If you’re working your way out of credit card debt, a year-long 0% introductory APR offer is great. Especially since this card also offers great rewards on purchases, which you can use while you’re getting out of debt or after you’ve paid off the transferred balance.


How to Refinance Your Car Loan

More and more people are deciding to finance the purchase of their cars. According a study conducted by Experian, 84.9% of new cars were purchased with financing in 2015. In 2016, that number rose to 86.3%.

To further demonstrate the increasing amount of auto debt we’re in, the study found that the average loan amount on a new car has increased also – from $28, 711 in 2015 to $30, 032 in 2016.

If you’re part of these statistics, you may find yourself in a situation in which your monthly payments are too high for your budget. That’s when refinancing a car loan comes into the equation. This often reduces your monthly payments, and may make it easier to pay off the note faster. Here’s how to go about refinancing a car loan.

When to Consider Refinancing a Car Loan

Before we discuss how to refinance a car loan, we should talk about when you should. It’s important to consider your circumstances and determine if refinancing a car loan is, in fact, the right decision for you.

Here are a couple of situations in which it makes sense to refinance your vehicle’s note:

Your credit score has increased. If your credit score has increased since you took out the loan on your car, you may qualify for a lower interest rate. Lowering your interest rate by even just 2% can save you a lot of money in the long run. Let’s take a look at an example.

Let’s imagine you have an existing car loan for $15, 000 for 36 months, at 5% interest. Your current monthly payment is $449.56. Now, say your credit suddenly increased and you refinanced your loan. You took out a new loan for the $15, 000 but at only 3% interest, for the same 36 months. Your new monthly payment would be $436.22.

You would save a little bit of money each month, which you could then tuck away or use to pay off the loan even sooner than 3 years. But the real savings comes in over the life of the loan.

If you paid off the original 5% loan over the scheduled 36 months, your total payout (and therefore the total cost of the car) would be $16, 184.16. But if you refinanced at 3% interest and paid it off as scheduled? The total cost would drop to $15, 703.92. Simply lowering your interest rate by 2% would save you $480.24. Plus, if you used the monthly savings to pay extra on your loan, you’d save even more in interest over the life of the loan.

refi-car

Interest rates have decreased. If your credit score is the same but interest rates have decreased over the years, it may be worth looking into refinancing. The example above still applies. Just this time, the market is in your favor regardless if your credit score has changed.

On the flip side….

There are times when you shouldn’t refinance a car loan, no matter how tempting it may be. These include:

Your loan has a prepayment penalty. If your existing car loan has a prepayment or early termination penalty, it may not make sense to refinance. You’ll want to make sure the savings outweigh the fee. For example, if the prepayment fee is $500, your savings in the above example wouldn’t warrant incurring the penalty.

You’ll extend your loan’s term. In general, it’s best to avoid extending your loan’s terms. For example, if your current loan’s term is 36 months, refinancing to a 60 month term is generally a bad idea. Although this will lower your monthly payments, you’ll likely end up paying more in interest.

How to Refinance a Car Loan

If you reviewed your situation and determined that refinancing is right for you, there are a few ways to go about the process.

You’ll apply for an auto refinance loan which is used to pay the existing balance on your current car loan. Your car is used as collateral for the new loan. The new car loan has a fixed interest rate with fixed monthly payments for a specific number of months.

The application process is straightforward. You’ll simply go to your bank of choice and provide three sets of information:

  • Personal – This includes things like your date of birth, home address, and other information that verifies your identity.
  • Financial – This includes things like employment status, monthly income, and other information that verifies your ability to pay the loan.
  • Auto – This includes things like the year of your vehicle, remaining loan balance, and other information that will determine the terms of your new car loan.

At the end, you’ll sign loan closing documents. You’ll also have the option to set up automatic payments from your bank account.

Where to Refinance a Car Loan

Big banks are a good first choice when you want to refinance a car loan. Some big banks to consider are:

(All rates shown are current as of November 1, 2016)

You can also use car loan services such as CarsDirect and MyAutoLoan. These services connect buyers with lenders and give you the tools and information you need to choose the best lender for your situation.

Wrapping Up

Before heading to the bank to refinance a car loan, it’s important to consider your financial situation and the terms of your current loan. These two factors may determine that refinancing your car loan isn’t right for you. In other instances, it may make the best financial sense.

When going through the actual process, you’ll want to make sure you have all the documentation needed: personal, financial, and auto. You have multiple options when it comes to where you refinance your car loan. You can use services like CarsDirect and MyAutoLoan to shop around. Or you can go straight to a big bank like U.S. Bank, Capital One, or Bank of America.

Either way, make sure that it is the right financial decision for you, now and in the future. And if you do manage to save yourself some money on a refi? Use it to pay off some debts or pad your emergency fund, and double up on the financial smart moves. Good luck!

Have you refinanced, or are you thinking about refinancing, your car?


A Review of the Hilton HHonors Card

The Hilton HHonors card from American Express is great for those who frequently stay in the Hilton chain of hotels. It offers excellent rewards, especially on travel-related purchases, and comes with complimentary Silver Status within the Hilton HHonors program.

Hilton HHonors Card Basics

This credit card is clearly geared towards the elite traveler. It offers 7 points per $1 spent on eligible purchases at participating Hilton Portfolio hotels and resorts. Plus, you’ll get 5 points per $1 spent on eligible purchases at U.S. restaurants, supermarkets, and gas stations. Lastly, you’ll earn 3 points per $1 spent on all other purchases.

The card comes with automatic Silver Status within the HHonors program. This gives you a 15% bonus on HHonors Base Points earned through the HHonors program when you stay with Hilton.

If you spend $20, 000 on eligible purchases within a calendar year, you can earn HHonors Gold Status. This entitles you to a 25% bonus on HHonors Base Points earned through the program, room upgrades when available at participating hotels, and high-speed Wi-Fi access in your room at some Hilton properties.

Both Silver and Gold members are eligible to receive every 5th night free on eligible stays of five or more consecutive nights.

The Bonus Offer

To earn 50, 000 Hilton HHonors Bonus Points, just spend $750 in purchases on this card within three months of ownership. This could transfer into up to 10 nights in a category 1 Hilton hotel.

Redeeming HHonors Points

Points are redeemed at different rates, depending on hotel and resort categories. The standard room rewards breakdown provided by HHonors is as follows:

hhonors

You can also combine points and cash to redeem your rewards more quickly. At the same time, you’ll still net a discount on your stays. What if you don’t have enough to book your full stay with rewards points? You can use your points to pay less per night at select hotels and resorts.

HHonors points earned directly through the HHonors program or through the HHonors card can also be used for on-property purchases at many Hilton properties. This can include resort and vacation packages (think on-site dining and spa treatments), golf rewards, and more.

Besides these options, points can be used for other rewards with certain travel partners. American Express gives you quite a few options, ncluding over 60 airline and rail partners. You can use points to book or upgrade a rental car, or to book a cruise. Gifting points is an option, as well. You can even exchange them into another program, such as the American Express Membership Rewards Program or an airline miles program.

Of course, what value you’ll get from your points varies. It depends heavily on where, when, and how you choose to redeem them. Still, there’s no denying that HHonors Points are easy to use for a variety of vacation and travel options.

Rates and Fees

For a card with excellent benefits, this one has an unusually low annual fee: $0. However, it does charge a 2.7% foreign transaction fee, which isn’t great news for a card otherwise made for jetsetters.

This card carries a 15.49% to 19.49% variable APR for purchases and balance transfers, depending on creditworthiness. The APR for cash advances is 25.49%. The penalty APR, which applies when you’ve made a late or returned payment, is 29.49%

Additional Benefits

As a travel-oriented credit card, many of this American Express option’s additional benefits have to do with travel. Other card perks include:

  • Baggage Insurance: If your luggage is lost or damaged during a trip for which you’ve purchased tickets on your HHonors card, you could be eligible for baggage insurance. Limits on coverage are up to $1, 250 for carry-on baggage or up to $500 for checked baggage.
  • Room Reservation Bonus: You’ll earn 500 Hilton HHonors Bonus Points for each stay when you use your Hilton HHonors card to both book your reservation online and pay for your stay using the same card.
  • Roadside Assistance Hotline: Get access to emergency services when you have a flat, need a tow, or otherwise need roadside assistance.
  • Car Rental Insurance: Book a car rental using your HHonors card, and decline the collision damage waiver at the rental car counter. Your HHonors card could cover damages if the car is damaged or stolen, though there are some important restrictions to this benefit. Be sure to check out the fine print before you book your rental car.
  • Travel Accident Insurance: If you suffer from a serious accident when traveling by plane, train, ship, or bus that has been charged to your card, you could have access to accidental death and dismemberment coverage.
  • Global Assist Hotline: Say something happens to you when you’re more than 100 miles from home. You can call this hotline for 24/7 access to experts who can answer your questions and help you through an emergency.
  • Entertainment Access: Get access to cardmember-only tickets for Broadway events, sporting events, tours, and more.
  • Extended Warranty: When a manufacturer’s warranty runs out on a product purchased using your American Express, you may be eligible for an additional year of warranty coverage.
  • Purchase Protection: If items purchased on this card are damaged or stolen within 90 days from the date of purchase, you may have access to purchase protection coverage.
  • Return Protection: Can’t return an item you bought within the past 90 days to the merchant? American Express may refund the full purchase price, up to $300 per item or $1, 000 per calendar year per account.
  • Dispute Resolution: Notice a fraudulent or incorrect charge on your statement? American Express will work with you to resolve the dispute.

The Bottom Line

The Hilton HHonors Card from American Express is generally available to those with excellent credit. It’s a great card if you’re already sold on the line of Hilton hotels and resorts, or if you’re interested in joining the HHonors program.

With a generous introductory offer, no annual fee, and bonus points on everyday purchases like groceries and gas, it’s not hard to make this card worth your while. Sure, your points may not be as flexible as with a cash back card. They are, however, very easy to use at Hilton properties. If you’re not a frequent traveler, this card could be a great way to earn points for your annual family vacation, or to save up points for a specific trip you’ve been dreaming about.

Interested in the card? Learn more about the Hilton HHonors Card from American Express and apply here at Card Ratings.


5 Quick Fixes to Improve Your Credit Score

Over the past ten years, the average credit score in America has hovered in the high 600’s. This is considered a fair credit score, but definitely not excellent.

If you’re among those who have a fair credit score and are looking to improve it, you’ll have to focus on a few different financial principles. Fortunately, there are easy fixes to improve your credit score. But first, let’s take a look at how your credit score is calculated:

How Your Credit Score Is Calculated

There are a number of factors that go into calculating your credit score (and, depending where you check your score, there are even different formulas!). For ease’s sake, though, let’s go with the golden standard: the FICO. Here’s how your score formula breaks down:

  • Payment history (35%) — Payment history is whether, and how often, you pay your credit accounts on time.
  • Amounts owed (30%) — Amounts owed is how much credit you’re using at a given time, compared with your total available credit.
  • Length of credit history (15%) — Length of credit history is the average age of your credit accounts.
  • Credit mix (10%) — Credit mix is the variety of accounts you have including credit cards, retail credit cards, mortgage loans, auto loans, and most other kinds of debt.
  • New credit (10%) — New credit is how many recently opened credit accounts you have, and also how many recent credit inquiries you have.

Now that you have an idea of where you stand and why, let’s look at how you can improve upon your credit score.

Fix 1: Get Current With Your Bills

Paying for bills on time is the most important fix you can make to improve your credit. Since payment history makes up the majority of your credit score, this will have a significant impact. Potential lenders look at your payment history to determine how likely you are to pay their loan/revolving credit back on time.

One way to make sure you pay your bills on time is to set calendar reminders. I set calendar notifications one week before my credit card due date, as well as one day before. My bank’s mobile app also sends a reminder to my phone the day before payment is due.

If you miss one payment, it’s not the end of the world. As long as you have plenty of on-time payments, one missed payment shouldn’t plummet your credit score. Just make sure you continue to make on-time payments after that.

Fix 2: Reduce And Eliminate Debt

Amounts owed is the next most important factor that contributes to your credit score. Your credit utilization ratio is the current balance on your debts divided by your available credit. You want to keep your credit utilization ratio as low as possible.

Reducing and eliminating debt will decrease your credit utilization ratio. To reduce your debt, simply continue making on-time payments to your bills. It’s great if you can pay more than the minimum balance. This will help you eliminate the debt faster. If you can pay your entire credit balance off in full each month, that’s even better!

There is no magic number for your credit utilization ratio (though some financial gurus recommend staying below 35%). Just keep in mind that lower is better.

Fix 3: Ask For A Credit Limit Increase

Another easy fix to improve your credit score is to ask for a credit limit increase. If your debts remain the same, having a higher credit limit will decrease your credit utilization ratio. Having a lower credit utilization ratio, in turn, improves your credit score.

The point of increasing your credit limit should be to decrease how much available credit you’re using. It shouldn’t be used to further fund your lifestyle or pay for additional expenses.

When you request the credit limit increase, ask if it’s possible for the credit card company to do so without doing a hard pull. A hard pull is an inquiry on your credit report that can have a temporary negative impact on your credit score. Instead, ask if the credit card company can do a soft pull.

Fix 4: Avoid New Credit Cards

Getting a new credit card affects two parts of your credit score: length of credit history and new credit. When you get a new credit card, your average length of credit history decreases.

For example, let’s say you have two credit accounts — one is six years old and the other is three years old. Your length of credit history will be 4.5 years (the average of your accounts’ ages). If you open a new credit account, the average age of your accounts will plummet because the newest account will be zero years old.

Another tip is to make sure you keep your oldest credit card open. This will keep your length of credit history long and help improve your credit score.

Although they have a small impact, recent inquiries play a role in your credit score as well. As previously mentioned, a hard pull creates a small dip in your credit score. This is another reason to possibly avoid getting a new credit card.

Fix 5: Check Your Credit Report

Checking your credit report can only help you. It may not have a direct impact on improving your credit score, but it can help you avoid some very costly mistakes.

You should check your credit report to make sure there aren’t any unauthorized accounts under your name and that all of your payment history is correct. Sometimes data furnishers make mistakes. Catching those mistakes early and removing them immediately will prevent any negative impacts to your credit score.

You can check your credit report for free at annualcreditreport.com. All three bureaus are required to offer your credit report for free each year. I usually check my report from one of the three credit bureaus every four months, so that I have an opportunity to check for errors multiple times throughout the year. Sites like myFICO, Credit Karma, and Credit Sesame also offer free credit reporting tools.

The Takeaway

These easy fixes to improve your credit score are based on the five factors that contribute to your credit score, as determined by FICO. It’s important to be patient when it comes to improving your credit score.

There’s no magic formula to increase your score by 200 points. But with persistence and following through on these tasks, you can improve your credit score over time.


5 Ways to Save Big On Things You’re Already Buying

5 Ways to Save Big on Things You Already Planned to Buy

I’ve never been the type of person to clip coupons at the grocery store. If you are like me, you may have found that proactively browsing for 10 cent deals is not a cost-effective use of time.

However, I still love a good value. Nowadays, I can leverage technology to help me save on items that I am planning to buy. Here are five ways that you can whittle an extra 1-60% off things that are already on your list.

  1.   Shop through your credit card rewards program

I’m part of Chase’s Ultimate Reward Network. I automatically earn 1% on purchases and 5% on quarterly incentives, just by swiping my card. I also add rewards multipliers by routing my purchase through Chase.

When shopping online, I keep in mind the stores that are affiliated with my bank’s credit card reward program. This list includes retail stores ranging from Walgreens to Nordstrom. All I have to do is use the Chase portal to access those online stores, and make my purchase as usual. Then, watch the points add up.

The rewards can be huge, actually. You can earn double, triple, and even 20x the points per dollar, depending on the store you choose. The extra rewards are immediately added to my account and can be converted into cash using at 100 points to the dollar.

An added benefit of this approach is that there is no penalty if you return the item. The additional rewards points received are simply removed automatically when the transaction is reversed.

I personally use Chase, but other companies like Ebates, FatWallet, and MyPoints have similar programs.

  1.  Buy a discounted gift card

It seems like there is a secondary market for everything these days. Gift cards are no exception.

It makes sense that if you have a gift card for a store you don’t frequent, you could sell it to recoup some of the funds. Conversely, if you know you’ll be shopping at a particular store, you could buy a discounted card that someone else is looking to sell.

There is plethora of sites to buy discounted cards, but the easiest way is to use an aggregator like Gift Card Granny and find all of the deals in one place.

Deals can vary based on supply and demand, as well as store popularity. Discounts on Amazon gift cards, which are versatile and very popular, tend to hover around 1%. Retail stores such as The Limited and Coach, however, can skyrocket to over 50% savings.

You can either purchase digital cards are instantly sent to your email, ready to use in seconds. Plastic cards are also an option, and arrive within a week or so via snail mail.

The biggest risk with this approach is purchasing a card that doesn’t work. Each company has a unique protection policy, so make sure to read the details before you buy. Look for companies that offer a 100% cash back guarantee.

  1.  Buy a gift cards through reward programs

New startups, like the app Benefit, allow customers to buy gift cards while seeking cash back rewards. Before you make a purchase at CVS, Old Navy, Amazon, the Olive Garden and many others, quickly buy a digital gift card through the app and save up to 10%.

Have you been in the situation where you wanted something that was $12, but had a $25 gift card? Say goodbye to fixed price cards that encourage you to purchase more in order to to “use it up” (or even worse, let it go unused). A great thing about this app is that many retailers allow you to purchase a gift card for the specific amount you need… down to the penny.

Benefit also gives customers the option of linking a credit card or bank account to their application. Since transaction costs are higher when credit cards are used for purchase, the rewards incentives are too. Rebates are an average of 3% higher for cash purchases.

Note that you should only buy gift cards for purchases you intend to keep, though. If you return the item, you are given the money back on a gift card instead of cash.

  1.   Search for Promotional Codes

If you see a field for “Promotional Code” during an online checkout process, it may mean that the site offers additional buying incentives. It is easy to find out, just search for the company site and the word coupon and see what pops up (Here an example: Search for “Target Coupon”). Try it for retailers, restaurants, ticket purchases—anything you can buy online.

RetailMeNot, Coupons.com, and Coupon Cabin are popular sites that aggregate promotional codes. You may find codes that open up free shipping, an extra 15% percent off, or a $10 discount on your purchase. Just copy the promotional code from your search results and paste it in the promotional code field. Not bad for 30 seconds of work!

  1.   Use retail price monitoring apps

For a long time credit cards have offered the benefit of honoring price adjustments for items that go on sale within weeks after the point of purchase. Most consumers forget about this benefit or feel that it is not worth their time to report the price change. Recently, apps and tools have been flooding the market to automate both the identification of price changes and the refund process.

Paribus is a site that taps into your email and Amazon account to monitor online purchases. When it finds that the exact item you purchased has a price drop, they work with your credit card to honor the price adjustment. In return, they take a small cut, but it’s money you likely wouldn’t have sought out anyway.

Similarly, many credit card companies offer their own opt-in monitoring programs. I suspect we will see more of these companies come to market.

Stack rewards programs, discounts, promotional offers, and monitoring services for ultimate savings!

Finding the best combination of discounts can be a fun and profitable game. Advanced savers can use these strategies in tandem to increase the rewards.

Example 1

  • Use a cash-back credit card that incentivizes department stores at 5%.
  • Add a promotional code for 20%.
  • Then, let a monitoring service find additional 1% saving two weeks after you made the purchase.

That is a 26% discount!

Example 2

  • Use a 2% cash back credit card to purchase a gift card discounted at 19%.
  • Layer on a %10 coupon code.

That is a 31% discount!

There are many ways to save a little extra cash on what you’re already planning to buy. All you have to do is utilize the many resources available to you, plan ahead when you can, and take advantage of all of the discounts and promotions just waiting to be found. Happy saving!

Now, let’s hear from you. Have you tried any of these techniques? Tell us about your best combinations for saving online!


Top Credit Card Fees to Watch Out For (and How to Avoid Them)

At the end of day, banks and credit card issuers are businesses. As such, one of their primary aims is to make a profit. Part of the way these companies make money, of course, is through fees.

Many people think that credit cards are bad because they get you into debt and can cost you money. Although both can be true if you use credit cards unwisely, credit cards can also serve as a powerful tool for increasing your purchasing power and providing you an extra layer of protection.

Your goal should be to reap the benefits of credit cards without paying more than you need. To do so, it’s important to know the terms that come with your credit card, especially the fees associated with it.

Here are six types of credit card fees to watch out for, and how to avoid them:

Annual Fee

With so many credit cards on the market that have no annual fee, you may wonder why anyone would intentionally sign up for a card that carries one. One reason is because those cards tend to offer more generous rewards.

Take, for example, the Chase Sapphire Reserve Card, which has an annual fee of $450. But it comes with an annual travel credit of $300 and many other travel perks. These include trip cancellation insurance and complimentary airport lounge access.

If you decide that a credit card is worth its annual fee, all you have to do is plan for that expense each year. You can either save for it on a monthly basis or set the money aside in a separate account when you run into extra cash.

Foreign Transaction Fees

Foreign transaction fees are applied by your credit card issuer when you make a purchase outside of the United States. On my Wells Fargo Cash Back Card, the foreign transaction fee is 3%. This is pretty standard.

One way to avoid foreign transaction fees is to use cash. You can convert U.S. dollars into foreign currency before you leave the country. You can also use an ATM once you get to your travel destination.That way, you’ll pay a one-time flat fee rather than an ongoing percentage of your purchases.

If you’d feel more comfortable using a credit card abroad, there are plenty of credit cards that have no foreign transaction fees. To name a few: the Chase Sapphire Preferred Card, Capital One Venture Rewards Card, and BankAmericard Travel Rewards Card.

Paper Statement Fees

Banks like PenFed have started issuing a revolving fee for customers receiving paper statements. For banks and credit card issuers, it’s a way cut costs.

Although small, this fee is simple to avoid. Simply opt for electronic statements instead. If you ever find the need to print a copy of one of your statements, you can do so from your home or office.

Balance Transfer Fee

A balance transfer moves your account balance from one credit card to another. This is often done to reduce or eliminate the interest on a debt. By transferring your balance on a high-interest credit card to a card with a lower interest rate (or promotional interest rate of 0%), you can save a lot of money. It can also allow you to pay off your debt faster. That’s one reason we track the latest 0% balance transfer offers.

The only downside is that balance transfers come with a fee — often 3% to 4%. You’ll have to do the math to figure out if the fee is worth the transfer. Depending on your interest rates, it probably will be.

Cash Advance Fee

A cash advance fee is charged when you borrow cash against your credit card. Typically, a cash advance fee is between 2% and 5% of the amount you withdraw.

An advance comes with additional costs as well. The amount you withdraw will start to accrue interest from the date of withdrawal. Also, the interest rate for cash advances is often higher than that of normal credit card purchases.

It’s best to avoid taking out a cash advance if at all possible. Consider pulling the money out of your savings instead. If the amount you need is really high, withdrawing from your checking account and getting hit with an overdraft fee may even be cheaper than a cash advance fee.

Late Payment Fee

A late payment fee is assessed when you fail to make a payment on your credit card bill by the due date. According to the CARD Act, late payment fees must not exceed the minimum payment due. Typically the fee is $25 or $35.

The best way to avoid paying a late payment fee is to always pay your credit card bill on time. I have automatic payments set up, so I don’t even have to think about it. On the due date, my last statement’s balance is automatically transferred from my checking account to pay my credit card bill. In addition, I also have a monthly reminder on my calendar to check that the bill’s been paid on time.

If you don’t pay your entire balance in full each month (although that’s highly recommended), at least pay the minimum payment due. That way, you can avoid the late payment fee.

Final Thoughts

The good news is that most of the credit card fees out there can be avoided. Others, such as the annual fee and balance transfer fee, can often be worth paying for.

By law, you are entitled to know all fees associated with your credit card, as well as how those fees are calculated. You can find most of this information directly on your monthly statement. If anything is unclear to you, don’t hesitate to call up your credit card issuer and ask questions. It’s your right as a consumer.


Why borrowing for a wedding is a bad idea

I enjoy weddings. I’m just not sure how much I’d pay for one.

That thought was prompted by reading recently that the typical wedding in the United States costs around $30, 000 these days. Now, I’m a little skeptical about that number. After all, there is whole cross-section of businesses dedicated to promoting the idea of big weddings. I think of it as the wedding industrial complex. It is in their interest to promulgate figures that suggest it’s perfectly normal to spend a small fortune on a wedding.

Still, whether or not $30, 000 is an accurate figure, the fact remains that many people spend far too much on their wedding. It could be seen as a welcome sign of prosperity, except that these are not prosperous times. No, we are living with an epidemic of people struggling to pay their student loans and failing to save for retirement. So really, it is worrisome to see couples start their lives together by taking on a heaping helping of debt.

There is even an entire category of personal loans called wedding loans. It is worth looking at how those stack up relative to other options for financing a wedding; but also, I can’t resist the urge to follow that up with reasons not to borrow money for a wedding in the first place.

Compare wedding financing options

Here are some of the ways you can borrow to pay for your wedding:

  1. Credit card. Wedding expenses tend to come up over a period of time, as deposits have to be made, dresses and tuxedos bought, etc. These periodic expenditures make it all too easy to fall back on a credit card as a handy way to pay. But don’t forget that credit card debt is extremely expensive and interest rates are likely to be especially high for young couples with limited credit histories.
  2. Personal loan. At around 10 percent, personal loan rates aren’t exactly cheap, but they are lower than most credit card rates. Also, debt repayment is structured, which makes it easier for borrowers to stay on track toward timely repayment.
  3. Home equity loan. If you are lucky enough to already own a home by the time you get married, a home equity loan is a cheaper way to borrow than either credit cards or personal loans. Just be sure you feel confident in your long-term job security, because using your house as collateral really raises the stakes of borrowing for your wedding.
  4. Line of credit. Another option is a line of credit, which may be either unsecured or secured by equity in your home or some other asset. (Again, secured loans are generally cheaper, but they put your collateral at risk.)
    There are pros and cons to using a line of credit to finance a wedding, though. Since you don’t pay interest until you actually use the line of credit, this approach can be well suited for the way wedding expenses don’t all come up at once. On the other hand, having access to a line of credit can make it too easy to make spur-of-the-moment upgrades or additions to your wedding plans, which can send your costs soaring.

Why going into debt for your wedding is a bad idea

So now I get to be the wet blanket and tell you why you should not borrow to pay for your wedding:

  1. Long-term debt is bad for short-term expenditures. Borrowing for assets like cars and houses makes sense because the useful life of the asset outlasts the repayment period. However, borrowing for short-term events like vacations or a wedding means taking on debt without an offsetting asset.
  2. Don’t feel you have to prove anything. Make the wedding entirely about your commitment to each other, and not about showing off for friends and family.
  3. It’s really easy to overpay. Most people don’t have a lot of experience with weddings, so they are essentially sitting ducks for the professionals who make their living in that industry.
  4. Saving could tell you something about each other. Being disciplined about money will help your marriage work, so why not find out how well you can manage this kind of thing together by waiting and saving up to pay for the wedding?
  5. Multiple debt layers could become a strain. When you think about it, it often takes 15 years to pay off student loan debt. After you are married, you may want to buy a house, for which you will possibly need a mortgage. Do you really want to create a third layer of debt by taking on a wedding loan?

I don’t have any formal data on this; but given the way celebrity marriages often turn out, I get the impression that there might even be an inverse relationship between the cost of a wedding and the length of the subsequent marriage. Then again, that impression might be skewed by the fact that my own low-budget wedding has led to 29 wonderful years of marriage, and counting.