Top 3 Flexible Travel and Rewards Credit Cards for Individuals

Chase Sapphire Preferred Card

The Chase Sapphire Preferred Card is a neat card with its bright blue color and noticeable weight, as well as for its its point earning capabilities.  The Sapphire Preferred accrues 2X Sapphire points on restaurants and travel (including subways, cabs, and trains).

Key features are as follows:

Note that the Chase Ink Plus Card, the business version of this card, is essentially the same card but provides a sign up bonus of 50,000 to 70,000 points.  Applying for that card with your social security number as your EIN may also be worth considering. 

American Express® Premier Rewards Gold Card

The Amex Premier Rewards Gold Card has strong reward categories and good transfer partners, including British Airways and Singapore Airlines, and sometimes offers a transfer bonus to British Airways.  This card however offers 3x points on travel spend, 2x points on supermarkets and gas station spend, and purchase protection (up to $1,000). 

Key features include:

Note that a business version of this card often provides 75,000 Membership Rewards® points after you spend $5,000 during your first three months of card membership.  Applying for that card with your social security number as your EIN may be something that you will want to do in addition to, or instead of, applying for this card, especially as Amex's rules allow you to reapply for the business card every two years.

The Barclaycard® Arrival Plus World Elite Mastercard®

The Barclaycard Arrival Plus World Elite Mastercard is different from other point earning cards in that the points are not transferrable to any airline or hotel chain to redeem for airfare or free nights.  Rather, the points accrue in your Barclaycard account at a rate of 2x per dollar spent and can be used to wipe out (pay for) for any travel-related expense over $25 within the previous 120 days just by logging in your account online.  Some travel categories provide a 10% discount upon redemption; hence, this card produces between 2% and 2.20% in value per dollar spent.  While greater value can be achieved with other cards, this Barclayscard is in fact the most flexible of the flexible travel and rewards credit cards.  An additional important feature of this card is Chip-and-PIN capability which is particularly valuable if you are using the card in Europe where automated most automated vending machines now require the technology (leaving those without it to wait on long lines).  

Key features are as follows:

  • Earn 40,000 bonus points when you spend $3,000 with the card in the first 90 days of card membership - that is enough to redeem for a $400 travel statement credit.
  • Earn 2X points on all purchases.
  • Points don't expire as long as your account is open, active and in good standing.
  • Chip card for increased confidence and convenience to pay abroad as easily as you do at home.
  • Book the travel you want — airfare, hotels, cruises and more and earn miles on your purchase.
  • Get 10% points back to use toward your next redemption every time you redeem for travel statement credits.
  • No foreign transaction fees on anything you buy while in another country.
  • Complimentary online FICO® Score access for Barclaycard Arrival cardmembers.
  • Introductory Annual Fee of $0 for the first year; $89 thereafter.

Editorial Disclosure: Opinions expressed here are those of the author, and have not been reviewed, approved or otherwise endorsed by any bank advertiser, card issuer, airline or hotel.

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Today's Credit Card: A Financial Tool for Fun, Profit and Savings

Today's Credit Card: A Financial Tool for Fun, Profit and Savings

If you use credit cards as a financial tool rather than as just a means for credit, they can help you get that trip to the beach or plasma TV faster than you could have gotten it on your own…without depleting your savings.

You saw a great deal on the HDTV you've been eyeing, but you're still trying to put away money for a vacation to Florida. What's a savvy saver to do? If you find a credit card with a great sign-up bonus, you may be able to get both the TV and the trip to Florida without spending a lot of extra money. The key is finding a card that works with your spending plan and financial habits.

For example, the US Bank FlexPerks Travel Rewards Visa Signature Card offers new cardholders 17,500 bonus FlexPoints after the first $2,500 in purchases, as long as the $2,500 is spent within the first five months. It only takes 20,000 points to get a $400 airline voucher (with no blackout dates), so that HDTV or new entertainment center could put you well on your way to Florida. You also earn one point for every dollar spent and double points on gas, groceries and some cell phone bills. If you donate to money to charity on the card, you'll earn 3 points per dollar spent.  The card also gives you an additional $25 airline allowance with each award ticket to help reimburse baggage fees or in-flight meals. While there is no annual fee for the first year, card does charge a $49 annual fee thereafter and has an APR of 13.99 to 23.99%, based on your credit score.

As such, you shouldn’t open up a card like this if you don't pay off your balances in full; you should consider these cards to be a financial tool rather than a means for credit. That being said, there are some great deals to be had if you pick and use your credit cards wisely. If you are big traveler and you don’t want to worry about paying annual fees, you can always investigate a hotel-sponsored credit card, like the Citi sponsored Hilton HHonors Visa card. This card has no annual fee, gives you 40,000 Hilton HHonor points after you spend $1,000 within four months, and automatically grants you HHonors Silver Status. If you frequently stay in Hiltons, the HHonors Silver Status the card provides will automatically save you fitness center fees since the status gives you free access. However, you don’t have to use your points to stay at Hiltons: you can also use them for airline tickets, car rentals, or even on-line shopping. The standard variable APR for purchases is around 14 – 16%, so you should plan on paying off the balance in full every month if you don’t want the interest charges to offset your point earnings.

Your credit score could take anywhere from a 5 to 20 point hit when you apply for a new card, but if you pay your balance off in full every month your score should be back to the original level within a year. Because your credit can take a slight hit, this card strategy isn't recommended if you're preparing for a major purchase like a house. Then again, if you're saving for a new house, you probably wouldn't be in the market for vacations and home entertainment systems at the same time—the BestCashCow.com page on mortgage products and rates would serve you better.  

Image: Stuart Miles at FreeDigitalPhotos.net

Editorial Disclosure: Opinions expressed here are those of the author, and have not been reviewed, approved or otherwise endorsed by any bank advertiser, card issuer, airline or hotel.

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How to Achieve and Maintain a Healthy Credit Score

How to Achieve and Maintain a Healthy Credit Score

The most obvious way to have a great credit score it to pay your bills on time. There are, however, additional moves that can be made to further improve a great credit score or help repair a mediocre one.

The after effect of the credit crisis has led to a tightening of lending standards; banks simply are not as willing to loan people money as they have been in the past.  This reluctance on the part of lending institutions to take on risk has resulted in a person’s credit score, always an important number, being more critical now than ever.  Fortuitously there are a number of relatively simple ways to create a strong credit history and a resulting high credit score.  First, however, an outline of what a credit score is and how it is calculated will help frame the context of this article.

The most commonly used credit score model is called FICO, which stands for Fair Isaac Corporation, the company that designed what has become the industry standard used by almost all lenders.   A FICO score is an algorithm that produces a numeric summary of the information contained in your credit reports that illustrates the potential credit risk you represent to whoever might lend you money or offer you a line of credit through a product such as a credit card.  The FICO credit score is comprised of five factors.  The first, and most important, is your payment history, which at 35% represents the largest single input into your overall score.  It is a reflection of whether you make payments on time and if you do not, how often you are late on paying your bills.  The higher the proportion of on-time payments, the better your score will be.  The second factor that determines your credit score is the amount of money you owe.  This represents 30% of your score and is a reflection not just of the total owed, but with the type of debt, the number of accounts the debt is spread out over and the proportion of money owed relative to how much credit you have available, with this latter factor being known as your credit utilization score. The third factor that affects your credit score is the overall length of your credit history  which constitutes 15% of your total score.  Establishing credit as soon as you can and maintaining that credit throughout your life is a critical component of a healthy credit score. The fourth factor is the types of credit accounts you hold, with a diversity of accounts being desirable.  This is worth 10% of your credit score. Recent credit activity is the fifth and final factor; this also counts 10% towards your score. 

Paying your bills on time is the easiest and most effective way of having a high credit score.  There are a number of other less obvious moves that can be made that can also lead to the creation and maintenance of a great credit score.  Here are a few suggestions:

  • Don’t open new accounts unnecessarily. Opening a new line of credit negatively affects your credit score initially due to the lack of credit history with that particular creditor.  A new account also lowers the average age of all your credit accounts. Additionally, by applying for several credit cards in a short period of time, you run the risk of lenders viewing you as a credit seeker. Lenders are likely to suspect that you are suffering financial difficulties which you are seeking to remedy through additional credit lines. 
  • Be careful closing accounts.  The reduction of the number of active accounts that you have limits the overall credit history that potential lenders can reference.  Banks prefer more  information with which they can assess risk, not less. The closure of accounts also lowers the overall amount of credit that you have available to you, which adversely impacts your credit utilization score.  Even if you haven’t increased the amount of debt you owe by so much as a penny, the percentage of available credit that you are now utilizing has increased which will likely reduce your score.
  • Keep your lines of credit active. Carrying around a lot of debt isn’t desirable, but making sure you use your credit cards and other lines of credit on a reasonably frequent basis is important as it continues to build both your overall credit history and your recent activity profile, both of which count heavily towards your score.  Simply making a few small purchases on your credit cards and then paying them off at the end of the month, on time and in full, will contribute towards a better score with little if any associated risk.
  • The More Credit the Better.  Request a credit line amount increase on existing credit cards or lines of credit.  It doesn’t matter whether you take advantage of the increase in available credit or not; the additional credit will improve your credit utilization ratio even if you haven’t decreased the amount of debt you are carrying.  Be cautious, however, in how you go about doing this.  Only issue such a request to a lender or credit card company with whom you have a strong relationship with.  Customers with a history of carrying high amounts of debt and/or not paying on time will likely have their lenders or card issuers view such a request with suspicion.  This could lead to the exact opposite of the desired result as your line of credit could be reduced if the company decides your risk profile has increased.
  • The Less Debt the Better.  There exists the persistent belief that in order to have a high credit score you have to have debt.  Not so, as carrying a lot of debt could hurt your score, even if you are paying it off in its entirety at the end of the month.  The reason for this is that the balance you carry on any given account that is reported to the credit bureaus by the banks can be from any day the bank chooses; that day may be towards the end of the month, after you have piled up the charges, but before you have paid them off.  In order to avoid this try to keep the amount of debt you have at any given moment below 10% of the amount of total credit available to you. 
  • Check Your Credit Report for Errors. Mistakes do happen.  If you have a relatively common name, activity associated with someone else can end up on your credit report and could hurt your score.  More commonly you could be a victim of identity theft and purchases made by someone else using your name are destroying your credit without you being aware of it.  Check your credit report at least once a year.  Take advantage of the free service offered by annualcreditreport.com which gives you access to the credit report held by each of the three major credit report bureaus, Equifax, Experian and TransUnion. This report will not include your score, you have to pay to get that, but it will list all of your accounts and their associated activity thus making it possible to verify the veracity of the contents.  

Editorial Disclosure: Opinions expressed here are those of the author, and have not been reviewed, approved or otherwise endorsed by any bank advertiser, card issuer, airline or hotel.

Advertising Disclosure: This site may be compensated for hosting offers.