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Have You Been Rejected for the Chase Sapphire Reserve Card Because of the 5-24 Rule?

Chase has been forcefully implementing a new rule designed to stop people from churning credit cards.  The rule, known as the 5-24 rule, bars people from getting a new point-earning credit card if they have applied for more than 5 credit cards in the last 24 months.  The rule applies to credit cards received not just from Chase, but from all credit card issuers.   The rule currently applies to all Chase Sapphire products, Chase Ink products and Chase Freedom products.  It does not apply at present to other Chase-branded cards such as the United card, the Fairmont card, the Hyatt card and their Marriott and Ritz Carlton cards.

BestCashCow thinks that Chase’s 5-24 rule is entirely misguided.   As it applies universally to all customers, including those who have records of having spent thousands monthly through Chase products, it prevents their most loyal and highest spending customers from upgrading to their new products.   These customers are then driven to competing products, such as the American Express Platinum card and the Citibank Prestige card, in order to take advantage of the higher level of service that Chase is now offering.   Because it applies to business cards as well as personal cards, the rule disproportionately discriminates against small business owners and entrepreneurs, many of whom need to frequently open multiple cards at once for accounting and legal purposes.

Quite oddly, Chase’s entire marketing strategy for the Chase Sapphire Reserve Card is to advertise on Bankrate’s ThePointsGuy website, a website which is designed to advise young kids in their 20s how to effectively rack up tons of points and miles through flipping credit cards.  Essentially, Chase has given Bankrate a present which will have unintended consequences for them (similar to Putin’s decision to undermine the US election system and install Donald Trump as President).  In the case of Chase, they are attracting those customers who have not demonstrated loyalty in other Chase product offerings and who present a much higher credit risk than those in their 30s and up who they should be attracting for this product. 

Nevertheless, the reality is that if you apply for this product and are rejected, you have very little recourse.  Your first line of recourse to get them to make an exception is to call the Chase Credit Card reconsideration line at 888-270-2127 (the Business Credit card reconsideration line is 800-453-9719).   The Chase credit analysts who answer the phone may not change the outcome of your application, but they will inform you how many cards Chase has a record of you having applied for in the last two years and when you will be eligible to apply for the Chase Sapphire Reserve Card.

If you visit a branch to seek reconsideration for your application, you will be encouraged to apply for a Chase Private Client account.  These accounts require $250,000 to qualify and are part of Chase’s latest bank-wide efforts to get into the money management business and compete on some level with Bank of America Merrill Lynch and Morgan Stanley.   Even if you have the ability to do this, you may want to pause and consider the following:

  1. Anecdotal evidence is that Chase’s Private Client system isn’t tied to their credit card system.  While Bankrate’s ThePoints guy brags of having defeated the 5-24 rule through his having a Chase Private Client account, plenty of customers are opening these accounts and then getting rejected a second time for the Chase Sapphire Reserve card.
  2. The benefits of the Private Client account really do not justify having the account.  While Chase offers these clients free ATMs, no foreign currency exchange fees, a free safe deposit box, free checks and free money orders, these services do not compete with the access and services that Merrill Lynch and Morgan Stanley provide.  
  3. If you are moving $250,000 in cash to qualify for Chase’s Private Client status, your cash will be earning 0.05% or less at Chase.  That same cash deposited at one of the leading online banks will earn over 1%.  Hence, you will be foregoing over $2,500 a year in interest.  See the best savings rates here.   (Note: You can also transfer assets in kind to Chase to obtain Private Client status).

In short, if you get rejected for Chase Sapphire Reserve, you should fear not and take a look at the other great cards you can get:

Find the best credit cards for travel sign up bonuses

Find the best credit cards for travel rewards

Find the best business credit cards for travel rewards

Editorial Disclosure: Opinions expressed here are author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

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

How To Get A Credit Card With Bad Credit

One of the major disadvantages of having bad credit is that you will frequently have trouble qualifying for a credit card.

As we all know that can be a major problem because many businesses, including hotels and car rental agencies will not do business without you providing a credit card.

Failure to own one may also mean you can't make purchases online as well. All in all, not having these pieces of plastic can be a major inconvenience.

These credit cards are the best for racking up travel rewards.

Credit card issuers rely on the potential applicant's credit histories to assess and determine whether they should be issued credit cards. A poor credit history will tell credit card companies that an applicant may not have the resources to pay bills on time or regularly. Because of this, many aspiring cardholders fail to get their own credit cards.

However, more and more companies are offering new products and services for people with poor credit histories. While it may be counter-intuitive, a credit card for people with bad credit can spell the difference between a company's failure and profit.

Because of a large number of applicants turned down by many banks and credit card companies, some issuers have opted to provide these rejected consumers with the opportunity to regain and restore their credit histories. Right now, an individual with no prior credit history can get a credit card for people with bad credit.

Basically, there are two main types of a credit card for people with bad credit, unsecured and secured. unsecured credit cards are just like the standard credit cards but with lower credit lines and higher fees. Secured ones are backed by a bank deposit. The money in the bank account serves as security for the card.

Customers with unsecured credit cards are judged based on their credit histories, income potential, and financial strength. On the other hand, secured credit cards require collateral, in this case, a bank deposit, for them to be approved.

A credit card for people with bad credit will allow a consumer with bad or no credit history to start with a clean slate, so to speak. Most issuers offer new credit cards for minimal or no fees at all. Some even include 0% APR or annual percentage rate for the first 6 months. In almost all cases, credit card companies and banks guarantee applicants 100% approval. Despite this, their credit lines can be much lower than standard credit cards, ranging from $5,000 to $10,000 for some cards.

One way to manage the problem is to take out what is known as a secured card. These are backed by a deposit you make to cover the costs you charge on the card. At first, this may not sound like much of an advantage, especially if you are strapped for cash. This type of arrangement can help you to build your credit back up to a reasonable number while also providing you with the convenience of possessing a credit card for renting cars, reserving hotel rooms, etc.

Depending on the company you elect to go with, you may be able to obtain a secured credit card with a credit limit as high as the deposit you can afford to make.

Another option is to purchase a pre-paid card. You may wonder how that is different than a secured option. With a pre-paid card the money you pay for the card goes directly to the expenses you charge on it. This is different from a secured card because you are responsible for making the monthly payments on it for the expenses you charge. The security deposit is just in case you don't pay back the money.

You might also wish to obtain a credit card offered specifically for those individuals with bad credit. While this type of option will get you the credit card you need it doesn't come without drawbacks. You'll probably be charged the highest interest rate allowable and your maximum credit line will probably be quite low. When you first take out the card, you can expect for your credit line to only be about $250 or perhaps even less. As you make payments on time, pay off the expenses you charge and make an effort to keep your balance below the maximum credit, and you may qualify for lower interest rate and credit line increases.

Regardless of which method you decide to use when obtaining a credit card for your bad credit situation, remember there is generally a reason why you have a bad history. It may have been due to a financial hardship that is now no longer a problem but is sure to use discretion and good judgment to ensure you don't create even more financial problems.

Editorial Disclosure: Opinions expressed here are author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

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

Choosing the Best Student Credit Card for You

As a college student, being independent is one of the primary priorities in life.

One such major step is getting a credit card that enables them to get credit and use their money in the way they want.

Many college students get excited about their credit cards as they feel like they can purchase whatever they want without someone watching over them. Yet, it may be quite arduous to get the best credit card considering the several credit card options in the market available for students. It even gets worse if one does not know what to look for when selecting their specific credit card.

Before one cherry-picks their credit card, there are a few basic things that any cardholder should be knowledgeable about.

Since everyone’s needs are different, there are also different credit cards to suit these diverse needs. As a student, not every credit card will be cheap for you as there are some that may be costly due to what they offer. Having a credit card not only gives you several benefits but also allows you to build up on your credit so that you are able to access loans and mortgages. Even so, one has to consider that as a student such a credit card may not be exactly what one needs.

One option would be to go for a student credit card. Not only is it easy to get but the package can be very generous due to its advantages.  For example,  students are allowed to make late payments or enjoy travel benefits and other rewards.  These cards, however, are traditionally not as favorable as the best travel rewards cards that are available to the general population so you may want to consider applying for one of those as your first card.  

Get Great Travel Rewards When you Sign Up for your First Credit Card

Another option if you cannot get approved for one of these cards is secured credit cards. They are quite convenient for those people with none or very little credit. Whenever you use the credit card, your credit builds up and the chief credit bureaus are updated on your progress. Secured credit cards also have bigger credit limits than the basic student credit cards. The only demerit associated with this is that one needs to pay a large amount as a deposit before getting the credit card. Generally, they would charge about $200 to start you up which will also serve as the limit to which you can use your credit card. Any case one fails to pay up debts or make payments, the creditor will be able to retrieve the money from that deposit.

Terms and conditions for the credit card

Prevention is better than cure. Before you get committed to a specific credit card company, you should be fully aware of what is expected from you as the credit card holder.

For instance, the Annual Percentage Rate (APR) that you are charged is one important factor to consider. You need to select one that prices your credit card low or at no cost at all. In case you fail to make your payments in time due to any reason, the interest will not be so high that it will leave a deep hole in your pocket.

Moreover, you need to worry about the credit card fee you need to pay. Whether it is a student credit card or a secured one, you will discover that there are some credit cards that charge annual fees that are quite costly. There may also be some extra charges that are concomitant with processing the credit card. Before you quickly sign or agree to the terms and conditions, ensure that you have thoroughly read through the required documentation and have everything explained to you properly. Make sure that those terms and conditions are suitable for you as a student so that you do not strain yourself in the future.

Besides, there are some credit card companies that reward their credit card holders on specific occasions or when certain transactions are made. This is definitely something a student will look forward to as it will provide an opportunity to treat oneself. To note, however, is that all these offers have expiry dates linked to them and conditions that need to be met before one gets the award. In as much as a credit card may look attractive because of its rewards, think twice as not all that glitters is gold.

Using the credit card in the best way

There is more to having a good credit score and history than just having a credit card as using it carelessly will cause more harm than good. Being your first independently attained credit card, you want to learn as much as you can about credit card management before you make mistakes.

First, you need to be smart by paying your bills and making payments in time to avoid penalties. In as much as you may be allowed to make late payments in some instances, the charges you will incur are not worth it if you can avoid it all together. To be on the safe side, you can try making payments in advance and at the same time so that you do not have stress when the payments are due. The last thing you want is to be on your creditor’s bad side.

Living within your means is another way to use your credit card wisely as it teaches you self-discipline. You should only use it where it is important and where you had budgeted for to avoid excess charges that are uncalled for. As a student, you should be more focused on the essential items more than luxuries. If you charge everything you see and want on your credit card, you will find yourself in debts that may even take years to pay off. If you intend to buy something that you know is very expensive, try saving up first and paying it in cash.

Every credit card has a credit limit to which one can use it. If you want to use your credit card properly, avoid reaching the limit as it puts you in a dangerous spot where you will not be able to access your money in emergency cases. Always charge things up to a level where you are comfortable and sure that you will still be able to get credit. Some creditors will advise that when you utilize 70% of the credit on your card, you should relax and wait until when you have enough credit to charge stuff on the card.

Be updated on your credit reports as often as you can. With the new statute put in place, The Fair and Accurate Credit Transactions Act of 2003 (FACTA) getting these reports is now right for every credit card holder as they can access these reports from the credit bureaus near them. Such bureaus include Equifax. Experian and TransUnion. If one is not able to physically go to these bureaus; there is no need to be worried as they can log into annualcreditreport.com and request for their credit report from there.

What to consider

Now that you are aware of what to expect when looking for the ideal credit card and what you should brace yourself to do when you actually get it, you need to start looking around for that card.

Here are a few things to assist you in your decision making;

The price of the credit card

Start your search by looking for the cheaper credit card options as they are more suitable now. You need to understand that not all student credit cards are cheap. This is because not many students have a credit history or if they do, it is very little. Creditors will charge more on those student credit cards as a sign of assurance. The APR will also be slightly higher; on average about 21.4% for every year.

Do your homework by researching the charges of different credit cards. This will give you an opportunity to scrutinize them well before purchasing the cards. You may also seek recommendations from other students or people who were once students and used those credit cards at that time. As you do this, it is vital that you are aware beforehand that the charges on your credit card will also be largely influenced on what you use it for. If you are a shopaholic, you are likely to have bigger debts than someone who only uses their credit card to pay tuition fees or for their dorm room.

The fees

As mentioned above, the fee charged should influence your decision on the credit card you will choose. There are different types of fees that you will be charged as a credit card holder.

First in line is the annual fee that is meant to cover as insurance for the benefits that the credit company owes you such as travel and shopping benefits. So if you thought that you will just enjoy these benefits without paying something small for it, then you are wrong. Of course what you pay for is way cheaper than the actual amount itself, but it is still something that should be on your budget. Additionally, in their attempts to get more clients, some credit companies will advertise that you do not need to pay any annual fees. With time, they will require you to start paying up claiming that the first year was a trial period and that is why they did not charge you any annual fee. Be smart and ask about all this before you obtain that credit card.

Besides, there is the late payment fee that comes with the credit card. The great thing about choosing a credit card that is suitable for a student is that the penalties are not as strict like the other credit cards. This is because the creditors understand that a student does not have a constant supply of money which may lead to the late payments. The price to pay for not paying off debts in time will normally range from $25 to $35 which is quite pocket-friendly. However, one should avoid these late payments as much as possible as not every day may be a lucky day and these advantages are subject to revision at any time. Some creditors may also not be so pleased if the card holder is constantly making late payments.

Starting small

It is quite common among students to compete as you want to appear well established among your peers. Yet, if you do not take precaution this can lead you to deep debt. The best thing to do when you are getting your first student credit card is to select one that has a low limit, of about $500 so that you can easily pay it back. Having one that has a low limit will also be good for you as it will teach you responsibility since you know that your credit is limited and you must, therefore, use it wisely.

On the other hand, there are some college students that want to try out everything. So instead of settling on a single credit card to start off with, they purchase so many credit cards that in the end are very stressful to pay off. Another way to keep off the radar of debt with your credit card is making purchases in small amounts rather than spending so much at once. Clearing your balances each month is also a good way to manage your credit card as you are able to monitor how much you use in a month. Paying the debt in full will save you on both costs and time as you do not face extra charges that are associated with late payments. It also saves you the trouble of piling up debts that become difficult to pay off when the deadline reaches.

Conclusion

All in all, getting the perfect credit card should be a dream that comes true for any student. Applying the above tips, any student will have an easy time accessing the best credit card that will suit them perfectly.

Editorial Disclosure: Opinions expressed here are author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

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