Credit card companies continue to offer lucrative incentives to lure in new customers.  These include extremely long 0% APR deals and some pretty substantial cash back bonus offers. Last month, Chase came out with the Chase Freedom® Visa – $100 Bonus Cash Back Bonus Offer. This card, which is still available, offers consumers who spend $799 during their first three months of card membership a-drum roll please-$100 cash back bonus.

Yesterday, Chase released a new version of the Freedom credit card, the Chase Freedom® Visa – $50 Bonus Cash Back Offer. While this offer may seem less generous, it is in fact the opposite. This new Chase Freedom card lets you earn $50 cash back after your first purchase and, more importantly, offers a 0% APR on balance transfers for 12 months and a 0% APR on purchases for 6 months.

Consumers who don’t carry credit card balances and thus don’t need a 0% APR on balance transfers can clearly benefit more from the $100 cash back bonus offer. However, consumers who carry balances and could benefit from a 0% APR for a year are much better off with the new deal.  While the balance transfer offer carries a 5% balance transfer fee, the $50 cash back bonus offsets this fee on the first $1000 transferred, essentially providing a no fee balance transfer. Continue Reading »

While consumers don’t have to worry about credit card rate increases, small businesses still need to closely monitor their credit card statements.  Why?  Because small business credit cards aren’t covered by the CARD Act, credit card companies can increase interest rates at any time, for any reason.

I recently found a rate increase notice on page 9 of a 13 page credit card statement from American Express.  Presently, the rate on this particular business card is a very reasonable 12.24%.  On August 1st, the rate increases by nearly 30% to 16.24%.

If I want to opt out of the interest rate increase, I have until August 20th to call in and close my account.  This would allow me to repay my current balance at the lower interest rate.  However, if I want to keep my card open, I must accept a higher interest rate. Continue Reading »

A few days ago, a visitor of Smart Balance Transfers contacted me about an issue she had with a credit card check her fiance received in the mail. I have long cautioned against the use of balance transfer and cash advance checks, mainly because there is always a chance that these checks may bounce.

Below is Irina’s experience with a bouncing credit card check from Citibank. Fortunately, she did not incur great expense. However, anyone considering use of these credit card checks should think twice before using them.

From Irina:

 1. My fiance has a credit card with Citibank. He is paying it off and has never incurred in default. His APR is about 7%.

3. My fiance saw an opportunity to get some credit card relief and make some payments and decided to take 3,000. He called and validated them. The executive that made sure of that told him that he could write the check to himself, go to a Citibank branch and get cash. Continue Reading »

Citibank recently raised the fee it charges credit card users for cash advance transactions to 5% with a minimum fee of $10. This move is not surprising, as banks have been raising cash advance and balance transfer fees since the start of the Great Recession.

The 1 percentage point increase by Citibank puts its cash advance fees on the same footing as Discover and Chase, who also charge 5% cash advance fees. Bank of America charges a 4% fee.  American Express and Capital One currently charge 3% fees which are the lowest among the major credit card companies.

In 2008, most major credit card companies charged 3% cash advance fees. By 2009, 4% fees became the norm. Now that Citibank has upped its fee to 5%, American Express and Capital One may follow suit. And there is still room to maneuver, as there is no government mandated ceiling on what banks can charge for either cash advances or balance transfers. Continue Reading »

If you earn rewards points or airline miles with your credit card, now may be the time to cash them in.  Recent additions to the financial reform bill  include a limitation on interchange fees which are collected by credit card issuers every time you swipe your card. 

Interchange fees, which are paid by merchants, generally run at 2% of the transaction.  When you spend $100, $2 is split between your credit card issuer and the credit card network, such as Visa or Mastercard.  Of the $2, the lion’s share goes to the credit card issuer.  Part of this money is returned to customers in the form of credit card rewards.

While some credit card companies offer generous rewards of 2% or more, most credit card rewards are about 1%.  This can be 1% cashback, 1 reward point, or 1 frequent flyer mile.  If interchange fees are limited, credit card companies may stop offering these rewards altogether.  However, even if these fees aren’t reduced, credit card companies may take proactive steps to protect themselves. Continue Reading »

If you have multiple types of balances on your credit card and are repaying little more than the monthly minimum, a 0% balance transfer may provide even more benefits than usual.

While most anyone with a credit card balance stands to save a substantial amount of money by taking advantage of 0% APR balance transfers that last up to 18 months, people who have used their credit cards for cash advances as well as purchases stand to reap even more savings.

According to a story by AP Personal Finance Writer Candice Choi, many of the nation’s largest credit card companies are applying all payments up to the minimum to balances that have the lowest interest rate. 

Consequently, if you owe $1,000 from a cash advance at a 29.99% interest rate and $1,000 from purchases at a 14% interest rate, your monthly minimum payment will likely be used to reduce the low interest balance, not the 29.99% rate that is driving you to the poorhouse.  Continue Reading »

Unless your credit card company lacks an online account management feature, you should take advantage of online payment options.  With online payment, you can make sure your credit card payment is always on time and prevent “lost in the mail” situations that can lead to late payments, interest rate increases, and credit limit cuts.

The key reason to pay online is to prevent “lost in the mail issues.”  Many people rack up late fees because their checks, for one reason or another, arrive a few days (or even minutes) late.  With online bill pay, you know your payment is on time and you get nearly instant confirmation.  Continue Reading »