Credit Cards

How to Request a Credit Limit Increase With Wells Fargo

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Wells Fargo Bank

If you want to continue to increase the amount of credit available to you without constantly applying for more credit cards or loans, requesting a credit limit increase is a reasonable solution. However, like most things in life, there are pros and cons to requesting a credit limit increase.

The pros of requesting a credit limit increase:

There are at least two reasons why requesting a credit limit increase may be a good idea for you. First, since you have already proven yourself as a valued customer, it can be easier and faster to request and receive an increased credit line as opposed to applying for a brand new line of credit. Second, if approved, it can increase the total amount of credit available to you, which can potentially improve your credit score. That’s because your utilization rate — how much credit you’re using vs. how much credit you have access to — makes up 30% of your credit score.

The cons of requesting a credit limit increase:

There are also some downsides to requesting a credit limit increase. First, the request will likely trigger a hard check on your credit, which can lower your credit score by a few points. Second, if you are requesting the increase so that you can spend more each month, the advantage of lowering your credit utilization to improve your credit score would disappear. Additionally, it becomes a slippery slope; the more you spend, the harder it can become to pay off the credit card each month, which could lead to credit card debt.

How a credit limit increase can help raise your credit score even if it initially dips

Any hard checks on your credit will likely result in your credit score dropping a few points temporarily. However, the benefit of an increased credit limit and its impact on your credit score will make up for the few points it dropped from the hard credit check.

The number of hard credit checks on your account is not a huge factor in determining your credit score. What is a huge factor in determining your credit score? Credit utilization. In other words, how much of the credit available to you are you using? Ideally, you want to keep your credit utilization under 20%. An increase in your credit limit will immediately lower your credit utilization percentage. However, this will only be the case if you don’t increase your spending with the increased credit line.

Since your credit utilization has a larger impact on your credit score than the number of hard checks, requesting the credit limit increase is likely to help raise your credit score. As improving your credit utilization will do more to improve your credit score than the hard check would lower your credit score, it’s worth it to ask for a credit limit increase.

How to request a credit limit increase with Wells Fargo

Before asking for a credit limit increase with Wells Fargo, you should make sure you meet the minimum requirements of having an account that is at least a year old. If you don’t satisfy these requirements, then your request is likely to be denied. If they do a hard check on your credit and ultimately deny your request, you will still see the negative impact of a few points from having the hard credit check without the benefit of increasing your credit utilization.

Unfortunately, unlike many other banks these days, Wells Fargo does not have a simple online process to request a credit limit increase. According to the Wells Fargo FAQ, if you want to ask for a credit limit increase, you will need to call 1-800-642-4720. As with any request for a credit limit increase, be prepared to have them run a hard check on your credit and to answer questions regarding your current income level.

You can find the information on the Wells Fargo website by going to the “Loans and Credit” section and then clicking “Credit Cards.”

Then click “See credit card FAQs.”

 

The information on how to increase your credit limit by calling the number mentioned above is listed toward the bottom.

How to improve your chances of getting the credit limit you want

 

While ultimately the decision to increase your credit limit is up to the bank, there are a few things you can do to improve your chances. According to credit card expert Jason Steele, banks like Wells Fargo will “look at your reported income, which would demonstrate your ability to repay the loan. They would also look at the length of your relationship with Wells Fargo, and how long your account has been opened. Finally, they might also look at your payment record, and of course, your current credit utilization.” So by ensuring you have an excellent repayment record and a good relationship with the bank and the accounts you have with them, you can give yourself a better chance of being approved.

When looking at those who received the credit line increase they wanted and those who didn’t, the biggest difference appeared to be how active a customer was with Wells Fargo. Meaning they regularly used their credit card and paid it off, and they also often had another type of account with Wells Fargo, such as a mortgage.

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Credit Cards

6 Credit Card Perks You Should Know About

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Earning rewards is probably one of the most talked about benefits of using a credit card aside from being able to use it to increase your credit score.

While earning points and cash back that you can redeem for travel, gift cards, and other rewards is nice, that’s not the only benefit involved with choosing to use a credit card.

In many cases, a credit card can actually be safer than cash or a debit card or even provide you with additional savings. Here are six credit card perks you should know about if you want to make the most out of using your credit card(s).

Purchase Protection

If you need to purchase something valuable, you might want to do it on a credit card if the card offers purchase protection. Most credit cards offer purchase protection for items that are lost, damaged, or stolen as long as you paid for the item with the credit card.

Each credit card has different policies and may reimburse you up to different amounts. For example, American Express credit card holders can file a claim to report any theft, accidental damage, or loss of a product they purchased with their card within the past 90 days, and they can be reimbursed for the amount paid for the item up to $10,000.

Price Protection 

With credit card price protection benefits, you could receive a refund if the price drops on an item you purchased with your card. This can happen a lot around the holidays, so it’s a good benefit to have.

With most credit cards, there is a time limit to take advantage of price protection, which is usually anywhere from 30 to 90 days after you make the initial purchase. That being said, you won’t get price protection for an item you purchased last year that suddenly went on sale the other day.

With price protection, you can save quite a bit if you purchase a big item like an appliance or a TV on your credit card and the price suddenly drops. That’s why it’s best to hold onto your receipts for at least 30-90 days depending on your credit card’s price protection terms.

Extended Warranty 

An extended warranty offered by your credit card company can be very similar to a manufacturer’s warranty in that it can add up to a year of additional coverage for certain purchases.

With some purchases, getting an extended warranty is definitely worth it even if it costs a little extra money. However, if your credit card offers an extended warranty, you may not need to purchase one on your own.

All Discover cards have an extended warranty feature for up to one additional year for original warranties that are 36 months or less. Discover’s extended warranty covers most items, but may not protect you from a repair caused by normal wear and tear, a power surge, or if the item is covered by a product recall.

The maximum coverage is $10,000 / $50,000 (per item / per year). You must file your claim within 45 days of the loss or incident, and as long as you send the necessary paperwork, you will receive a reimbursement within 60 days.

Credit Monitoring 

Monitoring your credit is very important because it can help you know where you stand and help you avoid situations like identity theft. Monitoring your credit is a good habit to adopt so you can track your score and see how your spending and payment activity affects it.

Instead of having to pay a monthly fee to have your credit monitored by a third-party service, you can see if your credit card issuer provides this service as a courtesy to cardholders.

Chase Slate allows cardholders to view their FICO score monthly and use their Credit Dashboard for free to monitor their credit.

Select Citi credit cards also provide you with your FICO score for free.

Rental Car Insurance

If you’re traveling and need a rental car, most credit cards offer free rental car insurance coverage as long as you pay for the rental car with your card.

The rental car insurance provided by your credit card can include coverage for collision damage or theft, but there may be some limitations to the coverage so don’t assume certain things are covered like the loss of items during a collision or personal injuries.

Some credit cards with rental insurance options may not even cover cars that aren’t standard, like large trucks or luxury car rentals, so it’s important to thoroughly read your credit cards terms if you’re thinking of taking advantage of this feature.

Airport Lounge Access 

Why pay to access an airline’s lounge when many credit cards provide you with this option for free?

Airport lounges are a great amenity to check out when you’re traveling or have a long layover. They tend to offer exclusive amenities including Wi-Fi, desks, comfortable seating, personal assistance, arrival recovery, and more.

The Citi Prestige card and the American Express Platinum card are just two credit cards that include free airport lounge access.

Final Word

It pays to read the fine print when reviewing your credit card terms because you could learn more about additional free benefits you can take advantage of.

Carefully review the card agreement details for any new or existing credit cards you have. You may not need benefits like rental car insurance or purchase protection all the time, but when you do, you’ll know how to access them for free with your credit card.

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Credit Cards, Featured

How to Redeem Cash Back with Citi

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Citi is well known for offering quality credit cards with great balance transfer offers, but the Citi Double Cash card, in particular, is a strong contender for cash back rewards.

The Citi Double Cash card has no annual fee and offers unlimited 1% cash back on purchases plus an additional 1% cash back as you pay for those purchases.

This card also has a variable interest rate of 14.24% to 24.24% and a balance transfer APR of 0% for 18 months.

Even though Citi doesn’t have the highest cash back rate, the fact that you can earn unlimited cash back sets this card apart from others.

In this post, we’ll touch on:

  • How to earn and track cash back rewards with your Citi Double Cash card
  • Navigating through Citi’s online portal to access cash back rewards
  • How to redeem cash back rewards

How to Access Cash Back with Citi

To access your cash back rewards with your Citi Double Cash card, you’ll need to log in to your account by visiting Citi.com/credit-cards. You’ll see a screen similar to the one below. Then, you can log in with your credentials.

screen shot of Citi homepage

Next, you’ll see the main dashboard and all your card information. You’ll also see your cash back balance off to the right.

I have two Citi credit cards so I scrolled down to show my Citi Double Cash card along with where you can expect to see your cash back amount.

screen shot of Citi account dashboard

How to Redeem Cash Back

If you have a cash back balance that you’d like to redeem, you’ll want to click on the button that says “View/Redeem Cash Rewards.”

Once you click that button, you’ll be taken to a page that shows you an entire summary of your cash back earnings per billing statement.

Your cash back earnings will be split up between cash back earned from purchases and cash back earned from payments.

I just signed up for the Citi Double Cash card and have yet to make my first purchase so my cash back amount is currently $0, but when you have a balance, you’ll click the green button that says “Redeem” to move forward with redemption options.

Screen shot Citi redeem cash back

Next, you’ll be taken to a page with different redemption prompts to choose from. You need a balance of at least $25 in cash back before you can successful redeem your earnings.

Citi cash back buttons

As you can see, there are four different ways to redeem cash back with your Citi Double Cash card, and here is an explanation of each of them.

Gift Card

If you choose to redeem your cash back for a gift card, you must click the gift card option, then you’ll be directed to Citi’s gift card marketplace where you can choose from retail, restaurant, entertainment, and electronic gift cards.

Screen shot of Citi gift card redemption

Gift cards are worth $25, $50, and $100, and once you select one, Citi will mail it to you.

Statement Credit

You can also opt to use your cash back earnings as a statement credit to lower the current balance you owe on your Citi Double Cash card. Your statement credit will post to your account within 2-3 business days and will appear on your next statement after it is posted.

It’s also important to realize that Citi does not count a statement credit as a payment even though it will reduce your current balance. You must still make at least your minimum monthly payment by the due date if you want to avoid getting charged a late fee.

Direct Deposit

You can redeem cash back by transferring it directly to your bank account whether it’s a Citi account or not. In order to use this redemption option, you must have either linked your Citi checking or savings account OR have paid a Citi credit card bill at least two times from a non-Citi checking account.

Once you’ve done either of these things, all you need to do is enter in the amount you wish to deposit along with your account information when you redeem cash back via this option. The direct deposit will post to your account within 1-2 business days in most cases.

Check

The final option you have to redeem your cash back is to do so by paper check. Just make sure Citi has the correct address on file for you, then allow 7-10 business days for the check to arrive in the mail.

Final Word

The Citi Double Cash card has one of the easiest online cash back redemption processes, along with plenty of options to accommodate your preferences.

Keep in mind that payments based on balance transfers, interest, fees, and cash advances won’t earn 1%, but you will earn cash back on all other purchases plus additional cash back when you make at least your minimum monthly payment on time.

The Citi Double Cash card is unique in that it rewards you for paying your monthly credit card bill on time, which is a good habit to adopt.

While there is a minimum cash back balance required in order to redeem your rewards, you can track your progress regularly by logging into Citi’s online portal.

 

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3 Ways to Get a Credit Limit Increase

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In many cases, a credit limit increase can sound like a good idea. If you start out with a credit limit of $2,000, for example, it’s good to know that your limit can increase in the future so you can have more buying power and find it easier to maintain a low utilization rate.

Sometimes, increasing your credit limit will not always be in your best interest because it can tempt you to overspend. In that case, it’s also easy to drive up your utilization rate, which is how much you are spending versus how much available credit you have. If your utilization rate gets higher than 20%-30%, it can begin to hurt your credit score.

What’s worse, by overspending and not paying your credit card balance off in full each month, you can get into debt.

If you’d like to secure a credit limit increase for a credit card and you know that you’ll have a good sense of self-control over your spending, there are quite a few ways to obtain a credit limit increase.

In this article, we’ll go over your different options when it comes to obtaining a credit limit increase and what you might want as an alternative.

How to Ask for a Credit Limit Increase on Your Current Card

One of the most common ways to obtain a credit limit increase is to simply ask for one. Most credit card companies and banks allow you to request a credit limit increase online or you can do it by phone.

We’ve gone through the process of requesting a credit limit increase with various banks in detail, including Wells Fargo, Capital One, Discover, Barclaycard, American Express, and more, if you need specific instructions regarding the process.

When requesting a credit limit increase, it’s important to make sure you meet the criteria to be considered. Some banks have certain requirements and like to see your account paid off and in good standing, a good credit score, and recent spending activity on your end.

If you haven’t been consistent about paying your credit card bill on time, that may work against you when you decide to request a higher credit limit.

On the other hand, if you’ve been managing your card well and paying your bill on time and would like more buying power, you may want to consider requesting a credit limit increase just to see what the end result will be.

Sit and Wait (Automatic)

Some credit card companies will offer you a credit limit increase automatically so you won’t need to do anything on your end.

If you’ve been spending on your card regularly, paying your bill on time, and keeping your utilization rate low, you may receive an offer to increase your credit limit automatically.

In this case, you can either accept or deny the offer. In most cases, accepting the offer will be your best bet if you like the credit card and use it from time to time. Even if you don’t use the card often, having a higher limit will only help lower your utilization rate as long as your spending doesn’t increase significantly.

Consider a New Card

If you’re on the fence about getting a credit limit increase, you can always consider signing up for a new credit card instead. Adding a new credit card to your wallet can increase the number of accounts you have, which can be a positive move for your credit if you only have a low number of accounts total.

Some new credit cards also have great sign-up bonuses so you can take advantage of more cash back offers, an extended 0% APR rate, balance transfers, etc., and these are benefits you might not be able to receive if you only increase the limit on your existing credit card.

To find out if you’ll be approved for a new credit card without hurting your score, you can get pre-qualified, which typically allows banks to peek at your creditworthiness via a soft inquiry. Getting pre-qualified for a credit card can reduce your risk of getting denied, and it’s pretty simple. Find out how to do it here.

Also, another reason why you might opt to just get a new credit card instead of considering a credit limit increase is if you don’t like or use your current card often. If you have an annual fee, a high-interest rate, and little reward opportunities with your existing card, it won’t make much sense to increase your limit and buying power.

Instead, signing up for a new and better credit card can be more beneficial and help you save money, especially if it has no annual fee.

Get a Personal Loan

If you are thinking about a credit limit increase because you need the extra money but don’t want to obtain a hard credit inquiry, a personal loan is an alternative option.

There are quite a few internet-only personal loan companies that allow you to see if you are pre-approved for a loan without involving a hard credit inquiry. Personal loans also tend to have lower interest rates than credit cards, so if your main intention is to borrow money to cover an expense, this may be a better option.

To see if you qualify for a loan, use our online tool here. You just need to fill out one application, and MagnifyMoney will check your rate with multiple lenders (without harming your credit score) to help you find the best offer.

What to Do If You Get Denied

If you request a credit limit increase and get denied, you’ll usually receive a response explaining why you didn’t get approved. Once you know why you didn’t get approved, you can take the necessary steps to fix the issues outlined and request an increase again if you wish.

Be mindful that some banks will let you request a credit limit increase at any time, while others may require that you wait a few weeks or months before putting in a request again.

While waiting it out and correcting the issues that contributed to you getting denied should fix the issue, you can also try either of the alternative options mentioned above as well if you didn’t get approved for a credit limit increase the first time around.

Benefits of Requesting a Credit Limit Increase

Obtaining a credit limit increase can be a smart move and provide you with benefits like increasing your credit limit and having more buying power in the event that you need to use your card for a large expense or emergency. With a higher limit, you are less likely to max out your card.

A credit limit increase will also make it easier for you to keep your utilization rate low and preferably below 20%. The process may also be easier than applying for a brand new credit card, especially if you receive credit limit increase offers automatically.

Drawbacks of Requesting a Credit Limit Increase

Increasing your credit limit isn’t always the best option for everyone, so it’s only fair to go over some of the possible drawbacks of making this decision.

In some cases, you’ll receive an extra credit inquiry, which could be a hard credit inquiry when you request a credit limit increase. Increasing your limit can also increase the risk of overspending and getting into debt.

There’s also no guarantee that you’ll get approved for a credit limit increase, so your request can get rejected. Also, if you have a card with a high-interest rate and an annual fee, you might be better off signing up for a better credit card.

Final Word

Requesting a credit limit increase can seem like a good idea on the surface, but it’s not the best solution for everyone. You must determine your needs, current situation, and intentions before going through with your decision.

If you decide to move forward with obtaining a credit card limit increase, be sure to pay your credit card balance off in full each month and keep your overall utilization rate at 20% or lower.

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Credit Cards

Disputing Credit Card Charges: What You Need to Know and Instructions for Each Card Issuer

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If you use credit cards, chances are at some point you’ll need to dispute a charge that appears on your statement for one reason or another. The good news is that this common practice has some pretty awesome guidelines and provisions protected under both state and federal laws.

Whether your dispute is straightforward or complicated, you’ll want to know the ins and outs of how the dispute process works so that it can ultimately work for you should you need it. The dispute process will help you get the best outcome in the case of billing errors, fraud, misrepresented products, or any other charge on your statement you believe you shouldn’t be responsible for.

When to Dispute a Charge on Your Account

The Fair Credit Billing Act (FCBA) protects consumers from unfair credit billing practices. This federal law also provides guidelines to both consumers and credit card issuers for dispute management and resolution. According to the FCBA, consumers can file disputes, according to the FCBA settlement procedures, for the following billing errors (list provided by the FTC website):

  • Unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50.
  • Charges that list the wrong date or amount.
  • Charges for goods and services you didn’t accept or that weren’t delivered as agreed.
  • Math errors.
  • Failure to post payments and other credits, like returns.
  • Failure to send bills to your current address — assuming the creditor has your change of address, in writing, at least 20 days before the billing period ends.
  • Charges for which you ask for an explanation or written proof of purchase, along with a claimed error or request for clarification.

There are additional FCBA provisions covering problems with the actual goods or services, aside from billing errors. This is known as the right to assert “claims and defenses.” In other words, the charge is correct, but the goods or services are not delivered as promised or described. This right can be exercised up to one year after purchase.

Under claims and defenses, the purchase has to be made within 100 miles of your current billing address and be more than $50, and you’ve got to make a “good faith” effort to resolve the dispute with the merchant first. The dollar and distance rules don’t apply if there is a special relationship between the buyer and seller or the purchase was made via internet, mail, or phone.

When you are initiating a dispute on this basis, make that clear with the credit card company so they’ll process the dispute accordingly. In this case, state laws may also play a part in determining what actions you can take against the merchant and the credit card issuer if the dispute is not resolved in your favor.

How to Dispute a Charge on Your Credit Card

The first thing you’ll want to do is determine if the charge is really an error. A little research will help you figure out if a charge is an error, fraudulent, or a purchase gone wrong. Some things to consider:

  • Did you let someone use your card? Do you have an authorized user on your account? They may have made a purchase with it.
  • Is it possible that someone obtained your information illegally and made a fraudulent charge on your card?
  • Does the merchant use another company name that appears on your credit card statement? (For example, Binky Toys can appear as “TOY CORP” on your billing statement.)
  • Did you read the fine print? You may have signed a contract with a merchant authorizing charges you were not aware of.

Once you determine there is an actual problem with your statement, you’ll want to figure out if the problem is with your credit card issuer or a merchant. The process can be slightly different if a merchant is involved or not.

If the charge is an error that doesn’t involve a merchant, like fraud or identity theft, then you can contact your credit card issuer directly. Though it’s best to document your dispute in writing, many card issuers will discuss the issue with you (and sometimes even resolve it) over the phone.

Nowadays, most major card issuers will allow you to log in to your account and file the dispute or initiate an inquiry about a charge online. If you don’t feel comfortable with any of these methods, you can use this sample dispute letter provided by the Federal Trade Commission (FTC) and begin the dispute process via mail.

If the charge involves a merchant whose goods or services were either defective, misrepresented, or not delivered as agreed, then you’ll want to contact them first. You can place a call to start the process, but it’s best to have things in writing. So an email or snail mail letter can either kick things off or confirm and reiterate what was discussed over the phone regarding the issue.

Many times, merchants will work with you because they want to keep their chargeback rates (credit card refunds due to errors and disputes) low. Merchants who have higher chargeback rates are deemed high risk by credit card processors and face higher penalties and processing rates which cut deeply into their bottom line. For this reason, try to settle with them before going to your credit card company with the problem.

If you can’t get an acceptable resolution from the merchant who charged your card, then it’s time to contact your credit card issuer. Just like the process outlined above for billing errors, you can choose to initiate the dispute via phone, internet portal, or mail.

In all your disputing, remember the timelines set forth by the Fair Credit Billing Act. If your problem is with a merchant, you’ve got up to a year to make a claim under “claims and defenses.”

For errors, your dispute correspondence has to be received by the credit card issuer no later than 60 days after the first statement containing the charge you are disputing. In either case, if you decide to send your correspondence via mail, it’s a good idea to send it certified with proof of delivery.

What Happens After You Initiate a Dispute

Under the FCBA, your card issuer has to acknowledge your complaint 30 days after receiving it (unless they resolve it before then). Sometimes, the dispute process is fairly straightforward and within a matter of minutes the dispute could be resolved in your favor. You’ll receive a credit on your statement and the issue is resolved.

You should also be aware that under the FCBA, you don’t actually have to pay the amount in dispute or any interest or any related late fees while the dispute is ongoing. Sometimes, the card issuer will even remove the charge under investigation right away. The bank has 90 days to investigate the issue and resolve it either in your favor or the merchant’s favor.

Keep in mind that you could be asked for supporting documentation to back up your dispute. This could include police reports, photos of a defective product, manufacturer claims and descriptions, tracking numbers, screenshots, and email correspondence.

This evidence will be gathered and checked against any evidence supplied from the merchant. Once the bank has concluded the investigation, you’ll receive a final ruling where the charge is either removed permanently or placed back onto your statement and becomes your responsibility to pay. You should also know that you may be responsible for interest and fees that accrue for a dispute you ultimately do not win.

What If Your Dispute Isn’t Approved

If finally, despite your best efforts, you’re deemed responsible for the disputed charge, you still have a few options. You could appeal the final decision with the credit card issuer within 10 days of the decision. Sometimes, the investigation could be reopened. Inform the bank that you’ve got new information they should consider.

If they still decline to reconsider or resolve in your favor, they can report your failure to pay to credit bureaus. If they do report this information, it must also state that you do not believe you owe the amount in question.

Another option is to take the merchant, your bank, or both parties to court. This can be costly, but for an amount that’s high enough, a court case could be justified. Be sure to check terms and conditions for both the merchant and the issuer, because you may have waived your right to this course of action in doing business with them. Also, state laws will have a say in what legal recourse is available to you against both the merchant and credit card company. Check with the consumer protection division of your state’s attorney general office for guidance in this area.

Also, don’t be afraid to engage help and organizations that might have oversight of the institutions involved in your dispute. You can file a complaint against credit issuers with the FTC. The FTC complaint process, however, won’t apply to banks. Banks are regulated by the FDIC. You can find the regulator that has oversight of the bank you are dealing with here, or you can file a complaint with the Federal Reserve Consumer Help website.

If you’ve got the time, energy, and ambition, you can always take to social media to vent and tell the world about your experience. Many companies are diligent about protecting their online reputation and prefer to route these conversations offline for resolution. If possible, be just as polite and diplomatic on social media channels as you would be with a phone call or written complaint. You’ll likely get further with this approach.

Where It Can Get Sticky

As mentioned, disputes can be settled quickly and easy. Some people say that their card issuer didn’t even ask for documentation but charges were immediately reversed. Other times, it can be a longer process, especially if a merchant objects to your dispute.

When this happens, there can be a lot of back-and-forth between everyone involved in a credit dispute. The purchaser, the merchant, the acquirer (Visa, MasterCard, American Express, Discover), and the issuing bank all have to coordinate communication to make sure disputes are investigated thoroughly and resolved appropriately.

Be aware that there are circumstances that can complicate, delay, and even hinder the dispute procedures.

Bankruptcy

When a merchant doesn’t deliver goods or services due to insolvency, there may not actually be any money in their bank’s account to cover a chargeback. You might be better off filing a case in small claims court. Sadly, in many bankruptcy proceedings, outstanding payables due to customers are one of the last payment priorities.

Collections

Though the dispute can be resolved in your favor from the credit issuer, the merchant could come back and bill you anyway. They can even send your account into collections. In this case, keep your documentation and be ready for a potential battle with collection agencies that have been engaged to recoup the funds from you. You credit report could also suffer.

Prepaid services

Let’s say you make an advance payment on a fitness camp 12 months in advance, but the company goes out of business and won’t be hosting the camp after all. You’ll want to make sure that you fully understand the dispute resolution process regarding future purchases. It will vary for each card issuer, so find out how you are protected in a situation like this. Consult your bank’s card member agreement and speak with someone who can give you clarity on dispute terms before making advanced payments with your credit card.

Product returns

If the dispute is resolved in your favor, part of the resolution may be connected to returning goods in order to receive the refund amount. There are very clear rules around what merchants must do when they receive your goods — a credit must be transmitted to the card issuer within seven days. From there, the issuer must ensure it shows up on your account within three days. It’s not unheard of for a seller to “send” for an item and never retrieve it in order to delay or avoid issuing a refund. Make sure that you take responsibility for returning goods. It’s a good idea to pay for tracking and insurance to make sure your items arrive safely, with proof of delivery, to the seller.

Pre-existing contracts

Terms and conditions are no fun to read, but it’s a good practice to look at the fine print (especially for large purchases). Hidden in these terms could be strict refund policies and even waivers to the dispute process should a problem occur with a sale.

Instructions for Filing Disputes with Major Credit Card Issuers:

 

Card Issuer: Instructions for Disputes:
Chase Chase dispute instructions
Bank of America Bank of America dispute instructions
Capital One Capital One dispute instructions
Barclays Barclays dispute instructions
Discover Discover dispute instructions
Citi Citi dispute instructions
American Express American Express dispute instructions

Final Thoughts on Credit Card Instructions

There are so many variables that can influence the outcome in all of these cases that it can seem like the final decisions are arbitrary. What worked in one scenario may not work in another with a different company or cardholder.

Many times, you’ll be working with a customer service representative who is unfamiliar with your rights as a consumer and the laws that should govern the outcomes of credit card charge disputes. When all else fails, research, education, and persistence may be your most powerful weapons in the fight for your consumer rights.

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Best of, Credit Cards

Credit Cards: Find the Best Credit Card Offers & Deals (0% for 24 mos, 6% cash back)

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Credit Cards: Find the Best Credit Card Offers & Deals

Updated April 18, 2017

The best credit cards can help you earn $2 or more for every $100 you spend – an easy way to make $100s or even $1,000s a year. When done properly, low rate credit cards are also the cheapest way to borrow. You can get 0% interest for up to 2 years. And credit cards are the best way to build, rebuild or maintain an excellent credit score, without paying fees.

But if you get it wrong, you can easily end up buried under a pile of expensive debt. This is a step-by-step guide that will help you find the best credit cards (updated daily) while avoiding expensive traps.

Should You Get a Credit Card?

Credit cards are like knives. Used well, they are great (even essential) tools. But if you start playing with them, you can get into trouble quickly.

There are two big risks associated with swiping plastic:

  • You spend more than you should, because it is just too easy
  • You pay higher interest rates than you should, adding years to your debt repayment

Before using a credit card, you need to answer the following question honestly:

Do I trust myself with plastic? Can I exhibit the necessary self-control to spend only what I can afford to pay in full every month?

If you have the discipline and self-control, keep reading and we will help you find the best credit card for your needs. But, if you don’t, it is possible to live a long and fulfilling life without plastic cards in your pocket.

The CFPB has a good guide on what to be aware of with your first credit card, as does the Federal Reserve.

Which type of card is best for you?

Why do you want a credit card ? The answer to that question will determine which type of card is best for you.

Just remember this critical rule when selecting a credit card:

You should have a Rewards Card for your spending. You should have a Low Rate Card for your borrowing. But you should avoid mixing the two. The best Rewards Cards tend to have higher interest rates. And the best Low Rate Cards often have no (or bad) rewards.

How to Choose and Use a Rewards Card

It is now easy to earn great rewards when you use a credit card for your spending. You should earn at least 2% cash back, and can earn even earn more with a bit of work. The money can add up quickly. If you spend $1,000 a month, you can earn $240 a year. It is not very often you can get something for nothing. But if you make the right choice and follow the rules, it is possible to get something for nothing.

How to Choose

Best Cash Back Credit Cards

These are the top cards offering a flat cash back rate.

Citi Double Cash Card

1% When You Buy + 1% When You Pay

Citi Double Cash Card

The Citi Double Cash Card is the best overall cash back credit card. So long as you pay your statement balance in full and on time every month, you will earn 2% cash back. You earn 1% unlimited cash back on all of your purchases. You then earn an additional 1% on payments based on your purchases. The bonus cash back can take up to two billing cycles to post.

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  • No caps on how much cash back you can earn.
  • Cash back earning formula is easy to understand
  • There is a range of interest rates. You won’t know yours until after you apply

Key Information

Credit Score Required : Good or Excellent Credit

Purchase Interest Rate : 13.49% – 23.49%

Annual Fee : $0

Sign-on Bonus : None

Intro Purchase APR : None

Intro Balance Transfer : 0% for 18 months with a 3% fee

Tip: Make sure you pay your statement balance in full and on time to maximize your cash back

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Fidelity Rewards Visa Signature Card

Unlimited 2% Cash Back on Every Purchase

Fidelity Rewards Visa Signature Card

The Fidelity Rewards Visa Signature Card offers Fidelity customers a generous 2% cash back on all purchases, with no limits or category restrictions. The cash back you earn must be deposited into a Fidelity account, but you don’t need to have a Fidelity account to apply for the card.

If you do not have a Fidelity account, they will open a Fidelity Cash Management Account to deposit your cash back. It works like a checking account with no minimum balance requirement and no monthly fees. In addition, all domestic ATM fees are reimbursed (unlimited).

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  • Simple cash back earning formula
  • No caps on how much cash back you can earn
  • You need to have a Fidelity account in order to redeem your cash back

Key Information

Credit Score Required : Excellent Credit

Purchase Interest Rate : 14.49%

Annual Fee : $0

Sign-on Bonus : None

Tip: You don’t need to keep your retirement or stock accounts with Fidelity to qualify for this card. Anyone can apply.

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Barclaycard Cash Forward Credit Card

1.575% Cash Back

Barclaycard CashForward World MasterCard

Barclaycard has just recently launched this card, which offers a generous 1.5% cash back rate on all purchases. You can earn a 5% bonus when you redeem, which creates an effective 1.575%. Cash redemptions start at $50.

There is a $200 cash rewards bonus after you spend $1,000 in the first 90 days after account opening. There is also a generous 0% intro APR on purchases for the first 15 months. The card has no annual fee.

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  • Cash back earning formula is easy to understand
  • There is a range of interest rates. You won’t know yours until after you apply

Key Information

Credit Score Required : Excellent Credit

Purchase Interest Rate : 15.74%, 20.74% or 25.74%

Annual Fee : $0

Sign-on Bonus : $200 after spending $1,000 in the first 90 days

Intro Purchase APR : 0% for 15 months

Tip: Always pay your bill on time to avoid late fees.

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Best Category Bonuses (Gas, Grocery, Travel, Dining)

Here are the top cash back cards that pay much higher rates in certain bonus categories, which can be a great way to boost your returns.

Fort Knox Credit Union Platinum Visa

Unlimited 5% Cash Back on Gas

Fort Knox Credit Union Platinum Visa

If you spend a lot of money on gas, there is no better card than this. You can earn unlimited 5% cash back on spending at gas stations. You will earn 1% on all other spend. You must be a member of the credit union, but anyone can join. Pay $5 to join the American Consumer Council of Kentucky (you can do that here) and you will be eligible to join.

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  • No limit to the cash back you can earn, even in the bonus category
  • You have to be a member of the credit union to get the card

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 9.50%

Annual Fee : $0

Tip: If you are not yet a member, you can use the non-member application process. Once approved, you can join with your $5 contribution to American Consumer Council.

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Blue Cash Preferred Card from American Express

6% Cash Back on Groceries (Up to $6,000 of Spend)

Blue Cash Preferred Card from American Express

The unparalleled 6% cash back rate on groceries makes this one of the best cards on the market for heavy grocery consumers. Even with the $75 annual fee, most grocery shoppers will come out ahead.

You will also earn 3% cash back on all gas station purchases, 3% at select department stores and 1% on all other purchases. You will earn a bonus offer of $150 after you spend $1,000 in the first three months. And, for a limited time, you can earn 10% back at Amazon.com, up to $200 within the first six months you have the card.

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  • Simple, easy to understand bonus offer
  • There is an Annual fee

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 13.49% – 22.49%

Annual Fee : $95 (no fee for additional cards)

Intro Purchase APR : 0% for 15 months

Tip: If you spend less than $200 a month on groceries, you will earn less than 2% cash back (after taking into account the fee) and would be better with Citi Double Cash or Fidelity American Express. But, if you spend more each year, this is a great option.

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PenFed Premium Travel Rewards American Express

4.25% Cash Back on Airfare Expenses

PenFed Premium Travel Rewards American Express

If you buy a lot of plane tickets every year, this card can be particularly lucrative. You will earn 5 points for every $1 spent on air travel. When you convert those points to a prepaid Visa card, those 5 points turn into a 4.25% earn rate. You earn 1 points per $1 on all other purchases.

There is no annual fee, no foreign transaction fees and 20,000 bonus points when you spend $2,500 within three months.

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  • No annual fee and no foreign transaction fees
  • The conversion from points to $ can be confusing
  • You must be a member of the credit union

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 9.24% – 17.99%

Annual Fee : $0

Intro Balance Transfer Offer : 0% for 12 months with a 3% fee

Tip: Keep an eye open on the redemption opportunities. You can sometimes find better deals than just prepaid Visa cards.

GO TO SITE More Cards for Travel Spending

AARP Credit Card from Chase

3% Unlimited Cash Back at Restaurants

AARP Credit Card from Chase

You do not have to be over 55, or a member of the AARP, to apply for this credit card. When applying, you just need to keep the “AARP Membership Number” field blank. You can earn unlimited 3% cash back on your dining expenses. So, if you are a foodie, this is a great card. You also get a healthy 3% cash back on gas and 1% on all other purchases.

If you are interested in joining the AARP, you also don’t need to be older than 55. Anyone can join.

You can learn more about the offer by visiting AARP.org.

The information related to AARP Visa credit card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card.

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  • No limit to the cash back you can earn
  • You do not need to be an AARP member to get the card

Key Information

Credit Score Required : Good or Excellent

Ongoing Purchase APR : 16.99% to 23.74%

Annual Fee : $0

Intro Purchase APR : 0% for 12 months

Intro Balance Transfer Offer : 0% for 12 months with a fee of 3% or $5 (whichever is greater)

Tip: Joining AARP at a younger age isn’t as crazy as it sounds. There are a lot of benefits and discounts available to members.

More Dining Credit Cards

Do you spend a lot of money in other categories? You can find the best cash back credit cards for every category here.

Best Travel Rewards Credit Cards

If you would like to earn free travel, there are a number of credit cards designed specifically to help you earn free flights quickly. Here are the best travel rewards credit cards.

BankAmericard Travel Rewards

Best No Annual Fee Travel Card – Miles Can Be Used Anywhere

BankAmericard Travel Rewards

You earn 1.5 points for every $1 you spend. There is no limit to the number of points you earn.

The points can be used on any purchase. There are no restrictions and no blackout dates. Every 100 points can buy $1 worth of travel. The rewards get even better if you have “Preferred Rewards” at Bank of America. You can earn a bonus of between 25% and 75% if you have significant balances at Bank of America or Merrill Lynch.

There is no annual fee and no foreign transaction fees. You can use your points for a wide range of travel options, including flights, hotels, vacation packages, cruises, rental cars and even pesky baggage fees.

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  • Simple introductory bonus
  • No limit to the points you can earn
  • There is a range of interest rates. You won’t know yours until after you apply

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 15.49% – 23.49%

Annual Fee : $0

Intro Purchase APR : 0% for 12 months

Tip: The Preferred Rewards program offers excellent rewards. If you rollover your old 401(k) or IRA to Merrill Edge, you can get up to a 75% credit card bonus and ATM fee reimbursement with a Bank of America checking account.

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Amex Everyday Credit Card

Best No Annual Fee Travel Card – Earn Airline Miles & Hotel Points

Amex Everyday Credit Card

You can earn 2 points for every $1 spent at supermarkets, up to $6,000 per year. You will earn 1 point on all other purchases, including supermarket spend above $6,000. And there is an added bonus. If you use your credit card for 20 purchases per month, you will get a 20% bonus. That means you would get 2.4 points on grocery store spend (up to $6,000) and 1.2 points on everything else.

You will be earning Membership Rewards Points, which have a wide variety of redemption options. You can convert these points into frequent flier miles of airlines. Participating airlines include Delta, Virgin America, British Airways, Virgin Atlantic and more. You also have the option to convert points into hotel programs, including Hilton and Starwood.

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  • Simple introductory bonus
  • The 2-point bonus on grocery store spending is capped
  • You need 20 transactions each month to get the the 20% bonus

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : Prime + 9.74% – Prime + 18.74%

Annual Fee : $0

Tip: Make sure you use this card for all of your everyday spend. The 20% bonus is based upon the number of transactions made, not the value of those transactions. Even buying a package of gum in the grocery store counts.

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Best Credit Cards for Foreign Travel

These are the best credit cards for use when traveling outside of the country. None of these cards have foreign transaction fees. And some of them even have chip and pin, helping to increase acceptance.

First Tech Credit Union Platinum Rewards MasterCard

No Annual or Foreign Transaction Fee + Chip and Pin Functionality

First Tech Credit Union Platinum Rewards MasterCard

This card is the perfect companion for overseas travel. There is no annual fee or costly foreign transaction fee. Even better, the card offers chip and pin functionality. Most major credit card issuers in America have rolled out chip and signature, which can be problematic overseas. If you try to use your card at a ticket machine or with a waiter’s portable payment device, you have a good chance of being rejected.

The card also offers low credit union interest rates, starting at just 9.99%. It is easy to join the credit union. Membership is free if you work for a sponsor technology company. If you work for the state of Oregon or live in Lane County, Oregon membership is also free. Otherwise, you just need to join the Financial Fitness Association. There is a one-time fee of $8, and you are member. That membership gives you the right to join the credit union and apply for this card.

You will earn 1 point for every $1 you spend. This is not the best rewards program on the market.

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  • No annual fee or foreign transaction fees
  • You have to be a member of the credit union

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : from 10.24%

Annual Fee : $0

Tip: First, join the Financial Fitness Association. Then join the credit union. Finally, apply for the credit card. This can all be done online, and it is an easy process.

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Barclaycard Arrival Plus World Elite MasterCard

No Foreign Transaction Fee + Chip and Pin Functionality

Barclaycard Arrival Plus World Elite MasterCard

With this card, you earn 2 miles for every $1 you spend. When you redeem, you receive a 5% bonus, which gives you a 2.1% earn rate. Your miles can be used on any travel purchase with any airline, hotel or other travel expense. There is an annual fee of $89, which is waived during the first year. If you spend $1,000 a month, you would earn $252 of rewards during the year. After deducting the annual fee, you will have earned 1.4%.

There is a sign-on bonus of 50,000 miles after you spend $3,000 in the first 90 days. But the real strength of this card is for foreign travel. There are no foreign transaction fees and full chip and pin functionality is available.

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  • No limit on the bonus points you can earn
  • There is an annual fee

Key Information

Credit Score Required : Excellent

Purchase Interest Rate : 16.74%, 20.74% or 23.74% variable

Annual Fee : $89 (waived during the first year)

Intro Purchase APR : None

Intro Balance Transfer : 0% for 12 months with a 3% fee

Tip: Given the high annual fee, this card is only worthwhile if you expect to spend a lot on the card.

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Capital One Quicksilver One Rewards MasterCard

Best Foreign Travel for Fair Credit

Capital One Quicksilver One Rewards MasterCard

This card is designed for people with Average/Fair credit. If you have defaulted on a loan in the past five years (but not more than one), or if you have had limited credit history (at least one account for less than three years), you would be considered “average/fair.”

With this card, you can earn 1.5% unlimited cash back. There is also no foreign transaction fee. That combination of no fee and rewards can make this card lucrative. There is an annual fee of $39.

This card can be useful to build your credit score. Just keep your utilization low (ideally below 20% of the available credit) and make your payments on time and in full every month. Capital One provides free access to your FICO score. So, you can track your score and see when you are eligible for an upgrade to a no-fee card.

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  • No limit to the cash back you can earn
  • No confusing categories or limits
  • No annual fee or foreign transaction fee

Key Information

Credit Score Required : Fair or Average

Purchase Interest Rate : 24.99%

Annual Fee : $39

Intro Purchase APR : 0% until September 2016

Tip: Use this credit card to build your score and avoid expensive foreign transaction fees.

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How to Use

In order to maximize your cash back, make sure you follow these suggestions:

  • Use your chosen cash back card for ALL of your spending. Your goal should be to replace cash, checks, automatic debits and debit cards completely. For example, you can automate bill payments (like your cell phone) to be debited from your credit card. This will make your life easier (only one payment to make each month) and it will make budgeting easier (you can set a target for spending and track it easily).
  • Set up automatic monthly payments for the statement balance, not the minimum due. If you set up automatic payments, you will ensure that your payment will be on time every month. And if you set up the automatic payment for the statement balance, you will ensure that you are never charged interest and only charge what you can afford to repay.
  • Avoid cash advances. If you use your credit card to take out cash, most companies will charge a cash advance fee that averages 3%. The interest rate on cash advances is usually above 20%. And there is no grace period, which means interest starts accruing right away.

Brian Karimzad, Co-Founder of MagnifyMoney, explains how to get the most out of cash back credit cards in this video:

How to Choose and Use a Low Rate Credit Card

When done properly, credit cards can be the cheapest way to borrow. Just make sure you choose the right credit card for your situation and automate a plan to pay off the debt as quickly as possible.

How to Choose

Best Balance Transfer Credit Cards

With a balance transfer credit card, you can transfer debt from a high interest rate credit card to a 0% introductory promotional rate. You can find no fee balance transfers for up to 15 months. If you are willing to pay a fee, you can find balance transfers for up to 24 months. The fee is usually worthwhile – if you want to do the calculation, you can use the calculator on our interactive tool.

Remember: you cannot transfer debt between two credit cards of the same bank.

Here are the best 0% balance transfer offers in the market today. All of these credit cards waive interest – which means there is no retroactive interest charge to worry about.

Chase Slate®

$0 introductory balance transfer fee, 0% introductory APR for 15 months on purchases and balance transfers, and $0 annual fee

Chase Slate®

With Chase Slate®, you can save with a $0 introductory balance transfer fee and get 0% introductory APR for 15 months on purchases and balance transfers, and $0 annual fee. Plus, receive your Monthly FICO® Score for free. At MagnifyMoney, this is our favorite balance transfer offer.

You cannot transfer debt from other Chase credit cards, including their co-brand cards. Chase operates credit cards for companies like United Airlines, Southwest Airlines and Marriott.

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  • Interest is not deferred during the introductory promotional period. It is waived.
  • There is a range of interest rates. You won’t know yours until you apply.

Key Information

Credit Score Required : Good or Excellent

Ongoing Purchase APR : 15.74% to 24.49% variable

Annual Fee : $0

Intro Purchase APR : 0% for 15 months

Tip: Make sure you complete the balance transfer within 60 days of opening the account.

LEARN MORE Read Our Full Review

Alliant Platinum Visa

No Fee – 0% on transfers for 12 Months

Alliant Platinum Visa

With the Alliant Platinum Visa, there is no balance transfer fee and you pay no interest for 12 months. You can apply for the credit card even if you are not a member of the credit union. If you are approved for the credit card, you can then join

Anyone can join the credit union. You just have to make a contribution of $10 to Foster Care for Success and then you can become a member of the credit union. That is what we love about credit unions: joining requires a donation to a worthy charity.

There is one catch (that we don’t like). Even if you are approved for the credit card, you might not get the 0% offer. Depending upon your credit score, you might be given a much higher introductory interest rate.

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  • Interest is not deferred during the introductory promotional period. It is waived.
  • You might not get the 0% offer, depending upon your credit score
  • You have to join the credit union

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 9.49% – 21.49%

Annual Fee : $0

Intro Purchase APR : 0% for 12 months

Tip: If your credit score is not excellent, you might find it difficult to get the 0% offer. Pay close attention to the offer details once approved.

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Santander Sphere Visa

0% on transfers for 2 Years – 4% Balance Transfer Fee

Santander Sphere Visa

This is the longest 0% offer in the MagnifyMoney database. The only catch: it comes with a hefty 4% balance transfer fee. The fee could still be worthwhile, depending upon how long it takes for you to pay off the debt. You cannot transfer debt from other Santander credit cards.

The card also offers a rewards program, with 1 point for every $1 spent. And if you spend $1,000 in the first 90 days, you earn 10,000 bonus points.

You have 90 days from account opening to complete the balance transfer, otherwise you lose the promotional rate.

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  • Interest is not deferred during the introductory promotional period. It is waived.
  • There is a range of interest rates. You won’t know yours until you apply.

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 12.99% – 22.99%

Annual Fee : $0

Tip: This card is a good option if you think it will take a long time to pay off your debt in full.

GO TO SITE Read Our Full Review

Citi Simplicity

0% on transfers and purchases for 21 Months; 3% Fee

Citi Simplicity

Citibank has a strong balance transfer offer, with a long 21 months and a 3% fee. In addition, Simplicity has some added perks. There are no late fees, no penalty rate and no annual fee. Although you should always try to pay on time, it is nice that this card will not punish you for the occasional mistake.

In addition to the balance transfer offer, you pay no interest on purchases for 21 months.

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  • No late fee, no penalty APR and no annual fee
  • Interest is not deferred during the introductory promotional period. It is waived.
  • There is a range of interest rates. You won’t know yours until you apply.

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 13.49% – 23.49%

Annual Fee : $0

Tip: Make sure you transfer your balance within 4 months of opening the card, otherwise you lose the promotional offer.

GO TO SITE Read Our Full Review

Paying off credit card debt sometimes requires more than one balance transfer credit card. If you want even more choices, check out our full guide to the best balance transfer cards, or use our balance transfer calculator to see which cards will save you most.

Best 0% Purchase Credit Cards

With a 0% introductory purchase offer, you will not be charged interest for purchases made on the credit card during the promotional period. This is a great way to finance a purchase. Even better, none of these top cards charge retroactive interest if you don’t pay off the balance during the promotional period. (A lot of store credit cards offer 0%, but then hit you with a big penalty. But don’t worry – these recommendations don’t do that).

Citi Simplicity

0% on Purchases for 21 Months

Citi Simplicity

If you are looking to finance a purchase, Citibank offers the longest 0% purchase promotion of any credit card in the MagnifyMoney database. The APR on purchases will be 0% for the first 21 months after opening the credit card.

Additionally, Citi Simplicity charges no annual fee, no late fee and has no penalty APR.

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  • No late fee, no penalty APR and no annual fee
  • Interest is not deferred during the introductory promotional period. It is waived.
  • There is a range of interest rates. You won’t know yours until you apply.

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 13.49% – 23.49%

Annual Fee : $0

Tip: The 21 months starts from when you open the credit card, not when you make the purchase. So make sure you time your application with your planned purchase.

GO TO SITE Read Our Full Review

TruWest Visa Signature

0% on Purchases for 18 Months – Credit Union Membership Required

TruWest Visa Signature

TruWest is a credit union with restricted membership. Unfortunately, you need to live in certain regions of Texas or Arizona, or work for a few select employers (like Motorola) to join. You can learn about membership eligibility here.

If you are able to join, you will find a long 0% promotional period. Even better, the credit card has reasonable credit union interest rates after the promotional period ends. There is no annual fee on the card.

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  • Interest is not deferred during the introductory promotional period. It is waived.
  • There is a range of interest rates. You won’t know yours until you apply.

Key Information

Credit Score Required : Good or Excellent

Purchase Interest Rate : 8.15% – 9.15%

Annual Fee : $0

Tip: Make sure you check your membership eligibility before you apply.

Best Low Interest (not 0%) Credit Cards

Having a credit card with a rate that stays low is a good idea. In case of an emergency, you will always have access to a low cost way to borrow. Here are some great low interest rate options:

Barclaycard Ring

13.74% Variable Interest Rate

Barclaycard Ring

Barclaycard Ring was launched as a new type of credit card. Barclaycard has created a “community” that allows cardholders to share opinions and participate in a charity partner Giveback program.

There is a flat 13.74% APR (variable), regardless of your score. That is a nice card to have in your back pocket in case of an emergency. There is also a generous balance transfer offer. You can get a 0% intro APR for 15 months with no balance transfer fee (balance transfer must be done within 45 days of opening the account).

There are no rewards offered on this card.

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  • One flat interest rate
  • No annual fee

Key Information

Credit Score Required : Excellent

Purchase Interest Rate : 13.74% Variable

Annual Fee : $0

Tip: This is a good card to keep in your back pocket in case of an emergency

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Langley Select Visa Platinum Card

As Low as 7.50% from a Credit Union Anyone Can Join

Langley Select Visa Platinum Card

Anyone can join Langley Federal Credit Union by joining an association during the signup process for $5.

If you have excellent credit and just want a place for emergency spending with no rewards, consider keeping this card on hand. Although the rates start as low as 7.50%, not everyone will get a rate that low.

It’s more of a hassle than a regular bank card, but if you insist on the very lowest rate consider this.

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  • Interest is not deferred during the introductory promotional period. It is waived.
  • There is a range of interest rates. You won’t know yours until you apply.
  • You have to join the credit union

Key Information

Credit Score Required : Excellent

Purchase Interest Rate : from 7.50%

Annual Fee : $0

Tip: You need to have an excellent credit score in order to qualify for the lowest interest rate. And unfortunately the online banking is not as good as some of the bigger banks.

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You might get a lower rate from a credit union or bank near you that doesn’t accept nationwide applications, and you can check our full list of low interest credit cards to see if there is one that works for you.

How to Use

If you need to borrow money, credit cards can be an incredibly low cost way of borrowing. Just make sure you pay attention to the following tips:

  • Get that balance transfer done quickly! If you are transferring a balance, make sure you complete the transfer as soon as possible. The introductory offer starts from when you open the card, not when the transfer is completed. And you can lose the offer with most issuers if you wait more than 60 days to complete the transfer.
  • Automate your monthly payments. If you pay late, you can be charged a costly late fee. And, if your payment is 60 days late, you can lose the introductory offer entirely.
  • You cannot transfer debt between two cards of the same bank. For example, if you open a Citibank account you will only be able to transfer debt from credit cards other than Citibank.

Nick Clements is the Co-Founder of MagnifyMoney. He also used to run a large credit card company and explains how to use balance transfers in this video.

How to Choose and Use a Credit Card to Build or Rebuild Your Score

If you are looking to build or rebuild your credit score, a credit card can be the perfect tool.

How to Choose

If you have no credit, or your credit score is below 620, you should consider a secured credit card.

If you have limited credit history (less than three years) or you have only defaulted once on a credit card or loan (not multiple times), you should consider a credit card for fair credit.

Best Secured Credit Cards for People with Bad or No Credit

Secured credit cards are the best option if you need to build or rebuild your credit score. The best secured credit cards have no annual fees. If you’re going to use a secured credit card, it will help you grow your score if you pay your balance on time every month, keep your credit utilization low, and you apply for an unsecured credit card after 12-18 months of regular use.

Need to know more? These are ways that you can build your credit without paying interest and spending just $10 a month, and these are tips for improving your credit score.

No Fee Secured Card with Free FICO Score; $200 Deposit Required

Discover it® Secured Credit Card – No Annual Fee

This is our favorite secured credit card. There is no annual fee. You will get free access to your credit score. You can watch your good behavior being rewarded, and you will know when it is time to convert to a fully unsecured credit card.

In order to open the card, you will need to deposit at least $200, depending upon your creditworthiness. With this secured credit card, you will actually be able to earn cash back rewards. If you have previously filed bankruptcy, you still have the chance to be approved.

Our favorite part of the product is the automatic graduation. After seven months, Discover will start monthly automated reviews. If you qualify for a standard card, you will be graduated (and get your deposit back).

Transparency Score 25
Transparency Score
  • No annual fee
  • Free FICO credit score

Key Information

Credit Score Required : Best for no credit, 670 or less

Purchase Interest Rate : 23.74% variable APR

Annual Fee : $0

Tip: This product reports to all three credit bureaus. It is a great tool to build your score. But, if you miss payments, you can do damage to your score.

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Community Secured Visa from Coastal Credit Union

No Fee Secured Card; Credit Union Membership and $100 Deposit Required

Community Secured Visa from Coastal Credit Union

This card has no annual fee, and you only need to deposit $100 in a Collateral Savings Account to get started. If you’re not a member of Coastal Credit Union, you can join an organization for $18, which is deducted from your initial deposit, and become a member. So you’ll need $118 to get started.

While the initial deposit is a bit higher than the Capital One card, you get the peace of mind that your interest rate will be more reasonable in case you get into trouble. This one takes more work to open than the Capital One card, since it involves joining a credit union, but you deal with less fine print once you have the card.

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Transparency Score
  • A single interest rate that you know up front, before you apply
  • You have to join a credit union

Key Information

Credit Score Required : Anyone can apply

Purchase Interest Rate : 15.50%

Annual Fee : $0

Tip: It is easy to join the credit union. Join an organization for $18 and you will become eligible.

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We also have a list of several other no annual fee secured credit cards from both banks and credit unions anyone can join. Or browse our list of hundreds of secured cards to compare rates, fees, and deposit requirements.

Best Credit Cards for People with Fair Credit

If you have fair or average credit, you might be able to qualify for an unsecured credit card. If you have more than one default in the last five years, you will find it difficult to get approved. In addition, if you are currently delinquent on any of your accounts it will also be hard to get approved, and you should try a secured card instead.

Here are some good cards for people with fair credit:

Capital One Quicksilver One

1.5% Cash Back for People with Fair Credit – with $39 Annual Fee

Capital One Quicksilver One

Capital One has created a credit card specifically for people with fair or average credit. If you have defaulted on a loan (but not more than one) in the last five years, or you have limited credit history (at least one account for less than three years), you would meet the definition of fair credit.

You will earn 1.5% cash back, unlimited. There is also 0% interest on purchases until September 2016 as well.

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Transparency Score
  • Interest is not deferred during the introductory promotional period. It is waived.
  • There is an annual fee

Key Information

Credit Score Required : Fair or Average

Purchase Interest Rate : 24.99%

Annual Fee : $39

Tip: Watch your credit score closely. As you pay down your debt, your score will improve. Once your score is above 700, you can find a lot of choices for credit cards with better rewards or no annual fee.

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You may also want to try and see if you are pre-qualified for a credit card before applying. Banks can perform a ‘soft’ pull on your credit file to give you a sense of whether you might qualify for one of their products. It leaves no mark on your credit score, and you can see a full list of ways to check if you’re pre-qualified here.

A Special Note: Beware Predatory Companies

Many lenders target consumers with FICO credit scores of less than 650. If you have searched for “credit cards for bad credit,” you will probably find offers from companies like First Premier. In addition to high interest rates, these lenders often require application processing fees, maintenance fees and more. You could be given a $300 credit limit and see a big portion of it eaten up with fees.

Stay away from these specialist subprime lenders. Instead, consider the following:

  • If you need to borrow, consider a personal loan instead. You can find much better deals. Search for options here
  • If you want to build your credit score, use a secured credit card instead.
How to Use It

In order to build your credit score with one of these cards, you should follow our tips. By doing this, you should see real improvement in your score.

  • Don’t use more than 10% – 20% of your available credit. For example, if you have a $500 credit limit, never spend more than $50. That keeps your utilization low.
  • Use your card every single month. You should make sure you have a transaction every month, so that positive data is reported to the credit bureaus.
  • Automate and pay your statement balance in full and on time every month. Even just one late payment could crush your score. And by paying the balance in full, you will avoid any interest expense.
  • Watch your score closely. Keep an eye on your credit score. After 12 months, you should really start to see a big improvement. Once your score is above 650, you should try to get your secured card converted or apply for an unsecured credit card.

Other Benefits of Using a Credit Card

Not only can you use a credit card to earn rewards, borrow at low rates or build your credit score for free – but there are many other benefits available. Here are some of the benefits that you can find:

Available on Most Credit Cards

$0 Liability on Fraudulent Activity: Credit cards are the best way to protect yourself from fraud. So long as you report the fraud to your credit card company, you will not be liable for any losses on any major credit card.

Car Rental Collision Insurance: If you waive collision coverage when renting a car, your credit card may provide secondary coverage of $50K or more.

Available on Some Credit Cards

Retail Purchase Protection: Protects you from loss, theft, fire or accidental damage for a limited period of time after your purchase has been made. Not all cards protect you from loss, so look it up in the Purchase Protection Coverage Description Document.

Price Protection: If you buy something in stores and you see an advertised price, you will receive the difference between the two prices.

Extended Warranties: Duplicates both manufacturers and store warranties for a limited length of time and for limited dollar values (varies by card).

Travel Accident Coverage: If you are injured during travel, and you purchased the tickets via credit card, your company fully insures you.

Lost Luggage Coverage: You can receive compensation for lost, stolen or damaged luggage if you purchased flight or travel tickets using your credit card.

Trip Interruption Cancellation Coverage: If travel delays keep you from completing a trip, and you purchased the tickets on your credit card, the full value of the tickets will be refunded

Concierge Services: Certain cards offer free access to local concierge services that can help you make dinner reservations, purchase event tickets, and locate items while you are abroad.

FAQ

The minimum payment calculation differs by credit card issuer. The most common is 1% of the principal balance plus any interest or fees that accrued in the month (or a set amount, like $25, if the minimum due is very low).

If you use your credit card at an ATM to take out cash, a few things will happen. First, you would be charged a cash advance fee, which is usually about 3%. Second, interest would start accruing immediately, because most issuers do not have a cash advance grace period. And the cash advance interest rate is usually much higher than the purchase rate. Don’t be surprised to see interest rates as high as 24% (or higher).

While there is no over-limit fee, having a credit card with a balance that is greater than the credit limit can have a very negative impact on your credit score. In general, you want to keep your credit card balance below 20% (ideally below 10%) of your credit limit.

We do not recommend closing credit cards, because it can reduce your credit score. Closing unused credit cards does two things. First, it reduces your total available credit. That increases your utilization, which is bad for your score. Second, the age of your open credit cards helps your score. If you close old accounts, you can hurt your score over time.

The law requires that any payment amount beyond the minimum due must be applied to the highest APR balance first. The minimum due is at the discretion of the credit card companies. However, it is usually applied to the balance with the lowest APR first. Your goal is to eliminate high APR debt – so don’t be afraid to make much bigger payments on credit cards. The extra amount will always go to the most expensive debt first.

Each application for new credit can take 5-10 points off your credit score. If you are planning on applying for a mortgage or auto loan in the near future, you have to be very careful. Even just 5 points can be painful. However, if you are not going to be applying for a mortgage or auto loan in the next 6-12 months, you should not worry too much about your credit score. Instead, focus on getting out of debt quickly.

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Credit Cards

What Everyone Should Know About the New VantageScore 4.0 Credit Score

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View Your Free FICO Score for all 3 Credit Bureaus

In the world of consumer credit reporting and credit scoring moves at glacial speed. Every few years credit scoring systems are rebuilt or, more formally, redeveloped.  But, it’s rare that the newer versions of credit scoring systems are meaningfully different than their predecessors.

However, today VantageScore Solutions announced the release of the 4th generation of their VantageScore credit score which will become available from the three credit reporting agencies in the Fall of 2017, and it’s a game changer.

What is the VantageScore Credit Score

VantageScore Solutions was created by the three credit reporting agencies in 2006. The VantageScore credit score is a tri-bureau credit scoring model, meaning it is available for purchase and use from all three of the credit reporting agencies. The score is scaled 300 to 850, and the higher the score the better you look to lenders. According to VantageScore some 8 billion of their scores were used during the 12-month period between July 2015 and June 2016.

How is VantageScore 4.0 Different Than Prior Versions

VantageScore 4.0 is the only credit scoring system that considers your “trended” credit data.

What trended data says about the consumer is whether they’re paying their credit card balances in full each month, or if they’re just paying a small amount and revolving some or most of the balances to the next month. In the older form of credit reporting, prior to trended data, there was no way to distinguish between someone who paid in full each month from someone who paid a small amount and rolled the remaining unpaid balance to the next month.

Several years ago the credit reporting agencies began maintaining and reporting the historical balances and payments made on your credit card accounts. So rather than just reporting what your balance was last month, all three credit bureaus now report the historical balances and the amount you paid going back 24 months. This information is being called “Trended Data.”  You can see your trended data by looking at your credit reports via www.annualcreditreport.com.

Why does trending data matter?

In short, people who do not pay their cards in full each month are riskier than people who do pay them off in full each month.

That’s not anecdotal. TransUnion performed an analysis comparing the risk between transactors and revolvers and the results were staggering. People who do NOT pay their cards off in full each month are 3 to 5 times riskier than people who do pay in full each month. But until VantageScore 4.0, there was no difference in credit scores for someone pays in full each month versus not doing so. That’s why this is a big deal for lenders…it’s a materially better scoring model.

When Will Lenders Start Using the New Score?

This is the million dollar question…when? Converting to a new credit score is expensive and time consuming, and not mandatory.  Because of that, the industry tends to take a very long time fully adopting new scoring systems. Even FICO 9, the most current version of FICO’s credit score, doesn’t have a critical mass of users and it has been commercially available since late 2014. But, the features of VantageScore 4.0 are very compelling so it’s reasonable to expect lenders to be very interested as soon as the model goes live at the credit bureaus.

Having said that, VantageScore has partnerships with a variety of websites, like Credit Karma and Credit Sesame, that give their scores away to the sites’ registered users. Converting to newer score version is much easier for these websites because they don’t have the same barriers that lenders have. VantageScore 4.0 will likely be live and available from one or more of these websites not long after it goes live in the Fall of 2017.

What does this mean for you?

  1. It will become more important to pay your bill in full each month.

For you, this new model underscores the importance of paying your card in full each month. The average interest rate on a credit card is about 16% so it’s expensive to revolve balances. Notwithstanding the fact that you’re paying interest on the unpaid balance, now by not paying your balance in full your VantageScore 4.0 score is likely to be lower because you’re a riskier consumer. Conversely, those of you who do make it a practice to pay your cards in full each month, your VantageScore 4.0 score is likely to be higher because you’re a less risky consumer…and you’re not paying interest.

  1. Liens and judgments won’t hurt your score quite as much.

On or about July 1, 2017 the credit reporting agencies will remove most of the judgments and about ½ of the tax liens from credit reports. VantageScore 4.0 has been engineered to be less reliant on liens and judgments because, not surprisingly, there will be considerably fewer incidents where those public records find their way to credit reports. This isn’t really a big deal for consumers but it is a very big deal for lenders that will rely on the new score.

  1. Medical collections less than six months old won’t hurt your score at all.

Further, VantageScore 4.0 will ignore medical collections that are less than six months old, as in they won’t hurt your score at all. And the credit bureaus, as part of the NCAP, will remove medical collections that are paid or are being paid by an insurance company. The hypothesis, which makes perfect sense, is to avoid any unfair score impact caused by the inefficient insurance claim process. And for those medical collections that are older than six months and are not paid by insurance, which will remain on credit reports, VantageScore 4.0 will discount them so they don’t have as much of a negative impact as non-medical collections.

The Bottom Line: The VantageScore 4.0 is better for consumers and better for lenders.

The changes that were made benefit consumers who pay their cards off each month, and/or have medical collections. The changes benefit lenders because the score is considerably more powerful because of the consideration of the trended data information. It’s rare that a new scoring system is a true win-win for consumers and lenders…and VantageScore 4.0 is just that.

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Building Credit, Credit Cards

Guide to Adding an Authorized User to Your Credit Card

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: Though we have done our best to research information regarding this topic, be aware that issuing banks may have unique rules and agreement terms that apply to their particular credit card accounts. Contact issuing banks directly for questions on terms and policies relevant to specific credit card accounts.

What Is an Authorized User?

An authorized user on a credit card account is any person you allow to access your credit card account. Not to be confused with a joint account holder, an authorized user can only make purchases and, in some cases, have access to certain card benefits and perks. Joint account holdership is becoming extremely rare, but typically occurs when two people apply for a credit card together. In joint account ownership, both people are liable for charges and can access and make changes to a credit card account.

An authorized user can be a spouse, relative, or employee. When you designate an authorized user on your credit card account, this person usually gets a card bearing their name with the same credit card number as the primary cardholder. In this scenario, the primary cardholder is liable for all transactions made by themselves as well as by any authorized user tied to their account.

Why Would You Add an Authorized User to Your Credit Card Account?

There are many reasons you might think about designating an authorized user for your credit card account. It all comes down to convenience and extending benefits that a credit account offers: access to credit, related perks, and credit card rewards, as well as the potential to improve the credit score of the authorized user.

For example, couples that share expenses might find it easier to designate one or the other as an authorized user to avoid passing a single card back and forth to make purchases. Perhaps you have a relative who lives far away, and it would be easier to give them access to your credit account for emergency purchases. You may also have a child that you want to assist in building credit history to increase their credit score. Adding them as an authorized user could help with this, but we’ll cover that more in another section.

Additionally, if you are an employer whose employees need to make purchases on behalf of the company, it would make sense to make them an authorized user. Without this designation, it could be extremely inconvenient for them to not have a company credit card at their disposal.

In some cases, adding an authorized user can also accrue reward points connected to a credit card account. These reward points can be used to make purchases or receive discounted pricing on things like travel and retail products. Typically, points are accrued from reaching credit card spending amounts within a certain time frame. Sometimes, the act of adding an authorized user can garner additional rewards as well.

How Can I Add an Authorized User to My Credit Card Account?

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As the primary cardholder you are the only person who can designate an authorized user. The authorized user cannot contact the credit card issuer and add themselves to your account. You will have to contact the issuing bank and request to add one or more authorized users to your account.

Depending on the bank and the technology in place, you may be able to handle this process entirely online. Some banks allow you to log in to your banking portal to designate additional authorized users, create their own bank login and profile as well as determine the level of access you’d like them to have to your account. Levels of access can range from being able to view transactions only to making purchases. If your bank doesn’t have this technology in place, usually a phone call is sufficient.

Adding Authorized Users Online

How to Add an Authorized User to a Chase Credit Card Account:

  1. Log into your Chase credit card account
  2. Under “My Accounts” click “Add Authorized User”
  3. Complete the information requested (see screenshot below for reference)How to Add an Authorized User to a Chase Credit Card Account

    How to Add an Authorized User to a Bank of America Account:

  1. Log onto your Bank of America account.
  2. Select the credit card you’d like to change.
  3. Click on the tab labeled ‘Information & Services’
  4. Scroll down to the section labeled “Services”
  5. Click on “Add an authorized user”

How to Add an Authorized User to a Chase Credit Card Account

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How to Add an Authorized User to a Capital One account:

  1. Log onto your Capital One credit card account online.
  2. Under the “Services” tab, click “Manage Authorized Users”
  3. Click “Add New User”

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How to Add an Authorized User to a American Express credit card account:

  1. Log onto your Amex account online.
  2. Click on “Account services”
  3. From the lefthand menu, select “Card Management”
  4. Under “Account Managers”, click “Add and Manage Users with Account Manager”screen shot 10
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How to Add an Authorized User to a Citi credit card account:

1. Log onto your Citi credit card account online.
2. Select the “Account Management” tab.
3. Click “Services” from the lefthand menu.
4. Click “Authorized Users”
5. Click “Add an authorized user”
6. Fill in the authorized user’s personal information.

 

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How to Add an Authorized User to a Barclays credit card account:

  1. Log onto your Barclays credit card account.
  2. Select the “services” tab.
  3. Under the dropdown menu, select “Authorized users”
  4. Select “Add an authorized user”
  5. Complete the form to add an authorized user.
    screen shot 17screen shot 18screen shot 20

Who Can Be an Authorized User on My Account?

An authorized user can be anyone you choose, whether they are related to you in some way or not. In most cases, the bank will request identifying information such as name, birthdate, Social Security number, and address. Some card issuers require that authorized users meet age requirements, and others do not have age requirements. As always, check with the bank to understand the criteria authorized users must meet for your card.

The Fees

Some credit cards will charge an additional fee for more additional authorized users, while others will offer this benefit at no charge. Make sure you read the fine print in your cardholder agreement so that you are aware of all the fees associated with having one or more authorized users on your account.

Fees can range from less than $100 to a few hundred dollars and beyond each year. Business accounts especially can carry higher fees when multiple authorized users are associated to one account.

Liability

As the primary account holder, you must understand that you are 100% solely liable for any and all charges made on your account by both yourself and your authorized user. If you have been designated as an authorized user, you do not legally share liability for purchases made on the credit card account. However, you may have a personal arrangement with the primary account holder to pay your share of charges when the bill is due.

What Can an Authorized User Do?

This can depend on the level of access you’ve chosen with your card issuer for your authorized user. If there are not varying levels of access to choose from, check with the card issuer to find out exactly what an authorized user can and cannot do.

In most cases, an authorized user cannot make changes to an account. They cannot close an account, request changes in bill due dates, change account information, or request limit increases or a lower annual percentage rate.

Again, this varies from card issuer to card issuer, but there are many other things an authorized user can do.

Here are some possible capabilities based on the terms of your credit card issuer:

  • Make purchases
  • Report any lost or stolen cards
  • Obtain account information
  • Initiate billing disputes
  • Request statement copies
  • Make payments and inquire about fees

Benefits of Adding an Authorized User

As mentioned before, adding an authorized user to a card can be for convenience, accruing rewards, or sharing card perks and benefits. An authorized user can be incredibly convenient in the case that you don’t have your personal card or for some reason don’t have immediate access to it.

Having an authorized user can help a primary user reach limits to earn reward points for some cards. One of the most effective marketing strategies of credit card companies is to offer bonuses and rewards for adding authorized users to your account. Adding another user to your account could add a few thousand extra reward points you would not have earned without adding the user. Then, there’s always the chance that the authorized user will make purchases that contribute even more to your attempt to accrue reward points.

Finally, there are a number of credit cards that offer perks or benefits that can extend to your authorized users. Depending on your credit card, benefits like car rental insurance, lost luggage reimbursement, and extended warranties could apply to all purchases made, including those by your authorized users, on your credit card account.

Benefits of Becoming an Authorized User

Though the credit-reporting landscape is changing, there’s still the potential to “piggyback” on a primary account holder’s credit history for a card in good standing. But not all credit card companies report information to credit bureaus for authorized users in all circumstances. However, to know for sure what will be reported to the credit bureaus in regard to your authorized user status, speak with your card issuer for the details of what information is reported and when to credit bureaus.

Another benefit is having access to more credit. If you are in a bind and have emergencies that come up, access to credit can be helpful. Plus, exercising diligence in managing purchases and bill payment can help you develop good credit habits.

You should also know that being an authorized user may grant you access to certain perks for account holders and their primary users. There are benefits like access to travel lounges, Global Entry or TSA PreCheck application, travel credits, and discounts an authorized user could be privy to as well.

What Could Go Wrong?

If for some reason the credit card account doesn’t remain in good standing, the credit score of both the primary account holder and the authorized user could be affected. If you are a primary account holder, make sure your authorized user understands the terms under which they can make purchases. If they make purchases that cause your payments to be delinquent, your credit score could suffer.

Even if you did not give this person permission to make purchases with your credit card account, the fact that you designated them as an authorized user is evidence that you at some point trusted them with your credit card access. A claim of criminal or fraudulent activity in this instance would be extremely difficult to prove, so choose your authorized users wisely.

Though not as common with an authorized user, your credit score could be negatively affected if an account becomes delinquent. Because tradeline reporting for authorized user accounts to credit bureaus varies from card to card and scenario to scenario, a delinquent account status could still appear on your credit report. If you will be added to someone’s account as an authorized user, find out whether or not the credit history of the account will be reported to credit bureaus under your authorized user status.

Removing an Authorized User from an Account

Either the primary cardholder or the authorized user can remove an authorized user from an account by contacting the credit card issuer. You may be asked to verify your information as well as the information of the primary account holder.

In many cases, only one card number is issued between one or more users. Your credit card company may deactivate the primary cardholder’s credit card number and reissue a new card and number once an authorized user is removed from an account.

If your status as an authorized user does show up on your credit report for the credit account after you’ve been removed from a credit card account, you may have to contact credit bureaus to have it removed.

The Best Way to Manage Shared Credit Access

Designating someone as an authorized user is not something to be taken lightly. Even a small misunderstanding of credit card issuer terms and your own interpersonal credit arrangement can cause problems. Before adding an authorized user to your account, set ground rules around card use that covers access to perks and making purchases.

Some things to consider and discuss with your authorized user include:

  • What is the goal in having the authorized user on the account?
  • Will the authorized user have a physical card?
  • When is it OK to use or not use the credit card to make purchases or access card perks?
  • The credit history of both the primary cardholder and the authorized user
  • Good credit habits that will prevent identity theft and fraud
  • Setting up monitoring alerts with the credit card company or an identity theft protection service

The ability to add an authorized user to a credit card account can be a double-edged sword. On one hand, convenient benefits of access to credit and credit card perks can make life easier in so many ways.

On the other hand, this same convenience can cause problems if both the primary cardholder and the authorized user don’t understand the rules of engagement with each other or the terms set forth by the credit card company.

Adding an authorized user to your account has the potential to be incredibly convenient and mutually beneficial if handled the right way. Make sure you follow best practices to get the most out of this financial arrangement.

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Credit Cards

Review: PenFed Launches 1.5% – 2% Power Cash Rewards Credit Card

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

PenFed, a credit union that anyone can join (more on that later) has just introduced a new cash back rewards credit card. The card pays a high, flat cash back rate and brings a credit union approach to fees (low and not many of them) and simplicity. Here are the details on the cash back that you can earn:

  • Anyone with military service earns 2% cash back on all spending, with no limits or restrictions. That is the highest flat cash back rate in the market.
  • Anyone with a PenFed checking account (restrictions apply) earns 2% cash back on all spending, with no limits or restrictions. (If you keep $500 in the checking account, there is no fee and you earn 0.20% APY on the money).
  • If you do not have military service or a checking account, you can earn 1.5% unlimited cash back. At 1.5%, the card matches Chase Freedom Unlimited or Capital One Quicksilver, but it is still beat by Citibank’s Double Cash.
  • There is a minimum redemption amount of $5 for the cash back that you have earned.
  • There is a bonus offer: get $100 of cash if you spend $1,500 during the first 90 days.

In addition to the cash back, here are some additional features:

  • Chip with pin functionality: if you travel overseas, you might find chip + signature limiting. For example, trying to use a card with only signature functionality at kiosks across Europe (like the London Underground) can be challenging.
  • No annual fee and no foreign transaction fee.
  • Variable APR range of 9.24% – 17.99%. If you have excellent credit, the lowest APR at Citi (on the Double Cash product) is 13.49%. For people who revolve occasionally, this could be a better option. (Although our advice remains to pay your balance in full and on time. If you need to borrow money, personal loans and balance transfers remain cheaper options).

Our Verdict

Best Cash Back Credit Card for Military: 2% is the gold standard for a flat rate cash back credit card, and PenFed delivers for men and women who have served. This is better than any competing flat-rate cash back credit cards because of the lower APR and lack of foreign transaction fees.

Best Cash Back Credit Card for Spending Abroad: If you use Citi Double Cash, you would be hit with a foreign transaction fee of 3%. So, you would earn 2% but be forced to pay 3% in fees. Before this card, Capital One Quicksilver was our top choice because of a 1.5% earn rate and no foreign transaction fees. PenFed’s card now wins because (a) if you put $500 into a PenFed checking account you can earn 2% on this card, and (b) the card offers chip and pin functionality. If you spend $1,000 overseas this year, you would pay $10 to Citi, (2% cash back – 3% fees = -1%), would earn $15 with Capital One and would earn $20 with PenFed.

Tie: Best Flat-Rate Cash Back Credit Card: With both Citi Double Cash and PenFed you can earn up to 2%. Each card has its own unique differences, which is why they are tied for best flat-rate card in the market.

  • PenFed: You need to join the credit union, open a checking account and fund the account with $500 (or sign up for direct deposit) to ensure you get the full 2% and avoid fees. Financially it will make sense, but there are a number of obstacles to get the full rewards (unless you are military).
  • Citi Double Cash: It is easy to apply and get the card (no credit union membership or Citi checking account required). However, the card is actually 1% as you earn and 1% as you pay, so it takes longer to get the full 2%. The interest rates are higher and there is a foreign transaction fee.

There are still options to earn higher cash back rates in certain categories. You can find the best cash back credit cards by every category here. For example, you can earn 5% unlimited on gas with Fort Knox Credit Union or 6% (with limitations) on groceries at American Express.

If you want to learn more or apply, you can visit PenFed’s website.

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Requirements To Earn 2%

Here are the details on how to ensure you get the full 2% earn rate:

Military: You are eligible to earn 2% if the primary or joint applicant is in military service, the National Guard, the Reserves, an honorary discharged veteran or retired from the United States military. Military members receive the 2% upon completion of the application – no further action is required.

Checking Account: If you do not meet the military requirements, you would need to open a checking account with PenFed. The account is called the “AccessAmerica Checking Account.” There are some decent benefits to the account (you can earn 0.20% APY interest on balances up to $20,000 and 0.50% APY on balances between $20,000 and $50,000). If you shift your monthly direct deposit of at least $500 to this account, you will not have a monthly fee. However, if you do not want to shift your direct deposit, you can deposit $500 and keep it there to meet the required minimum balance. This is actually the easiest way to earn the 2%, cash back rate and, given the 0.20% interest on the checking account, it can be financially worthwhile.

Join the Credit Union: There are multiple ways to join the credit union. If you are active or retired military, you are eligible to join for free. If you work for the US government or are a relative of a member, you can also join for free. But don’t worry if you are unable to meet those requirements. You might belong to an eligible organization (check here). You can also join an organization to become eligible for credit union membership. You can pay $17.00 (one time and non-refundable) to join Voices for America’s Troops or the National Military Family Association. By supporting a good cause, you become eligible for credit union membership. In addition to the credit card, PenFed is known for low rates on auto loans and mortgages.

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Best of, Credit Cards, Reviews

2017 Best Credit Cards for Small Businesses

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Note from the Editor: The information related to Chase Ink Business Preferred Card credit card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card.

 

As a small business owner you know you need to manage your cash flow and plan for financing. Credit cards can be an ideal way to meet those needs. But business owners need to be savvy cardholders. Small business credit cards come with unique risks that personally affect entrepreneurs.

 

In this roundup we cover the risks and advantages of small business credit cards. And we’ll show you what card fits your business needs.

 

Best Cards for Financing

If credit cards are an important source of financing and capital for your business, then you need to be a savvy borrower. Look for cards with compelling terms, and take the time to understand the fine print. Remember, the card may be in the business’s name, but you’re personally liable for the debt. Don’t take on more debt than you can handle.

Best 0% Financing

The American Express Blue for Business card offers 15 months of 0% APR for financing. If you fail to pay back your purchases within 15 months, your interest rate will move to 11.74%-19.74%, depending on creditworthiness. You lose access to the introductory rate if you make a late payment.

The 15-month 0% APR window is one of the most generous offers available. On top of generous financing, you earn rewards for spending.

You can also earn 10,000 Membership Rewards points after making your first purchase. Every year, you’ll also receive a bonus of 30% of the previous year’s points earned.

The card offers perks including secondary car rental insurance, purchase protection, extended warranties, baggage insurance, trip accident insurance, and travel hotline help.

The Fine Print
  • Introductory rate: 0% APR financing for 15 months. You must pay on time, or you lose this rate.
  • APR: After 15 months, 11.74%-19.74%, depending on your creditworthiness
  • Penalty APR: 29.74%
  • Annual fee: No annual fee
  • Late fee: Up to $38
  • Returned payment fee: $38
  • Cash advance fee: Greater of $5 or 3%
  • Cash advance APR: 25.74%
  • Rewards: 1 point per dollar spent on all other purchases.
  • Bonus: 2 points for every dollar you spend booking travel at amextravel.com

Apply Now

Low Interest Rates

If you and your business have excellent credit, the Platinum Plus for Business MasterCard from Bank of America offers low ongoing financing. This is a great card for businesses with periodic short-term borrowing needs. Besides interest rates as low as 9.74%, it offers a seven-billing-cycle 0% APR promo rate and $200 statement credit if you spend $500 in the first 60 days.

Plus, the card offers travel accident insurance, secondary rental insurance, and automatic downloads to QuickBooks.

Remember, it’s not wise to use a small business credit card for long-term financing. Many credit unions will offer low rates on installment business loans.

The Fine Print
  • Introductory rate: 0% APR financing for seven billing cycles.
  • APR: 9.74%-20.74% variable APR, depending on your creditworthiness (after seven billing cycles)
  • Annual fee: No annual fee
  • Late fee: $19-$49 (depending on your balance)
  • Returned payment fee: $39
  • Cash advance fee: Greater of $10 or 4%
  • Cash advance APR: 24.74%
  • Sign-up bonus: $200 statement credit if you spend $500 in your first 60 days
  • Rewards: None

Apply Now

Cash Flow Management

Managing cash flow can be one of the most difficult problems facing small business owners. The Plum Card by American Express makes cash flow easier. The Plum Card is a charge card not a credit card. This means that it is designed to give you access to short-term working capital. However, it is not a good source of financing.

If you pay your bill within 10 days of statement closing, you’ll get a 1.5% discount on eligible charges. Otherwise you have a full 60 days without interest before you need to make a payment. Beware, these benefits come at a steep price. After one year, you’ll pay a $250 annual membership fee. Plus, carrying a balance on a charge card comes with huge penalties. The first time you go past due, you’ll be charged 1.5% of the balance. After that, they charge a late fee of 2.99%. The minimum fee is $38.

The Fine Print
  • Late fee: 1.5%, then 2.99%; minimum of $38
  • Returned payment: $38
  • On-time payment bonus: 1.5% discount if you pay balance within 10 days of statement closing
  • Annual fee: $0 for the first year, $250 thereafter
  • No cash advance
  • Rewards: None

Apply Now

Imperfect Credit

If you’re struggling to get approved for a small business credit card, the Spark Classic from Capital One offers an excellent option. The card has a high variable APR (23.49%) and mediocre rewards (1% cash back). But Capital One will approve business owners with just average credit.

This isn’t a great card for borrowing, even in the short term. However, the Spark Classic will give you some working capital, and it will help your business build its credit. Just remember to pay your bill on time each month and to keep your credit use low.

The Spark Classic also offers perks like purchase protection, free extended warranties, and travel and emergency assistance. These protections offer tremendous value to business owners.

The Fine Print
  • APR: 23.49% variable APR
  • Annual fee: No annual fee
  • Late fee: Up to $39
  • Cash advance fee: Greater of $10 or 3%
  • Cash advance APR: 23.49%
  • Rewards: 1% cash back on all purchases

Apply Now

Cards for Service Members

Former and current members of any branch of the military can join Navy Federal Credit Union and apply for these high-quality credit cards. The Visa and MasterCard have the same fees and conditions, but they offer different perks.

 

Navy Federal Credit Union’s Visa for Business credit card gives former service members access to low interest rates and rewards spending. This can be an excellent choice for service members with excellent credit who may have to borrow for short-term needs.

The card gives access to the Visa SavingsEdge program, which gives up to 15% off business purchases at qualifying retailers. However, the card doesn’t offer extended warranties or other protections, so it isn’t always the best choice.

The Fine Print
  • APR: 9.65%-18.0%
  • Annual fee: No annual fee
  • Late fee: Up to $20
  • Returned payment fee: Up to $20
  • Cash advance fee: $0 at Navy Federal Credit Union branch ATM, 50 cents domestic, $1 foreign
  • Cash advance APR: APR + 2%
  • Rewards: 1 point per dollar spent

Apply Now

Navy Federal Credit Union’s MasterCard for Business credit card gives former service members access to low interest rates and rewards. The low interest rates make it a compelling choice for service members with short-term borrowing needs.

The card gives access to the MasterCard Easy Savings program, which gives automatic 10% rebates at a network of gas stations, auto repair shops, and shipping companies. This can lead to significant savings. The card also connects to the MasterCard Business Network, which makes expense reports easy. However, the card doesn’t offer extended warranties or other protections.

The Fine Print
  • APR: 9.65%-18.0%
  • Annual fee: No annual fee
  • Late fee: Up to $20
  • Returned payment fee: Up to $20
  • Cash advance fee: $0 at Navy Federal Credit Union branch ATM, 50 cents domestic, $1 foreign
  • Cash advance APR: APR + 2%
  • Rewards: 1 point per dollar spent

Apply Now

Best Cards for Rewards

Many small business credit cards offer compelling rewards to cardholders. These rewards can allow you to reinvest in your business, or you can take them for personal use. If you choose to use a rewards credit card, try to avoid paying interest. Most of these cards are not good choices for short-term borrowing.

Travel Perks

If you’re a frequent traveler, these small business credit cards give you access to incredible perks. But be sure to read the fine print. These cards have a few gotchas attached.

 

The American Express Business Platinum Card is a charge card with a premium price tag ($450 per year) and premium benefits for some users. Please note, it is not a credit card; you should not plan to borrow money with this card. These are the most significant perks:

  • Global Lounge Collection access, which includes access to Delta Sky Club lounges and American Express Centurion lounges
  • $200 airline fee credit (for checked bags, inflight refreshment, etc.)
  • One free Global Entry or TSA Pre-check application fee (allows you to expedite security at select airports and U.S. Customs)
  • 10 free passes per year to inflight Gogo Wi-Fi and unlimited Boingo (land-based Wi-Fi) access
  • 50% airline points redemption bonus on first- or business-class tickets (if you spend 100,000 points on a business-class ticket, you’ll get 50,000 points back 6-10 weeks later)
  • Starwood Preferred Guest Gold Elite Status, which also gets you Marriott Rewards Gold status for room upgrades and free breakfast. It also gets you access to the Fine Hotels and Resorts Program (perks like in-room WiFi, complimentary breakfast, and other hotel perks at participating luxury hotels).
  • Elite status for National car rental for free upgrades whenever you rent a car.
  • This could be a great card for frequent Delta fliers; not only do you get access to the Delta Sky Club lounges but you can also convert the points you earn into Delta SkyMiles.
The Fine Print
  • Annual fee: $450
  • Late fee: 2.99% or $38, whichever is greater
  • Returned payment fee: $38
  • No cash advance
  • Sign-up bonus: Earn 50,000 Membership Rewards points after you spend $10,000 within three months of card membership. Earn 25,000 more points after spending an additional $10,000 within your first three months.
  • Rewards: 1 point per dollar spent
  • Bonus rewards: 1.5 points per dollar for first $5,000 spent in a year; 2 points per dollar spent through amextravel.com.

Apply Now

As a business owner, little incidentals can add up in a big way. The Chase Ink Business Preferred Card mitigates these costs by providing high-value insurance protection to you and your employees. Not only will you earn rewards (outlined in the fine print), you’ll enjoy these perks, too.

Trip Cancellation/Trip Interruption Insurance
If your trip is canceled or cut short by sickness, severe weather, or other covered situations, you can be reimbursed up to $5,000 per trip for your pre-paid, non-refundable travel expenses, including passenger fares, tours, and hotels.

Trip Delay Reimbursement
If your common carrier travel is delayed more than 12 hours or requires an overnight stay, you and your family are covered for unreimbursed expenses, such as meals and lodging, up to $500 per ticket.

Travel Accident Insurance
When you pay for your air, bus, train, or cruise transportation with your card, you are eligible to receive accidental death or dismemberment coverage of up to $500,000.

Auto Rental Collision Damage Waiver
Decline the rental company’s collision insurance and charge the entire rental cost to your card. Coverage is primary when renting for business purposes and provides reimbursement up to the actual cash value of the vehicle for theft and collision damage for most cars in the U.S. and abroad.

Baggage Delay Insurance
You are reimbursed for essential purchases like toiletries and clothing for baggage delays over six hours by passenger carrier up to $100 a day for five days.

Lost Luggage Reimbursement
If you or an immediate family member check or carry on luggage that is damaged or lost by the carrier, you’re covered up to $3,000 per passenger.

Extended Warranty Protection
This warranty extends the time period of the U.S. manufacturer’s warranty by an additional year on eligible warranties of three years or less.

Cellphone Protection
Get up to $600 per claim in cellphone protection against covered theft or damage for you and your employees listed on your monthly cellphone bill when you pay it with your Chase Ink Business Preferred Credit Card. There is a maximum of three claims in a 12-month period with a $100 deductible per claim.

The Fine Print
  • APR: 16.74%-21.74%
  • Annual fee: $95 per year
  • Late fee: $15-$39, depending on balance
  • Returned payment fee: $39
  • Cash advance fee: Greater of $15 or 5% of transaction
  • Cash advance APR: 25.74%
  • Sign-up bonus: 80,000 points when you spend $5,000 in the first three months
  • Rewards: 1 point per dollar spent, 3 points per dollar spent on travel, shipping purchases, internet, cable or phone services, or online advertising (social media or search engines)
  • Bonus: Points worth 25% more when you redeem through Chase Ultimate Rewards (Chase’s travel website)

Big Introductory Bonuses

Business owners who know they’ll spend a lot in a short period of time should take note of these cards. These bonuses provide excellent value if you can meet the spending requirements. But be wary: these cards have high interest rates. You won’t come out ahead if you end up financing a big purchase with these cards.

The Business Platinum Card offers excellent travel perks, but it offers an unparalleled sign-up bonus, too. Right now, you can earn 50,000 Membership Rewards points after you spend $10,000 within three months of card membership. You’ll also earn 25,000 more points after spending an additional $10,000 within your first three months.

If you plan to spend $20,000 or more in the next three months, this bonus is worth the highest value when redeemed for travel rewards. Depending on which option you choose, this bonus may offset annual fees. You need to churn through a lot of money to meet the spending minimums, but this is a lucrative bonus.

Click here to see details including perks and the fine print.

The Chase Ink Business Preferred Card offers ideal perks for frequent travelers, but right now you can get a great sign-up bonus, too. By spending $5,000 in three months, you’ll earn 80,000 points. This bonus is worth $1,000 if you spend your points through Chase Ultimate Rewards for travel or $800 if you redeem for cash back. You can also transfer the points to airline partners like United and Virgin Atlantic and hotel partners like Marriott and Hyatt.

In addition to the lucrative bonus, you can earn everyday spending rewards (including 3 points per dollar spent in certain categories) and valuable trip insurance.

Click here to see details including perks and the fine print.

Cash Back Rewards

Every business owner can benefit from more cash in their pocket. These cards give you the best cash back offers for everyday spending. You can find better rewards if you use multiple cards, but these have excellent rewards for those who don’t want to mess around with multiple cards. Plus, these cards have excellent protections, too. But be careful when you finance with these cards; they don’t offer great terms for borrowing.

 

The Spark Cash card from Capital One offers unlimited 2% cash back on all purchases, and it is free for the first year. Plus, if you spend more than $4,500 in the first three months of holding the card, you get a $500 cash bonus. After the first year, you’ll pay $59 to hold the card. After the first year, if you spent more than $3,000 per year, it’s worth it.

The Spark Cash card also offers valuable protective features like purchase protection, free extended warranties, primary auto rental collision coverage, and more. Overall, the Spark Cash card gives straightforward rewards to business owners with excellent credit.

The Fine Print
  • APR: 17.49% variable APR
  • Penalty APR: 29.9% (applied if you make a late payment)
  • Annual fee: Free for the first year, $59 per year afterward
  • Late fee: Up to $39
  • Cash advance fee: Greater of $10 or 3% of transaction
  • Cash advance APR: 23.49%
  • Sign-up bonus: $500 reward when you spend $4,500 in the first three months
  • Rewards: 2% cash back on all spending

Apply Now

The Spark Cash Select card from Capital One offers a rare combination of friendly financing terms and rewards. You’ll earn an unlimited 1.5% cash back rewards on all purchases, and you’ll receive a $200 sign-up bonus if you spend $3,000 or more in your first three months.

On top of that, you’ll have a 0% APR financing rate for nine months, and an APR as low as 13.49% afterward.

This isn’t the most lucrative rewards card, but you won’t pay an annual fee. This makes it a great card for businesses that don’t spend as much on a credit card.

The Fine Print
  • Promo APR: 0% for nine months
  • APR: 13.49%-21.49%, depending on your creditworthiness
  • Penalty APR: 29.9% (applied if you make a late payment)
  • Annual fee: $0
  • Late fee: Up to $39
  • Cash advance fee: Greater of $10 or 3% of transaction
  • Cash advance APR: 23.49%
  • Sign-up bonus: $200 reward when you spend $3,000 in the first three months
  • Rewards: 1.5% cash back on all spending

Apply Now

Best Category Bonuses

If you and your employees spend a lot of money in a limited number of categories, you might want to consider a rewards card with heavy bonuses in those categories. These cards offer at least 3 points for every dollar you spend in a given category. That’s the equivalent of a 3% reward.

Remember, rewards cards aren’t usually a good choice for financing purchases. Look to pay off these cards every month.

Online Advertising

Businesses that regularly advertise on social media networks (Facebook, Twitter, etc.) or via search engines (Google, Bing) can earn impressive rewards on their marketing spending. These are the best cards for heavy online advertisers.

 

You’ll earn 3 points for every dollar you spend on online advertising. In addition, you’ll be eligible for travel perks, sign-up bonuses, and more.Click here to see details including perks and the fine print.

The American Express Business Gold Rewards Card allows you to choose to earn 3 points per dollar spent on any one of the following categories: advertising in select online media, airfare from airlines, gas, shipping, or computers and cloud services from select providers. You’ll earn 2 points per dollar on the categories you don’t choose.

All other spending earns 1 point per dollar you spend.

As a sign-up bonus, you’ll earn 50,000 points if you spend $5,000 or more in your first three months of holding the card. In addition to the rewards, you get trip accident insurance, extended warranties, and purchase protection.

Since the Business Gold Rewards Card is a charge card, you shouldn’t plan to borrow with the card. But the rewards for online advertisers are excellent. Just watch out for the $175 annual fee that kicks in after the first year.

The Fine Print
  • Annual fee: $0 for the first year, then $175
  • Late fee: 2.99% or $38, whichever is greater
  • Returned payment fee: $38
  • No cash advance
  • Sign-up bonus: Earn 50,000 Membership Rewards points after you spend $5,000 within three months of card membership
  • Rewards: 1 point per dollar spent
  • Bonus rewards: 3 points in one category (pick between advertising in select online media, airfare from airlines, gas, shipping, or computers and cloud services from select providers).
  • 2 points rewards on remaining four categories.

Apply Now

Dining and Travel

Dining and travel cost a lot, but these cards offer enticing rewards. The cards we recommend offer more than 3% cash back on restaurant spending, travel, or both. Plus, they have other compelling perks. But most of these cards aren’t great for borrowing, so check the fine print.

 

The American Express Blue for Business card offers the single best dining deal, at least during your first six months. During the first six months of holding the American Express Blue for Business card, you’ll get 10 points for every dollar you spend at a restaurant up to $2,000. Once the six-month offer period is over, you may want to turn to other rewards programs from the cards we outline below.

This is also one rewards card that has a decent financing option. Right now you can get 0% APR financing for the first twelve months.

Learn more here about the perks, rewards, and fine print before you apply.

Looking to thin down your wallet? A Sam’s Club Business MasterCard, doubles as your membership card. But it’s not just for wholesale shopping. Spending on the Sam’s Club Business MasterCard gives you the opportunity to earn 3% cash back rewards on all restaurant spending worldwide. It also gives 5% cash back rewards on gas (except when purchased at other wholesalers) and 1% on all other spending.

Road warriors and frequent business entertainers will love this card. Plus, the $45 statement credit (if you spend $100 the day you open it) pays for your annual Sam’s Club membership.

The Fine Print
  • APR: 15.15%-23.15%
  • Penalty APR: 29.99% (applied if you make a late payment)
  • Annual fee: $0 (requires $45 Sam’s Club membership)
  • Late fee: Up to $39.99
  • Cash advance fee: Greater of $5 or 3% of transaction
  • Cash advance APR: 20.15%-26.15%
  • Sign-up bonus: $45 statement credit when you spend $100 on your first day (applying in-store makes this easy).
  • Rewards: 1% cash back on all spending. Maximum of $5,000 back in a given year.
  • Bonus rewards: 3% on dining and travel expenses. 5% on gas (up to $6,000 in gas purchases). Gas cannot be purchased from other wholesale clubs.

Apply Now

If you prefer Costco to Sam’s Club, the Costco Anywhere Visa Business Card offers similar terms. Their 4-3-2-1 program includes 4% on gas purchases (up to $7,000 per year), 3% cash rewards for all dining and travel expenses, 2% on Costco purchases, and 1% on all other spending.

While the rewards are sweet, the terms can be expensive. This is not a good card for borrowing, so be sure to pay it off each month.

The Fine Print
  • APR: 0% for seven months, then 15.74%
  • Penalty APR: 29.99% (applied if you make a late payment)
  • Annual fee: $0 (requires $55 Costco membership)
  • Late fee: Up to $37
  • Returned payment fee: Up to $37
  • Cash advance fee: Greater of $10 or 5% of transaction
  • Cash advance APR: 22.49%
  • Rewards: 1% cash back on all spending.
  • Bonus rewards: 4% on gas (up to $7,000 in gas purchases). Gas cannot be purchased from other wholesale clubs. 3% on dining and travel expenses. 2% rewards on all purchases from Costco and Costco.com.

Apply Now

If you’re a frequent business traveller, Chase Ink offers the best rewards. You earn 3 points for every dollar you spend on travel, but you get a travel bonus. Every point is worth 1.25 points when you book through Chase Ultimate Rewards.

Travel perks also include trip insurance, auto rental collision damage waivers (this is primary coverage), and more.

Click here to see details including perks and the fine print.

Gas

 

As a small business owner, you know that driving can be an economical choice, but you can also earn rewards for all those miles on the road. Sam’s Club Business MasterCard gives 5% cash back rewards on gas (except when purchased at other wholesalers), and 1% on all other spending.

Even if you don’t frequent Sam’s Club, this is the best category for rewards for gas purchases.

Click here to see details including perks and the fine print.

Learn More

Risks of Using Small Business Credit Cards

Many business owners see credit cards as an easy solution to their capital needs. But small business credit cards have unique risks. Savvy entrepreneurs will consider the risks before opening a new line of credit. These are the most important considerations.

 

1. Personal Liability

As a small business owner, you’re personally liable for credit card debt. Business bankruptcy won’t protect you. Whether your business succeeds or fails, you have to pay back the debt.

The only way to get rid of small business credit card debt is to declare personal bankruptcy. Bankruptcy destroys your credit history for a few years, and it stays on your report for 7-10 years.

Don’t treat a credit card like venture capital. It’s not. You need to repay it.

2. Credit Bureau Reporting

Small business cards don’t report to the credit bureaus the same way personal cards do. Depending on which card you choose, if you pay your credit card on time, you may not see any information on your personal report. For most business owners, that is a good thing. It will keep your personal credit utilization low.

However, an unpaid bill will show up on your personal credit report. A bill that goes unpaid for 60 days will generally appear on your personal credit report. Some banks offer more generous reporting and some less. You can speak with a banker to determine your bank’s reporting standards. Still, your personal credit score can take a hit at the same time that your business credit runs afoul.

When you take out a business credit card, put precautions in place to protect yourself. You can limit employee spending, and remove authorized users. You can also set up automatic payments each month.

3. Not Protected by the Credit CARD Act

In 2009, Congress passed the Credit CARD Act. The act curtailed predatory lending behaviors, including raising interest rates on existing balances. It also required credit cards to be more transparent about rates and fees.

This act does not apply to business credit cards. With a small business card, banks can raise the interest rate on your existing balance at any time. A higher interest rate means a bigger minimum payment and a longer time to pay off your debt. If you’re using your small business credit card to finance something, you could be at risk.

Still, many banks will not raise your rate if you have an excellent history of on-time payments. It is simply a risk to understand.

Another risk related to the Credit CARD Act is the possibility of double-cycle billing. Business credit cards do not require an interest accrual grace period. This means you may begin accruing interest on purchases right away. We only recommend cards that have a grace period of at least 23 days built in. If you choose a different card, be sure to check for this in the rates and fees schedule.

4. Employee Risk

Small business credit cards make it easy to watch employee spending. Still, they pose serious risks. You’re personally liable for any employee spending on a credit card. If you wouldn’t trust an employee with your wallet, don’t trust them with a company card. Employees can rack up debt and leave the company. That leaves you with a bill and no recourse to get the money back.

The Best Ways Use Small Business Credit Cards

Once you understand the risks of small business credit cards, you can also understand their best uses. Over 65% of small businesses use credit cards on a regular basis. Some use them for rewards, and some for financing. In fact, close to 10% of all small business financing comes from credit cards.

Here are some of the best ways to use a small business credit card.

 

1. Earning Rewards and Protection

If you pay your small business credit card in full each month, you can earn substantial rewards. Many business credit cards offer perks, including cash back, travel rewards, extended warranties, trip insurance, and more. As a business owner, you can reinvest the rewards into your business or take them for personal use.

2. Managing Cash Flow

Cash flow problems destroy small businesses, but credit cards provide short-term working capital. If you have a sales cycle that lasts 30 days or less, a credit card can fund inventory purchases. By the time your bill comes due, you’ll have money to pay it off. If you follow this practice, you’ll pay no interest, and you’ll manage your cash flow.

Credit cards can simplify employee monitoring, too. Most business credit cards allow you to place individual restrictions on employee use. That means you can limit how much and where employees can use company cards. But your employees may manage to misuse the cards. If they do, you will be stuck with the bill.

3. Building Business Credit

Businesses have credit reports just like people. Business credit cards can help you build your score. To build your business credit, hold the card under your employer identification number (EIN).

When your EIN establishes a record of paying its bills on time, it makes your business creditworthy. That means you’ll have an easier time finding long-term loans at great rates.

63% of all small businesses carry debt. Having a lower interest rate on that debt could make the difference between success and failure. This means every small business should take their credit history seriously from the outset. Small business credit cards may allow you to build that history without paying interest or fees.

4. Short-Term Borrowing

Small business credit cards have high interest rates, but they can work for short-term borrowing. If you know that you’ll only carry debt for a few months, you may want to finance something with a credit card.

Credit cards do not have origination fees or prepayment penalties. Sometimes this means that they offer the best terms for short-term borrowing. Just be careful when you borrow, and pay it back quickly. High interest debt compounds over time.

If possible, borrow on a card with a 0% introductory offer. Remember, failing to pay off 0% interest purchases may result in back interest. Be sure you understand the risks before you borrow.

The Worst Ways to Use Small Business Credit Cards

Small business credit cards aren’t always the best tool to get the job done. These are a few times when you should avoid using credit cards.

 

1. Personal Expenses

Bad accounting sinks many entrepreneurs. Always keep your personal spending off of your business credit cards. This will simplify bookkeeping, and it will keep your business credit utilization low. If you need to borrow for personal expenses, look for a low-interest credit card instead.

2. Long-Term Financing

Due to the high interest rates, most businesses should not finance long-term commitments using credit cards. Instead, consider an installment loan from a local credit union or a bank.

Applying for an installment loan can be a pain, but the lower interest rate will be worth it in the long run. Keep money in your pocket and avoid small business credit cards for long-term financing.

3. Cash Advances

Cash advances are the most expensive way to use a credit card. Banks begin charging interest right away, and the advance has a higher interest rate. Cash advances also have high fees of up to 10% of the amount you withdraw.

If you need cash, withdraw it from your business checking account instead, or take out a traditional loan.

4. Financing a Failing Business

Do not use credit cards to help a failing business limp along. Too many people will not give up on their idea even when the execution doesn’t work out. Credit card debt will bury a failing company and erode your personal wealth.

Remember, negative credit behavior will show up on your personal credit report. Plus, courts hold you liable for all credit card debt your business incurs. Use an objective lens to decide whether you need to shut down your business.

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