Tag: BANK OF AMERICA

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Credit Cards

Bank of America® Premium Rewards® Credit Card Review: Rewards for High Spenders with a BofA Relationship

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.

Updated October 5, 2017

Bank of America is joining the premium rewards card category with the new Bank of America® Premium Rewards® Credit Card. This card boasts a 50,000-point sign-on bonus and a much lower annual fee ($95) than comparable cards, making it a great way for consumers to earn rewards at a low yearly cost. There are additional perks for Bank of America account holders that will allow you to earn a higher rewards rate, making this card a great choice if you have an account with Bank of America and are looking for a premium rewards card.

We believe that everyone should be able to earn at least 2% cash back, without paying a fee (thanks to Citi® Double Cash Card). If you have over $20,000 in a Bank of America checking, savings, or investment account, you will be able to earn more than 2%. If you have less (or no relationship balance), it gets more complicated.

Bank of America® Premium Rewards® Credit Card

Apply Now Secured

on Bank Of America’s secure website

Bank of America® Premium Rewards® Credit Card

Annual fee
$95 For First Year
$95 Ongoing
Rewards
2 points on travel, 2 points on dining, 1.5 points on all other purchases
APR
16.99%-23.99%

Variable

Credit required
excellent-credit
Excellent

Key insights

  • This card only works if you have a deep relationship with Bank of America. If you don’t have other assets (either in a savings account or investment account), you are better off with a flat-rate cash back card, such as the Citi® Double Cash Card
  • This card is probably not for you:
    1. If you have less than a $50,000 relationship with Bank of America and spend less than $2,000 a month on the card.
    2. If you spend a lot in travel and dining but have less than a $20,000 total relationship balance with Bank of America.
  • This card is for you – and you can earn more than 2%:
    1. If you spend at least $2,000 a month and have at least a $50,000 relationship balance with Bank of America
    2. If you have a relationship balance between $20,000 and $50,000 and spend a lot on travel and dining.
  • The biggest winners are people who have more than $100,000 at BofA (and that can include an IRA at Merrill Edge) and spend more than $3,000 a month on the card. People with this profile can earn up to 3% – which is hard to beat.

How the card works

This card charges a $95 annual fee, which is much less than competing premium rewards cards that have annual fees around $450. But this card competes on value (the amount of cash back you can earn) rather than luxury (you will not get access to swanky Amex lounges, for example).

There is a 50,000-point intro bonus offer, available for qualifying customers. Customers must make at least $3,000 in purchases in the first three months of opening to earn the bonus. This is a feasible amount if you typically charge $1,000 a month.

The amount you earn depends upon your relationship with the bank. Your total relationship includes:

  • How much you have deposited in a checking and savings account. (But beware: interest rates are very low at BofA. Find the best savings account rates here).
  • How much you have invested at Merrill Lynch, which includes Merrill Edge (the self-directed brokerage account that has very competitive fees and commission).

As a cardholder you will automatically earn 2 points per dollar spent on travel and dining and 1.5 points per dollar spent on all other purchases. The more assets you have at BofA, the more points you can earn. Account holders must enroll in Bank of America’s Preferred Rewards program to benefit from these higher rewards levels. See the breakdown below.

We like the concept: BofA is trying to reward their most loyal customers with the best rewards.

The Bank of America® Premium Rewards® Credit Card is most beneficial to those who have $20,000 or more in a Bank of America account. This is a lot of cash for a savings or checking account with low interest rates. However, it’s possible to earn a higher interest rate from your Bank of America account if you roll over your IRA or 401(k) into a Merrill Edge® account. You can learn more here.

The table below shows your effective annual cash back rate depending on your monthly spending and relationship with Bank of America. This first table demonstrates the cash back rate earned for cardholders who are not big spenders in the bonus categories of travel and dining. Monthly spending was allocated at 40% toward travel and dining and 60% on all other purchases. The effective annual cash back rate deducts the annual fee, but does not factor in the sign-on bonus.

As you can see from the table, you won’t see significant return until you have at least a $50,000 relationship with Bank of America and spend over $2,000 a month. This will allow you to earn an effective annual cash back rate of over 2%. From this point on, you will start to see higher cash back earning potential.

Now if you’re a big spender in the bonus categories of travel and dining, you will see higher cash back earning potential at lower relationship levels. For the table below, monthly spending was allocated at 80% toward travel and dining and 20% on all other purchases. Again, the effective annual cash back rate deducts the annual fee, but does not factor in the sign-on bonus.

As you can see from this table, having at least a $20,000 relationship with Bank of America and spending over $3,000 a month allows you to earn an effective annual cash back rate of over 2%. From this point on, you will start to see substantial cash back earning potential.

In conclusion, the Bank of America® Premium Rewards® Credit Card is a good option if you are an affluent account holder at Bank of America and prefer to open a premium rewards credit card from the same bank as your savings account. If you plan on moving your IRA or 401(k) to Merrill Edge®, you will benefit from a higher interest rate.

How to qualify

To qualify for this card you will need excellent credit. The higher rewards levels for Bank of America checking, savings, and investment accounts with large amounts of money target affluent customers. Therefore, you will also need to have a steady job, which will show that you are responsible and can pay your bills.

What we like about the card

Large sign-on bonus

This card offers a 50,000-point sign-on bonus when you spend $3,000 in your first three months of account opening. This a reasonable amount of money to earn the large sign-on bonus, and lower than competing cards.

Reasonable annual fee

This card charges an annual fee that is significantly lower than competitors who can charge upward of $450 a year. The low annual fee allows you to enjoy more of the rewards you earn.

Bonus for Bank of America account holders

If you have a checking, savings, or investment account with Bank of America, you will benefit greatly from the additional points you earn. Higher tier points depend on the amount of money you have in your account and can increase your rewards potential significantly.

Unlimited higher rewards rates

You will benefit from the higher rewards rate for travel and dining without any caps. This means you don’t have to worry about hitting a predetermined dollar value and then being downgraded to a lower rewards rate.

What we don’t like about the card

Must be a Bank of America account holder for higher rewards rates

To earn more points per dollar spent you need to be a Bank of America account holder with a checking, savings, or investment account. If you don’t have an account, you will still earn the 2 points per dollar on travel and dining and 1.5 points per dollar on all other purchases, but can find a better deal with a flat-rate card such as the Citi® Double Cash.

Who the card is best for

This card benefits affluent Bank of America account holders with a checking, savings, or retirement account balance over $20,000 at the bank. If you fall in this category, your loyalty to Bank of America will be rewarded with the higher tiered rewards levels that allow for high rewards earning potential. In addition, this card has one of the lowest annual fees for premium rewards cards on the market and offers a large intro bonus.

Alternatives

There are multiple combinations of savings accounts and credit cards that you can use to maximize your savings. In the table below we compared the Citi® Double Cash Card, the Chase Sapphire ReserveSM card, and the Citi ThankYou® Premier card paired with a typical online bank savings account to the Bank of America® Premium Rewards® Credit Card.

Note that the Citi ThankYou® Premier card waives the annual fee in year one. Also, we listed the effective annual fee for the Chase Sapphire ReserveSM card; assuming you spend $300 in travel a month, the $450 annual fee would be an effective $150.

Savings Account

Typical
online bank

Typical
online bank

Typical
online bank

Bank of America

Credit Card

Citi® Double Cash

Citi® Double
Cash

Chase Sapphire Reserve®

Chase Sapphire
Reserve℠

Citi ThankYou®

Citi ThankYou®
Premier Card

Bank of America

Bank of America
Premium Rewards®

Average Deposit Balance

$100,000

$100,000

$100,000

$100,000

Average Monthly Card
Spending

$8,000

$8,000

$8,000

$8,000

Travel and Dining

$4,000

$4,000

$4,000

$4,000

Everything Else

$4,000

$4,000

$4,000

$4,000

Savings Account Interest
Rate

1.15%

1.15%

1.15%

0.06%*

Interest Earned on
Savings

$1,150

$1,150

$1,150

$60

Rewards Rate

Travel

2

3

3

3.5

Dining

2

3

2

3.5

Everything Else

2

1

1

2.6

Cash Back Earned

$1,920

$1,920

$1,680

$2,928

Bonus Offer

$0

$500

$500

$500

Annual Fee

$0

$150

$95

$95

YEAR 1: Cash Back +
Interest Earned + Bonus

$3,070

$3,420

$3,330

$3,393

YEAR 2: Cash Back +
Interest Earned

$3,070

$2,920

$2,735

$2,893

*.06% interest may be available if you roll over an IRA or 401(k) into a Merrill Edge® account.

From this table we can draw several conclusions:

  • The Citi® Double Cash Card paired with a typical online bank savings account will earn you the most money at year’s end.
  • A typical online bank earns you the most interest compared to the other savings accounts.
  • The Bank of America® Premium Rewards® Credit Card will earn you the most cash back, but coupled with the low interest rate from the Bank of America savings account, you will fall short of earning as much money at year’s end as Citi® Double Cash or Chase Sapphire ReserveSM cards paired with a typical online bank  savings account.

To sum it all up, if you want to earn the most money at year’s end, the best option would be the Citi® Double Cash Card paired with a typical online bank  savings account. The high interest rate that a typical online bank offers coupled with the card’s flat-rate cash back rewards are what make this the most profitable pairing. The Bank of America® Premium Rewards® Credit Card lures consumers in with the higher tier rewards levels for affluent account holders, but offers a low interest rate for those accounts that ultimately hinders your year-end earning potential. However, if you transfer your IRA or 401(k) to Merrill Edge, you will earn a higher interest rate than a typical Bank of America savings account and can make up some of the difference.

Here’s an overview of the alternative cards:

Citi® Double Cash Card – 18 month BT offer

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

1% when you buy, 1% when you pay

APR

14.49%-24.49%

Variable

The Citi® Double Cash Card is a flat-rate cash back card that will earn you a consistent cash back rate. You will earn 1% when you make a purchase and an additional 1% when you pay your bill. This card has no annual fee unlike the Bank of America® Premium Rewards® Credit Card or the other alternatives. Keep in mind this is a cash back card, so you will not be earning points that can be redeemed for travel. Cash back comes in the form of a statement credit, deposit, check, or gift card. Paired with a typical online bank savings account, this card will earn you the most money at the end of the year (excluding year one), beating the Bank of America® Premium Rewards® Credit Card by $177 in subsequent years. Refer to our chart above for a detailed comparison.

 Chase Sapphire Reserve<sup>SM</sup>

Annual fee

$450 For First Year

$450 Ongoing

Rewards

3X points on travel and dining, 1 point on everything else

APR

16.99%-23.99%

Variable

This card comes with several great perks that make it a stand-out favorite among frequent travelers. Each account anniversary year, Chase automatically gives you $300 in statement credits as reimbursement for travel purchases you make throughout the year on your card. This lowers the $450 annual fee to an effective $150. You will also benefit from a 50% rewards boost when you redeem for airfare, hotels, car rentals, and cruises through Chase Ultimate Rewards®. For example, 50,000 points are worth $750 toward travel. The Chase Sapphire ReserveSM is a great alternative if you are a frequent traveler and want a higher redemption value for your rewards.

The information related to the Chase Sapphire ReserveSM Card has been collected by MagnifyMoney.com and has not been reviewed or provided by the issuer of this card.

Citi ThankYou® Premier Card

Annual fee

$0 For First Year

$95 Ongoing

Rewards

3X on travel, 2X on dining and entertainment, 1X on all other purchases

APR

15.49%-24.49%

Variable

This card is a good alternative if you want a card that offers a high rewards rate for travel, dining, and entertainment. If you’re not a Bank of America account holder, you will earn a higher rewards rate on travel and entertainment with the Citi ThankYou® Premier card. Citi also charges an annual fee, but this is waived the first year. Keep in mind that you will fall short of earning as much money at the end of the year with this card compared to the Bank of America® Premium Rewards® Credit Card (by approximately $63 in year one and $158 in subsequent years). Refer to our chart above for a detailed comparison.

FAQ

This card will be released in September 2017.

Yes, anyone can apply for this card. Keep in mind, an excellent credit score is needed to have the highest approval odds.

No, there are no limits to the amount of points you can earn in each category. That means you will consistently earn the higher rate for travel and dining, regardless how much you spend.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at alexandria@magnifymoney.com

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Auto Loan, Reviews

Review: Bank of America Auto Loan

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.

Bank of America Auto Loan

Shopping for a new or used car has become a complicated experience. There are so many makes and models to choose from, so many dealers to purchase from, and a range of prices that makes it hard to see if whether or not you’re getting the best deal.

It can be overwhelming, to say the least.

That overwhelming feeling can lead so questionable financial decisions, such as spending more than you can afford, paying too much for the car you choose, and spending hundreds or thousands more in interest than necessary because you didn’t shop around for the best rate.

The Offer

A Bank of America auto loan will provide 12 to 60 months with APRs starting at 2.84%. There is no origination fee, but Bank of America does not provide online pre-approval for new or used auto loans. You can, however, be pre-approved for a new dealer purchase by applying at a Bank of America branch.

APR discounts

Bank of America provides several APR discounts to its existing customers as well as Preferred Rewards Customers.

Current Bank of America personal checking account holders receive a 0.15% APR discount on their auto loans or auto refinances.

Bank of America also offers an APR discount of 0.25% to 0.50% on auto loans when you enroll in Preferred Rewards at the time of application. There are no fees to participate in Preferred Rewards, but you must have a Bank of America personal checking account and a 3-month average combined balance of $20,000 in your Bank of America accounts and/or Merrill Lynch investment accounts.

Car Buying Basics

The first thing you should do when considering a new or used car purchase is to take hard look at your budget. Consider all of your current debt payments – these should not exceed 50% of your income. Factor in the payment for your new car, and make sure that it will not stretch your budget too thin.

Then, shop around online for your best rate on an auto loan during a 30-day period. Doing all of your rate shopping within 30 days will result in minimal impact because all inquiries within a 30-day period are treated as a single inquiry.

Once you have secured financing and determined the budget for your vehicle, use a site like TrueCar or Kelly Blue Book to help you determine the best price for the car you want to buy by comparing what other people actually paid for the same model.

How To Apply

In order to apply for an auto loan from Bank of America, you must be at least 18 years of age (19 in Alabama or Nebraska). You should also be prepared with the following:

  • Your address, phone number, email address, and Social Security number
  • Employment and income verification
  • Information on the vehicle you wish to purchase, such as the make, model, mileage, and the VIN

In most cases, you will receive approval or denial within 60 seconds of submitting your application with all of the required information online. However, some applicants will require a more detailed review. If you do not receive a decision within 60 seconds you will be contacted by email when the decision regarding your loan is ready.

In some cases, you could receive your funds in as little as 24 hours.

After you apply and are approved for the loan, you have 30 days from the date of the original loan request to use it without being required to re-apply.

The Fine Print

The 2.84% starting APR is only valid in certain states. Go here to check yours. The 2.84% APR assumes an excellent credit history and that you are purchasing a new vehicle from a dealership. Other types of purchases have the following minimum APRs:

  • Dealer Used: 3.19%
  • Private Party: 3.99%
  • Refinance: 3.19%
  • Lease Buyout: 3.19%

Your actual APR may be higher depending upon your creditworthiness, as well as the state in which you reside.

In order to finance a used vehicle through Bank of America, it must be not be older than 10 calendar years, have no more than 125,000 miles, and not be used for commercial purposes. It also cannot have a salvage title.

Bank of America does not finance auto purchases from independent dealers that carry several different brands of vehicles. The general exceptions to this rule are CarMax, Hertz Car Sales, Enterprise Car Sales and other found using this dealer locator tool.

In same cases, if the applicant is not deemed creditworthy enough, Bank of America will require a down payment or minimum loan to value ratio. These are determined on case-by-case basis and will not be known until you apply.

Pros

  • Rates starting at 2.84%
  • Terms of 12 to 60 months
  • 60 second online approval, in some cases
  • Funds in as little as 24 hours
  • Will finance private party sales and lease buyouts
  • No origination fee
  • No prepayment penalties
  • Up to 0.50% APR discount when you enroll in Preferred Rewards
  • 15% discount for having a Bank of America Checking account

Cons

  • Exact APR is not known until you apply
  • Down payment may be required for certain applicants
  • Will not finance purchases from independent dealers
  • Used cars must be less than 10 years old and have less than 125,000 miles
  • No online pre-approval

How It Stacks Up

LendingTree

If you want to explore your options, there are hundreds of lenders on LendingTree ready to compete for your business. LendingTree is the parent company of MagnifyMoney. You simply have to fill out a short online form and upon completion, you may see real interest rates and approval information instantly. While the online form is only a soft pull on your credit, meaning your score won’t be impacted, if you choose to move forward with a lender, lenders will likely do a hard pull on your credit.  Note that since multiple hard pulls only count as one pull, it is smart to have all your hard pulls done at once.

LightStream

LightStream can beat Bank of America’s starting APR and is far less complex. Its APRs start at 2.19%, it will finance vehicles up to $100,000, and it does allow you to receive pre-approval online before shopping. Its terms vary from 24 to 84 months, which allows for longer terms than Bank of America.

PenFed

If you like great rates, but a more personalized experience than a big bank provides, then consider PenFed. PenFed is a credit union, but anyone can join with a one-time donation to an eligible charitable donation. It has APRs ranging from 1.49% to 3.84%, terms of 12 to 84 months, and will finance up to $100,000. It has no origination fee, but does not provide online pre approval.

Shop Around First

When purchasing a new or used car, the two most important factors are making sure you don’t spend more on a vehicle than you can afford, and getting the best rate possible. Before setting foot on a dealership, shop around for your best auto loan rate so you can have one aspect of car shopping taken care of up front.

Compare Auto Loan Offers Here.

Gretchen Lindow
Gretchen Lindow |

Gretchen Lindow is a writer at MagnifyMoney. You can email Gretchen at gretchen@magnifymoney.com

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News

The Big Banks Announce Earnings

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.

review-full

The US banking scene is dominated by four mega-banks: Bank of America, Citibank, Chase and Wells Fargo. On January 14th and 15th, these banks reported their earnings. At MagnifyMoney, we look closely at the results of the credit card and retail banking divisions to see what they can tell us about the state of the American consumer, the cost of credit and the trends in savings account rates.

The headlines talked about disappointing earnings, and compressing net interest margins due to a low rate environment. But the mega-banks include consumer banking, as well as corporate and investment banking. If you peel the onion and look at the consumer business, you will see that banks are maintaining (or even expanding) their spreads in the consumer business to counter-act declining margins elsewhere. Although there have been massive settlements and penalties, banks are using low interest rates on savings accounts and high interest rates on credit cards to cover the costs of those settlements. So, while middle class America may feel good about seeing the headline settlement costs, they are in fact funding those settlements through their banking relationships.

Here is a quick summary of what we found

  • Banks continue to make outsized returns in their consumer banking and lending franchises: The Return on Equity of the consumer businesses remains high. Chase generated a 31% ROE. Bank of America generated a return of 26% (with a 36% return from the consumer lending business). Most banks have a target return of 10% – 12%, and their investment banks tend to be below the target return.

In the credit card industry:

  • Consumer spending is increasing: People made more purchases on credit in the last 3 months of 2014 than they did during the same time in 2013. Depending upon the bank, spend increased from 3% to 10%.
  • And people are paying their bills: The percent of people who are 30 days (or more) late on their credit card bills continue to decrease across all of the major issuers. Delinquency ratios were down 10% – 18%.
  • Credit card businesses continue to generate impressive yields: Borrowing on credit cards is expensive, and (despite all-time-low interest rates) banks continue to defend margins. The largest lender, Chase, saw its yield increase from 9.1% to 9.2%. Note: That number looks a lot lower than the interest rate paid by credit card borrowers, because people who pay their balance in full pay no interest. In addition, banks have promotional offers (for example, 0% interest rates), which bring down the blended yield. Our review of credit card interest rates show that, for borrowers, they can expect to pay 15% or higher if they do not have a promotional rate.

Savings Q4

Credit card companies make money in the following ways:

  • Interchange on spending: Every time you make a purchase on a credit card, the bank typically receives about 2%. Spending is increasing, so interchange revenue should be increasing.
  • Interest charged on borrowing: As people spend more, you can expect that they will revolve more. And, given that interest rates are being held firm despite low rates, this is an area of strength for banks.
  • The main costs for a credit card business are:
    • Operating expenses: the cost of people, equipment, marketing, and other similar expenses.
    • Credit costs: when people do not pay back, the balance is written off at 180 days past due.
    • Funding costs: banks just borrow the money from someone else in order to lend to consumers.
    • Credit and funding costs are still at cyclical lows.

All of the key drivers of credit card profitability remain strong. Don’t let the building and release of reserves confuses the situation. Because credit card businesses are growing, they will have to build reserves. But that does not mean that the business is doing worse – it is just a tax for growth. The underlying businesses have been strong, and delinquency remains low. However, future growth will come from expanding into higher risk segments. Expect to see more credit available in the next 12 months – especially to people who are higher risk. You can also expect to see delinquency start to deteriorate over an 18-24 months time frame, as these newer booking vintages begin to season.

delinquency Q4

Interest on deposits remains shockingly low

If you are looking to save money, the biggest banks are the worst place to keep your money. There is a war being waged online for deposits, with the best rates now reaching 1.25% for large balances. However, the interest rates paid on deposits at large banks remains shockingly low.

  • If you wanted to open a savings account today, Citi, Chase, Wells Fargo and Bank of America all pay 01% on a traditional savings account.
  • Wells Fargo bragged that the average cost of deposits declined to 0.09%, which is 2 bps lower than a year ago. And total deposits were up 8% Year-over-Year.
  • Bank of America bragged that the “rate paid on deposits declined to 0.05% in Q4 2014.”

What does this all mean?

  • Banks continue to get away with overcharging and underpaying retail banking consumers (a.k.a the middle class). The returns in the consumer business remain incredibly high.
  • If you are looking to borrow, don’t expect the near-0% interest rates to be reflected in your credit card interest rate. Banks continue to defend their top line interest rates, and credit cards for the mega-banks remain incredibly expensive ways to borrow.
  • If you are looking to save, the mega-banks have ignored the price war that is happening online. Yet, for some reason, we continue to give them money. Interest rates continue to decline, and banks continue to brag about it.

There is one upside to all of this: banks want more credit card debt. So, you can expect more aggressive 0% offers to lure customers. For savvy debt surfers, this means you will have more option to cut the cost of your interest and reduce the time that it takes to pay back your debt. We have just seen that in early January with Citizens Bank launching a 0% balance transfer offer for 15 months, with no fee.

Otherwise, the financial results just reaffirm our belief: your basic banking and borrowing should not be with the giant mega-banks.

promo-savings-wide

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Building Credit, News

New: Free FICO scores from Chase Slate, Bank of America, USAA, and Ally

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.

Credit score large

This year getting your real, free FICO score will get a lot easier.

The President announced in a speech this week that several banks will start offering more free, real FICO scores to consumers. That’s important, because these are not the ‘FAKO’ scores you’ll find on free credit sites like Credit Karma and Quizzle.

They are the actual scores each bank uses when making credit decisions, backed by data for the primary credit bureau each bank uses.

Here’s the rundown of new banks offering the scores this year:

  • Citibank: You’ll get your Equifax version of your FICO score if you hold any Citibank branded card starting later this month. Non branded cards issued by Citibank like Sears and Best Buy cards won’t get the free score.
  • Chase: An Experian score is now available to Chase Slate card holders on a monthly basis.
  • Bank of America: Sometime later this year. Bank of America pulls from all 3 bureaus so it’s not clear which version of the FICO score they will offer.
  • USAA: Starting in March all credit card holders will get the Experian Vantage version of their FICO score.
  • State Employees Credit Union of North Carolina: Sometime later this year all members with credit cards will get their FICO scores. They generally use the Equifax version of the score.
  • Ally: If you have an auto loan with Ally you’ll get your score by this summer. They generally use the Transunion version of the FICO score for decisions.

[Find the Best Free Credit Score Sites Here]

They join several other financial institutions, including Discover, Barclaycard, PenFed, DCU, and First National Bank of Omaha in offering free real FICO scores.

We haven’t yet heard from American Express, which is the other big missing link, though some account holders have seen test of free FICO access when logging into their accounts in recent months.

Wells Fargo offers a free score once a year, but requires you to come into a branch during a special promotional period, which is basically an opportunity for a sales pitch.

We keep a complete list of who lets you view your free FICO score, including updates on which underlying credit bureau each uses.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Get A Pre-Approved Personal Loan

$

Won’t impact your credit score

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Balance Transfer

Why You Should No Longer Avoid Bank of America Balance Transfer Credit Cards

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.

Screen Shot 2014-11-25 at 3.35.54 PM

Updated May 30, 2017

If you have credit card debt, you are most likely paying a very high interest rate. In a recent survey by MagnifyMoney, we identified that over 75% of people with credit card debt have an interest rate higher than 15%. Given that the prime rate is currently 4.00%, it is crazy to pay such high interest rates on your debt.

If you have $5,000 of credit card debt at a 15% interest rate,  you will end up paying over $700 of interest in just the next 12 months. Money is time, and the more interest you have to pay to the bank, the longer it will take for you to pay off your debt.

Many banks offer balance transfers, including Bank of America. In this article, we will discuss how a balance transfer works, and then review those offered by Bank of America.

New: Bank of America has just launched a new balance transfer deal. You can now get 0% intro APR for 15 months with no balance transfer fee – so long as you complete the transfer within 60 days of opening the account. This offer is on the standard BankAmericard. This offer is only available for people with excellent credit.

If you already have debt at Bank of America, you would not qualify for the new balance transfer offer. Instead, you might want to consider:

In addition, you can shop for balance transfer offers here.

How to Lower Your Interest Rate

Americans are very good at refinancing their mortgages. When we see low interest rates (like the ones out there today), we take advantage of those rates by refinancing. However, for some reason, we often feel uncomfortable doing the same thing with our credit card debt. But we shouldn’t.

Banks will compete for your business, by offering low introductory interest rates if your move your debt from another bank. It is not uncommon to see 0% interest rates for 12, 15, 18 or even 24 months. Typically, these balance transfers have a fee that is charged up front. However, even with the fee, they will dramatically reduce the cost of servicing your debt during the balance transfer period.

Some other banks will offer low, fixed interest rate options without a fee. For example, they may charge 3.99% for 24 months on the transferred debt.

At the end of the day, the best option for a balance transfer comes down to math. Where can you save the most amount of money, when you compare the interest rate you are paying today to the combination interest and fees that you would pay for the balance transfer. In our balance transfer marketplace, we update offers daily and do the math for you.

 

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In the example earlier, I wrote about an individual with $5,000 of debt at a 15% interest rate. If that person can afford to pay about $100 per month, than a balance transfer could save someone over $2,000.

 Bank of America

Bank of America offers balance transfers on most of their credit cards. Their best balance transfer offer is on the BankAmericard. But the bank does offer balance transfers on many other credit cards.

Here are the details of their other balance transfer offers:

  • Bank of America® Cash Rewards Credit Card: 0% intro APR for 12 months, with a balance transfer fee of 3% (or $10, whichever is greater)
  • Bank of America® Travel Rewards Credit Card: there is no balance transfer offer on this card. There is a 0% intro APR for 12 months on purchases.
  • BankAmericard® Credit Card: 0% intro APR for 15 months, with a $0 balance transfer fee, so long as you complete the transfer within 60 days of opening the account. This is the new offer – and their best balance transfer offer.
  • All other Cash Rewards cards (Susan G. Komen, World Wildlife Fund, MLB, U.S. Pride): 0% intro APR for 12 months, with a balance transfer fee of 3% (or $10, whichever is greater)
  • Their co-branded travel rewards cards (like Alaska Airlines and Virgin Atlantic) typically do not offer balance transfers
  • For students, they do have a balance transfer offer on the basic BankAmericard® Credit Card (which does not offer rewards). You can get 0% intro APR for 15 months with a 3% fee (or $10, whichever is higher). This is one of the best balance transfer offers for students that we have found.

So, the best balance transfer offer is 0% intro APR for 15 months with no balance transfer fee, on the basic BankAmericard® Credit Card.

And, Citi Simplicity® Card – No Late Fees Ever and Citi® Diamond Preferred® Card provide 0% intro APR for 21 months and a 3% fee.

Fine Print Alert: What to Watch Out For 

If you do complete a balance transfer with Bank of America, make sure that you:

  1. Complete your balance transfer within 60 days of opening the account. Otherwise you will lose the introductory rate
  2. Continue to pay on your old credit card until you see that the balance transfer has been completed. It can take 2 weeks for the balance transfer to complete, and you don’t want to be hit with late fees on your old credit card while waiting for the transfer.
  3. You can only move debt to Bank of America from another bank. You can not transfer debt between 2 credit cards of Bank of America.
  4. Make your payments on time, every month. They charge a late fee of up to $35, and a returned payment fee of up to $25. Paying late can also result in a loss of your introductory APR, and a potential penalty APR of up to 29.99%
  5. Try to avoid spending on the card. Although it might be tempting to start spending on the card, try to use the card to get out of debt.
  6. Do your best to pay off the balance during the promotional period. But don’t worry: if you still have a balance remaining after the promotional period ends, Bank of America will not punish you with a fee. And there is no deferred interest.

In Conclusion

If you have a high interest rate credit card, a balance transfer can be a great way to dramatically reduce the interest that you are paying on your debt and take years off your repayment.

And the balance transfers offered by Bank of America will likely save you money. In other words, they will probably give you a deal that is better than what you have right now. Just make sure you shop around to get the right balance transfer for your needs.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Consumer Watchdog

Bank of America Preferred Rewards: A 75% bonus but watch the rates

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.

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Bank of America recently launched a new rewards and benefit program for its best customers, called Bank of America Preferred Rewards. We think it’s a reminder of why you should do your homework when you’re offered something extra for being loyal.

The most enticing feature is this:

Up to a 75% bonus on all credit card rewards you earn.

With the 1.5% reward Bank of America Travel Rewards card that means you can earn 2.6% in cash travel rewards back on all your purchases with no limits or caps.

So let’s say you spend $2,000 a month on the card.

You’ll earn $360 + a $270 bonus = $630 in travel rewards each year thanks to the 75% bonus.

No other option can give you that kind of no hassle reward value from your spending.

Sound tempting?

To qualify for the 75% bonus level you need to keep at least $100,000 in Bank of America checking, savings, or investment accounts (via Merrill Lynch).

Let’s think about what you could be trading off here.

Bank of America’s best savings accounts earn only around 0.10% interest, and that’s including a special 20% interest rate boost.

So on $100,000 you earn just $100 a year in interest.

In contrast, it’s easy to earn 1% or more with an online savings / checking combo. That would earn you $1,000 a year in interest.

So to earn an extra $270 in cash back a year, you could be sacrificing $900 a year in interest.

Is that a good deal?

Sure, you have to pay taxes on interest, but not on credit card rewards. So call it $600 a year sacrificed.

Unless you manage to spend over $50,000 a year on your card it’s just not worth the lost interest. That’s over $4,000 a month in card spending.

And even then you’re doing barely better than a good double cash back card like the Citi Double Cash, which doesn’t have a requirement to lock up hundreds of thousands of dollars at a bank that offers terrible rates.

What about the rest of the benefits?

These are the rewards you get with other deposit levels…

Gold ($20,000 in accounts)

  • A 5% interest rate boost on Money Market Savings
  • A 25% bonus on credit card rewards
  • No monthly maintenance fees
  • No fees for check orders, cashier’s checks, stop payments

Platinum ($50,000 in accounts)

  • A 10% interest rate boost on Money Market Savings
  • A 50% bonus on credit card rewards
  • Up to 12 out of network ATM withdrawals per year with fees refunded
  • No monthly maintenance fees
  • No fees for check orders, cashier’s checks, stop payments

Platinum Honors ($100,000 in accounts)

  • A 20% interest rate boost on Money Market Savings
  • A 75% bonus on credit card rewards
  • Unlimited out of network ATM fees refunded
  • No monthly maintenance fees
  • No fees for check orders, cashier’s checks, stop payments

When are you better off?

One way Preferred Rewards makes sense with high balances is if you have your IRA or brokerage account with Merrill Lynch, as those balances count toward the minimum balances for Preferred Rewards.

If you use a ‘Merrill Edge‘ account you get monthly fee free trades and you can keep your money in low cost index funds, so you can get a fair market return on your money with no unnecessary fees.

That makes Preferred Rewards a great deal.

Otherwise, get an online only bank account with no checking or ATM fees, and a high rate on savings.

Then get a cash back card that earns 2%. You won’t miss the extra 0.6% cash back because of all the interest you’re earning on your savings.

 

Have questions you need answers to? Then tweet at us @Magnify_Money or email us at info@magnifymoney.com. 

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Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Consumer Watchdog

Consumer Watchdog: The Loophole to Get Paid $200 A Year For Using Auto Pay

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.

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We spend a lot of time talking about traps set by banks, but there are also hidden ways to earn extra cash from things that are designed to be traps. If you’re in the know, you can use these plotted traps to your advantage.

BankAmericard Better Balance Rewards Credit Card

How would you like to earn up to $200 a year just for paying a bill or two you already have set up on auto pay?

There are no fees for doing this, and no ‘trial periods’ to worry about.

It’s taking advantage of a benefit from Bank of America that’s designed to lure in people who don’t pay their cards in full each month. But you won’t fall into that trap.

Here’s how it works

You’ll need to sign up for the no annual fee Better Balance Rewards card from Bank of America.

This card pays you $25 every quarter (3 months) that you pay your monthly statement on-time. That’s $100 every year.

Bank of America does this because it hopes people who don’t pay their cards off in full each month will use it, giving them more interest payments, which is a trap. In fact, the card’s advertisement has really ugly language stating, “If you typically pay off your card over time, this new credit card could be for you.” Which it’s not. It’s only good if you pay it off in full every month.

How to avoid the traps

But with this plan you’ll use this trap to your advantage and just get paid cash with no extra interest charges or fees:

  1. Put a single bill on auto-pay with the Better Balance card. You can pick any bill you’d like – it can be your cable bill, electric bill, cell phone bill, etc.
  2. Set up your checking account to auto pay your Better Balance card. Then, set up your new Bank of America card bill to auto pay the balance in full each month from your checking account. That way your bill is automatically paid in full with no interest charges. The checking account can be from your existing bank (like a good, no fee account from Ally Bank). There is no need to switch to Bank of America.
  3. Put the card away. Or just cut it up so you won’t be tempted to use it for other spending. There’s no benefit to spending more than a single charge on this card each month. Use other low rate cards or balance transfer cards if you carry a balance month to month.
  4. Get $25 every 3 months ($100 a year). Because you’re paying a charge each month, $25 will be automatically added as statement credit to your Bank of America credit card account every quarter as part of the Better Balance Rewards program. There are no points to deal with or checks to handle – it just makes your bills smaller, and it adds up to $100 a year.
  5. Double it up with your spouse. Have your spouse apply for the card and do the same thing with another bill to double your savings to $200 a year.

Bank of America doesn’t require you to spend a certain amount to receive the $25 bonus each quarter. You just have to have a balance of any size, even just $1, to pay each month, and then pay more than the minimum due.

In your case, you’ll pay the full balance each month.

You can even do this without a reoccurring bill. Just charge a small amount, like a cup of coffee, each month and have it set to pay off in full, but that’s less seamless than just setting a monthly bill on auto pay to the card.

We’re not big fans of the Better Balance card’s marketing – it tries to lure people in who don’t pay their balances in full each month, but if you play it right, you could make $100 a year (or $200 with a partner) with no effort.

Want regular updates about the best financial products out there? Then sign up for our Price Checker Newsletter. Twice a month, we’ll deliver the best-of-the-best right to your inbox.

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Eliminating Fees

Bank of America Is Now A Good Option for Unbanked

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.

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This week, two new products have been announced that specifically target the un-banked:

  • Citibank Access Account
  • GoBank, in partnership with Wal-Mart

Nearly 10 percent of Americans do not have bank accounts, and these new products promise to make it easier and cheaper for people to enter the banking system. These accounts come after the introduction of Bluebird (by American Express), Safe Balance (by Bank of America) and Opportunity (by Wells Fargo).

If you need access to a basic account, but have difficulties opening an account (because of bad previous history that is now reported on your Chexx Report), or you want to avoid the high overdraft fees, these accounts could be for you.

None of the accounts offer the ability to borrow money. So, you should only view these as low-cost transaction accounts, and will need a separate strategy (like a credit card from your local credit union) for any borrowing needs you might have.

We have reviewed the products to see which offers the best deal.

No account is perfect. In summary:

  • If you need to write personal checks, and you don’t mind a six day hold on check deposits, then BlueBird is for you
  • If you don’t need to write checks, then:
    • Citi is best if you have a monthly direct deposit, or you can keep at least $1,500 in your account
    • Bank of America is best if you don’t have a direct deposit or high level of funds to keep in the account

And the cheapest account is….

Bluebird by American Express is the cheapest account:

  • $0 monthly fee, with no direct deposit requirement and no minimum balance requirement
  • No overdraft and NSF fees
  • MoneyPass ATMs are free; $2.50 at other ATMs

If you have a monthly direct deposit, you can have a fee-free account at GoBank, Wells Fargo or Citi. However, GoBank has long check hold times, and Wells Fargo still has expensive overdraft fees.

If you do not have a direct deposit, then Bank of America is the cheapest. And if offers BillPay.

The most services are offered by….

Bluebird by American Express enables BillPay and the ability to write checks. None of the other accounts offer check writing.

If writing checks is not important, you still have access to BillPay at Bank of America, Citi, Wells Fargo and Go Bank.

Ability to Deposit Funds

The banks enable access to their branch and ATM network. In addition, for any deposited check, $200 would be made available on the next business day.

However, Bluebird and GoBank have very long hold times (they do not promise less than six days).

In Conclusion

None of these products are perfect, but they could be useful if you need access to a bank account.

If you don’t deposit checks, than BlueBird could be a great option. The Wal-Mart cash register becomes your branch, and you can keep this account completely free. However, the long hold time may make this account impossible to use.

If you do need to deposit checks, and don’t have a direct deposit, than Bank of America has the best offer. You will need to pay $4.95 per month, but you get access to the entire Bank of America network.

Unfortunately, none of these products offer overdraft protection at reasonable prices. If you need to borrow money, you will need to find other options.

 

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Do you have experience with being “unbanked” you’d like to share? Get in touch withus on Twitter, Facebook, email (info@magnifymoney.com) or in the comment section below.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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College Students and Recent Grads

Growing Up in a Family Without a Bank Account

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.

Hiding money under mattress

This may sound ludicrous to most, but I spent a huge chunk of my life “unbanked”. Every transaction I made was with cash or money orders; and when it came to savings, let’s just say it wasn’t a frequently practiced habit of mine. Fast forward a couple years later, at 24 years old I finally opened up my very first bank account equipped with a checking account. I also have two credit cards that are great for everyday purchases, and even better for building credit. Not to mention, I’m already contributing to a 401(k).

To think, two years ago I didn’t even know what credit was or why it was so important. Now, I wouldn’t say that I’m a financial guru, but I know enough to live a financially healthy lifestyle. However, I my time living off the financial grid forced me take initiative and take control of my money.

The backstory

Growing up, my father never discussed money with me. I naturally assumed that it was something that I didn’t need to worry about, and would probably tackle in my later years. When I started college, I realized my peers seemed to have a different relationship with money than I did. While I paid for tuition, books, and miscellaneous college expenses with cash, my peers paid with credit cards and checks. I always felt very uncomfortable heading to school with three thousand dollars in my bag. But, at the time, it was the only way I knew how to pay off my tuition.

College made me aware that carrying thousands of dollars in cash isn’t how other parents teach their children to handle money.

During an economics class, a good friend of mine shared a financial lesson from his parents. He said they encouraged him to invest in mutual funds, and to make sure the benefits package from his first job after graduation would be up to par. My father never even mentioned a lick of financial gibberish to me. So, all that valuable financial information that my friend shared, pretty much went in one ear and out the other. If I needed money, my father would simply hand it to me in cash. And saving for him consisted of stashing money in a safe in his closet.

The turning point

Intimidated, yet curious about the mainstream financial community, I felt compelled to sit in on a financial literacy workshop hosted by the business department of my college. During this hour-long seminar, I was enlightened about the Do’s and Don’ts of consumer banking. Then, it hit me, my father an immigrant from Trinidad who’s accustomed to handling cash, and only wanted to stick with what he knew. He always cashed his checks at the cash-checking store for a fee, while the majority of people have their income directly deposited into their checking or savings accounts for free.

Little did I know, my father’s financial behavior was rubbing off on me. If I were never exposed to the vast amount of financial information available in college, I probably wouldn’t have transitioned to using mainstream financial products.

An immigrant myself, I understood my father’s inability to deal with banks but refused to be left behind.

My first bank account

After much deliberation and a pep talk, I finally found the courage to walk into a Bank of America branch. Undocumented at the time, my hopes of opening an account were very low, but to my surprise BofA didn’t require you to have certain documents to open up an account. With just my passport, college ID, and a recent tuition bill, I opened up my very first checking account, no hassle. I walked out of the bank with three complimentary checks, a temporary debit card to use until my permanent piece of plastic came in the mail, and a folder filled with information on how to manage my new checking account.

I used the overdraft horror stories from my peers to discipline myself. It felt great to enter this new world of banking, and to take full advantage of the range of financial products that were out there.

Today, I put my tuition money in the bank and pay from the comfort of my home, which is a lot safer than carrying a stash of cash to the Bursar office. Instead of traveling to stores, I now shop online. Every transaction has become a breeze, and living off the mainstream financial grid became a relic of my past.

Building my credit score

After spending close to a year with Bank of America, and with the new changes made to my immigration status, I decided to switch banks. Equipped with the necessary documents that made me eligible to open up accounts with a range of banks outside of BofA, I switched to Chase Bank and also signed up for the Chase Freedom credit card.

My new credit card enabled me to start building credit. My score at the time was in the 400 bracket. Apparently, I didn’t have a long enough credit history. After a year of paying off my balances in full every month, my credit limit was raised and my credit score slowly increased.

Overtime, the rewards program connected to my Chase Freedom card started to make more sense. I learned fairly quickly that if I purchased certain items I would be rewarded with one percent cash back. I realized that I should have a credit card with a cash-back program that maximizes rewards for my spending habits. After doing some research, I learned that American Express- Blue Cash Card was the right card for me. Now I was improving my credit score, earning cash back on daily purchases and being fiscally responsible.

Living off the financial grid gave me ample time to observe how those around me handled money and learn how to best move into using mainstream financial products. Though my father still uses cash for all of his transactions, I’m eager to introduce him to a more convenient, safe and rewarding way of handling money. By switching to a checking and savings account, my Dad can protect his money and earn interest. I also plan to find him a fee-free banking experience. While I teach my Dad how to change his banking habits, I’m going to continue expanding my financial knowledge and finding the best financial products for me.

Looking to see if your financial products are the best ones for you? Use MagnifyMoney to compare checking accounts, savings accounts and cash back rewards cards.

Kelly Harry
Kelly Harry |

Kelly Harry is a writer at MagnifyMoney. You can email Kelly at kelly@magnifymoney.com

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College Students and Recent Grads

MagnifyMoney.com Study: College Students Face High Interest Rates on Student Credit Cards

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.

Paying with credit card

It is that time of year: millions of students will be heading to college. For many students, this will be the first time that they will be the targets of banks’ marketing departments.

While the CARD Act changed how lenders can offer college students credit cards, young adults are still able to acquire these potentially expensive products. A study of college student credit cards by MagnifyMoney.com shows that a student new to credit is likely to pay an average APR of 21.4%. And taking out cash is even more expensive, with an average APR of 24.1%.

  • We reviewed the Top 50 banks in the US by deposits
  • We reviewed credit cards specifically targeting students and actively marketed on the banks’ websites
  • All credit cards, with the exception of Capital One Journey, offer a range of Purchase APRs. CapitalOne offers a single, flat APR of 19.8%
  • For credit cards that offer a range of APRs, the average range is nine percentage points
  • The lowest possible APR is 10.99%, offered by Bank of America on the BankAmericard Credit Card for Students

Note: Bank of America charges higher APRs on student products that earn rewards. A no rewards card has a range of 10.99% – 20.99%. The cash rewards card has a range of 12.99% – 22.99%. The travel rewards card has a range of 14.99% – 22.99%. Remember: rewards can be very expensive!

  • The highest possible APR is 23.99%, offered by Citi (both the ThankYou Preferred for College Students and Dividend Platinum Select Visa for College Students)
  • If your student credit card is your first credit product, then you will likely have no score. No score means you are the highest risk, and it is highly likely that you will receive the highest price point. The average of the highest price points is 21.4%

If a student charges $1,000 on a credit card and only pays the minimum due at the average rate of 21.4%, it will take 7.6 years to pay back the debt. And the total amount repaid would be $1,941.

Noticeably absent from the list of banks offering credit cards that target students are American Express and Chase. Chase recently exited the business, recognizing that earning interest rates more than 20% on students still in college didn’t feel right.

The CARD Act restricted, but certainly did not eliminate, credit cards that target students. In 2012, applications for student credit cards were at 43.5% of 2007 levels. The CARD Act put the following restrictions into place:

  • No pre-approved offers to people under 21, without consent
  • If you are under 21, you need to prove that you have income (a part-time job, for example), or have a cosigner older than 21
  • Credit card companies can no longer give out free gifts on campus to induce people into signing up for a credit card. No more frisbees or beer mugs

However, there are still plenty of student credit card offers out there. While they don’t give out frisbees, they do offer sign-on bonuses. Citi, for example, gives you 2,500 Thank You points if you spend $500 within 3 months of opening the card. We find that worse than the free frisbee. Before, they would incent you to open a card. Now they are incenting you to spend on the card!

While credit cards can be a great way to build your credit while in college, they can turn into expensive traps that send you down a dangerous path.

The only reason you should apply for a student credit card is to build your credit score. And follow these three tips:

1.Your statement balance should never be more than 30% of your limit. High utilization, early in your credit history, can have a meaningful negative impact. So, just make one to two purchases a month on the card.

2.Pay your balance in full. Credit cards are expensive, and you should not use them to borrow.

3.Never use a credit card for a cash advance. It may seem like easy money, but you will be paying for it.

Have questions for us? Get in touch via TwitterFacebook, email info@magnifymoney.com or in the comment section below!

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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