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Uber Visa Card Review: Uber’s First Credit Card Offers a Lot for Millennials to Love

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication. This site may be compensated through a credit card partnership.

The rumors were true. Uber’s made the leap from the smartphone in your pocket to the wallet in, well, your other pocket.

The ride-hailing company teamed up with Barclays, the credit card division of UK-based Barclays PLC, to launch an excellent no-fee rewards credit card for millennials, urbanites and business travelers alike. The new offering, dubbed the Uber Visa Card, became available nationwide Nov. 2, 2017.

Uber’s first branded credit card lets cardholders earn 4% back on dining, 3% on hotels and airfare, 2% on online purchases including Uber, online shopping and video and music streaming services, and 1% on most everything else. Individually, the bonus categories are similar to those of a few existing no-fee cards with special category bonuses. But the Uber Visa Card’s 4-3-2-1 cashback rewards structure makes it a leading bonus category rewards credit card.

And that 4% cashback bonus makes the Uber Visa Card a leader in dining rewards.

Heavy Uber-app users need look no further for a cashback offering. However, to get the best bang for their buck, they should pair the Uber Visa Card with a flat-rate 2% cashback card such as the Citi® Double Cash Card – 18 month BT offer*  (Earn 2% cash back on purchases 1% when you buy and 1% as you make payments for those purchases) or PayPal Cashback Mastercard®.

Uber Visa Card

The information related to Uber Visa Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Uber Visa Card

Regular Purchase APR
17.24% - 25.99% Variable
Annual fee
$0
Rewards Rate
4% back on dining, 3% back on hotel and airfare, 2% back for online purchases, and 1% on everything else.

Part I: Card benefits at a glance

The Uber Visa Card boasts an impressive 4-3-2-1 rewards program, as described above, in addition to other bonuses. But those aren’t the only perks this car packs. The company is clearly making a play for millennials, with unique benefits such as account credits for digital subscription services (a la Netflix or Hulu) and mobile phone protection.

With its rewards package, the Uber Visa Card could act as bait to convince some millennials to use credit more often. (Recent research shows this generation favors debit and cash for everyday purchases.)

Cashback rewards

The pros

The cons

  • Unlimited 4% cash back on dining and takeout.
  • Unlimited 3% on hotel and airfare
  • Unlimited 2% back on online purchases including Uber.
  • Unlimited 1% back on all other purchases.
  • No annual fee
  • No foreign transaction fees.
  • Earn $100 after spending $500 on purchases in the first 90 days after opening an account.
  • Cardholders who spend $5,000 or more per year, are rewarded with a $50 credit to use on digital subscription services.
  • Cardholders who use the card to pay their phone bill each month also get up to $600 for mobile phone supplemental insurance.
  • Cardholders can only redeem up to $500 worth of points per day for Uber Credits and bank deposits.
  • Online limitations to those 2% cash-back rewards.
  • No interest-free balance transfer period.

High rewards for no fee

The Uber Visa Card grants consumers comparatively lucrative ongoing-bonus-category rewards for no annual fee, and the card charges no foreign transaction fees. That’s rare, even in a market where banks are spending more and more on credit rewards to attract consumers.

The card that comes closest to offering a similar level of bonus rewards is the Chase Sapphire Reserve®*. It earns users an annual $300 travel credit, unlimited triple points on dining and travel, and 1% back on all other purchases. But it charges a hefty $450 annual fee.

If you don’t have an extra $450 in your budget but still want to earn big on dining and travel, the no-fee Uber Visa Card may be the better choice.

Chase Sapphire Reserve® altered one cardholder perk in January – the lucrative 100,000-point-bonus signup offer. After less than a year on the market, Chase cut back a 100,000-point Ultimate Rewards bonus after spending $4,000 within three months to just Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.

An Uber spokesperson tells MagnifyMoney that the Uber Visa Card’s rewards are not temporary, and there are no plans afoot to change them.

It’s important to note the Chase Sapphire Reserve® does offer other traveler perks, such as $300 in statement credits for travel reimbursements per year, a $100 statement credit for applying for Global Entry or TSA PreCheck, and several travel protection benefits. If you use those perks, it may be worth it to you to pay the beefy annual fee for the Chase Sapphire Reserve®.

4% cash back on dining

The Uber Visa Card awards a whopping 4% unlimited cash back on dining, which includes restaurants, cafes, bars and even takeout like UberEATS. The category’s cashback rate leads the industry, beating the AARP® Credit Card from Chase Bank and Costco Anywhere Visa® Card by Citi*, which award only 3% cash back on dining.

The Uber Visa Card also beats the Chase Sapphire Reserve®‘s points racked up for dining charges.

As mentioned, the Uber Visa Card awards 4% on takeout, too, and millennial cardholders may enjoy this perk the most. According to a recent Bureau of Labor Statistics survey, the average millennial spends about $3,416 on food away from home annually. If a cardholder spends a monthly $285 on dining, he or she will earn about $11.38 a month, or $136.56 in cash back annually.

3% cash back on hotel and airfare

Cardholders earn 3% cash back on hotel and airfare purchases made using the Uber Visa Card. Another bonus for millennials: Cash back applies to vacation home rental services, like Airbnb.

According to travel website Hipmunk, nearly three-fourths of millennial travelers have used a vacation rental service like Airbnb while traveling for work, compared to only 38% of Gen-Y and 20% of Boomers. And, about 81% of millennial travelers said they would add extra time to business trip to make some room for leisure.

While the Uber Visa Card’s 3% offer on airfare and hotels is a good offer for the average frequent flyer, consumers can find the same deal with some other no-fee cards, like the AAA Member Rewards Visa and Costco Anywhere Visa® Card by Citi.

Beware: Although it offers the same amount of cash back on travel, the Chase Sapphire Reserve® technically beats out the Uber Visa Card when cardholders use their points for travel rewards.

With Uber, 1 point = $0.01, but if users redeem points using the Chase Ultimate Rewards® portal 1 point = $.015, so your points go about 50% further with Chase, allowing cardholders to purchase more with the same point value. Put another way: A 50,000-point bonus is really worth $750, instead of $500.

Up to $50 streaming credit bonus

Here’s a perk you won’t find on many rewards cards these days.

If a cardholder spends $5,000 or more in a cardmembership year — the 12 consecutive months following your account’s anniversary date — he or she stands to earn up to $50 for digital streaming purchases. Cardholders can earn the subscription credit each year.

The $50 credit is automatically applied as a statement credit for eligible digital subscription services once the cardholder meets the $5,000 spending threshold. If the cardholder hasn’t made $50 worth of eligible purchases by the time he/she spends $5,000, the result is a statement credit for any new eligible digital subscription services charged to the card up to $50.

Cardholders can track their progress toward the annual spending threshold on BarclaycardUS.com.

Up to $600 worth of mobile phone insurance coverage

When cardholders use their Uber Visa Card to pay for their monthly wireless bill, they receive up to $600 for mobile phone damage or theft for each phone listed on the wireless account. Coverage begins one month after the first bill was charged to the Uber Visa Card.

Depending on the kind of coverage a cardholder currently has through a carrier, those who take advantage of this perk could save a good chunk of money. Those under one of the four major carriers could see savings of $7 to $15 a month for a single device or up to $35 a month to cover up to three devices on one account.

There is a $25 deductible to use the protection. After that is paid, the protection covers up to $600 per claim on up to two claims in a 12-month period. If the phone has to be replaced, the protection awards the suggested retail value of the replacement phone, up to the $600 maximum per claim.

2% cash back on online purchases

The Uber Visa Card pays cardholders 2% cash back on online shopping, purchases made through Uber, video and music streaming services and online services like Instacart and TaskRabbit.

The cool thing about this perk is that cardholders can earn cash back on subscription services like Netflix, Amazon Prime and Spotify. Millennials, the leaders of the cord-cutting movement, will likely benefit by simply “setting and forgetting” their Uber Visa Card to pay for their favorite streaming services.

Update: Barclays sent cardholders an email Dec. 5 saying “using a third party payment method including PayPal, Venmo, Apple Pay, Samsung Pay, and Android Pay will now earn 2% back.” Take note: Using a credit card to make a person-to-person (P2P) transfer often carries a fee of about 3% of the transaction. Be sure to review the cards terms & conditions for details.

The 2% cash back on online purchases is good, but the bonus category offer isn’t a leading rate. Consumers who don’t do all their shopping online could benefit more from cashback options that earn double points on all purchases, not just those made online, like the Citi® Double Cash Card – 18 month BT offer, Fidelity® Rewards Visa Signature® Card, or PayPal Cashback Mastercard®.

1% cashback on all other purchases

The Uber Visa Card still rewards spending if you don’t purchase in one of the bonus categories,. The card rewards cardholders 1% back on all other purchases, so it’s a good go-to card for everyday purchases, in addition to bonus-category buys. The 1% offer isn’t very competitive, as there are many existing cards that offer 2% on all purchases, but it ensures cardholders earn at least a little something on everything they buy with the Uber Visa Card.

Part II: Applying for the Uber Visa Card

The Uber Visa Card opened for applications Nov. 2, 2017. Interested applicants can apply for the unsecured rewards card online or directly through the Uber phone app and see an approval within minutes. The in-app application may be more of a win for Uber than for millennials, but it makes the application process easy for anyone who already has the Uber app, so may appeal to digital natives, too.

Once the application is approved, the card is made available for use immediately on rides and UberEATS purchases made through the Uber application on the cardholder’s mobile device. Cardholders should receive a physical card in the mail within 1 – 2 weeks of approval.

What it takes to qualify

Borrowers with higher credit scores are more likely to qualify for the lower interest rates, while those with lower scores are likely to qualify for the higher APR. At this time, there is not a way for applicants to check to see if they prequalify.

This card is best for …

The Uber Visa Card is best for the regular Uber customer who dines out often, frequently travels for work, handles most shopping and bill paying online, and pays his/her balance in full each month. The unsecured rewards credit card’s features will likely hold the most appeal for traveling business people and city-dwelling millennials.

Consumers who spend heavily on dining, travel and online purchases would have the best shot at maximizing the Uber Visa Card’s rewards offers. However, the benefit is canceled out if a user carries a balance, thanks to a high interest charge on purchases.

Uber loyalists will benefit most from Uber app-centric perks like the ability to manage and redeem point using the app, and redeem rewards for Uber Credits for Uber rides and UberEATS.

Again, millennials may reap the greatest reward here as they more likely to use ride-hailing services like Uber on a regular basis. According to Pew Research, 7% of all 18- to 29-year-olds use ride-hailing on a daily or weekly basis; that figure rises to 10% among 18- to 29-year-olds living in urban areas.

Depending on how much an Uber app user spends and how often Uber gets used.

Those who aren’t frequent users of Uber’s app may benefit from earning cash back on spending in the card’s bonus categories, but may not realize as much value in the various app-centric perks.

Part III: Redeeming rewards

Cardholders can redeem cash back via Uber credits, gift cards, statement credit or direct deposit. Cardholders can start redeeming cash back for Uber credits once their cashback balance reaches $5, or 500 points.

As long as the account is active and in good standing, points never expire. The cashback balance must reach $25 before users can access it for gift cards, statement credit or direct deposit.

Cardholders are able to redeem rewards through the Uber app, online through the cardholder portal at BarclaycardUS.com, or by calling the customer service number on the back of the card. Cashback redemption is capped daily at $500.

If there are any authorized users on the card, they can earn and redeem points for gift cards and cash back, but not for Uber credits. Each cashback point is equivalent to $0.01 (2,500 points = $25).

How to redeem rewards for Uber credits in the Uber app

Uber lets cardholders directly manage the rewards points they’ve accumulated for Uber credits, gift cards or cash back through the Uber phone application. Users must first add the Uber Visa Card as a payment method.

Once the card is added, the user will tap on the Barclays mobile app menu to see a points balance. After tapping the points balance, the user should be prompted to select the amount to be redeemed.

Uber says the redemption should happen within seconds, but may take up to 24 hours to be applied to the account. The process is demonstrated in the GIF below.

Part IV: Pros and cons

What we like about the Uber Visa Card

No annual fee

The Uber Visa Card charges no annual fee, which is unusual for a card this loaded with rewards and bonuses. Cardholders can make the most of this no-fee rewards card if they charge only items that fall into the bonus rewards categories and pay the balance in full each month.

4-3-2-1 rewards perks

The Uber Visa Card awards holders a high return on most purchases. In addition, rewards are unlimited and never expire. The card’s 4-3-2-1 cashback rewards program is appealing.

No foreign transaction fee

Cardholders can swipe to pay for items and services overseas without incurring foreign transaction fees. The lack of this fee combines with the 3% travel rewards bonus category to make the Uber Visa Card a good travel companion. Purchases made overseas also earn cashback rewards.

Apply directly in the Uber app

Uber’s 40 million active riders won’t need to rush to a computer to apply for the Uber Visa Card once the application opens Nov. 2. They can simply apply through Uber’s phone application. Uber claims users will be able to submit an application and see a decision within minutes on the app. Users can also apply for the Uber Visa Card online.

Immediate access

Approved applications are granted access to the funds immediately. Users can add the card as a payment option in the Uber mobile application for immediate use on rides and UberEATS orders.

Immediate access comes in handy if an applicant is in need of the funds ASAP. But it’s unclear if cardholders will be able to use the card immediately on purchases outside the Uber app, too.

Exclusive access to events and offers

Uber Visa Card users will get exclusive invites to events and offers in select U.S. cities. Uber app users may already be familiar with this perk if they have checked out Uber’s Visa Locals Offers. Cardholders earn Uber credit when they visit participating stores and restaurants if they pay with a Visa card (like the Uber Visa Card). Uber’s branded credit card is a Visa, so cardholders can earn rewards — like 10% Uber rewards if you shop at Whole Foods — plus the regular purchase rewards if they use the Uber Visa Card at checkout.

What to watch out for with the Uber Visa Card

$500 daily redemption limit

Cardholders can only redeem up to $500 worth of points per day on Uber Credits and cash back for a bank deposit. This may prove problematic if one wants to use points to redeem more than $500 in cash back rewards via bank deposit. There is no daily limit for cash back as a statement credit or for gift cards.

2% cash back on online purchases

2% cashback on online purchases is good, but the bonus categories offer isn’t a leading rate in itself.

1% cashback on all other purchases

For all other purchases, 1% isn’t a very competitive offer.

No interest-free balance transfer period

The Uber Visa Card is not a good option for anyone looking to consolidate credit card debt using a balance transfer. Unlike with the Citi® Double Cash Card – 18 month BT offer, Uber Visa Card cardholders don’t pay 0% interest on balance transfers for a period. The card charges the greater of $10 or 3% of the transfer amount to transfer a balance, followed by the regular 16.24% – 24.99% variable APR the cardholder is charged on all other purchases.

Part V: Alternatives to the Uber Visa Card

Consumers who don’t use Uber, don’t dine out often, don’t travel much or don’t make most of their purchases online may not find the Uber Visa Card’s cashback offer very appealing. While they can still earn a flat 1% cash back on all purchases they won’t be able to benefit much from the card’s bonus categories. Using a flat-rate cashback card with a higher reward, or one that offers a high cashback bonus in a category they use more often, may be beneficial to those consumers.

Flat-rate cashback alternatives

A flat-rate cashback card like the leading Citi® Double Cash Card – 18 month BT offer and PayPal Cashback Mastercard® is a great option for anyone who wants to earn a reward on all purchases without thinking about bonus categories.

Citi® Double Cash Card – 18 month BT offer

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The information related to Citi® Double Cash Card – 18 month BT offer has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Citi® Double Cash Card – 18 month BT offer

Regular Purchase APR
15.74% - 25.74%* (Variable)
Annual fee
$0*
Rewards Rate
Earn 2% cash back on purchases 1% when you buy and 1% as you make payments for those purchases
Credit required
good-credit
Excellent, Good

The Citi® Double Cash Card – 18 month BT offer is the second-highest no-fee flat-rate cashback credit card on the market. The card lets you Earn 2% cash back on purchases 1% when you buy and 1% as you make payments for those purchases, totalling 2% cashback. It also offers an introductory 0% for 18 months on Balance Transfers* so it’s a good choice for those seeking to consolidate debt. Borrowers with Excellent, Good credit scores may be approved for the Citi® Double Cash Card – 18 month BT offer.

PayPal Cashback Mastercard®

Regular Purchase APR
22.24% - 29.24% Variable
Annual fee
$0
Rewards Rate
Get 2% cash back every day, every time you use your card.

Cardholders with a PayPal Cashback Mastercard® can get 2% cash back every day, every time you use your card. All for a $0 annual fee. The card charges slightly higher variable interest rates than the Uber Visa Card — 22.24% - 29.24% Variable — based on creditworthiness. Borrowers with fair, good or excellent credit scores may qualify for the PayPal Cashback Mastercard®.

Similar to the Uber Visa Card, those approved for the PayPal Cashback Mastercard® can use the card immediately to pay for purchases through PayPal’s online and mobile applications. Cash back can be redeemed to the cardholder’s PayPal balance. From there it can be sent to the user’s bank account or used to send money to peers or make purchases via PayPal.

Fidelity® Rewards Visa Signature® Card

Regular Purchase APR
16.24% Variable
Annual fee
$0
Rewards Rate
Unlimited 2% cash back on everyday purchases.

The Fidelity® Rewards Visa Signature® Card earns cardholders unlimited 2% cash back on everyday purchases. The annual fee is $0. The card is best for existing Fidelity customers, since the cashback earned has to be deposited into a Fidelity account.

Only borrowers with excellent credit should apply for this card. Fidelity also bases its credit limits on the total amount of assets it is managing on a consumer’s behalf, so those approved may still be disappointed in the limit they receive if they don’t have much money with Fidelity already.

Bonus category cashback alternative

The bonus categories the Uber Visa Card offers may not appeal to everyone hoping to earn cash back on the purchases they make most, therefore bonus category cashback cards can be a good alternative.

Best for supermarkets and fuel:

Blue Cash Everyday® Card from American Express

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on American Express’s secure website

Terms Apply | Rates & Fees

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Blue Cash Everyday® Card from American Express

Regular Purchase APR
15.24%-26.24% Variable
Annual fee
$0
Rewards Rate
3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 2% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.

The Blue Cash Everyday® Card from American Express is a good alternative for consumers who spend more money on grocery than dining and more running around IRL on gas than making online purchases. The card offers cardholders 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 2% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.
The card has a $0 annual fee. The card also awards new cardholders to $150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

*The information related to Chase Sapphire Reserve®, the Citi® Double Cash Card – 18 month BT offer and Costco Anywhere Visa® Card by Citi has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at [email protected]

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Credit Cards, Featured, Pay Down My Debt

Guide to Credit Counseling: 7 Key Questions to Ask

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

couple talking to a financial advisor
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If you have little knowledge on the topic of personal finance and are struggling with your own money issues, you might want to think about getting credit counseling.

Credit counselors can help you set a budget and advise you on how to manage your debt, which can include credit card debt, student loan debt and even housing debt.

Reputable credit counseling organizations have certified counselors who are trained in consumer credit, budgeting, and money and debt management. Credit counselors will work with you to come up with an individualized plan to address any money problems you may have. This can be done in person, over the phone or online.

Seeking credit counseling is typically voluntary but can be required when filing for bankruptcy. In this guide, we’ll answer some key questions you might have about credit counseling and whether it’s right for you.

How do you find a credit counselor?

Before settling on a credit counseling organization, do your homework to make sure they are not only reputable but will also be the most helpful for your particular financial circumstances. Check with your state’s attorney general and consumer protection agency to see if there have been any complaints filed against the organization.

Ensure that the organization is accredited and certified. Check to see if they are members of the National Foundation for Credit Counseling or the Financial Counseling Association of America. Most non-profit credit counseling agencies are associated with these organizations.

When researching agencies, first ask what information or educational materials they provide for free. Organizations that charge for information are typically more interested in their bottom line than in helping you. Also, ask about the types of services they offer. Limited services can be a red flag. The fewer services they offer, the fewer solutions they may provide for you.

You should also attempt to understand the organization’s fee system — not only how much services will cost but also how employees are paid. If employees make more based on the number of services you receive, look for another credit counseling organization.

MagnifyMoney has come up with a list of some of the best credit counseling options, which is a great place to start. If you are looking for credit counseling as a pre-bankruptcy measure, the U.S. Trustee Program has a list of approved credit counseling agencies that can provide pre-bankruptcy counseling.

How much does credit counseling cost?

Credit counseling can involve both start-up and monthly maintenance costs. The Department of Justice says that $50 per month is a reasonable fee. Further, the National Foundation for Credit Counseling (NFCC) suggests that a start-up fee should not exceed $75 and monthly maintenance fees should not be more than $50 per month.

Credit counseling agencies may offer fee waivers or reductions, depending on your income levels. Where credit counseling is required, the DOJ says that, if household income is less than 150% of the current poverty line, the client is entitled to a fee waiver or reduction.

Other regulations, such as when fees can be collected and circumstances that would warrant a fee reduction or waiver, may also be outlined by your state.

How long does credit counseling last?

While the length of your credit counseling session depends on the complexity of your financial problems, sessions typically last 60 minutes. After the initial session, credit counselors will follow up to ensure you understand the actions you need to take and that you have been able to get started on the plan they developed. Another session may be necessary depending on how your financial situation unfolds following the first session.

What do you accomplish with credit counseling?

According to the NFCC, reputable counseling involves three things. First, there must be a review of a client’s current financial situation. You cannot move forward unless you know from where you are starting. Second, there should be an analysis of the factors that contributed to the client’s bad financial situation. You don’t want bad habits to undermine your progress. Lastly, there must be a plan to address the situation without incurring negative amortization of debt. Negative amortization occurs when the amount of debt you have increases because you aren’t paying enough to cover the interest, even though you are making payments.

Understanding these three factors of good credit counseling gives you a place to start in improving your financial situation.

What is the difference between credit counseling and debt management programs?

A debt management plan is just one solution a credit counselor may recommend based on your financial situation. Having a debt management plan is not the same as credit counseling.

A debt management plan involves the credit counseling organization acting as an intermediary between you and your creditors. Each month you will deposit an agreed upon amount of money to your credit counseling agency, which they will, in turn, apply it to your debts.

The credit counseling agency works with your creditors to determine how the amount will be applied each month, and negotiates interest rates and any fee waivers. It’s important to call your creditors directly to check whether they are open to negotiating interest rates or offering waivers for fees. In some cases, a credit counseling firm may promise to negotiate those items for you but be stonewalled when they discover a creditor isn’t even open to the discussion.

Before agreeing to a debt management plan, make sure you understand any fees associated and any choices you might be giving up. For example, some debt management plans may require you to give up opening up new lines of credit for a specified period of time. Remember that a debt management plan is just one of many solutions a credit counselor may advise you to consider.

How does credit counseling impact your credit score?

Not directly. While the fact you are in credit counseling may show up on a credit report, that does not affect your credit score. The actions you take as a result of credit counseling, however, can impact your score.

For example, if you don’t choose a reputable credit counseling agency, the agency may submit a payment on your behalf late to your creditors. So even though you submitted your payment on time to the credit counseling agency, your score may still be dinged. This is just one reason why it’s important to make sure you use a reputable credit counseling agency.

Who should consider credit counseling, and when?

While credit counseling is sometimes required, such as in instances of bankruptcy, you always have an ability to seek credit counseling.

Boston-based Bankruptcy attorney Julie Franklin explains, “For bankruptcy purposes, there are two course requirements — a debtor must complete the first credit counseling course prior to filing and obtain a certificate that is filed with the court in their initial bankruptcy petition documents. Post bankruptcy filing, the debtor is required to take a second course, and upon completion, the certificate that is issued must be filed with the court in order for the debtor to obtain an order of discharge.”

Anyone struggling with their personal finances can consider credit counseling as an option. Franklin also notes that “the first credit counseling course is a tool for debtors, as it compels the individual taking the course to closely examine the household assets, income, liabilities and spending habits to determine if there’s a way to save the debtor from having to file bankruptcy.”

If you are considering bankruptcy, you will have to attend some credit counseling anyhow, but doing so could also help you avoid filing for bankruptcy at all. Keep in mind that filing for bankruptcy will always have a significant effect on your credit score, and can hurt your changes for getting loans or new credit for years to come. If you can avoid it, you probably should.

Voluntary credit counseling might not help if you are already being sued to have a debt collected. However, you may be able to negotiate terms with the debt collector that result in a withdrawal of the suit if you agree to enroll in credit counseling and possibly a debt management program. Not all creditors will agree to such terms, but it is possible.

Bottom line

Many people run into trouble with their finances, whether they have too much credit card debt, are struggling to make their housing payments or just find general budgeting to be a challenge. Some people are dealing with more serious issues, such as potential bankruptcy. There are credit counselors available to help you with any difficult financial situation you may be facing. The most important thing is to ensure you work with a reputable credit counseling agency, so do your research first. A good credit counselor can help you get on the road to financial health, but working with a bad one can lead to more problems than you already have.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Liz Stapleton
Liz Stapleton |

Liz Stapleton is a writer at MagnifyMoney. You can email Liz here

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Credit Cards, Identity Theft Protection

When Banks Can Refuse to Refund Fraudulent Debit Card Charges

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

ATM

Typically, debit cards that are used as “credit” are offered the same protections as credit cards. This means that if you use your debit card in a store and choose “credit” instead of entering your PIN number, you should receive the same protections as if you used an actual credit card. However, we do encourage you to double check the fine print your bank provides on this matter before assuming your debit card will receive those protections.

But here’s a scenario where your debit card is riskier than your credit card. If you withdrawal money at an ATM (or any store doing cash back) using your PIN number, you have additional risk. If someone steals your pin number with a skimming device at an ATM, then he has direct access to your money. This isn’t like credit card fraud with obnoxious charges you need to dispute. This is your hard-earned cash being taken directly out of your checking account. And if you aren’t careful, you might not be able to recoup your losses.

So, what can you expect if you are a victim of debit card fraud?

Timeline for Being Able to Get Your Money Back

If you are a victim of debit card fraud, you are responsible for the following:

  • $0 if you report the loss or fraud immediately and the card has not been used,
  • Up to $50 if you notify your bank within 48 hours of your lost or stolen card,
  • Up to $500 if you notify the bank with 48 hours and 60 days of your lost or stolen card, and
  • All of the fraudulent charges if you don’t notify the bank until after 60 days.

It’s important you don’t delay in reporting the fraud to your bank if you want to be able to get all of your money back. If you were the victim of theft because the crook skimmed your info and used your PIN, then you may be on the hook for the $50 because you couldn’t report to the bank before the card was used. You didn’t know it had happened until the strange transaction showed up!

It may seem unfair to be responsible for charges that you did not actually charge yourself, but to avoid that scenario and protect yourself, consider taking the following precautionary actions.

What You Can Do To Protect Yourself

To protect yourself against debit card fraud, you should do the following:

  • Only use an ATM inside a bank (this will lesson the likelihood that a scanner is on an ATM)
  • Cover your hand when you type your pin into an ATM (to protect yourself against any devices attached to the ATM from getting your PIN)
  • Set up text alerts for each transaction over $0.01 on your card. This way you’ll be immediately alerted if a bogus charge is made
  • Monitor your bank on a regular basis (so you can give notice of fraud immediately)
  • Report stolen funds immediately (so you’re not responsible for the charges)
  • Check-in annually with your bank as to the policies regarding debit card theft (know whether your debit card is specifically protected and to what extent)

While you can notify the bank by phone, it is best to get everything in writing. For purposes of the time requirement, notice is considered given when you put the letter in the mail. It’s even better if you send the mail certified. You can, of course, send notice by mail and call. Whatever you do, keep a record of your communications you have with the bank. This will put you in the best position if you have to escalate your problem.

Remember that if you take the actions listed above, you will be more protected than you otherwise would. Even if you didn’t do anything wrong, like in the example above, you can still find yourself stuck with fraud charges that your bank won’t reverse. These specific steps will help you protect yourself, even when you’re not at fault. This is particularly important if you use your debit card frequently.

Don’t want to use a credit card? Learn how to survive with just debit cards here. 

Debit vs. Credit: How to Decide

Using a debit card forces you to keep your spending in check because you cannot spend more than you have in the bank. However, it may be riskier than using a credit card for the reasons described above. Discover, for example, now offers a Freeze It® on/off switch for your account. If you’re concerned because you’ve lost your card, you can temporarily freeze your account and Discover will not authorize new purchases, cash advances or balance transfers.

Discover it® Balance Transfer

Intro BT APR

0% for 18 months

Balance Transfer Fee

3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

Regular APR

14.24% - 25.24% Variable

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

If you’re not sure which is best for you, ask yourself what do you value more – your spending being limited or the additional protections from fraud. If you can control your spending, then you may be better off with a credit card. If you are a spender, however, then take the additional steps listed above to make sure you fully understand your specific liability in the event of debit card fraud. If you feel your bank is behaving unethically and should be refunding you, then reach out to the Consumer Financial Protection Bureau to file a complaint.

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Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at [email protected]

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