Credit Card Blog

According to a recent post by Banknet360 JetBlue’s American Express card, the Discover More Card, and the Miles Card by Discover were each cited as offering the best credit card deals around, according to a new ratings service.

Banknet360.com said the three cards were tops among airline rewards cards, cash rewards cards, and travel rewards cards, respectively.

The JetBlue card offers two miles for each dollar spent, has an low introductory rate of 3.99% and, because it is an American Express card, includes emergency assistance, purchase protection, extended warranty services, and as much as $100,000 in travel accident insurance.

The Discover More Card was voted best in the cash rewards category because it allows for 5% rebates in some expense categories. The card also has a 0% introductory rate and no annual fees.

The Miles Card by Discover won in the travel rewards category because it pays double miles on the first $3,000 of travel and restaurant purchases, and up to 12,000 bonus miles just for using the card during the first year.

A few weeks ago Bankrate wrote a post on balance transfers and how to transfer to a zero percent interest card, take the credit limit out via convenience checks, invest that money in a high-yield savings account or CD, pay off the card with that money when the zero-percent intro rate expires and keep the profit from the savings account or CD.

After doing some research a few companies seem to have removed the cap from the balance transfer fee. Most companies charge a fee of 3 percent of the amount transferred, capped at $50 or $75.  Here are some of my results:

Advanta: 3%, $5 min, $50 cap

American Express Blue: no balance transfer fee

Bank of America World Points Mastercard: 3%, $10 min, no cap listed

Capital One: no balance transfer fee

Chase Bank Freedom: 3%, $5 min., $75 cap

Citi: 3%, $5 min., no cap listed

Discover: 3%, $5 min., $50 cap

HSBC: 3%, $15 min., $99 cap

Pulaski Bank: no balance transfer fee

Simmons Bank: no balance transfer fee

I also looked at a couple of other BofA cards and found that the Bank of America Platinum Plus Visa says there is no transfer fee, but in the fine print it says this:
“We include Transaction Fees when computing finance charges. Incurring Fees results in an APR exceeding 0% for the billing statement on which Fees appear. The Daily Periodic Rate (DPR) will remain 0% as disclosed”.
Since AmEx doesn’t have a fee on its cards, I looked at the Bank of America Rewards American Express. It says: 3%, $10 min., no cap listed, and the same footnote as above.

So my advice for anyone thinking of doing a balance transfer is to choose your card very carefully and be sure you read the finest of the fine print.

About a month ago we wrote a post on the American Express Members Project and how they were looking to donate money for one great idea. Well the ideas are in and the semi-finalists for “The Members Project” were announced this week by American Express.

The program asked cardholders to submit, discuss and rate ideas to make a positive impact in the world. Project ideas ranged from local community-based projects throughout the USA to international aid projects in Africa and Asia. More than 7,000 project ideas submitted to “The Members Project.”

In the next phase of “The Members Project,” American Express is calling for cardholders to register and vote for their favorite project ideas to narrow down the list to the idea about which cardholders are most passionate. For every cardholder that registers, American Express will contribute $1 toward the winning idea. American Express has committed at least $1 million and up to $5 million to bring the winning idea to life.

For more information visit: http://www.membersproject.com.

With all of the coverage the iphone has been receiving over the last month I decided to find out what will be the next big thing in cell phones. Now we have already gotten to the point where we can take pictures, play songs, and surf the internet with your cell phone. What’s left? Well it seems like the cell phone is just becoming the use-all device where you won’t need to every carry anything else. I believe the next big thing to hit cell phones is that it will double as a credit card.

After doing some research I found the following: Motorola and MasterCard are at work on cell phones capable of secure financial transactions, such as banking or buying groceries with a credit card, the two companies said Tuesday.

Later this year, a few hundred U.S. residents will be testing two such product lines made by Motorola that use MasterCard’s PayPass wireless payment system, according to Motorola.

The Motorola-MasterCard phones will have “the potential to be lifestyle-changing–in essence, your phone will become your wallet, key chain and your ID,” Ron Hamma, a Motorola vice president, said in a statement.

The promised handsets, and the surrounding hype, revisit an idea that was much talked about a decade ago–that consumers could make purchases with cell phones rather than carrying cash, coins, credit cards and bank cards. Instead of having to reach for a wallet or purse, the thinking goes, consumers could wave cell phones over wireless readers, similar to the way a grocery store cashier scans items.

The idea fizzled because wireless data networks were, at the time, too slow and porous. But both Motorola and MasterCard said new technologies developed over the last few years have changed the situation for the better.

Motorola will outfit the phones with Near Field Communication, a powerful and secure wireless signal with a range of just 8 inches. NFC is used in “contactless” credit card readers, which are replacing traditional readers that require cards to be swiped, or gobbled up and spat out.

MasterCard conducted a nine-month trial of the technology, using phones from Nokia, last year in the Dallas area. These phones required an attachment with the PayPass chips inside. The Motorola phones will have the chips embedded, said Oliver Steeley, a MasterCard vice president.

As more information comes out about this product I will keep you posted. Remember, you heard it here first.

Debit cards work differently than credit cards. There is no “balance” to manage or serve as a buffer between you and the merchant. You’d be surprised at the problems that can cause. I have put together a couple of quick examples in how frustrating it can be.

Problem 1: Double funds tie-up

You pull into a gas station, pick a pump and swipe your card. What happens? Turns out the bank sets aside an “approved” amount, say $50, in advance of pumping the gas. Then, when you finish the transaction, your account is charged for the actual amount. In effect, there are two charges to your account.

Problem is, the bank takes up to 48 hours to release the original $50. Travel the country and gas up twice a day, and your account may support less spending than you thought.

Problem 2: Can’t dispute debits

Credit cards allow you to dispute charges. The process can be elaborate, but it works. You can’t do it with debit cards, for the most part.

A friend of mine recently bought three bottles of his favorite Whisky on a cruise ship duty-free shop. The shop didn’t deliver the goods to him before leaving and he went home empty-handed. He was able to successfully dispute the charges. Good thing he used a credit card.

Some companies, however, have started to offer protections similar to credit cards. Consult your card issuer. Visa, for instance, does allow you to dispute charges (should something be wrong with the purchase). If you aren’t successful in disputing it, then you can take it up with the card issuer.

Problem 3: Can’t rent a car

The inability to rent cars may be the best known debit-card pitfall. Rental companies can’t sequester a large enough amount to cover their exposure, so they don’t accept debit cards when you check a car out. You’ve probably seen surprised tourists (and maybe some stranded ones) stunned by the fact that a direct payment simply won’t do the trick.

But if you can get over the initial hurdle, most rental firms will accept a debit card for payment when you turn the car in.

Problem 4: Theft protection

Lose your credit card to a thief, and your exposure is limited to $50. Lose your debit card to a thief, and you’ve got trouble. Why? Because that thief is out spending from the minute your card is gone, and your bank account is being depleted in real time.

Yes, your exposure is also limited to $50 if you inform the bank within 48 hours. But in the meantime the money is gone from your account and it might not reappear quickly.

The bank has up to 10 business days — and up to 45 if an investigation is required — to restore your balance. And if you take more than 48 hours to report a lost card, your liability limit is $500, not $50. Worse yet, if you fail to report a loss within 60 days of a bank statement showing the fraudulent transaction, your loss is unlimited.

Debit-card advice

Here are some rules of thumb for when to — and when not to — use the debit or credit card:

Use credit cards for gas, hotels and rentals. Debit cards don’t work for rentals at all, and hotels and oil companies will tie up more than you’ve bargained for. And you’ll get insurance and other special protections most debit cards don’t offer. Use the debit card for food. There’s no downside here. Eat it, it’s gone, no disputes, and it’s nice not to see the bills for all those margaritas when you return. And you probably use the ATM card for groceries while at home, too, so your payment methods are consistent. Use the credit card for gifts and souvenirs. That way you have a chance to dispute something that isn’t delivered or isn’t what you expected. And it’s consistent with the financial logic of paying with credit for something that lasts. If a debit card is lost or stolen, call your bank immediately. Lost time could turn into big lost money.

Do you have one of those credit card companies that send you a blank check along with your monthly statement?Well, if you use it, you might as well go to a loan shark, according to one consumer group. Consumer Action says that credit card checks are the same as a cash advance on your credit card in most cases. In many cases, putting a $100 on a blank check subjects you to a twelve-dollar fee for the month. That may not sound bad, until you realize it is a 144% annual interest rate. According to Consumer Action that approaches Payday Loan rates.

Use those credit card checks only if you have no other option. Otherwise, shred them!

For those of you with Discover credit cards, it would be important to read the following so that you are aware of some of the changes. I received a small four-page pamphlet from Discover Card announcing changes to the Discover More and Discover Motiva cards. The changes include terms on cash advances, the Late Fee, and assorted changes to the rewards programs.

For the cash advances, they say that once that special rate expires, the standard APR will apply, and if you are late with a payment during that special rate period, your rate will end.

The Late Fee will be $19 if your balance is less than $250 and $39 if it is more than $250. Previously, the late fee was $15 on balances up to $500, and $39 for balances over $500.

In the rewards area, they say they are changing how they calculate total annual purchases for the Cashback Bonus, which will no longer include purchases at warehouse stores or Get More purchases for the Discover More card. (Bye- bye rewards on those mega purchases at Sam’s Club or Costco.) They will also no longer be mailing checks for cash back. Instead, cardholders can choose a credit to the account, an electronic deposit into a designated account, a gift card or electronic gift certificate for partners or make a charitable donation.

The terms and rewards changes go into effect for billing periods after October 1, 2007. The opt-out period ends September 25, 2007. If you opt out of these changes, your account will be closed. If you use your card after September 25, 2007, you have accepted the term changes.

I know most people probably throws away all your junk mail that comes with their credit card statements, but it’s important to look at those inserts.That’s usually how the credit card companies announce changes. And a good card becomes a bad card, you need to be prepared to close the account.