Credit Column

Whether you love it, hate it, or love hating it, credit is a part of our capitalist experience and one that is a double edged sword. Use it responsibly and you’ll discover that the leverage it provides can enrich your life considerably. Use it irresponsibly and you’ll discover that the leverage it provides can put you in a deep hole of debt that can take years to recover from.


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Why I don’t bother with manufactured spending…Gaming credit card reward programs just isn’t worth it

Do you envy colleagues and friends who vacation for free thanks to all of the credit card reward points and cash rebates they’ve earned from work-related travel?

Travel that doesn’t cost them a dime?

Well, the proponents of “manufactured spending” would have you believe that you can enjoy similar rewards even if you spend eight hours in the same cubicle every day.

These enthusiastic credit card bloggers have developed all sorts of schemes to rack up tens of thousands of points and hundreds of dollars in cash rebates with their credit cards without actually spending any money.

Or, to be more precise, without spending very much money.

Now that I’ve done all the research on manufactured spending, I don’t think it’s worth the time and trouble for most people — including me.

But I know it’s the latest money-for-nothing fad out there in the blogosphere, so I’ll walk you through how it works and show you why I’m not going to game my credit cards like this.
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6 costly credit cards to avoid

Sky-high interest rates. Ridiculous fees. Piddling rewards and modest perks.

That’s what makes these credit cards stand out to me.

Let’s spend a few minutes looking at some of the most disappointing deals currently being foisted on unsuspecting consumers and consider what a more reasonable card might offer.

Least Bang for Your Buck: Visa Black Card

Even though it is made out of stainless steel, don’t confuse the Black Card with the famous Centurion Card from American Express it’s copying, or any other metal-level card, for that matter. For its $495 annual fee, you’ll only get one point per dollar you spend – that’s what many other rewards cards with much lower fees offer. You also get access to some airport lounges and a vague promise of “luxury gifts from some of the world’s top brands” as a token of appreciation.

The alternative: You won’t have any trouble finding a reward card with the same, or even more generous, rewards system and charges an annual fee of $100 or less. All of that other stuff? You’re paying a premium price for perks you not want or use.
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My favorite no-fee credit cards provide lots of perks

A credit card that offers cash rewards, a low interest rate and no annual fee? What’s the catch? There might not be one – you may just have scored a good deal.

The best credit cards are the cheapest credit cards and annual fees are often the biggest out-of-pocket expense for consumers who never, or rarely, carry a balance.

They range from $80 or $90 for a typical airline reward card to $500 for prestige cards that cater to the famous and well-to-do — and those who think the card will make them appear famous and well-to-do.

Don’t be fooled by offers that waive the fee for the first year. You’ll forget about it and then 13 months later find a $200 fee charged to your account.

So I’ve been shopping around for the best credit cards with no annual fees.

I found some incredibly attractive terms. Up to 5% cash back on purchases. No interest and even no fees on balance transfers. Introductory interest rates of 0% on purchases and regular interest rates as low as 10.9%. Even a sign-up bonus.

Could one of these be the perfect plastic companion for you?
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How I earn credit card rewards responsibly

The topic of maximizing credit-card rewards seems to be a popular one lately, especially in the world of personal finance blogging.

Many of us use our credit cards to pay our bills and monthly expenses. We earn cash back and rake in the rewards. Some of us have even mastered the envious ability to churn credit-card rewards to pay for awesome vacations.

Because personal finance readers are so financially savvy, we usually take for granted that, for many people, this is a dangerous habit. After all, the average US household credit card debt is upwards of $15,000.

If you do it right, earning credit card rewards is a great money hack. Last year, for example, I earned $450 in cash-back. But you should have control of your finances before trying any kind of hack like this.

Let’s say you have control of your financial situation and you’re ready to play this credit-card-rewards game. How do you play properly? And what precautions should you take?

Here’s what’s worked for me.
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5 signs your credit card sucks

If your credit card sucks, it belongs hereWhen it comes to choosing the right credit card, you’ve got plenty of options. A good card can give you a long promotional period, a great interest rate and reward you with some nice benefits. On the other hand, a bad card at best takes up undeserved space in your wallet, like so many stripes of vanilla ice cream in a carton of neapolitan, and at worst can result in larger balances and serious financial damage.
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Why you spend more when you use a credit card

You tend to spend more if you use a credit card than you would with cashEver feel like you go on bigger spending binges when you use a credit card than you would have with cash? You’re not the only one.

There’s a lot of research that suggests using a credit card to make purchases usually means that those purchases are bigger than what we’d make with cash. But if the math is the same, why should it matter which method of payment you use?
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Can You Really Build Credit Without Credit Cards?

Visa Credit CardIn recent years, there’s been something of a backlash against the credit industry and the credit scoring industry. Some consumers don’t like the idea of using credit cards, and they are getting rid of them.

Unfortunately, the credit industry is so ingrained in our financial infrastructure that eschewing all credit can be detrimental. It’s not just lenders that look at your credit history; insurers, landlords, and even some employers might have a peek at some version of your credit report.

As a result, participating in the credit industry is a necessary evil for many consumers. But what if you could build a credit file without using credit cards or other loans? That’s what alternative credit scoring is all about.


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Are These 5 Non-Credit Items Ruining Your Credit Score?

Ruin your creditWhen we think of having a good credit score, we often think of paying down debt and making sure that we pay our credit card statements on time.

However, there’s more to maintaining a good credit score than just showing good credit habits. Non-credit situations, if reported to the credit bureaus can turn into a problem that results in a lower credit score. Before you think that your utility payments or your parking tickets don’t matter to your credit rating, think again.

Here are 5 non-credit items that could spell disaster for your credit score:


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