If you’ve been watching any TV, visiting any financially focused website, or have opened a financial magazine or newspaper, you’ve probably seen a Chase ad and information about their “Blueprint” program. They’ve done a huge media push over a program that, while a little innovative, only helps people who are carrying a balance. With the average credit card debt, it’s refreshing to see a credit card company offer up tools to help people pay down debt.

I think there are two reasons they’ve pushed these features out. First, it’s great PR to have a credit card company offer features that help people pay down debt. Second, it’s great business to have a credit card company offer features that help people pay down debt because it means they are less likely to default on it! I read the August 2009 Nilson Report, a credit card industry trade magazine, and it listed Chase has having the most outstanding debt at nearly $166 billion. A good customer is a paying customer, not a bankrupt one.

The Blueprint program has four components: Full Pay, Split It, Finish It, and Track It.

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Liz Pulliam Weston recently published an article summarizing and analyzing J.D. Power and Associates 2008 survey of credit card user happiness. They surveyed 8,000 users on five factors: interaction with the company, billing and payment processes, fees and rates, reward programs, and benefits and services.

I was a little surprised to see that the highest score was 783 out of 1,000 for American Express, with Discover taking second with 751. Everyone else surveyed scored less than the industry average of 724!

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When I used to play the balance transfer arbitrage game a few years ago, no fee 0% balance transfers were plentiful. I had my pick of the litter and it usually was a Citi card because they would send the check directly to you. Nowadays, 0% balance transfers are still available but they have 3% balance transfer fees (sometimes capped, oftentimes not) making them good options for people with credit card debt but effectively killing the balance transfer arbitrage games (well, sagging interest rates on high yield savings accounts probably did that more than anything).

However, one place you might look to for a no fee 0% balance transfers is at your community bank. Reader Robert shared an experience he had with a local bank in Connecticut that was still offering 0% balance transfers on their credit cards.

Just thought I would let you know that I received and took advantage of a fifteen month, 0% balance transfer offer with NO fees. This was through a local bank here in Connecticut (Liberty Bank), underwritten by Elan Financial Services. I have not these types of offers for a long time and thought they were dead, but apparently not.

Oftentimes we always think to look for the best offers from national companies like Citi, Discover, Chase, and Bank of America; but the best offers may be in your own neighborhood.

(Photo: smiteme)

I’m often emailed by readers to list what I feel are the best reward credit cards currently available. I personally think that “best” is such a subjective term, the best set of reward credit cards really depends on your spending profile. If you spend a lot in a particular category, you’ll want to get the best card for that category and make sure it has a place in your wallet. If you don’t know what you spend a lot on, you might as well save yourself the hassle and get one that works in all scenarios.

The best cash back credit card is the one that maximizes your reward earnings and converts those rewards into cash or products that you would buy at a favorable exchange rate. Many cards offer high reward points on the front end and then effectively reduce your rewards by converting them at a horrible exchange rate when you redeem them. It’s important to look at both sides of the equation.

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The reports of the death of 0% APY balance transfers are greatly exaggerated.

Many years ago, no fee 0% balance transfers were a dime a dozen. It would be difficult to find a credit card that didn’t offer a no fee 0% balance transfer as the cheap and easy credit flowed like wine at a Great Dionysia Festival. You couldn’t open your mailbox because it was stuffed full with special promotional offers from all your good friends at the major credit card companies.

The fee-free frenzy gave way to new terms like app-o-rama and balance transfer arbitrage. People would go on credit card application binges so that they could get as many cards as possible (an App-o-rama) just to take advantage of the balance transfer offer. It was not unheard of for someone to get $30,000 (and that’s just a conservative figure) in balance transfers just to put it in a high yield savings account earning 4-5% APY (that’s the arbitrage).

Now, balance transfers with 0% APY promotional rates are still available but the fees have been re-introduced and the promotional periods are quickly slipping from 12 months to a mere six. The offer now is less attractive to those looking to arbitrage (bank interest rates are now in the 3-4% range, rather than the 5-6%, cutting the interest earned side of the equation as well) but they are still attractive to those paying double digit interest rates on their existing credit debts.

Good for Debt Recovery

I think the credit card companies re-instituted fees because they found an inordinate number of consumers using these offers to arbitrage rather than pay off existing debt. While they can never be sure how someone is using the transfer, I imagine their accounting departments are telling them that the percentage of people paying off the loan after the promotional period is higher than their projects… so something is amiss.

However, their only reaction is to stop their policy of waiving balance transfer fees. Citi has been the most aggressive in this group as many of their cards have a 3% fee and no limit on the transfer fee. Other companies like Discover and Chase will also have a 3% fee but cap the fee at a double digit amount such as $75 and $99, respectively. The cap is enough to dissuade all but the most hardcore balance transfer arbitragers but it makes the cards good candidates for people looking to actually transfer debt.

Watch Out For…

Whenever you take on debt, there are always things you need to be aware of. After years of blogging, watching these offers, participating in arbitrage myself, and reading trade publications like Cards and Payments, I learned that you can get in trouble if you’re not careful.

It will affect your credit history and score. Every time you apply for a card, it’s recorded on your credit history and your score may be negatively affected. Every time you are approved for a card, it’s recorded and your score can be negatively affected. One thing to be very cognizant of is the long term effects of balance transfers (and any credit activity). It doesn’t make much sense to take on new credit card if you’re a couple months away from buying a home. The savings you’d get on the transfer will look like a drop of water in an Olympic-sized pool when compared to your mortgage loan.

Balance Transfer, not Cash Advance: It is very important that you request a balance transfer rather than a cash advance or otherwise ask for a “check.” The confusion comes from when you request it. I’ve known someone to request a “check for their credit limit,” which the CSR conveniently understood to mean that he wanted a cash advance rather than a balance transfer, which is what he actually wanted. Balance transfers often come by way of check, I know Citi does this, so you can see why there was confusion. Unfortunately, cash advances aren’t billed the same as balance transfers. Often times the cash advance doesn’t have the 0% APR promotional rate and the fee structure might be different. One one card I saw, there was a cap of $75 on the fee for a balance transfer but no maximum for cash advances. Be very specific when you make your request to say balance transfer.

Balance transfer fees: The best deals in balance transfers are those that have no fee whatsoever. Those types of no fee 0% balance transfer offers were abundant a year or two ago but are nearly impossible to find now. The next best thing is to find a card that will charge a percentage based fee but cap the maximum they will charge. Many Discover cards have a 3% fee with a $75 cap. If you transfer a balance greater than $2,500, the percentage will be lower than 3% because of that cap. If you transfer $5,000, the fee is now only 1.5% of the balance.

Post-0% APY interest rates: If you’re using balance transfers to combat debt, be very aware of the post-promotion interest rate you’ll be charged. You can often read this off the “important fee, APY and promotion” terms & conditions sheets for each card. What you’ll want to look in the rates section and they will often explain where the rate will go. Many cards will have the balance transfer interest rate increase to the standard APR for purchases, which is often pegged to the WSJ Prime Rate + some percentage.

Default Rules: Defaulting generally refers to when you fail to make a required payment on your credit card. If you “default,” then the credit card company often increases the interest rate on your debt to the Default Rate (also listed on those rate & fee T&Cs), which can be extremely bad. There are also several other events that can trigger a default other than non-payment. In the case of Discover, some cards have a clause that warn a default could be triggered if you exceed your account credit limit twice. The default rate on most cards is a staggering 23.99% – 28.99%, so knowing the rules is absolutely crucial.

A few years ago, some companies began enforcing a concept known as Universal Default, where defaulting on any other loan or payment resulted in defaulting on that card, though that’s slowly been abolished. Check your T&Cs to ensure the card doesn’t have that policy.

Always Be Diligent

The number one rule of working with credit cards is that they require diligence and lots of reading. Every card has its own set of rules, terms and conditions; be sure to review them and make sure you understand everything you’re agreeing to. You can take a few days to review an offer before applying, it’s much easier to change your mind before you’ve sent off your information.

I hope you found this guide informative!

All photos taken by thetruthabout.

A little while ago Chase ran a sizzling hot promotion where if you signed up for their Chase Freedom card and made a purchase, they’d reward you with $250 (Chase $250 promotion) but lately they’ve been a little tighter on the promotions, until today. Now, if you apply for a Chase Freedom card, you can get $50 after your first purchase plus get 3% cash back at certain locations and 1% at others. It’s not as hot as the $250 promotion from a few months back but it’s certainly better than nothing if you were looking to snag the Chase Freedom card in the first place.

If $50 isn’t enough for you, check out these credit card promotional offers, many of which offer $100 gift cards.

Liz Pulliam Weston of MSN Money asked five credit card industry experts (basically representatives of companies that run credit card websites) and a frequent flier guru for their favorite cards in one of three categories: travel programs, cash-back programs, and savings programs. Travel programs are those cards that offer miles and upgrades and perfect for those with a lot of travel each year. The cash-back programs are, as you would expect, those cards that offer the best cash-back rebate. Finally, the savings programs are those cards that give you savings towards something, instead of straight cash, such as for a house, a car, or even directly into a brokerage account.

One trend you’ll see is that all of the winning cards are American Express! Is this some kind of conspiracy? Hardly. American Express is less widely accepted because they have higher merchant fees. The higher fees means that they’re able to offer higher reward earn rates because their profits are better. So, in each category you’ll see an American Express card winning out.

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I love the Consumerist’s Confessions articles and recently they had one from a Chase representative, which taught me quite a bit about the inner workings of a bank and credit card company. The Confessions articles are fantastic because you get actionable information from an insider willing to tell you how things really work. In this case, it’s a customer representative and they validate a lot of ideas people have had about how to work with them. Here are the lessons I’ve learned and distilled from the confessions article.

Be Civil

First off, you should be civil and courteous to anyone you ever deal with. There’s simply no reason to be a prick about anything, even if you are having the worst day of your life. Everyone you deal with is a human being and everyone, deep down inside, wouldn’t mind helping someone out if that person is being nice to them. No one likes being talked down to, insulted, berated, or any of the other things you’d be doing if you flipped out on them. So be civil, courteous, polite, nice, whatever, and you’re more likely to get the results you like.

Get To The Point

Stores are great for books and movies, they’re not good for resolving problems unless the solver needs them. Get to the point of your call ASAP and then let the representative ask pointed questions to dig down deeper. They know the root cause, let them ask questions to find the answer and you won’t waste both of your times giving useless information over the phone.

Three Strata of Credit Card Users

This was interesting and not unexpected, there are three strata of customers (Best, Valuable, and Non-Profit) and I’d guess that every financial institution as at least three categories. What you should take away from this is that you should try to be in the least valuable category (Non-Profit) and learn from the mistakes of the other categories. One interesting point to make is that they don’t consider spending patterns in the calculation (or the confessor just didn’t mention it) because even if you get 1% cash back, the credit card is still earning money on transaction fees. I also disagree with the idea that they won’t waive fees for Non-Profit customers, I’m pretty non-profit and I get fees waived.

Six Months Time Limit

Very valuable to learn, you can get fees waived about once every six months – especially if you’re nice. I would try to get them waived even if you do get hit more often than every six months and then I’d try to fix my behavior so I stop getting dinged all the freaking time.

Those are the things I learned reading that article, did you get anything else out of it?

It sounds like Chase is giving new cardholders some grief when it comes to collecting on the $250 promise they made with their $250 new cardholder promotion, so I hope that I can give some words of advice for everyone.

• Since Chase is giving many people grief, I recommend not participating in their promotions in the future. When I signed up for the American Express Business Gold card, which promised me 25,000 Membership points, they delivered without a single question. That’s how you run a promotion, customers shouldn’t have to fight you or show proof, just to get the promotion you offered.
• That being said, make sure you were actually eligible, the offer was a limited run promotion but it was alive and dead so often in a short period of time, even they might be confused.
• Get it escalated to a supervisor and keep plugging away until they demand a screenshot, then send them this screenshot.
• Don’t let them beat you, perseverance will get you your rightful $250. $250 is a lot of money, don’t let them take it from you.

Good luck!

I just made a trip to China and one of the interesting things I learned before I left was that a credit card will often tack on a foreign currency transaction fee if you use your card abroad – this fee is tacked onto the cost of the purchase and is used to cover the foreign currency exchange, in theory. No matter what the reason, the fee still exists and it certainly would be helpful to know which card issuer charges the most and which charges the least right? So, check out the table below:

Visa and Mastercard automatically charge the card issuer 1% for the foreign currency transaction itself so a lot of the Visa/Mastercard cards will pass that onto the end user (which is included in the number above). Capital One is the lone exception, eating the fee, and Discover and American Express obviously aren’t on that network so don’t have that extra overhead.

It looks like Capital One and Discover are the best for this though I’d argue that you likely want to get a Capital One card because Discover isn’t as widely accepted overseas. It’s the reason why I chose a Capital One card as the best international credit card on my trip to England.