Just because you’ve received an offer in the mail for a rewards card doesn’t mean the offer will still be open when you send in your application. So before you take the time to fill out the form, visit the company website and get the current details.
Because credit card companies have been hit hard with delinquencies and defaults, many are trying to recoup their losses by discontinuing or altering their rewards programs.
Some are shortening the expiration periods, charging higher fees for redeeming the rewards, and putting a cap on the rewards you can earn in a given time period. Others are requiring a higher number of “points” before you will earn a reward, such as airline miles.
If you are already using a rewards card, pay attention to all correspondence from your credit card company. Some of it may be informing you of changes that could effectively wipe out any rewards you have already earned. For instance, you could learn that you have only a month or so in which to redeem those rewards.
Among the changes that have already taken place, American Express has cut some double-miles opportunities on its Delta Sky Miles card and Citibank is eliminating one option for redeeming its Thank You Rewards. In addition, the Chase Freedom card now offers fewer ways for a customer to earn extra cash back.
A few card issuers still do offer rewards that can save you money, and you can learn about them here at enter site name. We’ve done some research for you and offer a few good choices – but do read each offer to see which one is best for you.
Each of us spends money in different ways, so choose the rewards card that offers savings on the items you buy most often.
Recently, Bankrate conducted a survey, asking consumers how their credit card usage might change in the coming year.
50% said their use would not change at all; 1% said they expected to charge more; and 32% planned to charge less. A whopping 15%, however, said they would not use their credit cards at all in the coming year.
This is in keeping with a trend among American consumers to cut back and attempt to get out of debt – the exact course of action recommended by financial advisors in spite of Washington’s plea that we all spend more.
On the other side of the issue, financial analysts are expecting credit card debt to rise this year as more consumers find themselves out of work and unable to keep up with basic monthly obligations.
This prediction is no doubt the thinking behind credit card issuers’ decision to lower credit limits for even their best customers. It is probably also the reason why some credit card issuers are now tracking their customer’s spending habits. Too many grocery purchases seem to signal declining income and a possible future default.
Whether you plan to charge less – or not charge at all – you know that your plans could be changed by the economic conditions around you. The one thing certain about this year is that nothing is certain.
That means it is in your best interest to have that credit available, even if you have no plans to use it.
If you already have credit cards, keep them open by charging a small amount occasionally and paying the balance when the statement comes in. This not only keeps the account open, but creates a good record on your credit report.
If you don’t have credit cards, now is the time to get one or two and use them carefully, for 2 reasons:
A credit card could be the safety net you need in the event of a job loss or a decline in income due to wage cuts being made across the country.
Wisely used credit cards will help build your credit score.
If you are among those fortunate consumers who are in a position to take advantage of low home prices combined with low interest rates, a high credit score will serve you well. The higher your score, the lower the interest you’ll pay on that home mortgage.
Then choose the card most favorable to you and make application. This will give you a A few credit card companies are still sending offers in the mail – and those offers sound too good to resist. Some offer introductory rates as low as Zero percent for a limited time, others offer low rates for the life of a transferred balance – and no balance transfer fee. Others are offering rewards incentives with no annual fee.
If you have a card with a high balance, or if you use your card a lot and the rewards are attractive, you’ll naturally be tempted to take them up on the offer.
There’s just one catch. That fantastic offer has fine print – and the fine print says you’ll get the offer only if you meet their requirements. Your credit score is the strongest determining factor.
They’ll also look at your annual income compared to current outstanding debt. Be careful here – because reporting a lower annual income could affect not only this application, but could trigger a reduction in credit lines with affiliated credit cards.
Chase Bank, for instance, offers numerous cards to individual card holders, but they do share information.
So… you might fill out the application and send it off expecting to receive a card carrying exactly the benefits outlined in the advertisement. And that might not happen.
Instead, you could be sent a card with a lower credit line or a higher interest rate. If you’ve entered a balance transfer, it may have been denied, which is why those offers advise you to continue making payments on the old card until you receive notice of the transfer.
What can you do? You’ve read that canceling accounts is not a good thing to do, but this card does offer terms that fit your needs. In short – you don’t want it!
Credit expert Emily Peters recommends calling to cancel within 30 days, and better yet, calling immediately. Because credit card companies generally report to the credit bureaus only once per month, your new card and its cancellation will probably not be reported. Thus, it won’t help your credit score, but neither will the cancellation harm you.
A better plan:
If you need or want a new card, a better alternative is to do your research and apply for the card you want, rather than respond to the offers in the mail. Explore the offers on this site and see what is available for a person with your credit score.
better assurance of getting exactly what you’ve asked for.
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