Should You Apply for A Card with an Annual Fee?

When it comes time to get your first credit card, or perhaps get a new credit card, take time to sit down and make a list of everything about the cards that you're interested in.  The PROS and the CONS.  Depending on your credit level, the cards you're interested in, the rewards available (if any), and the fees attached to the credit cards, you can either save a bundle or end up paying an annual fee that simply doesn't make it worthwhile to get the credit card at all.  But, are there actually times when paying the annual fees on certain credit cards makes sense?  

Let's look at some of the reasons you might consider paying those annual fees:

You have a Limited Credit History:  If you're just starting out, it's not always easy to get a credit card in the first place.  Most of the top credit card companies reject your application right off the bat, others promise a certain amount of credit, but hit you with a hefty fee (up to half of the credit limit), and still others charge a higher than normal interest rate.  

Unfortunately, many of the credit cards that are marketed to customers with limited or no credit history also charge an annual fee. However, for these types of cards, you'll typically see an annual fee that's less than a $100, but when it costs you the $100 just to get a credit limit of $200-$300, it's very frustrating to say the least.  But, if your credit score is very low and you're serious about building it up, then this may be the best way to start, so don't discount these credit cards without considering whether it will work for your circumstances.  Sometimes, the end justifies the means.  

2. You Don’t Qualify for a No-Annual-Fee Card

What if you’ve established credit, but it’s not very good? You may not qualify for a mainline cash-back credit card with no annual fee. You may not even qualify for a basic no-annual-fee card designed for cardholders with average credit, like the Capital One Platinum card.

If that’s the case, begin with a fee-bearing secured credit card. With responsible use, it won’t be an indefinite condition, as the best secured credit cards offer a clear upgrade path — on the order of months, not years — for users who make payments on time and utilize credit appropriately.

3. You Plan to Capitalize on a 0% APR Purchase Promotion

Don’t apply for an annual-fee credit card solely to take advantage of a 0% APR purchase promotion. The leading low-APR credit cards with long 0% APR promotions usually don’t charge annual fees. Nor do no-annual-fee cash-back cards like the Capital One Quicksilver credit card, which has a 15-month 0% APR purchase promotion that pairs with unlimited 1.5% cash back on every purchase every day.

That said, a long 0% APR promotion can serve as a tiebreaker when one or more additional fee-favoring conditions are present. For instance, the Blue Cash Preferred® Card from American Express (read our American Express Blue Cash Preferred review) is a top choice for cardholders who spend heavily on gas and groceries. The 6% cash-back rate on grocery store spending, up to $6,000 in annual supermarket purchases, offsets the $95 annual fee several times over when fully exploited.

Blue Cash Preferred also has a 12-month 0% APR promotion on purchases. That comes in handy if you need to drop serious dough at the supermarket ahead of a big event, like Christmas or a graduation party, and don’t have the financial breathing room to pay off the entire purchase in a single month.

4. You Can Easily Clear Minimum Spending Requirements for Your Preferred Card’s Welcome Bonus

Many if not most annual-fee credit cards offer spending-based enticements to new cardholders — variously known as sign-up bonuses, early spend bonuses, welcome offers, and new card member offers, depending on the issuer.

Some enticements are very generous. For example, the Chase Sapphire Preferred card’s sign-up bonus promises 60,000 bonus points when you spend at least $4,000 on eligible purchases within three months of opening your account. That’s a $750 value when redeemed for bookings in the Chase Ultimate Reward travel portal. Sapphire Preferred’s $95 annual fee pales in comparison.

If you can exceed the minimum spending requirements for an annual-fee credit card’s new cardholder enticement without upending your budget, eating the annual fee for the first year or two may be worth it to you.

5. You Travel Frequently & Aren’t Brand-Loyal

Most premium general-purpose travel rewards credit cards carry annual fees. Some clock in around $100, a relatively modest level, but others rise north of $400.

For frequent travelers who aren’t loyal to a particular airline or hospitality brand, that kind of annual outlay can be worth it. When evaluating annual-fee travel cards, look for benefits such as:

  • Complimentary Airport Lounge Access. The most valuable airport lounge access deals aren’t limited to airline-branded lounges, like United Club or the Delta SkyMiles lounge. The Chase Sapphire Reserve® card (read our Chase Sapphire Reserve card review) and The Platinum Card® from American Express (read our Platinum Card from American Express review) both offer access to more than 1,000 airport lounges worldwide through complimentary memberships in Priority Pass Select and the Global Lounge Collection, respectively. With unsubsidized lounge admission typically running in the neighborhood of $60, the value adds up fast.
  • Annual Travel Credit. For frequent travelers too busy to visit airport lounges regularly, the annual travel credit delivers the best combination of value and convenience. Cards with annual travel credits automatically credit eligible purchases until you reach the annual spending cap. For instance, Chase Sapphire Reserve’s $300 credit offsets your first $300 in eligible travel purchases each year, effectively reducing the $450 annual fee to $150.
  • No Foreign Transaction Fees. Most premium credit cards waive foreign transaction fees. If you routinely travel outside the United States, don’t forget your card. You could reduce your net international spending by up to 3% — the standard foreign transaction fee on most cards.
  • Global Entry Application Fee Credit. You only need to reapply for Global Entry every four or five years. But a $20 to $25 annualized subsidy still isn’t bad when combined with more substantial benefits like airport lounge access or waived foreign transaction fees.
  • Car Rental Insurance. Most premium travel credit cards offer complimentary rental car insurance — usually collision and loss — when cardholders pay for the rental in full with the eligible card and decline the rental company’s offer of insurance. It only takes one unfortunate incident for this perk to pay off many times over. In the meantime, cardholders don’t have to worry about paying extra for rental company coverage that may or may not be adequate.

Man Traveler Waiting For His Flight Airport Airplane WindowMan Traveler Waiting For His Flight Airport Airplane Window

6. You Travel Frequently, Usually With the Same Brands

Brand-loyal travelers have different priorities than brand-agnostic travelers. Luckily for them, dozens of co-branded credit cards are happy to oblige.

The two most common types of co-branded cards are airline and hotel credit cards. Regardless of the annual fee, when choosing a co-branded card, pay attention to two things in particular:

The two most common types of co-branded cards are airline and hotel credit cards. Regardless of the annual fee, when choosing a co-branded card, pay attention to two things in particular:

  1. The size and reach of the brand as measured by property count for hotels and destinations served for airlines
  2. The number of partner brands, if any, that accept direct redemptions or transfers of the brand’s loyalty currency

Unless you already know you only plan to visit the same few destinations for the foreseeable future, those two metrics reveal how widely you can use your card and how likely you are to confine most of your travel spending to its ecosystem.

Beyond these, look for co-branded cards with the following perks.

  • Complimentary Airport Lounge Access. Co-branded cards generally restrict complimentary airport lounge access to branded lounges, such as the Delta SkyMiles Lounge for Amex’s Delta SkyMiles credit cardholders. However, some participate in multibrand lounge networks.
  • Complimentary Hotel Club Access. Though not as common, some hotel credit cards, like the World of Hyatt credit card, offer discounted or complimentary access to exclusive club or lounge areas at high-end properties. These facilities often feature complimentary food and beverages along with other perks of entry. And they frequently have stunning views.
  • Automatic Loyalty Status. Many hotel credit cards offer complimentary loyalty status, usually at a lower or middle loyalty tier. Status benefits often include perks like higher base point earning rates, complimentary room upgrades, and free breakfast, though the specific benefits vary by brand and property. Without a card, you must stay with the hospitality family at least 10 nights per year — and sometimes many more — or meet high minimum spending thresholds to qualify for the same status, so this perk can be invaluable. Some luxe general-purpose travel cards offer automatic loyalty status as well. The Platinum Card® from American Express promises automatic Marriott Bonvoy Gold Elite status and automatic Hilton Honors Gold status.
  • Accelerated Progress to Higher-Status Levels. Other co-branded cards accelerate cardholders’ progress toward status tiers. The American Express Delta Reserve card’s welcome offer includes a portion of Medallion qualification miles, the currency of Delta’s SkyMiles Medallion loyalty program, which they typically reserve for true road warriors.
  • Complimentary Award Travel. Complimentary travel is a common feature of premium co-branded credit cards. Some hotel cards offer one or more free nights each year to cardholders in good standing, a perk that by itself can more than offset a sub-$100 annual fee. Many offer additional spending-based opportunities to earn a free night or flight awards.

7. You Can Spend Heavily Enough to Offset the Annual Fee With Rewards

Frequently, moderate to heavy spenders can easily offset the annual fee with rewards on purchases they commonly make.

As an example, Chase Sapphire Preferred cardholders who spend more than $3,800 on dining and travel combined each year earn enough rewards to offset the $95 annual fee.

But the lift becomes heavier as the annual fee increases. Assuming a 5% return on travel spending and not factoring in its airline fee credit, you’d need to charge at least $11,000 in travel to your American Express Platinum card each year to break even.

8. The Card Has Generous Benefits Aligned With Your Lifestyle & Spending Patterns

This scenario usually overlaps with the preceding two, as these benefits are most often associated with premium co-branded and general-purpose travel credit cards. That doesn’t dent their potential value, though.

  • Partner Currency Transfers at Favorable Transfer Ratios. For cardholders with multiple travel loyalty memberships, the potential benefit of this value is difficult to overstate. The best general-purpose travel credit cards, including the Chase Sapphire Reserve® and Chase Sapphire Preferred® cards, set point transfer ratios at 1-to-1 — that is, cardholders may convert 1 point of card loyalty currency to 1 point or mile of partner currency. Since partner currency is usually worth more than card currency, the value of which rarely exceeds $0.015 per point, this is a fantastic way to boost rewards value without much effort.
  • Airline Fee Credit. A general-purpose travel card benefit — most notably of The Platinum Card® from American Express — airline fee credits are enticing for brand-loyal frequent travelers. Platinum’s $200 annual airline fee credit offsets incidental fees, such as baggage fees, charged by one airline of your choice. It effectively reduces the Platinum card’s $550 annual fee to $350 when fully exploited.
  • Hospitality Benefits. Premium co-branded and general-purpose cards alike frequently offer complimentary hospitality benefits — such as complimentary room upgrades and experiences — for guests of specific hospitality brands or collections. Amex Platinum’s Fine Hotels & Resorts benefits are worth an average of $550 per stay, according to American Express. Its Hotel Collection benefits include a complimentary $100 hotel credit to redeem for dining, spa, and resort charges.
  • Brand-Specific Credits. Some travel cards offer credits against purchases made with specific brands. Amex Platinum’s Uber credit, worth up to $200 per year, is particularly generous. Multiple Amex credit cards offer $10 per month in credits against purchases with Seamless and GrubHub, two popular food-delivery apps. Multiple Chase cards offer accelerated points or cash-back earnings on Lyft rides (through March 2022). And the Chase Sapphire Reserve® card offers up to $120 in DoorDash credits over two years (through 2021) plus a complimentary DoorDash DashPass subscription for a minimum of one year. These and similar promotions are more vulnerable to discontinuation than core benefits, so check with the issuer before applying.

9. The Issuer Offers a Clear Downgrade Option

If you decide a year or two into card membership that you’re not getting your money’s worth from your annual fee card, it’s nice to have the option to downgrade your card to a no-annual-fee alternative without closing the account. Closing it can reduce your total available revolving credit and increase your credit-utilization ratio — possibly to the detriment of your credit score.

If it’s not clear whether your preferred card offers a downgrade path, ask the issuer. They probably have a downgrade policy, even if it’s not clearly communicated on their website.

Final Word

Annual-fee credit cards almost always have more generous rewards programs and more valuable perks than comparable annual fee-free credit cards. The dichotomy between the generous fee-bearing Blue Cash Preferred® Card from American Express and the less generous fee-free Blue Cash Everyday® Card from American Express is just one example. Blue Cash Preferred earns double the rewards on grocery store spending and 50% more rewards on gas station spending.

If you’re able to capitalize on any of the scenarios described above to negate your fee-bearing card’s annual fee each year, that card is likely a superior alternative to any annual fee-free equivalent.

And that’s if you even have to pay the card’s annual fee each year. Your mileage may vary, but it’s an open secret that credit card issuers have the discretion to waive annual fees. The 10 or 15 minutes it takes to call your issuer and threaten to close your account can pay off handsomely.

Do you have any annual-fee credit cards? How do you offset those recurring charges and maximize your cards’ rewards and benefits?

Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

10 Ugly Truths About Credit Cards

Credit card debt is one of the most difficult financial obstacles to overcome – interest rates are high, minimum payments barely scratch the surface of the actual debt, and it's just so, so easy to fall into the trap you set for yourself whenever you use your credit cards without having a real plan for paying them off.  Unfortunately, the ugly truth about credit card usage has only gotten uglier in the past few years.  Not only have interest rates risen, but credit card use itself has tripled, and there doesn't appear to be an end in sight.

Here are just a few of the down and dirty truths about credit cards and the debts we carry… and you might be surprised at just how much you don't really know!

1. Nearly Half of the Population is in the Same Boat You Are

That's right, you're not alone.  Nearly half (46%) of all adults carry a balance on their credit cards from month to month, and since interest rates rarely drop, we're all paying a premium for those purchases we made on that card. 

2. It Takes Years to Pay Off Some Balances

If you're like most people, and there are months when you can only pay the minimum payment, it can be very difficult to pay your credit card balances in full, ever.  For example, if you carry $3,000.00 in debt, at 17% interest, over time, your interest charge can easily amount to another $3,000.00.  That's DOUBLE your initial balance – take a look at how much of your monthly payment actually goes toward the principal.  You might be sick.

3. Americans Aren't Paying Off the Balances

Even though we're really good at spending money, it turns out we aren't nearly as good when it comes to paying the balance off.  In fact, for every dollar on average that we pay off, we're adding another $2.65 in new debt.  It doesn't take a genius to figure out that this cannot continue indefinitely.  

4. The Average Household Credit Card Debt Is $5,700 

Even though the overall economy has improved significantly, the average household still carries around $5,700 in credit card debt, and are still unable to pay off much of that debt. 

5. Interest Rates Are Not Coming Down

Even though the economy has improved, and mortgage rates, car loans, and other types of loans have low interest rates right now, most credit cards average at or above 16% interest.  Make just one late payment, and that can jump to 30% (or higher).  

6. Just One Late Payment Will Damage Your FICO Score 

Even though it's better to pay late than not at all, making just one payment that is more than 30 days past the due date can really harm your credit score for a very long time.  Payment histories stay on your credit report for up to seven years and can cause your score to drop significantly. 

7. Baby Boomers Have the Least Amount of Credit Card Debt 

Perhaps it's because baby boomers are aging, but the least amount of credit card debt belongs to the Baby Boomer Generation, while Gen X owes the most.  Born between 1967 and 1981, the average Gen Xer holds a credit card balance that is nearly $8,000. Even more telling, credit scores have historically dropped lower with each successive generation, meaning the successive generations will likely carry a larger balance than the Gen Xers.

8. 20% Of Americans Have More Credit Card Debt Than They Have In Savings

Even though it's recommended that we all build an emergency fund that will cover three-to-six months of living expenses, most people have less than $1,000 in savings, and another 12% don't have any emergency savings at all.  That means an emergency can quickly put most people into credit card debt. 

9. Women Carry Less Debt Than Men 

Even though women are the "shoppers," men actually carry more credit card debt, coming in at an average of $7,407 vs. women, who carry about 22% less, or $5,245. 

10. Most of Us Will Die Carrying Credit Card Debt

Approximately 65% of Americans will owe credit card debt up to the day we die.  That’s more than those of who are not expected to leave this earth without a mortgage.  The average debt, which is more than $4,000, also leaves a legacy that family members have to deal with.

In closing, understand that credit card debt is an ugly problem that we Americans have yet to take control of in our own lives. But, it doesn't have to be the norm – not if you take action now.  Control costs where you can, pay as much as you can on those balances, and stop the cycle before you find yourself struggling. 

Ten Debt Facts You Should Know

There are a lot of methods you might participate in trouble financially, however among the most tough to recuperate from is charge card financial obligation. With its common high interest rate, anyone who utilizes them and doesn’& & rsquo; & rsquo; t settle the balance within the initial thirty days could discover themselves struggling.

1. You Are Not Alone.

If you feel you’& rsquo; re in the minority when it concerns credit card debt, think again. With 46% of the adult population carrying an exceptional balance on their credit cards, you’& rsquo; re in business with a great deal of people. It appears that while it is advised to pay off the balance monthly, more individuals are making it a practice of carrying it forward and paying the hefty insurance rates with it.

2. Large Balances Can Use Up To A Decade To Settle.

Utilizing your card to the max might be simple but paying it off can be really tough. Today, with the average rates of interest at nearly 17%, a $6,000 financial obligation could easily incur another $6,000 in interest in time. Often, if you pay over an extended amount of time, you will wind up paying more in interest than you provided for the purchase itself.

2. Big Balances Can Use Up To A Years To Pay Off.

Utilizing your card to the max may be simple however paying it off can be really tough. Today, with the typical interest rate at almost 17%, a $6,000 debt could quickly incur another $6,000 in interest in time. Frequently, if you pay over an extended amount of time, you will wind up paying more in interest than you did for the purchase itself.

3. We’& rsquo; re Including More Than We Are Settling.

US customers are excellent at spending however not so great when it concerns paying. According to CardHub, in 2016 customers paid their credit card companies $26.8 billion dollars, however they added $71 billion in brand-new debt. That indicates they are just paying off $38% of the quantity they in fact owe.

4. Typical Financial Obligation Owed Is Almost $6000 Per Home.

On average, American homes hold around $5,700 in unsecured debts like credit cards. This suggests that many families weren’& rsquo; t able to make a significant damage in their credit card debt, although other economic factors enhanced over the years.

5. Rates of interest Are Not Boiling down.

While you may think that the financial situation would bring down the high interest rates, however the majority of United States charge card still average 16% or greater. Contribute to that the penalty interest customers should spend for every late payment they make, and you may discover yourself paying as much as 28%.

6. One Late Payment Can Badly Damage Your FICO Rating.

Paying late is much better than not paying at all, but you will pay in other ways. If you are repeatedly late or you pay more than 1 month past the due date, your lender may report you to the nationwide credit bureau. Even one late payment can stay on your report for approximately 7 years and can bring your score down as much as 100 points.

7. One of the most Indebted are the Gen Xers.

The least quantity of charge card financial obligation comes from the Baby Boomers, however the generation that owes the most are the Gen Xers. Those born between 1967 and 1981, hold a typical credit card balance that is almost $8,000. In addition, credit rating have historically dropped lower with each successive generation.

8. One-Fifth Of Americans Hold More Charge Card Debt Than They Have In Their Emergency situation Fund.

It is recommended that everybody have on hand an emergency situation fund that will cover three-to-six months of living expenditures. Nevertheless, a minimum of 12% do not hold any emergency cost savings at all. That indicates that even if they put on’& rsquo; t carry charge card financial obligation, an emergency situation might put them into debt at any time. 8. One-Fifth Of Americans Hold More Credit Card Financial Obligation Than They Have In Their Emergency situation Fund.

It is recommended that everybody have on hand an emergency situation fund that will cover three-to-six months of living expenditures. However, at least 12% do not hold any emergency situation cost savings at all. That suggests that even if they wear’& rsquo; t carry charge card debt, an emergency situation might put them into debt at any time.

9. Men Tend To Carry more Financial Obligation Than Females.

While women are often considered more shopping oriented, it is the men that carry the most financial obligation. With an average debt load of $7,407 rather than ladies with an average debt of $5,245, it is clear who are the most significant spenders. Women’& rsquo; s debt load is a full 22% less.

10. Chances Are High That Many Will Pass Away Carrying Charge Card Financial Obligation.

Records reveal that 65% of Americans can anticipate to pass away still owing a balance on their credit card. That’& rsquo; s more than those who are anticipated to leave this earth with a home mortgage payment due. Usually, people tend to leave a balance of more than $4,000; a legacy that their relative might need to deal with.

It is clear that charge card debt is a substantial problem that Americans have yet to handle. If you’& rsquo; re dealing with charge card debt, it doesn’& rsquo; t need to be the standard in your case. It is better to do something about it now to decrease this cost and offer you a bit more financial liberty so you can really get into enjoying life.

Have You Checked Your Credit Cards Lately?

Have you checked the credit limits on your credit cards lately?  If not, you might want to take time to do just that, especially since roughly 50 million Americans’ credit card accounts were either closed or had their credit limit cut in the past 30 days.  That’s about 1 in 4 credit card holders, and of those, men between the ages of 18-38 years old were particularly affected.

Credit CardWhat’s even worse is that lenders are not even required to tell you when your credit limit is lowered, so you may not find out until you’re ready to actually use that credit card.  Why now, you wonder?  Truthfully, this is another financial side effect of the COVID-19 pandemic.  Early on, lenders reviewed accounts, then lowered some credit limits to reduce their risk of loss if it appeared that consumers would struggle to make payments, or even use the cards to live on, as unemployment skyrocketed across the country.

Sadly, these credit cutbacks occurred just when household budgets were hit the hardest.  Not only are families using their cards frequently right now, but some are having to use them to make ends meet until unemployment funds start coming in, or to buy essential goods.

Unfortunately,  even though this makes sense for the credit card companies, it didn’t make things any easier for consumers.  But, in their defense, total credit card debt has been growing steadily since 2015, and is hovering right around $1.1 trillion nationwide.  And, even before the pandemic, delinquencies had already hit a seven year high as many families struggled to meet payments.

While we don’t have exact details, some cardholders have reported credit limit reductions in the thousands of dollars, so you’ll want to log in to every account to check your limits. Then, if you find your credit limit has been reduced, contact the issuer and request that they reconsider the reduction, or even in some cases, closures of accounts that have been dormant for some time.

In fact, you may want to consider moving a couple of small recurring payments to a dormant card, like Netflix or Hulu subscriptions, and set it up on autopay to handle payments, just so that the card is not considered dormant (and subsequently closed).  Just that one regular monthly charge will keep your credit card account active without adding any unnecessary expense to your budget, thereby  preserving the now-active card’s larger spending limit for true spending emergencies.

10 Ugly Truths About Credit Cards

Credit card debt is one of the most difficult financial obstacles to overcome – interest rates are high, minimum payments barely scratch the surface of the actual debt, and it’s just so, so easy to fall into the trap you set for yourself whenever you use your credit cards without having a real plan for paying them off.  Unfortunately, the ugly truth about credit card usage has only gotten uglier in the past few years.  Not only have interest rates risen, but credit card use itself has tripled, and there doesn’t appear to be an end in sight.

Here are just a few of the down and dirty truths about credit cards and the debts we carry… and you might be surprised at just how much you don’t really know!

1. Nearly Half of the Population is in the Same Boat You Are

That’s right, you’re not alone.  Nearly half (46%) of all adults carry a balance on their credit cards from month to month, and since interest rates rarely drop, we’re all paying a premium for those purchases we made on that card.

2. It Takes Years to Pay Off Some Balances

If you’re like most people, and there are months when you can only pay the minimum payment, it can be very difficult to pay your credit card balances in full, ever.  For example, if you carry $3,000.00 in debt, at 17% interest, over time, your interest charge can easily amount to another $3,000.00.  That’s DOUBLE your initial balance – take a look at how much of your monthly payment actually goes toward the principal.  You might be sick.

3. Americans Aren’t Paying Off the Balances

Even though we’re really good at spending money, it turns out we aren’t nearly as good when it comes to paying the balance off.  In fact, for every dollar on average that we pay off, we’re adding another $2.65 in new debt.  It doesn’t take a genius to figure out that this cannot continue indefinitely.

4. The Average Household Credit Card Debt Is $5,700 

Even though the overall economy has improved significantly, the average household still carries around $5,700 in credit card debt, and are still unable to pay off much of that debt.

5. Interest Rates Are Not Coming Down

Even though the economy has improved, and mortgage rates, car loans, and other types of loans have low interest rates right now, most credit cards average at or above 16% interest.  Make just one late payment, and that can jump to 30% (or higher).

6. Just One Late Payment Will Damage Your FICO Score 

Even though it’s better to pay late than not at all, making just one payment that is more than 30 days past the due date can really harm your credit score for a very long time.  Payment histories stay on your credit report for up to seven years and can cause your score to drop significantly.

7. Baby Boomers Have the Least Amount of Credit Card Debt 

Perhaps it’s because baby boomers are aging, but the least amount of credit card debt belongs to the Baby Boomer Generation, while Gen X owes the most.  Born between 1967 and 1981, the average Gen Xer holds a credit card balance that is nearly $8,000. Even more telling, credit scores have historically dropped lower with each successive generation, meaning the successive generations will likely carry a larger balance than the Gen Xers.

8. 20% Of Americans Have More Credit Card Debt Than They Have In Savings

Even though it’s recommended that we all build an emergency fund that will cover three-to-six months of living expenses, most people have less than $1,000 in savings, and another 12% don’t have any emergency savings at all.  That means an emergency can quickly put most people into credit card debt.

9. Women Carry Less Debt Than Men 

Even though women are the “shoppers,” men actually carry more credit card debt, coming in at an average of $7,407 vs. women, who carry about 22% less, or $5,245.

10. Most of Us Will Die Carrying Credit Card Debt

Approximately 65% of Americans will owe credit card debt up to the day we die.  That’s more than those of who are not expected to leave this earth without a mortgage.  The average debt, which is more than $4,000, also leaves a legacy that family members have to deal with.

In closing, understand that credit card debt is an ugly problem that we Americans have yet to take control of in our own lives. But, it doesn’t have to be the norm – not if you take action now.  Control costs where you can, pay as much as you can on those balances, and stop the cycle before you find yourself struggling. 

It’s October!

Well, it’s October, and you know what that means? Yes, your mailbox is likely filled with all sorts of offers… credit cards with no interest, catalogs with pre-approved lines of credit, and personal loan offers! Some of them look pretty tempting, don’t they? But, should you fill any of them out and return them? Should you complete the application online? Should you even consider the offers at all?

Honestly, yes and no to all of these questions. While the offers are definitely worth considering, you also need to do your research before applying for ANY credit card, catalog card, or personal loan.

First and foremost, check your credit score! Most of the mailers that you receive are based on the demographics of your state, city, town, or even your specific neighborhood, and not necessarily on your specific credit profile, so checking your credit first gives you the basic information that you need to start with before you even consider a single offer. If the offer is for a credit score that’s much higher than yours, you are likely to be rejected, which definitely hurts your credit score. And if the offer is for a credit score that’s much lower than yours, you will most certainly pay a higher interest rate, additional fees, and lose out on the perks that come with a credit card for better credit. So, start with your credit score.

Once you have your credit score in hand, you’re ready to move on to the next step. Consider each offer carefully! Remember, these are bulk rate mailers, and they’re not necessarily tailored to your specific needs, so what looks good at first may not compare to other options that you most likely have with other credit card, catalog, or personal loan vendors.

The best place to start is the individual credit vendor’s website. Are they legitimate? Are the terms that you see in your offer the same as you find online? Are they typically for individuals with credit scores in the same range as your credit score? Remember, these days, everything and anything is fair game to scammers out there trying to steal your money, your identity, or worse, and as such, you must consider everything and anything as suspect.

Once you’ve determined that the offer is legitimate, then it’s time to compare the offer in your hands to other offers that are out there. Are you getting the best interest rate? Are you getting the best rewards? Would you be paying fees? Is there a better option for you?

Unless you do the research, you can and you will lose out on the best credit card offers, and that will most certainly cost you more in the long run. So, do the research first, and then enjoy the benefits of those credit offers!

Here’s a good place to start:


Want the Best Interest Rates? Time’s Almost Up

Getting the best interest rates on mortgages, auto loans, personal loans, and even credit cards depends largely on two things – your credit score and the market.  Yesterday, the Federal Reserve raised the interest rate by .25% and they “signaled” two more planned interest rate hikes this year alone – that means that the rates on every single loan of any kind can be expected to go up by that same .25%.

Now, while that doesn’t seem like a lot of money, over the term of any loan, it can add up to a significant amount of money that you will pay in interest.  For example, that 30 year home loan, or that 6 year car loan, or even those credit cards that you’re only paying the minimum payments on each month… ALL of them will cost more, and not just with this rate increase, but with the two more that are expected before the end of this year.

So, what should you do?  Well, if you’re considering buying a home or a new car, now is definitely the time to lock in those loans!  And those credit cards?  Maybe it’s time to take out a personal loan at a lower, fixed rate so that you can get those paid off, too.  But remember, interest rates are going up again, so you don’t have much time to waste.  Here are some of the best personal loan offers we’ve found today:

Taxes, Budgets & Planning

Well, it’s tax time again and you know what that means? Time to gather all of your 2017 wage and expense information, sit down with the numbers, and file that tax return. Of course, if you’re like most people, when you gather those receipts, you’ll also review your checkbook, bank statements, and even your credit card bills looking for every single deduction. And while you’re looking at all of the ways that you’ve spent money over the past year, you may want to take a little time to think about all of the ways that you might save money this year.

How many credit card statements did you have to review? How high are the balances? What’s the interest rate on each card? And even more importantly, how much could you save if you were able to pay off all those credit cards and make one single, low interest payment each month? Would you save hundreds or even thousands of dollars? How much sooner would you be able to pay off one bill if you had a lower interest rate and if that bill was the only loan that you had to pay each month?

Have we captured your attention yet? If any one of the questions that we have posed sounds like something that you might benefit from, then you might just want to look into taking out a personal loan from one of these lenders:

Want a Higher Limit on Your Credit Cards?

Ever wondered why your credit limit on your credit card is at whatever limit that it is? And how to go about raising that limit? Before the 2009 credit card reforms, it was fairly common to see people with excellent credit who had credit limits of $15,000, $25,000, or even $50,000 on some credit cards. Since then, credit limits have been scaled back so that the higher limits are usually around $5,000 or more, depending on your credit score.

Typically, those with a credit score over 750 are the ones who qualify for these cards, but there are also other tiers that most credit cards are based on:

850 to 781 (superprime): $9,543
780 to 661 (prime): $5,409
660 to 601 (near prime): $2,277
600 to 500 (subprime): $966
499 to 300 (deep subprime): $509

So, how do you get your credit limit increased?

Nearly every credit card company relies on your credit score to extend credit, but once you’ve been approved and have demonstrated responsible usage, the credit card company may utilize different criteria to determine if you’re eligible for a credit-limit increase. For example, they may ask you for updated personal information regarding your salary, they may look at your payment history (especially if you pay more than the minimum amount due), and they will likely look at your credit report.

Most of the time, assuming you have a solid history with a company, you’ll see “automatic” increases, but some companies don’t give automatic increases, and you’ll need to request an increase.

Bear in mind that requesting an increase can affect your credit score, just as having a higher credit limit that you’re utilizing to much of can also negatively affect your credit score, so use your larger credit limit just as wisely as you do the smaller one.