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Guide to Credit Card Perks by Credit Score

credit card perks

Credit scores and histories play a tremendous role in determining what, if any, credit card perks are available to cardholders. Those who fall on the lowest rungs of the credit scale will typically find that merely getting a credit card is the perk, while those with good and excellent scores are faced with the somewhat daunting, high-end problem of having to ascertain which perks they can benefit from and which ones return little value.

Credit Card Perks: Poor, Bad and Miserable Credit

Credit card perks for those with credit scores that fit into the poor (580 to 619), bad (500-579) and miserable (below 500) categories have poor, bad and miserable options. This is not only confined to perks, but to the overall lack of credit cards available.

Presently, no major credit card company offers a rewards card for credit scores in this range, and the ones that do offer credit cards to this demographic charge onerous interest rates and substantial annual fees.

Consequently, consumers with credit scores of 619 and below should consider a reasonable annual fee ($49 or less) and an interest rate below 25% to be as good as perks get.

Credit Card Perks: Fair/Average Credit

A credit score in the 620-679 range provides a few more options, but that isn’t saying much. Very few credit card companies offer products to consumers in this category and, like cards for those with the lowest scores, most carry some type of annual fee and inflated interest rate.

Two exceptions to the broadly perk-less options available to consumers with average credit are the Capital One Cash Rewards and Barclays Rewards MasterCard. Capital One’s average credit rewards entry provides 1% cash back on all purchases, but carries a $39 annual fee. Barclay’s offering provides rewards points and does lack an annual fee. However, it carries an interest rate of 24.99% — nearly 10 full percentage points above the national average.

Despite the drawbacks of these cards, the rates and fees they charge aren’t dissimilar from what other companies presently levy on cards to consumers with average credit that lack any type of perks.

Credit Card Perks: Good and Excellent Credit

A consumer with a credit score above 680 is considered to have good credit, while one with a score of 720 or higher qualifies as excellent. Ninety-nine percent of all credit card perks are focused on consumers in this credit score range.

Consequently, the primary issue confronting consumers in search of credit card perks with good to excellent credit scores is narrowing down options to isolate cards that offer the best value.

Best Credit Card Perks

The first step in winnowing down options is deciding which type of reward offering is best. The primary options include:

  • Cash Back Perks
  • Proprietary Reward Points
  • Airline and Hotel Branded Rewards
  • General Travel Reward Miles/Points

Once a determination has been made regarding rewards type, high credit score consumers will generally find that cards matching their rewards interest have varying layers of extra value added perks. These non-reward perks are available on all American Express cards as well as on high end Visa Signature and World MasterCard products.

While the list of extra perks available is somewhat extensive, a few notable benefits available on high end rewards cards include:

  • Enhanced auto rental insurance
  • Travel accident insurance
  • Lost luggage reimbursement
  • 24/7 personal concierge access

Ultimately, credit card perks are best viewed as a reward for consumers who have built up good credit scores as, unlike with just about anything else, money can’t buy these features. Thus, those who have good credit should actively take advantage of the perks available to them while those with less than pristine credit should focus on improving their credit scores so they too can enjoy the benefits available to consumers with good credit scores.

Guide to Credit Card Perks by Credit Score

Credit-Cards – Credit-Cards & Credit Debt

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American Express: Cardmembers Keep Spending, EPS Up 10%

By Steve Schaefer

The first quarter of 2012 was a friendly one for American Express, which reported better than expected results for the January-March period Wednesday.

American Express booked net income of $1.3 billion, up from $1.2 billion a year ago, and earnings per share of $1.07 that were up 10% from 2011 and better than the Street’s consensus call for $1.00

Revenue, net of interest expense, was up 8% to $7.6 billion, in line with estimates and reflecting “strong cardmember spending and higher net interest income driven by moderate growth in the loan portfolio,” according to the Dow Jones industrial average component.

Chairman and CEO Ken Chenault said the increased spending and tight management of expenses led to the record first-quarter results.

“Spending on the American Express network rose 12 percent, remaining strong throughout the quarter, both in the U.S. and internationally. Credit quality continues to be among the best we have ever experienced, and our lending portfolio continued to grow at moderate levels,” he said.

American Express raised its quarterly dividend 11% to 20 cents per share, and is moving forward with up to $4 billion of share repurchases in 2012 and another $1 billion through the first quarter of 2013 after easily passing the Federal Reserve’s stress test on the largest U.S. financial firms.

As to the global breakdown, the company’s U.S. card services unit recorded a 35% jump in net income to $752 million. Provisions for losses in the unit were much higher — $301 million from $47 million a year ago – but attributed to a larger reserve release in the 2011 first quarter. On the international card services side, net income was up just 4% to $197 million.

Chenault highlighted the firm’s “spend-centric business model,” in describing the results. “We knew we wouldn’t have the same benefit from reserve releases and settlement payments from Visa orMasterCard that we had received last year,” he said, and the company was also “concerned about the uneven recovery in the U.S. and a European environment that posed challenges to the global economy.”

The solution for American Express was tight discipline on spending, or as Chenault put it, “we maintained our focus on containing costs and kept the growth rate in total expenses well below that of our revenues.”

That recipe for success and the solid quarter drew little enthusiasm from the market though, as shares fell 0.8% to $57.56 in after-hours trading.

American Express: Cardmembers Keep Spending, EPS Up 10%

Newton Credit Card Blog

Global Payments credit card hack: What do I do?

By Julianne Pepitone

A credit card hack attack on Global Payments is hitting the headlines. Here are answers to some of the key questions it raises.

What happened in the Global Payments breach?

Global Payments, a company that processes card transactions, discovered an an unauthorized intrusion into its servers in early March. The company says it “promptly” notified others in the industry. It didn’t publicly announce the breach until Friday.

The breach affects all major credit and debit card brands, because Global Payments is one link in the long chain involved in card transactions.

When a customer swipes a credit card, the data is sent to a payment processor like Global Payments, which coordinates the steps involved in authorizing the charge and submitting the transaction details to card networks like Visa (VFortune 500) and MasterCard (MAFortune 500). It’s a quick but complicated process, with lots of players in the mix.

What kind of information was stolen? What can the hackers do with it?

Global Payments (GPN) released a statement late Sunday saying thataround 1.5 million card numbers may have been compromised. That’s a big breach, but the odds are good that your card wasn’t among them. There are more than 1 billion credit and debit cards currently in circulation in the U.S., according to the Nilson Report, an industry trade publication.

Card numbers were stolen, but that’s all the thieves got. Cardholder names, addresses and Social Security numbers were not affected, according to Global Payments.

That’s good news. Stolen numbers can be used create to fraudulent cards, but they’re not enough for full-fledged identity theft.

Global Payments is still investigating how the breach happened. The U.S. Secret Service has launched its own inquiry.

What does this mean for me? Should I be worried?

While the threat of a compromised card is upsetting, customers should sit tight. If your card issuer thinks your account may have been compromised, they’ll contact you. Some may need to reissue credit cards or take other steps to contain the damage.

No matter what, you’re not liable for unauthorized charges made on your account.

As Visa (VFortune 500) put it in a response to the Global Payments debacle: “It’s important for U.S. Visa consumer cardholders to know they are protected against fraudulent purchases with Visa’s zero liability fraud protection policy, which exceeds federal safeguards. As always, Visa encourages cardholders to regularly monitor their accounts and to notify their issuing financial institution promptly of any unusual activity.”

How they’ve hacked you

Keeping your online accounts safe

Global Payments credit card hack: What do I do?

Newton Credit Card Blog

6 credit mistakes that can ruin your holidays

By Lisa Bertagnoli

Credit cards can help make a breeze out of holiday shopping. A few missteps, though, and that breeze can turn into a storm of financial headaches. Here are six credit slip-ups to avoid this holiday season, along with patch-up advice for the sadder and wiser shoppers among us.

Mistake No. 1: You now own a half-dozen retail credit cards. Signing up for an in-store credit card to save 20 percent or even 30 percent on purchases that day is tempting. It’s also trouble, says David C. Jones, president of the Association of Independent Consumer Counseling Agencies, a nonprofit trade group based in Fairfax, Va. Sign up for a new card too many times in too short a period, and it can hurt your credit. “And in a lot of cases the interest rates are ridiculous,” Jones says. (A 2010 survey said that nearly two-thirds of retail cards feature an APR of 23 percent or higher. Meanwhile, the annual interest rate on a new bank credit card is roughly 15 percent.) Holiday help: Take a pass and make do with the credit you already have. Or if you absolutely must get a new retail card, get just one — instead of signing up for one in every store you visit.

Mistake No. 2: You’re tempted by delayed-interest offers. A popular offer this time of year is “no interest until 2013,” especially on big-ticket items such as appliances and furniture. So even if you don’t need a new California king mattress and storage headboard to go with it, you buy. Holiday help: Read the fine print before you sign. Retailers “aren’t in business to lose money,” Jones points out. “The truth of the matter is these offers are very carefully calculated.” Either the interest rate is built into the cost of the item, or interest accrues during the “free” period, and you pay it at the end of the free period. “It’s wonderful to use credit to get things you need right away,” Jones notes, “but it’s much better if you pay cash.”

Mistake No. 3: You’re spending more than you planned to. So you walked out of the mall with twice as much stuff as you wanted or needed? No wonder: Retailers are geniuses at getting consumers to spend money. “Marketers know all about the psychology of spending,” says Cicily Maton, founder of and financial planner at Aequus Wealth Management in Chicago. Everything from artful displays to that pile of fetchingly priced stuff at the cash wrap “is geared toward making us spend more money,” she says. Her favorite crafty ploy: Buy-one-get-second-for-(however much)-off, which sends most consumers searching for a sweater or pair of socks they don’t need, just for the discount. “And you’re still spending half as much as you would anyway,” Maton points out. Holiday help: Make a list for every single store you plan to visit, and stick to it, Maton advises. Stay out of stores you don’t need to shop at, she adds. Taking cash, not credit cards, also helps resist temptation, as does a snack before a shopping trip. “If you shop when you’re low on blood sugar, your judgment is impaired,” she says.

Mistake No. 4: You’re a big bargain shopper. Newspaper ads and in-store signs tout half off — even 75 percent off — tempting gifts and goodies, and urge consumers to “buy now, while supplies last.” They’re bargains, right? And as a good shopper, how can you resist? Holiday help: Unless the item is on your list, resist the urge to rush out and buy. “It’s not on sale,” points out Ed Landis, president of Landis Financial Services in Annapolis, Md. “Two weeks later, they’ll have another sale.” Landis also points out that a bit of Internet research often can reveal similar bargains (though be aware of shipping and handling costs).

Mistake No. 5: The bad guys got your credit card number. The keep-it-close protectiveness you feel about your wallet or handbag can fade while shopping online. Yes, you’re safe at home, but talented hackers can breach even secure sites. Less-than-trustworthy e-retailers can neglect to fully secure their websites. Scam artists double down on spear fishing — sending innocent-looking links that, when clicked, download malware onto desktops. That malware records keystrokes and enables thieves to steal any and all data entered into that computer. Holiday help: Make sure e-commerce sites are secure. Look for a small icon of a lock in a lower corner of the screen. The Web address prefix “https” denotes a secure site; the “s” stands for secure, explains Stan Stahl, president of Citadel Information Group, a Los Angeles-based cybersecurity firm. To protect your home computer, download software updates regularly. To avoid malware downloads, don’t click on links in e-mail advertisements; cut and paste them into your browser, Stahl advises. Finally, buy only from e-retailers you recognize; thieves set up pop-up Internet shops this time of year and use savvy search-engine optimization tools and ridiculously low offers ($10 for an iPad, anyone?) as come-ons. Finally, review your credit card statements each month to make sure you, and not a thief, are responsible for the charges.

Mistake No. 6: You’re spending money you don’t have. With mortgage and auto loan rates at record lows, credit card debt falling (it’s dropped by about $180 billion since August 2008) and a slight rebound in the job market, it may be tempting to feel flush, and spend accordingly. That might include tapping into the holiday bonus you know is coming this month or signing up for an extra credit card or two. Holiday help: Don’t do either, advises Chris Karam, chief investment officer at Sheridan Road Financial, a financial-planning firm in Northbrook, Ill. “These are murky economic times,” Karam says, adding that credit-card companies are making offers again because of those low interest rates. “Liquidity has returned, but the ability to spend has not necessarily improved,” he says.

Newton Credit Card Blog

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