5 Benefits of Good Credit

There’s no way around it: Having good credit is important. We hear as much from parents, colleagues and, sometimes, complete strangers. A stellar credit history shows potential lenders that you’re likely to repay loans in full and on time, which can help you lock in better rates on car loans, mortgages and other financial products. What’s more, it’s worth noting that the advantages of strong credit extend far beyond receiving good rates on loans. Here’s a closer look at the benefits of good credit.

Qualify for excellent credit card deals

A strong credit history will help you qualify for the best credit cards, which include low interest rates, rewards and cash back. As well as helping you save money while providing you with a wide range of perks, these factors will encourage you to keep using your credit card, which will boost your credit score if you continue to make payments when they’re due.

Improve chances of landing an apartment

Much like a potential lender, your landlord will want to determine your financial trustworthiness by taking a look at your credit score. This gives him or her better insight into how likely it is that you’re going to pay your rent on time every month. If that three-digit number is too low for your landlord’s liking, procuring your dream apartment may become difficult. Even if you’re able to get an apartment with a bad credit score, your landlord may increase the security deposit or request a co-signer on the lease.

Receive better car insurance rates

In order to predict potential losses on customers, some car insurance companies factor in credit scores when determining the price of monthly premiums. The better your credit score, the better your shot of receiving a reasonable deal. You may be turned down altogether if your credit score is too low.

Lock in utility services

Before taking you on as a customer, a utility company might look at your credit report to get a better sense of your payment history. If your credit history isn’t up to snuff, the utility company may require you to pay a deposit or ask for a so-called letter of guarantee in which a friend or family member agrees to pay your bill if you fail to.

Get a job

Though they have to get your permission beforehand, some employers will request to see your credit report as part of your job application. Red flags like past bankruptcies or frequent late payments may make them reluctant to extend you a job offer, as they may worry that these financial struggles will distract you from the demands of the job.

Because the effects of good credit can be felt in so many parts of your life, it’s important to do what you can to boost your credit score. Paying your credit card bills in full and on time is a great place to start, and will set you up for success as you apply for jobs, apartments and insurance coverage.

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Reduce Credit Card Debt with These 6 Tips

Having more than $15,000 in credit card debt is a lot, but it’s about average for U.S. households, according to NerdWallet analysis. Carrying this, or any amount of credit card debt, from month to month can be overwhelming and disastrous to your credit score. Paying off this debt is possible, but it takes focused determination and smart budgeting.

Before you start sending the credit card company a stack of money each month, sit down with all of your account information and total your credit card debt. That goes for all credit cards, including store cards and gas cards. Take a look at your balances, interest rates and minimum payments due.

1. Make a plan. If you have an end date in mind (the date by which you’d like to have all zero balances), use the NerdWallet payoff calculator to determine just how much you’ll have to pay each month. This tool is also great for illustrating just how fruitless it can be to pay only your minimum payment every month.


2. Consider a balance transfer. Credit card companies often offer balance transfer credit cards with 0% APR for an introductory period of up to 18 months. If you’re paying 19% interest on a high balance, cutting this interest could save you hundreds of dollars. NerdWallet’s most recent roundup of balance transfer cards will help you find the one that works best for you.


3. Stop spending. The more you add to your credit card balance, the more difficult it will be to reduce your credit card debt. So, stop spending. If you don’t have cash, don’t make the purchase.


4. Look for places to save. Find places to cut expenses and direct those savings to your debt. Maybe you can go without cable television for a few months, or perhaps you can reduce your restaurant budget to only one meal out per month. Cutting back on the things you enjoy can have double the benefits: reducing your spending and giving you incentive to pay off your debt.


5. Look for opportunities to earn. Maybe you can take on a part-time job for a few months or earn some cash on the side doing freelance projects. If you’ve made your household finances work without a part-time gig, all of the money earned here can go toward paying off your credit card debt.


6. Be flexible. You didn’t rack up your credit card debt overnight, and it may take much longer to pay it off. If you make a plan to put $400 on your balance every month, but have a tough month, don’t feel bad about cutting that payment to $350 (as long as you always make at least the minimum payment). Just pick it back up the following month (or earlier) with renewed dedication to getting debt-free.

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Will My Spouse’s Debt Hurt My Good Credit?

Handling finances within a marriage can either be a piece of cake or seem complicated and complex, especially if your spouse’s credit isn’t as healthy as yours. You may be asking yourself if your spouse’s debt will hurt your good credit.

If you’ve already tied the knot or are thinking of getting married, you should know a few things. Marriage itself does not affect your good credit or your individual credit report, according to credit reporting agencies like Experian. In fact, you will always have a separate credit report from your spouse. Even if you change your last name, your good credit will still exist, since credit scores and reports are based on your personal Social Security number.

Your spouse’s credit, in turn, will not instantly improve just because of your married relationship.

However, your good credit has the potential to become damaged when and if you and your spouse commingle your credit.

For example, if you become a joint cardholder on any one of your spouse’s existing credit cards, late payments and delinquency will reflect on your credit report. When you agree to become a joint cardholder, you become responsible for the existing and accrued debt on those cards. If you are simply an authorized user, you are not technically responsible for any of the debt, but late payments will reflect on your credit report.

The same is true if you and your spouse apply and take advantage of offers for credit cards for people with good credit. If you apply for a credit card with your spouse and are approved, reports for that credit card will appear on both your credit reports, negative or positive.

Your good credit can also be damaged if you and your spouse cosign on a loan for a car or even for a mortgage. Simply applying together will not have an affect on your credit, though your spouse’s poor credit could win you a higher interest rate or even a decline stamp. However, if you are approved, your good credit could take a hit if you or your spouse make a late payment on the loan for which you were both approved.

If you are set on combining your credit without giving up your ability to apply for credit cards for people with good credit, one option would be adding your spouse as an authorized user to your existing credit cards or new ones. Every time you pay on time, your spouse’s credit will improve.

Many financial advisors, however, recommend that to protect your credit, you keep your credit separate from your spouse’s at least until your spouse’s credit record improves. It is also recommended that you and your spouse sit down and review your credit reports and scores annually.

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Gas Cards and Bad Credit: How They Help, How They Can Hurt

If you have poor or no credit but still want a credit card that earns you solid rewards on gas spending, your options will likely be limited to a bad-credit credit card or a gas station card.

While these cards tend to offer fewer rewards, higher interest rates, and annual fees than traditional cards do, they may still be a wise choice, as they can help you rebuild your credit while earning some cash back on fuel purchases.

What is a gas rewards credit card?

A gas credit card rewards you for every purchase you make at the pump. For example, a company may offer a 2% cash-back bonus every time you swipe the card to pay for gas, so by spending $200 a month at the pump, your savings would equal $4. If you commute for work or travel a lot, a gas rewards card can make a whole lot of sense.

A gas credit card from an actual gas station is a little different. BP, Exxon and Shell all offer their own gas cards, but to get rewards, you are limited to using the cards at their stations. In addition, the interest rate charged on these cards tends to be higher than for regular credit cards, and you can often get the same rewards or better with more flexibility by using a regular gas credit card.

Choosing a gas credit card for bad credit

You have to be careful when looking at gas credit cards’ annual percentage rate (APR).

For example, say a card comes with unlimited 1% cash back gas rewards and no limit to the rewards you can earn, and you can qualify with limited or bad credit. However, the card also comes with a $99 annual fee and an APR between 17.9% and 23.9%, depending on your creditworthiness.

In this case, getting the card might only make sense if you expect to spend enough on gas to outweigh the annual fee. For this to happen, you’d have to spend a whopping $10,000 a year on gas ($100 in rewards at 1%). In addition, you really can’t carry a balance on the card, as the interest costs would outweigh any of the rewards you receive.

Another thing to keep in mind: Some gas stations charge more if you use a credit card instead of cash at the pump. Even if the difference is a mere five cents per gallon, the additional cost will likely still outweigh any rewards you receive from you gas credit card. So try to fill up at a station that offers gas for the same price, cash or credit, as long as it’s a reasonable price compared to other stations.

Why a bad-credit credit card can make sense

If you have poor credit or no credit history at all, it may still be worth signing up for a gas credit card for poor credit, even if the card comes with high interest costs and fees.

By signing up for such a card, using it and paying it off on time each month and maintaining a low balance on the card, you can improve your FICO credit score, since your payment history is sent to the major credit bureaus.

Credit cards also come with numerous fraud and security features that debit cards don’t offer, which makes them safer to use at the pump. For example, credit cards offer zero fraud liability for unauthorized transactions, which means you won’t be held responsible for any unauthorized or fraudulent transactions.

Finally, keep in mind that you only get charged interest on your card if you carry a balance. So the 20% APR you read about will actually be 0% if you pay off your balance in full each month.

Bad-credit credit cards hurt you if you carry a high balance, but you can avoid paying any interest and improve your FICO credit score by paying off the balance in full each month, while also earning some decent rewards for your gas spending.

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5 Sources of Credit Card Stress — and How to Get Past Them

We live in a hectic world, and the last thing most of us need is one more thing stressing us out. But the truth is that a lot of everyday items and situations could be sources of anxiety — including your trusty credit card.

Luckily, there are easy ways to deal with tension caused by your plastic. Take a look at five common sources of credit card stress below, and our tips for getting past them.

1. You charged more than you can afford to pay off in one month

Overspending with credit cards happens to everyone from time to time. If you got slammed with a bill you don’t have the funds to pay off in full, you have a few options for avoiding interest charges:

• Use savings to pay it off.


• Rework your budget to accommodate the bill.


• Transfer the balance to a 0% card.

But only do the transfer if it’s a really big balance that would take longer than six months to pay off — otherwise, the balance transfer fee you’d pay probably isn’t worth it.

In the future, be sure to track your spending carefully to avoid a larger-than-expected bill.

2. You missed your payment due date

Forgetting to pay a bill on time can be embarrassing, but the first thing you should do if this happens is call up your issuer. Apologize for missing the due date and make arrangements for the payment — if this is your first offense and you’re only a few days late, they might even be willing to waive the late fee.

If you’re more than 30 days past due, there’s the possibility your late payment has already been reported to the three major credit bureaus. If so, don’t panic — pay what you owe (including interest and fees), and make it a priority to pay on time in the future. The mark will stay on your credit report for up to seven years, but as long as you keep making responsible moves, its effect on your credit score will lessen over time.

In the future, set calendar reminders for your due dates, or sign up to get text or e-mail alerts from your issuer when a payment is due.

3. You got hit with an unexpected fee

The CARD Act of 2009 went far in helping reduce unfair or unexpected credit card fees. But they do still happen. If a fee you weren’t expecting shows up on your credit card statement, it’s best to get in touch with your issuer for an explanation. There’s always the possibility you were charged the fee in error, which is why looking over your credit card statement carefully every month is key.

Assuming the fee is no mistake, you should explain to your issuer that you didn’t anticipate the charge; they might be willing to reverse it this one time. Either way, be sure to ask for a clear explanation of how it can be avoided in the future, and call this one a lesson learned.

4. Your card was involved in a data breach

If you recently shopped at a store that was involved in a breach, take a deep breath and relax — it’s possible that your data didn’t make it into the hands of criminals at all.

The best thing you can do is monitor your credit card account and await further instructions from your issuer. They may decide not to take any action, but if they feel your account is at risk, they’ll notify you about canceling your card. In this case, simply follow their directions and wait for your new card to arrive.

On the other hand, if you spot a sketchy transaction on your account, be sure to get in touch with your issuer immediately. They’ll likely cancel your card, and, according to the terms of the Fair Credit Billing Act (FCBA), you won’t be responsible for the fraudulent charge since it happened while the card was in your possession. Phew!

5. You got hit with an unauthorized charge

Speaking of unauthorized charges, this is another stressor your credit card could cause. If a charge you didn’t make shows up on your online account or statement, again, it’s important to notify your issuer right away. They may take some time to investigate, but keep in mind that the FCBA limits your liability for unauthorized charges to $50.

What’s more, that liability drops to $0 if the fraud happens while the card is in your possession, or you report the theft of your card before any charges are made. Plus, most credit card issuers have $0 fraud liability policies, so the chances that you’ll have to pay anything are slim.

It might be a little bit of a hassle to untangle, but just keep reminding yourself that an unauthorized charge isn’t your fault and you likely won’t be out any money in the end. That should bring some needed peace of mind!

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5 Sources of Credit Card Stress — and How to Get Past Them

We live in a hectic world, and the last thing most of us need is one more thing stressing us out. But the truth is that a lot of everyday items and situations could be sources of anxiety — including your trusty credit card.

Luckily, there are easy ways to deal with tension caused by your plastic. Take a look at five common sources of credit card stress below, and our tips for getting past them.

1. You charged more than you can afford to pay off in one month

Overspending with credit cards happens to everyone from time to time. If you got slammed with a bill you don’t have the funds to pay off in full, you have a few options for avoiding interest charges:

• Use savings to pay it off.


• Rework your budget to accommodate the bill.


• Transfer the balance to a 0% card.

But only do the transfer if it’s a really big balance that would take longer than six months to pay off — otherwise, the balance transfer fee you’d pay probably isn’t worth it.

In the future, be sure to track your spending carefully to avoid a larger-than-expected bill.

2. You missed your payment due date

Forgetting to pay a bill on time can be embarrassing, but the first thing you should do if this happens is call up your issuer. Apologize for missing the due date and make arrangements for the payment — if this is your first offense and you’re only a few days late, they might even be willing to waive the late fee.

If you’re more than 30 days past due, there’s the possibility your late payment has already been reported to the three major credit bureaus. If so, don’t panic — pay what you owe (including interest and fees), and make it a priority to pay on time in the future. The mark will stay on your credit report for up to seven years, but as long as you keep making responsible moves, its effect on your credit score will lessen over time.

In the future, set calendar reminders for your due dates, or sign up to get text or e-mail alerts from your issuer when a payment is due.

3. You got hit with an unexpected fee

The CARD Act of 2009 went far in helping reduce unfair or unexpected credit card fees. But they do still happen. If a fee you weren’t expecting shows up on your credit card statement, it’s best to get in touch with your issuer for an explanation. There’s always the possibility you were charged the fee in error, which is why looking over your credit card statement carefully every month is key.

Assuming the fee is no mistake, you should explain to your issuer that you didn’t anticipate the charge; they might be willing to reverse it this one time. Either way, be sure to ask for a clear explanation of how it can be avoided in the future, and call this one a lesson learned.

4. Your card was involved in a data breach

If you recently shopped at a store that was involved in a breach, take a deep breath and relax — it’s possible that your data didn’t make it into the hands of criminals at all.

The best thing you can do is monitor your credit card account and await further instructions from your issuer. They may decide not to take any action, but if they feel your account is at risk, they’ll notify you about canceling your card. In this case, simply follow their directions and wait for your new card to arrive.

On the other hand, if you spot a sketchy transaction on your account, be sure to get in touch with your issuer immediately. They’ll likely cancel your card, and, according to the terms of the Fair Credit Billing Act (FCBA), you won’t be responsible for the fraudulent charge since it happened while the card was in your possession. Phew!

5. You got hit with an unauthorized charge

Speaking of unauthorized charges, this is another stressor your credit card could cause. If a charge you didn’t make shows up on your online account or statement, again, it’s important to notify your issuer right away. They may take some time to investigate, but keep in mind that the FCBA limits your liability for unauthorized charges to $50.

What’s more, that liability drops to $0 if the fraud happens while the card is in your possession, or you report the theft of your card before any charges are made. Plus, most credit card issuers have $0 fraud liability policies, so the chances that you’ll have to pay anything are slim.

It might be a little bit of a hassle to untangle, but just keep reminding yourself that an unauthorized charge isn’t your fault and you likely won’t be out any money in the end. That should bring some needed peace of mind!

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NerdWallet’s Sexiest Credit Cards Alive 2014

Contrary to what you might think, Nerds know sexy when we see it. In fact, we’ve done some analysis and put together a list of the sexiest credit cards of 2014.

Like any good beauty contest, our choices are based on a combination of looks and personality – be sure to read about each card’s features below:

Sexiest card for dealing with debt: Chase Slate®

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Making an effort to get rid of credit card debt is a smart and sexy move. If this is one of your goals, the Chase Slate® is here to help. With it, you’ll get 0% on purchases and balance transfers for 15 months, and then the ongoing APR of 12.99%, 17.99%, or 22.99% (V).This means that, if you move your balance onto the card, you’ll have over a year at 0% to pay it down. Talk about an attractive offer!

But what’s more, the Chase Slate® also waives its balance transfer fee for balances transferred within 60 days of opening your account. In addition to its sleek, vertical design, this feature really sets it apart from the crowd. And since it has an annual fee of $0, you can be sure you’re getting a hot deal.

Sexiest card for travel: Chase Sapphire Preferred® Card

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When it comes to design, the Chase Sapphire Preferred® Card is definitely a conversation piece. It’s made of metal, not plastic. This gives it an edgy, sexy feel that many consumers crave.

But again, it’s not all about looks – the Chase Sapphire Preferred® Card brings a lot of other great features to the table. You’ll earn 2 points per dollar spent on dining out and travel and 1 point per dollar spent on all other purchases. Generally, points earned with the Chase Sapphire Preferred® Card are worth $.01 apiece. But if you redeem them for travel through Chase Ultimate Rewards, the value of each goes up by 25%.

Also remember that you have the option to transfer your points to participating frequent traveler programs at a 1:1 ratio. This perk could really spice up your options when it comes time to book your trip.

If you’re planning an overseas getaway, the Chase Sapphire Preferred® Card is a great choice to take along. It comes chip-enabled and charges no foreign transaction fees.

To get started, the Chase Sapphire Preferred® Card provides a signup bonus: Earn 40,000 bonus points after you spend $4,000 in the first 3 months. It charges an Introductory Annual Fee of $0 the first year, then $95. They say that sexy can’t be bought, we think the annual fee is a reasonable price to pay for a card this exciting.

Sexiest card for earning cash back: Citi® Double Cash Card

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OK, we admit: This card leaves a little to be desired in the looks department. But when you hear about the rewards structure provided by the Citi® Double Cash Card , we think your heart will skip a beat.

With it, you’ll earn 1% cash back on your purchases, then an additional 1% cash back when you pay them off. That’s a sky-high rewards rate, and there’s no limit to the cash back you can earn. Plus, it charges an annual fee of $0*, so it’s an inexpensive card to keep on hand. (We were tempted to call it cheap, but it’s just too classy for that kind of language.)

Sexiest co-branded card: Citi® / AAdvantage® Platinum Select® MasterCard®

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Deciding on a sexiest co-branded card was tough, but ultimately we’re pretty enamored with the Citi® / AAdvantage® Platinum Select® MasterCard®. Appearance-wise, the card is cheerful – the little airplane on the front is just too cute. We also think the gray background on the card art was a good choice because it’s cool and low-key.

In terms of card features, the Citi® / AAdvantage® Platinum Select® MasterCard®’s are enticing. They include:

• A signup bonus: Earn 50,000 American Airlines AAdvantage® bonus miles and 2 Admirals Club® Passes after making $3,000 in purchases within the first 3 months of account opening*.


• A free checked bag for you and up to 4 travel companions on every American Airlines flight.


• 2 AAdvantage miles for every eligible dollar spent with American Airlines and 1 AAdvantage mile for every dollar spent on other purchases.


• Group 1 boarding on American Airlines flights.


• Get a $100 American Airlines flight discount every year that you spend at least $30,000 on the card.


• Get 10% of your redeemed miles back, up to 10,000 miles per year.


• $95, waived for first 12 months*.

This card is an exciting choice for folks who fly American Airlines frequently – and what’s sexier than racking up enough miles for a little weekend getaway?

Sexiest card for big spenders: Citi Prestige® Card

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on Citibank's

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Without question, the Citi Prestige® Card is one of the hottest cards on the market today. Physically, it’s very impressive – a little black dress has nothing on this baby. Plus, we love the bold, teal emblem on the front. It’s just enough to make the card stand out, without being too flashy. Coco Chanel herself couldn’t have done better.

But the card’s features are equally stunning. With it, you’ll earn 3 ThankYou points for every dollar spent on airfare and hotels, 2 ThankYou points for every dollar spent on dining and travel, and 1 ThankYou point for every dollar spent elsewhere. You can use your ThankYou points for everything from merchandise to travel, and remember that this is one of the few Citi cards that allows you to transfer your points to participating frequent traveler programs.

The rewards earning and redemption structure provides a lot of opportunities for cashing in big on spending you’re already doing, but this card’s cachet mostly comes from its fringe benefits. These include:

• Access to a private jet, airport lounges, chauffeured car service, and more.


• 24/7 concierge service to help take care of your shopping, travel, entertainment, and dining needs.


• Access to exclusive events through Citi Private Pass Beyond.

The Citi Prestige® Card also carries a signup bonus: 30,000 ThankYou points when you spend $2,000 within the first 3 months of opening your account. In this case, sexy doesn’t come free – the card’s annual fee is $450. But if it’s a luxe lifestyle you’re craving, you might want to consider coughing up the cash. Remember, it’s partially offset by the card’s annual $250 air travel credit.

So there you have it, folks – the sexiest credit cards of 2014. Now go take a cold shower and consider applying for one of them today!

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