4 Ways to Know if a Balance Transfer Credit Card is for You

Is the interest rate on your credit card debt sinking you deeper into a financial hole? A 0% APR balance transfer credit card offer can provide a ladder to help climb out of the abyss.

Simply put, these balance transfer offers can help save on interest payments that make it tough to pay down credit card debt quickly. But, like all tools in your financial arsenal, they must be treated with care. Will a balance transfer help or simply kick the can on your credit woes further down the line? Here are some questions you need to ask:

Do you have a good credit score?

Most cards that offer 0% promotions require a FICO credit score of 690 or higher. In fact, the best offers are usually only available to those with a score of over 720. A lower FICO score will greatly limit your options for balance transfer credit card offers. That’s just the way it is.

So know where your credit score stands before you begin.

Does the cost of balance transfer make sense?

Even with a “0%” offer, most balance transfer cards charge a one-time balance transfer fee. Typically, this fee is 3% of the total charges you’re moving onto the card.

In general, if it will take you less than six months to pay off your credit card balance, doing a balance transfer doesn’t make sense. Otherwise, price out the offer carefully against what you’re paying in interest on your current card to see how much you’re really saving. Or, use NerdWallet’s tool to figure out the true cost of your balance transfer. This will help you decide if moving forward with this refinancing option is right for you.

Nerd note: There is one card on the market that waives its balance transfer fee under certain conditions. If you have excellent credit, be sure to check it out.

How long can you take advantage of 0% interest payments?

All good things come to an end. If you get a 0% interest credit card, the first move you should make is to note on your calendar when the promotion ends; it’s often somewhere between six and 15 months.

Let’s be honest: Credit card issuers are betting that the bulk of your debt won’t be repaid before the 0% APR period ends. Prove them wrong. Plan to use the 0% period to double-down on paying off as much of the balance as possible.

Also, read the fine print once the card arrives. Have they given you 0% rates on both the transfer balance and future purchases on the new card? No matter the advertised rate, be vigilant about what the company actually sends you in the mail.

Can you make your payments on time?

Once you make the switch to a 0% card, it’s crucial that you make your payments on time. Many cards have penalties that void the 0% deal the moment you miss a payment. This could cause your APR to spike to a rate that’s way higher than what you were paying before, so proceed with caution.

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4 Ways to Know if a Balance Transfer Credit Card is for You

Is the interest rate on your credit card debt sinking you deeper into a financial hole? A 0% APR balance transfer credit card offer can provide a ladder to help climb out of the abyss.

Simply put, these balance transfer offers can help save on interest payments that make it tough to pay down credit card debt quickly. But, like all tools in your financial arsenal, they must be treated with care. Will a balance transfer help or simply kick the can on your credit woes further down the line? Here are some questions you need to ask:

Do you have a good credit score?

Most cards that offer 0% promotions require a FICO credit score of 690 or higher. In fact, the best offers are usually only available to those with a score of over 720. A lower FICO score will greatly limit your options for balance transfer credit card offers. That’s just the way it is.

So know where your credit score stands before you begin.

Does the cost of balance transfer make sense?

Even with a “0%” offer, most balance transfer cards charge a one-time balance transfer fee. Typically, this fee is 3% of the total charges you’re moving onto the card.

In general, if it will take you less than six months to pay off your credit card balance, doing a balance transfer doesn’t make sense. Otherwise, price out the offer carefully against what you’re paying in interest on your current card to see how much you’re really saving. Or, use NerdWallet’s tool to figure out the true cost of your balance transfer. This will help you decide if moving forward with this refinancing option is right for you.

Nerd note: There is one card on the market that waives its balance transfer fee under certain conditions. If you have excellent credit, be sure to check it out.

How long can you take advantage of 0% interest payments?

All good things come to an end. If you get a 0% interest credit card, the first move you should make is to note on your calendar when the promotion ends; it’s often somewhere between six and 15 months.

Let’s be honest: Credit card issuers are betting that the bulk of your debt won’t be repaid before the 0% APR period ends. Prove them wrong. Plan to use the 0% period to double-down on paying off as much of the balance as possible.

Also, read the fine print once the card arrives. Have they given you 0% rates on both the transfer balance and future purchases on the new card? No matter the advertised rate, be vigilant about what the company actually sends you in the mail.

Can you make your payments on time?

Once you make the switch to a 0% card, it’s crucial that you make your payments on time. Many cards have penalties that void the 0% deal the moment you miss a payment. This could cause your APR to spike to a rate that’s way higher than what you were paying before, so proceed with caution.

---

Image via iStock.

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Chase Freedom®: A Killer Credit Card Offer is Ending Tomorrow!

If you only apply for credit cards that offer a generous signup bonus, you’re going to want to act fast. Until Dec. 17, 2015, the Chase Freedom® - $200 Bonus is offering: Get a $200 Bonus after spending $500 on purchases in your first 3 months from account opening.. That means you have until tomorrow to score this card while its signup bonus is double the usual offer.

Unfamiliar with the Chase Freedom® - $200 Bonus and not sure what all the fuss is about? Take a look at the details below – the Nerds will tell you everything you need to know about this great card.

Apply Now

on Chase's

secure website

Why the Chase Freedom® - $200 Bonus credit card offer rocks

In addition to its limited-time signup bonus offer, there’s a lot of other stuff to love about the Chase Freedom® - $200 Bonus. With it, you’ll earn 5% cash back in rotating quarterly bonus categories, up to $1,500 spent per quarter. You’ll also earn unlimited 1% cash back on all of your other spending.

When it comes time to redeem your rewards, you’ll have a lot of options. You can purchase gift cards, get a statement credit or direct deposit into your bank account, or even head over to Amazon.com to do some shopping.

Apply Now

on Chase's

secure website

But if you also have the Chase Sapphire Preferred® Card, there’s actually another way you can cash in on your rewards: Because the Chase Freedom® - $200 Bonus earns Chase Ultimate Rewards points, you can move them to your Chase Sapphire Preferred® Card account and use them for travel. And remember, the Chase Sapphire Preferred® Card allows you to transfer your points to participating frequent traveler programs. This strategy is a great way to make those 5% bonus categories go the distance.

Finally, remember that all these stellar perks come at an annual fee of $0. This makes the Chase Freedom® - $200 Bonus an economical addition to your wallet.

Chase Freedom® - $200 Bonus 5% bonus categories for 2015

Earning 5% cash back in rotating quarterly bonus categories is all well and good if those featured retailers are places you actually shop. Luckily, the Nerds got a sneak peek at the Chase Freedom® - $200 Bonus’s 5% merchants for 2015 – Chase hasn’t released all the details yet, but this will give you a pretty good sense of where you can expect to earn bonus cash back next year:

• Q1 (January-March) – Grocery stores, Starbucks, movie theaters


• Q2 (April-June) – Restaurants (and more)


• Q3 (July-September) – Gas stations (and more)


• Q4 (October-December) – Amazon.com (and more)

Is the Chase Freedom® - $200 Bonus right for you?

The Chase Freedom® - $200 Bonus is one of our favorite cash back cards because so many consumers can benefit from what it has to offer.

If your spending aligns with its 5% categories, or you have the Chase Sapphire Preferred® Card and want to maximize your rewards earning, or you’re simply looking for a high-value, low-cost card, we say go for it. But again, be sure to move fast – that killer signup bonus offer will be gone before you know it!

Image via iStock

The post Chase Freedom®: A Killer Credit Card Offer is Ending Tomorrow! appeared first on NerdWallet Credit Card Blog.

Source Article http://ift.tt/1y39EC7

Read More

Chase Freedom®: A Killer Credit Card Offer is Ending Tomorrow!

If you only apply for credit cards that offer a generous signup bonus, you’re going to want to act fast. Until Dec. 17, 2015, the Chase Freedom® - $200 Bonus is offering: Get a $200 Bonus after spending $500 on purchases in your first 3 months from account opening.. That means you have until tomorrow to score this card while its signup bonus is double the usual offer.

Unfamiliar with the Chase Freedom® - $200 Bonus and not sure what all the fuss is about? Take a look at the details below – the Nerds will tell you everything you need to know about this great card.

Apply Now

on Chase's

secure website

Why the Chase Freedom® - $200 Bonus credit card offer rocks

In addition to its limited-time signup bonus offer, there’s a lot of other stuff to love about the Chase Freedom® - $200 Bonus. With it, you’ll earn 5% cash back in rotating quarterly bonus categories, up to $1,500 spent per quarter. You’ll also earn unlimited 1% cash back on all of your other spending.

When it comes time to redeem your rewards, you’ll have a lot of options. You can purchase gift cards, get a statement credit or direct deposit into your bank account, or even head over to Amazon.com to do some shopping.

Apply Now

on Chase's

secure website

But if you also have the Chase Sapphire Preferred® Card, there’s actually another way you can cash in on your rewards: Because the Chase Freedom® - $200 Bonus earns Chase Ultimate Rewards points, you can move them to your Chase Sapphire Preferred® Card account and use them for travel. And remember, the Chase Sapphire Preferred® Card allows you to transfer your points to participating frequent traveler programs. This strategy is a great way to make those 5% bonus categories go the distance.

Finally, remember that all these stellar perks come at an annual fee of $0. This makes the Chase Freedom® - $200 Bonus an economical addition to your wallet.

Chase Freedom® - $200 Bonus 5% bonus categories for 2015

Earning 5% cash back in rotating quarterly bonus categories is all well and good if those featured retailers are places you actually shop. Luckily, the Nerds got a sneak peek at the Chase Freedom® - $200 Bonus’s 5% merchants for 2015 – Chase hasn’t released all the details yet, but this will give you a pretty good sense of where you can expect to earn bonus cash back next year:

• Q1 (January-March) – Grocery stores, Starbucks, movie theaters


• Q2 (April-June) – Restaurants (and more)


• Q3 (July-September) – Gas stations (and more)


• Q4 (October-December) – Amazon.com (and more)

Is the Chase Freedom® - $200 Bonus right for you?

The Chase Freedom® - $200 Bonus is one of our favorite cash back cards because so many consumers can benefit from what it has to offer.

If your spending aligns with its 5% categories, or you have the Chase Sapphire Preferred® Card and want to maximize your rewards earning, or you’re simply looking for a high-value, low-cost card, we say go for it. But again, be sure to move fast – that killer signup bonus offer will be gone before you know it!

Image via iStock

The post Chase Freedom®: A Killer Credit Card Offer is Ending Tomorrow! appeared first on NerdWallet Credit Card Blog.

Source Article :http://bit.ly/1uW6jBD

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How to Use a Bad Credit Credit Card to Boost Your FICO Score

Have you ever heard the phrase, “Rome wasn’t built in a day?” This adage can certainly be applied to a FICO credit score: If you have poor credit or none at all, you’ll need to start somewhere, and a bad credit credit card can be a great place to begin.

With poor or no credit, you’ll likely have a tough time getting approved for regular credit cards, car loans or a mortgage, since lenders see you as a higher-risk borrower. Signing up for a credit card for people with bad credit, paying it off on time each month and keeping a low balance proves you are a responsible borrower, which can lead to a FICO score boost in no time.

What is a FICO score and how will a credit card for bad credit increase it?

Your FICO score determines your creditworthiness, which affects whether you’ll get approved for a loan and the interest rate you’ll pay on that loan. Scores range from 300 to 850, and the higher your score, the more trustworthy you are in the eyes of the lender.

The best way to improve and maximize your FICO score is to first know exactly what it’s composed of.

Payment history: This is FICO’s most heavily weighted category, making up 35% of your score. Late or missed payments will negatively affect your score, whereas consistent on-time payments will improve it.

Remember that you don’t have to wait until the credit card bill is actually due to make a payment. Instead, it could be wise to make multiple payments throughout the month, which lowers the amount you owe and ensures you never miss a minimum monthly payment.

If you fear you may forget when a payment is due, you can always set up automatic online bill payments, or email or text message reminders.

Credit utilization: The percentage of available credit that has been borrowed makes up 30% of your FICO score.

It’s generally a good idea to keep credit usage on all credit accounts below 20%. So, if you have a bad credit credit card with a $1,000 limit and it’s your only card, try not to hold a balance higher than $200. This shows lenders that you don’t max out your accounts and you can handle debt responsibly.

Length of credit history and new credit: The length of credit history (15%) and new credit (10%) make up a combined 25% of your FICO score.

Opening too many new accounts in a short period of time will negatively affect your score, as it could suggest that you are in financial trouble and need to take on new debt just to keep up with the bills.

For this reason, signing up for one bad credit credit card is likely a better idea than signing up for several. Also, try to keep old credit accounts open instead of closing them, since the length of credit history makes up 10% of your score.

Types of credit used: Your credit mix makes up 10% of your FICO score. Lenders generally want to see that you’ve handled different types of accounts responsibly, so it’s great if you’ve had positive experiences with both revolving credit lines (credit cards) and installment type accounts (home and auto loans), instead of just one type of credit.

If you have poor credit or none at all, a bad credit credit card can support you in your effort to improve up your FICO score — but results will ultimately depend on the borrower’s individual actions, not the plastic.

---

Male high jumper image via Shutterstock.

The post How to Use a Bad Credit Credit Card to Boost Your FICO Score appeared first on NerdWallet Credit Card Blog.

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How to Use a Bad Credit Credit Card to Boost Your FICO Score

Have you ever heard the phrase, “Rome wasn’t built in a day?” This adage can certainly be applied to a FICO credit score: If you have poor credit or none at all, you’ll need to start somewhere, and a bad credit credit card can be a great place to begin.

With poor or no credit, you’ll likely have a tough time getting approved for regular credit cards, car loans or a mortgage, since lenders see you as a higher-risk borrower. Signing up for a credit card for people with bad credit, paying it off on time each month and keeping a low balance proves you are a responsible borrower, which can lead to a FICO score boost in no time.

What is a FICO score and how will a credit card for bad credit increase it?

Your FICO score determines your creditworthiness, which affects whether you’ll get approved for a loan and the interest rate you’ll pay on that loan. Scores range from 300 to 850, and the higher your score, the more trustworthy you are in the eyes of the lender.

The best way to improve and maximize your FICO score is to first know exactly what it’s composed of.

Payment history: This is FICO’s most heavily weighted category, making up 35% of your score. Late or missed payments will negatively affect your score, whereas consistent on-time payments will improve it.

Remember that you don’t have to wait until the credit card bill is actually due to make a payment. Instead, it could be wise to make multiple payments throughout the month, which lowers the amount you owe and ensures you never miss a minimum monthly payment.

If you fear you may forget when a payment is due, you can always set up automatic online bill payments, or email or text message reminders.

Credit utilization: The percentage of available credit that has been borrowed makes up 30% of your FICO score.

It’s generally a good idea to keep credit usage on all credit accounts below 20%. So, if you have a bad credit credit card with a $1,000 limit and it’s your only card, try not to hold a balance higher than $200. This shows lenders that you don’t max out your accounts and you can handle debt responsibly.

Length of credit history and new credit: The length of credit history (15%) and new credit (10%) make up a combined 25% of your FICO score.

Opening too many new accounts in a short period of time will negatively affect your score, as it could suggest that you are in financial trouble and need to take on new debt just to keep up with the bills.

For this reason, signing up for one bad credit credit card is likely a better idea than signing up for several. Also, try to keep old credit accounts open instead of closing them, since the length of credit history makes up 10% of your score.

Types of credit used: Your credit mix makes up 10% of your FICO score. Lenders generally want to see that you’ve handled different types of accounts responsibly, so it’s great if you’ve had positive experiences with both revolving credit lines (credit cards) and installment type accounts (home and auto loans), instead of just one type of credit.

If you have poor credit or none at all, a bad credit credit card can support you in your effort to improve up your FICO score — but results will ultimately depend on the borrower’s individual actions, not the plastic.

---

Male high jumper image via Shutterstock.

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4 Signs You May Need a Credit Card for Bad Credit

It’s hard to miss the credit card offers on television advertising flashy rewards, fancy perks and celebrity endorsements. While these cards do feature great benefits, the hard truth is they are generally only available to those with excellent credit.

Those with bad credit are limited to credit cards for people with poor credit. These may not have bells and whistles you want, and interest rates will be higher, but they do offer the opportunity to build better credit and can serve as a backup in emergencies.

Here are four signs you may need a credit card for bad credit:

1. You don’t have much in savings.

Life always throws emergencies our way. Having an emergency savings fund you can pull from is always the best strategy, but if your savings are low, it’s smart to have a credit card to fall back on rather than having to take out a loan. Just remember that if you can’t pay it off quickly and are forced to carry a balance, you will have to pay interest — and interest fees are high on credit cards for bad credit. So only borrow what you absolutely have to, and pay it back as soon as possible to make this card a true benefit.

2. You can’t qualify for a regular credit card.

If you have tried to apply for a credit card for fair credit or good credit and were rejected, that’s a sign you may need to apply for a bad credit credit card instead. They are geared toward people with low credit scores, so it’s easier to be approved for them. If you aren’t able to qualify for this type of card, you may need to try for a secured credit card instead.

3. You have had debt in collections or bankruptcy.

These types of problems can damage your credit for years to come. If you have had to file for bankruptcy or deal with a collections agency in the past few years, chances are you won’t qualify for a regular credit card. A credit card for bad credit is likely the best option for you until marks from collections or bankruptcy are no longer on your credit report.

4. You need to build better credit.

Whether you have bad credit from some financial blunders, or no credit at all, using a credit card for people with poor credit is the ideal way to start building positive credit history. Your activity is sent to the three credit bureaus that create credit reports, so when you make a smart move like pay a bill on time, it helps boost your credit score. With time, your credit will improve and you may be able to qualify for a credit card with rewards or other perks.

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