Archive for Nick Clements

Pick the best travel credit card like a pro

 

Travel rewards have become about much more than just earning airline miles, and if you’ve been carrying the same card for years, you might be missing out on better rewards for the same or lower fee as banks and airlines fight for your business.

If you don’t want to think much, and just want one card with a good offer, a comparison site like MileCards.com will let you enter your spending habits and tell you which cards earn you the most miles, or you can browse a list of the best travel credit cards.

But travel pros who have racked up millions of miles diversify their loyalty to reap the most rewards.

Gary Leff, an air travel expert who writes the View From the Wing blog, suggests three reasons to get a card. The first reason is the sign on bonus, which can offer significant value. The second is to take advantage of perks offered by the card, including free bags and priority boarding. And third, you should use a card that lets you rack up miles most quickly based on your spending pattern.

Very few cards offer do all three of these things well, so experts often hold more than one credit card to get the most out of things.

For example, many of the airline branded cards offer a first free checked bag. If you tend to use the same airline a couple times a year and check a bag, you can save the annual fee in bag fees, plus get perks like priority boarding. But these cards rarely offer you the most miles for every dollar you spend.

Instead, consider putting your spending on a card that earns transferable points, while keeping the airline card for the perks.

Transferable points are a favorite of Brian Kelly, founder of The Points Guy blog. They let you book travel two ways. First, you can transfer them into real airline miles with several airlines. Second, you can choose to use them like cash to book flights on any airline.

That makes them really flexible – you can add to the miles you’ve earned by flying, or you can use them like cash if you don’t want to deal with the rules of airline miles for a trip. Chase, American Express, and Citibank each have cards that offer transferable points. Many offer special bonuses on spending categories like dining and gas, so they can earn points more quickly than a single airline card.

Regardless of what card you choose – get to know the benefits. Many travel credit cards offer coverage that’s similar to the travel insurance airlines and travel agencies will try to sell you. You could be reimbursed if you need to cancel a trip because you get very ill, or get covered for a hotel if your flight gets delayed. There’s no extra charge – just book your flight with the card to activate the coverage. These benefits aren’t …read more

Read more here: Pick the best travel credit card like a pro

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4 ways hotel points beat airline miles

If you’re facing sticker shock from your travel this summer, earning points and miles is a great way to save on next year’s vacation. And while you might think airline miles are the best place to start, there are several ways hotel points can save you more with less hassle. They’re worth a look if you’ve given up on airline miles, or of you’re just getting started thinking about travel rewards.
1. Finding rooms with points is easier than flights with miles.

Hotels aren’t as aggressive with blocking rooms from awards as airlines are. While there are some restrictions, most of the big programs let you book just about any standard room with points. If there’s a room for sale with cash, you can book it with points, and don’t have to pay double the points on popular days. It’s a lot easier to score one hotel room in a good location for your family than 4 award seats on the same flight at a reasonable time.

2. They’re more flexible.

Hotel rewards don’t have change fees, and you can often cancel them right up until a day or so before you arrive, so you have lots of flexibility. Adding or deleting a night is just a quick phone call.

And if you decide you’re just not interested in hotel rewards, most hotel points can be transferred into real airline miles, though they’ll get diluted some in the process.

3. You can earn them more quickly.

Many hotel credit cards let you earn bonuses in categories like dining and gas spending, while the big airline credit cards tend to only give you one mile per dollar spent on anything but tickets with the airline. So with the right card, you can earn miles a lot faster.

If you want to compare the best hotel credit cards, this calculator at MileCards.com lets you see what the hotel points you earn from various cards mean in dollar rewards, so you can compare more easily.

Several cards also throw in a free night each year, without having to use points.

4. You can share them easily.

Some of the big hotel programs let you share points with family for free or a small charge. So if your spouse has just enough points to top off your account to get a free night, you can combine your points. Hyatt Gold Passport and Starwood Preferred Guest let you do this free, while Marriott Rewards charges a small fee.

Airlines charge you for this privilege, often hundreds of dollars, so the cost of combining miles is often more than buying a ticket in cash without miles.

The downside to hotel points is they can be harder to compare than airline miles. A mile gets you pretty much the same thing at each of the big airlines. But with hotel programs, what a point means varies a lot more.

If you’re trying to pick a hotel points program, this tool lets you see a map of what hotels …read more

Read more here: 4 ways hotel points beat airline miles

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5 ways to skip long airport lines

If TSA lines aren’t enough, there’s another summer travel delay to worry about. According to a recent study of Federal data, June and July are the worst months of the year for passport checkpoint waits returning to the U.S.

Some airports have average wait times of over 30 minutes, and maximum wait times often top out at around an hour or more.

But there are new ways around this and other airport delays that can save you aggravation.

Get Mobile Passport Control. This is an app officially authorized by the Department of Customs and Border Protection, which lets you use special passport checkpoint lanes with no paperwork involved. This is the simplest, and sometimes most effective way to cut down on passport checkpoint waits. It’s free, there’s no advance registration needed, and everyone in your family can use it. Download it and you’ll be able to skip the congested passport and customs lines at some of the busiest airports.

If you fly a lot, consider Global Entry. Global Entry, a trusted traveler program, is more involved than Mobile Passport Control because it requires an in-person interview and a $100 application fee. The benefit is it gets you both priority at passport checkpoints and regular domestic security lines via TSA Pre Check. It’s also available at more airports than Mobile Passport Control.

Some credit cards will reimburse you the cost of TSA PreCheck or Global Entry application fees. You probably don’t want to get a card just to offset the fee, because most of the cards that offer the benefit have annual fees of their own. Better to pick a travel credit card based on your spending habits.

Pay up for priority once. Some airlines let you pay a fee to get access to priority security and boarding lanes. And you can buy it right up until check-in via mobile apps, kiosks, or online checkin. So if you get to the airport, and lines look hopeless, the fee might help you make your flight.

Become a SkyMiles member. Delta SkyMiles members get discounted membership to CLEAR, which is a private service that offers expedited biometric security clearance at several airports. Instead of paying $179 a year, SkyMiles members pay $99, and anyone can become a SkyMiles member for free.

Try a different terminal. If lines are really bad at one terminal, consider another in the same airport. Many big airports let you clear security in a different terminal than the one you’re departing. Some terminals are connected behind security, while others have shuttles running in between, If you’re facing an hour plus wait at your terminal, it may be worth the walk to a terminal with little or no wait.

RELATED: 9 of the best airports to kill time in

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6 ways to get the best travel rewards

Are you trying to earn free travel with frequent flier miles? There have never been more ways to earn miles. But getting the best deal can sometimes be confusing. Here are six ways to make sure you earn the most miles for your money.

1. Switch to the right miles

If you don’t travel much, you probably shouldn’t mess with airline miles and it might be time to switch. 2% cash back or travel rewards points you can use on any airline could be a better bet. Stick with airline miles if you want a big international trip, big sign up bonuses, or want to fly in first class. And if you do, consider a card that earns points you can transfer to several airline mile programs. For example, some cards let you transfer points into real miles with both United and Southwest Airlines. That will give you more options when you’re ready to book your travel.

2. Get the most from your spending

Many travel rewards cards offer special bonuses for spending in certain categories like gas or dining. It can get confusing, but this tool at MileCards.com will rank travel rewards credit cards based on how many points they can earn from your monthly spending. Switching to a card with good bonuses in categories you use a lot could double your rewards.

3. Maximize your online shopping

It’s easy to earn extra points shopping online. All of the big mileage programs have sites that let you earn points for shopping at online stores you were already planning on using. You could earn 2, 3, even 5x points per dollar with no additional charge to you. The online stores want your business, and in exchange for that they’re willing to offer points on top of what your credit card offers while still giving you the same prices you’d pay without the miles. EVReward has a good directory of stores that offer extra points and miles.

4. Stick to using your points for travel

Using travel rewards points for things that aren’t travel related, like gift cards, merchandise, and even food at the airport, usually gets you a lot less value than using them for actual travel. A good rule of thumb is to get at least $100 in value out of 10,000 points. If what you’re using points for doesn’t pass that test, it’s not a great deal, and you should switch your focus to earning real cash rewards instead of travel rewards. One exception: magazine and newspaper subscriptions. Those can offer great value for 5,000 points or less.

5. Don’t pay the transfer fee

Giving the gift of travel is great, but don’t think you have to pay to transfer miles to do it. Most airlines let you use your miles to book a ticket in anyone’s name, including relatives and friends. And most will let you book one way tickets for half the price of a round trip, so it’s easy to help a friend who …read more

Read more here: 6 ways to get the best travel rewards

Category: airlines, bargains, rewards, savings, summer travel, travel, Vacation

3 steps to an excellent credit score

 

An excellent credit score can unlock low interest rates on mortgages, auto loans and credit cards. In many states, a good score is also the key to lower auto insurance premiums. Although there are hundreds of credit scores out there, FICO remains the industry standard and isn’t shy about telling people how to improve their scores. If you want to have an excellent score, you should follow these three steps.

Always Pay On Time

The single most important part of your credit score is making payments on time. Even a single missed payment that becomes thirty days late could take 90 points or more from your credit score. Banks use credit scores to predict whether or not you will make payments on time in the future. It should not be surprising that the most important part of a score is how often you have made payments on time in the past.

To make sure you never run the risk of missing a payment, sign up for automatic payments with your creditors. By automating your monthly payments, you can ensure that you avoid a big, unexpected hit to your score.

In addition, be particularly careful with your medical bills. If you don’t pay your doctor or hospital bill on time, it could quickly end up with a collection agency and on your credit report. Even a small medical bill can have a big negative impact on your score.

Keep Your Credit Card Balances Low

The second most important part of your credit score is the total amount of debt that you have. FICO tends to treat some debt as good debt, and other debt as bad debt. Mortgages, auto loans and student loans are considered good debt. Credit card debt is considered bad debt. In particular, you can lose a ton of points if you max out your credit cards.

FICO uses a measure called “utilization” to determine how risky you are. You calculate utilization by dividing your current statement balances on all of your credit cards by your credit limits. If you have $10,000 of credit limits and a $1,000 balance, your utilization would be 10%.

In general, people with the best credit scores have a utilization ratio of 10% of lower. To keep your utilization low, you should pay down credit card balances and avoid closing old credit card accounts. If you close an unused credit card, you will be reducing your credit limit and increasing your utilization.

Feed Your Score With “Good” Activity Every Month

Do you remember your days in elementary school, when you would get a “gold star” for a job well done? Your goal with your credit score is to accumulate as many “gold stars” as possible. And that means using a credit card each month responsibly. Ideally, you will use less than 10% of your available credit with transactions each month. You will then pay your statement balance on time and in full every month. By doing that, you are showing that you …read more

Read more here: 3 steps to an excellent credit score

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How to Survive Predatory Parent Plus Loans

Direct Plus loans, frequently called Parent Plus, are probably the most irresponsible form of government lending in the entire student loan market.

Even though the federal government knows the income and repayment capability of a parent, those facts are ignored when deciding how much money to lend. Instead, Parent Plus loans only consider how much the education costs, and how much money needs to be borrowed to fund that education. Credit requirements focus only on major derogatory items on your credit report. If you are seriously delinquent or had previous bankruptcy or foreclosure, you would be declined. But your ability to repay is ignored. Someone with an annual income of $20,000 could theoretically borrow $40,000, so long as they are current on all of their obligations.

When new hires start working for a bank, they are taught the basics of underwriting. A very basic lesson is that you should determine whether or not the borrower has the ability to repay that loan. Every time we ignore a borrower’s ability to repay, we end up in trouble. The 2008 mortgage crisis was probably one of the greatest examples of ignoring repayment ability. Unfortunately, the lowest income parents are most vulnerable to these loans. Because of the ever-increasing cost of education, parents are often asked to borrow additional money to fund their child’s education.

Here are some of the biggest problems with Parent Plus loans:

  • The responsibility of the loan remains with the parent and can never be transferred. Even in retirement, wages could be garnished and assets seized to collect the debt.
  • It is almost impossible to have these loans discharged in bankruptcy.
  • The interest rates have historically been much higher than federal loans granted to students.
  • Although loans to students aren’t repayable until after graduation, loans to parents become due as soon as they are disbursed.

If you need to take out a Parent Plus loan, you should consider your options carefully. I recommend that all parents answer these three questions:

 

  • Can I afford the monthly repayments on this loan?
  • Am I getting the cheapest interest rate?
  • Should I really borrow with a Parent Plus loan?

 

Can I Afford the Monthly Repayment?

Remember that the Department of Education won’t figure out whether or not you can afford the monthly payments. But you will need to figure out whether or not you can afford the loan.

You should start by creating a written budget. Take stock of how much earn and spend each month. There are some excellent tools to help you do this, including Mint and LevelMoney.

To see if you can afford the monthly payment on the loan, consider the 50/20/30 budgeting method, which is a useful guide. Specifically:

JPMorgan Earnings Reveal Consumers Ready to Borrow

JPMorgan Chase (JPM) is the largest issuer of credit cards in the country, and its quarterly results can reveal a lot about the health and mindset of the American consumer.

Two metrics from JPMorgan’s most recent report, released Tuesday, tell us a lot. Total spending on credit cards is up 7 percent compared to last year. And the percentage of people paying on time continues to increase. Only 1.3 percent of borrowers are 30 days or more delinquent. That means we are spending more, and we continue to make our payments on time.

We Still Like To Spend

Consumption is the motor of the American economy. And the fuel for American consumption is the credit card. Despite talk of becoming increasingly rational after the 2008 financial crisis, Americans are once again swiping their credit cards. Last year, Chase cardholders spent $118 billion on their credit cards. This year, they spent $126 billion. Spending continues to increase, as consumers feel more confident.

The Chase data reinforces data released earlier in the year by the Federal Reserve Bank of New York, which showed credit card balances growing again. Total credit card balances increased by $20 billion, the fastest rate of growth since the crisis.

We Are Paying on Time, and More Than the Minimum Due

Unemployment continues to decrease, and consumers are making payments on time. After the financial crisis, credit card defaults soared. However, in the current environment, people are able to make at least their minimum payment on time. Credit cards typically have very low minimum payments. You can usually pay only 1 to 2 percent of the credit card balance and remain current. After the financial crisis, even that payment became too much for many American families. But today, American consumers look financially healthier and are able to pay.

Even better, the data at Chase seems to indicate that people are able to pay far more than the minimum due. Although total spend increased by $7.7 billion, the total balances only increased by $800 million. We need to watch this indicator closely. When more of the spend is added to the balance, that means more people aren’t able to pay their statement balance in full.

Early Warning Signs

An increase in spending, particularly now that people are fully employed, may not be a bad sign. Because companies like Chase create credit card products with robust rewards, a lot of good spending can happen on a credit card. Good spending means that the statement balance is paid in full at the end of the month, and people use the credit card to earn rewards and benefit from fraud protection.

However, bad spending can also happen on a credit card. If you are unable to pay your balance in full, you will end up paying high interest bills. Funding living expenses with debt can be a warning sign that a debt bubble is building.

Data from the last three …read more

Read more here: JPMorgan Earnings Reveal Consumers Ready to Borrow

Category: banks, consumer spending, credit cards, earnings, economy, gdp, jpmorgan chase, stocks, wall street

How to Find the Best Travel Rewards Credit Card for You

Choosing a travel rewards credit card can be overwhelming. Every week, American consumers receive millions of pieces of direct mail from credit card issuers offering large sign-on bonuses and fast ways to travel for free. If you search for the best travel card on Google, you will be presented with millions of results. It can be very difficult to find the best card.

Most credit card comparison tools are either blog posts or static lists of credit cards. One of the oldest in the market is CreditCards.com, which has a page dedicated to travel and airline credit cards. The top result is the Capital One Venture Rewards Credit Card.

Is Capital One Venture the best card for everyone? As my research reveals, it depends upon your situation. I used the customizable tool at MileCards.com to review three different scenarios, and I received three different recommendations. Now more than ever personalized recommendations are important to earn the best rewards.

Scenario 1: The Frequent Flier

Bob flies United Airlines all the time for business. He is earning 50,000 miles every year from business travel and wants to top up those miles with a credit card. He spends about $3,000 each month on his personal credit card and about $800 of that is in restaurants.

Based upon Bob’s information, the recommendation was the Chase Sapphire Preferred Card. The card allows you to earn 2 points for every $1 you earn on dining, and you can transfer the Sapphire points directly to United Airlines. Including the first year bonus, Bob would earn 91,600 points in the first 12 months. Capital One Venture doesn’t allow you to transfer points to existing frequent flier programs, and would not have been the best option for Bob.

Scenario 2: The Infrequent Flier With Hawaii Dreams

Sarah never flies. A recent graduate, she wants to visit Hawaii soon, but only if she can get a free flight. And she doesn’t want a card with an Annual Fee. She spends about $1,000 a month, and most of it is spent on groceries and gas.

After inputting Sarah’s information, the Amex Everyday Credit Card was the top result. There is no annual fee on the credit card. You earn 2 points for every $1 spent in grocery stores, up to $6,000 each year. And Sarah can transfer those points directly to Delta Airlines. In the first 12 months, Sarah will earn 31,600 points. So long as Sarah pays her bill on time and in full every month, those points won’t have cost her a dime. That would be enough for a flight anywhere in the continental United States and she would be on her way towards that Hawaii trip.

Scenario 3: The Big Spender

Emily has a big job and likes to spend what she earns. She spends $4,000 a month on her credit card and pays the balance in …read more

Read more here: How to Find the Best Travel Rewards Credit Card for You

Category: airlines, banking, consumer issues, credit cards, financial services, personal finance, rewards, travel

4 Ways to Deal With Medical Debt

Medical debt can be crushing: 43 million Americans have overdue medical debt on their credit reports. If you have health insurance, the deductibles can be high: For families with a bronze health plan, the average deductible is $10,545. Given that 62 percent of Americans do not have enough money saved to handle a $500 emergency, medical debt can quickly become a big problem.

The problem is even worse for the 12.9 percent of people who do not have health insurance. If you enter an emergency room without insurance, you are going to be charged obscenely high rates. It is not uncommon for people to leave the hospital with $100,000 or more in medical bills. If you find yourself in a medical emergency, here are four things to consider to help manage the situation.

1. Try to Reduce the Bill When It First Arrives

If a big hospital bill arrives that you cannot afford, you should immediately try to negotiate the rate down. Nonprofit hospitals are required to offer financial assistance programs. But even for-profit hospitals are often willing to agree to a payment plan. But you need to talk to the hospital right away to take advantage of any program that it offers.

Professional, for-profit companies will negotiate your medical bill on your behalf. They will often charge by taking a percentage of your savings. You may want to shop around and hire someone to help you negotiate, if you don’t feel comfortable yourself.

2. Negotiate a Full and Final Settlement With a Collection Agency

If you do not pay your bill, the hospital or doctor often turn over that debt to a collection agency. The agency will put a negative record on your credit report and begin calling you. The negative item can have a big impact on your score.

Once a medical debt is placed on your credit report, the damage is done. Whether you pay off the debt or not, the impact to your credit score will be the same. In other words, there is no benefit to your score to pay the bill. This will be changing with FICO 9, but for now paying off the debt will not improve your score.

The debt collection agency can sue you and garnish your wages. Paying your debt will not improve your credit score, but it may help you avoid being sued.

If you plan on paying the debt collection agency, you should negotiate hard and agree to a full and final settlement. Most collection agencies want to get you to sign up to a monthly payment that will last forever. But your goal should be to agree a full and final payment that ends all future collection activity. And make sure you get any deal in writing, before you pay.

If you can’t afford a lump-sum payment, try to negotiate a reduced sum and monthly payments. And get that …read more

Read more here: 4 Ways to Deal With Medical Debt

Category: bankruptcy, bill collectors, collection agencies, debt, doctor, financial literacy, health care, health care costs, hospital, hospital bills, medical bills, negotiate

We Need to Talk About Credit Card Debt

Americans are embarrassed by their credit card debt but don’t like to talk about it.

In a national survey, 42.4 percent of Americans reported having credit card debt, and the average balance is a staggering $10,902. According to a survey by the National Foundation for Consumer Counseling, 37 percent of Americans would be more embarrassed to admit the balance on their credit cards than their age or weight.

Why are so many of us afraid to talk about the problem that is haunting so many of us? And does our inability to talk publicly about debt cause bigger problems in the long run?

I Am a Failure

Credit card debt is viewed as a failure and weakness of character. People who spend too much are accused of living beyond their means, shopping too much and indulging in a life they can’t afford.

And to a large extent, this is true. Credit cards make it easy to shop without thinking. If you don’t have a budget, it is incredibly easy to spend just a bit more than you should. Countless studies show that spending with plastic means that we spend more. And we don’t just spend more money in absolute terms. We will actually pay more for the same item. One of the more famous studies showed that, in some cases, people were willing to pay double for an item when they used a credit card. When we pull plastic out of our wallet, we are no longer savvy shoppers. Instead, we give into the temptation of the moment and build up a debt over time as a result. Spending $50 that we can’t afford every week can easily turn into $10,000 of debt within four years.

But there are other reasons for credit card debt. Two of the biggest causes of debt are job loss and medical expenses. Fifteen percent of the population still does not have health care, and a big emergency expense can generate massive medical bills. If you are not prepared financially for a job loss, debt can start to accumulate quickly.

Having credit card debt is never a reason to celebrate. So, people with credit card debt are embarrassed and remain silent.

Silence Is Costly

Credit card debt is expensive. Most store cards charge above 20 percent, regardless of your credit score. And more than 75 percent of people with credit card debt are paying an interest rate higher than 15 percent. By refusing to talk openly about our debt, we make three big mistakes:

 

 

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