The Perks of American Express Credit Cards

American Express credit cards are not be as widely accepted as Visa or Mastercard, which is why this should not be the only card in your wallet just in case you find yourself in a situation where it is not accepted. But owning one can still give you a lot of benefits that you can enjoy. Although some people may choose other cards rather than American Express because of this issue, having this card can put on more weight on your credit card portfolio.

American Express credit cards allow consumers to have an additional of up to five cards which they can share with their family members. You will pay only a one-time fee of $30 and if you need more than that, then they will just charge you an addition al $30 per card and there is no limit to how many you can get. Each card will have the same benefits and restrictions as well, just like the original card. The whole family can enjoy having their own card separately. For instance, if the wife wants to go shopping, the husband does not have to give out his card. There is also the convenience of having to manage only one account for all family members.

There is no preset spending limit with this card, compared with other cards that usually limit each member to a certain amount. American Express credit cards are believed to be for the wealthy, as the limits are based on the person’s financial capabilities and spending style. The spending limit is flexible and on a shifting basis, depending on the person’s ability to pay.

It also has pay features that can be used to pay bills using their online system. They have partnered with over a hundred companies wherein you can just settle your bills using the credit card either on automatic, monthly basis, or even for one-time transactions. The consumer can enjoy the convenience of this service and enjoy earning rewards as well for every payment made using the card.

American Express credit cards earn points once they are used for payments through their Membership Rewards Program. Every time you use the card in dining out, shopping, traveling, and entertainment, it will accumulate points that can be exchanged for gifts and other privileges – thus, the reason why American Express is known to be one of the most generous credit companies. This is all because of the perks they award to their loyal customers.

Four Ways to Get Your Money Back from a Credit Card Purchase

Nix Billing Errors with the Fair Credit Billing Act

In 1986, the Fair Credit Billing Act joined the fray in protecting you rights by making it illegal for credit card companies to charge you for mistakes made by the card issuer or the vendor. This includes:

• Clerical errors resulting in charges in the wrong amount
• Duplicate charges
• Charges for goods never received
• Calculation errors
• Late fees levied because a statement was mailed to the wrong address

The key to getting your money back from a billing error is catching it within 60 days of receiving the statement with the mistake on it. You must send a letter into your credit card company which includes your name, your account number and a written statement notifying them of the error (including the dollar amount in question and the reason for dispute). After that, the credit card company must launch an investigation which must be resolved within 90 days or two billing cycles (whichever comes first). Meanwhile, you can withhold payment for the amount in question – but you still have to make your minimum payment. If you win your dispute, the erroneous amount deducted will be credited to your account.

Get Paid Back for Unauthorized Use

There’s some debate over how much you’ll owe the credit card company if someone nabs your identity and goes on a spending spree, but the range is squarely between $0 and $50, thanks to federal law. For credit cards, you are automatically absolved for any charges that occur after you report the card as lost or stolen. For fraudulent charges made prior to that, you may be liable to pay up to $50, which really ain’t bad. Either way, it’s in your best interest to call that number on the back of your card ASAP. (But wait, if your card’s been stolen, how can you look at the back of the card? I’ve always wondered that. Anyway, the number is on their website or in the phonebook, too.)

Debit cards don’t have the same protections, however. You only have two days to report your card as lost or stolen to protect yourself from liability from fraudulent charges. So, if someone steals your debit card on Monday, goes out and buys $50,000 worth of Bacon Salt on Tuesday and you don’t get on the horn until Friday, then you’re out of luck. Watch those statements closely.

Disputes Over Shoddy Goods

There are numerous reasons to pay with plastic even if you have cash, but here’s one more. If you make a purchase in your home state or within 100 miles of your home address and the quality isn’t as advertised or the product is an obvious sham, you can dispute it through your credit card issuer. How? Call them up and tell them to stop payment. This protection is also part of the Fair Credit Reporting Act, so the process is much the same. Oftentimes, your credit card company will do a chargeback or cancel the transaction if you win your dispute. They do appreciate it if you try to resolve the issue directly with the merchant first, however, and may even request to see evidence of your efforts. So, next time you’re worried that a product is a ripoff and there’s no moneyback guarantee, get some insurance and pay with your credit card.

Purchase Protection Perks

This last one isn’t a federal protection – it’s actually a perk offered by most credit card issuers. We’ve talked about price protection and extended warranties here at MYC before, but these can’t be overlooked in a rundown of convenient ways to get your money back from your credit card company. As a service, credit card companies will often protect your purchases from theft or damage within 90 days of purchase. They’ll also protect you for a certain amount of time after the manufacturer’s warranty expires in case your gadget goes kaput. In fact, if you buy a nifty gizmo on Tuesday and the price drops on Thursday, you can even file a claim to get the difference back. Not bad.

Visa, MasterCard, American Express and Discover all have their own online portals for activating this protection, but in most cases, you don’t have to. However, registering your products beforehand will streamline the claims process if something happens.

Upromise Credit Card

As you probably know, Upromise is a savings program that helps parents save for their kids’ college. It’s a great concept, but they do have their critics. Check out this Upromise credit card review to find out the pros and cons:

For starters, here are the two different credit cards they offer:

(1) Upromise MasterCard w/ grocery and dining rewards
This card gives back 1% on all purchases (which are deposited into the 529 savings account) so essentially, it’s like a 1% cash back credit card.

On purchases from Upromise restaurants, the card gives a 10% extra. They do the same thing on participating grocery and drugstore items.

(2) Upromise MasterCard w/ grocery and gas rewards
This Upromise credit card also gives 1% on all purchases.

Like the card above, it also gives the 10% match on eligible grocery and drugstore items.

For gas purchased from Exxon or Mobil stations it does 2%. This is extremely disappointing for three reasons (1) you need to buy 20+ gallons per month (2) it only applies to Exxon and Mobil stations, which tend to cost a lot anyway, and (3) the standard rewards at these stations are only 1 penny per gallon.

Citi used to be involved with Upromise credit cards but Bank of America took over in 2009 and now issues/manages them. This is a turnoff for many people, since we all know B of A isn’t exactly known for stellar service.

Are either of the Upromise cards worth it?
At first glance, the 10% sound exciting. But you have to realize that is only on eligible items. For most people only a small percentage of their shopping would qualify.
For example, let’s say you spent $100 at the grocery store and among that was $5 in eligible Upromise items (and those participating items gave 1%). Your total rewards would break down as follows:

1% back on all credit card purchases = $1
1% back on Upromise items = $0.05
10% extra on Upromise items = $0.50
Total Rewards: $1.55 for spending $100

As you can see the Upromise credit card rewards in actuality aren’t too exciting. Furthermore, since Upromise participating items are usually more expensive name brand items anyway, you almost always would be saving more simply buying a store or generic brand instead.

Is there a better option? (sponsored)
Of course you should use your Upromise account to rake up savings, but the added rewards from the Upromise credit card are far from impressive. A better option would be to get a higher cash back credit card and then deposit that money yourself into your 529 savings plan. But what’s the best card do to this? Check out our review of the new, re-vamped 5% cashback program on the

Card Issuers Find Loop Holes in New Credit Card Legislation

The Credit Card Accountability, Responsibility and Disclosure act, which passed in May 2009, was supposed to protect the general public from high interest rates and irresponsible acts made within the credit industry - as well as allow the government to better regulate this side of banking.

We have seen many positive things come from the legislation, but only a year later many card issuers have found loop holes to pass their higher costs on to customers, according to an article on the Wall Street Journal.

The main protection the Credit Card Accountability, Responsibility and Disclosure Act provides the public is from credit card companies raising interest rates on existing accounts, and on accounts that are in their first year of being opened.

Some examples of loop holes being used by credit card issuers:

JP Morgan’s Chase raises the minimum payments from 2% to 5% of the balance. The law affects how much they can raise interest rates, but there is no such provision to protect the minimum payments.

First Premier Bank charges $95 dollars for processing fees, before the account is even opened. First Premier Bank offers credit to individuals with less than perfect credit scores and histories.

Citibank increased some of their customers’ interest rates before they made a late payment, and then offered a partial refund of finance charges if the customer paid their bill on time. This gets Citibank around the law of not being able to raise customer’s interest rates due to making late payments.

Another popular ploy is to charge high processing or annual fees when opening a new card. For instance many cards will offer you a $300 spending limit, and a $75 annual fee. Again the law doesn’t specifically protect you from this action, because it does not affect the interest rate. Many banks are using this method to pass some of the costs to you.

In August, it is expected that the Federal Reserve will release a new set of rules affecting the credit card industry that address a provision that would require card penalties to be proportional to a company’s actual costs, as well as require that card companies evaluate interest rates for customers who previous saw interest rate increases every six months.

Debit Card Fees Restricted By the Senate, MasterCard Vowing to Fight it

A bill approved by the U.S. Senate on May 13^th will allow merchants to set minimum and maximum transaction amounts for debit card purchases. Previously, you could buy anything with a debit card, regardless of the amount, and for store owners – if the purchase was small, like a pack of gum, it meant paying more in debit card service fees than the profits made on the purchase. With this bill, merchants will be able to set limits to ensure their profitability on debit card purchases.

MasterCard and Visa have been concerned over credit and debit card regulation for a long time. They are credit and debit card processing networks, and don’t receive all of the interchange fees directly, but their revenues do depend on how much people spend on their cards. If merchants restrict purchases, they fear they will experience large drops in revenues as people will be less likely to use their cards.

MasterCard is determined to fight this bill until it is finalized into law. While the bill isn’t restricting the amount Visa or MasterCard can charge in interchange fees to merchants on credit card purchases, they’re concerned that the regulation on debit transactions will open the door to more regulation in the future.

Reuters reports:

“MasterCard U.S President McWilton said in a speech earlier on Sunday that MasterCard was “very concerned” about the amendment and “working very hard to make sure” that it would not be attached to the final financial regulation bill.”

Paying Taxes by Credit Card: Tax Pros, Con Jobs and Hidden Fees

Yes, you can pay your federal income taxes to the IRS by credit card or debit card. Should you do it? Maybe. Here’s how it works:

When you file your tax return through an official IRS e-pay service provider (see list below), you’ll have an option to pay your tax bill by credit card or debit card now or schedule a later date. This payment is processed by the service provider and passed along to the IRS. You will not write your credit card on your tax return. The IRS will never see nor store your credit card information. You will then pay a convenience fee to the service provider.

There are obvious pros and cons to paying your taxes by credit card, most of which are already inherent to using credit cards at all.

Pros of Paying Your Taxes by Credit Card

• Convenience – You can send electronic payment by credit or debt whether you e-file or paper file. This saves you from writing out and mailing a paper check (does anyone still do this?).
• Deferred Payment – It’s a bit late now, but if you’re one of those nerds who files taxes early, you can schedule the credit card transaction for later so you don’t take that financial hit until you absolutely have to. Also, paying by credit card is an option for folks who simply don’t have the cash to pay their tax bills, though putting it on your credit card balance can quickly become a con (more on this later).
• Reward Points – If you’ve got a $100,000 tax bill (and some do), that can add up to a lot of frequent flyer miles. Rewards junkies should be pleased with this additional opportunity to rack up the free stuff.
• Security - The IRS uses the same credit card processing system as Macy’s or Target. As such, you’re protected by the same anti-fraud measures.
• Fees are Tax Deductible – It may be small potatoes, but every bit counts. You can deduct your convenience fee as an itemized business or personal deduction.

Cons of Paying Taxes by Debit or Credit Card

• Fees – The fees range from a low of $3.95 flat charge per transaction to a whopping 2.35% percentage of your total tax bill. With a $5,000 tax liability, you’re looking at a convenience fee of $117.50 – a high price to pay for saving a stamp.
• Higher Interest Rates – If you’re paying by credit card because you’re strapped for cash, you should be aware that there are some other options available. The IRS has an installment plan with interest rates as low as 4% (a sweet deal if your credit card APR is in the double digits) which you can get by filling out Form 9465.
• Card Rejections Can Lead to Big Trouble - If you don’t have the credit line or checking balance to cover your tax bill on the transaction date, it could lead to even more hot water. A rejected card can lead to a late tax payment which introduces even more penalties.
• Responsibility - If the service provider drops the ball for any reason and doesn’t get your money to the IRS, it’s your problem. Even though it’s not your fault, you’ll be responsible for any fees, penalties or other delinquent charges – so be sure you choose a third-party service provider that you can trust.

Don’t Get Scammed

Undoubtedly, the scammers will try to use awareness of this option to their advantage – so it’s your duty to be vigilant. To be safe, only use the providers officially approved by the IRS and never write your credit card information down on your tax return. Also, make sure you get a confirmation number – even if you complete your transaction by phone.

When all is said and done, take a look at your credit card bill. You’ll see two transactions: one for the amount of your tax bill and one for the convenience charge. The first will appear as:

United States Treasury Tax Payment

The second will be some variation of “Tax Payment Convenience Fee.” Don’t be alarmed if it’s something slightly different (i.e. the service provider’s company name). But do investigate if your tax bill and the convenience fee are lumped together in one transaction.

Ready to pay your taxes by credit card? Here’s a list of the IRS approved third-party service providers:

• Official Payments Corporation – Debit fee: $3.95/Credit Fee: 2.35%
• Pay1040.com – Debit fee: $3.89/Credit fee: 2.35%
• PayUSATax.com – Debit fee: $3.89/Credit fee: 1.95%
• FileYourTaxes.com – Credit/Debit fee: 3.93%
• TurboTax – Credit/Debit fee: 2.35%

Also note that these fees may change and that most providers have a minimum convenience fee of $1.00.

Credit or Debit? It’s Becoming Harder to Tell the Difference

Last March, we did a breakdown of debit cards vs. credit cards to show you the differences between the two plastic doppelgangers. Fast forward two years, and suddenly, the ying is starting to look and act a whole lot like the yang. Debit cards are accepted everywhere a credit card is, have rewards programs and, hey, they even have hidden fees and nefarious traps. But why are debit cards acting a lot more like credit cards these days? According to DailyFinance, it’s because credit cards are dead. And it wasn’t even Obama who killed them.

It was you! You and me, that is – the consumers. We were fed up with the wavering interest rates, devastating fees and bruises to our credit history. But instead of kicking the plastic, we eased down to a reasonable facsimile: the debit card. It works like a credit card, it looks and (probably) tastes like a credit card, but because you’re drawing from your own bank account and not being charged any interest, it’s a much smoother ride with less surprises.

Debit Cards Close the Gap

According to eCommerce Journal, Visa customers’ debit card spending surpassed their credit card spending in 2008. Visa cardholders spent $206 billion in debit purchases – mostly on necessities, like food and clothing – and $203 billion in credit purchases. Those figures aren’t widely different on theri face, but consider this: this is the first time in history that debit card spending has exceeded that of credit spending for Visa. The paradigms are shifting.

Debit vs. Cash: No Contest

While consumers cite greater convenience and security over cash and checks as one of the main boons of debit, card issuers are doing their part as well to promote debit card usage. With features like Zero Liability from Visa and PayPass from MasterCard, debit is simply the easiest way to pay. While a thief can nab your wallet or forge a check, your debit card has certain built-in protections that safeguard your assets in the case of identity theft. Even if you are victim of a skimming or phishing scam, you can quickly control your damage with a quick call to your card company – in most cases you’ll be liable for less than $50, even if the crook wipes you out. Plus, when you pay with a debit card you don’t ever have to deal with those pesky pennies.

You’ve Got Rewards!

But perhaps more significant to the shift is in rewards. One of the main hooks of credit cards has always been the opportunity to accrue points, cashback and other free stuff from your spending. These perks drove shoppers to use cards even when they had the cash on hand. The most responsible ones would simply pocket the points and pay off their balance as soon as they got home. But with card issuers offering rewards programs for debit purchases, there’s no need for this slice of the cardholder pie to even bother with credit cards. Things work out nicely for the issuers, too – retailers have to kick back upwards of 2.1% per debit transaction.

Here Come the Catches

Still, that 2.1% per swipe is, apparently, not doing enough for the card companies’ bottom lines. Those fees from over-the-limit spending, finance charges, late fees and membership costs that caused cardholders to flee from credit in droves are exactly what were making card issuers weathy. But like rats abandoning a sinking ship for one that’s afloat, those parasitic caveats and gotchas have followed the crowd to debit cards.

Since the beginning, the danger of overdraft has existed. But now, instead of reeling you in when you overstep your checking balance by denying your card, banks and issuers are automatically fronting you the money so the transaction goes through. You won’t know your overdrawn until the next time you look at your statement. Meanwhile, the bank charges you a hefty $25 to $35 fee per transaction for the “convenience” of covering you while you were short. It’s a racket that’s earning banks upwards of $38.5 billion in overdraft fees.

This may be preferable to having your check bounce and your utilities or mortgage payments become delinquent. But anyone who has come to the cold revelation that they are overdrawn only to next discover that they’ve been charged hundreds of dollars of overdraft fines on top of it is unlikely to rejoice.

Push Me, Pull You

Meanwhile, while debit cards are starting to resemble credit cards more, so too are credit cards changing. One of the main reason why debit wins over credit is the danger to a consumer’s credit rating, or a credit history that is already prohibitive of a traditional credit card. But with new prepaid credit cards, even those with little or bad credit can carry a card. The credit limit of a prepaid credit card is commensurate with how much the cardholder pays into the account. So, if the holder prepaid $1,000, he or she could spend $1,000 – after that, the card would be denied.

But wait a minute – isn’t that exactly the same as a debit card? Replace “credit limit” with “checking account balance” and basically, yes, it is the same. But the important difference is that, as of now, the credit bureaus still consider prepaids credit accounts. That means you can slowly build your credit using them (though likely no better than with a secured card). However, as with all cards for those with bad credit, there is a circuitous labyrinth of fees and terms. Plus, the system is somewhat rife for exploitation – meaning that FICO might take preventative action, much like they did in order to stop piggybacking.

But the moral of the story is this: as restrictions on issuers (such as the C-Card Act) continue to make debit cards more competiitive, card companies will begin making changes in order to keep their earnings up. And until Obama comes up with a Debit CARD Act, you may have to be just as vigilant with your debit card as you were with your credit card.

Credit Score Strategy: Paying in Full vs. Credit Limit Increases

There’s this pervasive myth going around that paying off your credit card balance in full each month will score you points (literally) with TransUnion, Equifax and Experian. The fact of the matter is that it won’t. And, in fact, you could even be hurting your credit score by purposefully racking up a high balance and then paying it off before incurring a finance charge. Sound crazy? I’ll explain.

Paying off your credit card balance in full is definitely a good thing. The benefits include:

• Not paying any finance charges.
• Reducing the risk of going into debt.
• Avoiding late or delinquent payments (which DO go on your credit report).
• Being a good customer in the eyes of your credit card company.

I added that obnoxious emphasis to the last point because there is the key difference between building credit and building goodwill with your credit card company. Both are important to your credit score, but in different ways.

FICO Factors – How Punctuality Matters

Payment history eats up a whopping 35% of the pie that makes up your credit scoring factors. But the credit reporting bureaus are only concerned about whether you pay the minimum amount on time. They could care less if you overachieve by paying off your credit card in full each month. That’s because the carrying a credit card balance is part of the agreement between you and your credit card company. You’re not breaking any rules by doing so. While incurring finance charges may be less economical on a personal finance level, it is by no means a penalty and is not indicative of your inability or unwillingness to stick to the terms of your contract. It’s merely a money management choice.

Timing Issues and High Balances

In fact, paying off your debt in full each month may even less beneficial than you thought because of the way the credit reporting bureaus pull your information. The second biggest slice of the FICO pie is amount owed, which takes up 30%. This is a measurement of your credit to debt ratio, or how much you owe vs. how much you can borrow. So, if you pay off your credit card balance every month, that ratio should be very low, right? Nearly zero, even. Wrong.

Let’s say that you have a balance of $1,000 on your credit card with a $2,000 limit and you intend to pay it off on the 23rd. Meanwhile, the credit reporting agencies pull your file on the 22nd. Guess what? It’s going to show up as if you had a 50% credit utilization, even though it would’ve been zero if they would’ve pulled the information two days later. This is an extreme example, but having a credit utilization of 30% or more can bring down your score by 10 to 20 points.

Fixing the Credit Ratio Quirk

It’s not all bad news, especially if you really are in a position to pay off your credit card in full each month. If so, that means that you have reasonable income and assets and probably qualify for a credit line increase. And since you’ve been such a great, responsible customer who has never missed a payment, your chances for getting a credit line increase are even higher.

Extending your credit line will directly help your overall credit to debt ratio. But it also may help to start charging less on your credit card as well. Use some of that cash that you were saving for the end of the month and buy things the old fashioned way until you get your average credit utilization well below 30 percent at any given time. In this way, you’ll be attacking the issue from both ends and you can reclaim some of those stray FICO points that you deserve.

Got a tip for cutting down your credit to debt ratio? Share it in the comments!

IBERIABANK Visa® Platinum Card

Intro Balance Transfer Rate: 1.99% for 6 months Reg Purchase APR: 8.25% - 14.25% Reg BT APR: 8.25% - 14.25% Annual Fee: None Credit Needed: Excellent

IBERIABANK Visa® Platinum Card

• Variable Rate APR ranging from Prime + 5.00% thru Prime + 11.00% depending on creditworthiness and other factors
• Purchase and Cash Advance APR's may vary with the market based on the Prime Rate.
• Earn 1 bonus point for every $1 in qualifying net retail purchases
• Turn your points into hotel, gift, or experience rewards
• Travel accident coverage up to $1,000,000
• No annual membership fee
• Low Introductory APR on balance transfers for your first 6 billing cycles. Applies to balance transfers processed within three months of your account open date.
• 25 day grace period
• Online access to credit card account information

Citi Forward Card: 5 ThankYou Points Per $1 Spent on Books, Movies, Music, Restaurants

Today Citi announced a new credit card created in partnership with MySpace, called the Citi Forward. It features a few incentives to consumers for managing their credit wisely, including lowering the purchase interest rate by 0.25% when cardmembers make a purchase, stay under their credit line and pay on time 3 months in a row. In addition, you’ll earn 100 ThankYou Points each billing period for paying on time and staying under the credit line.

Citi customers with a Citi mtvU Visa will also note the Citi Forward’s uncanny resemblance. Similar to the mtvU card, the Forward earns 5 ThankYou Points for every $1 spent on restaurants, books, music and movies. More importantly, the Citi Forward does not require that you be a student in order to apply.

Other noteworthy benefits of the Citi Forward include:

* 6,000 bonus ThankYou points after spending $50 in 3 months
* 5,000 bonus ThankYou points when you sign up for paperless statements within 3 months
* 0% APR on both purchases and balance transfers for 6 months (though balance transfers do incur a 3% uncapped fee)
* No annual fee

New Credit Card Abuses Spread in Advance of Credit CARD Act

A new study by the Center for Responsible Lending finds that credit card issuers have managed to find new ways to pad their profit and work around the Federal Reserve Board rules and federal law set to take effect in February 2010. Even as old abuses are outlawed, CRL finds that new ways to squeeze fees out of consumers are being introduced and popularized.

Among them:

Pick-a-rate: Up until now, a variable rate card was usually tied to the prime rate on the last day of the last billing cycle. CRL’s report shows that a number of issuers now have added language to select the highest prime rate within a 90-day period. The change may seem innocuous enough but CRL estimates it currently costs Americans an additional $720 million a year.

Variable rate floors: A practice that seems to be spreading, this clause stipulates that a variable interest rate cannot go down from the initial rate when an account is opened, but can go up.

Minimum finance charges: Consumers with only a penny in finance charges get charged a minimum amount up to two dollars.

Compression of balance categories in tiered late fees: While late fees have traditionally been imposed on a sliding scale, with a larger flat fee charged for a larger total balance, issuers have been steadily lowering the tiers, such that the balance required to trigger the largest fees has been significantly decreased.

Inactivity fees: Issuers charge consumers for not using or closing their account, with fees as high as $36/year.

International transaction fees: Issuers are increasing charges for transactions in foreign currency and expanding the definition of foreign transactions to include those in dollars.

Balance transfer/cash advance fees: This change has been obvious for anyone following credit card deals. Larger minimum balance transfer fees and percentages are proliferating. Most balance transfer fees are now also uncapped.