SOCIAL: credit card

Wed Mar 26 15:06:51 PDT 2008

Ok, I can't resist offering my twelve cents. 

(Peat, I just got a notice from USAA, through which I have my Visa, that
they are raising their foreign transaction rates, so I think this is
happening across the boards. USAA is usually pretty slow to raise fees.)

I have a couple of credit cards: Visa, Discover, MC and have had many over
the years. I generally use all of them as charge cards (pay off balance
every month) rather than true credit cards (keep a balance), so I care most
about features and having no annual fee rather than interest rate. 

I have also played the balance transfer game a few times-moving a balance
from one card whose 0% introductory rate is about to expire to another card
who is offering 0% interest. You have to be very careful researching the
fees when you do this and vigilant about moving the balance before the 0%
goes up. They won't send you a reminder about the expiration of any program
or introductory rate! As was mentioned in other posts, you shouldn't buy
things with a card that carries a balance from a transfer. 

As was also mentioned, you can generally negotiate with any card on the
interest terms for transfers, cash advances and other fees or programs. Say
what you want or ask for something that a competitor is offering and see
whether they can accommodate you. Threatening to cancel a card is a pretty
big negotiation tool. 

Discover works a little harder because they have less market share. They are
not as widely accepted as Visa & MC but are still very widely accepted
domestically. They currently have a premier (or platinum or whatever)
program in which they offer 1% cash back for most purchases and 5% back for
gas and groceries. You can apply the cash in chunks of $20 to paying your
balance or you can redeem. No annual fee. I don't know what the interest
rate is because I pay off the balance every month. Paying the bill online is
pretty straightforward, and I've never had any trouble with their customer
service. 

Discover also offers the Motiva program:
http://www.discovercard.com/motiva/. You get an extra bonus for paying on
time six months in a row. I'm not in this program, but it looks interesting.

Because of the more limited acceptance you should have a Visa or MC in
addition to Discover. Same thing with American Express. AmEx is pretty well
accepted in the East and in Europe, but not so widely  out here.

I've been thinking about getting an AmEx small business card because of
their great reward system. (I'm self-employed.) A true AmEx card has to be
paid off every month, but now banks are offering AmEx credit cards. In that
case it's just like getting a Visa or MC through that bank, and you would be
offered the bank's rewards program rather than AmEx's. The benefit I guess
over getting MC or Visa from the bank is the cache of AmEx as a fancy card.
The real AmEx cards usually have an annual fee. The bank ones I don't know.

Bank of America WorldPoints reward program is OK but not remarkable. BofA
acquired this reward program from MBNA (a horrible bank) a few years ago. At
that time the redemption merchandise was not very interesting (I had an MBNA
card), but you could always redeem for gift certificates at Amazon or Eddie
Bauer or the like.

The affinity (donation) cards can be good. I've had them at different times.
Check on the issuing bank. Sometimes you have to weigh the goodness of the
benefitting organization against the evilness of the bank (like when MBNA
acquired the Working Assets credit card, much to WA's dismay. WA couldn't
get out of the contract. But now BofA owns MBNA, which isn't as bad.) I
believe that the REI Visa has gotten very high marks on social
responsibility.

There are sites that rate credit cards on conventional terms and on SR
issues. Consumer Reports usually has good general advice about CCs and
personal finance: http://www.consumerreports.org/cro/money/index.htm. Coop
America can also be a good source for info. This article is a few years old,
unfortunately:
http://www.coopamerica.org/pubs/realmoney/articles/creditcards.cfm

One other thing, kind of related: DO NOT GIVE GIFT CREDIT CARDS! It's hard
to use the whole amount unless you buy something more expensive and pay the
balance with cash, which can be awkward. The $3.50 or $6.72 that's left on
the card then gets eaten up by the 'maintenance' fees after six months. Just
write the person a check or give them cash.

Thanks for reading!

Erin

----------------------

Erin Milnes

Branding

510.444.6768

 <mailto:Erin at TheBillyBoys.com> Erin at TheBillyBoys.com

The Billy Boys

 <http://www.thebillyboys.com> www.thebillyboys.com

 <http://www.myspace.com/thebillyboys> www.myspace.com/thebillyboys

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