You are previewing How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line.
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How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line

Book Description

Who would not be interested in getting an interest-free loan for 12 months for any type of purchase just for taking a few minutes to complete a credit card balance transfer offer? Or a free round-trip airline ticket twice a year just for making purchases on a rebate card? Or lowering their insurance premiums by hundreds of dollars a year just by raising their credit score? Obviously, just about every consumer is interested in saving money and getting freebies! Hence, the universal appeal of this book cannot be overstated. Today, the average American household has 12.7 credit cards. Banks maximize their profits by "nickel and dimeing" and outsmarting their cardholders: that's why credit cards are their most profitable product. Banks spend billions enticing consumers with rebates, freebies, low-introductory rate offers, and airline miles. Learn how to take full advantage of these offers, without paying for them through brutally high interest rates, fees, and penalties! Arnold offers specific advice targeted to young consumers who are being aggressively targeted by credit card marketers; retirees facing credit discrimination; Americans recovering from bankruptcy or other debt problems; and even consumers with great credit. You'll learn the techniques he has personally used to escape credit card debt, "creatively finance" his wedding, car, and home purchases, and earn thousands in credit card "perks" every year.

Table of Contents

  1. Copyright
    1. Dedication
  2. Praise for How You Can Profit from Credit Cards
  3. Acknowledgments
  4. About The Author
  5. 1. It’s Not Just Plastic—It’s Money
    1. The Power of Credit Cards
    2. Choosing a Credit Card That Will Benefit Your Bottom Line
      1. Credit Card Basics
      2. Debit Card Basics
      3. Debit or Credit—Which Is Better?
    3. Stricter Liability Laws
    4. Consumer Protection
    5. Establish or Build Your Credit
    6. Which Card Should Be in Your Wallet?
      1. Put Yourself in the Driver’s Seat
      2. Understand the Terms and Conditions
        1. The Schumer Box
        2. Billing Cycles
        3. Fees
        4. The Notorious Fine Print
      3. Learn about Card Features
        1. Which Type of Card Can I Get?
        2. How Will I Use the Card?
        3. What Rewards Will Benefit Me the Most?
  6. 2. Show Me the Money! Credit Card Rebates
    1. America’s Love Affair with Card Rebates
      1. When Did the Reward Card Craze Begin?
      2. What Accounts for the Growing Popularity of Reward Cards?
      3. The Dark Side of Reward Cards
      4. Spending and Point Levels
    2. What You Need to Know to Make the Most of Cash-Back Cards
      1. Cash-Back Credit Cards Are Great If...
      2. You Don’t Carry a Monthly Balance But...
      3. Is There an Annual Fee?
      4. Does the Card Require You to Carry a Balance?
    3. You’ve Considered the Basics, Now...
      1. What’s an Everyday Purchase?
      2. Other Qualifying Merchants It Pays to Know
      3. Do You Have to Reach a Threshold Before Receiving Any Cash?
      4. You Get Great Rewards for 90 Days, but Then What?
      5. Is There a Limit to How Much You Can Earn?
      6. How Is the Cash Issued?
      7. What Is Meant by a “Year”?
      8. The Terms Can Change at the Drop of a Hat
    4. You Might Also Want to Consider...
      1. Paying Down Your Mortgage
      2. Setting Aside a Little
      3. Increasing Your College Savings
    5. Cut Your Gas Bill by 5% with Gas Rebate Credit Cards
    6. Should You Get an Airline Reward Card?
      1. Frequent Flyers and Frequent Buyers
      2. Do the Fees Outweigh the Rewards?
      3. Expiration Dates
      4. Using and Losing Rewards
      5. Racking Up Bonus Miles
      6. Other Important Tips for Frequent Flyers
    7. Have Fun
  7. 3. Unlock the Key to Huge Savings: Master Credit Card Rates and Transfer Offers
    1. Know Your Interest Rate
    2. How Your Rate Is Determined
      1. Variable Versus Fixed-Rate Credit Cards
      2. Exceptions to the Rule
    3. Is a Fixed Rate Truly Fixed?
      1. When a Fixed-Rate Card Truly Has a Fixed Rate
      2. Get a Lower Rate for Unbelievable Savings
      3. Set a Goal, Save a Fortune
      4. Comparison-Shop to Get a Lower Rate
      5. Negotiate a Better Rate
    4. Fees
    5. The Three Keys to Using a Low-Rate Card to Your Advantage
      1. 1. Make Your Payments Early
      2. 2. Avoid the Dreaded Default Rate
      3. 3. Consider Credit Score Implications
    6. Low-Rate Introductory Offers and Blank Checks
      1. Don’t Skip the Fine Print
      2. Do the Math
      3. Watch the Dates
    7. Use a Low-Rate Credit Card to Pay Down Any Type of Loan
  8. 4. Avoid Problems That Hinder Maximum Profits
    1. Avoid Card Debt: Preventive Medicine for Your Pocketbook
    2. 1. Keep Some Perspective—Don’t Fall for the Hype
    3. 2. Actively Manage Your Finances
    4. 3. Reach Out to Get Support and Save Money
    5. 4. Avoid Extra Expenses
    6. 5. Is a Card Right for You?
    7. 6. Pay the Balance in Full
    8. 7. Pay Before Your Due Date
    9. 8. Treat Your Credit Cards like Cash
    10. 9. Limit the Plastic in Your Pocket
    11. 10. Cash Advances = Financial Suicide?
    12. 11. Say “No!” to Extra Products and Services
    13. 12. Benefit from Planning and Saving
  9. 5. How to Slash Your Debt and Keep Your Hard-Earned Money for Yourself
    1. Is It Time to Get Serious about Your Debts?
    2. Diagnose the Problem
    3. Planning a Debt-Defying Strategy: The Basics
      1. Go Cold Turkey
      2. Live Within Your Means
      3. Find Extra Cash
      4. Don’t Fall into the Minimum Payment Trap
    4. Create a Repayment Plan: The Do-It-Yourself Strategy
      1. Face Your Debt
      2. Find the True Cost of Your Debt
    5. More Proven Techniques to Pay Down Debt
      1. Ask Your Credit Card Company to Work with You
      2. Pay the Highest-Rate Card First
      3. Pay the Lowest Balance First
      4. Consolidate and/or Get an Unsecured Personal Loan
      5. Balance Transfer Offers
      6. Home Equity Loan/Line of Credit
    6. Is It Time for Professional Help?
      1. Credit Counseling
    7. Debt Settlement and/or Negotiation
    8. Bankruptcy
      1. You Are Not Alone
  10. 6. Watch Out: Traps and Scams Can Cost You Big Bucks!
    1. Grace Periods Are Shrinking
    2. Confusing Cash Advance Fees
    3. Small Cash Advances Have Sky-High Interest Rates
    4. Trailing Interest: A Phantom Interest Charge
    5. Credit Discrimination: Retirees and Race
      1. The Rules
      2. Dealing with Discrimination
    6. Where to Turn for Help
    7. Credit Card Fraud and Credit-Related Scams
      1. Pay-First Guarantee Scams
      2. Credit Repair Scams
      3. Debt and Fraud: Two Peas in a Pod?
      4. Fraud Protection Scams
    8. Elder Fraud
      1. Phishing
      2. Skimming
    9. Life after ID Theft: A Step-by-Step Plan of Action
      1. Id Theft: A Living Nightmare
      2. If You Think You Might Have Been a Victim of Identity Theft...
      3. If You Know You’re a Victim of Identity Theft...
      4. Credit Freezing
    10. Is ID Theft Insurance the Answer?
    11. Protecting Yourself from Fraud
    12. Virtual Account Numbers Offer Extra Online Security
    13. Virtual Numbers: What’s the Point?
    14. Some Final Tips
  11. 7. Start Out on the Right Foot: Credit Cards for Students and Saving for College
    1. Why Do Credit Card Companies Court College Students?
    2. Mixed Marketing Messages
    3. The New College Order
    4. Remembering Sean Moyer
    5. How Students, Their Families, and the Industry Can All Win
    6. You Have to Start Somewhere: Money Management 101
    7. Should My Teenager Get a Credit Card?
    8. Foundations for Good Credit: Tips for College Students
      1. Three Times Three: The Good, the Bad, and the Ugly
        1. The Good
        2. The Bad
        3. The Ugly
    9. Keeping It Good
    10. Developing a New View about Credit
    11. Advice to Grow On
    12. Saving for College Tuition
      1. The ABC’s of 529’s
      2. Spending to Invest
    13. You Are in the Driver’s Seat
  12. 8. Use Targeted Cards to Your Financial Advantage
    1. Need to Rebuild or Build Credit? Get a Secured Card
      1. What Is a Secured Credit Card?
      2. What Are the Benefits of a Secured Credit Card?
      3. Tips for Finding Your Best Secured Card
      4. Where to Look
      5. Fees
      6. Interest Rates
      7. Fine Print
      8. Earned Interest
      9. If You’re Denied a Secured Card
      10. How to Use a Secured Card to Help You Build or Rebuild Credit
      11. When Will I Qualify for an Unsecured Credit Card?
    2. How Your Business Can Profit from Cards
      1. Benefits of Business Cards
      2. Credit Criteria for Business Cards
      3. How to Play Your (Rebate) Cards Right
      4. Other Items to Consider
    3. Retail and Department Store Cards: Worth a Look?
      1. Applying for Multiple Accounts Can Cost You in More Ways Than One
      2. It’s a Balancing Act
    4. Affinity Cards: Using a Card to Help Others
      1. What Is an Affinity Credit Card?
      2. An Objective Approach to Affinity Cards
    5. Credit Cards for the Rich and Famous
      1. American Express Centurion
      2. Carte Blanche
      3. Visa Signature/World MasterCard: Elite Benefits for the Rest of Us
      4. Keep Your Spending in Check
    6. Final Thoughts
  13. 9. Your Credit Report and Score: The Better You Look, the More You Profit
    1. Improve Your Credit Report
      1. Get Your Free Annual Credit Report
      2. What’s on Your Credit Report?
      3. Correcting Credit Reports
      4. Typical Credit Report Errors
      5. When You Find Errors on Your Report
      6. Success or Failure
    2. Protecting Your Credit Reports during Bankruptcy
      1. The Don’ts of Working with Collection Agencies and Creditors
      2. All Other Creditors
      3. Watch Out for Accounts Handed Over to Bill Collectors
      4. Complaints
      5. Rebuilding Your Credit
    3. Improve Your Credit Score
      1. How Do Scoring Systems Work?
      2. What Goes into a FICO Score, and How Can You Increase Yours?
        1. 35% of Your Score Is Affected by Your Payment History
        2. 30% of Your Score Is Affected by Utilization
        3. 15% of Your Score Is Affected by Your Established Credit History
        4. 10% of Your Score Is Affected by Credit Inquires and New Credit
        5. 10% of Your Score Is Affected by Your Mix of Credit
        6. Does Everyone Use FICO Scores?
    4. Where Should I Get My Credit Score?
    5. Final Tips
  14. 10. Maximize the Benefits of Your Cards by Taking Advantage of Additional Free Perks
    1. Purchase Protection
    2. Purchase Protection for All
    3. Extended Warranties
    4. Special Merchandise Discounts
      1. Keep Your Eyes Out
    5. Travel Insurance
    6. Rental Car Insurance
      1. Collision Coverage
      2. Liability Coverage
      3. Find Out What Rental Car Coverage Comes with Your Cards
    7. Price Protection
    8. Lost Luggage Help
    9. International Travel Discounts
      1. Choose the Right Cards to Take on Your Journey
    10. Card Registration Services
      1. What Does a Registration Program Do?
      2. What Are the Advantages of Registration Services?
      3. Other Options
    11. Credit Card Protection Insurance (aka Credit Insurance)
      1. Is Credit Insurance Worth the Fee?
    12. Final Thoughts
  15. 11. Master Advanced Card Techniques to Save and Make Money
    1. Reallocating Credit Lines
    2. Making Biweekly Credit Card Payments
      1. Here’s How to Use the Biweekly System to Your Advantage
      2. Afraid You’ll Forget?
    3. Using Credit Cards to Make Money
      1. Credit Card Arbitrage
      2. For Arbitrage to Work
      3. How Much Can You Really Earn with Arbitrage?
      4. App-O-Rama
    4. Paying Your Taxes with a Credit Card
      1. How It Works
      2. Hefty Convenience Fees
      3. Paying Taxes with a Reward Card: Is It Worth It?
      4. A Better Choice for Paying Taxes
    5. Steering Clear of Universal Default
      1. Ahead of the Pack
      2. Prevention Is Key
      3. What’s Going on in Washington
  16. 12. Capitalize on Future Card Trends
    1. Trend 1: Cards Will Be Accepted in New Places
    2. Trend 2: Cards Will Be Even Smarter and Safer
    3. Trend 3: Issuers Will Keep Finding New Markets
    4. Trend 4: Seniors and Debt—a Disturbing Trend
    5. Credit Cards for Seniors
    6. Trend 5: New Enticements Will Be Trendy, Targeted, and Even Practical
    7. Watch for New Incentive Programs
    8. The Rest Is Up to You
  17. Glossary
  18. Financial Times Press