6 Credit Card Perks You Should Know About

Earning rewards is probably one of the most talked about benefits of using a credit card aside from being able to use it to increase your credit score.

While earning points and cash back that you can redeem for travel, gift cards, and other rewards is nice, that’s not the only benefit involved with choosing to use a credit card.

In many cases, a credit card can actually be safer than cash or a debit card or even provide you with additional savings. Here are six credit card perks you should know about if you want to make the most out of using your credit card(s).

Purchase Protection

If you need to purchase something valuable, you might want to do it on a credit card if the card offers purchase protection. Most credit cards offer purchase protection for items that are lost, damaged, or stolen as long as you paid for the item with the credit card.

Each credit card has different policies and may reimburse you up to different amounts. For example, American Express credit card holders can file a claim to report any theft, accidental damage, or loss of a product they purchased with their card within the past 90 days, and they can be reimbursed for the amount paid for the item up to $10,000.

Price Protection 

With credit card price protection benefits, you could receive a refund if the price drops on an item you purchased with your card. This can happen a lot around the holidays, so it’s a good benefit to have.

With most credit cards, there is a time limit to take advantage of price protection, which is usually anywhere from 30 to 90 days after you make the initial purchase. That being said, you won’t get price protection for an item you purchased last year that suddenly went on sale the other day.

With price protection, you can save quite a bit if you purchase a big item like an appliance or a TV on your credit card and the price suddenly drops. That’s why it’s best to hold onto your receipts for at least 30-90 days depending on your credit card’s price protection terms.

Extended Warranty 

An extended warranty offered by your credit card company can be very similar to a manufacturer’s warranty in that it can add up to a year of additional coverage for certain purchases.

With some purchases, getting an extended warranty is definitely worth it even if it costs a little extra money. However, if your credit card offers an extended warranty, you may not need to purchase one on your own.

All Discover cards have an extended warranty feature for up to one additional year for original warranties that are 36 months or less. Discover’s extended warranty covers most items, but may not protect you from a repair caused by normal wear and tear, a power surge, or if the item is covered by a product recall.

The maximum coverage is $10,000 / $50,000 (per item / per year). You must file your claim within 45 days of the loss or incident, and as long as you send the necessary paperwork, you will receive a reimbursement within 60 days.

Credit Monitoring 

Monitoring your credit is very important because it can help you know where you stand and help you avoid situations like identity theft. Monitoring your credit is a good habit to adopt so you can track your score and see how your spending and payment activity affects it.

Instead of having to pay a monthly fee to have your credit monitored by a third-party service, you can see if your credit card issuer provides this service as a courtesy to cardholders.

Chase Slate allows cardholders to view their FICO score monthly and use their Credit Dashboard for free to monitor their credit.

Select Citi credit cards also provide you with your FICO score for free.

Rental Car Insurance

If you’re traveling and need a rental car, most credit cards offer free rental car insurance coverage as long as you pay for the rental car with your card.

The rental car insurance provided by your credit card can include coverage for collision damage or theft, but there may be some limitations to the coverage so don’t assume certain things are covered like the loss of items during a collision or personal injuries.

Some credit cards with rental insurance options may not even cover cars that aren’t standard, like large trucks or luxury car rentals, so it’s important to thoroughly read your credit cards terms if you’re thinking of taking advantage of this feature.

Airport Lounge Access 

Why pay to access an airline’s lounge when many credit cards provide you with this option for free?

Airport lounges are a great amenity to check out when you’re traveling or have a long layover. They tend to offer exclusive amenities including Wi-Fi, desks, comfortable seating, personal assistance, arrival recovery, and more.

The Citi Prestige card and the American Express Platinum card are just two credit cards that include free airport lounge access.

Final Word

It pays to read the fine print when reviewing your credit card terms because you could learn more about additional free benefits you can take advantage of.

Carefully review the card agreement details for any new or existing credit cards you have. You may not need benefits like rental car insurance or purchase protection all the time, but when you do, you’ll know how to access them for free with your credit card.

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7 Hacks for Using American Express’ Membership Rewards Program

Here's how to make the most of your Membership Rewards.

[Disclosure: Our partners are mentioned below.]

There are a few different transferable points programs available, but over the years one of the most popular has always been American Express’ Membership Rewards program. The reason is because of the ample ways points can be used and the wide selection of credit cards that can help you earn points quickly. Let’s take a deeper look into how you can earn Membership Rewards points and the different ways you can receive ultimate value.

1. Transfer Points to Loyalty Partners

One of the best ways to receive maximum value for your Membership Rewards points is to transfer them to one of the many loyalty partners. There is a large selection of both hotels and airlines and each of the following partners will transfer 1-to-1 unless noted.

  • Aeromexico — 1-to-1.6
  • Air Canada (Aeroplan)
  • Air France/KLM (Flying Blue)
  • Alitalia
  • All Nippon Airways
  • Asia Miles
  • British Airways — 250-to-200
  • Delta Air Lines
  • El Al Israel Airlines — 1,000-to-20
  • Emirates
  • Etihad Airways
  • Hawaiian Airlines
  • Iberia Plus — 250-to-200
  • JetBlue Airways — 250-to-200
  • Singapore Airlines
  • Virgin America — 200-to-100
  • Virgin Atlantic Airways
  • Choice Hotels
  • Hilton Hotels — 1-to-1.5
  • Starwood Hotels — 1,000-to-333

To get the most value out of each point, you could use them for one of the following redemptions.

All Nippon Airways From the United States to Japan

Until recently, the All Nippon Airways award chart was based on distances. That used to provide many sweet spots for award travel. Even though they have changed to a region based award chart, there are still some great deals. One of them is round-trip flights from the United States to Japan. You can fly round-trip in coach for just 40,000 miles during low season and business class for 75,000 miles, also in the low season.

All Nippon Airways From the United States to Asia Zone 2

You could use All Nippon Airways miles to fly round-trip from the United States to Asia Zone 2 for just 55,000 in coach or 100,000 in business class. Asia Zone 2 is classified as Vietnam, Singapore, Thailand, Myanmar, India, Indonesia and Malaysia.

Flying Blue From the Continental United States to Hawaii

A great use of Flying Blue miles is to fly round-trip from anywhere in the continental United States to Hawaii for just 30,000 miles.

Aeroplan From the United States to Oceania

Transferring Membership Award points to Aeroplan will allow you to use 90,000 miles to fly round-trip from the United States to Australia, New Zealand or anywhere in the South Pacific. You could make this trip for 80,000 United miles, but what makes using Aeroplan miles worth it is that they will allow you to make two stopovers before reaching your destination. That means you could fly to Tahiti and make stops in both Australia and New Zealand on the way.

British Airways From Miami to Lima, Peru

If hiking to Machu Picchu is on your bucket list, you might want to consider flying British Airways from Miami to Lima, Peru. Because British Airways has a distance-based award chart, the flight in coach is just 12,500 miles each way.

2. Buy Gift Cards

Another way to use your Membership Rewards is to receive gift cards from different restaurants, retailers and for travel. The value you receive will be anywhere from a half-cent to one cent per point.

3. Go Shopping

You could also use your points to shop online with certain retailers. Amazon.com, Bestbuy.com and Newegg.com offer 0.7 cents per point. Other partner retailers give you a half-cent per point in value.

4. Use American Express Travel or Airbnb

There are a few different ways you can use your points on travel beyond transferring them to partners. You can book airfare on American Express Travel for one cent per point. You could also book with Airbnb for 0.7 cents per point.

5. Enjoy Entertainment

If you want to redeem your points for concert tickets or for a Broadway show you can do so through Ticketmaster.com, AXS and Telecharge.com. The value is a half-cent per point.

6. Ride With Uber

You could also use your Membership Reward points to pay for Uber rides. You will receive one cent value per point used.

7. Get a Statement Credit

Finally, you could choose to use your points to receive a statement credit. However, by doing this, you will only receive 0.6 cents value per point.

Cards That Earn Membership Rewards Points

There are quite a few different credit cards that give you the opportunity to earn Membership Rewards points. Below you will find a few of our favorite cards.

Platinum Card from American Express

The Platinum Card from American Express has been one of the elite cards available for a few years. When you sign up you will receive 60,000 Membership Reward points after spending $5,000 in the first three months. You can then receive five points per dollar spent on flights and hotels when booked through the airline and by using American Express Travel. All other purchases will receive one point per dollar.

Earlier this year, the annual fee on the Platinum card increased from $450 to $550. This will put the card out of reach for many people. But before you discard the idea of adding it to your wallet, you should consider the travel benefits. Not only will you receive a $200 airline fee credit, which will pay for things like change fees or baggage fees, you also receive a $200 Uber credit. You will receive up to a $100 statement credit to cover the cost of either Global Entry or TSA PreCheck. In addition, you will receive Starwood Preferred Guest and Hilton Honors Gold status. Plus, the next time you travel, it will be in comfort. You will have access to the Delta Sky Club, Centurion Lounges, Airspace Lounges and a Priority Pass Select membership.

Premier Rewards Gold Card from American Express

Another of the elite cards from American Express is the Premier Rewards Gold Card. When you sign up for this card, you receive 25,000 Membership Reward points after spending $2,000 in the first three months. You receive three points per dollar spent on any airfare purchased directly with airlines. You also receive two points per dollar spent at U.S. restaurants, gas stations and supermarkets. All other purchases will earn one point per dollar. There is a $195 annual fee, but it’s waived the first year. Other than the earnings potential, the other benefits can make the annual fee worthwhile to travelers. Each year you receive a $100 airline fee credit. You also receive two points per dollar when you book a hotel through the Hotel Collection. Plus, you receive a $75 hotel credit for qualifying charges.

Amex EveryDay Preferred

When you sign up for the Amex EveryDay Preferred card you receive 10,000 Membership Reward points after spending $1,000 in the first three months. When you use the card at U.S. supermarkets, you receive two points per dollar, on up to $6,000 in purchases each year, and one point per dollar on everything else. Also, if you use your card 20 or more times on purchases in a single billing period you’ll earn 20% extra points on those purchases minus returns and credits. Terms and limitations apply.

At the time of this writing, the EveryDay Preferred also offers a 0% introductory APR on purchases and balance transfers for 12 months. After that, your APR will be a variable 13.74% to 23.74%, based on your creditworthiness and other factors. This card has an annual fee of $95.

If you don’t already have one of these cards keep in mind you’ll need excellent credit to qualify. You can see where your credit stands by getting your two free credit scores right here on Credit.com.

Image: AleksandarNakic

At publishing time, the Platinum Card from American Express, Premier Rewards Gold Card from American Express and Amex EveryDay Preferred card are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

The post 7 Hacks for Using American Express’ Membership Rewards Program appeared first on Credit.com.

7 Credit Card Tips for Soon-to-Be College Grads

A credit card is one of the best ways to start building credit. Here's a plastic primer for soon-to-be college grads.

We get it, soon-to-be-grad, you’re busy. Finals need to be taken; dorm rooms need to be cleared out. Jobs need to be procured — as does your very first apartment. But amid all these big changes, you’ll also want to make time for some good old fashioned financial literacy. After all, money management is critical to your success in the so-called real world. And, believe it or not, having a credit card can help your overall financial health. Of course, that’s only if you use that little piece of plastic responsibly, so, to help you come out ahead, here are 7 credit card tips for soon-to-be college grads.

1. Get One

Sure, there are plenty of reasons to be wary of plastic. But a credit card is one of the best ways to start building credit — and you’ll need a solid credit score when it comes time to get an affordable auto loan, mortgage, insurance policy or more. If you don’t have a credit card already, you’ll probably need to look into secured credit cards, which require an upfront deposit that serves as your credit limit and are designed specifically for people with thin or bad credit. If you were using plastic while in school, you may be eligible for an unsecured card with better terms and conditions. Of course, that’ll come down to what your credit looks like already. (You can see where you stand by viewing two of your credit scores for free on Credit.com.)

2. Pay Your Bills on Time …

The number one rule of credit cards? Pay your bills on-time each and every month. If you don’t, you’ll likely be hit with a late fee, face a penalty annual percentage rate (APR) and damage your credit — seriously. A first missed payment can cause a score to drop 100 points or more.

3. … & in Full Each Month

Or, at the very least, keep the total amount of debt you’re carrying on the card below at least 30% and ideally 10% of your total available credit limit. Any balance over that could hurt your credit utilization rate, which is the second most important factor among credit scores.

4. Monitor Your Statements

Do it even if you’ve signed up for auto-pay, because fraud, unfortunately, can occur at any time. Plus, you’ll want to be sure your balances aren’t burgeoning out of control. Check statements every day or at least once a week. Make small payments if those balances are starting to climb too high and be sure to report any suspicious activity your spot right away to your issuer.

5. Upgrade When You Can …

The better secured credit cards on the market (go here to check those out) usually provide cardholders with automatic reviews after 6 to 12 months of use that’ll determine whether they can get their deposit back and possibly receive a credit limit increase. Make a note of when you’ll be eligible for that type of upgrade and keep an eye on your credit as you use your card. You may be able to build a score solid enough to qualify for not just an unsecured credit card but a rewards or low-interest piece of plastic.

6.  … But Resist the Urge to Churn

Be prepared to encounter big signup bonuses as you shop around for new plastic. (Example: Earn $150 when you spend $3,000 or more in your first three months as an accountholder.) But refrain from applying for every offer you see. Yes, an extra $150 or a boatload of bonus miles are nice, but too many new credit inquiries (which are generated each time you fill out a credit card application) can damage your credit score and make it harder to qualify for important financing down the line.

7. Know When to Stop Charging

If your spending starts to get out of control, put your card on ice. Literally, if you have to. (That’s actually a better bet than formally closing the card, which can hurt your credit score, though you can do that, too, if absolutely necessary.) Next, come up with a plan to pay down those debts. Rework your budget to come up with some extra dollars you can put toward your balance and, if you’re carrying debt on multiple cards, prioritize payments. Make the minimum payment on all your cards but put the most money toward the balance with the highest APR (which can lower the total cost of your debt.) Alternately, you can pay off the smallest balance first, which could keep you motivated as you work to get back into the black. You can find more strategies for paying down credit card debt right here.

Looking to do some more financial planning pre-diploma? We’ve got 50 money moves you should make before graduation

Image: pixelfit

The post 7 Credit Card Tips for Soon-to-Be College Grads appeared first on Credit.com.

Outgrown a Student Credit Card? Here Are 5 Worthy Upgrades for New Grads

If you're graduating with some good credit, you might want to consider a plastic upgrade.

[Disclosure: Cards from our partners are mentioned below.]

Thanks to student credit cards, secured credit cards and a little something called “the authorized user,” plenty of college seniors will be graduating with some credit. And, if you’re one of them (you can check via your free credit report summary on Credit.com) you might want to consider a plastic upgrade.

Starter credit cards are great for building credit, but they don’t usually tout the best terms and even if there’s a $0 annual fee or base rewards program, that plastic likely carries a low credit limit — which might not help in case of an emergency or if you want to further boost your credit. (Remember, a low limit makes it harder to maintain a solid credit utilization rate — how much debt you’re carrying versus how much credit is available to you. For best scoring results, you’ll want to keep your charges below at least 30% and ideally 10% of your total credit limit.)

If you’ve outgrown your starter credit card, or think you’re about to, here are five credit cards worthy of your consideration.

1. Discover it — 18-Month Balance Transfer

Purchase APR: Variable 11.74% to 23.74%, depending on your credit

Annual Fee:  $0

Why You’ll Want to Consider it: Because the Discover it is a solid rewards credit card with some built-in training wheels. Cardholders get 6-months of 0% financing on purchases and a full 18-months 0% financing on balance transfers (the annual percentage rate after that will be a variable 11.74% to 23.74%, depending on your credit). There’s also no late fee for a first missed payment (which you should still avoid at all costs) and no penalty APR.

Plus, if you use your card right, you’ll earn some serious rewards. The Discover it offers 5% cash back on up to $1,500 in purchases in revolving bonus categories each quarter and 1% cash back everywhere else — plus, Discover will match all the cash back you earn at the end of your first year. And there’s an added bonus for new grads getting ready to move out of their parents’ house: Now through June, you can get 5% cash back on up to $1,500 in purchases at home improvement stores.

2. The Citi Double Cash Card

Purchase APR: Variable 14.24% to 24.24%, depending on your credit

Annual Fee: $0

Why You’ll Want to Consider it: Rewards credit cards can be tricky. Points, miles and cash back are nice, but they can easily entice someone to overspend. Charge more than you can pay off each month and any interest you pay on the balance will wind up eating those rewards — and then some. But here’s the thing about the Citi Double Cash Card: It rewards you for paying the bills. Cardholders earn 1% cash back on purchases, then another 1% back when they pay that purchase off. That means you can earn a full 2% cash back on every dollar you spend, which is pretty tops for a cash back credit card, especially since there’s no annual fee. There’s also a 0% introductory APR for balance transfers for your first 18 months. (You’ll pay a variable 14.24% to 24.24% after that.) (Full Disclosure: Citibank, as well as Discover, Capital One and Barclaycard advertise on Credit.com, but that results in no preferential editorial treatment.)

3. Capital One QuicksilverOne Cash Rewards Credit Card

Purchase APR: Variable 24.99%

Annual Fee: $39

Why You’ll Want to Consider it: Available to people with average credit, the QuicksilverOne is a solid alternative for any new grad who had a credit misstep (or two) while they were in school. Yes, you’ll pay an annual fee ($39) and its 24.99% APR will sting if you wind up carrying a balance (expert intel: avoid carrying a balance), but you’ll earn an unlimited 1.5% cash back on all your purchases. You’ll also have access to a higher credit limit after making your first monthly payments on time and receive a few ancillary benefits that’ll come in handy if you need to purchase some stuff for your first apartment. Those bennies include an extended warranty that doubles the original manufacturer warranty up to a maximum of 12 months on most purchases and price protection that reimburses you the difference in price on eligible items charged to the card if you find a lower price for the same item within 60 days of purchase (see card agreement for full details.)

Plus, if you use the card responsibly, you may be able to upgrade to the QuicksilverOne’s no-annual-fee big brother: the Capital One Quicksilver Cash Rewards Credit Card — which we’ve got a full review of right here.

4. Barclaycard Ring Card

Purchase APR: Variable 13.74%

Annual Fee: $0

Why You’ll Want to Consider it: If you’re worried about overspending for rewards, are looking for an in-case-of-emergency card or you need to make a big purchase soon that you might not be able to pay off right away, the no-frills, low-cost Barclaycard Ring Card will probably fit right into your wallet. There’s no annual fee, no foreign transaction fees and no balance transfer fee. Plus, the card comes with a 15-month 0% introductory APR on purchases and balance transfers made within 45 days of account opening — after which, you’ll pay a reasonable variable 13.74%. So, if you need to pick up a few necessities for your first apartment, this is the kind of card you’ll want to put those on. Not to mention the Barclaycard Ring lets cardholders drive: You’ll be invited to share your opinions and vote on product changes in Barclaycard Ring’s online community.

5. Citi Costco Anywhere Visa

Purchase APR: Variable 15.99%

Annual Fee: Technically $0, but you’ll need a Costco membership to apply — and that’ll cost you at least $55

Why You’ll Want to Consider it: Because the card offers big-time rewards on all the stuff you’ll be purchasing once you leave the nest. That includes 4% cash back on eligible gas for the first $7,000 per year (then 1%); 3% cash back on restaurants and eligible travel purchases; 2% cash back on Costco and Costco.com purchases and 1% cash back everywhere else. Plus, there’s a 7-month 0% introductory purchase APR (after that, your APR will be a variable 15.99%). Of course, only Costco fans should apply: While the rewards are plentiful, they’re issued as an annual credit card reward certificate on February billing statements and are redeemable for cash or merchandise at U.S. Costco stores.

Remember, no matter what credit card you choose, smart spending habits should apply. Sign up for alerts or set your bill to auto-pay so you never miss a payment, keep your balances low (or, ideally, pay them off in full) and avoid signing up for every credit card on the market that catches your eye — too many inquiries can damage your credit standing.

In the meantime, if you’re also looking for some new digs, we’ve got a rundown on the 19 mistakes college grads tend to make when looking for their first apartment that you’ll want to read. 

At publishing time, the Discover it, Citi Double Cash, Capital One Quicksilver One, Barclaycard Ring and Citi Costco Anywhere Visa cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.

Image: martin-dm

The post Outgrown a Student Credit Card? Here Are 5 Worthy Upgrades for New Grads appeared first on Credit.com.

How to Redeem Cash Back with Citi

Citi is well known for offering quality credit cards with great balance transfer offers, but the Citi Double Cash card, in particular, is a strong contender for cash back rewards.

The Citi Double Cash card has no annual fee and offers unlimited 1% cash back on purchases plus an additional 1% cash back as you pay for those purchases.

This card also has a variable interest rate of 14.24% to 24.24% and a balance transfer APR of 0% for 18 months.

Even though Citi doesn’t have the highest cash back rate, the fact that you can earn unlimited cash back sets this card apart from others.

In this post, we’ll touch on:

  • How to earn and track cash back rewards with your Citi Double Cash card
  • Navigating through Citi’s online portal to access cash back rewards
  • How to redeem cash back rewards

How to Access Cash Back with Citi

To access your cash back rewards with your Citi Double Cash card, you’ll need to log in to your account by visiting Citi.com/credit-cards. You’ll see a screen similar to the one below. Then, you can log in with your credentials.

screen shot of Citi homepage

Next, you’ll see the main dashboard and all your card information. You’ll also see your cash back balance off to the right.

I have two Citi credit cards so I scrolled down to show my Citi Double Cash card along with where you can expect to see your cash back amount.

screen shot of Citi account dashboard

How to Redeem Cash Back

If you have a cash back balance that you’d like to redeem, you’ll want to click on the button that says “View/Redeem Cash Rewards.”

Once you click that button, you’ll be taken to a page that shows you an entire summary of your cash back earnings per billing statement.

Your cash back earnings will be split up between cash back earned from purchases and cash back earned from payments.

I just signed up for the Citi Double Cash card and have yet to make my first purchase so my cash back amount is currently $0, but when you have a balance, you’ll click the green button that says “Redeem” to move forward with redemption options.

Screen shot Citi redeem cash back

Next, you’ll be taken to a page with different redemption prompts to choose from. You need a balance of at least $25 in cash back before you can successful redeem your earnings.

Citi cash back buttons

As you can see, there are four different ways to redeem cash back with your Citi Double Cash card, and here is an explanation of each of them.

Gift Card

If you choose to redeem your cash back for a gift card, you must click the gift card option, then you’ll be directed to Citi’s gift card marketplace where you can choose from retail, restaurant, entertainment, and electronic gift cards.

Screen shot of Citi gift card redemption

Gift cards are worth $25, $50, and $100, and once you select one, Citi will mail it to you.

Statement Credit

You can also opt to use your cash back earnings as a statement credit to lower the current balance you owe on your Citi Double Cash card. Your statement credit will post to your account within 2-3 business days and will appear on your next statement after it is posted.

It’s also important to realize that Citi does not count a statement credit as a payment even though it will reduce your current balance. You must still make at least your minimum monthly payment by the due date if you want to avoid getting charged a late fee.

Direct Deposit

You can redeem cash back by transferring it directly to your bank account whether it’s a Citi account or not. In order to use this redemption option, you must have either linked your Citi checking or savings account OR have paid a Citi credit card bill at least two times from a non-Citi checking account.

Once you’ve done either of these things, all you need to do is enter in the amount you wish to deposit along with your account information when you redeem cash back via this option. The direct deposit will post to your account within 1-2 business days in most cases.

Check

The final option you have to redeem your cash back is to do so by paper check. Just make sure Citi has the correct address on file for you, then allow 7-10 business days for the check to arrive in the mail.

Final Word

The Citi Double Cash card has one of the easiest online cash back redemption processes, along with plenty of options to accommodate your preferences.

Keep in mind that payments based on balance transfers, interest, fees, and cash advances won’t earn 1%, but you will earn cash back on all other purchases plus additional cash back when you make at least your minimum monthly payment on time.

The Citi Double Cash card is unique in that it rewards you for paying your monthly credit card bill on time, which is a good habit to adopt.

While there is a minimum cash back balance required in order to redeem your rewards, you can track your progress regularly by logging into Citi’s online portal.

 

The post How to Redeem Cash Back with Citi appeared first on MagnifyMoney.

Got the Worst Credit? These Cards Can Help You Rebuild It

Sounds counterintuitive, we know, but a new credit card can help you re-establish your payment history. Just use it wisely.

Chances are, your credit isn’t actually the worst. According to data furnished to Credit.com by TransUnion, only a very tiny portion of the U.S.’s scoreable population has the lowest VantageScore possible. Of course, escaping the dreaded 300 won’t get your credit out of the woods. Any score below 600 is considered, well, bad, and even a score in the 650 to 699 range will cost you in interest.

Still, there’s no need to despair: Nothing lasts forever, including a terrible credit score. You’ve just got to take steps to rebuild it. Paying down high balances, shoring up delinquencies, paying collection accounts and disputing errors on your credit report are great places to start. (The further you get from 300, the better. You can track your progress using Credit.com’s free credit report summary.)

After that, consider getting a new credit card. It sounds counterintuitive, we know, but that plastic can be instrumental when it comes to reestablishing a solid payment history. Just be sure to pay all your bills on time and keep balances as low as possible.

Here are five cards designed to help people with bad credit rebuild their scores. (See card agreements for full terms and conditions.)

1. OpenSky Secured Visa Credit Card

Annual Fee: $35

Purchase Annual Percentage Rate (APR): Variable 18.14%

Why It’s a Good Option: Yes, secured credit cards are designed for people with bad credit, but most still require a credit check, and there’s no guarantee you’ll be approved. The OpenSky Secured Visa Credit Card foregoes pulling your credit and doesn’t require a checking account either, so if your finances are really damaged, you may want to take up their offer. OpenSky reports to all three credit bureaus, so you’re covered there. And there’s a wide range for a security deposit: You can put down as little as $200 and up to $3,000.

Beyond that, the terms of the card are decent, especially given that there’s no credit check. (There are certainly secured credit cards out there touting higher APRs and annual fees.) One drawback worth mentioning: There’s no built-in way to upgrade to an unsecured credit card, so you’ll have to improve your scores and apply elsewhere.

2. Discover it Secured

Annual Fee: $0

Purchase APR: Variable 23.74%

Why It’s a Good Option: Back in Dec. 2016, Discover announced that Chapter 7 bankruptcy would no longer automatically disqualify Discover it Secured applicants, so someone with that big blemish on their credit report could conceivably get approved. That’s great news for people with bad credit, because this card is pretty tops, as far as secured credit cards go.

There’s no annual fee, account reviews begin at seven months to determine whether to refund your deposit (a minimum of $200 is required to open an account), and there’s even a rewards program. Cardholders earn 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases each quarter, and 1% cash back on everything else. Plus, Discover is currently matching all the cash back you earn at the end of your first year.

Other Big Perks: Discover reports to all three credit bureaus, waives the late fee on your first missed payment and won’t impose a penalty APR if you miss a bill. Just be sure to pay your balances off in full: That APR is on the high side and will quickly negate any rewards you do earn.

3. First Progress Platinum Select MasterCard Secured Credit Card

Annual Fee: $39

Purchase APR: Variable 14.99%

Why it’s a Good Option: There’s no credit history or minimum credit score required for approval — so long as you don’t have a pending bankruptcy. First Progress reports to all three major credit bureaus, offers a flexible deposit range ($200 to $3,000) and features a reasonable annual fee and low APR. Again, the potential drawbacks are that you don’t have a built-in option to upgrade and the card isn’t currently available in Arkansas, Iowa, New York or Wisconsin.

4. primor Secured Visa Gold Card

Annual Fee: $49

Purchase APR: Fixed 9.99%

Why It’s a Good Option: This card touts guaranteed approval so long as your monthly income exceeds your monthly expenses by $100 or more. Plus, while that $49 annual fee can be bested, you’ll be hard-pressed to find a secured credit card with an APR lower than primor’s. There’s no penalty APR either, though you’ll still want to pay your bills on time and ideally in full. Your card use will be reported to all three credit bureaus, and you can put down a deposit of $200 to $5,000. There are no built-in upgrades with an unsecured credit card, however.

5. CreditOne Bank Visa

Annual Fee: $0 to $75, the first year; $0 to $99 thereafter, based on your credit

Purchase APR: Variable 15.90% to 24.40%

Why It’s a Good Option: OK, if you’ve got really bad credit, you’re probably going to pay a high annual fee and receive a high APR with the CreditOne Bank Visa. But it’s an unsecured credit card, meaning you won’t have to put down a deposit that serves as your credit limit. Plus, it’ll let you pre-qualify without incurring an inquiry (which would damage your already-hurt credit score), so it’s worth considering if you don’t want to go the secured-credit-card route. There are also rewards — 1% cash back on eligible purchases, including gas, groceries, mobile phone, internet, cable and satellite TV services. Just be extra careful about paying your balances off in full, and prepare for a fee when looking to get a higher credit limit, as one may apply.

At publishing time, the OpenSky Visa Secured, Discover it Secured, First Progress MasterCard Select Secured, primor Secured Visa Gold and CreditOne Bank Visa credit card are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, these relationships do not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Image: mapodile

The post Got the Worst Credit? These Cards Can Help You Rebuild It appeared first on Credit.com.

3 Ways to Get a Credit Limit Increase

In many cases, a credit limit increase can sound like a good idea. If you start out with a credit limit of $2,000, for example, it’s good to know that your limit can increase in the future so you can have more buying power and find it easier to maintain a low utilization rate.

Sometimes, increasing your credit limit will not always be in your best interest because it can tempt you to overspend. In that case, it’s also easy to drive up your utilization rate, which is how much you are spending versus how much available credit you have. If your utilization rate gets higher than 20%-30%, it can begin to hurt your credit score.

What’s worse, by overspending and not paying your credit card balance off in full each month, you can get into debt.

If you’d like to secure a credit limit increase for a credit card and you know that you’ll have a good sense of self-control over your spending, there are quite a few ways to obtain a credit limit increase.

In this article, we’ll go over your different options when it comes to obtaining a credit limit increase and what you might want as an alternative.

How to Ask for a Credit Limit Increase on Your Current Card

One of the most common ways to obtain a credit limit increase is to simply ask for one. Most credit card companies and banks allow you to request a credit limit increase online or you can do it by phone.

We’ve gone through the process of requesting a credit limit increase with various banks in detail, including Wells Fargo, Capital One, Discover, Barclaycard, American Express, and more, if you need specific instructions regarding the process.

When requesting a credit limit increase, it’s important to make sure you meet the criteria to be considered. Some banks have certain requirements and like to see your account paid off and in good standing, a good credit score, and recent spending activity on your end.

If you haven’t been consistent about paying your credit card bill on time, that may work against you when you decide to request a higher credit limit.

On the other hand, if you’ve been managing your card well and paying your bill on time and would like more buying power, you may want to consider requesting a credit limit increase just to see what the end result will be.

Sit and Wait (Automatic)

Some credit card companies will offer you a credit limit increase automatically so you won’t need to do anything on your end.

If you’ve been spending on your card regularly, paying your bill on time, and keeping your utilization rate low, you may receive an offer to increase your credit limit automatically.

In this case, you can either accept or deny the offer. In most cases, accepting the offer will be your best bet if you like the credit card and use it from time to time. Even if you don’t use the card often, having a higher limit will only help lower your utilization rate as long as your spending doesn’t increase significantly.

Consider a New Card

If you’re on the fence about getting a credit limit increase, you can always consider signing up for a new credit card instead. Adding a new credit card to your wallet can increase the number of accounts you have, which can be a positive move for your credit if you only have a low number of accounts total.

Some new credit cards also have great sign-up bonuses so you can take advantage of more cash back offers, an extended 0% APR rate, balance transfers, etc., and these are benefits you might not be able to receive if you only increase the limit on your existing credit card.

To find out if you’ll be approved for a new credit card without hurting your score, you can get pre-qualified, which typically allows banks to peek at your creditworthiness via a soft inquiry. Getting pre-qualified for a credit card can reduce your risk of getting denied, and it’s pretty simple. Find out how to do it here.

Also, another reason why you might opt to just get a new credit card instead of considering a credit limit increase is if you don’t like or use your current card often. If you have an annual fee, a high-interest rate, and little reward opportunities with your existing card, it won’t make much sense to increase your limit and buying power.

Instead, signing up for a new and better credit card can be more beneficial and help you save money, especially if it has no annual fee.

Get a Personal Loan

If you are thinking about a credit limit increase because you need the extra money but don’t want to obtain a hard credit inquiry, a personal loan is an alternative option.

There are quite a few internet-only personal loan companies that allow you to see if you are pre-approved for a loan without involving a hard credit inquiry. Personal loans also tend to have lower interest rates than credit cards, so if your main intention is to borrow money to cover an expense, this may be a better option.

To see if you qualify for a loan, use our online tool here. You just need to fill out one application, and MagnifyMoney will check your rate with multiple lenders (without harming your credit score) to help you find the best offer.

What to Do If You Get Denied

If you request a credit limit increase and get denied, you’ll usually receive a response explaining why you didn’t get approved. Once you know why you didn’t get approved, you can take the necessary steps to fix the issues outlined and request an increase again if you wish.

Be mindful that some banks will let you request a credit limit increase at any time, while others may require that you wait a few weeks or months before putting in a request again.

While waiting it out and correcting the issues that contributed to you getting denied should fix the issue, you can also try either of the alternative options mentioned above as well if you didn’t get approved for a credit limit increase the first time around.

Benefits of Requesting a Credit Limit Increase

Obtaining a credit limit increase can be a smart move and provide you with benefits like increasing your credit limit and having more buying power in the event that you need to use your card for a large expense or emergency. With a higher limit, you are less likely to max out your card.

A credit limit increase will also make it easier for you to keep your utilization rate low and preferably below 20%. The process may also be easier than applying for a brand new credit card, especially if you receive credit limit increase offers automatically.

Drawbacks of Requesting a Credit Limit Increase

Increasing your credit limit isn’t always the best option for everyone, so it’s only fair to go over some of the possible drawbacks of making this decision.

In some cases, you’ll receive an extra credit inquiry, which could be a hard credit inquiry when you request a credit limit increase. Increasing your limit can also increase the risk of overspending and getting into debt.

There’s also no guarantee that you’ll get approved for a credit limit increase, so your request can get rejected. Also, if you have a card with a high-interest rate and an annual fee, you might be better off signing up for a better credit card.

Final Word

Requesting a credit limit increase can seem like a good idea on the surface, but it’s not the best solution for everyone. You must determine your needs, current situation, and intentions before going through with your decision.

If you decide to move forward with obtaining a credit card limit increase, be sure to pay your credit card balance off in full each month and keep your overall utilization rate at 20% or lower.

The post 3 Ways to Get a Credit Limit Increase appeared first on MagnifyMoney.

Disputing Credit Card Charges: What You Need to Know and Instructions for Each Card Issuer

If you use credit cards, chances are at some point you’ll need to dispute a charge that appears on your statement for one reason or another. The good news is that this common practice has some pretty awesome guidelines and provisions protected under both state and federal laws.

Whether your dispute is straightforward or complicated, you’ll want to know the ins and outs of how the dispute process works so that it can ultimately work for you should you need it. The dispute process will help you get the best outcome in the case of billing errors, fraud, misrepresented products, or any other charge on your statement you believe you shouldn’t be responsible for.

When to Dispute a Charge on Your Account

The Fair Credit Billing Act (FCBA) protects consumers from unfair credit billing practices. This federal law also provides guidelines to both consumers and credit card issuers for dispute management and resolution. According to the FCBA, consumers can file disputes, according to the FCBA settlement procedures, for the following billing errors (list provided by the FTC website):

  • Unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50.
  • Charges that list the wrong date or amount.
  • Charges for goods and services you didn’t accept or that weren’t delivered as agreed.
  • Math errors.
  • Failure to post payments and other credits, like returns.
  • Failure to send bills to your current address — assuming the creditor has your change of address, in writing, at least 20 days before the billing period ends.
  • Charges for which you ask for an explanation or written proof of purchase, along with a claimed error or request for clarification.

There are additional FCBA provisions covering problems with the actual goods or services, aside from billing errors. This is known as the right to assert “claims and defenses.” In other words, the charge is correct, but the goods or services are not delivered as promised or described. This right can be exercised up to one year after purchase.

Under claims and defenses, the purchase has to be made within 100 miles of your current billing address and be more than $50, and you’ve got to make a “good faith” effort to resolve the dispute with the merchant first. The dollar and distance rules don’t apply if there is a special relationship between the buyer and seller or the purchase was made via internet, mail, or phone.

When you are initiating a dispute on this basis, make that clear with the credit card company so they’ll process the dispute accordingly. In this case, state laws may also play a part in determining what actions you can take against the merchant and the credit card issuer if the dispute is not resolved in your favor.

How to Dispute a Charge on Your Credit Card

The first thing you’ll want to do is determine if the charge is really an error. A little research will help you figure out if a charge is an error, fraudulent, or a purchase gone wrong. Some things to consider:

  • Did you let someone use your card? Do you have an authorized user on your account? They may have made a purchase with it.
  • Is it possible that someone obtained your information illegally and made a fraudulent charge on your card?
  • Does the merchant use another company name that appears on your credit card statement? (For example, Binky Toys can appear as “TOY CORP” on your billing statement.)
  • Did you read the fine print? You may have signed a contract with a merchant authorizing charges you were not aware of.

Once you determine there is an actual problem with your statement, you’ll want to figure out if the problem is with your credit card issuer or a merchant. The process can be slightly different if a merchant is involved or not.

If the charge is an error that doesn’t involve a merchant, like fraud or identity theft, then you can contact your credit card issuer directly. Though it’s best to document your dispute in writing, many card issuers will discuss the issue with you (and sometimes even resolve it) over the phone.

Nowadays, most major card issuers will allow you to log in to your account and file the dispute or initiate an inquiry about a charge online. If you don’t feel comfortable with any of these methods, you can use this sample dispute letter provided by the Federal Trade Commission (FTC) and begin the dispute process via mail.

If the charge involves a merchant whose goods or services were either defective, misrepresented, or not delivered as agreed, then you’ll want to contact them first. You can place a call to start the process, but it’s best to have things in writing. So an email or snail mail letter can either kick things off or confirm and reiterate what was discussed over the phone regarding the issue.

Many times, merchants will work with you because they want to keep their chargeback rates (credit card refunds due to errors and disputes) low. Merchants who have higher chargeback rates are deemed high risk by credit card processors and face higher penalties and processing rates which cut deeply into their bottom line. For this reason, try to settle with them before going to your credit card company with the problem.

If you can’t get an acceptable resolution from the merchant who charged your card, then it’s time to contact your credit card issuer. Just like the process outlined above for billing errors, you can choose to initiate the dispute via phone, internet portal, or mail.

In all your disputing, remember the timelines set forth by the Fair Credit Billing Act. If your problem is with a merchant, you’ve got up to a year to make a claim under “claims and defenses.”

For errors, your dispute correspondence has to be received by the credit card issuer no later than 60 days after the first statement containing the charge you are disputing. In either case, if you decide to send your correspondence via mail, it’s a good idea to send it certified with proof of delivery.

What Happens After You Initiate a Dispute

Under the FCBA, your card issuer has to acknowledge your complaint 30 days after receiving it (unless they resolve it before then). Sometimes, the dispute process is fairly straightforward and within a matter of minutes the dispute could be resolved in your favor. You’ll receive a credit on your statement and the issue is resolved.

You should also be aware that under the FCBA, you don’t actually have to pay the amount in dispute or any interest or any related late fees while the dispute is ongoing. Sometimes, the card issuer will even remove the charge under investigation right away. The bank has 90 days to investigate the issue and resolve it either in your favor or the merchant’s favor.

Keep in mind that you could be asked for supporting documentation to back up your dispute. This could include police reports, photos of a defective product, manufacturer claims and descriptions, tracking numbers, screenshots, and email correspondence.

This evidence will be gathered and checked against any evidence supplied from the merchant. Once the bank has concluded the investigation, you’ll receive a final ruling where the charge is either removed permanently or placed back onto your statement and becomes your responsibility to pay. You should also know that you may be responsible for interest and fees that accrue for a dispute you ultimately do not win.

What If Your Dispute Isn’t Approved

If finally, despite your best efforts, you’re deemed responsible for the disputed charge, you still have a few options. You could appeal the final decision with the credit card issuer within 10 days of the decision. Sometimes, the investigation could be reopened. Inform the bank that you’ve got new information they should consider.

If they still decline to reconsider or resolve in your favor, they can report your failure to pay to credit bureaus. If they do report this information, it must also state that you do not believe you owe the amount in question.

Another option is to take the merchant, your bank, or both parties to court. This can be costly, but for an amount that’s high enough, a court case could be justified. Be sure to check terms and conditions for both the merchant and the issuer, because you may have waived your right to this course of action in doing business with them. Also, state laws will have a say in what legal recourse is available to you against both the merchant and credit card company. Check with the consumer protection division of your state’s attorney general office for guidance in this area.

Also, don’t be afraid to engage help and organizations that might have oversight of the institutions involved in your dispute. You can file a complaint against credit issuers with the FTC. The FTC complaint process, however, won’t apply to banks. Banks are regulated by the FDIC. You can find the regulator that has oversight of the bank you are dealing with here, or you can file a complaint with the Federal Reserve Consumer Help website.

If you’ve got the time, energy, and ambition, you can always take to social media to vent and tell the world about your experience. Many companies are diligent about protecting their online reputation and prefer to route these conversations offline for resolution. If possible, be just as polite and diplomatic on social media channels as you would be with a phone call or written complaint. You’ll likely get further with this approach.

Where It Can Get Sticky

As mentioned, disputes can be settled quickly and easy. Some people say that their card issuer didn’t even ask for documentation but charges were immediately reversed. Other times, it can be a longer process, especially if a merchant objects to your dispute.

When this happens, there can be a lot of back-and-forth between everyone involved in a credit dispute. The purchaser, the merchant, the acquirer (Visa, MasterCard, American Express, Discover), and the issuing bank all have to coordinate communication to make sure disputes are investigated thoroughly and resolved appropriately.

Be aware that there are circumstances that can complicate, delay, and even hinder the dispute procedures.

Bankruptcy

When a merchant doesn’t deliver goods or services due to insolvency, there may not actually be any money in their bank’s account to cover a chargeback. You might be better off filing a case in small claims court. Sadly, in many bankruptcy proceedings, outstanding payables due to customers are one of the last payment priorities.

Collections

Though the dispute can be resolved in your favor from the credit issuer, the merchant could come back and bill you anyway. They can even send your account into collections. In this case, keep your documentation and be ready for a potential battle with collection agencies that have been engaged to recoup the funds from you. You credit report could also suffer.

Prepaid services

Let’s say you make an advance payment on a fitness camp 12 months in advance, but the company goes out of business and won’t be hosting the camp after all. You’ll want to make sure that you fully understand the dispute resolution process regarding future purchases. It will vary for each card issuer, so find out how you are protected in a situation like this. Consult your bank’s card member agreement and speak with someone who can give you clarity on dispute terms before making advanced payments with your credit card.

Product returns

If the dispute is resolved in your favor, part of the resolution may be connected to returning goods in order to receive the refund amount. There are very clear rules around what merchants must do when they receive your goods — a credit must be transmitted to the card issuer within seven days. From there, the issuer must ensure it shows up on your account within three days. It’s not unheard of for a seller to “send” for an item and never retrieve it in order to delay or avoid issuing a refund. Make sure that you take responsibility for returning goods. It’s a good idea to pay for tracking and insurance to make sure your items arrive safely, with proof of delivery, to the seller.

Pre-existing contracts

Terms and conditions are no fun to read, but it’s a good practice to look at the fine print (especially for large purchases). Hidden in these terms could be strict refund policies and even waivers to the dispute process should a problem occur with a sale.

Instructions for Filing Disputes with Major Credit Card Issuers:

 

Card Issuer: Instructions for Disputes:
Chase Chase dispute instructions
Bank of America Bank of America dispute instructions
Capital One Capital One dispute instructions
Barclays Barclays dispute instructions
Discover Discover dispute instructions
Citi Citi dispute instructions
American Express American Express dispute instructions

Final Thoughts on Credit Card Instructions

There are so many variables that can influence the outcome in all of these cases that it can seem like the final decisions are arbitrary. What worked in one scenario may not work in another with a different company or cardholder.

Many times, you’ll be working with a customer service representative who is unfamiliar with your rights as a consumer and the laws that should govern the outcomes of credit card charge disputes. When all else fails, research, education, and persistence may be your most powerful weapons in the fight for your consumer rights.

The post Disputing Credit Card Charges: What You Need to Know and Instructions for Each Card Issuer appeared first on MagnifyMoney.

Can Your Airline Credit Card Keep You From Getting Bumped?

Find out how the right card can help you keep your airplane seat.

Getting bumped from a flight can be a trying experience, as evidenced by the viral video of a passenger being removed from a United Airlines flight. (Thinking of ditching United? Here are four solid airline credit card alternatives.)

While the situation almost never gets that extreme, many airlines overbook flights and getting bumped is a very real possibility for air travelers. If passengers want to keep their seats, having an airline-branded credit card can help.

Membership in a frequent-flyer program generally makes a passenger less likely to be bumped, said Cecilia Minges, a spokeswoman for AirHelp, a company that provides legal advice to passengers whose flights are delayed, canceled or overbooked. The federal Department of Transportation requires airlines to explain how they decide who gets bumped off oversold flights.

While having a certain card won’t directly help keep you on a plane, having elite frequent flyer status often can, and many cards help holders attain that status. The big three U.S. airlines — United Airlines, American Airlines and Delta, (none returned Credit.com’s requests for comment by press time) — have similar policies on bumping, which take frequent flyer status into account. But their branded airline cards vary in their ability to help you earn elite status.

Here’s a closer look at the policies of America’s three biggest airlines.

United Airlines

United Airlines’ contract of carriage — a document outlining the rules it applies to passengers — says the status of a passenger’s frequent flyer program membership, along with the cost of their fare, their itinerary and when they showed up for check-in may determine whether they are bumped or not.

Having a United Airlines credit card won’t confer a higher status in the United MileagePlus frequent flyer program. Only earning the requisite miles by flying with United and its partners will get a passenger to a Premier level. However, having a United Mileage Plus credit card can help you get there faster. United’s credit cards all award two miles for each dollar spent on tickets purchased from United, though signup bonus miles don’t count toward Premier status.

American Airlines

American Airlines’ contract of carriage contains language similar to that of United Airlines. Membership in its AAdvantage program is one of many factors it considers in deciding which passengers to bump.

Both the Citi AAdvantage Platinum Select World Elite Mastercard and the AAdvantage Executive World Elite Mastercard help cardholders earn miles faster — two miles for every $1 spent on American Airlines purchases — but only the Executive World Elite card awards 10,000 miles that will help qualify you for elite status, and only after you spend $40,000 in purchases in a year. The lowest level of elite status in the AAdvantage program, Gold, requires 25,000 Elite Qualifying Miles. (Full Disclosure: Citibank advertises on Credit.com, but that results in no preferential editorial treatment.) 

Delta Airlines

Delta Airlines also favors high-status members of its frequent flyer program when deciding who will get bumped from flights. Unlike American and Delta, it specifies exactly how much it favors elite members.

Its boarding priority rules place Diamond, Platinum and Gold Medallion members behind only passengers with disabilities, unaccompanied children, the elderly and members of the U.S. Armed Forces. Silver members are a few tiers down.

In a recent change to its policies reported by the Associated Press, Delta plans to let its employees offer close to $10,000 to coax customers to give up their seats. The airline’s previous max award was $1,350.

Delta’s branded cards offer signup bonuses that count toward qualifying for elite status. For example, the Delta Reserve Card awards 10,000 Medallion Qualification Miles after the first purchase on the card. Reaching Gold status, which means almost never being bumped, requires 50,000 Medallion Qualification Miles.

Before you apply for any new credit card, especially a reward credit card, you’ll want to be sure your credit is good enough to qualify. You can check two of your scores free on Credit.com.

Other Ways to Avoid Getting Bumped

Policies vary by airline. A representative for Southwest Airlines said the company didn’t consider whether a passenger has a Southwest credit card. Rather, passengers are bumped in reverse order from when they boarded, irrespective of other factors like how much they paid.

In most cases, Minges said, the more you pay for your ticket, the less likely you are to get bumped. That’s because when airlines bump passengers, they have to compensate them based on their fares, per DOT rules.

For example, if an airline bumps a passenger and arranges substitute transportation that gets them to their destination between one and two hours after their original arrival time, the airline has to pay 200% of their one-way fare, up to $675 max. Any later than two hours and they must pay 400% of a passenger’s fare, up to $1,350 max. If you paid with miles, compensation will be based on prices for other tickets in the same class.

These compensation numbers are updated every two years to account for inflation, said Charlie Leocha, president and founder of Travelers United, a Washington, D.C., advocacy group. So there’s an incentive for airlines to bump people who paid less for their tickets, Minges said. Because of that, buying a higher priced ticket, in addition to joining the airline’s frequent-flyer program, are among the surest ways to keep your seat, she said. “It’s not guaranteed, but it can help.”

Here are some other moves Minges suggested:

  • Check in early, when fewer people fly.
  • Get to the gate early. Some airlines, like Southwest, bump people based on when they check in or arrive at the gate.
  • Check your luggage. It’s easier for the airline to bump people without luggage because they don’t have to find their bags and get them off the plane before it can take off.
  • Pick the right airline. As we said, different airlines have different policies. Each airline posts their contract of carriage online. Dig through the legalese and you can find their overbooking policy. Some are friendlier than others.

At publishing time, the Citi AAdvantage Platinum Select World Elite Mastercard and the AAdvantage Executive World Elite Mastercard are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, these relationships do not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Image: Tommaso Tagliaferri

The post Can Your Airline Credit Card Keep You From Getting Bumped? appeared first on Credit.com.

Here’s How Many People Actually Have the Worst Credit Score

It is possible to have a rock-bottom credit score. Find out exactly how many U.S. residents meet this dubious threshold.

As confusing as credit scores can be, most people get the basic concept: You want a high score, not a low one. What qualifies as a good credit score depends on the scoring model you’re talking about (and there are dozens of them), but a common range is 300 to 850. The higher your score, the better. You don’t have to aim for an 850 to get the best terms on a loan or qualify for top-tier credit cards, but anywhere in the high 700s is a good place to be.

Ideally, you’re not anywhere near the bottom of the range, but it is possible to have a 300 credit score on a 300 to 850 scale. The good news: A very small portion of the population has such a score. The bad news: Some people do.

How Many People Have the Worst Credit Score?

There are 294 million “scoreable” consumers, and only 0.01% of them had a 300 credit score, according to data credit bureau TransUnion pulled for Credit.com in March 2017. (A scoreable consumer is someone with enough information in their credit files to generate a VantageScore 3.0. TransUnion said 4.28% of the population is not scoreable.) While 0.01% is a really small portion of consumers, it still means 29,400 people have the worst credit score (on the VantageScore 3.0 scale). In other words: It’s totally possible for your credit to hit rock-bottom. (You can see where you stand by getting two of your credit scores for free on Credit.com.)

 

Though it’s uncommon to have the worst credit score, having bad credit isn’t. More than a quarter (27.66%) of consumers have a credit score between 300 and 600, which is considered bad credit or subprime credit. Conversely, 20% have a super prime credit score (781 to 850). The average credit score was 645 when TransUnion pulled the data.

How to Deal With Terrible Credit

TransUnion didn’t identify common factors among consumers with a 300 credit score, but they pointed out some characteristics of subprime credit files: “Generally speaking people with poor credit (300-600 score) usually make late payments, only contribute the minimum amount, carry high percentage balances on multiple cards and apply for multiple lines of credit within a short period of time,” said Sarah Kossek, a spokeswoman for TransUnion, noting that the factors vary by individual.

So if you want to avoid joining the population of people with bad credit (or you want to get out of the club), it’s smart to make credit card and loan payments on time, pay down your debts, use a very small portion of your credit card limits and apply for credit sparingly. It’s also a good idea to regularly review your credit reports for accuracy, as errors may be hurting your credit. You can pull your credit reports for free each year at AnnualCreditReport.com.

If your credit is the worst, figuratively or literally, well, you can find a full explainer on how to fix it right here.

Image: mikkelwilliam

The post Here’s How Many People Actually Have the Worst Credit Score appeared first on Credit.com.