10 Ways Divorce can Affect your Credit

how-does-divorce-impact-credit-score

As nearly half of the American population already knows, divorce is a difficult, emotional process to go through. This difficulty can be compounded depending on the number of years a couple has been together, the dollar amount of their acquired assets, and whether or not they have any children.

Divorce can also have an impact on your credit, though the proceedings themselves are not the reason for this. In other words, couples shouldn’t expect their credit scores to plummet the second they file for divorce. However, there are things that occur during divorce that can have a negative impact on credit. Here are 10 ways in which a divorce could affect your credit score:

  1. Having to refinance your home

    In order to move a property into one person’s name, it may be necessary to refinance your mortgage. As with any refinance situation, this will require a hard credit inquiry, and may also potentially add a great deal of new debt for one person.

  2. The splitting of the debt was uneven

    When assets are divided, one person may get to take more of the income, property, or assets, but also more of the debt. It all just depends on how the debt is divided.

  3. Going from two incomes to one

    If possible, it’s helpful to examine finances before a divorce and determine new budgets for both parties, so as to avoid falling behind on any bills or payments. Many divorced individuals report that losing another person’s income made the single greatest impact on them financially. Setting up a new budget early on can help avoid this issue.

  4. Not disclosing all debt during the proceedings

    At some point during the divorce process, both parties are required to disclose their financial accounts. However, as former spouses sometimes learn, not everyone is truthful about these assets. Running a credit report is the best way to ensure you’re aware of every account bearing your name.

  5. One party doesn’t pay his or her agreed-upon share

    Most courts are willing to work with couples to help them discuss and agree on a payment plan for shared assets, such as a home or any jointly-owned property.

  6. One party still has access to the other party’s accounts

    In the event that divorcing spouses do not split their joint accounts, both parties will still be responsible for any additional charges. It’s best to split any joint accounts as soon as possible.

  7. Credit limits are decreased

    Many creditors regularly check up on their clients to see if there has been a salary change, and most credit card agreements state that limits can be decreased at the creditor’s discretion. If one spouse was making more money than the other, and the accounts are separated, a credit card company can choose to lower the limits for one or both spouses. This can, in turn, affect credit scores, as well as catapult credit card holders to their maximum limits very quickly.

  8. The divorce turns ugly

    While no one enjoys going through divorce, the best solution is to try and remain civil to one another, lowering the risk of spouses doing financial harm to one another out of spite.

  9. There is confusion over the divorce decree

    People can often be confused about their financial responsibility as stated in the divorce decree. If you are unsure of where you stand or what you must pay, consult your attorney, family court facilitator, or mediator.

  10. Spouses don’t work together

    Sometimes, electric bills can be overlooked or go unpaid. Keeping the divorce process as amicable as possible helps parties communicate with one another over their shared financial responsibility after the households have been completely separated. Working together ensures everyone’s credit remains in good standing.

 

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10 Tips to Secure the Best Interest Rate on your Mortgage

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The process of buying a home is a very involved one, and can be daunting, especially for first-time buyers. It’s often a whirlwind of paperwork, credit reports, and scrambling to tie up loose ends.

One of the biggest factors that goes into calculating your monthly mortgage payment (other than the size of the loan itself) is your interest rate. Some of this is determined by the Federal Reserve, but it is mostly determined by you and where you stand financially, and many factors are considered. Here are ten tips on securing the best interest rate on your new mortgage.

Choose between a fixed or adjustable rate mortgage

While many people might be wary of an adjustable rate mortgage (ARM), it can be a better option for those who plan to pay off their mortgage in a short amount of time. For the introductory period of an ARM loan, the interest rate will be lower than that of a fixed rate mortgage. Just make sure you’re prepared to see an increase in your monthly mortgage payment after the introductory period is over.

Make the biggest possible down payment

The larger your down payment, the less money the lender will have to give you, and the lower your interest rate can be. Your interest rate is partially based on your home’s loan-to-value (LTV). For example, if a home is worth $200,000, and the loan is for $199,000, that would be considered a high LTV and is more risky for a lender. If this ratio is lower, however, you might be rewarded with a lower interest rate.

Make sure your credit is in excellent shape

While there is no one credit score needed to buy a house, those with higher credit scores have usually demonstrated good financial competency, and those are the types of consumers to whom lenders can offer lower interest rates.

Pay for points 

It it possible to pay extra directly to your lender in order to lower your interest rate. For every one percent of your loan amount you are willing to pay extra, it could amount to as much as half a percent off your interest rate. Essentially, you are just paying a larger amount of interest up-front.

Have a long employment history

Even if you haven’t been at the same job for several decades, demonstrating that you have no (or minimal) periods of unemployment shows lenders they can count on you to pay your mortgage in full every month. This can help lower your interest rate.

Prove income stability

If you can prove that your line of work is in high demand with no sign of slowing down, or if you work for a large, profitable company, your lender may take this into account when processing your paperwork. Income stability will help show that you won’t be likely to miss any mortgage payments.

Lower your debt-to-income ratio

Even with a high credit score, it’s possible to accumulate a lot of debt. Lenders don’t want you using more than roughly 40 percent of your monthly income on your mortgage, car payments, and credit card bills. The lower your debt-to-income ratio, the lower your interest rate will be.

Build up cash reserves

Most people know they should have enough savings to cover about six months worth of bills. Proving to your lender that you can still pay your mortgage in the event of a job loss will help you score a lower interest rate.

Shop around

Different lenders have different criteria for their loans. Finding the one that suits you best can help ensure you get the best possible interest rate for your financial situation.

Close on your loan as quickly as possible

Some buyers need 30 days to close; others might need as much as 60 days. If you can close within the initial 30 day window, however, you might pay as much as a half a percent point less than those who need 60 days to close.

 

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10 Tips to Secure the Best Interest Rate on your Mortgage

guarantee-a-mortgage

The process of buying a home is a very involved one, and can be daunting, especially for first-time buyers. It’s often a whirlwind of paperwork, credit reports, and scrambling to tie up loose ends.

One of the biggest factors that goes into calculating your monthly mortgage payment (other than the size of the loan itself) is your interest rate. Some of this is determined by the Federal Reserve, but it is mostly determined by you and where you stand financially, and many factors are considered. Here are ten tips on securing the best interest rate on your new mortgage.

Choose between a fixed or adjustable rate mortgage

While many people might be wary of an adjustable rate mortgage (ARM), it can be a better option for those who plan to pay off their mortgage in a short amount of time. For the introductory period of an ARM loan, the interest rate will be lower than that of a fixed rate mortgage. Just make sure you’re prepared to see an increase in your monthly mortgage payment after the introductory period is over.

Make the biggest possible down payment

The larger your down payment, the less money the lender will have to give you, and the lower your interest rate can be. Your interest rate is partially based on your home’s loan-to-value (LTV). For example, if a home is worth $200,000, and the loan is for $199,000, that would be considered a high LTV and is more risky for a lender. If this ratio is lower, however, you might be rewarded with a lower interest rate.

Make sure your credit is in excellent shape

While there is no one credit score needed to buy a house, those with higher credit scores have usually demonstrated good financial competency, and those are the types of consumers to whom lenders can offer lower interest rates.

Pay for points 

It it possible to pay extra directly to your lender in order to lower your interest rate. For every one percent of your loan amount you are willing to pay extra, it could amount to as much as half a percent off your interest rate. Essentially, you are just paying a larger amount of interest up-front.

Have a long employment history

Even if you haven’t been at the same job for several decades, demonstrating that you have no (or minimal) periods of unemployment shows lenders they can count on you to pay your mortgage in full every month. This can help lower your interest rate.

Prove income stability

If you can prove that your line of work is in high demand with no sign of slowing down, or if you work for a large, profitable company, your lender may take this into account when processing your paperwork. Income stability will help show that you won’t be likely to miss any mortgage payments.

Lower your debt-to-income ratio

Even with a high credit score, it’s possible to accumulate a lot of debt. Lenders don’t want you using more than roughly 40 percent of your monthly income on your mortgage, car payments, and credit card bills. The lower your debt-to-income ratio, the lower your interest rate will be.

Build up cash reserves

Most people know they should have enough savings to cover about six months worth of bills. Proving to your lender that you can still pay your mortgage in the event of a job loss will help you score a lower interest rate.

Shop around

Different lenders have different criteria for their loans. Finding the one that suits you best can help ensure you get the best possible interest rate for your financial situation.

Close on your loan as quickly as possible

Some buyers need 30 days to close; others might need as much as 60 days. If you can close within the initial 30 day window, however, you might pay as much as a half a percent point less than those who need 60 days to close.

 

Image: iStock

The post 10 Tips to Secure the Best Interest Rate on your Mortgage appeared first on Credit.com.

The 12 Scams of Christmas for 2017

steal Christmas

Scammers make a killing during the holiday season. While you spend your time thinking of ways to bring holiday joy to others, they spend their time thinking up ways to steal from you. The saddest part about this is that the ghosts of Christmases past keep visiting Christmas present.

With that, I give you this year’s 12 scams of Christmas.

  1. The Gift Card Scam

While definitely a ghost of Christmas past, this still works so scammers still do it. It’s pretty simple. The thief records the numbers displayed on a gift card, and then calls the company that issued it to find out if it has been activated, which occurs when the card is purchased. The problem here is one of timing. If you buy a gift card early in the shopping season, it’s more exposed to fraud. That said, recipients of gift cards often take a while to use them.

Tip: If you are going to purchase a gift card, do it as close to Christmas Day as possible, and encourage the recipient to use it as soon as possible.

  1. Sneak Attacks on Your Credit

With the non-stop news of data breaches involving credit card numbers, many of us are walking around with compromised payment cards that can be used by a scammer, and there is no more perfect time of the year for them to try than Christmas. The usual warning signs of an account takeover, or a fraudulent charge, may be harder for financial institutions to spot, since Christmas gifts often don’t conform to a cardholder’s buying patterns.

Tip: Sign up for transaction alerts from your bank or credit card issuer that notify you any time there is activity on your accounts.

  1. Fake Charities

While it’s not exactly the way it plays out in our nation’s malls and shopping districts, Christmas is traditionally a time for contemplation and charitable giving—something captured very well in Charles Dickens’s classic, “A Christmas Carol.” So if you want to give during the holiday season, it’s crucial to make sure the appeal is real.

Tip: Before responding to an online appeal, visit the website by typing in the organization’s URL manually, or by using search to find the link. If you are still unsure, call. If you are still uncomfortable, use Charity Navigator or contact the Office of the Attorney General in your state to confirm the organization’s authenticity.

  1. Temporary Holiday Jobs

Holiday jobs are a good way to make some extra money, and there are a lot of them, but bear in mind there are myriad scammers out there who may offer fake jobs to harvest your very real personally identifiable information—the most valuable of which being your Social Security number.

Tip: Don’t give your Social Security number to anyone unless you absolutely have to, and don’t provide it before you confirm you’re dealing with a representative of a real organization that has offered a job to you. Never send your information digitally unless you know the recipient uses proper security protocols. (You may not be using secure tech either, so try to be conservative about what you send digitally.)

  1. Phishing, Vishing and Smishing

You might receive a phone call, a text or an email. It doesn’t matter what the delivery system is, it’s a fraud but it won’t necessarily look like one. It could look like a sales promotion from a brand you like, or an offer on a deal that seems too good to be true, or even just “pretty good.” Scam artists can be very nuanced. Be on the alert before you act on any offer.

Tips: Check to see the URL matches exactly, and that you never provide any personal information on any web page unless the URL is secure and starts with “https.” Email links should always be considered suspect.

  1. True Love

The holidays can be lonely, and catphishers know that. Love scams are the worst, as they prey on the emotions in the most exploitative ways disarming the heartstrings with an eye to loosening purse strings. The money lost can be considerable, and the upset unfathomable.

Tip: As corny as it seems, be careful with your heart and don’t give it away to just anyone. If you feel like you’re falling for someone and they somehow can never make an in-person appearance, don’t send them money to do so. You can do better.

  1. Hotel Scams

You might fall victim to the restaurant flyer scam, the menu for a non-existent eatery shoved under the door resulting in an order that gets you robbed, or it could be the front desk scam where you get a call after check-in asking for another credit card number because “the one you provided was rejected.”

Tip: Assume the worst when in unfamiliar territory, and be on guard when traveling. Always distrust. Always verify.

  1. Fake online shops

This is a tough one, but here’s the deal… Bargain? Amazing prices on things that should cost a lot more than they are asking on a fake online shop is alluring, which is why people fall for them all the time. Pop up shops are cool, but they may not always be legit.

Tip: Look at the About Us page and call the designated contact number. If there is no number, think twice before making a purchase. Also pay attention to detail. Are there spelling errors in the copy? Bad-looking stock photos? Look for trouble.

  1. E-Cards

We all appreciate the sentiment behind an e-card, but that should not outweigh the risk of malware that can take a computer hostage or record every keystroke so that your most sensitive credentials for financial accounts can be stolen. E-cards are a popular form of fraud among scam artists, and you should be very cautious when you receive one.

Tip: Email, call or text the sender and ask if they sent an e-card. In this environment of constant attack, they will understand (and if they don’t, your Christmas present to them can be forwarding this column).

  1. E-voucher scams

This scam is built for people old enough to remember a physical, printed voucher, which, presented in person at a brick and mortar store, would get you a discount. They were basically a coupon. E-vouchers are fine if they come in the form of a number sequence, discount code or keyword, but anything else should be considered suspect.

Tip: Be on the lookout for grammar or spelling errors. Always type in the URL of the site for which you have an e-voucher, and enter the code or number there. If it comes by way of text or email and it involves a link, don’t click through. 

  1. Fake Shipping Notifications

What could be worse than a message from your favorite e-tailer letting you know that the must-have item you ordered is out of stock or was sent to the wrong address. Another oldie but goodie among thieves is a notice informing you that the “Item has been delivered” when it hasn’t been.

Tip: Never click any link associated with this type of communication. Always log onto the e-tailer site for more information, or pick up your phone and call.

  1. Wish list scams

Online wish lists are a bad practice that should be discouraged. In theory, the online wish list creates a place where friends and relatives can find out what you want for Christmas, which many find preferable to guesswork. Beyond being horribly transactional, the practice opens the list-maker to phishing attacks, since scam artists will automatically know what interests you.

Tip: If you must post a wish list online, custom set the privacy on the post so that only particular people can see it, and don’t include any personally identifiable information.

At Christmas it’s always better to give the gift, than be the gift that keeps on giving to identity thieves.

If your personal information does fall into the hands of a scammer, be sure to monitor your credit for signs of identity theft. You can do so by viewing your free credit report snapshot, updated every 14 days, on Credit.com.

 

Image: iStock

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10 Things to Know Before Getting a Credit Card

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If you’re thinking of getting one of the zillions of credit cards out there, make sure you know these 10 nuggets of credit card wisdom before signing up.

A credit card is not a debit card

If someone asked you to explain the difference between a credit card and a debit card, what would you say? We hope you’d tell that someone that using a credit card is like taking out a short-term loan for a purchase. Also, despite appearances, a credit card doesn’t work like a debit card, which takes money directly from your checking account.

You get extra points if you mention that a credit card carries interest, which you can avoid if you pay your credit card bill in full before the end of the billing cycle.

The real reason to get a credit card

People will say you need a credit card to build credit, but “need” is too strong a word. A credit card can help you build credit, and a good credit score can help you save money on loans down the road (mortgages, auto loans, etc.).

Some might argue that cash back rewards are the real reason to get a card, but that’s not nearly as important as maintaining and building your credit score.

The two types of credit cards

Credit cards come in two types: secured and unsecured. Secured means you’ll have to put down a cash deposit. A secured credit card is a good type of credit card for those with low or no credit. The downside is your card limit is likely the same amount as your cash deposit. An unsecured credit card also has a card limit, but instead it’s determined by your credit history and income.

All about that APR

The APR you see thrown around in commercials and ads refers to an annual percentage rate. It’s okay if you don’t remember what APR stands for, but you’ll always want to check the actual percentage of an APR before applying for a credit card. After all, the APR is what you’ll be charged if you don’t pay off your full balance when payment is due, and some APRs can be as high as 30%.

Watch out for nonstandard fees

Some credit cards have nonstandard fees—which, as you may have guessed by the name, are atypical. Good credit cards don’t deal with nonstandard fees, such as an audit fee, conversion fee, quarterly technology fee, and security fee.

Plan on paying more than the minimum payment

If you were to pay only the minimum required payment on your credit bill each month, you just might never pay off your credit card. As a best practice, try to pay off your credit card in full each month—in other words, don’t spend money you don’t have.

Watch out for an annual fee

If you’re not going to use a credit card frequently, you’re likely better off getting a credit card without an annual fee. These fees can cost as much as $100 to $300 per year. However, not all credit cards with annual fees are bad, and there are plenty of cards without them.

Understand credit card benefits

Credit card benefits come with their own terms and conditions. For example, you may be enticed by cash back rewards only to find that said rewards are limited to qualified purchases or change from quarter to quarter. If you don’t understand the ins and outs of a credit card’s benefits, you likely won’t get the most out of your credit card.

A credit card agreement is binding

Signing up for a credit card means you’re entering a legal contract. Make sure you’re comfortable with the terms and conditions set forth by the issuer, such as APR, fees, and credit limits.

Be sure to shop around

There are countless credit cards out there, so do some comparison shopping before you sign up. Don’t let yourself feel pressured to sign up for a store credit card when you’re at checkout. Taking a few minutes to look at what other credit cards are out there can save you some serious dough in the future.

 

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Credit Cards with Authorized User Bonuses

Credit cards are a super convenient financial tool, but they can often be confusing.

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

Adding an authorized user to your credit card account comes with a few advantages. You can share your account with a trusted loved one, help them build credit, and even reap rewards as they use your card.

Some credit cards offer additional incentives in the form of authorized user bonuses—and here are our top three picks.

  1. Chase Sapphire Preferred

Rewards: Two points per dollar spent on dining and travel; one point per dollar on all other purchases.
Sign-Up Bonus:
50,000 bonus points if you spend $4,000 in the first three months.
Annual Fee:
$0 the first year, then $95.

Annual Percentage Rate (APR): Variable 16.99% to 23.99% APR on purchases and balance transfers.

Why We Picked It: Cardholders can rack up travel points by adding an authorized user.

For Authorized Users: If you add an authorized user and make a purchase in the first three months, you’ll earn 5,000 bonus points. That’s up to $62.50 in redemptions when you book travel through Chase Ultimate Rewards.
Drawbacks: If you don’t travel often, this card won’t hold as much value.

  1. Chase Freedom Unlimited

Rewards: 1.5% cash back on all purchases.

Sign-Up Bonus: $150 bonus if you spend $500 in the first three months.

Annual Fee: $0
APR:
0% for 15 months on purchases and balance transfers, then variable 15.99% to 24.74% APR.

Why We Picked It: Cash back enthusiasts get an extra boost when they add an authorized user.

For Authorized Users: If you add an authorized user and make a purchase in the first three months, you’ll get a $25 cash back bonus.

Drawbacks: There are higher cash back rates available elsewhere.

  1. Virgin Atlantic World Elite Mastercard

Rewards: Three miles per dollar on Virgin Atlantic purchases; 1.5 miles per dollar on all other purchases.

Sign-Up Bonus: 20,000 bonus miles when you make your first purchase.

Annual Fee: $90

APR: Variable 13.24% to 20.24% APR on purchases and balance transfers.
Why We Picked It:
Virgin Atlantic customers get a solid incentive for adding users to their card.
For Authorized Users: You’ll earn 2,500 miles per authorized user for the first two users you add to your card. Miles can be redeemed for Virgin Atlantic flights, cabin upgrades, and much more through Virgin’s partner network.

Drawbacks: If you have another preferred airline, you should keep looking.

How to Choose a Card with an Authorized User Bonus

In most scenarios, you should consider your own credit card needs over those of potential authorized users. Choose a card that reflects your spending habits and provides rewards—such as cash back or travel redemptions—that are valuable to you.

Furthermore, adding an authorized user to your account should not be taken lightly. As the primary account holder, you are responsible for your credit card’s balance and activity. If an authorized user uses your card irresponsibly, you are liable for the ensuing balance and your credit could suffer. You should add an authorized user only if you consider them trustworthy and financially responsible.

With any card, closely evaluate the related fees and APR to ensure it’s a good fit for you and your authorized user. For example, if your authorized user frequently travels out of the country, you should avoid cards that charge foreign transaction fees.

What Credit Is Required for a Card with an Authorized User Bonus?

Rewards cards with authorized user bonuses usually require excellent credit. As the primary applicant, you—not the potential authorized user—will be evaluated. Before applying, you should check your credit score to verify you meet the card’s credit requirements. You can check your credit report for free at Credit.com.

At publishing time, the Chase Sapphire Preferred and Chase Freedom Unlimited cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for any of these cards. 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).

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.

 

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Why Your Credit Score Is Important as a Student

College is even better with the right credit cards. Don't miss out on deals and cash back!

Attending college comes with a host of new responsibilities, and your parents have (hopefully) sent you off with the wisdom and encouragement you need to handle those responsibilities on your own. Your studies and your GPA are your top priorities, but you may have other obligations that are important too. Whether you are responsible for paying tuition, holding a part-time job, or fulfilling an internship, these life-learning experiences can help you prepare for your future career.

While you’re busy writing term papers and picking up weekend shifts, though, there’s something else you should be working on: your credit score. That little number will play a significant role in your financial future, so here’s a closer look at why your credit score is so important as a student and how you can build, maintain, and keep your credit score in tip-top shape.

Why Credit Matters

1. Your future job opportunities may depend on it.

Once you graduate, you will be applying for jobs that will kick-start your career, and your goal is to land a job that not only makes you good money but is enjoyable as well. If you’re not careful, though, a poor credit score could keep you from getting that dream job.

Many employers run credit checks before they hire a candidate. A good credit score tells an employer that you are an organized and responsible person. You may have all the qualities they are looking for and your skill set may fit every description to land the job, but if your credit score is in bad shape, your opportunity may be given to another candidate with the same skill set and a better credit score.

2. Good credit could help you land your first apartment.

You may decide to live at home with your parents for the first few years after graduating college. This temporary arrangement can help you save up enough money to get yourself out on your own and into your first apartment. But keep an eye on your credit during this period, as it could impact your ability to get an apartment down the line.

Even if you have enough money for the deposit, your future landlord wants to be assured that you will be a responsible tenant that pays the rent on time, so they may check your credit report. If your score is low and your credit report shows that you aren’t paying your creditors on time, you may not get approved to rent the apartment.

3. You usually need solid credit to secure the best interest rates on loans.

Want the best interest rates on your future auto loan or mortgage? Then you need good credit. Getting the best interest rates on car loans, home mortgages, or any other type of loan generally requires a great credit score.

Lenders will base your interest rate on multiple factors, but your credit score will often carry a lot of the weight in that determination. If your credit is pristine, you have the upper hand—with a better chance to negotiate in your favor. Shopping around for the best interest rates on loans is easier with an excellent credit history and score.

Once you understand why your credit score is important, you’re ready to start building and maintaining it.

How to Start Building Credit

If you are starting from scratch as a college student and don’t have any credit history, a secured credit card is the safest and best option. A secured credit card is one of the best ways to build credit because an up-front refundable cash deposit is required to serve as your credit line. The cash deposit also serves as collateral in case you default on payments. In some cases, you might qualify for a credit line that’s higher than your deposit, but you can always expect to put some money down for a secured card.

While you never want to default on any credit card and should avoid it at all costs, that deposit does provide a way for you to pay off the card if you come upon unfortunate financial circumstances. However, even though the credit card company may be able to recoup the amount owed with your deposit, your late payments will still be reported to the major credit bureaus and you may still incur interest and late fees.

If you make purchases and pay the balance in full and on time consistently, you will create a positive credit history, and at that point, you will be able to apply for an unsecured credit card. Just keep in mind that if you are under 21 and do not have proof that you are employed, you will need a parent to co-sign your credit card.

How to Keep Your Credit in Good Shape

It may be tempting to treat yourself to something you want when you first receive that credit card, but you should try to steer clear of making purchases that are not necessary. Understanding your wants versus your needs is key to keeping your spending habits in check.

It’s important to live within your means and to keep your credit card balances well below your credit limit. It’s also crucial to pay your credit card bills on time consistently. Having a budget and cap on your spending each month will also help you maintain positive financial habits and make good decisions before buying. And once you have built credit and established a good credit history, you’ll still want to continue these steps to keep your score healthy and robust well into the future.

Credit is a big deal. Whether you’re just starting to build credit or have been working to build your score for a while, regularly checking your standing is a great practice—it’ll give you insight into your credit habits and alert you to any fraudulent activities that might be hurting your score. You can check your credit report for free at Credit.com.

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11 Things College Students Should Know Before Opening a Credit Card

Getting your first credit card is a big step and with the right knowledge you'll be on your way to having great credit and plentiful rewards in no time.

College is a great time for financially responsible students to start learning to use credit cards. Credit cards can enable students to make purchases, build credit and even earn rewards. But credit cards can be a confusing concept for a first-timer.

Here are eleven things all college students should know about their first credit card.

1. It Can Help Build Your Credit …

Credit cards are important credit building tools, as card activity is typically reported to credit bureaus and included on your credit report. Over time, credit cards can help you establish an excellent credit score. Excellent credit can help you secure loans, land better interest rates and even reduce common monthly payments.

2. … If You Use It Correctly

Credit cards only help your credit when they’re used wisely — irresponsible use can severely damage your credit. To successfully build your credit, you’ll need to start and stick to smart credit card practices. These include making payments on time, maintaining a low balance and keeping accounts open over time.

3. It Isn’t Free

The credit limit on your credit card isn’t a budget for your next spending spree. Any purchase you make on your credit card will accrue interest if isn’t paid off in time. Plus, credit cards charge additional fees, which may include annual fees, foreign transaction fees and late payment penalties. Pay close attention to the annual percentage rate (APR) and fees for any credit card you’re considering.

4. Missed Payments Have Consequences

If you miss a payment or make a late payment, your credit card issuer may charge you a late payment fee. You might get slapped with a penalty APR that’s much higher than the interest rate you signed up for. That missed payment could even land on your credit report and bring down your credit score for up to seven years.

5. There Are Options if You Have No Credit

If you have no credit history, you can still qualify for certain types of credit cards. One of the best options is a secured credit card, which requires a security deposit upfront but then works just like a traditional credit card. You could also have a trusted family member add you as an authorized user to their credit card account.

6. You Should Pay More Than the Minimum

While it’s tempting to only pay the bare minimum each month, it’s wise to pay a little more. Minimum payments won’t significantly reduce your balance, and you may wind up paying a lot in interest over time. To completely avoid interest, you should pay off your balance in full each month. This means you shouldn’t charge more than you can afford to pay.

7. Applications Can Harm Your Score

When you apply for a credit card, the ensuing credit check (known as a hard inquiry) may land on your credit report. Hard inquiries can ding your credit score a few points but aren’t damaging in the long term. There is a risk in submitting too many applications over a long period of time, so you should try to limit your credit card shopping to a two-week period.

8. Use Rewards Wisely

Many credit cards earn rewards, such as cash back or travel points, as you spend. These rewards can be extremely valuable, but only if you use your card correctly. For instance, cash back cards are less valuable if you carry a balance month-to-month, as interest will eat into the profitability of your card. The way you redeem rewards also varies from card to card, so you’ll want to pick a card that actually provides rewards you’ll use.

9. Not All Cards Are Created Equal

Some credit cards are specifically designed for college students and offer security features, rewards and programs that benefit the fledgling credit card user. Take a look at student-focused credit cards, as they may be more accessible to you and have student-friendly policies. Some of these cards have certain requirements when it comes to credit scores. Before applying for any new cards, it’s wise to check if you will qualify by reviewing your credit scores. You can check two credit scores for free on Credit.com.

10. It Doesn’t Have to Be Exclusive

Your credit card will help build credit whether or not you use it religiously, so don’t feel obligated to use it for everything. You can keep it in case of emergencies or for the occasional purchase.

11. There Are Security Benefits

Credit cards offer a number of security benefits over cash and debit cards. They aren’t tied to your bank account, and you’ll never be responsible for more than $50 if your credit card is stolen. Plus, credit card companies often offer additional security features and monitor your account for suspicious activity.

Image: GeorgeRudy

The post 11 Things College Students Should Know Before Opening a Credit Card appeared first on Credit.com.

6 Credit Cards for the Avid Nature-Lover

Even better than the great outdoors? A credit card that rewards you for loving them.

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

If the great outdoors is your ideal destination, the world is full of opportunities for your next vacation or weekend activity. But while your hobbies may be cheap compared to luxury hotels and shopping trips, you still have to pay for outdoor gear, gas and more.

Certain credit cards can help you fund your outdoor adventures and make them more affordable. Here are six credit cards for the nature-lover.

1. Cabela’s Club Visa Classic

Rewards: 2% points back on Cabela’s purchases and at participating Cenex convenience store locations, 1% points back on everything else
Signup Bonus: $25 in points upon approval and $10 in points when you make five purchases in 30 days
Annual Fee: $0
Annual Percentage Rate (APR): 9.99% on Cabela’s purchases, variable 16.22% to 25.22% on other purchases
Why We Picked It: Cabela’s shoppers earn points good for purchases at the outdoor supplier.
For Your Outdoor Needs: The card earns 2% points on all Cabela’s purchases and 1% points on everything else. Points can be redeemed for free gear and outdoor experiences at Cabela’s.
Drawbacks: If you don’t spend thousands of dollars a year at Cabela’s, keep looking.

2. Bass Pro Shops Outdoor Rewards MasterCard

Rewards: 5% points on Bass Pro Shops purchases, 1% rewards points on everything else
Signup Bonus: $20 statement credit when you spend $100 in the first 90 days
Annual Fee: $0
APR: Intro 1.99% for seven months on purchases, then variable 13.99% to 23.99%
Why We Picked It: Shoppers earn points for future Bass Pro Shops purchases and get access to special discounts all year round.
For Your Outdoor Needs: Cardholders earn 5% points on Bass Pro Shops purchases and 1% points on everything else. Points can be redeemed for goods and merchandise at Bass Pro Shops’ retail locations, website and catalog.
Drawbacks: If you aren’t a die-hard Bass Pro Shops customer, this card won’t provide much value.

3. Costco Anywhere Visa Card by Citi

Rewards: 4% cash back on up to $7,000 in eligible gas purchases per year, 3% cash back on restaurant and eligible travel purchases, 2% cash back on Costco and Costco.com purchases, 1% cash back on everything else
Signup Bonus: None
Annual Fee: $0 (you will need a paid Costco membership)
APR: 0% for seven months on purchases, then variable 16.24%; variable 16.24% on balance transfers
Why We Picked It: Costco offers a wide variety of outdoor and sporting products and cardholders can earn big cash back rewards. (Full Disclosure: Citibank advertises on Credit.com, but that results in no preferential editorial treatment.)
For Your Outdoor Needs: With this card, Costco members can get 2% cash back at Costco, which stocks supplies including camping gear, groceries and outdoor apparel. The additional cash back rates provide many ways to earn cash back on your excursions.
Drawbacks: The card is only available to those with an active Costco membership.

4. REI Co-op Credit Card

Rewards: 5% back on REI purchases, 1% back on all other purchases
Signup Bonus: $100 REI gift card upon your first purchase
Annual Fee: $0
APR: Variable 11.99% to 23.99%
Why We Picked It: REI shoppers can earn annually distributed rebates on all purchases on top of REI’s member dividend, a profit-sharing program.
For Your Outdoor Needs: The card earns 5% back on REI purchases and 1% back on all other purchases, with rewards distributed annually in the form of a rebate. That’s on top of your REI member dividend, a profit-sharing feature that typically earns you 10% back on your annual REI spending. Plus, every time you use your card, REI will make a donation to the National Forest Foundation.
Drawbacks: This card is only valuable if you spend a lot at REI.

5. Blue Cash Preferred Card from American Express

Rewards: 6% cash back on up to $6,000 in annual spending at supermarkets, 3% cash back at gas stations and select department stores and 1% cash back on everything else
Signup Bonus: $100 bonus cash back when you spend $1,000 in the first three months (offer may vary)
Annual Fee: $95
APR: 0% for 12 months, then variable 13.99% to 24.99%
Why We Picked It: If you travel by car and do your own cooking, this card can earn a lot of cash back.
For Your Outdoor Needs: With 6% cash back at supermarkets and 3% cash back at gas stations, you’ll put money back in your pocket every time you gas up or stock up on s’mores supplies. There’s also a nice $150 signup bonus.
Drawbacks: There’s a $95 annual fee.

6. Barclay Arrival Plus World Elite MasterCard

Rewards: Two miles per dollar on all purchases
Signup Bonus: 50,000 bonus miles when you spend $3,000 in the first 90 days
Annual Fee: $0 the first year, then $89
APR: Variable 16.99%, 20.99% or 23.99% on purchases; 0% for 12 months on balance transfers, then variable 16.99%, 20.99% or 23.99%
Why We Picked It: Every purchase earns double miles that can be redeemed for travel.
For Your Outdoor Needs: With double miles on all purchases and a signup bonus, you can quickly rack up points for your trips. For those that love to rough it, miles can be redeemed for campground rentals.
Drawbacks: After the first year, there’s an $89 annual fee.

How to Choose a Card for Your Next Adventure

When you’re choosing a card for your outdoor adventures, try to identify the cards that best reward your spending habits.

If you spend thousands of dollars annually at one outdoor supplier, a store-branded credit card may provide a good return. But if you tend to spread your purchases around, you should look for a card that isn’t tied to one store.

Try to choose a card that will reward the way you like to travel. For example, if you like taking road trips to camping destinations, a card with strong cash back rates on gas and groceries might be the right fit. Also be sure to check the redemption options for all rewards, as they vary between cards.

What Credit Is Required for an Outdoor Credit Card?

Store-branded credit cards tend to have looser credit requirements, though this isn’t always the case – for instance, the Costco credit card requires excellent credit. General credit cards with cash back or travel rewards tend to require good to excellent credit. Before you apply, you should check your credit score to make sure you have a good chance of approval. You can check two of your credit scores for free at Credit.com.

Image: pixdeluxe

At publishing time, the Costco Anywhere Visa Card by Citi,Barclay Arrival Plus World Elite MasterCard and Blue Cash Preferred Card from American Express credit cards 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).

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.

The post 6 Credit Cards for the Avid Nature-Lover appeared first on Credit.com.