FS Build Card Review: Build Credit With This Payday Loan Alternative

Source: iStock

Credit cards for people with poor credit scores are few and far between, but FS Card is looking to change that with its first product, the Build Card, an unsecured credit card designed specifically for borrowers with subprime credit scores.

If you’re in need of a couple of hundred dollars and your credit score falls below 600, you’re not likely to get approved for an unsecured credit card. You’re considered a subprime borrower — a lending risk to banks, who worry they won’t get their money back.

But when banks refuse to lend to risky borrowers, those consumers turn to more expensive short-term borrowing options like payday loans, auto title loans, and pawn products. Annual interest rates on those products often exceed 300%, according to research from the Pew Charitable Trusts. Paying a high interest rate and a number of additional fees attached to those short-term products can trap consumers in a cycle of debt.

What is FS Card?

FS Card was founded by former Consumer Financial Protection Bureau Assistant Director of Card and Payment Markets Marla Blow in 2014 to fill what she says was a gap in the credit card industry. Blow says she began FS Card when she noticed — after the housing market crashed in 2008 — banks began “pulling back from subprime consumers in a very directed way,” because they were wary of tougher regulations on the financial industry. As a result, those consumers turned to more expensive products like payday loans, she says.

“I wanted to be able to put that consumer into a place where, rather than having to go out and get a payday loan, they could use a credit card,” Blow says. She designed the Build Card to offer subprime consumers access to something that “a lot of our economy assumes is already present” — a rotating line of credit.

Build Card overview

The Build Card is an unsecured credit card for borrowers with subprime FICO credit scores in the 550 to 600 range (on a scale of 300 to 850). The invite-only card charges a variable 29.9% APR. The rate is high for a credit card but about 10 times less expensive than some payday loans. However, it’s not a card you’d want to open unless you are seriously in need of the funds and are looking to build your credit score.

What we like about the Build Card

Payday loan alternative

Ideally, a payday loan is used to meet short-term borrowing needs — to hold you over until you receive your next paycheck. However, Pew research shows the average borrower uses them for five months at a time on average and has to pay an average $55 fee ($95 online) each time they extend the loan, which is what makes these loans so expensive. That’s $275 spent renewing a loan that’s on average $375. Furthermore, Pew research found seven in 10 borrowers use them for everyday expenses like groceries, rent, and utilities.

With access to a rotating line of credit, borrowers can extend the amount of time they have to repay borrowed money without having to pay renewal fees for a payday loan.

Unsecured credit card for subprime consumers

The Build Card is a rare unsecured credit card for those with poor credit scores. Most cards you can qualify for with a score lower than 600 are secured cards, which require a deposit to secure a credit line. For people who have a few hundred dollars on hand, a secured card is a great way to get access to credit, but many low-income Americans are not in a position to spend that kind of money.

Build your credit score

FS Card reports your activity to national credit bureau TransUnion so you can use the Build Card to improve your credit score if you maintain good credit management habits. Negative activity — like late payments and high credit card balances — will also be reported, so be sure to pay your balance on time and in full each month for best results.

Quick and easy approval process

Because you must be invited to apply for the Build Card, you are prequalified for approval. There is an excellent chance you will be approved for the Build Card, unless something on your credit report has drastically changed between the time FS Card mailed your invitation and when you apply.

No foreign transaction fees

The Build Card doesn’t charge you for using it overseas, so you don’t need to worry about racking up fees for swiping your credit card on vacation.

What we don’t like about the Build Card

Invite-only

As of this writing, the Build Card is invitation only and has more than 50,000 cardholders, Blow says. You’ll have to wait to receive a code in the mail before you can apply for the card online, which is unfortunate for anyone who is in need of short-term funds now.

FS Card selects borrowers using an algorithm to prequalify borrowers with subprime credit scores and sends invitations to potential customers monthly. The algorithm sifts through consumer credit reporting data to identify consumers who have recently done something that reflects better borrowing habits like paying off a payday loan or an account in collections.

Blow tells MagnifyMoney FS Card will offer an open application for Build Card in 2018.

Many fees

This card carries a lot of fees. If you’re trying to build your credit and have the funds to get a secured credit card that doesn’t charge an annual fee or has an interest-free period, you’re better off going that route, as it will be significantly less expensive.

  • Startup & membership fees: It costs Build Card customers $125 simply to open the account. FS Card charges the initial start-up fee ($53) and annual membership fee ($72) on your first statement. Although the card begins accruing interest immediately, Blow tells MagnifyMoney FS Card does not charge Build Card users interest on the start-up fees assessed to the credit card.After the first year, the annual membership is paid in $6 monthly installments, charged to the Build Card.
  • Authorized user fee: If you authorize another person to use your Build Card, you’ll be charged a $12 fee per authorized user.
  • Late/returned payment fee: Don’t miss a payment on this credit card, or you’ll be charged a whopping $35 fee.
  • Cash advance fee: Try your best not to take cash from this credit line — in addition to paying 29.9% interest, you’ll be charged the greater of $10 or 3% of the amount you take.

A $500 limit

If you need to borrow more than $500, you’re out of luck with this card. Everyone who opens a Build Card account starts off with a $500 limit. But remember, that limit is immediately reduced to $375 once you open the card and are charged $125 in fees. That also doesn’t leave you a lot of room to spend, considering it’s bad for your credit score to carry a balance close to your credit limit. Blow says the company may soon offer starting lines above and below $500.

Right now, FS Card checks every month to see if you’re managing the card wisely (read: making payments on time). If you are, you could qualify for a credit line increase to $750 in as soon as seven months. Blow says 59% of Build Card customers have gotten increases so far.

No 0% interest period

This card doesn’t come with an interest-free grace period. It will begin charging a 29.9% APR to your purchases immediately.

No balance transfer

The Build Card doesn’t come with a balance transfer offer, so you won’t be able to use the card as a debt consolidation tool. If you are in a large amount of credit card debt, you could try applying for a personal loan through online lenders like Lending Club or Prosper, which offer personal loans to people with credit scores below 600.

Who is the Build Card best for?

The Build Card is worth opening if you:

  • have a credit score between 550 and 600,
  • are ready to start rebuilding your credit score, and
  • want an alternative to payday loans in the event of an emergency but don’t have the cash on hand to open a secured credit card.

Beware: If your poor credit history resulted from poor spending habits like spending more than you could afford or making late payments, ask yourself if you’re ready to make a change. Opening this credit line won’t help your credit score any in the long run if you don’t.

How to apply for Build Card

You must be selected to apply for the Build Card. When you receive your invitation to apply, you’ll be given an offer code and application ID to enter into the application form on the Build Card website. Enter that information, your ZIP code, and the last four digits of your Social Security number to apply for approval. You should know if you’re approved or not within a few minutes.

Source: thebuildcard.com

Alternatives to the Build Card

The post FS Build Card Review: Build Credit With This Payday Loan Alternative appeared first on MagnifyMoney.

Chase Sapphire Reserve Review: Is the Annual Fee Worth It?

Looking for a travel rewards card with a big bang for your buck? Chase Sapphire Reserve may be right for you.It comes with a litany of benefits for frequent travelers including:

  • 3 points per dollar spent on travel and dining.
  • 1 point per dollar spent on anything else.
  • Your points are worth 50% more when you redeem through the Chase Ultimate Rewards portal.
  • Ability to transfer your points on a 1:1 basis to major airline and hotel rewards programs.
  • $100 statement credit after you pay for your TSA PreCheck or Global Entry application.
  • The first $300 you spend on travel during each 12-month period measured by your sign-up date will be automatically reimbursed through statement credits.
  • Currently, you can get 50,000 bonus points when you spend $4,000 within three months of opening your card.

These benefits do come at a cost. The card has a $450 annual fee — and it is not waived in the first year. While the benefits are top-notch, they’re only accessible to those who can float the $450 in upfront costs.

 Chase Sapphire Reserve<sup>SM</sup>

APPLY NOW Secured

on Chase’s secure website

Chase Sapphire ReserveSM

Annual fee
$450 For First Year
$450 Ongoing
Rewards
3X points on travel and dining, 1 point on everything else
APR
16.99%-23.99%
Credit required
excellent-credit

Excellent


The information related to the Chase Sapphire Reserve and Preferred has been collected independently by MagnifyMoney and has not been reviewed or approved by the issuer.

How to earn points

The best way to earn points with Chase Sapphire Reserve is by placing all of your travel and dining purchases on this card exclusively. These purchases will get you 3 points for every dollar spent on travel or restaurant dining, while all other purchases will get you a less competitive return of 1 point per every dollar spent.

What, exactly, qualifies as a travel purchase? The obvious things, like hotels and car rentals, are included. But don’t forget merchants like Airbnb, Expedia, or even your state DOT when you drive on toll roads.

Certain travel-related expenses do not count as travel purchases. Amusement park tickets, excursions purchased directly through tour companies, and that Starbucks latte you purchased at the airport will not be counted as a 3-point-per-dollar travel expense, for example.

If you’re making a big purchase, but you’re not sure if it will qualify as a travel expense, it’s worth it to call the company you will be purchasing from. You want to find out how they are coded to credit card companies. Do they come through as “travel” or is the business classified into another category? Finding the answer to this question can help you decide if you should make the purchase on your Chase Sapphire Reserve or if you should charge it somewhere else where you’ll get more than one measly point per dollar.

Best ways to redeem points

Whether you’re purchasing a plane ticket for a work trip or booking your next family vacation, you want to make sure you’re maximizing all those points you’ve earned.

One of the best ways to redeem your points at booking is by using the Chase Ultimate Rewards portal. Here, you’ll be able to find flights, hotels, and more with no blackout dates. Because you’re a Chase Sapphire Reserve holder, your points will be worth 50% more here. That means that instead of your 50,000-point bonus being worth $500, it will actually be worth $750.

Another potentially great way to book is by transferring your points to one of Chase’s partner airline or hotel rewards programs. This can be done in real time on a 1:1 basis. Sometimes, it may even be a better deal than booking through Chase’s Ultimate Rewards portal.

For example, a flight from New York City to Tokyo may run you $1,200. If you booked within the Chase Ultimate Rewards portal, that would cost you 80,000 points.

However, if you transferred your points to United MileagePlus miles, you could score a flight for 70,000 points if you booked at the “Saver Award” level in economy class. There is limited seating at this award level, so you would want to book far ahead, but doing so would save you 10,000 points.

Chase Ultimate Rewards has several transfer partners aside from United. The full list includes:

  • British Airways Avios
  • Flying Blue (Air France/KLM)
  • Korean Airlines Skypass
  • Singapore Airlines Krisflyer
  • Southwest Airlines Rapid Rewards
  • United MileagePlus
  • Virgin Atlantic Flying Club
  • Hyatt Gold Passport
  • IHG Rewards
  • Marriott Rewards/Ritz Carlton Rewards

How to qualify

Those with the best chance of qualifying for Chase Sapphire Reserve will have a credit score of 700 or above without a history of chronically late payments. Those with a credit score below 650 are unlikely to qualify.

This card is only for people with excellent credit. In general, that means your score should be above 700. In addition, Chase (and other credit card issuers) have been cracking down on people who go from one bonus offer to the next. If you apply for a lot of credit cards, don’t be surprised if you are declined.

What we like about the card

There are a lot of reasons to love Chase Sapphire Reserve if you’re big on travel.

The bonus is nothing to laugh at.

Fifty thousand points is on the high end of standard spending bonuses for credit cards, but when you book through the Ultimate Rewards portal, Chase’s offer is even more stellar.

Your annual fee is effectively lowered to $150 every year.

Because you will receive up to $300 in statement credits for travel reimbursements per year, the $450 annual fee is effectively lowered to $150 — as long as you actually spend $300 on travel.

Rewards points are generous on dining and travel purchases.

Three points per dollar is a large multiplier in the world of travel rewards credit cards.

No foreign transaction fees.

When you’re traveling, the last thing you want to deal with is foreign transaction fees. They can quickly eat away at any value you’re getting with your rewards points, so we’re glad to see that this card doesn’t have any.

Additional $100 statement credit specifically for Global Entry or TSA PreCheck.

Both of these programs can save you a ton of time and hassle, especially if you travel frequently. The $100 statement credit reduces or even eliminates the application fees, depending on which product you pursue.

Plentiful travel protection benefits. When you book your travel with your Chase Sapphire Reserve card, you automatically have a lot of coverage as long as 100% of the purchase goes on the card. Coverage includes:

  • Auto rental collision damage waiver. You won’t have to purchase collision insurance from your rental company as physical damages to the vehicle will be covered by this waiver provided via Chase.
  • Roadside assistance. You’re covered up to $50, four times per year. Covered services include locksmiths, tows, tire changes, jump-starts, and gas.
  • Baggage delay insurance. If the airline has issues locating your luggage at your destination airport for six hours or more, this insurance policy will reimburse you for essential purchases, like shampoo or slacks. The policy maxes out at $100 per day over the course of five days.
  • Lost luggage reimbursement. What if the airport never finds your bag? Or damages your belongings? Chase will reimburse the value of your belongings up to $3,000.
  • Trip cancellation/interruption insurance. Certain emergencies, such as severe weather or illness, will merit a reimbursement of up to $10,000 if they force you to cancel or cut your trip short.
  • Trip delay reimbursement. If your flight is delayed for over six hours and the airline is offering little to nothing in the way of reimbursement, Chase will pay you back $500 per ticket to cover things like food and hotel stays.
  • Emergency coverages. Chase provides coverage for emergency evacuations, emergency medical and dental services, and accidental death or dismemberment while you’re on a trip that you’ve paid for 100% with your Chase Sapphire Rewards card.

What we don’t like about the card

While Chase Sapphire Reserve’s rewards are out of this world, they do come at a steep price.

The annual fee is colossal.

A $450 annual fee is huge—especially since it is not waived in the first year. This limits the number of people who will even be able to afford to open a card, nonetheless justify the expense.

Rewards points are scant on everyday purchases.

While this card is generous with rewards points for dining and travel, purchases in every other category only earn 1 point per dollar. Even when you account for the 50% bonus when booking through the Ultimate Rewards portal, it would be wise to put these purchases on one of many other cards on the market that will earn you more points.

Travel hackers will have a hard time qualifying.

Banks (and not just Chase) are making it more difficult for people to jump from bonus offer to bonus offer. If that sounds like you, it will probably be difficult to get approved.

Who the Chase Sapphire Reserve best for

Those who travel frequently, spending a good portion of their budget on related purchases including dining, will benefit most from this card. These applicants have a solid credit history and score and are more likely to have a higher income as they have the funds available to front the $450 annual fee without hurting their budget. Their travels enable them to get the most out of not only the rewards points but also the statement credits that make this offer so attractive.

Chase Sapphire Reserve vs. Chase Sapphire Preferred

If you have the $450 to spend up front, and know that you will be able to take advantage of the annual $300 travel reimbursement, Chase Sapphire Reserve is likely a better card for you than the Chase Sapphire Preferred.

While the Preferred’s annual fee of $95 is waived for the first year, in subsequent years its annual fee is only $55 less than the Reserve’s effective $150 fee after travel reimbursements.

For an additional $55, your Reserve points are worth 1.5 points each when you book through the Ultimate Rewards portal versus the Preferred’s 1.25 points. Let’s look back at our trip from New York City to Tokyo. With the Reserve, you would need 80,000 points to book your $1,200 flight. With the Preferred, you would need 96,000 points. That’s a 16,000-point difference. In order to make up the difference, you’d have to spend $6,400 on travel or dining on your Preferred card.

Fifty-five dollars starts to look like a deal.

You also earn 3 points instead of the Preferred rate of 2 points on each dollar you spend on travel and dining.

Given the increased point values, making up the $55 difference is easy. Having the income to support opening the Reserve in the first place is the challenge. Not only do you need to have $450 on hand up front, but you’ll also need to have an income that justifies a credit line of $10,000+. If you will have trouble achieving either of these things, the Preferred may be a better card for you. Read the Chase Sapphire Preferred Review for more details.

Alternatives

While Chase Sapphire Reserve offers fantastic benefits, it’s not for everyone. If you want a credit card that offers travel rewards without such large impositions, you do have other options.

 Chase Sapphire Preferred® Credit Card

Annual fee

$0 For First Year

$95 Ongoing

Rewards

2 points on travel and dining, 1 point on all other spending

APR

16.99%-23.99%

Variable

Chase Sapphire Preferred is much like the Reserve option, except its $95 annual fee is waived for the first year. It doesn’t have all the same perks, but it does offer 2 points per dollar spent on dining and travel while offering 1 point on all other purchases. When you redeem points in the Ultimate Rewards portal, they’ll be worth 25% more instead of Reserve’s 50% incentive.

Barclaycard Arrival Plus™ World Elite MasterCard<sup>®</sup>

Annual fee

$0 For First Year

$89 Ongoing

Rewards

2X miles on all purchases

APR

16.99%-23.99%

Variable

While the bonus in the Ultimate Rewards portal is attractive, earning 1 point per dollar spent on everyday purchases is not. The Barclaycard Arrival Plus World Elite MasterCard offers 2 miles per dollar spent on any purchase, which may make it more valuable for those planning one or two trips per year rather than getting away every other month for work or leisure. The annual fee is waived in the first year, and it currently comes with a 50,000-mile bonus when you spend $3,000 in the first three months. Barclaycard also gives you back 5% of the miles you redeem. For example, if you redeem 50,000 miles, you’ll get 2,500 back.

Venture® from Capital One®

Annual fee

$0 For First Year

$59 Ongoing

Rewards

2 miles per dollar spent

APR

13.99%-23.99%

Variable

Similar to the Barclaycard Arrival Plus World Elite MasterCard, the Capital One Venture card offers 2 miles per dollar spent on any purchase, with each mile worth one cent when redeemed against a past travel purchase. The annual fee is waived in the first year, and the current sign-up bonus is 40,000 miles when you spend $3,000 in the first three months.

FAQ

Yes, though you should keep in mind the credit requirements above. If you currently have Chase Ultimate Rewards points, it’s wise to transfer them to the Reserve so you can take full advantage of the 1.5-point redemption rate in the Ultimate Rewards portal.

Yes. As long as you share the same address, you will be able to transfer points one to another instantaneously. You cannot combine or share points with a family member who lives at a different address.

No. Once you transfer points to another program, you cannot convert them back to Ultimate Rewards points. Be sure you understand the redemption process for each program before you transfer to ensure you’re getting the maximum value for your points.

No. As long as you keep your account open, your points will not expire. If you have other Chase cards that are eligible for the Ultimate Rewards program, you could close your Reserve account and transfer them to your other card, but as of today Reserve offers the best redemption rate in the Ultimate Rewards portal, so this may not be the best move.

The post Chase Sapphire Reserve Review: Is the Annual Fee Worth It? appeared first on MagnifyMoney.

Blue Cash Preferred® Card Review: The Perfect Cash Back Card for Grocery Shoppers?

If you’re looking for a cash back program that will reward you handsomely for grocery shopping, the Blue Cash Preferred® Card from American Express is one to check out. Although this card has an annual fee, the amount of cash back you have the potential to earn can easily cover the fee.

Blue Cash Preferred® Card from American Express

APPLY NOW Secured

on American Express’s secure website

Blue Cash Preferred® Card from American Express

Annual fee
$95 For First Year
$95 Ongoing
Cashback Rate
up to 6%
APR
13.99%-24.99%

Variable

Credit required
good-credit

Good

How to earn cash back with the Blue Cash Preferred® Card

1. Earn 6% cash back at U.S. supermarkets with a cap.

The supermarket category excludes superstores and warehouses. Specialty retailers like wine stores and convenience stores likely won’t earn 6% cash back either. The annual cap for the supermarket category is $6,000.

2. Earn 3% cash back at gas stations and select department stores, 1% cash back on everything else.

There’s no annual spending cap for the 3% and 1% cash back categories. The following department stores are examples of those that qualify for 3%:

  • Bealls
  • Belk
  • Bloomingdale’s
  • Bon-Ton Stores
  • Boscov’s
  • Century 21 Department Store
  • Dillard’s
  • JCPenney (JCP)
  • Kohl’s
  • Lord & Taylor
  • Macy’s
  • Neiman Marcus
  • Nordstrom
  • Saks Fifth Avenue
  • Sears
  • Stein Mart

3. Earn an extra introductory bonus.

You get a bonus of $150 in cash back if you spend $1,000 within the first three months of card signing.

How redeeming cash back works

Cash back earned converts into Blue Cash Rewards Dollars. You can redeem Blue Cash Rewards Dollars for a statement credit in increments of $25.

Word of warning: A cash back statement credit does not get applied to your minimum payment. To keep your card in good standing, you need to make at least the minimum payment each month even if you redeem cash back.

Overview of card benefits

These are the American Express perks:

  • Car rental loss and damage insurance. You can decline the rental agency’s collision damage waiver because you’re covered if your rental car is damaged or stolen when you pay with this card, though some countries like Australia and Italy aren’t covered.
  • Global assist hotline. When traveling you get 24/7 access to legal, emergency, and financial assistance.
  • Travel accident insurance. You get coverage for accidental death or dismemberment during travel.
  • Extended warranty of up to an additional year after your manufacturer’s warranty expires.
  • Roadside assistance for emergencies if your car needs to be towed, you need to fix a flat, or you need a battery jump. Third-party service costs may apply.

What we like about this card

6% cash back on groceries up to $6,000.

Despite the annual fee and category restrictions, we’re still big fans of the Blue Cash Preferred® Card. You only need to spend $1,583 per year (or $132 per month) on groceries to earn enough cash back to cover the $95 fee.

Since the supermarket spending cap is a generous $6,000 per year, you still have plenty of room to earn cash back beyond this break-even point, and if you spend a full $6,000 on groceries in a year, you’ll earn $360 in cash back before the annual fee is deducted.

Unlimited 3% cash back for gas.

You’ll be able to earn 3% cash back in the gas category without any cap, which can serve you well on your commute.

No revolving categories.

This card is simple to use. You don’t need to enroll in the bonus categories quarterly or annually. You just need to remember to pull out this card when you shop at major grocery stores, gas stations, and department stores.

What we don’t like about this card

Store restrictions in 3% and 6% categories.

Category restrictions are common for most cash back cards, but still a piece of fine print you should be aware of. American Express uses merchant codes to determine how much cash back you get on each purchase.

Stores like Amazon, BJ’s Wholesale Club, Target, and Walmart won’t qualify as supermarket spending.

Furthermore, you can’t earn 3% cash back by pumping gas just anywhere. You have to buy gas at places with a gas station merchant code. Gas purchases at supermarkets or warehouse clubs will not qualify unless otherwise noted.

This restriction on gas spending may be the biggest deal-breaker for savvy gas shoppers since supermarkets and warehouses often have competitive gas prices with minimal markup.

Before you apply for the card, contact American Express if you pump at discount locations to see if the spending qualifies. American Express has a short list of example stores that fall into each cash back category here.

Who the Blue Cash Preferred® Card is best for

Whether the Blue Cash Preferred® Card is or isn’t for you will depend on how much you spend in the bonus categories.

Here’s why:

The Blue Cash Preferred® Card has a sister card that comes with no annual fee called the Blue Cash Everyday® Card.

The Blue Cash Everyday® Card gives:

  • 3% cash back on groceries
  • 2% cash back at department stores and gas stations
  • 1% cash back on everything else

Pick the Blue Cash Everyday® Card (no fee) instead of the Blue Cash Preferred® Card ($95 annual fee) if you spend less than $3,200 per year on qualifying groceries (about $300 a month).

If you spend more than $3,200 on groceries per year (about $300 a month), the Blue Cash Preferred® Card with the $95 annual fee outperforms the free Blue Cash Everyday® Card.

Another thing to consider is where you do your shopping.

If you live in a city where major groceries stores are few and far between, neither the Blue Cash Preferred® Card nor Blue Cash Everyday® Card will serve you well. You won’t get 6% for food purchases at corner markets and specialty stores.

Shoppers who stock up for groceries at warehouse or superstores like Walmart will also get less use from these American Express cash back cards since that spending doesn’t qualify.

Consumers who’ll get the most out of the Blue Cash Preferred® Card are those who spend at places that are eligible for bonus cash back like Whole Foods, Safeway, and Kroger.

Approval chances

You have the best chance of getting approved for the Blue Cash Preferred® Card with good to excellent credit (a score that’s 670 or above).

American Express lets you prequalify for offers without a hard pull to your credit history here.

Alternatives

You can find our ultimate roundup of cash back cards for every category in this post.

Here we’ll cover four alternatives to compare against the Blue Cash Preferred® Card:

  • Blue Cash Everyday® Card from American Express
  • Chase Freedom®
  • Citi® Double Cash
  • Alliant Visa® Signature
Blue Cash Everyday® Card from American Express

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

up to 3%

APR

13.99%-24.99%

Variable

As mentioned, the Blue Cash Everyday® Card is the free version of the Blue Cash Preferred® Card. It offers:

  • 3% cash back at grocery stores
  • 2% cash back on gas and department store spending
  • 1% cash back on all other purchases

Again, this is the card to go with instead of the Blue Cash Preferred® Card if you spend less than $3,200 per year on qualifying groceries.

But, let’s be honest: $3,200 or $267 per month spent on groceries is a pretty small sum even for a one- or two-person household. For this reason, the Blue Cash Preferred® Card is what we prefer of the two supermarket cards.

Chase Freedom<sup>®</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% on certain categories, 1% on everything else

APR

15.99%-24.74%

Variable

A revolving category cash back card is an alternative if you spend pretty evenly across multiple areas. The Chase Freedom® card gives you 5% cash back in bonus categories that change quarterly.

There’s a $1,500 quarterly spending cap on the 5% category. You earn 1% cash back on all other spending. The bonus category for July through September this year includes restaurants and movie theaters, but categories change every quarter, and there’s no guarantee these will be a bonus category in the future.

Citi® Double Cash Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

1% when you buy, 1% when you pay

APR

14.49%-24.49%

Variable

An unlimited flat-rate cash back card such as the Citi® Double Cash is good to pair with any of the category cards we discuss above. The Citi® Double Cash offers unlimited 2% cash back on all purchases with no fee, making this a great card to earn a consistent cash back rate. Citi® also does not charge an annual fee for this card.

Alliant Cashback Visa® Signature Card

Annual fee

$0 For First Year

$59 Ongoing

Cashback Rate

Unlimited 3% cash back during the first year; 2.5% cash back afterwards

APR

11.24%-24.24%

Variable

The Alliant Visa® Signature offers 3% cash back on all purchases during your first year as a cardholder. After the first year, you will earn 2.5% cash back. There is an annual fee for this card, however it is waived the first year. A good rewards strategy is partnering a high cash-back rate category card with one of these unlimited cards for non-category spending.

FAQ

One disadvantage of American Express is it’s a card that some stores don’t accept. Why? American Express charges a higher merchant processing fee, which causes some smaller shops to avoid it. Most of the places eligible to earn 6% and 3% cash back from the Blue Cash Preferred® Card are big stores that will most likely take American Express anyway. Stick to these stores and your cash back potential won’t be impacted by limited acceptance.

Anything you spend over the $6,000 cap on groceries will earn only 1% cash back. Fortunately, the 3% cash back at gas stations and department stores is unlimited, so you’ll always get bonus cash back for that spending.

No, Blue Cash Rewards Dollars do not expire as long as your account remains open.

Yes, the minimum amount to redeem Blue Cash Rewards Dollars is $25.

Blue Cash Rewards Dollars can only be redeemed for statement credit. They can’t be redeemed for merchandise or gift cards.

Blue Cash Rewards Dollars are redeemable for statement credit, while Membership Rewards® Points are redeemable for statement credit, travel, gift cards, merchandise, or entertainment. With the Blue Cash Preferred® Card you receive Blue Cash Rewards Dollars. You would need a different American Express credit card, such as the Amex EveryDay® Preferred Credit Card, to receive Membership Rewards® Points.

The post Blue Cash Preferred® Card Review: The Perfect Cash Back Card for Grocery Shoppers? appeared first on MagnifyMoney.

Zelle Is Big Banks’ Response to Venmo — Here’s How it Stacks Up

Perhaps you’ve heard of Venmo, a PayPal-owned company that caught like wildfire among millennials and is currently the most popular way for people to split the bill. The digital peer-to peer (P2P) payment service is ubiquitous to the point of being a verb — “Venmo me” — but that’s not stopping the big banks from making a play for the market.

They’re responding with Zelle, a P2P transaction platform that says it can process payments between accounts at different banks within minutes, for free. When using apps like Venmo, PayPal, and Square Cash, consumers may have to wait up to two or three days to access deposits in their bank accounts or pay a fee for instant access.

What is Zelle?

Zelle is a P2P payment service that lets you send money directly to your friends’ and family members’ bank accounts using only an email address or phone number, even if their account is with a different bank. As of this writing, Zelle is only live at nine banks: Bank of America, Capital One, Chase, Fifth/Third Bank, FirstBank, PNC, U.S. Bank, USAA, and Wells Fargo. It lists 25 additional bank as “coming soon” on its website.

Parent company Early Warning says Zelle will reach about 86 million U.S. consumers through its partners’ mobile banking applications. If your bank isn’t partnered with Zelle, you can still create an account using clearXchange, the network that powers Zelle, to send and receive money using email addresses and phone numbers (much like other P2P payment services).

Before Zelle became available through banks’ mobile apps, it was already hard at work establishing itself in the P2P payments space. Early Warning reported in April the Zelle network processed more than 170 million P2P payments in 2016 totaling $55 billion. In the same year, Venmo processed $17.6 billion in payments on its free mobile app, a year-over-year growth of more than 140%.

How Zelle works

Zelle plays up its ease of use: Because it’s integrated into mobile banking apps, customers of banks using Zelle can use a single app to schedule bill pay, make deposits, and complete fee-free P2P transactions. That means there is no extra app to download, unlike stand-alone apps like Venmo and PayPal. (Zelle does, however, plan to release an app.)

Here are some examples of how Zelle has been integrated into mobile banking:

Where to find QuickPay with Zelle. Source: JPMorgan Chase.

 

Zelle payment options in the Bank of America app. Source: Bank of America.

To reach customers whose banks aren’t part of the Zelle network, Early Warning says it partnered with MasterCard and Visa to make a Zelle app that will allow transfers to those at nonparticipating banks and just about everyone with a U.S.-based debit card. Early Warning says they plan to release the app in the coming months.

Where Zelle has an edge on competitors

When you send money to a friend using Venmo, they instantly receive that amount in their Venmo account, but then need to initiate a bank transfer to access the funds. The same goes for PayPal and Square Cash. With Popmoney, a service that sends money directly between bank accounts, there’s no need to initiate a deposit, but it takes a couple of days for the transactions to clear. With these services, it can take one to three days for a deposit to become available in your bank account.

By leveraging its network of bank partnerships, Zelle claims consumers should be able to make transactions between different institutions within minutes. However, if your recipient does not have access to Zelle through their bank or credit union, or their partnered bank does not yet support real-time payments, Zelle loses its advantage. The same is true if you decide to send the money using clearXchange. Transactions would then take between one and three days to complete, no better than the likes of PayPal or Venmo.

Though Zelle touts transaction speed as one of its greatest strengths, its competitors aren’t far behind. Square Cash offers instant access to transferred funds for a fee of 1% of the deposit amount, and in June, PayPal started rolling out instant transfers to PayPal and Venmo users with eligible Visa and MasterCard debit cards. That perk will carry a 25 cent fee per transfer, so for now, Zelle has an edge by offering fee-free speed.

There are dozens of ways you can can send money to friends, family members, or the person you picked up your coffee table from on Craigslist. They range from social media options like Snapcash or Facebook Messenger, to full-fledged mobile and web apps like the PayPal app or Google Wallet. We asked Aite Group’s Banking and Payments industry analyst Talie Baker which big players in the P2P payments space to compare to Zelle. Here’s a breakdown of how they stand up to the financial industry’s P2P processor:

Click an icon below to see how Zelle compares to other payment applications

Feature Zelle Venmo PayPal Square Cash Popmoney Google Wallet Facebook Messenger
Who you can send money to Anyone whose bank offers Zelle (86 million consumers) or anyone who is set up with ClearXchange (25 million registered users) Anyone with a Venmo account (unknown, owned by PayPal) Anyone with a PayPal account (210 million customer accounts) Anyone with a Square account (unknown) Anyone at any of 2,400 financial institutions (70 million consumers) Anyone with a Google account; no need to have a the Wallet app Anyone with a Facebook account who is 18+ years old
Time it takes deposit to become available in recipient’s bank account Minutes, unless the recipient banks with a bank that doesn’t support instant transfers or isn’t a partnered institution 1 to 3 business days after transferring from Venmo account to bank. Instant access coming soon, for a fee of $0.25 per transaction. Up to 4 business days. Instant access coming soon, for a fee of $0.25 per transaction. Up to 2 business days. Instant deposits are available for a fee of 1% of the deposit amount. Up to 2 business days 1 to 3 business days after transferring from Google Wallet to bank Up to 5 business days
Has a stand-alone app No. Zelle is integrated directly into existing bank mobile apps. Yes Yes Yes No. PopMoney is integrated into existing mobile banking apps. Yes Yes
Has a web version Yes Yes Yes Yes Yes Yes Yes
Fees None Free to send money from a bank account or debit card

3% fee to send money from a credit card

Free when you send funds via a bank account

2.9% plus 30 cents (U.S.) of the amount you send using a debit or credit card

Free to send money from a bank account or debit card.

3% fee to send money from a credit card

Free when receiving money

$0.95 to send or request funds

Free Free
Accepts credit card transactions No Yes Yes Yes No No No
Transaction limits None, but your bank may impose transfer limits Send and receive up to $2,999.99 per 7 days after identity verification; receive up to $2,000 per transaction on Venmo. Send and receive up to $10,000 per transaction Send up to $2,500 a week after identity verification; receive more than $1,000 per 30 days after identity verification Daily transaction limit for a debit card: $500

Daily transaction limit for a bank account: $2,000

30-day transaction limit for a debit card: $1000

30-day transaction limit for a bank account: $5,000

Send up to $9,999 per transaction or up to $50,000 in 5 days. If you live in Florida, you can send up to $3,000 every 24 hours. Up to $9,999 within 30 days
Supports international transfers No No Yes – Fees to more than 200 countries vary. No No No No
Lets you store funds on an in-app account No Yes Yes Yes Yes Yes No

Other things you need to know about Zelle

Transfer limits: There are no limits to the amount of money you can receive, but there may be limits on how much money you can send, depending on your bank and the type of account you’re using.

Zelle allows banks to regulate your transaction limits. For example, Chase caps transfers from personal checking accounts at $2,000 per transaction, and customers can send up to $2,000 a day and $16,000 in a calendar month. However, customers sending money from a Chase Private Client or Private Banking client account can sent up to $5,000 per day and $40,000 per calendar month. Check with your bank to see if any limits apply to you before sending large amounts of money.

No credit card transactions: You won’t be able to send money using a credit card at all, even after Zelle rolls out a mobile app, like you can for a 3% fee on Venmo.

No international transfers: As of this writing, Zelle’s system doesn’t support international payments. The service only works with U.S.-based bank accounts, so you won’t be able to send money directly to family abroad. However, if you are traveling and have access to your bank account overseas, you can receive transfers made to your U.S.-based bank account.

The bottom line

If you’re sick of waiting one to three days to access your roommate’s $400 share of the rent, Zelle may be a solution — that is, if you and your roommate both have bank accounts on the Zelle network. And even though Zelle may not have the name recognition of Venmo or PayPal, it offers something they don’t: fee-free instant transactions. A 25 cent fee for instant access to your funds or a 3% fee for using a credit card can add unnecessary costs to using your own money. But if you’re simply looking for a way to pay friends for free, Zelle is an easy-to-use option — just like many other P2P platforms out there.

The post Zelle Is Big Banks’ Response to Venmo — Here’s How it Stacks Up appeared first on MagnifyMoney.

Discover it® Secured Card Review: Rebuild and Establish Credit

Secured cards are great if you have little to no credit history or have poor credit history. With proper credit behavior they are a great way to build credit. The Discover it® Secured card is an excellent secured card that lets you build credit while also earning cash back. There is no annual fee associated with this card, making it easier to put your money where it’s needed.

Discover it® Secured Card - No Annual Fee

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Discover it® Secured Card - No Annual Fee

Annual fee
$0 For First Year
$0 Ongoing
Minimum Deposit
$200
APR
23.99% APR

Variable

Credit required
zero-credit
No credit, 670 or less

How the card works

The Discover it® Secured card is meant to help you rebuild or establish credit. You need to make a $200 security deposit that will become your credit line. If you want a credit limit that is higher than $200, you will need to put down a larger security deposit.

Discover reviews your account monthly starting at eight months to see if you can be transitioned to an unsecured card. This is a feature that makes the Discover it® Secured card unique. If you have responsible credit management, you may benefit from this feature and be transitioned to an unsecured card. If moved to an unsecured card, you will receive your security deposit back. This is hassle free and another reason the Discover it® Secured card is a great option.

This card offers 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases. This is a great bonus, but the main goal of a secured card is not to earn rewards, but to be responsible and build credit. Don’t let the prospect of cash back lead you to overspending. That will only defeat the purpose of this card.

To get the most benefit from your secured card, keep a low utilization rate and pay your statements in full and on time every month. Utilization is the amount of your total credit limit you use. It is calculated by dividing your statement balance by your available credit. A low utilization is not spending more than 20% of your credit limit. So if you have a credit limit of $200, that means don’t spend more than $40.

By following these two practices, you will begin to see your credit score rise. You can even build credit with $10 a month using a secured card.

How to qualify

To qualify for the Discover it® Secured card, you need to be at least 18 years old, have a Social Security number, U.S address, and U.S bank account and provide all the required information in the online application. Be sure to have your bank routing number and account number ready when you apply as they will be needed for the $200 security deposit. Don’t worry if your credit history is nonexistent or unfavorable — this card is great for people who are new to credit or are looking to rebuild credit.

What we like about the card

Earn cash back

You will earn 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases. This is a great added bonus that most secured cards do not offer. Discover will automatically match all of the cash back you earned at the end of your first year as a cardholder.

Automatic monthly reviews after 8 months

Discover takes the guessing out of wondering when you will qualify for an unsecured card by reviewing your account monthly starting at eight months. If you have responsible credit management across all of your credit cards, you may be transitioned to an unsecured card. This is hassle free and another reason the Discover it® Secured card is a great option.

Free FICO Score

It is important to monitor your credit score and each month you will receive your FICO Score for free. If you practice proper credit behavior, you will see your score increase.

What we don’t like about the card

High APR

This card, like most secured credit cards, has a high APR. If you pay your statement balance in full and on time every month, the APR will not matter (because no interest will be charged). And if you do that every month, your credit score will improve over time — making it cheaper to borrow money (if you need to) in the future.

Who the card is best for

This Discover it® Secured card is best for people looking to rebuild or establish credit. In addition to an easy transition to an unsecured card when the time is right, the Discover it® Secured card provides a cash back program and has no annual fee. By using this card coupled with proper credit behavior you can see a boost in your credit score.

Alternatives

If you want a smaller security deposit

Secured MasterCard from Capital One Bank

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$49

APR

24.99% APR

Fixed

The Secured MasterCard from Capital One is made for people who want to rebuild credit. There are lower security deposit options than the Discover it® Secured card, making it a good alternative if you can’t afford a large security deposit. However, it’s important to note that the lower security deposit is not guaranteed. This card also has no annual fee and offers your free credit score; however, there are no rewards. Just remember: A lower security deposit also means a lower credit limit.

An unsecured card from a credit union

Visa® Classic from Georgia's Own Credit Union

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

-

APR

12.99%-17.99%

The Visa Classic from Georgia’s Own Credit Union offers a competitive APR that is lower than Discover. There is no annual fee associated with this card and no rewards, making this card strictly for rebuilding credit. Keep in mind you will need to join the credit union, and the application process is more complicated compared to Discover. This card is a good alternative if you prefer to have an unsecured card and don’t mind working with a credit union.

FAQ

No, your cash back does not expire as long as your account remains open.

If you pay your balance in full and close your credit card account, your security deposit will be refunded. This can take up to two billing cycles plus 10 days. Also, during Discover’s monthly automatic reviews of your credit card account starting at eight months, they will see if they can return your security deposit while you continue to enjoy your card benefits.

The maximum credit limit is $2,500. This will be determined by your income and ability to pay. Keep in mind your security deposit must equal your credit limit, so you will have to deposit $2,500 if approved for this credit limit.

The post Discover it® Secured Card Review: Rebuild and Establish Credit appeared first on MagnifyMoney.

Capital One Spark Classic for Business Review: Unlimited Cash Back for Small Business Owners

The Spark Classic for Business card is a good card for small business owners with average credit. This card has unlimited 1% cash back and no annual fee, making it a great way to earn rewards from everyday business purchases. If you’re a business owner who frequently travels abroad, there are also no foreign transaction fees, which can save you money compared to other cards.

Spark Classic for Business from Capital One

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Spark Classic for Business from Capital One

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
1% on all spend
APR
23.99%
Credit required
fair-credit

Average

How the card works

The Spark Classic for Business card offers unlimited 1% cash back on all purchases; there are no changing categories to keep track of each quarter. To redeem cash back, you can request a statement credit or a check. You can also set up automatic redemption either at a set time each calendar year or when a specific threshold ($25, $50, $100, or $200) has been reached. This can be done online at capitalone.com or by contacting the Rewards Center. Cash back can also be redeemed for credits on previous purchases, gift cards, and more.

This card also offers credit-building tools that help you monitor your credit score. Frequently monitoring your credit score will allow you to build and strengthen credit for your business as long as you practice responsible credit behavior.

Capital One offers quarterly and year-end summaries of your spending that break down what you purchased. This simplifies planning, budgeting, and taxes. Your purchase records are also easily downloadable to multiple formats such as Quicken®, QuickBooks™ and Excel®, making accounting easier for your small business.

How to qualify

This is a small business credit card. But to qualify, Capital One will consider both you and your business. That means your personal credit score matters — and you need to have average credit to qualify. Capital One defines average credit as someone who has defaulted on a loan in the past five years or has limited credit history (having a credit card or other credit for less than three years). Your business will need to have an average credit score and an EIN. You will also need to provide details regarding your business’s revenue. Remember — even though this is a business credit card, you will be personally liable for any charges on the card — even if your business goes bankrupt.

What we like about the card

No annual fee

You won’t pay an annual fee with this card. Many small business rewards cards charge a fee, making this card unique.

No foreign transaction fees

There are no fees when you travel abroad and use this card. This is beneficial if you travel for business frequently or only on occasion, as you will avoid foreign transaction fees that most other cards have.

Unlimited cash back

This card offers unlimited 1% cash back on all purchases. There is no minimum amount to redeem cash back. This is a great way to earn rewards on your business purchases.

Free employee cards

Employee cards come at no additional cost. No longer do you have the hassle of reimbursing employees when they use personal cards. You will also earn rewards points from their purchases. Just remember — any spending by an employee on a small business card will be your personal liability.

You don’t need perfect credit

Capital One is willing to work with people and companies that have less than perfect credit.

What we don’t like about the card

High APR

There is a high APR for this card. Make sure that you pay all of your bills on time and in full in order to ensure you will not rack up debt. Keeping a balance on your card will defeat any cash back you earn.

Who the card is best for

The Spark Classic for Business card is best for small business owners with average credit who want to earn rewards with minimal additional fees. We recommend this card for business owners who travel abroad and plan on having multiple employee cards, as you will not be charged any fees. With unlimited 1% cash back and no annual fee, this card is a great option for business owners.

Alternatives

If you frequently spend on gas

Sam's Club Business MasterCard<sup>®</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

-

APR

15.40%-23.40%

The Sam’s Club Business MasterCard offers 5% cash back on gas purchases for the first $6,000 in a year (except when purchased from other wholesalers) and 1% cash back on all other purchases. This is a great added bonus for business owners who frequently spend on gas. Keep in mind that there is a $5,000 cap on cash back rewards you can earn each calendar year. Once you hit this cap, you will not earn any more rewards that year.

If you need to finance a purchase

Blue Business℠ Plus Credit Card from American Express

Annual fee

$0 For First Year

$0 Ongoing

Rewards

up to 2x points

APR

12.24%-20.24%

Variable

Owning a small business can be overwhelming, and at times, though not ideal, you may have to carry a balance on your credit card. If this is the case, the Blue BusinessSM Plus Credit Card from American Express offers competitive interest rates and a 0% introductory offer. This can help you save money while you pay off your purchase. In addition, there are rewards points you can earn on purchases. Keep in mind you need excellent credit to apply for this card.

FAQ

No, cash back does not expire as long as your account remains open.

No, you can redeem your cash back for any amount, anytime.

You can get your cash back upon request in the form of a statement credit or a check. You can also set up automatic redemption either at a set time each calendar year or when a specific threshold ($25, $50, $100, or $200) has been reached. Just go online to capitalone.com or contact the Rewards Center. You can also redeem for credits for previous purchases, gift cards, and more.

The post Capital One Spark Classic for Business Review: Unlimited Cash Back for Small Business Owners appeared first on MagnifyMoney.

OpenSky Secured Visa Review: No Checking Account Required

The OpenSky Secured Visa secured credit card can be helpful for those who have bad or no credit history. This card is designed for consumers who want to rebuild or create a credit history. OpenSky does not require a checking account or credit check when you apply, which makes the application process simple. Take note that this card does come with an annual fee, unlike other secured cards. With responsible use, you could see an increase in your credit score and move to an unsecured card.

OpenSky® Secured Visa® Credit Card from Capital Bank N.A.

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OpenSky® Secured Visa® Credit Card from Capital Bank N.A.

Annual fee
$35 For First Year
$35 Ongoing
Minimum Deposit
$200
APR
18.39% APR
Credit required
zero-credit
New to Credit, Bad

How the card works

Since this is a secured card you will have to make a security deposit. This money will become your line of credit and must remain in your account while your card is open. There are four options to make your security deposit and fund your account. The first is using a debit card. Simply provide your debit card information on your application, and OpenSky will process your transaction right away. You can also complete a wire transfer to Capital Bank. If you don’t have a checking account, you can use Western Union or mail a check or money order. An email with instructions on how to fund your security deposit will be sent after your application has been approved. Note that, depending on the method of payment that you choose, it may take up to five business days for your security deposit to clear.

If you’re looking to improve your credit score, the best way to take advantage of this card is to start off with a low credit limit and find a recurring expense you can put on the card. For example, you can put your utility bills on the card. Make sure that you pay this on time and in full every month. To ensure it’s paid on time, you can enroll in their auto pay program, which will guarantee you never miss a payment. Once you enroll in auto pay, the credit card company will make a scheduled monthly payment automatically on the day you choose. This way, you will have a purchase every month that OpenSky can report to all three major bureaus.

How to qualify

To quality for this credit card you do not need to have credit history, but you do need a job. By having a job you will show a stable source of income, which shows credit lenders you are responsible and can pay your bills. In addition you will need a security deposit. That means if you want a $1,000 credit limit, you’ll need to have $1,000 deposited at account opening. The online application is four simple steps that can be completed in 10 minutes. They request basic personal and financial information, have you choose the starting credit limit you prefer, and fund your security deposit. Your requested credit limit is subject to approval based on your creditworthiness.

What we like about the card

No credit check

OpenSky does not check your credit history during the application process. This is great if you lack a credit history or have poor credit, therefore improving your approval odds.

Simple application process

The application process takes place solely online, making it easy to apply at your convenience. It only takes 10 minutes according to OpenSky to complete the application. There are four easy steps: provide your personal and financial information, customize and fund your card, review your information, and accept the terms and conditions.

No checking account needed

OpenSky does not require you to have a checking account to apply for this card. This is great for those who want to establish credit but don’t have a bank account. The majority of credit cards require bank accounts, so this is a good option if you don’t have a bank account.

What we don’t like about the card

Annual fee

OpenSky charges cardholders a $35 annual fee. Be sure to review your credit options, because you can find other secured cards that do not charge an annual fee. However, note that those cards may require a checking account, so make sure to review your options.

Foreign transaction fee

Make sure this card remains at home when you travel abroad since there is a high 3% foreign transaction fee. This will increase your bill if you make purchases abroad, so it’s best left at home.

No option for an unsecured card

If you’re ready to move onto an unsecured card, there is no option with OpenSky. That means you’ll have to look to another company, which could be a hassle because of the process of applying for the card, getting a credit check, and closing your current card.

Who the card is best for

If you’ve struggled with being approved for credit cards in the past due to bad or nonexistent credit history, the OpenSky Secured Visa may be right for you. With no credit check during the application process, you have good approval odds. This card is also for those who do not have a checking account but want to build credit, as you won’t find many credit cards that are offered to people without checking accounts. However, the annual fee and lack of transition to an unsecured card can make you think twice about this card. You can find MagnifyMoney’s ranking of the best secured credit cards here.

Alternatives

Secured MasterCard from Capital One Bank

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$49

APR

24.99% APR

Fixed

This credit card doesn’t require that you have your security deposit equal your credit limit. You can make a deposit as low as $49, unlike the OpenSky card, which is $200. However, this card will check your credit history and will determine your deposit requirement based on your creditworthiness. There is no annual fee associated with this card, unlike OpenSky.

Discover it® Secured Card - No Annual Fee

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$200

APR

23.99% APR

Variable

This card has no annual fee, unlike OpenSky. It also features 2% cash back on up to $1,000 per quarter on gas and restaurant purchases and 1% on other spending. In addition, after eight months you may be eligible for an unsecured credit card, which you can’t do with OpenSky. These are great benefits that make the Discover it® Secured card a good alternative.

DCU Visa Platinum Secured from Digital FCU

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$300

APR

12.50% APR

There is also no annual fee for this card, as well as no cash advance or balance transfer fees. The APR is lower than OpenSky, which is beneficial if you think you might carry a balance month to month. According to a DCU representative, the maximum credit limit is $2,000. However, it is determined by your overall creditworthiness. Also, you’ll need to be a member of Digital Federal Credit Union, which may be difficult to get into. You can learn about eligibility requirements here.

FAQ

No, OpenSky does not check your credit history. So any bad history you may have will not affect your approval odds.

A security deposit is the amount of money you deposit into your account and acts as collateral. It also becomes your line of credit. That means if you make a $1,000 security deposit, you’ll have a $1,000 credit line.

There are four options to make your security deposit.

  1. Debit card- Simply provide your debit card information on your application, and OpenSky will process your transaction right away.
  2. Wire transfer to Capital Bank

If you don’t have a checking account:

  1. Western Union
  2. Mail a check or money order

An email with instructions on how to fund your security deposit will be sent after your application has been approved. Note that, depending on the method of payment that you choose, it may take up to five business days for your security deposit to clear.

Additional reporting by Alexandria White

The post OpenSky Secured Visa Review: No Checking Account Required appeared first on MagnifyMoney.

QuicksilverOne Review: Unlimited 1.5% Cash Back for Average Credit

For people with “average” or “fair” credit, Capital One offers QuicksilverOne Rewards.Every credit card issuer has a different definition of what “average” or “fair” credit means. Generally speaking, it means a FICO score between 580 and 669.

The QuicksilverOne Rewards card gives you an unlimited 1.5% cash back, which is a pretty sweet opportunity for consumers with less-than-perfect credit.

Just beware of the two catches: There’s a $39 annual fee and a high purchase APR.

QuicksilverOne® Rewards from Capital One

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QuicksilverOne® Rewards from Capital One

Annual fee
$39 For First Year
$39 Ongoing
Cashback Rate
up to 1.5%
APR
24.99%

Variable

Credit required
fair-credit

Average

QuicksilverOne Card Overview

The QuicksilverOne Rewards program is low maintenance.

Unlike other programs with revolving categories and spending caps, this card doesn’t hold you to either. You will earn 1.5% cash back every time you swipe.

You can redeem cash back at any time for a check, account credit, or gift card. Cash back you earn never expires.

What We Like About This Card

No fuss.

We like that the cash back program terms are uncomplicated. There are no preset bonus categories that you have to adapt your spending to each month. You can also redeem cash back at any time without having to wait for the balance to reach a certain threshold.

Low credit score requirement.

The QuicksilverOne is one of the only cash back rewards cards around town for average credit. If you’re having trouble getting approved elsewhere, this is a card you need to seriously consider.

What We Don’t Like About This Card

The annual fee.

Since this card costs $39 per year, you need to spend at least $2,600 per year (or $217 per month) for the cash back to break even with the fee. Ideally, you’ll want to spend more than just the bare minimum for the rewards card to be worthwhile.

High APR.

This is a high interest rate. Avoid carrying a balance at all costs if you choose this card.

Who This Card Is Best For

Again, the QuicksilverOne is our top unlimited cash back pick for consumers who have trouble getting approved for other cash back cards.

According to Capital One, you may qualify for this card if:

  • You have defaulted on a loan in the past five years
  • You have limited credit history
  • You have had your own credit card or other credit for less than three years (this may include students, people new to the U.S., or authorized users on someone else’s credit card)

Keep in mind, these are just guidelines to give you a general sense of whether you’ll qualify. Your income, debt, and other credit limits are also factors used to make a decision.

Capital One has a nice feature where you can get preapproved online for offers without a hard credit inquiry. See if you prequalify for the QuicksilverOne card here.

Keep an eye out for the Quicksilver alternative while checking offers as well.

Quicksilver Rewards is the “big brother” of the QuicksilverOne card. It has no annual fee, and it’s for people with excellent credit. There’s no harm in checking to see if you prequalify for the Quicksilver card.

Is the QuicksilverOne card good for rebuilding credit?

Despite the lenient qualifying criteria, the QuicksilverOne card is not our top recommendation if you’re rebuilding credit, because of the annual fee.

Your focus should be keeping your credit utilization very low when rebuilding credit. You shouldn’t worry about having to earn enough cash back each month to cover a card’s annual fee.

Try a no-fee secured card like the Capital One Secured MasterCard or the Discover it Secured Credit Card instead.

QuicksilverOne Credit Card Benefits

QuicksilverOne offers:

  • Travel accident insurance and 24/7 roadside assistance. Travel insurance for death or loss of limbs. You can call in for help if your car breaks down.
  • Auto rental insurance. Insurance covers rental damage from collision or theft.
  • Extended warranty. Purchases made on your card will get an extended warranty.
  • Price protection. You can get reimbursed the difference if you find items you purchased on sale within 60 days.
  • Fraud coverage. Covered by $0 fraud liability if your card is lost or stolen.

Alternatives to the QuicksilverOne

QuicksilverOne doesn’t have much competition since it’s the best card for consumers with average credit. The following no-fee cash back cards officially require good to excellent credit but allow you to prequalify without a hard inquiry.

1.5% cash back, no fee

Chase Freedom Unlimited<sup>SM</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

1.5%

APR

14.24%-23.24%

The Chase Freedom Unlimited card gives you an unlimited 1.5% cash back on all spending without category restrictions or caps. What’s great about Chase is it’s another credit card issuer that lets you prequalify for offers without a hard pull. Check out offers you may prequalify for here.

You can redeem cash back from your Chase Freedom Unlimited card at any time, and cash back never expires as long as you keep your account open. At times there is an intro APR deal or cash back bonus offer that add benefits to this card, and ongoing rates are sometimes lower than what you’d see on the QuicksilverOne.

Double cash back, no fee

Citi®Double Cash Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

1% when you buy, 1% when you pay

APR

14.49%-24.49%

Variable

The Citi Double Cash card is another good choice for low-maintenance cash back rewards. It gives double cash back on all purchases. You earn 1% cash back when you spend on the card and another 1% cash back when you pay off the bill.

This is a card that members report qualifying for with a credit score in the high 600s. Citi lets you shop for prequalified offers on the website as well. If you’re interested in this card, see if you can get prequalified here. In addition, there are changing intro APR deals for this card that allow you to save interest early on, and ongoing interest rates are sometimes lower than with the QuicksilverOne.

Bottom Line

The QuicksilverOne Rewards is a good rewards card for those with average credit. If you have had difficulty being approved for other higher cash back rewards cards, you may be approved for the QuicksilverOne Rewards, which offers unlimited 1.5% cash back. Be aware that this card comes with an annual fee and high APR, so make sure to do your research and see if this card is right for you.

FAQ

You should not keep a balance on this credit card to benefit from the cash back. The high APR is a large amount of interest to be paying on purchases. If the interest charges you experience on this card coupled with the annual fee surpass the cash back you earn, this card is pointless.

No. You’re free and clear to spend money on anything, and it’ll earn 1.5% cash back. This is the beauty of an unlimited cash back card. However, cash advances and balance transfers will not qualify for cash back.

No, you can redeem cash back for any amount at any time.

No, cash back does not expire as long as your account remains open.

You can, but not with average credit. The QuicksilverOne card is the best unlimited cash back card there is specifically targeting people with fair credit. Another option you have is working to improve your credit first before applying for a credit card to qualify for a card that gives you more cash back.

The post QuicksilverOne Review: Unlimited 1.5% Cash Back for Average Credit appeared first on MagnifyMoney.

Georgia’s Own Visa Classic Review: Good Choice for Rebuilding Credit

The Georgia’s Own Visa Classic card is made for those with low credit scores and helps you rebuild and re-establish your credit. If you’ve struggled in the past with getting approved for other credit cards due to poor credit, you may qualify for this card. By using this card, coupled with proper credit behavior, you will be able to improve your credit score.

Visa® Classic from Georgia's Own Credit Union

APPLY NOW Secured

on Georgia's Own Credit Union’s secure website

Visa® Classic from Georgia's Own Credit Union

Annual fee
$0 For First Year
$0 Ongoing
APR
12.99%-17.99%
Credit required
bad-credit
Bad
  • No annual fee
  • 2% foreign transaction fee
  • There is a balance transfer fee of 3% of the balance transfer; $10 minimum
  • Due date is 25 days after the close of each billing cycle. No interest if full balance is paid. Interest on cash advances and balance transfers begins on the transaction date.

How the Card Works

This is a relatively straightforward credit card. There is no annual fee and no rewards. Lack of a rewards program makes this card predominantly for rebuilding credit. Look at it this way — there are no tempting rewards to lead you to overspend, allowing you to focus on rebuilding your credit.

The APR for this card is a fair 12.99% to 17.99%. Other cards charge upward of 20%, so this is reasonable. However, a lower APR shouldn’t encourage you to accrue a balance month to month. Always make it a point to pay your balance in full and on time.

A good way to start rebuilding your credit with the Georgia’s Own Visa Classic is to add a recurring payment, like Netflix or Spotify. You can solely have your monthly Netflix or Spotify charge on your credit card statement and increase your credit score as long as you pay your bill in full and on time. This will give you a low utilization (the amount of your credit limit you use), which is a key factor in determining your credit score. For example, if you have a credit limit of $100 and charge your recurring $7.99 Netflix bill, then you will have a utilization of 8% (below 20% is ideal).

How to Qualify

In order to qualify for this card, you need to have a stable source of income, so a job is needed. This will prove that you can afford to make your monthly payments on time and are responsible.

In addition, since this card is provided by a credit union, you have to join Georgia’s Own Credit Union. Don’t worry if you reside outside of Georgia; anyone can become a member regardless of residence. There are four free eligibility options that can qualify you for free membership. Otherwise you will have to join the GettingAhead Association, with a $5 annual membership fee. The best bet is to speak to a Georgia’s Own loan officer (404-874-1166) and see if you’re pre-approved for the credit card. If pre-approved, you can join the GettingAhead Association while completing your credit card application. All members will also need to keep $5 in a savings account that must remain in the account while you have the card open.

A note on the application process for Georgia’s Own — when you apply for a credit card on Georgia’s Own website, you are directed toward an application that is for all the credit cards they offer. This means that depending on your creditworthiness, you may not be directed to the Visa Classic as an option. Therefore if you want to apply directly for the card, the best bet is to speak with a loan officer, who will tell you if you’re pre-approved for the Visa Classic card.

What We Like About the Card

Good chance of getting approved

Georgia’s Own tailored this credit card toward those needing to rebuild or re-establish their credit history. This gives those with bad credit a greater chance of being approved. Also, if your score is above 620, you are more likely to be approved.

Fair APR

This card has a fair APR ranging from 12.99% to 17.99%. This is significantly lower compared to other cards targeted to people with less than perfect credit, with APRs as high as 23.99%. Although your goal is to pay every bill in full and on time each month, if you keep a balance this low, APR won’t accrue as much interest as other cards.

What We Don’t Like About the Card

Have to join the credit union

In order to get this card, you have to join Georgia’s Own Credit Union. There are four free eligibility options, and if you don’t qualify for free membership, you will have to join the GettingAhead Association, with a $5 annual membership fee. You will also need to keep $5 in a savings account that must remain in the account while you have the card open.

2% foreign transaction fee

Make sure to leave this card at home when you travel abroad as you’ll be charged a 2% foreign transaction fee on all purchases. This is slightly lower than most cards, which charge a 3% foreign transaction fee, yet high enough to increase your bill significantly if you make purchases abroad.

No rewards program

There is no rewards program for this credit card. Georgia’s Own offers a Visa Platinum card that has a rewards program, but you may have a harder time qualifying if you don’t have a good credit score.

Who the Card Is Best For

If you’re someone who has a low credit score and doesn’t mind working with a credit union, this card may be right for you. We recommend this no-frills card for people who want to rebuild their credit with a credit card. While you won’t earn any rewards with this card, if you practice proper credit behavior, you’ll be rewarded by a better credit score.

Alternatives

Secured Card with Rewards

Discover it® Secured Card - No Annual Fee

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$200

APR

23.99% APR

Fixed

If you don’t want to join a credit union, you might want to consider a secured credit card to help you build credit. With a secured card, you make a deposit – and receive a credit limit based upon that deposit. The good news is that your secured credit card will report to the credit bureaus. That means your good behavior can help you improve your credit score over time. One of our favorite secured credit cards is from Discover.

Rewards Card with Good Approval Odds

Walmart® MasterCard<sup>®</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

up to 3%

APR

17.65%-23.65%

Store cards are more likely to approve people with low credit scores, and the Walmart MasterCard is known to have approved applicants with scores as low as 520. In addition to promising approval rates for people with bad credit, the Walmart MasterCard has unlimited rewards with up to 3% cash back. Don’t worry if you don’t shop at Walmart since you can earn rewards on any purchase. Be aware that this card has a higher interest rate than the Georgia’s Own card, so compare which card is best for you.

Bottom Line

With no annual fee and fair interest rates, the Georgia’s Own Visa Classic credit card is a good option for those with bad to fair credit who are looking to improve their credit score. If you don’t mind working with a credit union, this card is a good option to rebuild credit.

FAQ

If you don’t qualify for the four free eligibility options, you will have to join the GettingAhead Association, with a $5 annual membership fee. The best bet is to speak to a Georgia’s Own loan officer (404-874-1166) and see if you’re pre-approved for the credit card. If pre-approved, you can join the GettingAhead Association while completing your credit card application. All members will also need to keep $5 in a savings account that must remain in the account while you have the card open.

You should work hard to make sure you make payments on time every month. A missed payment will lead to a late fee and interest accruing on the balance. This will ultimately leave a negative mark on your credit report and lower your credit score. Try not to spend more than you are able to and stick to a budget with these helpful budgeting apps in order to rebuild your credit score.

There is no one way to increase your credit score; rather, there are numerous behaviors responsible cardholders practice to establish good credit history. Good practices include paying all of your statements on time and in full and keeping a utilization below 20%; these will help you rebuild credit.

The post Georgia’s Own Visa Classic Review: Good Choice for Rebuilding Credit appeared first on MagnifyMoney.

Ally CashBack Credit Card Review: Is it Worthwhile if You Don’t Bank with Ally?

Last year, Ally Bank rolled out the Ally CashBack Credit Card with a rewards program that offers 2% cash back on gas and groceries with no cap.

In addition to the cash back you earn from spending, Ally gives you a special 10% Ally Deposit Bonus when you deposit cash back earned into an eligible Ally Bank account.

Ally CashBack Credit Card

APPLY NOW Secured

on Ally Financial’s secure website

Ally CashBack Credit Card

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
2% on certain categories, 1% on everything else
APR
13.74%-23.74%

Variable

Credit required
excellent-credit

Excellent

  • No annual fee
  • 2% cash back at gas stations and grocery stores
  • 1% cash back on all other purchases
  • Receive a $100 bonus when you make $500 in eligible purchases during the first 3 billing cycles
  • Get a 10% Ally Deposit Bonus when you deposit your cash rewards into an eligible Ally Bank account
  • 13.74%-23.74% purchase APR
  • 0% Intro APR for 12 months from account opening on balance transfers, then a variable APR of 13.74%-23.74%. Balance transfer fee is 4% of the amount transferred, $10 minimum
  • 3% foreign transaction fee

The Ally CashBack Credit Card Offer

1. Earn up to 2.2% cash back at gas stations and grocery stores.

Factoring in the 10% Ally Deposit Bonus, you have the potential to earn a total of 2.2% cash back in the gas and groceries category.

You have to deposit cash back earned into a qualifying account to get the 10% bonus. Qualifying accounts include:

  • Ally Money Market accounts
  • Non-IRA Online Savings accounts
  • Interest Checking accounts

Fine print alert: Discount stores, superstores, and warehouses are not included in the groceries category. Stores like Target, Walmart, BJ’s, and Sam’s Club specifically may be off limits for 2% cash back.

Ally Bank qualifies your purchases for cash back using merchant codes. You can call up a store directly to see if it has a merchant code within one of these eligible 2% cash back categories:

  • Grocery
  • Bakery
  • Dairy
  • Service stations
  • Automated fuel dispensers
  • Fuel dealers

2. Earn up to 1.1% cash back on all other purchases.

Purchases outside of groceries and gas earn 1% cash back. You can earn a total of 1.1% if you add in the 10% Ally Deposit Bonus.

3. Earn an introductory incentive.

There’s an introductory bonus of $100 if you spend $500 within the first three months of having this card.

How to Redeem Cash Back

You can redeem cash back in two ways. As mentioned, you get the extra 10% bonus if you deposit cash back into an eligible Ally Bank account.

The second option is redeeming cash back for statement credit. You need to build a balance of at least $25 before you can redeem cash back.

What We Like About the Ally CashBack Credit Card

You guessed it — we think the most attractive feature of the Ally CashBack Credit Card is the 10% Ally Deposit Bonus. We also like that this card has no spending cap for the 2% categories.

Other benefits are that there’s no annual fee and the interest rate range is reasonable.

The card even has a 0% APR introductory deal on balance transfers, although the 4% balance transfer fee is something to consider before moving your money.

The Ally CashBack Credit Card Fine Print

One of the major drawbacks of this card is the merchant code restrictions.

Don’t get us wrong — the Ally CashBack Credit Card isn’t the only cash back rewards program that uses merchant codes to qualify purchases. Pretty much every niche category card has some fine print related to what you will and will not earn bonus cash back on.

Before shopping at a warehouse or specialty food store with this card (or any category card for that matter), double-check the merchant code to see if the purchase will be eligible for 2%.

One more spot where the Ally CashBack Credit Card has fine print is the program termination policy. If your account is canceled for any reason, by you or Ally Bank, you forfeit the cash back balance. Ally Bank also reserves the right to change terms or cancel the cash back program. If this occurs, you may give up your balance.

To avoid losing out on money, keep the card in good standing and cash out whenever you hit the $25 mark just in case Ally Bank should change terms in the future.

Who the Ally CashBack Credit Card Is For

This card is best suited for current Ally Bank customers, but even people who bank with Ally should explore other options.

For non-Ally Bank customers, the 2.2% on gas and groceries is not worth opening two new accounts (the credit card account and a qualifying savings or checking account) to earn maximum cash back.

There are too many other category cards to consider ahead of this one that can give you more than 2.2% on gas and groceries.

There are even a few cards that offer you 2%+ cash back on all spending with no pesky category restrictions to keep up with.

We’ll share two alternatives with you in the next section.

But first, here’s an example to give you an idea of how much you can earn with the Ally CashBack Credit Card:

Say you spend $4,000 per year on groceries and $2,000 on gas. You can earn up to $132 in cash back for the year. (This includes the 10% Ally Deposit Bonus.)

Keep this scenario in mind because we’ll reference it next when reviewing a competitor.

For eligibility criteria, Ally Bank doesn’t get specific about the type of credit history or score you need to get approved.

However, some applicants have reported getting declined because of too many recent inquiries or new accounts. These are factors to be mindful of that could hurt your chances of getting approved.

Cash Back Alternatives

We have a list of the top cash back cards for all categories in this post. Here are two alternative cards from that roundup to take a look at:

Amex Blue Cash Preferred

The Amex Blue Cash Preferred card is one of our top picks for gas and grocery shopping rewards. This card gives you a huge 6% cash back on groceries and 3% cash back on gas. You get 1% cash back on all other purchases. The Amex Blue Cash Preferred card has a $95 annual fee.

Back to our example scenario from above:

If you spend $4,000 annually on groceries and $2,000 annually on gas, you earn $300 in total cash back from the Amex Blue Cash Preferred. Subtract the $95 annual fee, and you still net $205 in cash back. Remember — the Ally CashBack Credit Card only gives you up to $132 in this same spending scenario. The moral of the story is, rewards cards that have an annual fee can still outperform cards with no annual fee. So don’t let a fee deter you from reviewing an offer.

Alliant Visa Signature

If you do most of your shopping at wholesale stores or you prefer a non-category card, the Alliant Visa Signature card is another option we recommend. The Alliant Visa Signature card gives you an unlimited 3% cash back for the first year with no fee. After the first year, you earn 2.5% cash back on all purchases with a $59 annual fee. If your spending is all over the map, an unlimited cash back card like the Alliant Visa Signature can give you more flexibility than the Ally CashBack Credit Card.

Rewards Cards: Frequently Asked Questions

No, Ally cash back does not expire as long as your account remains open and in good standing. There is no limit to the amount of cash back rewards that may be earned.

Anything over 1.5% cashback is a good deal. There are some cards that offer more — as much as 5 or 6% cash back on purchases. But sometimes those offers are too good to be true. Banks don’t like to lose money, and will pepper the fine print with all sorts of limitations. For example, they may offer 5% cash back on only purchases at certain types of retailers and only for certain periods of time. And those categories may change every quarter, which can make it hard to keep track.

Don’t let those cash back promises pressure you into spending more than you can afford. If you don’t pay your statement balance in full each month, you could get slapped with sky high interest charges. That would totally negate any benefit you might get from earning cash back. Cash back cards are only valuable if you can pay your bill in full and capture the entirety of your cash back rewards.

It depends on the card. Some cards allow you redeem cash back dollar for dollar as a statement credit, which can help lower your total balance. Just keep in mind that applying cash back to your card statement does not count as a monthly payment. Other cards will increase the value of your cash back if you spend on certain categories, like travel. Review your terms carefully to be sure you’re getting the most bang for your buck.

Find the card that fits your day-to-day spending needs best, beyond the flashy sign-up bonus offers and cash back promises. Pay your bill in full each month (spend only what you can afford to pay off).

The post Ally CashBack Credit Card Review: Is it Worthwhile if You Don’t Bank with Ally? appeared first on MagnifyMoney.