Credit Card Debt Management

For most of us, the holidays mean travel. Don’t be a grumbling grinch about it. Use your credit card travel rewards to make the most out of that 300-mile trip to see Great-Aunt Bertha. Jason Giacchino has several tips on how to spend wisely during the holidays, one of which is to “develop a buying strategy.”

It’s a great idea. Gas purchases and hotel stays can rack up rewards to help you enjoy a little post-holiday stress release. Check out Mr. Credit Card’s post on Kiplinger’s recommended list of credit cards for various categories.

The Capital One Platinum Plus MasterCard came out on top in the travel card category, according to Kiplinger’s. Mr. Credit Card agreed with this choice, as well as the magazine’s choice on best gas card, the BP Rewards Visa. That card offers 5% rebates on BP purchases and 2% on other travel and dining expenses. But Mr. Credit Card makes a good point - not everyone uses BP to fill up. I certainly don’t; I think their gas tends to cost more than competitors.

For non-BP users, Mr. Credit Card recommends the American Express Simply Cash Card. It is a business credit card that pays 5% rebates on gasoline and certain types of business expenses. The site mentions that a person can obtain a business credit card without actually owning a business; they will simply be treated as a sole proprietor. It’s worth a try!

For those who will need to fly instead of drive, Kiplinger’s has a recommendation on that too. Here’s what Mr. Credit Card had to say about the magazine’s choice, the Citi Premierpass Card Elite Level.

While this is a very good card, I think there are just too many types of travel reward cards to simply pick one. What they failed to mention is that this card will only suit those who travel a lot because you can earn points from the dollars you spend and also from the miles you fly. For those of us who are not really frequent flyers, then this card may not be suitable. Plus, Citi’s ThankYou Network airline reward system could get complicated as they have “fixed options” and “flexible options” for redeeming points for airline tickets. Check out our review of Citi’s Rewards for more details.

Something else to keep in mind is that the Platinum Plus MC (best travel card) is for consumers with “excellent credit,” according to MasterCard’s web site. If you can get it, go for it - and happy traveling!

You bank online, you play games online, you check the weather, the news and sports scores online, some people even work and date online. It makes sense to shop for credit card offers online as well. Just make sure you are using a reputable web site that offers details on the credit card offers along with a side-by-side offer comparison. Banks.com has compiled pretty comprehensive lists of credit card offers under categories like “Business credit cards” and “bad credit credit cards.” Simple to use, easy to read.

If you are eyeing new credit card offers - particularly for the purposes of balance transfers - you will want to read the latest from The Motley Fool. Essentially, a strategy used in 99 percent of credit card offers is to apply monthly payments in a tiered system to pay off lowest-interest debt first. For instance that $140 payment will go first toward interest charges and then toward paying off balance transfer amounts. This holds true even if the card has been used for purchases or cash advances, transactions that carry much larger interest rates. It is a tiered system of repayment. Almost as dirty as the Universal Default Policy so many credit card companies love. The Motley Fool scoured 300 credit card offers and found the four - that’s right, four - that don’t use this system.

Last but not least, the Baltimore Sun is taking notice of the lenders’ new habit of replacing mortgage offers with new and improved, more lenient credit card offers. A recent post in My Two Dollars points out that lenders “have eased their lending standards to be able to grab a bigger share of the credit card market, which the article says is ‘banker-ese for making lots of loans that won’t get paid back.’”

And the lenders will write-off the no-pay customers and in turn be forced to raise interest rates for good-credit customers and find more ways to slip in these mystical, magical fees. I guess they just feel like playing Robin Hood.

Let’s face it. Once the game of life throws you curves and knocks your credit rating out of whack, it can be incredibly difficult to recover. It may seem like you will never realize your desire to become part of that elite club of good credit people, or “Financial Barbies,” as Lisa Scottoline calls them in her enlightening and amusing column for the Philadelphia Inquirer.

The column focuses on Lisa’s battle to improve her bad credit rating, which she earned while charging (literally) her way to being a bestselling novelist. In Lisa’s case, she took a starter card with a low limit and paid off the whole balance each month. She then took a business credit card and was eventually able to enjoy some reward points with that.

Banks.com debt management blogger Jason Giacchino has also posted some great tips for improving or avoiding bad credit. It may seem an uphill battle at times, but persistence and diligence pays. Consumers - particularly those with bad credit - would do well to follow Jason’s advice and learn from the experiences of others like Lisa.