Credit-Card Promotions Improving, And Here's The Proof...

Citi® Credit Cards

The Fed lifted the U.S. Prime Rate from 3.25% to 3.5% at the end of last year.

While the U.S. economy is still not as healthy as it should be this far into the post-Great-Recession recovery, the Federal Reserve may still opt to raise short-term rates again as soon as the December 14, 2106 FOMC monetary policy meeting.

And when the Fed demonstrates confidence in the U.S. economy, big banks tend to respond by making their loan products more attractive.  American banks are more profitable when the short-term interest rates controlled by the Federal Reserve rise.

In the credit-card zone, I'm seeing the return of some very consumer-friendly promotions, including extended zero percent introductory APR offers, on both balance transfers and new purchases, and balance transfer offers that don't charge balance transfer fee.

I'm old, and I'm a very responsible borrower, so I always expect the banks and credit unions with which I have an established relationship to offer me nothing but the best. 

According to Equifax®, my FICO® credit score is 814 out of a possible 900.  A brief, FICO credit-score history is a new feature I noticed when I logged into my Citi® credit card account today.

My FICO® Credit Score - Brief History

What My 814 FICO® Score Means To Lenders

FICO® Scores At A Glance

Right now I'm taking advantage of three concurrent Citi promotions with my Citi® Dividend World MasterCard®:

• 0% APR on all new purchases until June 1, 2017.
• 5% cash back on purchases I make at department stores (Macy’s, Bloomingdale’s, Dillard’s, Kohl’s, Saks Fifth Avenue, etc.) and includes the electronics retailer Best Buy, which suits my geeky lifestyle just fine.  This particular promo lasts from October 1 through December 31, 2016.
• And last, but certainly not least, I am currently getting 5% cash back on all online purchases I make with my card, until November 30, 2016.

I understand the timing with the above incentives, with the holiday shopping season in the offing, but I won't be doing much spending.  I'm not rich, and I never spend for the sake of spending. 

Move Free® ULTRA

But I did use my Citi card to purchase some Move Free® ULTRA Triple Action Joint / Cartilage / Bone supplements, which the CVS.com website had discounted at buy one, get one free.  I'm an avid quad skater, and my knees have been complaining so much lately that I had to find a solution.  Move Free ULTRA has lots of very positive reviews online.

I like to use my Citi card every once in a while, just to let the folks and computers at Citi know that I'm interested in keeping the card alive.  The card offers the kind of value I appreciate, so I don't want some algorithm and/or employee to close my card due to inactivity. 

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Citi® Quick Lock

Citi Quick Lock

Citi® Quick Lock: A new and very welcome feature for my +Citi MasterCard®.

And because it is my habit to test everything, I tested it, and it worked perfectly.

I received a very rapid email from Citi when I locked and unlocked my card.

======

I have a business debit card with Chase®, and it would be great if the powers at Chase added this feature to it.  The card is connected with my business checking account so security is of the utmost importance.

And ditto for my Bank of America® business credit card.

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Somewhat unrelated, but I just want to add a strong kudos to +Bank of America, because during the worst of the 2008 banking crisis and the subsequent Great Recession, my favorite of America's big banks exercised decent and responsible banking with my credit-card accounts.  They did not:

• Lower my credit limit(s)
• Cancel my active account(s)
• Force an interest-rate increase

During the worst of everything, my FICO® credit score either continued sideways or moved up, so I did not appreciate being treated like a subprime borrower by other credit-card banks, some of which no longer exist (go figure.)

Here's what my credit scores look like right now, provided by CreditKarma: TransUnion (808) and Equifax (811.)

Credit Scores

 Responsible banking.

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What's The Point of Credit-Card Activation?

Credit Card Activation

Very recently, I had my mail routed to my cousin's house (we'll call her Sally.) Why? Because I was dealing with a number of moves within a short period of time, and needed a solid and stable place to park my mail.

My favorite rewards card expired, so a new one was mailed to Sally's place.

Sally discovered my new card and used it to buy some emergency drugs from her local pharmacy.    She simply ripped open the envelope and used it, without activating the card.

I check all my active accounts everyday (online of course.)  When I discovered the 3 charges totaling $235 @ a NYC pharmacy, I confronted my cousin immediately.  She did not deny anything, but, I was very disappointed when she suggested that I call my bank and claim that the charges were fraudulent.  Her logic was, "well, they should not have allowed me to use the card without activating it.  They deserve to take a loss."

No way.  Too dishonest.

I paid the $235 online the same day.

Sally wasn't trying to scam me.  I actually owe her money from years ago when I needed help with a large child support payment.  However, I was shocked that she didn't call me to let me know about the charges.  She knew that my credit score would have suffered a severe blow had I missed a payment on those charges.  What if I was on vacation and not checking my accounts as diligently as usual? What if I was in the hospital?

So, my question is: What's the point of credit-card activation?


I won't communicate the name of my credit-card bank, but it's a very large, financial institution with offices all over the world.

The CreditCards.com website has an interesting article here.

As always, your comments are welcome and appreciated.

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Discover Lowers Balance Transfer Fee from 4% to 3% On Two Very Popular Cards

Right now, the two most popular cards we recommend are both issued by Discover. They are the:

• Discover 18 Month Promotional Balance Transfer card, which offers 0% intro APR on transferred balances for 18 months, and zero intro APR on new purchases for 6 months
  
  
• Discover® More Card - 15 Month Intro Period card, which offers 0% intro APR on transferred balances AND new purchases for 15 months.

Transfer a balance to either card above, and you used to be subject to a 4% balance transfer fee. No longer. The transfer fee has been lowered to 3% for both cards. You have 6 months to take advantage of the 3% transfer fee -- plenty of time. After that, if you want to perform a transfer, the fee is 5%.

Obviously, the lower transfer fee makes these cards more competitive. But I think Discover is going to have to bring back their 24 Month Balance Transfer card, which offered zero intro APR on transferred balances for a full 2 years, if the company wants to stay ahead of Citi® in the balance transfer game (Discover pulled their 24 Month Promotional card from the market back May.)

Right now, Citi has no less than four credit cards that feature zero percent intro APR on both transferred balances AND new purchases for 21 months, with a transfer fee of 3%. Very competitive. These cards are:

• Citi® Diamond Preferred® Card
• Citi® Platinum Select® Visa®
• Citi® Platinum Select® MasterCard®
• Citi Simplicity® Card

So don't be surprised if Discover reintroduces an ultra-long duration, 0% balance transfer card, or a "no balance transfer fee" 0% card, or a card that combines both competition-trumping benefits, in the near future.

Chase recently upped the ante by introducing a version of its Slate card that features zero percent intro APR on transferred balances for 15 months, with no balance transfer fee. You can find this card at the top of this page.

Despite the increased competition, Discover remains the top choice for visitors who apply for credit accounts via this website. Discover's reputation for offering exceptional customer service ⁽¹⁾ is very appealing to all types of credit consumers. And it doesn't hurt that Discover has (arguably) the best cashback rewards program in the industry.

All of the above cards will be very popular from January through March, as Americans do their best to minimize debt related to holiday shopping. Christmas spending is great for the economy, and it's great for all the kids in your circle of family and friends. But try to take it easy. All things in moderation. The housing sector is still weak, unemployment still elevated and growth remains anemic. If your financial situation is great, then by all means spend away and enjoy all the juicy rewards that credit cards have to offer. If not, then please think twice hard before you upgrade that iPhone or that XBox 360.

As the economy slowly but surely thaws over the next three quarters, credit-card deals will get more and more consumer-friendly...no doubt. Stay tuned, and have yourself a superlative holiday season.

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Treasury to Sell Citigroup Common Stock

Yesterday, the U.S. Treasury Department announced that it plans to sell all 7+ billion shares of Citigroup common stock during the rest of 2010. Here's a clip from the press release:

"...The U.S. Department of the Treasury today announced its intention to fully dispose of its approximately 7.7 billion shares of Citigroup, Inc. common stock over the course of 2010 subject to market conditions. Treasury received these shares of common stock pursuant to the June 2009 Exchange Agreement between Treasury and Citigroup, which provided for the exchange into common shares of the preferred stock that Treasury purchased in connection with Citigroup's participation in the Capital Purchase Program. Treasury has engaged Morgan Stanley as its capital markets advisor in connection with its Citigroup position.

Treasury intends to sell its Citigroup common shares into the market through various means in an orderly and measured fashion. Treasury intends to initiate its disposition of the common shares pursuant to a pre-arranged written trading plan. The manner, amount and timing of the sales under the plan is dependent upon a number of factors.

This disposition does not affect Treasury's holdings of Citigroup trust preferred securities or warrants for its common stock..."

This is certainly good news for the American taxpayer, as the government will reap a tidy profit as a result of its emergency investment in the bank.

Treasury is going take its sweet time selling these assets, so it'll be some time before we can know how Citi will fare without the government crutch.

Are we ready to start recommending Citi credit cards as a result of this news? Nah. Once the government has divested itself from Citigroup, we'll be engaging in at least another 12 months of watching before we make a decision on Citi cards.

For now, we are still very keen on the Discover More card, or any card issued by American Express.

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New Balance Transfer Offer with My Citi Dividend Platinum Select Card

Since the peak of the credit crisis back in the fall of last year, I hadn't seen any favorable balance transfer offers from credit card accounts I already have open. Bank of America (BofA) has been sending me lots of offers, but each of these BofA offers left a bad taste in my mouth. BofA wants me to pay a balance transfers fee and pay finance charges on the transfer fee. No thanks!

I'm happy to report that Citi® is now offering a somewhat decent balance transfer offer with my Dividend Platinum Select® card. Here it is:



Back in early 2007, before the credit crunch, I used to login to this Citi account and I'd be presented with at least 4 unique offers. During the roughest part of the credit crisis, however, the balance transfer section of my online account management interface contained no offers. Today I found one offer: 0% intro APR for 6 months on transferred balances, with a $75 cap on the balance transfer transaction fee. $75 is not very consumer-friendly, but when you consider that many other balance transfer deals have no cap on the transfer fee (like with the Citi® Platinum Select® MasterCard®), it's not so terrible. Will I take advantage of this offer. Nah.

We are not recommend any Citi credit cards at the www.BalanceTransfer.cc website now, for the simple reason that we believe Citigroup is a zombie bank. However, if you really must have a Citi card, visit the www.citicards.com website and you can browse all the personal, business, secured, airline, gas, student and store-branded cards they have available.

We may recommend Citi cards at some point in the future, if Citi reorganizes and becomes a responsible and commercially sound retail bank.

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Chase "Forces" Me to Close My Favorite Business Credit Card

It's the old credit card bait 'n switch. The credit card banks bait you with attractive terms and generous rewards programs to get you to signup. Then, they wait. They wait for you to accumulate a large enough balance, then jack up your interest rate. I've been reading about this a lot on other websites recently; now it's happened to me, with my Chase business credit card.

Just got a snail mail notice from Chase informing me that the company is going to raise the interest rate on my favorite business credit card, from a fixed rate of 9.9% to a variable rate of (Prime + 11.99%) = 15.24%. 15.24% is now the interest rate floor for this card, since Prime is not likely to go any lower. Of course, I have the option to opt out of the change. This would cause my account to be closed, and I would then continue to pay the balance down to zero at the original 9.9% APR.

Thankfully, I'm prepared for this contingency. I plan on paying the balance off with some cash from savings and a small loan via Lending Club


I don't have to borrow any money via Lending Club to payoff my Chase business card, but I really like the idea of Lending Club -- bypassing the banks and borrowing from regular folks across the country -- and I want to go through the process of borrowing through Lending Club myself so that I can report on my experience here in this blog.

To be perfectly honest, I really like my Chase business card, but, clearly, it's time for us to part ways. With the U.S. Prime Rate at 3.25%, any rate above 10% is a subprime rate, in my opinion, and I'm not a subprime borrower. I took advantage of an excellent 0% intro APR offer with this card, and, when the 12-month, interest-free period ended, I used the cash back rewards program to lower my cost of borrowing to a nominal level.

I really like the cash back rewards program with this card. I spend money on it and reward points accumulate. Then, when points reach a certain threshold, I simply login to my account and request a statement credit. With a few business days, the statement credit is posted to my account. Easy. No forms to fill out, No waiting until the end of the year to get my cash back reward and no waiting for a snail mail check. I will miss this rewards program.

I have to hand it to Chase for being honest. In the change of terms notice they sent, they explained the change as a, "response to market conditions," and they also added that the company wants to "maintain profitability." I'm hating the change but I respect the honesty. Contrast this with the Barclay's notice I received when that credit card bank closed my BJ's Visa Card. The company wrote that it was to, "...help [me] better manage [my] credit accounts..." In other words, not only did they close my account without consulting me first, they also felt it necessary to insult my intelligence.

In other business credit card news: Citi® closed my inactive CitiBusiness® card recently. I will miss this card because:

• it had a decent credit line (~$10,000) which enhanced my business's credit profile, and
  
  
• the account was aged which, again, contributes to my business's credit rating. It was my first business credit card.
  

So now I'm left with 3 business credit cards: two from Bank of America and one from Advanta. The Advanta card is about to be anointed as my "goto" card, because I'm still enjoying 0% intro APR on purchases, and the purchase APR will jump to a somewhat reasonable 7.99% when the interest-free period ends . I have been reading some horror stories about this particular Advanta business card (unwarranted rate hikes), but so far I've all is well. If Advanta tries to pull some funny business by raising my rate, I'll just pay the card off (my credit limit is under $3,000, and my balance isn't anywhere near that.)

As a final note: it's really no wonder that American Express is consistently rated as the best credit card bank. Right now the company is offering some high-risk cardholders a $300 payment (in the form of a prepaid gift card) in exchange for these accountholders paying their balance down to zero within a certain timeframe, and closing their account. Now that's my kinda' credit card bank!

NB: In that same JD Power & Associates Credit Card Satisfaction Study(1), Discover Card placed second.

Chase, on the other hand, has identified certain credit card accounts that may be at risk for default, and has responded by imposing a $10 per month fee. Yikes! I'm not a public relations professional, but I do have some sage advice for JP Morgan Chase CEO Jamie Dimon: stop doing that!

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More Important News About Citi® Business Credit Cards and Balance Transfers

CitiBusiness® Credit Cards

CitiBusiness® credit cards have been the most popular business credit cards at this website for some time. The fact that with most CitiBusiness credit cards, approved applicants could transfer credit card balances at 0% intro APR, and pay no transaction fee on introductory transfers, was certainly a contributing factor to their popularity.

Now, all the CitiBusiness credit cards we recommend at this site include a fee on both introductory and non-introductory credit card balance transfers. Here's a list, with corresponding intro APR details:


-- The Citi® Professional^SM Cash Card

• 0% intro APR on purchases for 12 months.
• balance transfer fee on any credit card balance transfer to this card.

-- The Citi® Professional^SM Card with Thank You® Network

• 0% intro APR on purchases for 12 months.
• balance transfer fee on any credit card balance transfer to this card.

-- The CitiBusiness® Card

• 0% intro APR on purchases and balance transfers for 12 months.
• balance transfer fee on any credit card balance transfer to this card.

-- CitiBusiness® Card with ThankYou® Network

• 0% intro APR on purchases for 12 months.
• balance transfer fee on any credit card balance transfer to this card.

The balance transfer fee for all the above CitiBusiness cards is currently "3% of the amount of each balance transfer, $5 minimum."

I still like CitiBusiness cards a lot. I have a Citi® Business card in my wallet right now, and I've been very happy with it over the years. Citi is a highly reputable, world-class bank, and their credit products are outstanding.

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Important News Regarding The CitiBusiness® Card

CitiBusiness® Credit Card

Some good news and some bad news to report today.

The web surfers who visit this site like the business credit cards offered by Citi® a lot. Why? Because, heretofore, with all the Citi business credit card we've been recommending at this website, you could transfer non-Citi credit card balances at a zero percent introductory rate, and pay no transaction fee on the introductory balance transfers. The feeless, 0% balance transfer characteristic of these cards has helped to make them the most popular cards on this website.

OK, so first, the bad news. The CitiBusiness® credit card has recently been reconfigured by Citi, and now charges a fee on all balance transfers, including the introductory ones.

Actually, this news isn't so bad when weighed against the good news, which is that Citi still has 5  business credit cards to which you can transfer credit card balances at 0% intro APR, and pay no fee for the privilege. The cards are:

• The Citi Professional^SM Cash Card
• The Citi Professional Card
• The Citi Professional Card with Thank You^SM Network
• The CitiBusiness Card with Thank You Network
• The CitiBusiness PremierPass^SM Card

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No Balance Transfer Fee Credit Cards Still Obtainable Despite Credit Crunch

Credit Cards

The credit crunch that's been causing problems in American credit markets has been affecting all classes of Americans, from billionaire Wall Street insiders trying to finance huge corporate takeover deals to middle-class consumers looking for attractive deals on loans and credit cards. With the housing market still languishing and many seasoned economists declaring that the American economy is already in a recession, it seems that 2008 is not going to be a good year for many Americans, from a money and finance perspective. The Federal Reserve has been responding to turmoil in domestic financial markets and the slumping economy by cutting short-term interest rates, but there is no way to tell when or if these Fed actions will jump start the economy. Slowly but progressively, banks have been approving fewer and fewer credit card applications since the subprime debacle began at the end of last summer. Thankfully, however, applicants with strong credit profiles can still get approved for high quality credit products. Moreover, in the American market today, financially secure individuals can still find 0% introductory annual percentage rate (APR) balance transfer credit cards that don't charge a balance transfer fee, even with certain small business credit cards.

On the consumer side, feeless, 0% balance transfer deals are still being offered by some of America's most reputable financial institutions, including the Bank of America® (BofA), American Express® and the Pulaski Bank &and Trust Company. Web surfers looking for business credit cards which combine 0% intro APR on transferred balances with no balance transfer fee can choose from a healthy selection on offer from Citi®.

"We've been getting emails from consumers who have been writing us about manifestations of the liquidity crunch that have been causing considerable pain for both American banks and individuals trying to find favorable credit deals. Cardholders have been complaining most about seemingly random credit line decreases, ever for customers with perfect or near-perfect credit. A cardholder who has an excellent credit history but who also has a high debt-to-credit ratio may be targeted by their bank for a credit limit decrease or an interest rate increase, since banks are worried about consumers who may be relying too heavily on revolving credit. It's never a good idea to have a high balance on a credit card. Consumers should use credit cards to take advantage of rewards programs and zero APR offers, and for emergencies. The consumer who tends to carry a balance from month to month may be headed from trouble in this economy," said Brown.

"The only positive consequence of this sagging economy is that the Fed has been responding to it by lowering short-term interest rates. These moves by the Federal Reserve have made obtaining and paying off loans and credit cards easier," Brown added.

Since mid-September of 2007, the U.S. Prime Rate has been lowered from 8.25% to the current 5.25%, thanks to interest-rate cuts by the U.S. Federal Reserve. Since most variable-rate credit cards -- and many other types of loans -- are indexed to Prime, most consumers and business owners who have been making payments on these loans and credit cards have been enjoying reduced APR's. Any consumer with a variable-rate credit card indexed to Prime who hasn't seen a decrease in their APR over the last 6 months should contact their bank and ask for a lower rate, Brown advises.

Some credit cards and loans are indexed to the London Interbank Offered Rate (LIBOR). Since LIBOR tracks very closely with America's benchmark, short-term interest rate -- the Fed Funds Target Rate -- individuals and business owners with loans or credit cards indexed to LIBOR should be enjoying lower payments as well.

The Federal Reserve is expected to cut short-term rates again when the Federal Open Market Committee (FOMC) meets for its next monetary policy meeting on April 30, 2008.

0% intro APR credit card offers are ever-evolving. Brown urges consumers to visit the blogs at the  FedPrimeRate.com website to stay informed about the latest news and tips from the credit card industry and to read reviews of newly released credit cards. Brown welcomes any and all questions and comments, which can be emailed from either site's email form.

"The banks make a lot of money with credit cards, so they still want to fill consumers' wallets with their plastic despite ongoing troubles in the credit markets. Individuals who are interested in getting the best possible deal with a consumer card, business card or any other type of loan should be sure to keep their credit score high, pay all their bills on time and try to keep their debt-to-credit ratio at around 30%. Consumers who plan on spending money on a major purchase should try their best to pay cash. If an all-cash payment isn't possible, consumers should apply as much cash as possible to the purchase, and put the rest on a credit card that has a high credit limit, a zero or low APR and a generous rewards program," Brown concluded.

Source

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Important News Regarding The Citi® Home Rebate® Platinum Select MasterCard®

Citi® Credit Cards

If you're looking for a 0% balance transfer credit card, and you don't want to pay a transaction fee for transferring credit card balances, then the good news is that there are still plenty available. The bad news, however, is that the Citi® Home Rebate® Platinum Select MasterCard®, while still available, now charges a balance transfer fee for all balance transfers. This news is significant because the Home Rebate card was the last 0% "no fee balance transfer" card that offered an interest-free period of 12 months; currently, the all other cards offering free, 0% balance transfer deals have an interest-free of no more than 6 months.

Now don't get the wrong idea. The Citi Home Rebate card is still an excellent credit product offering great value, and you can apply for this card right now if you want to. You can still transfer a balance at 0% intro APR for 12 months, but you'll be charged a balance transfer transaction fee: 3% of each balance transfer with a minimum fee of $5. This card has been the #1 ranked credit product (based on both applications and approvals) at this website since the fall of last year.

I like the Home Rebate card because it has a very attractive rewards program that helps cardholders pay down their mortgage balance faster and build home equity. The American housing market probably won't improve until late 2009, so, for many, any help with getting ahead can make a real difference.

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A Fond Farewell to A Great 0% Credit Card from Citi®

Citi® Credit Cards

A moment of silence, please...

The good folks at Citi® have decided to suspend the Driver's Edge Platinum Select credit card. This is very disappointing for us, because this card offered one of the best 0% deals around, which was:

• 0% intro APR on the initial balance transfer for 12 months
• No balance transfer transaction fee
• No annual fee

There is now only one 0% balance transfer credit card that has the same excellent features listed above: the Citi Home Rebate Platinum Select Card. According to our research, all other 0% credit cards that are also "no fee balance transfer" cards have an interest-free period of 6 months or less.

The Fed is likely to cut short-term interest rates again next month in an effort to grease the wheels of America's financial markets and ward off a recession. While this is great news for anyone with a variable-rate credit card that's tied to the Prime Rate, overall credit market conditions may get worse before they get better. Was the Citi Driver's Edge card a casualty of the credit crunch? Maybe. Is the Citi Home Rebate card the next to go? Let's hope not!

Sometimes banks resurrect cards that have been suspended, so there is hope for the Driver's Edge card. Keep your fingers crossed. If the card makes a comeback, we'll blog about it here.

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I Paid A Fee, Willingly, for Transferring A Credit-Card Balance

Balance Transfer Fee

For obvious reasons, the most popular credit cards recommended at this site are those which offer a 0% intro APR on balance transfers for at least 6 months and don't charge a fee for transferring balances. So you may find it surprising that recently, I willingly paid a fee to transfer a balance, even though I could have easily qualified for a quality credit card that doesn't charge a fee for the privilege.

The reason I willingly paid a fee? Because, in my situation, it was worth it.

My business credit card debt was a bit high for my tastes (~$7,000) and, even though I could have paid the balance down to zero within 2 billing cycles, I wasn't interested in using up a large percentage of my free cash to clear the debt. The best solution, I thought, was to transfer the balance to a new business credit card with an attractive balance transfer offer and the best possible, fixed "goto" rate, then pay down the balance over 4 or 5 billing cycles.

I chose to transfer my business credit card balance to the Chase Premier Cash Rebate card, and I did so via an unsolicited offer I received in the mail! Critical offer details were:

• 0% Intro APR on new purchases, balance transfers and balance transfer checks for 12 months.
• Purchase APR (the "goto" rate) of 9.99% fixed.
• Balance transfer fee: 3% of transaction, with a minimum of $5 and a maximum of $99.

Here's why I chose this card:

• I've been yearning for a business credit card with a low and fixed interest rate (my idea of low is below 10% APR) for many years now. I like business credit cards because they afford me an attractive level of anonymity when I do business and shop online, and because they really do a great job of building the credit rating of my business. I applied for a similar Chase business credit card about 2 years ago, and that application was rejected even though my personal and business credit rating was good. I was disappointed, but not totally surprised by the rejection, because banks are very careful when it comes to business credit cards (unsecured debt) that have a very competitive interest rate.
• Even though I really don't like the idea of responding to unsolicited mail (the idea is anathema to me, almost as bad as responding to a spam email message, in my opinion), I had to make an exception for this card. As soon as I received the latest iteration of this particular offer (I get unsolicited business credit card offer from Chase about once per month!) I scoured the Internet to see if I could find the same deal online. I failed. The lowest goto APR for a Chase business card I could find online was 11%, and that was variable. I already have a business credit card from both Citi and Bank of America. I used to have a Capital One Business credit card, but I canceled it long ago because the credit line was wimpy ($500) and they wouldn't increase it. The Advanta Platinum Business Card with Rewards Options card was very, very tempting, with a 0% intro APR on balance transfers for 16 months, and a goto APR of Prime minus 0.26%, but the goto APR is variable, and there's no 0% intro APR for new purchases.
  
  Bottom line: big credit card companies often reserve the very best offers for the solicitations they send out to well-qualified, prescreened consumers.
  
  Actually, what I hate most about those wasteful credit card solicitations is the fact that they are the reason why identity theft is so prevalent these days. Many banks like to cast a very wide net so as to generate as much business as they can, but this tactic ends up making it easy for the crooks to get hold of our sensitive information. You can elect to opt out, of course, but I choose not to, because these offers are often the best deals around. So, yeah: I have a true love/hate relationship with unsolicited credit card offers. Of course, I have a very powerful and efficient shredder, so I can shred all the discarded offers 10 at a time.
  
  I sometimes wonder: if my mailbox was on the street and easy to access, would I be wrestling with a serious identity theft situation right now? It's the stuff of nightmares!
• After years of taking advantage of 0% deals in my never-ending quest to pay as little interest as possible, I now find myself loaded up with more personal credit cards than I need, and I don't want to add another personal card to my collection. Furthermore, canceling one or more of them would likely cause my personal credit score to drop, and I don't want that. I've worked hard to eliminate my personal credit card debt and simultaneously get my credit score to a happy place (my TransUnion score is 813 now) and I don't want to do anything to mess it up (I'm planning on buying some property in the not-too-distant future.)

So, as of right now, and thanks to a recent credit line increase on my Citi® Business card, I have $40,000 of unsecured credit available to me for business spending. Furthermore, I now have a business card with a low, fixed APR that I can use for all my temporary financing needs. So I am quite pleased...for now. Depending on how things go, I may signup for that sexy Advanta card in the future.

If you like 0% offers, then check out those unsolicited snail-mail offers at least once in a while. And make sure you have a good shredder.

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New Card Added: The Home Advantage World MasterCard

Citi® Credit Cards

Recently added a new Bank of America card: The Home Advantage World MasterCard® with WorldPoints® Rewards. This card is similar to the Citi® Home Rebate Platinum Select® MasterCard in that accumulated rewards dollars are used to pay down a cardholder's mortgage balance.

I like these two cards. As long as the cardholder can pay his or her entire balance in full at the end of each month, these cards can really help homeowners improve their mortgage situation and, by extension, their finances in general. By paying down a mortgage balance with extra payments, or in this case with accumulated rewards dollars, homeowners can:

• Build home equity faster. This is crucial in the current U.S. real estate environment. The more equity you have in your home, the less likely you are to run into problems if at some point you want to sell, refinance, or get a second mortgage (a home equity loan or a home equity line of credit.) FYI: a number of experts have recently predicted that the American real estate environment won't improve until 2009.
• Lower the total amount of interest that will be paid on the loan. If you take the example of a $250,000 mortgage with a 30 year term and a typical interest rate, the savings can be in the many thousands of dollars. It's amazing how these things add up over time!
• Payoff a mortgage faster. This is optimal for anyone with a mortgage, but especially optimal for homeowners who plan on using the equity in their home to help fund retirement.

Currently, the fee for transferring credit card balances to the Bank of America Home Advantage MasterCard is 3%, with a minimum of $10 and no maximum. However, the card offers a 12 month, 0% Introductory Annual Percentage Rate (APR) on Balance Transfers and Cash Advance Checks.

With the Citi® Home Rebate card, you can transfer credit card balances at 0% Intro APR for 12 months, and, currently, you don't have to pay a balance transfer fee for the initial balance transfer.

Enjoy!

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Credit Card Popularity Rankings for March, 2007

Here are the popularity rankings for the cards we recommend here at www.FedPrimeRate.com for March, 2007:

Credit Card Rankings

Just a reminder: the above rankings are based on both applications and approvals for the credit cards we recommend at this website. The information can be very useful for anyone shopping for a credit card.

The Discover Platinum card once again tops the lists, which is no surprise considering the benefits.

The Citi® Upromise® card is likely to become a lot more popular in the coming months, not only because using the card is a great way to start saving for college, but also because you can now transfer your non-Citi credit card balances to the Citi Upromise card and pay no interest on the transferred balance for 12 months, with no balance transfer fee. Good stuff!

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Executives from Chase, Citi and Bank of America Testify Before The U.S. Senate

A lot of folks out there like to bash credit card companies for their high fees and draconian penalties but I don't buy a lot of it, mostly because I've been able to surf 0% offers and enjoy interest-free loans for years now, which has enabled me to do great things from both a business and personal perspective. Bottom line: if you're a responsible borrower then the banks will treat you accordingly. It's really that simple. And I'm writing from experience: I am now a very responsible borrower, and, many years ago, I was the exact opposite (and then some!)

I was watching Bank of America's Bruce Hammonds, Citigroup's Vikram Atal and Chase Bank's Richard Srednicki testify before the U.S. Senate Committee on Homeland Security and Governmental Affairs on C-Span today. The hearing's title was "Credit Card Practices: Fees, Interest Rates, and Grace Periods." It was a very good discussion and I'm glad I caught it. Lots of hard questions were asked, and I learned quite a bit from the responses, comments and complaints made by hearing participants.

I was actually quite surprised to find myself on the side of the banks more often than I was against them. Four industry practices I don't like:

• 1) I'm very much against the marketing of credit cards to high school and college students. My credit woes (which are now ancient history) began in college when I lost my head with a credit card. I just learned today that the credit card companies pay schools for the right to shower kids with credit card offers. Should a kid with no experience with finances, working (maybe) a part-time job at minimum wage have a credit card? I don't think so! A college or high school student should have a prepaid debit card that can be monitored by parents online. Yup. Of course, the credit card companies should not shoulder all the blame: by accepting money from banks and credit card firms, colleges and universities are complicit with this dubious practice. Not good.
• 2) The way the credit card companies calculate the so called "grace period" needs to be fixed. There are credit consumers out there who pay their balance in full each and every month and still get stuck with interest charges because they don't really understand how the grace period rules work. Bottom line: the grace period rules are confusing, and industry leaders need work on improving the way grace periods are structured.
• 3) I understand the reasoning behind Universal Default, but the credit card companies have taken it too far. Credit card companies should either scale it back, or get rid of it altogether (see below for some positive news related to Universal Default.)
• 4) The use of the term "pre-approved." Nonsense. Some time ago I had an application declined, and it was initiated from a so-called "pre-approved" credit card offer. The experience really boiled my blood, especially because any rejection can cause your credit score to decline.
• 5) In my opinion, "fixed" should mean fixed, all the time, every time. Is that too much to ask? Under current federal law, a "fixed" annual percentage rate (APR) on a credit card means that the credit card company can change the so-called "fixed" rate as long as they give you 15 days notice of the change. To be fair to consumers -- especially those who are new to credit cards -- credit card companies should instead use the term "conditionally fixed" or "provisionally fixed."

A guy named Wesley Wannemacher, who had money problems back in 2001, testified about how a $3,200 credit card debt ended up costing him a total of $6,300, and, according to last month's credit card statement, he still owed $4,400! Yikes! Wannemacher was charged an over-the-limit fee 47 times. Chase Bank's Richard Srednicki apologized to Wannemacher for the experience, and pledged to have Wannemacher's credit card debt forgiven. Yup: he actually apologized. Now that was something to behold.

OK, now I present the positive side, the way I see it:

• O% Intro APR offers: love 'em!
• Credit card debt is unsecured! even if you decide to totally blow off your credit card debt, no one will come and take your home, your car, your first-born child, etc.
• Fraud protection: with most credit cards out there, if you get ripped off and you paid with a consumer credit card, you can dispute the charges (chargeback.) Furthermore, If someone gets hold of your credit card and goes crazy, in most cases you won't be responsible for those charges.
• The Internet makes it easier than ever to pay your bill on time. Even if you don't have an Internet connection, you can always stop by your local library and get online from there. And the industry should be commended for instituting payment tools like scheduled payments, automatic payments and email alerts (I use them all), so even the laziest of the lazy need not worry about late payments.
• Competition and regulation keep the banks and credit card firms in check. Don't like the terms with one card? Switch to another!
• No one is forced to open a credit card account!
• Convenience and Tracking: Who wants to carry wads of cash around all the time? Plus, it's much easier to track your spending when you use a credit card.
• Compared to 20-30 years ago (yes, I'm quite old!), credit is very easy to get today. Furthermore, interest rates were in the 20% range for everybody back then! And the fees! How many credit cards (credit cards, not charge cards) do you have in your wallet that charge and annual fee? I'm willing to bet none.

Individuals with credit card accounts who run into serious financial dire straits should keep in contact with each credit card company and workout a payment plan. I think a lot of people who run in to trouble with their finances get scared and try their best to hide from their creditors. Big mistake!


It's my opinion that credit card offers will only improve over time. Just last week, the folks at Citigroup announced that they won't play the Universal Default game anymore. Check out this clip from a recent press release:

"...Citi is eliminating the industry practice of increasing interest rates for individual cardholders due to their defaults on financial commitments with other parties, sometimes known as “universal default”. Until now, Citi has given customers the right to opt out of any such increase. But with this announcement, Citi is going even further, abandoning the practice altogether for all customers.

Citi is also eliminating “any time for any reason” increases to the rates and fees of its customers’ accounts. Traditionally, credit card issuers have taken the position that they can increase the rates and fees of a cardholder’s account at any time for any reason; for example, to respond to general conditions in the financial markets. As a result of the new policy, Citi will not voluntarily increase the rates and fees of the account until the card expires and a new card is issued (typically two years).

Now, the only reason the rates and fees will increase before the card expires is if a customer pays Citi late, exceeds the credit limit or pays with a check that bounces. When the interest rate on the card is linked to the prime rate, the rate would change only as the prime rate moves up or down..."

Kudos to you, Citi, for moving in the right direction.

Bank of America does not today, and has not in the past, engaged in the practice of Universal Default. Kudos to you, BofA.

The folks at Discover Card recently agreed to remove the Universal Default clause from the terms & conditions related to their credit card offerings. A gold star for you, Discover.

Double-cycle billing is one way that you can end up paying interest on charges even though you've been paying your balance in full each and every month. The folks at Chase recently announced that they won't engage in the practice of double-cycle billing anymore. They also announced that once an account is assessed an over-the-limit fee, Chase will stop adding new over-the-limit fees after 90 days.

Some interesting numbers:

• In 2006, Chase Card Service made $3,206,000,000 in profit, accounting for 22% of Chase's overall earnings.
• Profitability for large credit card issuers was in the 3.6% to 4.1% range between 2003 and 2005.
• Right now there are 6,000 credit card issuers in the United States.
• 41% of credit card account holders pay their balance in full each month.

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Citibank (Citi) Business Credit Cards Featuring No Fee Balance Transfers

Citi® Credit Cards

Zero percent credit card balance transfer offers are very popular right now -- especially feeless balance transfer offers -- and it's easy to understand why. Why would anyone pass on a chance to save on interest charges for up to 12 months?

The good news for business owners is that many business credit cards have excellent zero percent introductory annual percentage rate (APR) balance transfer offers associated with them, and with some of them you won't have to pay a balance transfer fee.

Recently, the good folks at Citibank removed the balance transfer fee from the 0% balance transfer offers associated with some of their business credit cards. You can't do much better than a feeless balance transfer offer, and, right now, certain Citibank business cards feature a 12 month interest-free period on both transferred balances and new purchases -- like the CitiBusiness Card®. Bottom line: credit card deals don't get too much sweeter than that!

Other Citi® business cards which currently feature the option to transfer credit card balances at zero percent with no balance transfer fee are:

• The CitiBusiness Card with ThankYou Network
  
• The Citi Professional Cash Card
  
• The Citi Professional Card
  
• The CitiBusiness PremierPass Business Credit Card

Of course, the terms and features associated with the above-listed offers can change at any time, so be sure to read any and all credit card terms and conditions carefully before applying for any card recommended here.

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A Balance Transfer First For Me: From One Business Credit Card to Another

A balance transfer first for me: I decided to take advantage of a 0% APR balance transfer offer to transfer my entire CitiBusiness® Platinum Select business credit card balance (about $4,000 ) to a new Bank of America Platinum Visa® business credit card.

After receiving the solicitation in the mail yesterday, I applied for the Bank of America card online, and I was approved for a $15,000 credit line--plenty of breathing room, so I don't have to worry about looking "maxed out" after transferring my Citibank balance.

What a great country: in a matters of seconds, I've eliminated interest charges on my entire business-related debt until December, 2006. Me likey'! And if all goes well, I may be able to pay off the entire transferred balance by December. Wish me luck!

Don't get the wrong idea here: I'm not transferring my CitiBusiness credit card balance because of problems with the card--no, I'm only doing it to save on interest charges, plain and simple. If you are in the market for a new business credit card, you should check out the CitiBusiness® Platinum Select credit card. I've had mine for years, and I've been very happy with it. And right now, you can get 0% APR on balance transfers for 12 months with the CitiBusiness® Platinum Select® card (of course, I'm not eligible to take advantage of this great offer since I already have a CitiBusiness® Platinum Select card in my wallet.)

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Consolidating My Debt While Avoiding Interest Charges: Zero Balance On All but Two of My Credit Cards

I recently transferred a few balances in order to consolidate my credit card debt and take advantage of some great lower interest balance transfer deals. Once again, I used a "2.99% until the transferred balance is paid in full" promotional offer that was presented to me by the folks who manage my Citibank Dividend Platinum Select® Card, simply because it was the best deal I could find at the time (Discover is still sending me offers of 0% APR on transferred balances, with the interest-free period recently extended until June 2007--which is a fantastic offer--but I'm still not sure about using Discover, and I really shouldn't be opening a new credit card account. I think I have too many as it is!)

Within a couple of weeks, I will have a zero balance on all my credit card accounts save two, which makes me happy: it means that I have far fewer accounts to monitor, thus reducing the number of did-I-forget-to-make-a-payment-on-one-of-my-credit-cards-this-month? panic attacks, I hope. These days, if you're late on a payment, or skip a payment, you not only get in trouble with the credit card account in question, but all your other creditors can raise your APR's as high as 29% (not all do, but they can); they may also nullify any promotional APR's related to any balance transfer deals you've signed up for, which for me would translate to a nightmarish escalation of debt. It's called Universal Default, and it's perfectly legal.

Stay tuned for more on my adventures with credit card balance transfers!

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Latest Citibank Offer: 2.99% APR Until Transferred Balances Are Paid In Full!

Sometimes, this credit card balance transfer game can get very, very frustrating.

Today, I received balance transfer offer in the mail from Citibank: 2.99% APR until transferred balances are paid in full! A fantastic offer, considering the fact that the current U.S. prime rate is 7.25%, and will probably be going up next week. But I don't think I'll be able to take advantage of this offer, darn it (read on for the reason why.)

In the letter I received today, Citibank refers to itself as a "responsible lender," and to be perfectly honest I agree with that. The last time I took advantage of a Citibank balance transfer offer, the folks @ Citibank were gracious enough to raise my credit limit by a considerable amount, so that even when the transferred balance was added to my current account balance, the resulting balance was still less than half my credit limit, which looks great on a credit report (creditors don't like to see an account that's maxed out or close to being maxed out.)

OK, now for the bad news: I recently transferred a considerable amount to the very same credit card account that is associated with the above balance transfer offer. The deal was very similar to the above, except that the offered APR was 3.99% until the transferred balance is paid off. So now that I've transferred all the balances I wanted to transfer with the original 3.99% offer, I am now faced with a new offer that has an APR that is 1 percentage point lower.

Is the 1 percentage point a big deal? Sure it is! When you are dealing with many thousands of dollars, a single percentage point can translate to hundreds and sometimes thousands of dollars in savings in the long term, no doubt!

So I guess I have 2 options:

1. Call Citibank and see if they'll drop the APR on the balance I transferred from 3.99% to 2.99% (or maybe I should try for 1.99%! The worst that can happen is they'll say "no.")
   
2. Transfers my current Citibank balance away from Citibank, wait a few weeks, then transfer it back with the superior 2.99% balance transfer offer.

Makes sense for me to try the phone call first, but I am not very optimistic about option 1's chances. Wish me luck!

Please feel free to post comments about your own credit card balance transfer triumphs, pitfalls, anecdotes, etc. Your comments are welcome and appreciated!

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