Credit Card Blog

Have most of us forgotten what the holidays are really about?  It’s not about running out to Wal-Mart and the mall to buy as much as your credit card limits will allow you to purchase for everyone on your gift list, is it?

Sure, everyone – especially kids – love to wake up to a Christmas tree that’s positively hidden behind the piles of presents, but there are other (possibly even BETTER) ways of celebrating the holiday season.

Instead of racking up even more credit card debt that the majority of Americans are struggling to pay already, why not spend less on each gift you buy (and if possible, pay with cash), and have a get together with family and friends instead?  Bake and share cookies and pies, have a party in someone’s home where everyone enjoys time with one another instead of exchanging expensive gifts.

If you’re a Citi cardholder, you might be in for some big rewards. Citigroup made an announcement Wednesday that it was partnering with Amazon.Com to bring its loyal customers what executives have termed “the largest-ever rewards program”, and “rewards on steroids”. How good is this rewards program, and who can participate?

13 million Citi cardholders will be able to shop online at Amazon to accumulate reward points. The program also gives customers points for booking their travel plans on Expedia.Com. Customers can also accumulate points by making purchases with their Smith Barney debit cards. 

At a time when consumers are using less plastic, and when lending criteria have grown tighter across the board, Citi’s reward program is a way to reward its good customers and give them an incentive to keep paying with credit. After all, if consumers stop charging their purchases, Citi’s profits would go down. The financial company has produced a win-win situation, giving its best customers the freedom of choice when it comes to earning their reward points.

Eager shoppers take note: to redeem your rewards, you need to go to Citi’s Thank You Network reward web site, not Amazon.Com.

The holiday shopping season is here, and it brings with it the temptation to spend, spend, spend. 0% interest credit cards can seem like a good way to finance your purchases without the hassle of interest. But before you fill out an application, get familiar with the common traps that these cards can spring on you.

Time Limits

You definitely don’t want to go crazy on the holiday spending, only to realize that your interest skyrocketed when you didn’t pay off your balance within six months to a year. 0% interest credit cards don’t stay 0% forever. The interest-free phase typically lasts for 12 months, though some last as few as three. Make sure you can pay off the full balance before your time is up.

Penalty Interest

As with other types of credit cards, the interest on your 0% interest card will go sky-high if you’re late on a payment. Your balance could jump from 0% interest to 30% interest overnight. To avoid this nasty shock, call your card issuer if you ever suspect that you’ll be late on a payment. They might work with you.

Balance Transfers

Does your credit card charge a different amount of interest for balance transfers and purchases? Some cards offer interest-free balance transfers from other credit cards, but apply a rather high rate of interest to regular purchases. Always read the fine print and know your credit card’s terms before you use it.

As credit card companies fear an increase in consumers who are unable to pay back their credit cards, many have begun reducing credit card limits for cardholders they consider “risky”.  In many cases, this doesn’t mean that the cardholder has made their payments late – it is often the result of other factors.  Card issuers report reducing credit card limits for cardholders who are carrying high balances on several cards, because they are seen riskier than someone who has small balances on their credit cards.

 A reduced credit limit can be a shock, because you often don’t get notified of the reduction until after it’s been changed on your card.  With holiday shoppers using their cards for their gift purchases, you could find yourself embarassed by a declined card that you thought had room on the balance for more purchases.

If you want to find out before the bored cashier tells you your card is declined in the check out line, call your credit card customer service and ask what your available balance is.  Also verify that they have no plans of lowering it as you intend to use the card – at least that way you will know where you stand.