May 2011 - Posts - Dollar Stretcher Guest Bloggers
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May 2011 - Posts

  • Gas Credit Cards Can Offer Attractive Rewards

    by Bill Hardekopf

    The average price of gas now hovers around $4 per gallon, and consumers are searching for ways to save money on gas purchases.

    Gasoline credit cards are one way to keep a little more money in your pocket. This is a good time to shop around before the summer driving season begins. As you compare cards, pay attention to the fine print because gas cards are more complicated, and potentially more expensive, than standard credit cards.

    Gasoline cards can come in many varieties: prepaid cards or certificates, credit cards issued by gasoline companies, and cards issued by credit card companies. These cards use cash back, gift card or fuel credit incentive programs that are based the amount of purchases you make. Some cards offer significant benefits, but you have to understand the fine print.

    Like all reward cards, the benefits are a good deal only if you pay off your balance each month. Station-branded gas cards have some of the highest interest rates that can range from 21% to 26.99%. If you carry a balance, these cash rewards are not worth the high rates.

    Gasoline Company Credit Cards

    Credit cards issued by specific gas companies like BP/Amoco, Shell, and Texaco offer large discounts for gas purchased from their stations. However, these cards typically have a much higher APR than bank-issued cards. Pay attention to the details of the offer because some companies give attractive incentives for the first few months, then change to a much lower rebate. Offers vary by card so read the fine print to see if the incentive is cash back or fuel credits. Some companies will credit your account monthly, but some only redeem annually.

    These cards offer some of the biggest savings to loyal customers who usually buy gas from one brand:

    The BP Visa - This card offers a 5% rebate for purchases made at participating locations. It also offers a double rebate for the first 60 days. BP Visa Rewards Card is issued through Chase and gives a 2% rebate for qualifying travel and restaurant purchases; it gives a 1% rebate on most all other purchases (except non-BP gasoline purchases). You can redeem your rewards in increments of $25. Unlike many rewards gasoline cards, you can redeem with BP gift cards, a check payable to you, or a donation to the BP Conservation Fund. The BP Visa APR ranges from 15.24% to 19.24%.

    The Shell Platinum MasterCard - This card offers rebates of 5% on Shell gas purchases and 0.5% rebates on all other purchases. The rebate is a fuel tax credit and is automatically credited to your Shell card for future gasoline purchases in $25 increments. It should be noted that Shell provides a maximum rebate per billing cycle of $20 ($240 per year). The APR for the Shell Platinum Select MasterCard is 23.99%.

    The Exxon/Mobil MasterCard - The fuel credit is $0.15 per gallon at Exxon/Mobil gas stations. There is a 2% rebate on your first $10,000 spent on other eligible purchases, and 1% on other eligible purchases over $10,000. The rebates are automatically credited to your card in $10 increments. You must make at least $10 in Exxon and/or Mobil gas purchases in a single billing cycle to redeem your rebates. The rebates are for future gasoline purchases at Exxon/Mobil stations. The APR for the Exxon/Mobil MasterCard is 24.99%.

    The Chevron/Texaco Visa - This card offers fuel credits of $0.30 cents per gallon for the first 60 days, then $0.10 per gallon and 3% fuel credits for non-gas purchases at Texaco/Chevron locations. In addition, you will receive 1% fuel credits for all non-fuel purchases. Chevron/Texaco has a maximum $300 annual fuel credit limit. These fuel credits are applied to future purchases of gasoline at Chevron/Texaco locations only. The APR for the Chevron and Texaco credit cards is 26.99%.

    Gasoline Rewards from Credit Card Companies

    Gasoline rewards from cards issued by credit card companies usually offer a wider range of benefits. These cards don't require purchases at a specific gas station, and give cash back on purchases other than gasoline. But these cards usually have some confusing terms and conditions that should be understood before applying for the card.

    Some cards offer rotating programs that give higher gas rewards for only a specific time during the year. The rewards rotate by quarter and enrollment is not automatic. Many of these programs require you to sign up each quarter to receive the rewards, making rotating rewards programs harder to navigate.

    A number of programs have a maximum benefit amount that you can earn per billing cycle. They may also have purchasing tiers, and full benefits may not begin until you reach the designated spending limit; rewards are smaller until you reach the tier.

    Most cards advertise that rewards don't expire, but rewards can be forfeited for late payments, inactive accounts or closed accounts. Some redemptions aren't available until they reach a specified reward amount.

    Chase Freedom Visa Card - This card advertises a 5% cash back reward for certain categories of purchases each quarter. But you are limited to earning the 5% cash back on $1,500 in purchases each quarter, so there is a quarterly maximum cash back reward of $75 in these special categories. Consumers can earn 5% on gas purchases during the third quarter of 2011. The card also gives 1% cash back on all other purchases with no limit on the amount earned. This card currently has an extra incentive. New customers receive an additional $150 cash back bonus once they spend $500 during the first three months. There is no annual fee on this card.

    Discover Card Open Road - You receive a 2% reward on the first $250 of all eligible gasoline and restaurant purchases each billing period, or a maximum of $5. Gas or restaurant purchases over $250 during a billing period earn 1%. Gasoline purchases at warehouse clubs only earn 0.25%. Discover also sets a spending tier on earning cash back on other purchases. Consumers earn 0.25% for all other purchases until you spend a total of $3,000. Then, you earn a 1% reward on all other purchases. You can redeem awards in $20 increments. There is no limit on the amount of cash rewards earned with this card, and there is no annual fee. Receive a free $75 Restaurant.com gift certificate after first purchase.

    Capital One No Hassles Rewards Card - This card offers 2% cash back on purchases at gas stations and major grocery stores, and 1% back on all other purchases. The rewards can be redeemed in increments of $25, $50, $100 and $200. You can redeem upon request or set up an automatic redemption each year. Consumers can earn unlimited cash rewards that don't expire. There is no annual fee with this card.

    True Earnings Card from Costco and American Express - True Earnings offers cash back awards of 3% for purchases of gasoline up to $3,000, and 1% on subsequent purchases. Cardholders also earn 3% cash back on restaurant purchases, 2% on travel-related purchases and 1% on all other transactions. The card only allows redemptions on an annual basis that is an in-store coupon redeemable for merchandise or cash at Costco only. There is no limit on the amount one can earn and no annual card fee for Costco members. Consumers also earn $25 statement credit with their first purchase.

    Keep in mind that your account must remain open and current to redeem your rebates. Rewards can expire for some cards in only twelve billing cycles, and a late payment can wipe out the rewards for that billing period.

    Bill Hardekopf is CEO of LowCards.com, ;a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories, such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

  • What Are You Doing for Memorial Day?

    by Doug Nordman

    Everyone has fond memories of Memorial Day, which is the traditional first weekend of summer, the unofficial launch of competitive barbecue season, the first wearing of a new summer outfit, and perhaps a family picnic trip to a park or a campground.

    But while we're remembering this day (and creating more memories), let's pause for a moment to remember those who gave their lives for this holiday. Formerly known as Decoration Day, it commemorates U.S. soldiers who died in military service. It was first enacted to honor Union soldiers of the American Civil War and then expanded to all who fought in that war. After World War I, it was extended to honor Americans who have died in all wars. (As noted in MemorialDay2011.org)

    Although Decoration Day began as a ritual of Civil War remembrance and reconciliation, today's Memorial Day is an occasion for honoring those who can't celebrate it with us. Perhaps your local Boy Scouts decorate veteran's graves while other organizations hold memorial services (just like their ancestors did nearly 150 years ago). Maybe you'll watch a parade or see the activities at a local military base. Although we've all been grateful for the sacrifices of our service members and veterans, this is a chance to take a moment to thank them once again. You could even quietly pick up the tab for someone's restaurant meal, buy them a frosty beverage, or treat them to free admission at one of the weekend's activities. 

    We joined the military for our personal reasons, but it's always nice to hear "Thanks!" It gives us a surprisingly big lift when we're feeling a little overextended.

    You don't have to wait for Memorial Day. Call your local veteran's organization to see if they could use your help with their service programs. Ask your Veteran's Hospital if they'd like an occasional visitor or contributions of toiletries and magazines. Make a donation to a military charity. Read the "Military Family Finances" section of our community forum for more ideas. 

    The habit of thanking someone on Memorial Day could become a year-round habit of thanking someone special to you. Enjoy your weekend!

    Doug Nordman, author of The Military Guide to Financial Independence and Retirement, coming in August. Learn more at The-Military-Guide.com.

  • Willingness of Banks to Lend Money Hits 17-Year High

    by Bill Hardekopf

    Banks are ready to lend money once again. According to the Federal Reserve's Senior Loan Officer Opinion Survey on Bank Lending Practices released yesterday, their willingness to make consumer loans rose to its highest level since 1994.

    In the credit card industry, banks appear eager to approve credit card applications for new customers, but consumers do not appear to be as anxious to apply.

    About 20 percent of banks reported having eased standards for approving credit card applications. However, consumer demand for credit card remained flat, so only a small fraction of banks reported an increase in the number of credit card applications over the past three months.

    Here are some findings of the quarterly Loan Officer Survey which was conducted in April 2011:

    • 20.5 percent of all banks say lending standards for approving credit card applications has eased somewhat. That's more than twice the percentage that relaxed standards in the fourth quarter of 2010.

    • The outlook was even brighter at large banks where 34.8 percent say lending standards for approving credit card applications has eased somewhat.

    • But consumer demand for credit cards showed no net change. 8.3 percent of banks reported demand for credit card loans was stronger, but 11.1 percent of banks reported that demand for credit card loans was weaker.

    • There has not been any net change in credit limits. 5 percent of large banks reported they have tightened credit limits while 5 percent have eased credit limits.

    • 10 percent of large banks have eased the minimum required credit score.

    • 11 percent of all banks reported that the overall credit quality for credit card applicants has improved.

    There is a cycle to this. Credit card delinquencies and defaults continue to fall, reducing the risk of lending. This gives banks room to lend again. But consumers seem reluctant to once again take the credit card plunge. Many consumers are still stinging from using too much credit before the economic downturn.

    The quarterly Senior Loan Officer Opinion Survey is based on responses from 55 domestic banks and 22 U.S. branches and agencies of foreign banks.

    Link to study here.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

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