Category Archives: money

Tips We Recommend When You Are Considering Applying For Credit Cards

How do you define what the best type of credit card is? For each of us, the answer likely differs, due to our own unique personal needs. Credit companies understand that consumers broadly differ in what they look for in a credit card, and in such a highly competitive field, offers and credit cards are continually improving. Credit cards can be compared to an arms race, when one or more credit card companies introduce a new perk or feature, more follow.

In a world where there are a multitude of options when it comes to credit cards, what do you look for? How do you compare the available offers when you are hunting for a new card? Some might look for a card with a multitude of perks, while others look to maximize their rewards earnings, others simply look for new cards based on the best sign up rewards bonus. Others who travel look for a card which offers them the features they need when traveling, such as air miles and hotel points, and also no foreign transaction fees. Some people weigh the fees a card carries, such as an annual fee vs no annual fee. others prefer to stick to a card type, such as Mastercard or Visa. So for the answer to what the best credit card is, it would be better to ask what the best credit card is for what you are looking for, be it rewards, air miles, low interest, sign up bonuses or perks.

If you want to base your worth of a credit card based on the bonus points, you should learn how to estimate those points value. If you cannot come up with a dollar value of the sign up bonus when you redeem your points, how can you effectively gauge weather or not a deal is good? One card might offer a sign up bonus of only 40,000 points and another might offer a sign up bonus of 50,000 points, but the redemption value may be higher on the 40,000 points card. You should also take into account any statement credits any sign up offer might have, as well as any statement credits that are given out each year to card members.


You should try and rank a credit cards perks as well.
For example if you often travel, free checked bags perk could be worth hundreds of dollars, unless you have elite status with an airline already that is. Things that are free from a credit card, such as free nights or a free travel companion ticket should be ranked accordingly as well. A free night at a hotel is roughly worth $250 for example.

One thing to consider is if you find two or more credit cards, with the perks that you are looking for, and roughly the same value in sign up rewards, is how to pick the right offer in this case. My opinion in this case would be to opt for the card with the lowest spending requirement to obtain the sign up bonus. All credit cards with sign up bonuses require some set spending limit, often with in 3 months of opening the account. So if you have 3 offers you really equally like, but two of the offers require you to spend $3000 for the sign up bonus, but the third card only requires you to spend $1000 to obtain the sign up bonus, you should opt for the card that only requires the $1000 spend.

Searching for the top finance and money savings offers, our editorial team covers loans, credit cards and debt savings topics, have a suggestion, send us an email anytime.

Why Different Credit Bureaus Show Different Scores

Today more than ever your credit score matters. Today’s economy and finances are credit score driven. Did you know just 1 point can mean the difference between paying hundreds and even in some cases thousands less in interest and fees on a mortgage? It is true a 679 instead of a 680 could cost you dearly. Yet figuring out your exact score can be a real headache, or rather your exact representative credit score. Why? Simple, each credit bureau might have different data on you.

Each of your creditors might report to different credit bureaus, in fact creditors are not required by law to report on you at all. Many do but some do not. Paypal credit comes to mind here, they do not report at all, that is unless you default on payment then sometimes they do. Smaller creditors are even less likely to report to all 3 credit bureaus, mostly due to the costs of reporting the data. The costs to report the data are not offset for smaller creditors. Major creditors however tend to report to all 3 credit bureaus. I always tell clients that I have who care about their credit scores to choose which creditors and lenders they use carefully and to ask before hand if they report to all 3 major credit bureaus.

Now even if every account gets reported to all 3 credit bureaus, your score may actually differ between one or more of the credit bureau reports. This is due to the fact that while bureau might have exactly the same information, it does not mean that each bureau calculates the score the same. Also each lender can pull a different score. Sound confusing? Its realy simple actually. There are two major scoring models FICO and Vantage. When you pull your own credit score you are likely to see your vantage score and not your FICO score.

Your vantage score is made up of 6 components: payment history (32%), utilization (23%), balances (15%), depth of credit (13%), recent credit (10%) and available credit (7%) and your vantage score will range from 501 to 990. Your FICO score on the other hand will have just 5 components: payment history (35%), length of credit history (15%), amounts owed (30%), types of credit (10%) and new credit (10%). Your FICO score will range from 300 to 850. There are also variants of the FICO and Vantage scoring systems such as FICO8 and FICO9 for example so even two lenders pulling your FICO score may end up getting different numbers on you.

The types of lenders you go to can also effect your score. Each type of lender uses their own in house variant of the same scoring system. Auto lenders for example are much more likely to weigh your auto payment history when calculating your credit score under the FICO or Vantage scoring model. If for example you had a car get repossessed, even if your credit report was perfect otherwise, your score for the auto lender might be terrible while the same scoring model such as FICO ran for a mortgage would be much higher. Many lenders have proprietary systems such as algorithms that will calculate a custom score based on in house criteria based on their unique credit products, services and past experiences.

You should there for expect your score to vary between 5 and 20 points higher or lower than the score that you see when you pull your own credit score online. Just because one lender says your score is for example 679 does not mean the next one will. This is where rate shopping comes into play. Rate shopping is where you get more than one quote by having multiple lenders pull your credit report. FICO only counts one inquiries made in the 30 days prior to scoring so that you can rate shop without harming your credit.

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