Credit Cards

How To Take Advantage Of The 0 Percent Interest Period

April 8, 2020 By Kathryn Vercillo Leave a Comment

I have been a freelance writer for more than ten years. In other words, I have learned to live with uncertainty when it comes to when my income will come in. As a result, I’ve learned to live with debt from time to time. Therefore, I’ve become pretty skilled at how to take advantage of the 0 percent interest period on credit cards. Having done so, I’m happy to share what I’ve learned about the pros and cons of these promotional periods on credit cards. Also, below, we will take a look at whether the federal rate cut on interest makes these deals more accessible or not.

What is the 0% Interest Period?

The 0% interest period is usually an introductory offer that comes with a new credit card. In other words, you don’t usually get this deal from an existing credit card (although rarely one will offer it to current customers as a promotional deal.) Instead, you apply for a new credit card and, if you qualify, get the zero percent interest period for the specified amount of time.

The zero percent interest period may apply to any or all of the following:

Purchases
Balance Transfers
Cash Advances

In order to take advantage of the 0 percent interest period, you typically have to have good credit. The better your credit score, the better the terms of the deal. For example, with a great credit score, you might qualify for one year or more of zero percent interest. With lower credit, you might only qualify for a six-month zero-interest period.

Here Are The Things to Look Out For

If you want to take advantage of the 0 percent interest period by applying for a new credit card, then you should look out for the following things:

What does the zero percent interest cover (for example, purchases or balance transfers)?
Are there any additional fees (such as balance transfer fees)?
How long does the zero percent interest period last?
Do you earn rewards of any kind on your zero percent interest purchases?
Most importantly, what is the new interest rate when the zero percent period is over?

That last one is critical in planning out how to take advantage of the 0 percent interest period. For example, let’s say that you get 0% on balance transfers for six months. You decide to pay the balance transfer fee to take advantage of that 0% interest period. However, you were originally only paying 14.99% interest on that balance and when the zero percent interest rate is up, this new deal jumps up to 28.99% interest. Is that a good deal? Unless you can pay off the entire balance in that six month period, probably not.

Benefits of the 0% Interest Period on Credit Cards

This doesn’t mean that the zero percent interest period isn’t advantageous, because it often is. It can be especially helpful during times when income payments are insecure. For example, if you have seen a dramatic increase in income due to COVID-19, then you might find yourself struggling to pay for basic necessities like food. In addition to taking advantage of any programs available to assist you during this time, you might want to apply for a zero-interest credit card for purchases.

If you can’t pay for food, you can put it on that credit card, and delay making the payments until the zero percent interest period is coming to a close. Just remember that you do have to pay that money back eventually and that if you don’t do it in a timely manner, then you might accrue greater interest costs down the line. Use this option to your advantage, not to your own detriment.

Tips for Taking Advantage of the 0% Interest Period on Credit Cards

Here are some of the top tips to review before you decide whether or not to take advantage of the 0 percent interest period on credit cards:

Review all terms carefully. Make sure you know exactly what you are getting into.
Make smart choices. It is all too easy to let fear motivate our financial decisions. Think ahead and consider whether or not this is your best option for both the short-term and the long-term.
Shop around. You have options for credit cards with different terms, especially if you have a good credit score. Don’t take the first one that you see. Instead, get the best deal for your unique financial needs.
Stick to a budget. Just because you have access to this “free money” for a period of time doesn’t mean that you should go on a spending spree. Limit your purchases to those that are necessary.
Make a repayment plan. Create a plan that will allow you to repay this debt in full before the 0 percent interest period is over. Stick to that plan, making the payments necessary throughout the period to remain in good standing while paying down as much of that debt as you can.
Use balance transfers wisely. If you choose to take advantage of a 0 percent interest period for balance transfers, do the math to make sure that doing so makes sense. Consider the fees. Think about what your repayment plan will be.
Utilize rewards to your advantage. If you can get a cashback credit card with a 0 percent interest period so that you can earn cash on purchases with no fees, then you’re setting yourself up for a good situation. Even if you can’t get rewards, be sure to learn about the credit card’s benefits to make the most of it.

How Does The Fed Rate Interest Cut Affect Credit Cards?

You may have heard that the Federal Reserve recently announced an emergency rate cut that impacts credit card interest rates due to the COVID-19 situation. Does this mean that you will be able to take advantage of 0 percent interest rates with more ease? Unfortunately no.

While the federal rate cut does mean that credit card interest rates will decrease a little bit, the amount won’t be significant. Moreover, it certainly won’t bring your existing credit cards down to zero percent. Instead, most likely, you will see a small 1% decrease in the existing rate on your current credit cards. For example, your APR might decrease from 21.99% to 20.99%. While every little bit counts, this isn’t enough to significantly impact your debt.

In other words, if you owe money on credit cards, then you should keep paying that debt off as much as possible. If you can take advantage of the 0 percent interest period on a card to make paying that off easier, then do so. Go in with a clear head and a plan in place.

Is Your Credit Score Keeping You In Debt

January 24, 2020 By Susan Paige Leave a Comment

If your credit score is low, getting out of debt can be much harder. It diminishes your ability to take certain actions that could improve your situation, leaving you with an uphill battle that may seem insurmountable. Once you’re in deep, digging your way out of debt is a cumbersome task even if your credit score is stellar. However, if yours is poor, the journey is usually rougher. However, that doesn’t mean things can’t improve. If your credit score appears to be keeping you in debt, here’s what you need to know.

How a Bad Credit Score Makes Getting Out of Debt Harder

When your credit score is poor, particularly if it has been for some time, reducing your debt is often challenging. Usually, you’re stuck with high-interest rates. As a result, a larger portion of your monthly payments goes to interest than they would if your rate was better, slowing your forward progress.

Additionally, you have fewer alternatives to explore that can help you get out of debt faster. For example, many people recommend personal loans for consolidating high-interest debt. But, if you don’t qualify or can’t get a better rate, that might not be a suitable option.

What You Can Do to Improve Your Debt Situation

While certain options for getting out of debt might not be viable, that doesn’t mean all hope is lost. There are things you can try, even if you have bad credit.

First, you can see if you have access to a reputable credit counseling agency, ideally a non-profit that is affiliated with the National Foundation for Credit Counseling. They can work with you to develop a functional budget, often at no cost.

Additionally, for a small fee, a credit counseling agency may be able to set up a debt management plan. In these scenarios, they work with your creditors to secure lower interest rates and reasonable payments. Then, you’ll be able to pay off your debt faster and pay less in interest.

Negotiate Your Debt Settlement

If you can afford to send a lender a lump sum near what you owe in total, then your second option is to negotiate your one debt settlement offer. In these cases, you may be able to pay less than the full amount you owe. However, this isn’t always an option and does have drawbacks. It could hurt your credit more, or you may have to claim any forgiven amount as income, impacting your taxes.

You may be able to qualify for a personal loan if you have a friend or family member with good credit who is willing to cosign. However, you could put your relationship at risk if you can’t make your payments.

Similarly, if you have access to a 401(k) loan, you could use the value of your retirement account to get things under control. But that means putting your financial future at risk as a means of controlling your debt.

Bankruptcy Could Be The Best Option

For those who have an impossible debt situation, bankruptcy might be the best choice. Again, this approach hurts your score, but that doesn’t mean it isn’t the best answer. You may be able to stop any current and future collection efforts on your existing debts, effectively getting them discharged legally.

While these options may not seem great, they might be worth exploring. If you can get your debt under control, building your credit score up after might be possible. Then, you can move forward, aiming to make smart choices to prevent you from struggling with debt or your credit score again.

Is your credit score impacting your ability to get out of debt? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

When Should You Use Your Credit Card?

January 9, 2020 By Trey LaRocca 1 Comment

One of the most controversial topics in personal finance is that magic piece of plastic in your wallet. Everyone you ask will have a different opinion, with many just saying to avoid them altogether. While I wouldn’t call someone a fool for holding that opinion, I do honestly think credit cards have a place in your life.

The major hurdle here is assessing exactly how large that place is, and your ability to stay disciplined. Studies have shown that sliding a piece of plastic that isn’t linked to your cash makes it easier to spend money. As a result, going overboard is extremely common. So, for those who aren’t sure how to maximize the benefits of credit while mitigating the risk, here is the answer to the golden question: When should you use your credit card?

When?

An obvious first step is to address the main question. There are a few use cases that I find the most low-risk as far as habit-forming goes. The first is bill payment. Selecting one low-cost bill to put on your credit card each month will make sure that you have utilization to build credit, but don’t run the risk of overspending.

Bills tend to stay relatively similar every month, so “going crazy” when using a credit card to cover a bill isn’t all that tempting. If you are too young to have bills quite yet, consider using your card to cover something else that you usually already cover with cash. The important part here is to make sure you are using it once or twice a month. Keeping the use infrequent keeps you from getting used to leaning on the card.

How much?

This one is a little less subjective. As far as responsible wealth management goes, a credit card is too high-interest to be heavily utilized. I don’t care what “rewards” you get. If you were the one benefiting the most from those reward programs, they wouldn’t exist. Credit bureaus do want to see some usage every month, though, and the highest scored utilization level is typically 1-9% each month.

If you keep your bill or routine credit spending in this range, your FICO score will increase rather quickly. A more obvious underlying rule here is to never spend more than you can pay off at the end of the month. Our directive is to never get interest charged on our credit card spending– that’s money in the toilet. Pay your card off every single month in its entirety. Then watch as your credit limit and FICO score skyrocket.

Know Yourself

To close this one out, here is a vital piece of the puzzle. You need to evaluate whether you should even have a credit card. If you have filed bankruptcy in the past, or came close due to impulsive spending, having a credit card in your pocket is a bad move. If you haven’t had enough time to get into a situation that dire, but know you have spending issues, don’t try it out.

Credit cards can help you in many ways, but none are as severe as the ways they can hurt you if misused. So, take a look inward before considering any of these rules, and make sure you have the discipline to stay focused on your goals. Just like any other addiction, impulsive spending is a temptation that never really goes away. Be responsible and don’t test waters in which you have already drowned.

Can An Unused Fingerhut Account Affect Your Credit Score?

December 11, 2019 By Tamila McDonald Leave a Comment

Fingerhut has been around since 1948. The company operates largely by extending shoppers credit lines that can be used to buy items from the Fingerhut catalog or at select partner businesses. Over time, a shopper may even qualify for a credit card that can be used anywhere. But not everyone continues to use Fingerhut. It isn’t uncommon for people to leave their accounts sitting open and unused. If you’re wondering whether an unused Fingerhut account affects your credit score. Here’s what you need to know.

How Fingerhut Credit Options Work

Mainly, Fingerhut targets consumers with less-than-perfect credit histories. Many have turned to the company to make purchases or even try and improve their credit scores. The company offers two main credit options: an installment loan and a store credit card-style account.

With the installment loan, the credit line is somewhat finite in nature. Usually, this account helps borrowers show that they can repay what they owe responsibly. After making a purchase, the borrower repays the principal and any applicable finance charges. Then, once they finish repaying, they might qualify for the store card-style account.

The credit account functions like a store credit card. It’s revolving, so users can make additional purchases whenever there’s enough room on their account. This option comes with a pretty high annual interest rate of 29.99 percent.

If a borrower keeps using their Fingerhut credit account responsibly, they might be able to convert their store card into a regular credit card. Then, they can use it at stores besides Fingerhut.

Fingerhut Credit Bureau Reporting

No matter which kind of account a borrower has, Fingerhut reports the activity to all three major credit bureaus. This means the size of the credit line, as well as other details, like payment history, make their way onto your credit report.

Depending on how a borrower uses or treats their Fingerhut account, they can impact their credit score. For example, making all of your payments on time and not maxing out your credit line could boost your score if you don’t have great credit. In contrast, reaching your credit limit or missing payments could hurt your score.

How an Unused Fingerhut Account Affects Credit Scores

If a revolving credit account is unused but open, it still impacts your credit score. First, the limit on that account is part of your available credit, a number that shows how much credit you can access practically immediately. Second, it affects your credit utilization ratio, a reflection of how much available credit you have, and how much credit you are using.

Both your available credit amount and credit utilization ratio are part of your credit score calculations. In some cases, your available credit amount can harm your credit or, at least, make it harder to obtain new credit. However, that depends on a variety of factors, including how large your Fingerhut credit line is and how much other credit you have available.

The impact of your credit utilization ratio can be fairly dramatic. If your unused Fingerhut account helps you keep your ratio low, say at 30 percent or less, it’s having a positive impact in that area. If, by closing your Fingerhut account, your credit utilization goes up substantially, then leaving it open might be a better choice.

Finally, your Fingerhut account’s age plays a role in your credit score. The average age of your accounts does impact your credit. Usually, the higher the average age, the better. If closing your account lowers the average age of your open accounts, such a move could cause your score to fall.

Should You Close an Unused Fingerhut Account?

Whether closing a revolving Fingerhut account is a smart idea depends on your unique situation. If leaving it open means you are tempted to acquire more debt, you might want to shut it down to avoid that situation.

Otherwise, you need to examine your situation carefully. For example, are you planning on opening a new credit account in the near future? Would closing the account dramatically raise your credit utilization ratio? Is your current credit score good, great, or exceptional, and could potentially weather a slight decrease?

Every person’s credit score situation is different. You need to examine how various factors might raise or lower your score. That way, you can decide if closing the account is right for you.

Do you have an unused Fingerhut account? What about a credit card? Are you worried about how it impacts your credit score? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

The Only Reasons For Getting A Horizon Gold Card

November 14, 2019 By Tamila McDonald Leave a Comment

If you have don’t have much credit history or have poor credit, finding financing options can be a challenge. The Horizon Gold card advertises that it’s meant for individuals who don’t have a great credit history, so you might think it’s a viable option for repairing or building your credit score. While this might technically be true, the Horizon Gold card isn’t necessarily a strong choice.

Netspend PayPal Prepaid Mastercard MLB Team Card Design

November 7, 2019 By Tamila McDonald Leave a Comment

When you are a sports super fan, you might go out of your way to showcase your love for a specific team. While t-shirts, hats, posters, flags, and similar branded items are the most commonly used, some fans look for other opportunities to show off their love for their favorite Major League Baseball (MLB) team. If that sounds like you, Netspend has you covered. With a Netspend PayPal Prepaid Mastercard, you can choose MLB designs that feature your favorite team’s logo.

Netspend Prepaid Mastercard MLB Team Designs

Baseball fans can be incredibly dedicated to their teams. Now, with the Netspend MLB prepaid Mastercard, you can show off your enthusiasm every time you make a purchase with the card.

Netspend has a range of MLB designs to choose from, starting with one that features the MLB logo. The company also has a version for every MLB team, including every option from the Arizona Diamondbacks to the Washington Nationals.

Getting a Netspend MLB Prepaid Mastercard

If you want to have a Netspend MLB prepaid Mastercard, the process is fairly simple. New customers begin by choosing their team card design from the available options, using a dropdown menu.

Next, you provide some basic personal information. Netspend needs your name, address, and email address to start your application.

Then, you can choose between some direct deposit choices. However, this step is technically optional, as you can select “None at this time” if you don’t want to set that up.

If you are approved and your card is set, you gain access to a range of features once you activate your Netspend prepaid Mastercard that features your favorite MLB team logo. Along with direct deposits that might allow you to get paid up to two days faster, you are also enrolled for Payback Rewards, a cashback program. Additionally, text alerts and mobile check loading are available, as well as access to the Netspend Mobile App, which allows you to check your balance, review transactions, and more.

You can also head to one of the 130,000+ reload locations to put funds on your card. This can include grocery stores, check-cashing locations, and a number of other physical destinations.

Using the MLB Team Card as a Netspend PayPal Prepaid Mastercard

With the Netspend MLB Mastercard, you can add funds to your account using PayPal. Begin by logging into your PayPal account. Next, go to your profile and click “Update Bank Account.” Then, click “Add Bank.”

At this point, you can enter your Netspend account details. If you don’t know your account number and routing number, sign in to your Netspend account. Next, select “Direct Deposit” from the main menu. Then, you’ll see the details you need in a gray box on the righthand side of the screen.

If you are enrolled in Anytime Alerts, you can also text DIRECT to 22622. After sending the message, you’ll get a reply with your account number and routing number. Alternatively, you can call Netspend at 1-866-387-7363 for those details. Just make sure to choose the “Other Services” option to get sent to the right department when you call.

With your account and routing numbers in hand, you enter those details into PayPal. Within a couple of days, you’ll see to small deposits into your Netspend account from PayPal. You need these amounts to verify your account.

Once you see the small deposits, log back into PayPal, and go to your profile. Click “Update Bank Account” and then click “Verify Bank Account.” Choose your Netspend account and enter the two small deposit amounts into the boxes. Finally, click “Continue” to finish verifying the account.

After that process is complete, you can withdraw PayPal funds to your Netspend card, turning it functionally into a Netspend PayPal prepaid Mastercard.

Netspend Prepaid MLB Card Fees

With any Netspend prepaid card, you’ll have to contend with some fees. Exactly which ones you’ll encounter depends on how you use your card. For example, you can choose to pay $9.95 a month and get free transactions. If you have $500 a month in direct deposits, that fee drops to $5.00. Alternatively, you can pay up to $2.00 per transaction.

Using an ATM comes with a $2.50 per withdrawal fee and a $0.50 balance inquiry fee regardless of whether you use the pay-as-you-go or monthly plan approach for transactions. Cash reloads also cost $3.95 no matter what.

However, loading the card through PayPal doesn’t have a fee, making it a way to avoid an extra cost. If you use a mobile check deposit, it’s free if you are willing to wait for up to 10 days. But speeding up the process will cost you, with the fee usually falling between 1 and 5 percent of the check amount for same-day processing.

If you don’t use your account for 90 days, you’ll end up with a $5.95 inactivity fee. There are also a few other potential fees that apply in specific situations, like declined ATM transaction fees and over-the-counter withdrawal fees.

Ultimately, the Netspend prepaid MLB Mastercard does let you show off your team spirit. But it’s important to understand the various fees you’ll encounter. Otherwise, you could dwindle your available balance down surprisingly quickly.

Do you like prepaid cards with sports team or other designs? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.