MOVED 8 Colleges That Will Let You Work for Your Tuition

Posted by Maurie Backman on Dec 27, 2019 6:00:00 AM


Avoid student loans by working your way through your studies instead.

Many college graduates today have no choice but to take out student loans to fund their education. The problem? Those loans are often difficult to pay off after graduation. Choosing an in-state public college over a private university could help you complete your studies with less debt -- but so can attending what's known as a work college.

Work colleges, as the name implies, have students work as part of their academic program. By offering free or reduced tuition, these schools are instrumental in helping students graduate without piles of debt.

Young bespectacled woman sitting on college campus bench and working on laptop.

In some cases, students' earnings are applied to their tuition directly, but in other cases, they get to keep their wages. And while peripheral expenses like fees, room and board, and textbooks generally aren't covered by these work arrangements, students can often borrow money or receive grants to make them manageable. 

If the idea of leaving college with minimal debt sounds good to you, then here are eight work colleges you might consider looking into:

1. Alice Lloyd College

Located in Pippa Passes, Kentucky, Alice Lloyd College is a private work college offering free tuition. Students come from one of 108 approved counties and work at least 10 hours a week, often in community service jobs. Room and board, books and supplies, and fees, however, aren't covered in the work program. 

2. Berea College

Kentucky-based Berea College is a private liberal arts work college offering free tuition. Students must work between 10 and 20 hours a week on campus, and typically earn $2,000 for the academic year. Registration, housing, meals, and fees aren't free, though.

3. Bethany Global University

Located in Bloomington, Minnesota, Bethany Global undergrads get work experience through training and outreach programs, and then spend 16 months overseas doing missionary work. The annual cost of attendance for students is estimated at under $10,000 a year.

4. Blackburn College

Located in Carlinville, Illinois, Blackburn College awards $5,000 in annual tuition credit to students who participate in its work program. Students work an average of 10 hours a week.

5. College of the Ozarks

College of the Ozarks, also known as Hard Work U, is a private evangelical college in Point Lookout, Missouri. Students are granted free tuition in exchange for 15 hours of work per week, plus two 40-hour workweeks per school year. Room and board and certain fees aren't free at this school. 

6. Paul Quinn College 

Paul Quinn College is a private, faith-based, four-year liberal arts school located right outside downtown Dallas, Texas. In 2015, it adopted a new financial structure that reduced tuition and fees, thereby allowing students to gain work experience and graduate with under $10,000 of debt. 

7. Sterling College

Vermont-based Sterling College charges 20% less for tuition and room and board than other private New England universities. Students typically work 80 hours per semester and graduate with 50% less debt than the national average.

8. Warren Wilson College

Located right outside Asheville, North Carolina, Warren Wilson College mandates that all students get involved in community engagement activities. Students typically put in more than 50,000 volunteer hours per year.

If you're willing to work during your studies, it pays to consider one of the above schools. You can also apply for the Federal Work-Study program, which is available at a large number of colleges nationwide. Not only can working while in school spare you from graduating with a mountain of student debt, but it can also give you valuable experience that's incredibly useful once you enter the working world. 

Topics: Student Loans

MOVED How 1 Phone Call Can Get You More Value From Your Credit Card

Posted by Lyle Daly on Dec 26, 2019 4:00:00 PM


It's the credit card trick most consumers aren't using.

If the annual fee on your credit card is coming up for payment, you may be weighing whether the card is worth keeping. The benefits of the best rewards cards can certainly justify their fees, but that's only true if you make the most of them. And if you have multiple credit cards with annual fees, it's more likely that you won't want to pay for all of them.

The typical consumer goes with one of three options: downgrading to a no-annual-fee alternative, canceling the card, or deciding to pay the fee for another year. None of those are necessarily bad ideas, but there is a way you can get a better deal.

Older woman writing something down in notebook while on the phone.

How credit card retention offers work

Credit card companies don't want good cardholders who pay their bills on time to cancel. That's why they have what are known as retention offers. These are offers that representatives in the retention department can make to get you to reconsider.

Common examples of retention offers include:

  • An annual fee waiver
  • Bonus rewards
  • A statement credit after you make a set amount of purchases


To provide a firsthand example, I recently called to cancel a card with a $95 annual fee. Although the representative said she couldn't waive it, she could offer me a $95 statement credit that would apply after I made $95 in purchases, which would effectively cancel out the fee. She also offered me 500 bonus points during each of the next 16 billing cycles when I made at least $500 in purchases, for a potential maximum of 8,000 bonus points.

It doesn't take anything special to get these kinds of offers. You just need to make a cancellation call to your card issuer.

And although conventional wisdom is that you have a better chance at a retention offer if you use the card frequently, this isn't a requirement. I also called to cancel a card with a $149 annual fee. With this card, I immediately stopped using it after I got the sign-up bonus, so there was almost 11 months of inactivity. Despite that, the representative still offered to waive the $149 annual fee for me.

Using retention offers to your advantage

A retention offer can get you some extra value from a credit card you weren't sure about keeping, but that's not the only way to take advantage. You can also see what offers are available for credit cards that you don't want to cancel.

Here's what you do -- call the number on the back of your credit card and say that you're thinking about canceling. Make sure you have a cancellation reason ready. One simple reason is that you're not sure the card's benefits are worth its annual fee.

You'll be transferred to the retention department, where you can tell the representative why you want to cancel the card. Then, it's just a matter of seeing what they offer you. This may be negotiable, so don't be afraid to try asking for more. For example, if they offer you 5,000 bonus points for spending $1,000 in three months, ask if they'll bump it up for 10,000 points for $2,000 in spending.

If you receive a retention offer, you can accept it immediately on the call. The worst-case scenario is that they don't offer you anything. In that case, you can tell them that you've changed your mind and decided to keep the card. You don't need to worry about accidentally canceling a card you wanted to keep, because the representative would need to officially confirm the cancellation with you before processing it.

Maximizing your credit card's value

Considering you can check whether you're eligible for a retention offer in one cancellation call, it's smart to do this with all the credit cards you carry. There's a good chance the card issuer will offer you something of value, and there's no work or risk required on your part.

Topics: Credit Cards, Cash Back & Rewards

MOVED 7 Factors Lenders Look at When Considering Your Loan Application

Posted by Kailey Hagen on Dec 26, 2019 2:00:00 PM


Credit plays a big part, but it's not the only deciding factor.

You want to put your best foot forward when applying for a mortgage, auto loan, or personal loan, but this can be difficult to do when you're not sure what your lender is looking for. You may know that they usually look at your credit score, but that's not the only factor that banks and other financial institutions consider when deciding whether to work with you. Here are seven that you should be aware of.

Two women sitting across a desk from one another in an office and discussing something important.

1. Your credit

Nearly all lenders look at your credit score and report because it gives them insight into how you manage borrowed money. A poor credit history indicates an increased risk of default. This scares off many lenders because there's a chance they may not get back what they lent you.

Scores range from 300 to 850 with the two most popular credit-scoring models, the FICO® Score and the VantageScore, and the higher your score, the better. Lenders don't usually disclose minimum credit scores, in part because they consider your score in conjunction with the factors below. But if you want the best chance of success, aim for a score in the 700s or 800s.

2. Your income and employment history

Lenders want to know that you will be able to pay back what you borrow, and as such, they need to see that you have sufficient and consistent income. The income requirements vary based on the amount you borrow, but typically, if you're borrowing more money, lenders will need to see a higher income to feel confident that you can keep up with the payments. 

You'll also need to be able to demonstrate steady employment. Those who only work part of the year or self-employed individuals just getting their careers started may have a harder time getting a loan than those who work year-round for an established company.

3. Your debt-to-income ratio

Closely related to your income is your debt-to-income ratio. This looks at your monthly debt obligations as a percentage of your monthly income. Lenders like to see a low debt-to-income ratio, and if your ratio is greater than 43% -- so your debt payments take up no more than 43% of your income -- most mortgage lenders won’t accept you. 

You may still be able to get a loan with a debt-to-income ratio that's more than this amount if your income is reasonably high and your credit is good, but some lenders will turn you down rather than take the risk. Work to pay down your existing debt, if you have any, and get your debt-to-income ratio down to less than 43% before applying for a mortgage.

4. Value of your collateral

Collateral is something that you agree to give to the bank if you are not able to keep up with your loan payments. Loans that involve collateral are called secured loans while those without collateral are considered unsecured loans. Secured loans usually have lower interest rates than unsecured loans because the bank has a way to recoup its money if you do not pay.

The value of your collateral will also determine in part how much you can borrow. For example, when you buy a home, you cannot borrow more than the current value of the home. That's because the bank needs the assurance that it will be able to get back all of its money if you aren't able to keep up with your payments.

5. Size of down payment

Some loans require a down payment and the size of your down payment determines how much money you need to borrow. If, for example, you are buying a car, paying more up front means you won't need to borrow as much from the bank. In some cases, you can get a loan without a down payment or with a small down payment, but understand that you'll pay more in interest over the life of the loan if you go this route.

6. Liquid assets

Lenders like to see that you have some cash in a savings or money market account, or assets that you can easily turn into cash above and beyond the money you're using for your down payment. This reassures them that even if you experience a temporary setback, like the loss of a job, you'll still be able to keep up with your payments until you get back on your feet. If you don't have much cash saved up, you may have to pay a higher interest rate.

7. Loan term

Your financial circumstances may not change that much over the course of a year or two, but over the course of 10 or more years, it's possible that your situation could change a lot. Sometimes these changes are for the better, but if they're for the worse, they could impact your ability to pay back your loan. Lenders will usually feel more comfortable about lending you money for a shorter period of time because you're more likely to be able to pay back the loan in the near future.

A shorter loan term will also save you more money because you'll pay interest for fewer years. But you'll have a higher monthly payment, and so you must weigh this when deciding which loan term is right for you.

Understanding the factors that lenders consider when evaluating loan applications can help you increase your odds of success. If you think any of the above factors may hurt your chance of approval, take steps to improve them before you apply.

Topics: Personal Loans

MOVED 6 Reasons to Make All Your 2020 Travel Plans Now

Posted by Lyle Daly on Dec 26, 2019 10:00:00 AM


Now is the time to plan your trips for 2020.

Where will you go in 2020? While it may seem like you have all the time in the world to figure that out and book your trips, there are several big benefits to making your travel plans sooner rather than later. You don't necessarily need to get every ticket, hotel, and vacation rental booked this second, but a broad-brush plan will make everything easier and more affordable.

Man in puffer jacket and parka crossing narrow bridge over forest and pointing intrepidly at mountain in distance.

1. You're more likely to follow through

We've probably all met someone who talks about all the places they'll go without ever making it happen. It's easy to tell yourself that this is the year you're going to Europe, or South America, or any other destination that interests you. But then life gets in the way. It seems as if you're constantly too busy, so you keep postponing your trip. Before you know it, another year has passed, and you're back to square one.

Planning is the key to making sure you go on the trips you want. Once you pick out a timeframe and start making the necessary arrangements, that trip moves from being a nice idea to a concrete plan you're putting into action.

2. You can watch for the lowest prices

It's not always true that you can get the lowest prices by booking early because prices often fluctuate. The advantage of making plans early is that you can monitor prices and book when you see a good deal. If you're shopping at the last minute, you're under more pressure to book something right away.

To have a better chance of snagging a low price, enter your desired travel dates on a booking site and set up price alerts. Another option is to book refundable airfare and accommodations. That way, if the price of either goes down later, you can cancel your original reservation and rebook it at the lower price.

3. There are more opportunities to book with travel rewards

If you use travel credit cards and you want to book using your points, you're much more likely to find award availability by shopping early. There's usually a limited number of flight seats or hotel rooms you can book with travel rewards. If you wait too long, other travelers may snatch them up first.

Keep in mind that many loyalty programs also have two types of airfare/hotel stays you can book with points: a standard option and a saver option that costs significantly fewer points. Saver airfare/hotel stays go much more quickly, for obvious reasons

4. You can request time off from your employer in advance

Although every employer is different, many of them handle time off on a first-come, first-served basis. When employees in the same role need time off, whoever asked first gets priority.

By figuring out your travel dates now, you can also request your vacation time at work. And in the event that your employer can't accommodate the dates you want, you'll have plenty of time to find alternative dates that work.

5. You have more time to budget and save for your trip

Vacations can be expensive, even when you're careful about your spending and you look for ways to save money on your trip. Unfortunately, this expense often pushes people to do one of the following:

  • Go into debt with loans or credit cards to pay for their trips
  • Skip travel because they don't have the money for it

Neither option is ideal. It's not a good financial decision to go into debt for an unnecessary expense, but you also don't want to miss out on traveling entirely.

The better solution is to save a set amount per month until the date of your trip. And if you get started on this early, you'll have a much easier time saving enough.

6. Popular activities can sell out quickly

It's never fun when you book a trip and learn about an activity that you'd love to do, only to discover that it's sold out. Many popular activities and events, such as tours and concerts, sell out several months in advance. If you miss out, you either won't be able to go or you'll need to pay a much higher price.

Don't wait

Although last-minute travel can be exciting, you're better off making your plans well ahead of time for the places you really want to go to. If you plan properly, 2020 could be the year when you take that trip (or trips) you've always wanted.

Topics: Credit Cards, Travel

MOVED 9 Travel Lessons I Learned After 1 Year of Living Abroad

Posted by Lyle Daly on Dec 26, 2019 6:00:00 AM


Here are my best pieces of travel wisdom.

In the past year, I've gotten more firsthand travel experience than ever before. It was my first year living as a digital nomad, and with no lease agreement tying me to one place, I've had the opportunity to move around and take a lot more trips.

Being a frequent traveler is a kind of crash course in what to do and what not to do. After spending time in three countries and counting, taking a dozen flights, and suffering through the occasional delay, these are the travel lessons I've learned to live by.

Middle-aged man looking at an iPad while sitting on rocks overlooking a sunset over mountains.

1. The most direct route is worth the cost

It's tempting to save some cash by booking airfare with more stops, but it's also important to consider how that extra stop will affect your travels. Flying to your destination will take you longer, and you may be more tired when you get there. You probably have limited vacation time to begin with. Do you want to spend more of it sitting around in an airport?

That doesn't even touch on the potential problems that could arise, such as delays or flight cancellations. Each stop you add to a trip makes it more likely something could go wrong.

2. Travel points you can redeem as cash are extremely valuable

I know that everyone raves about transferring points in hopes of those high-value redemptions, but I've found that I actually redeem points as cash more often.

If you're unfamiliar with how this works, some travel rewards cards let you redeem your points at a fixed rate to purchase travel in cash. For example, a card issuer may let you redeem rewards at $0.015 per point. In that case, you could use 10,000 points to purchase a $150 airline ticket.

This option comes in handy when you won't get a lot of value out of award tickets, which is often the case for shorter domestic flights. It's also helpful when there aren't any convenient award tickets available for the route you want.

3. You won't need to pack as much as you think

This is popular travel advice, but it's popular for a reason. Many travelers overestimate what they need to take and come to regret it when they're lugging around multiple heavy, awkward pieces of luggage.

A good way to approach packing is to treat it like writing a paper for school. Your first attempt is just the first draft. After that, it's time to review your work and cut unnecessary items. Odds are you won't use every piece of clothing and gadget that you initially thought you needed.

4. Always have a form of entertainment at the airport

If you're the type of person who dreads going to the airport, that could be down to a lack of planning. It's no fun to sit around an airport. But it can be nice to relax and spend the wait watching shows you downloaded or catching up on the reading you've always wanted to do.

Of course, this is especially important if your flight gets delayed. As frustrating as that can be, it's much worse when you're waiting for hours with nothing to do.

5. Vacation rentals are better than hotels for the budget-minded traveler

Trying to take a vacation without breaking the bank? One of the best ways to spend less is by choosing a vacation rental instead of a hotel.

Hotels typically cost more per night, with prices that are often twice as much or more than comparable vacation rentals. The price disparity becomes even greater when you consider the extra charges you can incur at a hotel. There may be resort fees or additional taxes charged upon checkout. And since most hotel rooms don't have kitchens, you'll likely go out to eat more.

6. Bring at least one backup credit card

Hopefully, you won't ever lose your credit card while you're traveling. But you should bring along an extra one in case it does happen. If you'll be outside the United States, you should also make sure that the credit cards you take with you don't charge foreign transaction fees. 

7. Be prepared, not paranoid

When discussing the safety of an area, the loudest voices often split into two groups. There are those who assume 95% of the world is dangerous and you'd be crazy to go there. And then there are those who would tell you an active war zone "really isn't as bad as people say."

As it often goes, this is a situation where the most sensible option is the middle ground. Any time you're traveling somewhere new, you should read up on common crimes in that area and watch out for potential dangers when you're there. However, you shouldn't let paranoia keep you from enjoying yourself.

8. Use an ATM instead of exchanging currency

Although currency exchanges are the traditional way to get cash while abroad, the exchange rates are rarely a good deal. It's better to withdraw money from an ATM using your debit card. You should check what kind of fees your bank will charge before you go, and if it will be expensive, look into checking accounts with no foreign transaction fees.

9. Unlock your phone and buy local SIM cards

Wireless carriers may charge an arm and a leg if you want to use your cell phone internationally. Fortunately, there's a much more affordable solution -- unlock your phone and when you arrive at your destination, buy a SIM card with a prepaid plan. You can often buy a local SIM card at the airport upon arrival. In many countries, weeks of prepaid data costs just $10 or less.

Making the most of every travel experience

It's always exciting when you have the opportunity to travel. By following the right strategies, you can save money and ensure you have an amazing trip.

Topics: Credit Cards, Travel

MOVED Why Do I Have So Many Credit Scores?

Posted by Kailey Hagen on Dec 25, 2019 2:00:00 PM


You have a lot of credit scores, and they're not all the same.

It's not difficult to get a free credit score these days. And if you check your score in a few different places, you might find that the numbers don't always match up. That doesn't necessarily mean that any of them are wrong. It probably means the scores are based on different credit reports or a different scoring model. 

The truth is, if you have a loan in your name or a credit card in your wallet, you have dozens of credit scores and one isn't necessarily more correct than another. Here's a closer look at what credit scores are and why you have so many of them.

Bespectacled young man looking at the numerous credit cards in his hand with confused disbelief.

What is a credit score?

A credit score is a three-digit number that's essentially a financial grade. It's based on the information in your credit reports. These contain details of current and past credit accounts in your name, including payment history, balances, and information from public records. Everyone has three credit reports, one for each credit bureau -- Equifax, Experian, and TransUnion -- so you effectively have three credit scores for every scoring model, one corresponding to each report.

There are several credit scoring models in existence because each one weighs the factors in your credit report a little differently. The goal of credit scores is to help lenders more accurately predict how a person will handle borrowed money. Lenders want to protect themselves from losing money to borrowers who go bankrupt. Credit scoring companies constantly analyze data from millions of borrowers. If they spot new data that could help them predict risk more accurately, they might create a new credit scoring model that incorporates this information to give them better results.

FICO® Scores and VantageScores

The two most commonly used scoring models are the FICO® Score and the VantageScore. If you're going to look up your credit score, you should check one of these since lenders are most likely to look at them when checking your credit. Both FICO and VantageScores have a few different versions, but they all use the same scoring system of 300 to 850, with a higher score being better. 

They look at pretty much the same factors, though VantageScore gives a stronger weight to payment history while FICO cares more about your credit utilization ratio -- the ratio between the amount you charge to your credit cards each month and the credit you have available to you. Other factors that both scoring models consider include the average age of your credit accounts, which types of credit you have on your account (credit cards, mortgages, etc.), and how often you apply for new credit.

There might be a slight variance between what you see and what lenders see. This depends on which version of the scoring model your lender is using and which credit report the score is associated with. Your credit reports all have largely similar information, but some financial institutions may only report payments to one or two of the credit bureaus instead of all three, resulting in slightly different scores even when using the same version of the same scoring model.

Other credit scoring models

Unless a company specifies that the score it's providing you with is a FICO or VantageScore, it's probably neither. Some companies develop their own educational scores using proprietary scoring methods. These may have different scoring ranges, too, so while a 600 might not be a great FICO or VantageScore, it could be a good score in a different model. 

These educational scores aren't used by lenders, so they're not that useful if you're trying to estimate your odds of success when applying for a new loan or credit card. But they can still provide valuable information on steps you can take to improve your credit. These educational scores may come with insights on how you can improve your credit score, like making efforts to pay all your bills on time in the future. Following those tips can help improve all of your credit scores.

How to raise your credit score

You'll never know exactly which version of which credit scoring model your lender is going to look at, so you must take steps to raise all of your scores if you want the best odds of success. This sounds intimidating, but it's really not that bad when you know that all scores consider the same basic factors.

Payment history is always the most important element, so paying your bills on time is critical. Set up automatic payments or reminders for yourself if you tend to forget. Your credit utilization ratio is the other major factor in your score. Try to limit yourself to 30% or less of your credit limit each month. A higher ratio indicates a heavy reliance on credit and suggests you may not be able to handle taking on more debt without falling behind on your payments.

Limit how often you apply for new credit and be careful about closing old credit accounts, as these are both things that can negatively affect your score. Applying for new credit generates a new hard inquiry on your report, which drops your score by a few points, while closing a credit account can hurt your credit utilization ratio by bringing down the total amount of credit you have access to. 

Time may seem like an enemy because negative marks on your credit report stick around for seven to 10 years, but it can also be your friend because a consistent, responsible payment history can help your score improve. Be patient and stay committed to demonstrating your financial responsibility and your score will rise over time, regardless of the credit scoring model. 

Topics: Credit Cards, 0% APR & Low Interest

MOVED Here's 1 More Reason to Never Cosign on a Loan

Posted by Lyle Daly on Dec 25, 2019 10:00:00 AM

 

Any loan you cosign on could become a thorn in your side.

While the consensus from financial experts is that you shouldn't cosign on a loan, people still wrestle with this decision. They consider cosigning other people's personal loans, auto loans, or, in extreme cases, even mortgages.

If you're in this situation, you may already know the obvious risks. You're responsible for the loan you cosign, and any missed payments or other repayment issues can affect your credit score. But perhaps you're confident that the borrower will pay, so you figure there's nothing to worry about. Although this is dangerous logic to use, let's assume you're correct.

Middle-aged woman showing document to an older woman, possibly her mother.

The problem is that even if the borrower makes all the payments on time and does everything right, being a cosigner on a loan could still come back to bite you. That's because that loan will be considered your debt, so it could prevent you from borrowing money in the future. Here's why.

Cosigning increases your debt-to-income ratio

When you cosign on a loan, it's tied to you. For all intents and purposes, it's as if you applied for the loan and borrowed that money. One reason that's important is because it increases your debt-to-income (DTI) ratio.

Your DTI ratio is your monthly debt payments divided by your gross income. For example, let's say you earn $5,000 per month. The payments on your credit cards, student loans, and other debt add up to $1,000 per month. You would have a DTI ratio of 0.20, which would more commonly be expressed as 20%.

Then, a friend of yours asks you to cosign on a personal loan with payments of $900 per month. Even if your friend is making every payment, it will still add $900 per month to your total monthly debt payments. That will push your DTI ratio up to 38%.

How a higher DTI ratio affects you financially

A higher DTI ratio may not initially seem like a big deal. If the borrower is paying, does it matter that your DTI ratio has increased?

To lenders, it does. Any time you apply for a loan, line of credit, mortgage or a credit card, the lender is going to review your DTI ratio to evaluate the risk of lending you money. If your DTI ratio is too high, the lender could deny your application.

Although there's no set cutoff point when it comes to DTI ratios, there are common guidelines used by mortgage lenders. You have a better chance of approval when applying for a mortgage if your DTI ratio, including your projected mortgage payment, is no greater than 36%.

Let's go back to the example above, where you cosign on a friend's loan and raise your DTI ratio from 20% to 38%. If you want to buy a house in the future, cosigning on that loan could be the difference between whether the mortgage lender approves or denies your application.

The same is true with any type of new credit account you want to open. It becomes more difficult to get approved as your DTI ratio increases.

Does cosigning on a loan ever make sense?

Cosigning on a loan is a high-risk, no-reward situation for you. The worst-case scenario is that the borrower doesn't pay. As you're responsible for the debt, you will suffer a credit score drop that could take years to fix. Even in the best-case scenario, you'll have a higher DTI ratio, and that could limit your own financial opportunities. The only person who stands to benefit is the person asking you to cosign.

The smart approach is to politely decline these requests. You can give advice on how to raise their credit or boost their loan approval odds, but you shouldn't put your financial stability in someone else's hands.

Topics: Personal Loans

MOVED 7 Strategies to Earn More Credit Card Rewards in 2020

Posted by Lyle Daly on Dec 25, 2019 8:00:00 AM

 

Let's make 2020 your most rewarding year yet.

When you've been using a rewards credit card for a while, you eventually reach the point where you want to take your earnings to the next level. Maybe you earned $700 in cash back last year, but you want to raise that to $1,200 or even $1,500. Or you want to go from 50,000 travel points per year to 100,000.

With the right strategies, it's possible to increase the total rewards you earn by 50%, 100%, or even more. Whether you prefer cash back or travel rewards, here are the changes you can make to get these kinds of results in 2020.

Young woman holding a calculator and a credit card and grinning with satisfaction at the credit card.

1. Apply for at least one new card to earn a sign-up bonus

The consumers who earn the most rewards are always on the lookout for the biggest credit card sign-up bonuses. With bonuses, you can earn a big chunk of cash back or travel points, and it usually takes just a few months.

Considering how quickly you can earn rewards this way, it's smart to apply for at least one card with a sign-up bonus each year. If you think you can manage more cards, then you may want to start looking for a new one each time you complete the requirements for a bonus.

2. Combine a flat-rate rewards card and a card with bonus categories

There are two types of rewards credit cards:

  • Flat-rate cards -- These earn one rate, such as 1.5% back on all your spending.
  • Bonus category cards -- These earn higher bonus rates in certain spending categories, such as 3% back at grocery stores. On regular spending, they typically earn 1% back.

To get the best of both worlds, you should carry each type of card. You'd use your bonus category card in any of the categories where it will earn you extra points and your flat-rate card for everything else. 

3. Review your spending to choose the right bonus category card

It's important to choose a bonus category card that you'll be able to use often. For that reason, you should review your spending to find the categories where you spend the most money.

There are a few ways you can do this. You could review all your expenses for the past month. If you want to go back further, you could use an entire year. Another option is to look at your monthly budget.

This will give you a good idea of whether you'll benefit most from a card that earns more back at grocery stores, restaurants, or another spending category.

4. Check the special offers your credit card company sends you

Credit card companies occasionally send out special offers that give you the opportunity to earn extra points. For example, I've seen offers of 500 to 1,000 points for either making at least three contactless card payments or for using a card at least three times through a payment app.

Offers like these aren't difficult to complete, so make sure you check any emails from your card issuer.

5. Use the shopping portals for your rewards cards

Most credit card companies have shopping portals. A shopping portal is a site you visit through your online credit card account, and it contains an assortment of merchant sites where you can shop to earn extra points. Under each merchant, the portal will list the number of additional points you earn per $1 spent.

Click the link from your card issuer's shopping portal to visit the store you'd like to shop in. You'll then earn extra points on any purchase you make.

6. See if you can get retention offers for the cards you already have

The last thing a credit card company wants is to lose a cardholder. To avoid that, it may offer you something extra if you want to cancel your card. This is known as a retention offer, and it could be an annual fee waiver, bonus rewards, or anything else the card issuer can provide to retain clients.

You can take advantage of this by calling your card issuer and telling them that you're thinking about canceling your card. The worst-case scenario is that they don't offer you anything, in which case you can always say that you've changed your mind and you want to keep the card. But there's also a good chance that you'll get a retention offer.

7. Consider carrying more than one bonus category card

Although a flat-rate card and a bonus category card are a great combination, you can earn even more by carrying multiple cards with different bonus categories.

It's obviously better from a rewards perspective to have more bonus categories where you can earn extra. The downside is that you'll have more credit cards to manage. That means more bills you need to pay on time, and you'll also need to remember which card to use for each purchase. If you can handle that, then it's worth expanding the number of bonus category cards you use.

Maxing out your rewards

It's never a good idea to spend more money in the pursuit of credit card rewards. That's why you need to find ways to earn as much back as possible on your normal expenses. By adopting some or all of the strategies above, you'll be able to wring a lot more rewards out of your typical spending.

Topics: Credit Cards, Cash Back & Rewards

MOVED 4 Common Credit Card Fees You Don't Need to Pay

Posted by Kailey Hagen on Dec 24, 2019 4:00:00 PM


Credit card companies set their own terms, but you get some influence over which ones apply to you.

Credit cards have their perks, but they also have their price. And that price can get very expensive if you run up a balance you can't pay back. Choosing the wrong credit card can also cost you in lost rewards and additional fees. The good news is, you can avoid many of these costs by choosing the right card and managing your money responsibly. Here are four credit card fees you don't have to pay.

Young woman holding credit card and looking at laptop screen suspiciously.

1. Annual fee

There are so many rewards credit cards available today that don't charge an annual fee, you shouldn't pay for one unless you want to. In rare cases, it might be worth it -- for example, if you're paying for a premium travel credit card that offers free travel vouchers and free luggage. But you should always do the math first to calculate whether the rewards you'll earn outweigh the cost of the annual fee. If not, move on to a different card.

Read the fine print carefully when signing up for a new card. It may be that the annual fee is only free or discounted in the first year, but then a standard fee kicks in in the second year. Check the cardholder agreement to learn about the card's annual fees, including any promotional rates. 

You may be able to negotiate a reduced annual fee with your card issuer, or even eliminate it completely. But card issuers don't have to agree. If you've had the card for a long time, you can use your loyalty as leverage and threaten to switch to a different credit card if they don't comply. Be prepared to make good on that threat if your card issuer denies your request.

2. Foreign transaction fees

You can incur foreign transaction fees when you use your credit card in a foreign country. This fee is often 3% of the transaction and you'll pay it every single time you use your credit card on your trip. It's possible to rack up quite a bit if you're not aware of these fees. 

Most top travel rewards credit cards don't charge foreign transaction fees, so choose one of these cards if you're planning to travel abroad. Check the cardholder agreement on your existing credit cards if you're unsure about whether they have foreign transaction fees. Another option for getting around these fees is to rely primarily on cash while you're abroad. It's still a good idea to have a credit card for backup, though, in case there's an emergency or you run out of cash.

3. Interest

Everyone knows that if you don't run up a balance you can't pay back, you'll never pay a dime in credit card interest. However, that knowledge isn't especially useful if you already have credit card debt. In this case, you can still avoid interest payments temporarily -- and possibly forever -- if you use a balance transfer card

These cards have 0% introductory APRs for six to 21 months. Pay off your balance within this timeframe and you won't need to pay any more interest. Balance transfers usually have a fee attached -- often a percentage of the balance you're transferring -- but this option will probably still be more affordable than continuing to deal with the interest you are paying right now.

If you cannot pay the full balance back within the introductory APR period, your remaining balance will begin accruing interest at the standard APR unless you transfer that remaining balance to another balance transfer card. 

4. Late fees

Late payments can hurt your credit, and they also come with late fees, which can make your balance more difficult to pay back. Your card issuer may charge you up to $28 for your first late payment and up to $39 for any additional late payments. But you can easily avoid these fees by always paying your credit card bill on time. Set up automatic payments, if possible, or set reminders for yourself so you remember to pay the bill by the due date.

The only things you should have to worry about paying for are the purchases you charge to your credit card. Read through the cardholder agreement before you sign up with a new credit card and make sure you understand all the associated costs. Then, choose and use your cards responsibly so you can avoid the four fees mentioned here.

Topics: Credit Cards, Cash Back & Rewards

MOVED Here's How Much a Single Percentage Point Can Change the Cost of Your Loan

Posted by Dana George on Dec 24, 2019 2:00:00 PM


When it comes to taking out a loan, interest rates and terms make all the difference. Don't be fooled by monthly payments -- what matters is the total cost 

We humans do strange things. We hit the elevator button several times, believing it will speed up the process. We check for bad guys hiding in the closet and behind the shower curtain as soon as we enter a hotel room. And we worry more about our monthly payments than the total amount a loan will cost.

That last one is straight-up silly. Paying more than necessary for a loan is like throwing money into a fire and watching it burn.

Two pairs of hands poring over loan calculations weighted down by a tiny model of a house.

The new car

Loan terms matter, no matter what you're shopping for. For purposes of illustration, let's say you're on the hunt for a new car and fall in love with one in a dealer's lot. The salesperson mentions the price and you swallow back your surprise. It's several thousand dollars more than your cool-headed research from home told you it should be. 

The salesperson insists that the number you've run across online is the manufacturer's suggested retail price -- and that demand for this particular model is so high that people are willing to pay much more.

You wisely turn to leave, but the salesperson stops you and asks what your ideal monthly payment would be. You are invited to have a cup of coffee while the salesperson speaks with the finance department. A few minutes later, miracle of miracles, you're informed that the dealership wants your business so much that they're willing to offer you special financing. In fact, they've crunched the numbers and were able to "get close" to your desired monthly payment.

By now, you've imagined driving the car off the lot and are emotionally committed. You don't worry that the annual percentage rate (APR) the dealership offers is 1% higher than you expected. How much damage can 1% do? 

They also tell you that you'll need to stretch the loan out over 72 months in order to keep your payment down. You were hoping for 60 months, but decide you can live with a longer loan. 

You want that car so much that you agree to terms without crunching the numbers and without thinking about how much you will pay in total. 

The difference a percentage point makes

Take a look at these comparisons of different interest rates on a 60-month and 72-month auto loan for a $36,000 car. If you take out an auto loan for 6% over a 60-month period, you'll pay a total of $41,759 -- with $5,759 in interest charges over the course of the loan. 

But if you agree to 7% instead, you'd pay an additional $1,012 in interest. And, if you extend that same loan for an extra year at the higher rate, you might lower your monthly payments, but you'd pay a total of $44,191. That's almost $2,500 more than the total cost of the five-year loan at 6%.

Charts like these might help you walk away from bad deals. Each shows how much more a single percentage point will cost you over the life of a loan. 

60-month loan

Interest Rate

Monthly Payment 

Total Interest Paid

Total Paid

4%

$663

$3,780

$39,780

5%

$679

$4,762

$40,762

6%

$696

$5,759

$41,759

7%

$713

$6,771

$42,771

8%

$730

$7,797

$43,797

9%

$747

$8,838

$44,838

10%

$765

$9,894

$45,894

Data source: Author calculations.

72-month loan

Interest Rate

Monthly Payment 

Total Interest Paid

Total Paid

4%

$563

$4,552

$40,552

5%

$580

$5,744

$41,744

6%

$597

$6,957

$42,957

7%

$614

$8,191

$44,191

8%

$631

$9,446

$45,446

9%

$649

$10,722

$46,722

10%

$667

$12,019

$48,019

Data source: Author calculations.

Understand your loan terms

No matter what you're shopping for -- whether it's a home, refrigerator, lawnmower, or new credit card -- interest rates matter. Agreeing to pay a single percentage point more in interest is like allowing the bank to siphon extra money from your account each month. 

One surefire way to avoid bad deals is to always ensure you understand the loan repayment terms and to keep an eye on the total cost rather than the monthly one. Another is to get your credit score so high that lenders compete for your business by offering the lowest possible interest rates. 

People with very poor credit scores may not get approved for loans at all, whereas those with very good or exceptional scores will qualify for better rates from lenders and more credit card perks or rewards.

Boosting your credit can save you money. There are lots of ways to improve your score, but ultimately it comes down to paying your bills on time and minimizing the amount of debt you carry. And whatever your score, don't forget that you always have the power to walk away from a bad deal.

We're all human. We'll continue to self-diagnose based on the latest Google search results. We'll still touch a plate the second a server warns us it's hot. And we'll still make financial mistakes. What makes us smart humans is correcting those mistakes so that next time, we can get it right. 

Topics: Personal Loans