According to Consumer Reports, the highest ranking credit cards were issued by American Express, Discover, and credit unions. Consumer Reports surveyed 36,000 cardholders and found that USAA Federal Savings scored the highest with 95 points out of a possible 100 points. The lowest ratings were earned by Direct Merchants (67 points) and Washington Mutual’s Providian (61 points). The three highest rated cards charged between 9% and 11%, showing that if you want your customers to be happy then you shouldn’t charge them such exorbitant interest rates (Direct Merchants and WaMu’s Providian charged 17%).

Here’s a little customer service tidbit for those card issues who weren’t so good:

Overall, 27 percent of consumers who called customer support reported problems in getting help from representatives. The respondents reported unreasonable waits, difficulty navigating voice systems, or having to make multiple calls to speak to several staffers.

Source: CNN Money

Yahoo Finance reported in a weekend edition article that credit card companies were turning towards creating flashier cards in order to entice consumers to use them. American Express is making some fancy card that “folds in half and pops out of a silver case attached to a key ring.” J.P. Morgan Chase will be offering a Battlestar Galactica themed card that features a “fiery red, outer-space-themed card.” You’ve also probably seen something MBNA did back in the day where they made cards that tapped into your allegiance to your college or your favorite sports team.

Don’t let the cool factor of your card sway your decision on what you should use, let the money do the talking. Get a solid boring looking cash back card that will pay you, not a stupid fancy looking card. No one will see you when you use your credit card, no one cares what your credit card looks like, and it still offers the same level of credit as any other card… get something with cash back.

This is another trick by credit cards to get you to use a card that may be sub-par, don’t let them trick you.

The hardest credit card to get will always be your first card since you will have no credit history for a creditor to review and base a decision on. They’ll strictly look at your current income and give you a limit that’s small enough so that you won’t bankrupt yourself too quickly, but a lot of creditors aren’t willing to do that when there are so many other fish in the sea. So, where should you turn for your first credit card?

If you’re a student, I recommend the Citi mtvU Platinum Select Visa Card because it was designed specifically for college students. Since it is designed for college students, students with little or no credit history are more likely to be approved for that credit card so it makes a great starter card for someone without any credit. Not only do you get your first credit card but it will give you 5% in points at places like the movies, bookstores, and restaurants - places most other cards don’t offer cash back incentives. You also get points for getting good grades and paying bills on time, hopefully things you’ll do anyway. If you’re a student, don’t skip this card.

If you’re not a student, try applying for the Citi Platinum Select Card, it’s nothing special but worth a try. If you are rejected, consider getting a credit card from a gas station or a department store. They’re usually more relaxed in their credit history reviews because they typically come with low credit limits and so they’re easier to get. Once you get one, start buying small amounts and paying them off to demonstrate responsibility.

Once you get that first card though, watch out! Before you know it you’ll have a mailbox stuffed full of credit card applications and preapprovals!

It’s the holiday season and it’s very easy for consumers to swipe a card than pull out cold hard cash when it comes time to check out at the register. Before you swipe though, think about whether or not you’ll be able to pay for this purchase by the time the balance is due. If you won’t be able to, don’t swipe it. Credit card interest rates, on average, are in the double digits. Use this calculator (Java required) from Dinkytown.net to figure out how much more in interest you’ll be paying if you charge those purchases and take your time in paying it off.

Now, if you know you can pay off the amount in six months (if not six, hopefully twelve), you can apply for a credit card currently offering a 0% balance transfer with no fee. By taking advantage of one of these credit card offers, you won’t have to pay any interest for twelve months - which hopefully will give you ample time to build up the funds to pay off your holiday spending spree.

The Citi Professional Rewards card has been out for quite a while now and now Citi has announced the introduction of the Citi Professional Cash card, which is like the original Professional card except it offers cash back instead of ThankYou reward points. The only major difference is the annual limit of $500 in cashback versus the 100,000 ThankYou Network reward points, which is the equivalent of $1000 dollars and the rewards card comes with $100 worth of points for gift cards with first purchase.

So, what do you get with the no annual fee card?

• Fits your professional lifestyle. Designed to make organizing expenses and getting reimbursed easier than ever.
• Earn 3% cash back on purchases at restaurants, gas stations, on auto rentals & at certain office supply merchants. Earn 1% cash back on other purchases.
• 24/7 Personal Business Assistant helps with travel, marketing, discounts & more.
• Online Expense Organizer helps track, categorize and report expenses for billing, reimbursement and taxes.
• Immediate one touch access to a live customer service representative.

Earlier this month, Citi got rid of the Universal Default clause in its user agreements meaning they can’t raise your interest rate if you miss or are late on payments to other creditors. I can understand how universal default was a safety measure for credit cards because of how low the minimum payments are compared to other expenses (such as a monthly electricity or water bill) but this clause screamed of abuse. The idea behind interest rates are that the higher the rate, the riskier the debt because there is a possibility of default. To combat default, creditors must take in more interest in order to offset any potential losses.

The universal default clause protects a creditor because they can detect a potential problem with a debt much earlier and make moves to counteract it by raising interest rates. This, of course, means that someone who borrowed at one interest rate can potentially get hosed when the lender increases the rate for any reason (which they are allowed to do, you know this before you get a loan). Either way, I think the universal default was probably abused because there’s no reason for a credit card company to “feel bad” for you. They are in the business of making money and making money off you and the stores you shop at, but it is nice to see when a big card issuer takes one of their weapons off the table in response to consumer pressure.

Two cycle billing is the practice of looking at two billing cycles to calculate your interest payments instead of just looking at the prior billing cycle. If you pay off your balances every month, then it doesn’t really matter to you how many cycles they look at to calculate your daily balance; but if you were to need an extra month to pay off something, you could be whalloped with additional interest payments on stuff you already paid for.

For example, let’s say you spent $5,000 in January and paid it off within the grace period. In February, you spend $50 but you need a little while longer to pay it off. The interest payments on that $50 isn’t just on the $50, it’s the average of the $5,000 you already paid off in January with the $50 for February. It’s really sneaky and it’s really unfair, I don’t know why credit cards thought this would escape scrutiny.

With so many credit cards out there, there is no reason why you should get one with two-cycle billing.

On my other blog I’ve written extensively about taking advantage of 0% balance transfer offers and it’s something I’ve touched upon here a few times in the past but now it’s time to bust out the 0% Balance Transfer Arbitrager’s Toolkit - a set of links (all to my other blog) that will help you figure out how to take advantage of the 0% offers given by the credit cards.

1. First, read this introduction to 0% balance transfer arbitraging to learn about how the whole thing works.
2. Now that you understand the concept, consider opening up an account at Emigrant Direct or ING Direct. There are referrals to ING Direct where you can get $25 for a $250 deposit, no such offer exists for Emigrant.
3. Now, start applying for some of the cards on this list of cards with 0% balance transfer offers. I recommend Citi over Discover because Citi will write a check and send it directly to you.

Share of wallet (or something similar to it) is the term used by credit industry professionals and what it means is how much of your spend a particular credit card company benefits from. For example, I have a couple credit cards in my wallet right now, each one serving a different purpose, and each one of those has a share of my wallet, along with cash, gift cards, etc. Credit card companies want to get in the game, they want to just make it into your wallet because once they get there, they know you’ll use it. Even if the percentage is small, such as my Discover Gas card, which I use only for gasoline purchases; they know that sometimes I might reach for that Discover card if I’m close to a cashback rebate payout or if I just don’t care what card I’m using (for those places that you only ever get 1% cashback).

This is why places offer 0% balance transfers or 0% purchases or free promotional gift cards for you to sign up, they just want to get a piece of the action and get in the game - i.e. get into your wallet (or purse).

You might have seen that term, 0% balance transfer arbitrage, floating around the internets, one personal finance blogs, on quick money blogs, on any number of sites that deal with money and getting more of it. 0% balance transfer arbitrage is where you take advantage of an offer to earn a little more money for yourself on the side.

In the beginning, credit cards offered promotional 0% offers to folks who were willing to roll over their existing credit card debt to their card. The reason for this was that after the promotional period, the card holder would likely stick with the new card and thus make their interest payments to them. This is a win-win for both sides - cardholder gets 12 months of 0% financing, credit card company gets to earn interested after the promotional period.

Enter in the savvy credit card user. Now, with the ease with which you can get a balance transfer, many folks are getting a 0% balance transfer check and depositing it with a high yield savings bank like ING Direct. What this means is that you’re borrowing money at 0% and earning 4.6% (some accounts have as much as 5.05%) on it, a $10,000 balance transfer would net you $460 for absolutely no work whatsoever. $460 is nothing to sneeze at.

Are there pitfalls? Certainly, the effect on your credit score will be negative - but if you don’t plan on getting any big loans in the near future, this could be an easy way to boost your cash flow with little risk. Another pitfall is not watching the terms closely, there are cards that will give you a 0% balance transfer but charge you a fee, which can kill the deal. It’s important to double check that you’re getting a no fee balance transfer when you execute it.