Even consumers who have good credit scores or who pay on time may face startling news under the first of many sweeping policy changes made by credit card companies in response to government regulations. New lender’s behaviors will swing into effect in February 2010, when the first provisions of the government’s Credit Card Accountability, Responsibility and Disclosure Act roll into law.

Get Ready for Sudden Account Closures

The Credit Card Act requires that your lender inform you within 45 days of any policy terms and changes, and many borrowers have already witnessed sudden shifts in rising interest rates and shrinking credit lines. While many Americans have maintained solid credit ratings through the economic slump, credit reporting agencies discovered a six-point drop in scores over the first three quarters of 2009.

That means that even good credit customers with years of brand loyalty are being jettisoned by banks and other lenders who are scrambling to regain equilibrium. They’re canceling accounts and letting customers know after the fact. Imagine making a purchase and being informed by the register clerk that your card has been declined!

Consumers Dazed and Outraged

Organizations like The New York Times, The Wall Street Journal, and ABC News have all published stories of stunned consumers who had maintained good credit yet found themselves shipwrecked on a dead piece of plastic, without hope at a restaurant, hotel front desk, airport terminal, or cash machine.

The very act of canceling your credit card without notice can send a ripple across your life as you find:

• Your “credit utilization” number–a detail that shows how much credit you’ve used or still have available–is popped towards the high end, informing lenders and weakening your credit score.
• Your insurance premiums suddenly leap, responding to the risk of a credit score turned suddenly downwards.
• Your failed transactions created by cancellation spark immediate penalties and fees.

Even if you’ve been diligent and worked hard to establish and maintain solid credit, you can fall prey to the latest tactics of credit card companies. Burned up? You should be!

Consumers Fight Back

First, let’s look at some likely scenarios for the new year when the act takes full effect. Credit card companies will probably raise interest rates when consumers try to shift their balances to another card. Your lender may also reduce your credit line.

Credit cards that once were free to own may now begin charging annual fees. Owners of reward cards, prepare for charges. Another adjustment may mean banks will scrap grace periods of 20-25 days they currently offer consumers in which to retire the balance before interest rates apply. More reasons for consumer outrage.

If you hope to fight back, you’ll have to change your way of handling credit. The companies are changing, and so should you. To wit:

• Become Aggressive in Retiring Balances. You’ll have a better chance of fighting the high utilization stigma by keeping your utilization at 30 percent or lower. Banks may fight back by lowering your credit line, but you’ll keep your card.
• Create and Maintain a Healthy Emergency Find. Get back to savings. Hold sufficient cash in case you need it for a unexpected medical costs, a home or car repair, or an emergency flight to visit a family member.
• Have a Backup Credit Card. Shop around for a new card with low interest rates and no annual fees to use if your existing card is suddenly cancelled. Remember to use your backup at least once every six months, even if you pay it down immediately. Credit card companies may pick off unused, dormant cards like ducks in a row.
• Monitor the Credit Bureaus. All three of America’s manor credit reporting agencies allow you to receive a free report on your credit scores each year. Websites like AnnualCreditReport.com can facilitate processing. You may not need all the for-fee services charged by some credit reporting businesses, but having a simple notification service that pings you about any and all sudden changes can be worthwhile, especially if you’re applying for new credit from other lenders.

Account Closed? Now What?

You’re not powerless and you’re not alone. Many American consumers are already outraged by their credit card company’s behavior. Do what most consumers do when they’re mistreated: take your business elsewhere. If it was your primary banking institution that closed your card without notice, withdraw your funds and open an account elsewhere.

Search around for consumer-friendly lenders like credit unions or larger community banks with a history of good-consumer relations, such as Simmons Bank or USAA. But before you go, write about your outrage to the president of your current credit card company and contact your local consumer protection agency or better business bureau.  Call or write your local and state legislators.  Find out which representatives have posts in banking or financial institution committees.

Despite their inconsiderate treatment of loyal customers, banks and lenders are responsive to a poor public image.  Organize visits to their headquarters or to offices of legislators.

There is a lot of fuss surrounding FICO scores and credit scores in general. These scores need to be understood for what they are, a tool to guide companies in the management of risk. FICO is designed to predict the likelihood of a customer defaulting in the next 12 months. FICO is designed to replicate the types of decisions that people made in the good ol’ days. It’s important to consider the things that can affect your credit history. It is my view that people shouldn’t look only to manage their FICO, but to actually exhibit the behaviors that make them a good credit risk. In other words, pay your bills on time and don’t take on a lot of debt. Good FICO scores naturally follow with these habits.

So what do lenders REALLY look at? When I was a credit analyst, (yes, actual people do make some of those decisions) our decision-making process was based on the likelihood of the customer to pay back his or her obligations. The three questions we asked surrounded Ability, Stability, and Willingness to Pay. There was no magic formula; it was the overall picture of the consumer. First, I must establish that the applicant is capable of paying.

1. Ability: In short, can this person afford the payments based on the income information provided? Does he or she earn enough to manage this credit card account? Does the credit report show signs of additional expenses that aren’t disclosed in the application?

There are many ways to evaluate a person’s ability to pay obligations. Ability is primarily a function of income and the amount of debt. The point here is that the consumer should have enough money to make the payments consistently. So what does this mean to you? Based on your monthly income, will your credit card payments be less than 10% of your take home pay? This is a rule of thumb, and the less credit card debt you have, the better off you are in my opinion.

Your other obligations include payments for your home, car, student loans, other card debt, and any sales finance accounts. If your income isn’t enough to cover these, expect to be declined for “insufficient income.” Companies look to see if your debt level is in line with others in the income band listed on your application. Another question is will you be able to make these payments in an ongoing fashion? This leads us to the next category.

2. Stability: Does the applicant have a consistent source of income? Is he or she likely to in the future? This question is answered by information about the length of time someone has been on a job, lived in a home, and used credit.

I also look at whether applicants are renters or homeowners and what the nature of their employment is. Someone who has been in the same job for a long time has established consistency of income. If someone is relatively new to a job (less than six months), I would look to see if he or she has remained in the same industry to indicate growth of experience over time.

Living in the same place for a while can indicate that your current financial scenario has been similar for a longer period of time. Also, people who move around a lot may be more difficult to contact if they enter collections than those who stay put. Again, these are not “make or break” traits, they just help flesh out an evolving picture of an applicant. Now that I’ve established that the consumer has a relatively stable source of income that can support the loan payments, I need to know that paying on time is not an unknown concept.

3. Willingness to Pay: Regardless of income and cash flow, has the consumer paid bills in a timely fashion in the past? I had a friend who was the daughter of a multi-millionaire. In her own right, she was also a millionaire. She always complained about being declined for credit; after all, she could afford the payments.

What she didn’t realize was that she failed test three. By being sloppy and not paying her bills on time, she sent lenders the message that she was irresponsible and probably wouldn’t pay them on time either. Showing that you’ve made on time payments is the best way to demonstrate to a potential lender that you’re likely to pay it on time as well.

Unpaid loans are obviously a loss for a lender, but late payments are problematic too. They are expensive because they require collection efforts. It’s hard for banks to tell the difference between someone who occasionally mails a check late and someone who really can’t pay, so an analyst will assume that the consumer had problems making the payment.

So think about your own Ability, Stability and Willingness to Pay. Would you lend to you? Do you have a history of paying your bills on time and receiving steady income? If so, you’re probably a pretty good risk. As a follow-up to this article, in the next weeks, we will examine two potential borrowers and see how one loan officer would make a decision.

I would welcome your comments in our active credit card forum.

1. The Credit CARD Act Is Discriminatory
Sec. 201.B of Reg B issued by the Governors of The Federal Reserve states, “The purpose of this regulation is to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract); to the fact that all or part of the applicant’s income derives from a public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The regulation prohibits creditor practices that discriminate on the basis of any of these factors.” Emphasis added.

The Equal Credit Opportunity Act was a major step forward in the advancement of rights for all adults. There was a time, not so long ago, when wives were denied credit because it was taken for granted that their husbands could handle finances for them. How is requiring the parent of someone under 21 (a legal adult in the United States) not the same? The CARD Act completely negates this principal and should be considered contradictory to Reg B. The “test” for discrimination in lending is “disparate impact”, meaning that ANY policy that resulted in one of the protected groups being adversely affected (including under-represented) was de facto discrimination. That’s why banks can’t get around these explicit provisions in marketing by using zip code (commonly known as redlining–it’s illegal), telephone listing (historically many households had the phone listing in the husband’s name), and other such less-than-savory tactics.

When I was a credit analyst at a credit card company, we were always taught that Reg B could easily be remembered by the idea “be fair.” The government regulates that banks CANNOT discriminate on many factors, including age. By requiring “independent means” of paying back the debt (namely, bank statements), students effectively will not receive credit because the system investment required to manage deposit verification simply is not worth the hassle. There’s a reason mortgages have upfront fees to cover that sort of data gathering. Would this part of the act have passed if we said that senior citizens had to have their children sign on their financial obligations? Once we attack this principle, what’s next–an IQ test to enter into a credit agreement?

2. The Credit Card Act Is Too Limited in Scope
So let’s be clear, someone under the age of 21 cannot be trusted with a credit card but can be trusted to go to war for this country, vote and participate in the democratic process, and can TAKE OUT A STAFFORD LOAN from the Department of Education? The average credit card debt for graduating students is said to be about $8,500. If a student takes all of the Stafford loans available to a dependent student, he/she has $27,000 in debt. It could be argued that this debt load is far more damaging than a credit card. After all, default on some student loans and your wages could be garnished. To limit the student marketing restriction for lending products only to credit cards seems to be woefully inadequate–if we do indeed believe that students can’t manage their finances. Students should feel safe now that Congress is watching out for them (sic).

3. The Credit CARD Act Will Stifle Innovation
Bill Gates was a Harvard drop out when he founded Microsoft. Facebook was founded in a dorm room. What other brilliant ideas will be stifled because a young entrepreneur does not have a credit card to cover his or her expenses? Ever tried to buy an interview suit with a debit card when there’s only $45 in your checking account and your tips from bartending Saturday night haven’t come through? Credit cards are a great float tool for students.

Also, they allow students the means to explore the world. Many students use their credit cards to travel for Study Abroad, knowing full well that they will need to pay for it later. Credit cards made it possible for me to travel all over Europe in a way that I will never have the freedom to do as a working adult. This experience has made me a better citizen of the country and the world. This experience was worth having a little bit a revolving debt when I graduated. The ideas that I developed during my study abroad year made all the difference in my ability to relate ideas and experiences to my work life. I would have a much narrower perspective without it and would be a less creative and innovative employee and citizen.

4. The Credit CARD Act Will Hurt an Entire Generation’s Access to Credit
Since FICO and length of credit history are key drivers of lenders’ decisions when making AND pricing auto and mortgage loans, a lack of credit history will make lenders less likely to grant credit to these students later in life. Imagine being offered a car note 200 basis points higher than someone ten years older than you because Congress made it illegal for you to have a credit card. Don’t forget, car insurance companies use credit scores to quote rates. Scary isn’t it?

In short, in their rush to pass a bill that would institute new reforms to the credit card industry, Congress forgot to ask themselves about the unintended consequences. Students are an easy target because they have fewer lobbyists screaming on their behalf. Once this law is enacted, a student who is denied credit based on this law should launch a test case for discrimination. Lawyers, start your engines.

But now, consumers are going to face a “triple whammy” under changes made by lenders that will alter the credit card industry and end whatever benefits consumers thought they received by leapfrogging their balances. Small business owners have already felt the heat as new federal capital regulations burst the easy pipeline to credit lines. Under federal laws that go into effect next February, lenders will be forced to apply your payments to the account portions that are attached to the highest rate of interest. In reaction, many lenders may extend longer deals on “no interest” offers. Ultimately, it can reduce finance charges.

Here are three trends that may materialize under the new regulatory provisions:

Balance Transfer Offers Will Bear Higher Interest Fees

In reaction to lower interest rates, some lenders will increase the percentage on balance transfer fees when consumers come looking. The practice is already underway. While fee limits are cut, banks are already raising transfer charges to recoup their losses. Bank of America saw it coming and boosted its balance transfer fee to 4%. Other lenders, including HSBC, Chase, and Discover have taken offers with 5% fees to the marketplace to test the waters. If you’re paying upwards of 20% on an expired offer for financing electronics or furniture, the up-front 5% transfer fee may look attractive. But the increased fees come with limitations on benefits you might receive for other transfers. It can be tricky.

New, Shorter Introductory Periods Will Spark Faster Repayments on Balances

Previous promotions granted consumers as much as a year before they accrued finance charges. But with the new realities, account managers are looking to earn interest as quickly as possible. That means shorter introductory periods that automatically apply finance charges over the promotion period of your balance. Ouch. The CEO of Discover Financial let loose in a conference call his expectations for dramatic cutbacks on the durations for balance transfer promotions. This is probably a harbinger of how other lenders will react.

Balance Transfer Offers for Zero Percent Will Evaporate

Credit card companies still think that balance transfer offers are great bait for attracting customers from their competitors, but they’ll need to turn a profit under the new conditions. Hence, you’ll find more transfer promotions in the 2.99% to 4.99% range than the zero percent rate consumers have come to love. The net result is that you may have to take the hit of paying small finance charges in lieu of paying higher interest rates that you assumed with prior promotions.

The “triple whammy” reflects the credit card industry’s drastic need to stop the bleeding on its own debt, which means that consumers–as always–will bear the brunt. That may mean the game of credit card musical chairs is over.

Regulators have kept an eye on minimum payments on credit cards for years, with guidance in 2006 from the Office of the Comptroller of the Currency (OCC) to raise minimum payments for many banks. Many credit card issuers responsded by changing their minimum payments to 1% of the principal balance, plus any interest charges and fees. At the time, lawmakers expressed hopes that new rules would prevent the strung-out accounts described by Dubner and Levitt. Likewise, representatives from the banking indusrty complained during Congressional hearings that higher mandatory credit card payments unfairly limited lenders’ abilities to generate profits. The world didn’t end, and American cardholders grew accustomed to paying off more of their balances during each cycle.

Chase Voluntarily Rises Minimum Credit Card Payments

Recently, at least one major card issuer has exceeded government expectations by requiring some customers to pay an eye-popping 5% of their total balances each month. Chase will be raising minimum payments to 5% on some accounts starting this month. Some media outlets have portrayed the actions of Chase as anti-consumer. In an economy where household cash flow has become more important than ever, surrendering 5% of an outstanding account balance can feel burdensome. However, heightened monthly minimums offer “tough love” that can actually elevate our country’s financial climate in three ways:

 Consumers preserve more of their capital
 Banks recapitalize their loans more quickly, limiting risk.
 Consumers are less likely to pay other fees, such as over limit fees, since debt repayment is accelerated.

Banks Put Profit at Risk, Yet Consumer Advocates Cry Foul

From a profit standpoint, banks have everything to lose by adopting this strategy. Card issuers must adapt their screening process to find only those prospective customers who can afford substantially larger monthly payments. Marketers must find ways to encourage more frequent card use to offset lost interest earnings with higher credit card interchange fees. And banks find themselves in the unlikely position of making decisions in the best interests of their customers instead of for the benefit of a bigger bottom line.

Yet, some consumers and consumer advocates still don’t see it that way, especially working Americans who live paycheck to paycheck. Using a credit card to weather a sudden illness or a job loss has become all too common. Asking customers to surrender more from their paychecks or benefits can seem unfair and cruel. And economists worry that paying off too much of our credit card debts during a recession can delay a much-needed recovery driven by spending.

Still, higher minimum credit card payments could be exactly the kind of tough medicine we need to help accelerate our country’s long-term savings. Some consumers still see the change as “retaliation” by credit cardissuers against recent industry reforms and that is unfortunate. Credit card issuers are simply trying to limit their risk and we as consumers are actually benefiting from this in the long run.

Going forward, banks must work even harder to help educate consumers about credit for higher minimum payments to become widely accepted and understood. And consumer advocates, regulators, legislators and members of the media need to look at both sides of the coin.

Just my two cents — I would certainly welcome your thoughts in our active credit forum!

1. The Ailing Airline Industry Wants You to Pay for Your Tickets

Airlines have taken knocks in the press lately for hiking fares and adding a laundry list of fees. One airline has even announced that it would charge a transaction fee to customers who try to pay unexpected fees in person at the airport! It’s not surprising, then, that carriers have scaled back frequent flyer programs.

For example, some airlines that once offered round trip travel at 20,000 miles now require 25,000 miles for the same destination. Also, airlines can even require fees to maintain a balance from year to year. Carriers compete on price more often than on loyalty these days, making most frequent flyer credit cards beneficial only to true road warriors (many of whom probably prefer to stay home when they’re taking time off).

2. Redemption Fees Clip the Wings from Frequent Flyer Airline Programs

Even if your purchasing patterns suggest that you could earn enough frequent flyer miles to make a reward credit card worthwhile, check the fine print. Some credit cards may charge a redemption fee to transfer your reward points into actual frequent flyer miles. Moreover, most generic airline reward cards that are not branded with a particular airline won’t even allow you to transfer your points to your existing frequent flyer mile accounts. You could also even be “double-dipped” by an airline that charges a ticketing fee when you want to exchange your miles for a flight!

3. Steep Costs Ground the Added Value of Airline Credit Cards

Airline reward cards feature some of the highest annual fees and highest interest rates of all credit cards. Although marketers at the airport might try to tempt you with “added value” features, like upgrades to elite status or no blackout dates, annual card fees as high as $100 can make a typical traveler feel less than valuable. You may be among the minority of Americans who charge enough to justify the cost of all those perks, but definitely do the math.

Here’s a quick scenario to consider. If you are only spending a $1,000 a month on an airline miles card that has an annual fee of $80, it will take you over 2 years to earn a free ticket (assuming that you have to earn 25,000 points for a roundtrip ticket). During that time, you will be out $160 in fees (2 years X $80). If the cost of your flight is $250, the true value of your $250 ticket is only 90 bucks ($250 less $160). Obviously, not exactly a way to get rich quick or slowly for that matter.

4. Cash Back Credit Cards Will Likely Get You There Sooner

Fortunately, there’s a less expensive alternative that can still help you cover the costs of that dream vacation. A few cash reward credit cards, like cards offered by Charles Schwab and Fidelity Investments, offer 2% cash back on all purchases. In the scenario just described above, you would have earned a generous cash rebate of $500 ($25,000 X 2%) had you used a cash reward card.

Considering the additional fact that very few cashback cards have annual fees, it’s easier and quicker to take that dream vacation to Hawaii using a cashback card. Not only will your card rebate likely be higher, you have more choice. For example, you can use your cash rebate to pay for discounted fares on any airline you choose to any destination you prefer. Or you could use your cash reward for any other purpose under the sun.

The bottom line is that if you want to get to your destination quickly and inexpensively, paying with a cash rewards card is the best way to go. You control your itinerary, not the airline, and you avoid a lot of fees in the process. Simply put, “cash is king” my friend (particularly in this environment)!

Debit cards offer convenience and are becoming increasingly popular with consumers, but they still don’t offer many of the same benefits as credit cards do. In fact, I can think of five specific areas where credit cards offer significant advantages over debit cards and many prepaid cards:

1. Dispute Protection

Talk to any merchant and they’ll tell you that nothing unnerves them like a chargeback notice. If you call to dispute a charge on your credit card account, merchants typically get a fax or e-mail notifying them of your concern. Unless the merchant can prove that they are not liable, your account will normally get credited for the disputed charge. However, the impact on your wallet is more profound if you use debit cards, since that cash has already been withdrawn from your bank account. Disputed credit card charges typically get credited very quickly, so you’re out of pocket expenses are minimized.

2. Fraudulent Charges

It doesn’t take long for card numbers from a lost or stolen wallet to wind up getting used at the mall or being sold through the “internet black market.” While banks often provide some protection against debit card fraud, unauthorized debit card charges hit your bank account immediately and can weeks to reverse. You may be liable under Federal Trade Commission rules for up to $500 of debit card fraudulent charges, but the same law caps your liability for stolen credit card charges to just $50. It is also worth noting that many issuers offer zero liability policies that totally eliminate your out-of-pocket exposure by covering 100% of unauthorized charges.

3. Extended Manufacturers’ Warranties

Many credit card issuers partner with retailers and manufacturers to extend warranty periods on popular consumer items. Some credit cards facilitate replacements at retail customer service counters, while others cover the costs of repairs at authorized facilities. Either way, credit cards can help alleviate unexpected frustration. Warranties are often extended up to a year beyond the manufacturer’s original warranty.

4. Credit Card Purchase Protection

When some punk stole some new lawn equipment from the shed in our back yard, I didn’t get upset for too long. I simply called the customer service number on the back of the credit card. Within a few weeks, I got a check in the mail for the full purchase price of the equipment. Many credit card issuers add value by insuring recent purchases against theft or damage for up to 30 days — consult your card issuer for details. Had I bought the same equipment with cash, I would have had no recourse.

5. Bank Overdraft Fees and Other Related Expenses

I call this “avoiding the hassle factor.” When you lose a debit card, your checking account becomes vulnerable to much more than theft. If you don’t immediately notice money missing from your checking account, stolen funds can cause your legitimate checks and bill payments to bounce. Many banks can ding your checking account up to several times each business day for overdrafts, even when it’s not your fault! In addition, vendors like utility companies and retail stores may charge their own non-sufficient funds fees, causing your bank balance to spiral further downward. Using credit cards consistently insulates you from this kind of “collateral damage”.

Remember that enjoying the added value of carrying credit cards doesn’t have to result in extra credit card debt. The key is to be savvy. Carry just one or two credit cards so you can limit your risk and enjoy credit card perks. By paying down your purchases in full every month, you can get all of the benefits of responsible card usage without any of the downside. I love making my cards work for me instead of being enslaved to my credit card companies like so many other consumers. I hope you share my convictions and can join me in my crusade!

What do you think about using credit cards instead of debit cards? We welcome you to share your ideas on our active credit card forum.

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Even though it seems like major banks have been rolling up the red carpet instead of rolling it out for new customers, I found a handful of money-saving deals for savvy credit card users. Even in the midst of the credit crunch, there are still some real jewels out there and these are among my personal top picks. If you don’t think your card measures up, be sure to view our ratings of credit cards on CardRatings.com. Free Credit Score from American Express

Normally, you’ll want to check your credit score before you apply for a new credit card. In this case, American Express wants to treat you to a complimentary credit score when you get approved for their new Clear Card. Because your free annual credit reports from the three major credit bureaus don’t include a free score, this benefit can save you a few bucks and the hassle of requesting your score.

The big benefit to you is that you can see your credit snapshot from a lender’s point of view. The offer also includes a tutorial on what your credit score means and how you can improve it. This no fee credit card also includes a host of travel perks and other benefits. Please note that the free credit score is not a FICO credit score, but rather a score that is offered by the credit bureau Experian (that competes with FICO).

1.99% Interest on Credit Card Balance Transfers from Iberia Bank

I can’t find another offer like this on the market right now (and believe me, I have spent hours and hours looking). The Visa Classic from Iberia Bank allows cardholders to transfer balances at 1.99% interest for six months! This 2% fee offer is truly amazing considering how some transfer fees have gone up 300-400% in the last several months.

If you think you’re going to get slammed with a heavy interest rate after your teaser rate expires, prepare for a pleasant surprise. Iberia Bank Visa Classic cardholders enjoy ongoing interest rates as low as 8.75% (based on your credit profile)! This Louisiana-based bank clearly wants to grow their customer base with an offer like this and they have a proven track record. CardRatings.com has listed Iberia as having one of the best low rate credit card offers in the country for the past decade.

Schwab Credit Card Offers 2% Ongoing Rebate

In an era when card issuers seem to find any excuse to scale back perks and benefits, it’s refreshing to see a simple credit card rebate program with a very aggressive rebate. Connect a Schwab Bank Invest First Visa Credit Card to your Schwab One brokerage account, and you earn a full 2% on all your purchases with no limits, no minimums and no spending thresholds! Your cash back rebates get deposited directly into your brokerage account every month for you to invest. Or, if you prefer, you can actually withdraw your rebates in the form of a check to yourself- in this capacity, the card can function as a quasi cash rebate credit card.

Bonus Rebates from Fidelity Investments

Fidelity now offers a trio of American Express branded cards that can help you save for college or retirement. One card even gives you a chance to invest in a regular brokerage account or a mySmart Cash Account. Like the Schwab card, this rebate is unbelievable. But, the real beauty of the Fidelity cards in my humble opinion is the preferential tax treatment that can take advantage of. Your rebate can grow in a tax-deferred account. The end result is a very cool way for you to supplement your retirement savings or help fund your child’s college education! The Fidelity website shows you how your rebate can grow into an even bigger credit card reward when reinvested over time.

5% Gas and Airfare Rebates for Military Families and Red Cross Volunteers

Qualifying for membership in a credit union carries special perks, like those offered through the Pentagon Federal Visa Platinum Rewards Card program. Members enjoy a whopping 5% rebate on gasoline purchases, 2% cash back at supermarkets, and 1.25% on all other purchases. Cardholders also get a 5% rebate on up to $4,000 of qualifying airfare purchases. Most PenFed members or their family members have served in the military. However, anyone can qualify for membership at PenFed by simply volunteering for the American Red Cross or by paying one year’s dues in an affiliated non-profit organization. A 5% credit card rebate on gas and an equally generous credit card rebate on air miles could really help ease the pain of summer travel expenses!

Remember to check the fine print on any credit card offers, especially when rebates and rewards are involved. Program details are often subject to change with little or no notice and to certain restrictions, so act fast if you want to learn more about these prime deals. As the name of my book entitled “How You Can Profit from Credit Cards” implies, I love making cards pay me back and hope you are getting your fair share of the bounty as well.

What do you think about these offers and do you know of any other “hot offers”? We welcome you to share your ideas on our active credit card forum.