How to Choose the Right Credit Card

By | Credit Cards, MasterCard, Visa

Credit card companies make every effort to convince you that their card is exactly what you need. How could you have possibly made it this far in life without their card? With bold letters on shiny plastic, there is certainly an initial appeal. Before requesting a card with your name on it, however, you should closely consider whether or not their offer is relevant to your lifestyle. When searching for the right credit card, there are a few things to keep in mind.

Choosing a credit card is similar to any other purchase. You want the lowest price possible with the most rewards and no hidden costs. Companies with unnecessary annual fees should be marked off your list first, followed by those with high interest rates. There are enough opportunities available with no annual fees and low interest rates that finding a reasonable offer should not be a problem.

Once you’ve eliminated the more expensive choices in your credit card search, you should begin to organize your options based on your individual needs. If you are a student with no credit history, a student credit card is a great way to get started. It is often easier to get approved for a student credit card than for a traditional card that requires extensive credit history checks and a good credit score. Secured credit cards are available to those with poor ratings who are longing to repair their credit. Those with good credit have access to a multitude of offers and rewards.

Rewards come in several forms. For the commuter or traveler, there are some cards that offer gas rewards, while others offer rewards that cater to frequent flyers. Additionally, some credit cards offer cash back on groceries as well as points that can be earned and applied to different prizes. However, keep in mind that these are only true benefits if you are paying in full each month.

Before choosing a credit card, be completely certain that you understand the terms. You may be offered zero percent APR at first, but how many months is that going to last? Your initial interest rate may be around 15 percent, but what will your interest rate be if you hold a balance or miss a payment? Read the entire disclosure agreement (even the tiny print).

Choosing the right credit card is easier when you look beyond the elaborate advertisements of credit card companies. A credit card is an essential financial tool when used correctly. With the right planning, you can build your credit history, improve your score and gain rewards through the use of your credit card.


Our Favorite Ovation Tool: Pay Off Highest Balance First

By | Credit Cards, Debt, MasterCard, Revolving Debt, Visa

Debt can be a heavy burden. While each payment slowly but surely helps you dig your way out of the debt hole, sometimes it only seems to get worse as time goes on. Your credit card payments start to resemble a game of roulette, and before you know it, you are sending the bare minimum to whatever bill comes your way first, doing what you can to keep your head above water.

It’s time to be honest with yourself. Is your payment schedule really helping you, or is it bringing you closer to financial – and mental – instability? Ovation has a payment tool that can restore your sanity.

Ovation has several financial tools designed to help you pay down your debts faster and save you the most money possible. The different payment schedules cater to individual needs, not only to rid you of pesky debts but to help you restore your credit as well. One of our favorite tools is the one in which you pay off your highest balance first.

Every debt comes with interest, and the more you owe, the more interest accumulates. This snowball effect packs quite a punch if not monitored. Therefore, rather than bouncing between different payments, choose to focus on paying the debt with the highest balance first. As tempting as it may be, resist the urge to deviate to other payments if at all possible. Once your highest debt has been paid off, continue to the next highest debt and begin to pay off that balance. Continue this process until you are debt free, at which time you can congratulate yourself on your victory in the battle against unmanageable debt.

Paying off the highest balance first is beneficial in several ways. Foremost, it is easier to manage. Payments are much less daunting when you are focused on one item on your list instead of several. Remember, your sanity is just as important as your financial stability. Paying off the highest debt also improves your credit scores. A high balance, especially if it is over 50% of the amount available on the card, equals a low credit score, and bad credit can limit you in a number of ways.

This helpful online tool is incredibly easy to use. With Ovation’s Highest Balance First Tool, you simply input your debt, and a payment schedule is created for you. Rather than keep up with the juggling act you have been performing, you can pay off your debts quickly. Our tools help you relieve debt and restore credit, granting you the serenity – and sanity – that you may have been missing.

Credit Card Act of 2009 Puts Consumers Back in the Driver’s Seat

By | Credit Cards, Credit Laws, MasterCard, Revolving Debt, Visa

Credit card companies have long been greasing the wheels of government with high priced lobbying, but in 2009 Congress struck a blow for the common man (and woman) – you know, the ones that actually voted for them. Few people know about the Credit Card Accountability Responsibility and Disclosure Act of 2009 and that’s exactly how the credit card companies would like to keep it, but this act puts the power back in the hands of the people and makes credit card companies accountable for their actions.

Follies of Youth

Most college students would likely contemplate selling a kidney if it meant a free pizza on Friday night. Money is tight and college cafeteria food is barely edible. It used to be that students going to sporting events or even walking around campus would be greeted by friendly credit card company reps who were passing out free stuff, from frisbees to t-shirts (letting laundry day wait one more day), just to get the students to fill out an application. It didn’t take long before thousands of college students had a lot of free shirts and a ton of credit card debt.

Credit card companies preyed on these groups because students were impulsive and an almost-sure money-maker. The credit card industry knew there were plenty of minimum payments and tons of interest to be collected from the free pizza generation. The Credit Card Accountability Responsibility and Disclosure Act of 2009 took away the credit card companies’ ability to market on campuses, much to the chagrin of dirty-shirted and hungry college students everywhere.  You can’t even get a credit card before you’re 21 anymore, unless you can prove you have income or have a co-signor. Credit card companies also can’t visit a sporting event or other venue to entice new customers without a valid reason for being there.

Interested in Interest

Credit card companies once had the ability to raise a person’s interest rates for almost any reason. Miss a few payments? Default on a previous credit card? Wear white shoes after Labor Day? Ok, so a fashion faux pas is a little exaggerated, but many people found their interest rates rising with little or no warning.  Your interest rate could jump by 18 points over night, and you were left holding the bag.

The Act has several provisions to protect the public from unreasonable interest rate increases. Companies now have to give 45 days notice before raising rates, so you can decide whether or not you want to keep the card. That 45 days is designed to give you time to pay off and close the card without incurring the new interest rate. It also keeps them from retroactively using the new rate on a balance in good standing.

We’ve all made credit mistakes, and credit card companies were taking advantage of that to increase rates if you were late on your payment by so much as a minute. The Act protects consumers by requiring a 45-day notice for increases in rate and, if you make six months of consecutive on-time payments, then your interest rate must be lowered back to the rate you had before the missed or late payments.

The main downfall of the Act is that it did not set a cap on interest rates. This means companies can still charge upwards of 30, 40 or even 50 percent interest if they want to.

Fees! We Don’t Need No Stinking Fees.

Credit card companies seem to have a fee for everything. There were late fees, over the limit fees and you-ate-too-much-chocolate-on-Thursday fees. The Credit Card Accountability Responsibility and Disclosure Act of 2009 gave credit card companies rules about when they are allowed to charge fees.  Before the Act, if you got your payment in too late at the post office or went one cent over your limit, they took the opportunity to rake you over the coals.

Now, credit card companies can only charge an over-limit fee for three consecutive billing cycles.  Also, payments made on the payment date before 5 p.m. cannot be charged a late payment fee.

Credit card companies are complying with the law, but they are counting on consumers not knowing about their rights. Grab the credit bull by the horns and turn your credit score around by exercising your ability to take control thanks to the Credit Card Accountability Responsibility and Disclosure Act of 2009.

When Do Interest Rates Vary?

By | Budgeting, Credit Cards, Credit Laws, Debt, MasterCard, Revolving Debt, Visa

You probably see credit card offers all over the place. They’re in the mail box, in your email, on TV, and on the web. Every one of them boasts about the great interest rate they’re offering, and the temptation to click and apply or fill out a form is great, especially when you need some financial relief.

Suppose you accept one of the offers. Will the sponsoring credit card company increase their rate after a couple of months? And what excuse will they use?

In the past, credit card companies could make changes with the wind, but new laws have stopped practices such as raising the rate on your card simply because a competitor raised your rate on their card. Credit card companies can still raise your rate, but they have to let you know when and why.

General Change of Rate: If you’re in good standing, your interest rate can change only if the credit card company changes the rate for everyone having the same kind of account with them, and they have to give you 45 days notice. The notice gives you time to pay the outstanding amount and cancel the card before the rate goes up.

Late Payment: Sometimes the credit card company will raise your rate to their default rate if your payments are late for two months. To do that, they have to give you the 45 day notice, and, if you make the required payments for six months – on time – at the new rate, then the company has to reduce the rate to the rate you had before the increase.

Cash Advances: A credit card company can offer a teaser rate coupled with a flat fee. After a period of time, the interest rate on cash advances can increase to a rate that’s higher than your credit card rate. What many companies don’t advertise is that your payments are applied to the minimum payment requirement on your credit account first. Only after that payment is made is anything applied to the cash advance, which is why we don’t recommend taking cash advances from credit cards.

Balance Transfers: Credit card companies will offer a lower interest rate on balance transfers to entice you to transfer your credit debts to their card so you have a bigger balance with them. They know that most folks won’t pay off large transfers during the teaser period and will end up paying the normal interest rate on the larger amount they now owe. Of course, you come out ahead if you do pay the transfer off during the teaser period, particularly if they offered you a zero percent interest rate.

Resist the temptation to fall for the pleas from credit card companies. Instead, take stock of the credit cards you currently have, work with them to lower your interest rate as much as possible, and focus on managing and reducing the debt you have instead of adding more.

DIY Debt Consolidation

By | Credit Cards, Credit Repair, Debt, MasterCard, Revolving Debt, Save Money, Visa, Your Credit

With the U.S. economy still trying to find its sea legs, it’s no surprise people might sometimes need to turn to professionals for assistance with debt consolidation or credit repair.

But what if you’re not struggling to make monthly payments and have reasonably good credit? Is debt consolidation even worth thinking about?


At the very least, examining and managing your debt may help you save money (you like money, don’t you?), and at best it could forestall a creeping credit slide that leads to late payments, a damaged credit rating, or worse. Given the do-it-yourself craze that seems to have swept the land, with people making everything from marshmallows to homes on their own, there’s no reason you can’t take on debt consolidation yourself.

First, you’ll need to inventory all your debt. Sites like can provide you with a free credit report to get started. Once you’ve listed all your debt sources, including interest rates, payments, and balances, you can develop a strategy for consolidation.

One approach is to divide your debt into groups, like good, bad, and neutral. “Good” debt might be such things as mortgages, business loans, and student loans (provided they don’t have high or variable rates). These have the potential to help your income down the road and are often tax deductible, so they have the lowest priority.

“Neutral” might include vehicle loans or fixed-rate personal loans. They don’t necessarily hurt you in terms of credit or finances, but they’re not necessarily doing you any favors either.

The debt you’ll want to concentrate on first is the “bad” stuff, which usually means they have variable or high rates, like credit cards or payday loans. Start with those with the highest rates, transferring them to accounts with lower rates. You might be tempted to transfer some of these to a new credit card with an attractive low teaser rate, but think twice about this. Will you be able to pay off the balance before the “real” rate kicks in? How high will that rate be? Also, you’ll effectively be adding more capacity for debt to your credit situation — is that really what you need?

If you have good credit, another option might be to call your card issuer and politely try to negotiate a new rate. Even if you shave off just 1 percent, that represents money you’ll be saving later. Transferring to a fixed-rate personal loan from a credit union or bank is another option.

If you’re carrying student loans, see where those rank on your hit list in terms of rates. Remember that federal student loans typically have lower rates, as well as deferral or forbearance options, so those will likely take a lower priority. That said, the federal government does have a site where applicants can attempt to consolidate their federal student loans and possibly lower their monthly payments.

Consolidating your high-interest loans into more reasonable ones — and strategically paying off the most expensive debt first — can reap dividends by saving you money and protecting your good credit rating in the future. By going DIY now, you can prevent your credit from being DOA later.

11 Months ‘Til Christmas…Are You Ready?

By | Budgeting, Credit Cards, Credit Repair, Debt, MasterCard, Payment, Personal Finance, Visa, Your Credit

Christmas season revelers were singing, “Bring in the noise, bring in the funk.” Funk is right! But the aftermath – high interest rates on credit cards – bring a different kind of funk to the months of January and throughout the year. Spending on Black Friday may have sounded like a good idea at the time, but overspending is never more prevalent than at Christmas. The months following yuletide bliss can be ferocious, especially for those drowning in high interest credit card debt. It’s so easy to justify that extra credit card debt at Christmas, but recovering from the spending can take you right into the next Christmas season. It’s possible that high interest rates on credit cards may have more to do with winter depression than lack of sunshine.

While retailers coast into the new year on your Christmas purchases, you’re stuck in a midwinter depression, paying interest on the purchases you made the day after Thanksgiving. You know the problem, but here is something perhaps you do not know: Your case is not hopeless. Getting out of the winter credit card funk will take a little work, but we can help you create a plan to pay down debt quickly.

Our suggestion? Start with the card that has the highest interest rate and pay it off first. This sounds radical since some financial advisers may encourage just the opposite: paying lower balances first. However, a financial payoff plan that targets high interest rates first is a good idea. Why? Let’s say you pay off the card of lesser interest first. While you are doing so, the higher interest is piling up fast. You will pay more in the long run on a higher interest loan that is left idling on minimum payments than you would on a lower balance card. Paying off the higher interest loan will result in less total interest piled on to your debt. When the high interest loan is eliminated, you can then concentrate greatly on the lesser loan, even adding the difference paid from the higher interest loan, which is now happily paid off.

Paying off high interest credit cards can help positively affect your credit rating, especially if you get the balances on the cards under 50%. Outstanding debt accounts for 30% of your credit score, so paying off those high interest cards can make a difference.

Ovation specializes in diffusing the funk on high interest loans. Our payment tools will take the guesswork on how to get started.

Making Returns On Your Credit Card

By | Credit Cards, Credit Repair, Credit Scores, Debt, MasterCard, Visa

When the fever of the season goes away, what may be left over (besides a few Christmas cookies) is a tinge of buyer’s remorse to go along with some hefty credit card debt. Maybe you bought your niece an iPod only to find out four days before the holiday that she owns one already. Or perhaps you bought your nephew the first book in the Wimpy Kid series only to discover he’s read all six.

Not only are you faced with the prospect of standing in long lines to make a return, but if you bought the items with your credit card, you won’t even get the satisfaction of an immediate refund. Refunds for purchases made with credit cards are credited back to the credit card company. While this will, in the long run, help lower your balance on your credit card, there are a few things you should understand about credit card refunds.

    • The refund will reduce the balance of the credit card, but it will not be considered a payment. You will still be required to make your monthly payment to avoid any blemishes on your credit score.
    • The refund may take a few weeks to process, so even though it will reduce your overall balance, it may not happen in the same month that you made the return to the store.
    • Returns will not have much of an impact on your credit score. So many different factors contribute to your score that returning items for a refund will not dramatically impact your score.

      The exception to the rule…

      If your credit card in the primary source of your debt, and you have used more than 50% of the available credit on the card (or cards), returning big-ticket items that bring the balance down below 50% could make some difference in your credit score.

      The better plan, however, is to start early on next year’s holiday shopping. Not only can you get great deals on post-Christmas sales, but by planning early, budgeting carefully, and spending wisely, you can give yourself the best possible gift for Christmas 12 months from now: less debt and a better credit score.

      Choose a Payment Schedule to Fit Your Needs

      By | Credit Cards, Credit Repair, Credit Scores, Debt, MasterCard, Payment, Revolving Debt, Visa, Your Credit

      The holidays are over, and if you’re like a lot of folks, your credit cards got quite a workout. As 2012 rolls in, you’re probably wondering how can you best handle the extra charges that’ll show up on your next statement. Ovation’s Payment Scheduling Tool can help you find a solution that fits your needs and goals. Ovation’s payment scheduling tool is available to everyone; Ovation customers have the added option of being able to save and download their queries. Anyone can run scenarios to determine the best course of action:

      Pay highest interest first: If your goal is to avoid interest payments, this is the right scenario for you. Let’s say you have a couple of cards that charge 20 percent interest and you have a couple of cards charging 10 percent interest that have higher balances. You’re better off paying your higher interest cards first because you’ll pay a lot less money in interest and then you can focus on paying down the balances on the other cards.

      Minimum payments only: The scheduler will tell you how long it will take you to pay the cards off.

      Minimum payments with a snowball: This option tells you how long it’ll take to pay off the cards if you add an additional amount to the minimum payment each month.

      Highest balance first: Another option is to pay off the card with the highest balance first to get rid of the bigger debt. You’ll have to apply more of your income to it, but once it’s paid off you can split that amount over several accounts. That way you can get four or five accounts paid off after you pay off one big one.

      Lowest balance first: This option will give you the satisfaction of actually paying a credit card off and free up some cash to apply to another card’s balance.

      Split Discretionary Evenly: This might be the option for you if your goal is to increase your credit score and the only thing holding it down is a card or two with a balance that’s more than 50% of the card’s limit.  Focus on those cards, get them below 50% debt to limit ratio, and then switch your focus to your high interest or high balance cards.

      Bi-monthly payments: Choose this option and the amount of your bi-monthly payment, and the Payment Scheduler will tell you the most effective way to split your payment amount to get everything paid off.

      We invite you to try Ovation’s Payment Scheduling Tool. It’s easy to use, helps you find the best way to manage your credit card balances, and puts you in control of your financial future.

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