Using Merchant Category Codes To Maximize Your Credit Card Rewards

Merchant Category Code

Merchant category codes, or MCC’s, are often overlooked – in fact, not many consumers even know they exist. Essentially, merchant category codes are 4-digit numbers that credit card networks – such as VISA, MasterCard, American Express and Discover – assign to businesses in order to classify them into certain industries. Because these codes are based upon the types of goods and/or services a merchant provides, they can range from industries as broad as “groceries” and “fuel” to those as specific as “wig and toupee stores.”

Though MCC’s were originally created by card networks to assist the IRS in tax reporting, they have since been used for other purposes, such as assisting the networks in determining interchange fees (as networks charge less in certain industries than others). However, from a consumer’s perspective, merchant category codes are most important as they pertain to credit card rewards. Many credit cards provide different rewards earning rates for purchases made in different spending categories – such as gas, groceries or dining – which makes the way a given merchant is classified very important. For instance, if you have a credit card that offers extra rewards on purchases made at grocery stores but your local Walmart is classified as a department store, you won’t be earning the bonus perks you might assume you’re getting.

Annual Percentage Rate: What It Is, How It Works and What to Avoid

Annual Percentage Rate

 

The Annual Percentage Rate (APR) is the approximate yearly cost of borrowing money from a financial institution.  It reflects the interest and/or fees assessed in conjunction with your balance and serves as a basis for choosing between similar financial products (e.g. between multiple credit card offers or mortgages).

Types of Gift Cards

Types Of Gift Cards

We’re all familiar with gift cards; they’re basically ubiquitous. After all, there were an estimated $126 billion in gift cards sold during 2014, which means U.S. consumption of gift cards is more than the GDP of 133 countries. Gift cards aren’t all created equal, though. They differ from one another based on their issuer and the manner in which they are delivered. Understanding how your gift card is structured will enable you to maximize its value.

Types of Gift Card Issuers

Store Gift Cards: Most stores these days have their own gift cards. Consumers can typically purchase them in store or online. Many credit card companies also enable you to redeem rewards points or miles for store-issued gift cards. These gift cards can only be used at the stores whose branding they bear.

Chase Ultimate Rewards Review: Tips, Transfer Partners & More

Chase Ultimate Rewards

Chase currently operates its credit card rewards program under the brand name of Chase Ultimate Rewards, which replaced the “Flexible Rewards” moniker just a few years ago. The Ultimate Rewards program features some of the most popular cards on the market, such as the Sapphire Preferred Card and the Ink Plus Business Card. Enabling cardholders to earn points with every dollar they spend, the program’s versatile nature allows its members to redeem for rewards ranging from travel amenities to gift cards for the biggest stores around.

It is important to understand the specific ins and outs of an issuer’s rewards program as it helps you extract maximum value in terms of both earning and redemption. In this review, CardHub will break down Chase’s program in order to help you do just that.

Credit Card Declined: Why It Happened, Declined Codes & Next Steps

Credit Card Transaction Declined

We all know how embarrassing it can be to hear the words, “Sorry, but your card just got declined.” Most people tend to assume it’s because they missed a payment or have “maxed” out their credit line.

However, contrary to popular belief, these reasons are among a multitude of factors that can cause a declined transaction – and this is precisely why it happens frequently with so many people. Even President Obama recently had his credit card declined when dining at a fancy New York City restaurant.

Credit Card Application Declined: Why & How You Can Fix It

Credit Card Transaction Declined

Like with any other type of rejection, having a credit card application get declined can be rather disheartening. However, it’s important to recognize that one denied application does not signal the end to your quest for a credit card. Not only might there be a way to reverse this initial decision, but there are also steps that you can take to improve your odds of approval the next time around.

This guide will teach you how to respond to a declined credit card application by explaining the different possible reasons for denial, as well as the immediate and long-term measures you can take to improve your credit profile.

Pay Taxes with a Credit Card: Pros & Cons

Pay Taxes With Credit Card And Other Alternatives

The IRS does indeed accept payment by plastic – a fact which leads many people to wonder about the viability of paying their taxes with a credit card. There are various arguments to be made both in favor of and against such a strategy, and we’ll do our best to lay them out below.

Pros:

  • Buy Yourself Some Time: Paying your taxes with a credit card is one way to buy yourself some extra time in order to come up with the cash needed to pay off Uncle Sam. It is important to note, however, that your credit line is not the only such tool at your disposal . The IRS offers a number of options to people who cannot pay their full tax burden by the deadline, including a 120-day extension and an installment plan. It is very important that you carefully consider each option, including any and all associated costs, in order to determine which would be most advantageous based on your circumstances.
  • Shift Your Obligation from the IRS: Many people simply do not want to mess with the IRS. Paying with a credit card solves that problem by enabling you to pay Uncle Sam in full and effectively shift your balance to your credit card issuer. This may prove especially important for people who are in dire financial straits, as taxes paid by credit card become dischargeable in Chapter 13 bankruptcy (not the case with Chapter 7, however).
  • Long 0% Intro Terms are Available: Credit cards now offer 0% introductory interest rates for up to 18 months, which means you can prevent your tax obligation from growing while you find the cash to pay it by simply using the right card. You may even wish to use a 0% credit card if you have the requisite cash, just so you can leave your money invested for longer.

    You simply need to make sure that you’ll be able to pay off your balance before high regular rates take effect and eat away at your savings. A credit card calculator will be a big help in that regard.

Chapter 13 Bankruptcy: How It Works, Who Is Eligible & More

Bankruptcy Chapter 13

Chapter 13 bankruptcy, also called “reorganization” or “wage earner’s” bankruptcy, requires debtors to restructure their debts and create a three- to five-year repayment plan. Under this bankruptcy option, debtors must use their future income to pay off creditors partially or in full. The arrangement allows debtors to extend the payment period on certain types of debt and retain all of their assets. It is the second most common form of personal bankruptcy after Chapter 7, or “liquidation” bankruptcy, which is a much swifter process compared with the multi-year timeframe of Chapter 13.

In this comprehensive guide on Chapter 13 bankruptcy, you will learn how the process works, who is eligible, how much it costs and more. At the end of the guide, you will also find advice from bankruptcy experts on ensuring a smooth and successful Chapter 13 bankruptcy.

Credit Card Security Code: What Is CVV, Where To Find It & More

Credit Cards

You’ve probably encountered a credit card security code before, whether you know it or not. This is the three or four digit number that is printed – not embossed – on all of your credit and debit cards, created to act as an extra measure of verification for transactions that are not completed in-person.

If you have a Visa, MasterCard or Discover credit card, your security code is the three-digit number listed on the back of your card, just to the right of your signature. In the event your card displays longer numbers, simply take the three last digits.

Credit Card Checkout Fees: Everything You Need to Know

Checkout Fees

Contributing to the credit card landscape’s plethora of fees, a credit card checkout fee – more formally known as a merchant surcharge – is the extra cost that is sometimes added by merchants for accepting a credit card as a payment method. Numerous retailers have begun imposing these fees as a way to cover the processing fees that they themselves are charged with for receiving credit cards – and in turn, we as consumers end up paying more.

But how much are these fees? How can merchants get away with charging them? And do they apply to any other forms of payment? We’ll answer those questions and more below.

Credit Card Cash Advance: Fees, Drawbacks & More

Credit Card Cash Advance

There are two types of credit card cash advances. The first and more common type occurs when you treat your credit card like a debit card, using it to withdraw cash from an ATM. This form of cash advance is subject to a cash credit limit, which typically comprises only a fraction of your total credit line. Both your cash credit limit and the PIN needed to make a cash advance can be found by calling your bank.

The second type of cash advance also allows you to tap into your credit line, but instead of withdrawing cash, your credit card is used to write checks or transfer money into a bank account. With this type of cash advance, you may or may not be subject to a lower cash credit limit, depending on the issuer.

The Pros & Cons of Credit Cards: Everything You Need to Know

Pros And Cons Of Credit Cards
Like any powerful tool, credit cards can be incredibly beneficial if used correctly but dangerously adverse when handled with the wrong mindset. Recognizing both sides of this double-edged sword will help you better navigate the credit space by enabling you to make the most of the positive features while avoiding the majority of the drawbacks.

Doing so could therefore be the difference between racking up expensive debt and damaging your credit standing or earning a free rewards vacation. Thus, for good reason, CardHub has compiled a guide to the advantages and disadvantages of credit card use in order to bring some transparency to the table.

Co-Branded Credit Cards: Everything Merchants & Consumers Need to Know

Co Branded Credit Cards

Co-branded credit cards have become increasingly prevalent in the credit market in recent years. In fact, many large corporations are now offering these handy pieces of plastic, promoting cards such as the SaksFirst Platinum MasterCard, the Barnes & Noble MasterCard and the Amtrak Guest Rewards MasterCard.

Co-branded credit cards, as the name suggests, are the product of a mutual partnership between a particular merchant and a credit card issuer. Together, they work to create a credit card that bears the merchant’s name and provides merchant-specific benefits to brand-loyal consumers. As a result, not only do cardholders gain rewards and discounts from the brands they are most loyal to, but affiliated merchants also acquire a larger customer database.

The Best Way to Pay Off Debt: Which Debt to Pay First & More

Best Way To Pay Off Deb7

It’s common for indebted consumers to hold multiple balances with various creditors. In such a situation, it’s fair to wonder which debt you should prioritize. Here are the basic steps that you should follow:

  1. Stop the Bleeding: This step is crucial, as it includes two important components. First, it’s important to curtail all unnecessary spending in order to devote as much financial firepower as possible to your debt situation. Second, you need to get caught up on minimum payments in order to mitigate the credit score damage that comes with being classified as delinquent.
  2. Attempt to Lower Your Interest Rates: Whether through a balance transfer, debt consolidation or a debt management plan, it’s important that you at least try to minimize the finance charges that you pay and thereby ease your path to debt freedom.
  3. Build an Emergency Fund: Without an emergency fund of at least a couple months’ take-home, even if you pay off all of your balances you’ll only be a lay off or market crash away from ending up right back where you started – mired in debt.
  4. Pay Off Your Highest-Rate Balances First: Some people will recommend focusing on your smallest balances, but getting rid of your most expensive debt first will save you both money and time.
  5. Explore Other Debt Solutions (If Necessary): If scrimping and saving aren’t enough to get you out of the hole, you may need to look into other options like debt settlement or even bankruptcy.

Now that you know the general roadmap to debt freedom, let’s take a closer look at each of these objectives. Afterward, make sure to check out our Ask The Experts Section for additional insights into how to get out of debt and stay out for good.

Placing Fraud Alerts On Your Credit Report: When and How To Do It

Fraud Alert Credit Report

Identity theft has become increasingly common – but so have preventive measures. Although there are various methods to choose from, one of the most effective ways to go about protecting yourself is to take advantage of a fraud alert. Fraud alerts are messages you can add to your credit report from each major credit bureau (Equifax, Experian and TransUnion) indicating that you believe you may be a potential victim of identity theft. Therefore, when people (such as potential creditors, renters or anyone who needs to pull your credit) view your credit report, they will be notified that further steps are needed to verify your identity. These extra steps significantly mitigate the chances of someone else establishing new lines of credit in your name without your consent.

  1. Types of Fraud Alerts
  2. How To Set Up Fraud Alerts
  3. Pros and Cons: Should You Use Fraud Alerts?
  4. Alternatives To Fraud Alerts

Credit Card Reconsideration: How and When To Request It

Credit Card Reconsideration

No one enjoys rejection – especially from banks. It’s pretty frustrating to be informed that you are not eligible for the credit card you’ve been waiting for. The reasons are endless; they tell you it’s because of your recent delinquency, or maybe, it’s because you have too many active accounts open. Regardless, it is important to know that you can get your credit card application reassessed and it is often worth a shot – after all, you have nothing to lose. Doing so is often known as a credit card reconsideration, meaning that you reengage with the same issuer to politely negotiate your way to an approval.

Generally, your initial rejection is issued to you by a computer with an algorithm that is designed to turn down people with select types of credit histories. However, note that issuers are required to reconsider your applications upon request. Under regulation 1002.6 in the ‘Equal Credit Opportunity Act’, it states that creditors shall consider “any information the applicant may present that tends to indicate the credit history being considered by the creditor does not accurately reflect the applicant’s creditworthiness”. Therefore, you can get in touch with an actual human representative to reposition your case by providing more information. They tend to have more empathy and understanding than the computers regarding your application – if you maneuver the process correctly, that is. Thus, if you were rejected the first time, you might have a better shot the second time by requesting a reconsideration.

Credit Freeze: When & How to Do It

Credit Freeze

Although identity theft only happens to a fraction of us, the repercussions can be extremely severe and tedious to resolve. Thus, it is recommended that you consider preventive methods whenever possible. One such preventive measure is called a credit freeze. Freezing your credit – also known as “locking”, “sealing” or “securing” your credit – essentially means that you preclude your credit reports from being accessed by most third parties.

A credit freeze prevents fraudsters from using your personally identifying information to open financial accounts or make transactions that require a credit check under your name. In other words, it nips certain types of financial fraud in the bud, enabling you to avoid the monetary loss and potential credit score damage that often accompanies them. Below you can learn more about how a credit freeze works, how much it costs, and alternative measures for protecting your financial life.

Dynamic Currency Conversion: What It Is, How It Works & How to Avoid It

Dynamic Currency Conversion

When shopping overseas, a merchant may ask you if you would like to convert your credit card transaction from the local currency into U.S. dollars. This is called Dynamic Currency Conversion (DCC). And while it may sound like an enticing offer, this conversion is very expensive for the cardholder and should be avoided.

Generally, when overseas merchants make this offer, they will use a conversion rate that is far higher than the actual going rate – as much as 7 percent higher – and pocket the difference as a fee. They get away with it because many customers are not checking the math at the point of sale.

Types of Prepaid Cards

 
Types of Prepaid Cards

“Prepaid card” is a very general term that can be used to describe a variety of different types of payment vehicles used for varying, and often very specific, purposes. This article is designed to clarify the subtle differences between each type of prepaid card, enabling consumers to better understand industry jargon and avoid misuse.

Usury Laws by State, Interest Rate Caps, The Bible & More

Usury Laws

Usury laws cap the interest rates that can be charged on a line of credit or loan. More than half of all U.S. states today have usury laws in place, and each dictates its own maximum legal limit. However, they have no effect on most credit cards, thanks to effective deregulation that began in the ‘70s.

For decades since, usury laws have remained in the economic spotlight, with constant debate centering on whether they should be changed or maintained. Many decry usurious practices for hurting consumers while others claim that the absence of usury laws open up access to credit for more people. The debate is one that surely will continue for years to come.

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Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. If you have any legal questions, please consult an attorney. Please let us know if you have any questions or suggestions.