Author: Karen Zimmermann

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Citibank Secured Credit Card Review

The Citibank Secured card offers interest on your deposit.

If you’ve already looked into the Citi Secured MasterCard, you might be a bit confused, since there doesn’t seem to be any mention of it in the Citibank website. Your eyes aren’t fooling you – it isn’t there. In order to get the details on this card, you need to head to a Citibank branch and talk with someone about it in person. They won’t even tell you over the phone. Pretty lame. Here’s another (better) secured card you can apply for right now – First Progress Platinum Prestige MasterCard® Secured Credit Card. 

Luckily, we did that leg work for you! Here’s the low-down on this secretive card.

Applying

As you might guess, you have to apply in person, and then it can take up to four weeks for your application to be processed. That’s a long wait for a secured card.

On the bright side, we were assured this card is easy to qualify for. That’s not saying much for a fully secured card such as this one, and customers report varying experiences. What’s clear is that not everybody gets accepted. However, the manager we interviewed claimed that there are few reasons not to accept an applicant, since the account is fully secured. Most likely, you should not have any major financial snafus such as recent bankruptcy, and not request a credit line that is too big.

Security Deposit/Credit Line

This card is “fully secured,” which means that your credit line will exactly equal your security deposit. The Citi Secured card functions on a “name your deposit” principle, with a minimum deposit of $200. Interestingly, the Citi representative informed us that there is no formal upper limit on requested deposits, but that the bank won’t issue something ridiculous like “thousands of dollars” to someone with a very low credit score. Other sources claim that you should consider this card to carry a $5000 maximum on the deposit.

If you can afford it, choosing a larger deposit can be a good way to accelerate rebuilding your credit score. That’s because if you have a higher credit limit but your spending remains the same, you end up using a lower percentage of your available credit. In other words, you have a lower credit utilization ratio, which helps improve your credit score. If this strategy interests you, you could check out the Wells Fargo Secured card, which offers a higher maximum deposit but doesn’t pay interest.

The Citi Secured card, on the other hand, does pay interest. Once you open the account, your deposit is put into a 1-year CD carrying a 1.01% APR. That’s pretty solid! If you were to establish the account with a $5000 deposit, you would get $50 after a year.

Remember, a CD is a special kind of account that you can’t touch for a specified period of time, or else pay a penalty fee. In the case of the Citi Secured card, the CD has to remain untouched for at least one year, if you want to avoid paying the penalty fee. Since the CD is linked to your secured card, the deposit remains completely inaccessible to you until you close the account.

Graduation

There is no automatic graduation option for the Citi Secured card, but you are welcome to apply for a “real” credit card with Citi after some time. The Citibank manager we interviewed recommended waiting at least 18 months after opening the secured card to apply, keeping credit utilization below 50%, and always paying on time and in full for the best chances at getting accepted for a better card.

Unfortunately, if you do get accepted for a real card with Citi, there is no conversion option. That means that you will have to close the secured card account and open a new one for the new card. We prefer secured cards that allow you to simply convert the account into a non-secured version, because then you don’t affect the length of your credit history. (Having a longer credit history is good for your credit score.)

The Rest

The Citi Secured card carries a $29 annual fee and 18.24% APR. These numbers are average for a secured card from a major bank. Unfortunately, the benefits are sparse – this card doesn’t offer purchase protections, insurance, warranty extensions, etc. But to be fair, secured cards that do offer those benefits are few in number. (One that does is the Digital Federal Credit Union Secured card.)

The Citi Secured card isn’t perfect, but it offers the best interest rate we’ve seen from a secured card. If you have to put a big chunk of cash away for a while, it might as well be growing while you wait.

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Secured Credit Cards for Bad or No Credit

Bad credit or no credit, it can be hard to get an issuer to cut you some slack. Secured credit cards are a good option for those who ready to start building or re-building credit.

Think about it: if you have bad or no credit, lenders see you as a risk. With no credit history, there’s no evidence to show that you will repay your debt. Even worse is a bad credit history. Would you lend money to someone who has a record of not paying it back? Even close friends and family would have a hard time getting you to hand over that cash.

Now imagine if your uncle, who in the past hasn’t been paying his debts, comes to you for money. But first, he hands you a hundred dollars, then asks to borrow fifty dollars. You would probably agree, and leave fifty bucks richer.

That’s the basic idea of a secured credit card.

The Concept

In real life, nobody, uncle or otherwise, would do that because it doesn’t make a whole lot of sense. Why give your lender just as much or more money than you’re going to borrow, when you could just keep all your cash? Well, in the case of secured credit cards, the reason is right in the name. You are getting a genuine credit card when no one else will give you one.

Essentially, what you are doing is paying for the privilege to have a line of credit. In turn, your lender will report your credit activity to the major credit bureaus, which over time rebuilds your credit and raises your credit score. After some time passes, your credit will be high enough for you to graduate to a better, “real” credit card.

Some people disparage secured credit cards as being functionally like prepaid cards, in terms of cash in-flows/out-flows, and as you can see, this is sort of true. But that line of thinking misses the point. If your credit score has taken a beating, you shouldn’t be in the mindset of looking for more “real” credit. You should be taking hold of your finances, accumulating cash and security, and rebuilding your reputation with lenders.

Don’t be spooked away from credit cards just because you made mistakes in the past. Without a good credit score, you are going to be paying out the nose in interest rates on future loans such as mortgages, auto loans, etc. Not to mention that most hotels, airlines, and rental car agencies require a credit card to make reservations. Those who take debit cards usually require a deposit. Even many employers use credit scores to gauge potential employees for hire.

How It Works

Enough of theory. Let’s get down to specifics.

  • When you open a secured credit card, you put down some cash. Ever had to pay a security deposit when you signed a lease? It’s the same idea. In the case of an apartment, if you took care of the property and left it clean and undamaged, you got your deposit back. Otherwise, your landlord took some or all of your deposit to pay for the damage. It works the same way with a secured credit card. If you pay all your credit card bills on time, you will get your deposit back when you close the card.
  • Typically, your credit limit will be no higher than your deposit, and sometimes it will even be less. Some cards allow you to increase your credit limit by putting down more money into your deposit, while others will increase it after you’ve made consistent monthly payments for a certain period of time.
  • The card issuer usually won’t tap into your deposit after just one or two late payments. But if you fall seriously delinquent (think about 150 days), they will close your account and take the deposit. By that point, interest charges have likely caused your balance to exceed your deposit, so not only is your credit worse than before, but you have additional debt. This is not a pretty road. Don’t go down it.

Getting a Secured Credit Card

  • The most important thing when looking for a secured credit card is that the card issuer will report your credit activity to the major credit bureaus. Absolutely do not apply for any secured card that does not do this for you, because that’s the entire point. Reporting your activity is what will rebuild your credit.
  • Compare interest rates, fees, and all other costs. Secured cards are a market of their own, and good lenders will be competing with each other to secure your business. Since so many people with bad or no credit are feeling desperate, many card issuers take advantage of that by charging ridiculous fees and interest rates. Just say no to such schemes.
  • With that said, many will charge processing fees, application fees, and annual fees. You probably can’t avoid annual fees, but try to find one with no application fee.
  • Secured credit cards typically have higher APRs than normal cards.
  • Some secured cards will put your deposit into an interest-bearing account.
  • Check whether the card you’re interested in will allow you to convert it into a normal card after a certain period of time. This is a nice thing to have, but not necessary.
  • Credit unions often have the most favorable fee schedules for secured credit cards, so give your local one a look.
  • Sometimes secured cards can even come with a rewards system! This is a nice bonus, but it should be a low priority, since fees can easily undo rewards.

Obviously, it pays to compare and contrast many secured card options before making a decision. Here’s one we like to get you started, the Capital One Secured MasterCard. Good luck!

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Understanding Balance Transfer Cards

Credit card debt can be easy to fall into and hard to claw your way out of. So when you see an ad for a balance transfer card that promises a lower rate — or even zero-percent rate — it might seem too good to be true.

It’s not. Balance transfer cards are the real deal, and they exist because card issuers stand to gain from attracting new customers, so much so that they are willing to loan you money up-front. When used correctly, these offers are an invaluable tool for paying off debt.

Why Balance Transfer?

The idea is simple. You owe X dollars on Card A. You get approved for a balance transfer card, Card B. The issuer of Card B pays off the debt you owe on Card A. Now, you owe X dollars on Card B instead, but Card B has a lower interest rate than Card A had. Or even better, Card B might have a 0% interest rate for a limited period of time.

Balance transfer cards are best suited for — you guessed it — people who have a balance that they would like to pay off soon. On the other end of the spectrum, you’ve got people who never carry a balance at all, and those people should not get a balance transfer card, because there is nothing in it for them. They should opt for a rewards card instead.

In fact, many card issuers allow you to transfer other kinds of balances besides credit card ones. You might be able to transfer an auto loan, student loan, or other kind of monthly payment plan. This varies widely by card issuer, so if that’s what you’re after, call and ask.

Interested? Great! Just heed this warning: don’t do this just to put more debt on your existing card. Not even with holiday shopping coming up. That shouldn’t be the purpose of a balance transfer. If you are already struggling to pay off your existing debt, adding more is going to make things worse, even if you do get a 0% rate. Plus, increasing your debt load is bad for your credit score.

How It Works

The process is straightforward. Many times you can stipulate that you intend to transfer a balance directly on the application. If not, simply call the bank once you’ve been approved and give them your older card’s account information, including the amount to transfer. The balance transfer process is pretty fast, often completed in just a few hours.

Keep these tips in mind:

  • Most of the time, you will have to pay a balance transfer fee. (Typically 3% of the balance.) Make sure to include this in your calculations when you are choosing the card.
  • Compare and contrast. There are a few different styles of balance transfer cards — different balance transfer fees, introductory periods, and interest rates. Don’t assume that you can pay your debt off any faster than you have already been doing.
  • You can only transfer a balance between different banks. For example, you cannot transfer a balance from one Chase card onto another Chase card, or from one Discover card to another Discover card, etc.
  • Often, you won’t know what your credit limit will be until you’ve been approved. If you think it might be less than the balance you’re trying to transfer, have a back-up plan or apply for two balance transfer cards.
  • Try not to cancel the old account. It could hurt your credit score by decreasing your credit utilization ratio.

Types of Balance Transfer Cards

There are two main types of balance transfer cards: teaser rate and fixed life of loan.

Teaser rate cards offer an APR that is low or even 0% for a limited amount of time after account opening. For example, the card might offer 0% APR for the first 12 months. This is clearly a great choice — if you can pay it off before the introductory period is up. Once time runs out, the rates jump, sometimes a lot. This shouldn’t be surprising: the lender has to make up for lost funds. Always check what the new rate will be once the teaser rate expires, because it could be even higher than what you pay now. Also, check what other conditions could cause you to lose the teaser rate. Usually a late payment will do it.

Some folks figure that they can just keep hopping from one introductory 0% APR card to another indefinitely. There’s a couple reasons why that’s not a viable long-term strategy. First, sometimes the fine print specifies that you can’t transfer the balance a second time within a certain period after opening the card. These clauses exist precisely to stop that kind of scheme. Second, realistically you won’t be able to keep getting approved for these offers, because card-hopping like that will hurt your credit score. Teaser rates of 0% usually require good to excellent credit.

Then there’s fixed life of loan offers. Instead of a time-limited introductory 0%, this type of card guarantees a low rate that remains for the life of the balance transferred. That low rate only applies to the initial balance, not to additional balances transferred after a specified time frame, usually something like 60 days. Like teaser rate cards, these are typically only guaranteed as long as the account is current.

Some Balance Transfer Options

Chase Slate: This card has a pretty long 0% introductory period at 15 months. On top of that, it has no balance transfer fee for the first 60 days. Amazing.

PenFed Platinum Cash Rewards: These fixed life of loan cards get you a 4.99% APR on your balance transfer that lasts for the life of the balance.

Barclaycard Ring: This card has some weird wrinkles that make it worth mentioning. It never charges a balance transfer fee — that’s right, not ever. There’s no special rate for balance transfers, but the 8% APR is pretty low. Plus, all balance transfers in the first 60 days get 1% cash back.

Or, check out our list of the best balance transfer cards for more great choices.

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Chase Hyatt Hotel Credit Card Review

Those with a taste for luxury will enjoy the metal Chase Hyatt credit card. Though Hyatt may not offer as many properties as the competitors, they tend to be nicer. Plus, this card is one of the most lucrative hotel cards on the market. Though its $75 annual fee isn’t waived for the first year, that may be to offset the stellar sign up bonus.

Earning Rewards

After spending just $1,000 in the first three months, you will receive a credit for two free nights at any Hyatt location. That’s right — any of them. (If you already have Platinum status when applying, you’ll get two free nights and two suite upgrades. If you already have Diamond when applying, you get two free nights in a suite.) This bonus only takes up to 10 days to post, which is pretty low. Beware: if the account closes in the first three months, your free nights will be deducted from your Gold Passport account.

Then, every year after you renew the Chase Hyatt card, you will receive a credit for one free night at a category 1-4 hotel. This one takes 4 to 6 weeks to post. All free nights are only good for one standard room (aside from the bonuses for existing Platinum/Diamond members) and must be redeemed within one year after being issued.

You also earn Gold Passport points for making purchases at the rate of 1 pointper $1 spent, with 2x points for restaurants, airline tickets, and car rentals, and 3x points for stays at Hyatt properties. (That’s in addition to the 5 points you get from the Passport program.) There’s no limit on your Passport points, and wonderfully, they never expire! Between that and the anniversary certificate, this card is worth hanging on to despite its annual fee.

Gold Passport points are worth about 1.5 cents each, depending on when and where you redeem them. You need to have at least 5,000 points in order to redeem. The range runs from 5,000 points for one night in a standard room at a category 1 property, all the way to 22,000 points for the same deal at a category 6.

Get Status

You, but not your authorized user, get complimentary Platinum membership for as long as you’re a Chase Hyatt cardmember. Platinum benefits include a 15% point bonus on eligible spends, free in-room Internet, 2:00 p.m. late check-out, a 72-hour room guarantee, upgrades based on availability, and more.

The Chase Hyatt card also gives you a fast track to Diamond status. Spend $20,000 in a calendar year and receive 2 stay credit and 5 night credits. Spend $40,000 in a calendary year and receive an additional 3 stay credits and 5 night credits. After you reach either 25 stays or 50 nights in a calendar year, you’ll get Diamond status. Be aware, these Diamond credits can take up to 2-3 weeks to post and are not valid for award travel.

If you do reach coveted Diamond status, you will enjoy a 30% point bonus on eligible spends, four suite upgrades per year on paid room nights, a 48-hour room guarantee, 4:00 p.m. late checkout, and guaranteed best room available upon arrival (except suites). You also receive exclusive access to Reagency Club or Grand Club lounges, which serve breakfast and evening hors d’oeuvres. And at those places without a lounge, you still get breakfast — which can prove quite valuable when traveling in Europe.

Traveler Benefits

Happily, the Chase Hyatt credit card comes with no foreign transaction fee. Plus, as a chip and signature card, it will be accepted at many places where magnetic-stripe-only cards are not, and offers extra security.

Not to mention that this is a Visa Signature card we’re talking about. Visa Signature benefits include solid protections for your purchases as well as many travel-minded perks such as lost luggage reimbursement, travel accident insurance, trip cancellation insurance, and 24/7 concierge service that can provide referrals, translations, etc.

The Bottom Line

Any Hyatt diehard should get this card. The sign up bonus is killer, since those free nights can be redeemed at any hotel — for Hyatt, that can get pretty darn rewarding. Plus, you get Platinum benefits that guarantee you availability, late check-out, and Internet access.

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Chase Marriott Rewards Premier Credit Card Review

First of all, the Chase Marriott Rewards Premier card is pretty. It’s pure black, somehow both shiny and matte, and distinctly heavy from the real metal inside.

Edit: see here for a higher limited time offer. 

But beauty is only skin-deep. For the Marriott diehard, this card also promises some valuable rewards. Although the card carries an $85 annual fee, it’s waived for the first year, and might be worth it even if it wasn’t. Here’s a guide to the benefits.

Earning Points

There’s two tasty sign-up bonuses to be had with the Marriott Rewards Premier from Chase. First, right off the bat, you get a credit for one free night at a category 1-4 hotel, to be redeemed within six months. Then, if you spend just $1,000 in the first three months, you get 50,000 Marriott points. That’s enough for three nights in mid-priced hotels with PointSaver awards, or a whole seven nights at a category 1.

Just be aware that if you close the account for whatever reason within the first six months, Chase and Marriott “can legally deduct your bonus points from your account.” That sounds to us like they’ll make you pay for it, and probably will. So hold on to this card for at least six months!

Plus, every year after you renew, you will receive a certificate for one free night at a category 1-5 hotel, to be redeemed within six months. This annual free night does well to make up for the annual fee, which is already waived the first year. It’s interesting because it makes the card worth holding on to even if you only occasionally stay at a Marriott.

The Marriott Rewards card also gets you 5 points per $1 spent at Marriott hotels and resorts, 2 points per $1 spent at restaurants, airlines, and car rental agencies, and 1 point for every other dollar spent.

Redeeming Points

It takes about 6 to 8 weeks for points to hit your account, so plan accordingly. You can redeem points at all Marriott properties, 3,600 locations in 68 countries and territories. Here’s the list:

  • The Ritz-Carlton
  • JW Marriott Hotels & Resorts
  • EDITION
  • Autograph Collection
  • Renaissance Hotels
  • AC Hotels by Marriott
  • Marriott Hotels & Resorts
  • Courtyard by Marriott
  • Fairfield Inn & Suites by Marriott
  • SpringHill Suites
  • Residence Inn
  • TownePlace Suites
  • Marriott Vacation Club International
  • Marriott Conference Centers
  • Marriott Executive Apartments
  • Marriott ExecuStay

Marriott Points are worth about .8 cents each, depending on where and when you redeem then. The range goes from 7,500 points for a standard reward night at a category 1, to 45,000 points for the same deal at a category 9. Happily, if you redeem for four nights, you get the fifth night for free! There’s no limit on your points and wonderfully, points never expire! (Yet another reason this card is worth holding on to.) However, you might be denied your award during peak times.

One could also exchange Marriott points for airlines, car rentals, cruises, travel packages, or merchandise, but for considerably less value. If you looking for ultra-flexible travel points, turn to a fixed value travel rewards card such as the Bank of America Travel Rewards card or the Barclaycard Arrival.

Get Status

The Chase Marriott Rewards Premier card gives you 15 Elite Credits right away and again every year after you renew. This insures you will always have at least Silver status, which requires 10 Elite Credits. You also get one Elite Credit for every $3,000 spent. Silver status elite benefits include a 20% bonus on base points earned on hotel stays (doesn’t include the credit card bonus points), priority late check-out when available, a private reservation line, and a weekend discount at participating Courtyard and SpringHill Suites locations. Not too shabby.

Traveler Benefits

This card is great for the traveler because it has no foreign transaction fee and is a chip and signature card, so you can expect it to be accepted at more locations in Europe, Asia, Canada, and beyond. This is also a Visa Signature card, which along with purchase protections, has many traveler-friendly benefits such as lost luggage reimbursement, travel accident insurance, car rental insurance, 24/7 concierge service including referrals and translation services, and much more.

The Bottom Line

The Chase Marriott Rewards Premier card is definitely worth the annual fee for any Marriott diehard, and maybe even the occasional patron. That’s because the annual free night makes up for that annual fee, plus the points never expire. The sign up bonus is solid, and every fifth award night is free! Looks like you’re running out of excuses not to take that vacation.

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The Citi & American Express Hilton HHonors Credit Cards Review

Both AmEx and Citi offer a 40,000 points bonus on their Hilton credit cards.

 

Hilton hotels number over 4,000 and are located all over the world, making the chain a solid choice for the prolific traveler. The Hilton HHonors program comes in four credit cards, two with an annual fee and two without.

This article focuses on the two Hilton cards with no annual fee, the Citi Hilton HHonors card and the American Express Hilton HHonors card. Despite being free to hold on to, both of these cards come packed with value, making either a great choice for the non-committal. But which to pick? Here’s the scoop, one feature at a time.

Earning Points

The Citi HHonors card nabs you 40,000 points after spending $1,000 in first 4 months. You also get two HHonors points for every dollar spent, with 6x points at Hilton hotels, 3x points at supermarkets, drugstores, and gas stations.

The American Express HHonors card also has a 40,000 point sign up bonus, but you only need to spend $750 in the first three months. It also has a more generous rewards scheme: you get three HHonors points for every dollar spent, with 7x points at Hilton hotels, and 5x points at restaurants, supermarkets, and gas stations.

As you can see, in the points category the AmEx HHonors card is the clear winner. Both cards offer a 40,000 point sign up bonus, but the AmEx card’s minimum spend is considerably lower. Plus, it offers more points earned for each spending category. The only reason to favor the Citi card is that you spend a lot at drugstores.

By the way, in order to get the hotel category bonus, you must, of course, be staying at a hotel that’s part of the Hilton HHonors portfolio. Just charge the room to your HHonors card and charge all hotel services to the room bill to receive the bonus. Simply using the card at the hotel is not enough.

Redeeming Points

You can redeem HHonors points for stays at select Hampton Inn & Suites, Embassy Suites, DoubleTree by Hilton, and Hilton Hotels & Resorts. An HHonor point is worth about half a cent. Now, your mileage may vary. The value depends on what category of hotel you will be redeeming at most and what time (peak or off-peak).

Redemptions start at 7,500 points for a standard room in a category 1 hotel, giving you a lovely 1.7 cents per point. But there seem to be only six (6!) category 1 hotels in the US. You can find them at Clarksville, AR; Cleburne, TX; Colombus, GA; Florence, AL; Jacksonville, FL; and Sandston, VA. So for most people, category 1 redemptions are not likely.

Then, for 10,000 points you can get a night at a category 2 hotel. Thankfully, there are 136 of those in the US. It’s 30,000 points per night for a category 4 and 50,000 points for a category 7. The middle range gets you about .4 to .5 cents per HHonors point.

One could also redeem points for merchandise or experiences, but these are lower value options. You can also purchase points directly from Hilton, up to a max of 40,000 per year. However, this is not recommended, since at the price of $10 for 1,000 points, you’re paying a 1.25 cents per point. Buy at least 10,000 at a time and you do receive a 25% discount, but this still doesn’t quite hold up to our point value estimate of half a cent.

There is no cap to how many points you can accumulate, and points don’t expire as long as you stay at a hotel, earn points, or purchase points at least once every 12 months.

Get Status

Both the Citi and AmEx HHonors cards automatically get you Silver Status, which includes benefits such as:

  • Book a reward stay of five nights and get the fifth night free. This applies only to standard rooms and kicks in automatically, you don’t have to do a thing. Needless to say, this perk is packed with value. Never has there been a better excuse for extending your vacation.
  • 15% bonus on HHonors Base Points earned on hotel stays. This doesn’t include the bonus points earned from the credit card, just the ones that any HHonors member would get.
  • Complimentary access to health club/fitness center

Additionally, both cards offer a way to “fast track” to Gold status. The Citi HHonors card will grant Gold status if you complete four stays at Hilton Worldwide Portfolio hotels within the first 90 days after opening your account. The American Express HHonors card will grant Gold status if you spend at least $20,000 per calendar year. When you do attain Gold status, it remains for the rest of that calendar year as well as the subsequent year. Gold benefits include free Internet access, room upgrades when available, 25% bonus on Base Points, and more.

American Express “AXON” Awards

The American Express HHonors card comes with a unique feature. It opens the door to what are called AXON awards, special redemption options available only to AmEx members. AXON awards are applicable to four-night stays in standard rooms and only in hotel categories 5 through 10. Here are the options, with the equivalent regular redemptions rates per night in parentheses:

  • Category 5: 130,000 (vs 30,000-40,000)
  • Category 6: 160,000 (vs 30,000-50,000)
  • Category 7: 190,000 (vs 30,000-60,000)
  • Category 8: 220,000 (vs 40,000-70,000)
  • Category 9: 260,000 (vs 50,000-80,000)
  • Category 10: 300,000 (vs 70,000-95,000)

Nice options, but AXON awards are not always the best choice. For example, four nights at the 30,000/night rate costs 12,000, which is less than the Category 5-7AXON prices. You also have to factor in the deal you get as a Silver member: stay five nights, get the fifth night free. AXON awards do not stack with that deal, you have to pick one or the other, and often the Silver deal is better.

To book an AXON award, you must call the line at 1-800-920-5649. They will ask for your Diamond number; just explain that you are an AmEx member calling for an AXON stay.

Traveler Benefits

The Citi HHonors card comes with Visa Signature benefits, while the AmEx HHonors card comes with American Express benefits. Both include car rental insurance, luggage insurance, roadside assistance, travel accident insurance, and 24/7 concierge-style customer service. Clearly such benefits are of great value to travelers.

On the other hand, both cards comes with a foreign transaction fee, which is a real bummer. The Citi card sports the usual 3%; the AmEx, 2.7%.

The Bottom Line

Getting an HHonors credit card is a no-brainer for any Hilton diehard. You get a tasty sign-up bonus and automatic Silver status, which includes a considerable discount built right in. Now, as for which no-annual-fee card to get, we think most people would want to get the American Express card, as it has a lower minimum spend for the bonus, better bonus categories, and extra award options. However, if you are planning to complete four Hilton stays in the first three months of card ownership, go for the Citi HHonors card to grab that Gold status.

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What You Need To Know About “Smart Cards”

If you love traveling and want to do so with as little hassle as possible, you’ll want to get a “chip and signature” or even better, “chip and pin” card. Both of these fall under what’s called EMV technology, often advertised as “smart cards.” Carrying of one these puppies will help facilitate your payments in Europe and Asia, and protect you from fraud.

What it is

For a while, we have had regular old magnetic stripe cards. The swipe machine reads the information, connects to the issuer to confirm, asks the merchant to confirm that the signature matches, and then processes the payment. Unfortunately, this method comes with a few security flaws. Some can learn to forge your signature or simply steal the actual card. The black market has even produced swipe machines that copy and store the card information, allowing a clone to be made.

EMV technology does away with these problems by putting a computer chip in the card. The new payment machines read the computer chip, which is difficult to replicate, and then also ask for a second piece of information, either a PIN number or signature match. Thus where we get the terms “chip and pin” card and “chip and signature card.” A “chip and pin” card is more secure because the merchant never sees the PIN. The chip simply confirms or denies the payment based on whether the PIN provided by the customer is correct.

EMV is so called because it was originally a joint effort between Europay, MasterCard, and Visa. Europay ended up being merged into MasterCard. Soon after, American Express joined the effort, along with Japan Credit Bureau and China UnionPay. Today, most of Europe and much of Asia has largely transitioned to this new technology.

Why you want it

So, there is clearly more protection with a chip card. France has cut fraud by 80% since introducing this technology two decades ago, and the UK has decreased counterfeit fraud by 75% between 2008 and 2012, according to Financial Fraud Action UK as cited by Aite. A computer chip is simply much more difficult, if not impossible to replicate. Of course, this technology doesn’t help combat card-not-present fraud (telephone, internet, or mail order scams), which continues to grow every year.

Even if you are not concerned about security, you want to have one of these for travel. In Europe, the major card issuers shifted liability for fraud on to the shoulders of merchants who don’t have the improved technology. Consequently, many businesses use chip payment systems in Europe. The issuers require vendors to still accept magnetic stripe cards, but some staff refuse anyway under belief that they will be liable for fraud. (Which is simply a common misconception.) Still, over all people get along pretty well with most merchants.

Where your old-fashioned magnetic stripe card is guaranteed to not work is at unattended machines. This could include vending machines, transport stations, ATMs, tollbooths, and even some buses. Some won’t even accept chip and signature.

Currently, chip and signature is the more common form in the US, Australia, New Zealand, Germany, and Austria. For most other European countries as well as Canada, chip and pin is king.

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Barclaycard Ring Credit Card Review

Barclaycard® Ring MasterCard® is unique. Open-source projects, co-op’s, and other kinds of social experiments are flowering now, in the information age. Even a bank is hopping on board.

That’s right — the Ring card is “crowd-sourced.”

The idea (according to Barclay’s) is that the cardmembers can discuss and vote, via an online community portal, and Barclay’s responds in “real time” to their requests. The issues discussed could be fee changes, marketing ideas, alterations to the terms and conditions — basically whatever is important to you, the customer. Barclay’s provides feedback about the consequences of ideas, and periodically posts all relevant financial information so that everyone can participate in this credit card business. Members even get a kind of “returns” — but we’ll get to that in a second.

Low Fees

First, let’s talk fees. Very low fees. Ring from Barclaycard is designed for those who desire simplicity and dependability, and it shows in their fee structure.

There is an 8% APR for everything, all the time. It applies to purchases, balance transfers, and cash advances. This is not promotional, and it does not depend on your credit score. (It could still change if the prime rate changes, as to be expected.) 8% is quite low.

Even lovelier, you aren’t looking at many costs beyond that. Check this out:

  • There is no annual fee — but that’s expected.
  • The foreign transaction fee is 1% — considerably lower than the standard 3-4%.
  • The cash advance fee is $1. Every time. (Typically, cash advance fees are 3% and at least $10.)
  • The late payment fee is $25 max. (Usually it’s $35 max.) Plus, there is no penalty APR for paying late. What does happen is that your returns for that cycle (part of the Giveback program, see below) get given to charity.
  • There is no balance transfer fee. Ever. In fact, you actually get 1% cash back on any balance transfers made in the first 60 days.

That last one is particularly sweet. No balance transfer fee — that alone makes this card worth having, as a back up, in case you suddenly find yourself in over your head. Now, if you are in the situation of already having a balance that you need to transfer, this may or may not be a good card for you.

Make a transfer with this card, and you get $0 transfer costs and then 8% APR. Or, you could opt for the many cards that have a 3% balance transfer fee and then 0% APR for some length of time. The longer ones right now are 12 to even 18 months. If you think you can pay the balance off in that time, go with one of those. On the other hand, if you can pay the balance off in four months or less, go with the Ring Barclaycard. (Four months is about how long it takes for the Ring’s interest charges to equal the 3% fee that you dodge.)

Giveback

Barclay’s Ring card does not have a rewards program per se. What it does have is Giveback, a feature that gives cardmembers a share of the “estimated profits.” First, returns need to pass a certain “hurdle” to cover taxes, marketing costs, and shareholder returns. The Giveback pool is 70% of whatever is remaining. Then, individual shares of that pool are computed by taking into account the level of participation.

Your Giveback share is improved by referring others, paying on time, actually using the card, or opting for paperless statements. You can choose whether to receive it as statement credit, donate it to charity, or a split between both. Note that the charity donation is not tax deductible, but if you do choose that path, Barclay’s will match the donation dollar to dollar. We applaud them for this socially conscious practice.

So, in a sense, it’s sort of like a rewards program. Except one in which nothing is guaranteed. The idea is that the cardmembers get to share in the story of the company, become concerned with profits, and thus are motivated to participate meaningfully.

Interestingly, the Ring blog indicates that as of late, members have been asking for a true cash-back rewards program. The scheme the company has proposed would have three tiers of card, with the most rewarding one earning 1.5% cash back, but at a 16% APR. It also would receive no Giveback for purchases, but more Giveback for revolving balances. But remember that if you revolve a balance on a rewards card, you negate the the rewards with the interest charges. (At a 16% APR, even just one month accumulates interest that basically equals the cash back.) Watch this space — we’ll let you know if that card comes to be, and if it beats out the other 1.5% back option, the Capital One Quicksilver.

The Truth

The truth is that the Barclaycard Ring is not a co-op card, not even close. Right in the terms and conditions, they admit that Giveback “is not based on the actual profits” and that “you have no property or other legal right in any aspect.” Having credit card members share in the profits and vote on the terms of a card is a great idea, but here that is all it is — an idea. Something to play around with.

Still, Barclay’s deserves credit for paying it lip service. Though Giveback isn’t actually the “profit sharing feature” it’s advertised as, it is based on a posted, easy-to-reference calculation. Although they don’t put up the real official financial statements, they do blog regular updates on financial performance. Not to mention that the genuinely low rates and fees are presented with clarity that goes above what’s required by law. All of this shows a true commitment to transparency.

The Bottom Line

The Ring card has no annual fee and never has a balance transfer fee, so it’s great to have as a back-up. Plus, with a constant low APR, it’s a good choice for anyone who typically carries a balance.

Or, it would be worth getting if you want to support the “crowd-sourcing” message.

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Don’t forget to check out our list of the best balance transfer cards.