You're watching...
SmartCredit.com President of Consumer Education John Ulzheimer on credit card companies offering big rewards and points upfront to get consumers to si...
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
But you can actually get paid for getting a credit card.
But with so many rewards cards out there which one's best for you -- that is John Alzheimer president of consumer education at smart credit dot com.
-- you know you get these things in the now for ED -- free my housing get cash back and how do you know where to begin.
Points points points -- -- don't don't go crazy thank all of a sudden my -- -- credit card you're gonna have to claim some sort of income at the end of the year pay taxes on it.
What credit harnisch is or during as they are reacting essentially to.
They -- own actions sever years ago -- -- carnac was being implemented a cast aside a great number of card holders because they felt they are too risky.
Now they want them back so what are they doing.
-- front loading rewards just try to entice people to open new car to not only open man but to use -- -- -- -- front loading these things but you have that sort of paid them back with charges well it that's -- that's the dilemma when you open one of these cards is.
You'll -- Carson used it even once or twice and to make it to a 25 or 50000 points.
The dilemma is as well what happens now quite close to six months down the -- -- twelve wants to write a big went to rescind them or not and that's the issue also another thing keep in -- -- like.
-- not charitable organizations they're gonna want to get some -- why in the kind of giving away those points rewards cards -- Always were expensive.
-- non rewards cards not only interest rates interest rates are almost always higher and watch out because they can always implement the new annual fee even though the card act says they have to be do you advance notice of doing so you also say though that the so these cards and just not for everybody.
Are not -- -- made these are not filling up the mailboxes of the people what ficus scores 500 that's simply isn't happening most consumers are still being avoid large because they're just too risky.
These consumers or tar these cards are target to consumers who have very very good square because they know they're gonna use and they're gonna -- back on time.
35% of Americans have credit scores below 650 though are so these are not the people getting these offers.
Canada and 650 seems to be the new dividing line between prime and sub prime -- lenders lines.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- If you really want to exempt yourself from the credit crunch you really better have 66760s.
Across the board.
And in some cases you better how to.
I'm really really significant down payment if you're looking for more.
So either one of these things and now that says I'm gonna get you know.
30000 air miles -- -- I'm planning a trip you're you're seeing not worth it just for the miles.
I would never ever -- a million years suggest anybody chase models -- chase points or -- cash back despite opening one of these parts.
Think of it this way if you're happy with the car because of the interest rates the fee structure of the customer service.
Then open it for that reason think about the reward points of the cash back just as.
As they as they did a benefit of having the -- not the reason to have the -- because if you think about it.
25000 miles to on -- flight.
-- bought plate it's come to New York for a 169 dollars you know what I had to spend 25000.
Dollars on the card.
Turn up miles to get the same ticket does that make any sense are you now.
That's why though you say these cash back cards are best -- cash back here's -- -- -- back.
Because we understand the value of the dollar.
Cash has no blackout periods right Ukraine is that whenever we're at the airline miles and I can't get to -- -- -- are you -- and I'm telling you.
If you if people just in an inventory on the cards they have in the wallets are the ones that -- using a harbor and all these on these points and miles and whatever.
You'd be surprised how much you throw away point why is -- zero value at -- Did better than to just go around finding your credit card I was I was under the assumption that it's nice to be a longstanding customer you know I've been with the card for ten years so why should stay.
You saying something behind the best value.
Now I don't follow lobby their credit card issuers like that I mean keep a dog because you laden that you don't give her credit card because you love it but they're -- -- -- in New York minute if all the -- are missing payments or choose a car because you like it now because you've been a front for a long time and finally an annual fees really still screw people have done that yet they did and what it.
People should be very very cognizant about what are what and and you'll see really is okay so let's say you have a card -- -- like -- like the rewards they treat you well.
And they charges 79 dollar hearing defeat -- nine dollars is a bar tab and I'm not a very good -- had about yet it's it's secures 152030000.
Dollars of unsecured credit for you.
I think it's 479 bucks a year but if they start hitting you with two and 300 there's there's one that I have 495 dollar annual -- 495 dollar and -- face affluent.
I used to headed to the shredder no no you don't ever pay annual -- headed to the shredder.
-- I learned -- thank you -- bad.
