While turning to credit cards to make holiday purchases isn’t the best idea for all shoppers, it can actually be quite beneficial for those who know how to spend within their budget.  Most who use credit cards this holiday season will turn to 0% interest credit cards to save a few bucks on interest as they carry balances into 2012. However, if you have a detailed budget planned to make sure you never pay any interest charges on credit card purchases, there are actually several holiday cards that offer more benefits than the typical 0% interest promotion.

Some of the best cards to use for holiday shopping include:

Citi Dividend Platinum

The Citi Dividend Platinum Visa seems to have been created with holiday shoppers in mind. This card offers up to 5 percent cash back on many common purchases, and even a bonus cash back offer until March 2012.

Chase Freedom

If you know that you will be spending quite a bit in retail shops, dining establishments, and movie theaters, then you may want to consider the Chase Freedom credit card. Cardholders can receive 5 percent cash back at all the aforementioned locations as long as they don’t exceed $1,500. New cardholders are even able to receive $200 cash back if they spend $500 or more within the first three months of acquiring the card.Check out the Chase Freedom® Visa – $100 Bonus Cash Back offer.

Chase Sapphire

Do you like to use one card to do all of your spending? Then the Chase Sapphire® Card is probably for you. The Ultimate Rewards program puts you in an elite group that grants you special VIP access to some amazing experiences. Not only that, but the rewards program is one of the most generous in the industry. Here’s what you get:

• Earn 25,000 bonus points after you spend $3,000 in the first 3 months – that`s $250 toward a flight or any other reward!
• 2 points per dollar spent on dining & 1 point per dollar spent on all other purchases.
• Points never expire and there are no limits on how many points you can earn
• Redeem points for travel, gift cards, merchandise, cash back and more
• 24/7 direct access to expert service advisors (No voice recording)
• No annual fee! Apply Now!

Discover More

The Discover® More® Card is a good option to use during the holiday season as it offers rewards at places visited most during shopping: restaurants, department stores, clothing stores, and Amazon.com.  For shoppers swiping their card while dining out or at clothing or department stores, they can earn 5 percent cash back through December on $300 in purchases a month.  Shoppers can also earn 2 percent cash back on purchases up to $250 a month when shopping at Amazon.com.  In addition, there is no annual fee associated with this card, which makes it a great long-term addition to your wallet. Other features include:

• 0% intro APR on purchases and balance transfers for 15 months, then the variable standard purchase APR of 10.99% – 20.99%*
• 5% Cashback Bonus® in categories that change like gas, restaurants, department stores and more. Limitations apply*
• Up to 20% Cashback Bonus at popular retailers when you shop online through Discover.com
• Discover is ranked #1 in customer loyalty–15 years in a row! (2011 Brand Keys Customer Loyalty Engagement Index report)
• 24/7 access to a U.S.-based Account Manager within 60 seconds
• $0 Fraud Liability plus automatic mobile and email fraud alert options
• Great rewards with no annual fee, no rewards redemption fee, and no additional card fee
• *Click apply to view rates, fees, rewards, limitations and other important information Apply Now!

Blue Cash Everyday American Express Card

If you know that you will be doing a lot of driving or cooking this holiday season, the Blue Cash Everyday(SM) Card from American Express may be the best card for you to use. In addition to offering 1 percent cash back on all purchases, the card offers double points when used at gas stations and triple points when used at grocery stores. In addition, there is no cash-back limit and no annual fee associated with the card, and cardholders receive the first 6 months interest free. Check out my American Express Blue Cash review for more detailed information.

Holiday shopping is often one of the most stressful and financially straining tasks of the holiday season, but if done responsibly, can actually be quite rewarding. Consumers who plan to use their rewards credit cards frequently during holiday shopping will enjoy some amazing benefits like signup bonuses, cash back, and miles worth hundreds or even thousands of dollars.  And even if you don’t have good enough credit to get approved for one of the best rewards credit card this year, you can always plan on making your holiday purchases with credit cards for bad credit in order to start rebuilding your personal credit as you enter into the new year.

Regardless of which type of credit card you choose to use this holiday season, always remember to practice responsibility first. Create a budget before you begin spending, and also be sure to create an adequate repayment plan so that you can avoid high interest rates and strapping your monthly budget well into next year. The holidays are meant to be enjoyed, not become a financial crisis, and good financial practices can ensure that your holidays stay bright.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

Don’t know which actions to watch out for?  Avoid these credit killing mistakes and you will certainly improve your credit score.

1. Late payments

Delaying or skipping a credit card payment will hurt your credit score significantly.  Place yourself in the place of a lender.  If a potential borrower has a history of being late on payments would you want to be lending credit to them?  I know I wouldn’t.  Never skip a bill.  In fact, I recommend automatic bill pay so you never miss a payment.

2. Defaulting

Whether it is a car loan or college loan, defaulting will wreck your credit score.  It’s a very simple concept:  You have agreed to a contact and now you are failing to meet your obligations.  Result?  Default and your credit score plunges and if it’s a secured loan, property may be repossessed in addition.  Lesson?  Manage your money well and always make good on your debt payments. Ultimately, this simply means only borrow what you can afford to pay back.

3. Bankruptcy

With a slumping economy and small businesses going under all around us, bankruptcy is a serious reality for many people.  Unfortunately, bankruptcy has a serious negative impact on your credit score.  You should seek out alternatives to bankruptcy, because it is extremely hard to get your credit score back to where it once was. If bankruptcy seems to be your only option it could be time to look at negotiating your debt or settle some for a lesser amount. While those also aren’t good for your credit it’s better than bankruptcy.

4. One too many in-store credit cards

I know it’s tempting to open store cards for extra discount this time of year, but try to avoid the urge.  Credit agencies will see this as a credit risk and notch your score down.  Even if you pay them off immediately, it can be looked at as a negative in terms of “credit worthiness.”

5. Maxing out a credit card

It might appear to be common sense, but people still do it.  Again, this goes back to what the creditor thinks about your credit worthiness.  Maxing out a credit card is not only foolish, but takes away trust that a creditor has in you.  Avoid this by only spending 25% of your maximum credit limit if you can.

6. Closing credit cards

The length of your credit history is a large percentage of your credit score.  The longer your credit history, the higher your credit score will be.  Avoid closing your oldest card, and only consider closing your most recent cards if you have a reason to close any.

7. Applying for multiple cards

Did you know that each time you apply for a credit card your credit score may be dinged slightly?  If you plan on opening multiple credit cards, try to space them out.  For example, I will only open two cards a year.  I open travel reward cards for the bonus miles, however I keep myself patient and just wait for the next year to open an additional card if a better offer comes around.

8. Charging off an account

If you are regularly very late on payments or start getting too far behind, a lender may “charge off” the account.  Basically, a creditor will charge off your account if they think you have no hope of paying back your debt.  You can avoid this by living within your means and not getting yourself into a bad situation in the first place.

9. Foreclosure

A foreclosure will  also impact your credit score.  A foreclosure shows credit companies that you are not responsible with your money and therefore you deserve a lower credit score.  Avoid this situation by buying only enough house for your needs and stay clear of home equity loans.  Leave the extravagance for your friends.

10. Bad spending habits

This one sneaks up on most people without them realizing it.  The basic rule of thumb on this one is to never spend over 25% of your credit limit on a credit card.  A portion of your credit score is based off of “credit utilization.”  You want to avoid the appearance of irresponsible credit use. Just like having a maxed out card sends a bad message, so does constantly carrying a high balance, even if it isn’t maxed out.

There you go folks, a quick run through some of those most common mistake to avoid when it comes to your credit score.  A credit score is connected to so many things in our lives, so protecting it should be a priority. Even getting that next job may depend on it.

What’s better than getting generous rewards? Try 0% APR on purchases and balance transfers for a full 18 months. The combination of rewards and a very generous 18-month zero interest and balance transfer feature, it’s hard to go wrong.

Some highlights of the card:

• 0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the APR will be 11.99%-21.99% based upon your creditworthiness.
• 24/7 access to personalized concierge service providing assistance in booking hotel, flights, concert tickets and much more
• Special access for Citi cardmembers to purchase presale tickets, preferred seating, VIP packages, and other unforgettable live entertainment experiences through Citi Private Pass(R).
• Exciting deals and savings for great brands through Citi Specials
• $0 liability on unauthorized purchases and Citi® Identity Theft Solutions
• No annual fee

With this card you also receive:

Price Protection - If you buy something with your Citi® card and then see it advertised in print for less within 60 days, you will receive a refund for the difference up to $250.

Retail Purchase Protection - Provides coverage for most items you purchase with your Citi Card if damaged or stolen within 90 days of the date of purchase.

Extended Warranty - The terms of the original manufacturers’ U.S. warranties (of one year or less) may be extended up to one additional year on most items purchased on your card.

If this card doesn’t quite fit your needs, be sure to check out the other credit card offers.

No Annual Fee

Let’s start right from the top and with one of the most shocking benefits of the American Express Blue Sky card. There is no annual fee. Zero. Zilch. Nada. I know, it’s shocking. Most travel or airline cards have stiff annual fees, even if they do waive it for the first year. So if you don’t like annual fees, this card probably already has your attention.

Valuable Reward Points

Obviously, the next best thing is the rewards. Again, this is where the Blue Sky card differs from many of its peers.  As with most cards, you’ll receive one point for every dollar spent, but the key here is that Sky Points are worth a little more than many others.  With Sky Points you only need 7,500 points to earn $100 in rewards. That’s 1.33% on everything you purchase compared to the industry standard of 1%.

Travel Benefits

While points are important, it’s how you spend them that can make the difference between an average rewards card and a great rewards card. This is where American Express really outdoes the competition. They are known to have one of the easiest redemption systems and most extensive customer support ready to help you at the drop of a hat.

To start, there are no blackout dates. None. In addition, there are no airline restrictions. Those two items right there are worth getting the card, but there’s more. You aren’t required to book travel through a special website or even use American Express services. Instead, you can book through your own travel agent, through a discount travel site like Expedia, or however you want. All you have to do is first redeem your statement credits and then book your travel using your Blue Sky card. It’s that simple.

As if that wasn’t all, there are even more items you can use Sky Points on. It isn’t just airlines and hotels. In fact, you can also apply rewards to rental cars, train tickets, cruises, tours, and many other items.

Want even more benefits? You’re in luck. In addition to all of the above you’ll receive:

• Guaranteed Room - When you reserve your room with your American Express Blu Sky card, your room is guaranteed. It doesn’t even matter where you stay.
• Free Hotel Breakfast - While it doesn’t apply to all hotel chains, if you stay at a JW Marriott or Renaissance hotel, you get free breakfasts plus an additional $100 towards your next stay at one of their hotels.
• Rental Car Insurance - Rent a car with this card and get added protection for free.
• Free Extended Warranty - When you purchase items with your Blue Sky card you get additional warranty coverage automatically. In fact, American Express doubles the manufacturer’s warranty, up to an extra year.

Get Your Blue Sky Card Today

This is probably one of my favorite reward cards in my wallet. It doesn’t get much better than having no annual fee, more valuable reward points, the ability to redeem travel points anywhere, and get all of the added protection at no additional cost. So what are you waiting for? Get your American Express Blue Sky card today.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

Building a solid credit history and credit score is a catch 22. In order to get credit you need to have a good credit history, but if you don’t have a credit history not many people will be willing to lend to you so that you can build that history. Luckily, most cards aimed at students take this into account and you can sometimes qualify with little or no credit history and the initial credit limits are usually low. This is perfect for a college student just starting out. The key is to continue using credit responsibly and maintain that good standing.

So, if you are looking for a credit card geared towards college students, here are some recommendations:

Warehouse stores such as Sam’s Club and Costco usually offer exclusive deals to their customers. These deals usually consist of special promotions and savings on products, but reward credit cards often don’t apply. A good credit card that that offers substantial cash back rewards will be especially popular with customers of warehouse stores. Costco has teamed up with American Express to create the TrueEarnings® credit card. This card features high cash back rates for a wide variety of purchases. This credit card helps Costco customers save money when making purchases.

I’m a big fan of shopping at warehouse and club stores because when you have young kids at home it is a big savings when you can stock up on the necessities. So, finding a credit card that will let me get a good deal of cash back on gas plus everything from travel to shopping at Costco is nice.

Card Features:

• American Express® Card and Costco Membership Card in one with no annual fee for Costco members
• Cash back on the things you buy: 3% on restaurants and gasoline up to $3,000 annually, 2% for travel, and 1% almost everywhere else
• Rated 4.5 out of 5 stars in overall satisfaction by current TrueEarnings® Cardmembers from Costco and American Express
• Get approved in 60-seconds.

Cash Back Rates

The TrueEarnings® credit card offers 3% cash back on gasoline up to a limit of $3,000. For gasoline purchased over the $3,000 limit, the cash back rate falls to 1%. The card also offers 3% on restaurant purchases, 2% on travel purchases and 1% on almost everything else, including purchases made at Costco. This method of calculating cash rewards makes it easy to project in advance how much cash cardmembers will earn. Budgeting becomes much easier when using this schemata.

Travel

Cardmembers can easily access foreign currencies when traveling. American Express can mail foreign currency bills or traveler’s checks to their cardmembers within five to seven days. The card also offers insurance for rental vehicles and legal, financial or medical advice is offered on demand. American Express also provides up to $100,000 in travel accident insurance, and the security of having access to cash from over 500,000 ATMs globally. American Express can provide international cell phone rental through Vodaphone with $20 worth of free airtime with rental periods of one week or more.

Entertainment

The card also offers great deals on entertainment, from sports to movies to operas. Cardholders enjoy exclusive access to low ticket prices in select markets and the chance to grab tickets before they become generally available. By using the code AMEX, cardmembers can even earn cash back on entertainment purchases. The rates vary based on the type of venue and the season. Get advance notice of shows and concerts and enjoy some of the biggest Broadway hits.

Shopping

Purchases are automatically protected when using the TrueEarnings credit card. Find savings and deals from merchants on products like dinners, electronics and clothing. American Express can extend the term length of the original manufacturer’s warranty up to one year, as long as the warranty is for five years or less. If an item breaks, cardmembers can get it replaced, repaired or even reimbursed for the amount that was originally put on the card . Finally,in cases of fraud, American Express TrueEarnings cardholders will not be held responsible for the charges.

Other Features

One of the best things about American Express is the great online interface they have put together for managing your accounts. It couldn’t be easier to login and make payments, set up automatic payments, or check the status of your rewards and cash back. With some companies it’s a real pain, so the fact they have spent time perfecting the system is a nice bonus.

Final Thoughts

This is a well-rounded cash back card. Yes, it is American Express and it may not be accepted in as many places, but considering the best cash back rates are on things like gasoline, dining, and travel, you should find it will be accepted in most of those places just fine. Besides, if you’re already a Costo member there’s no annual fee, so it’s a no-brainer.

Of course, there is always one last word of warning when it comes to credit cards. Getting rewards or cash back is great, but if you are someone who has struggled with credit card debt and can’t pay off the bill in full each month don’t go and sign up for a bunch of reward cards just for the sake of getting some cash back. Carrying any sort of balance on cards like these will almost always wipe out any savings or benefit. So, use these cards wisely.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

Have you tried to get a handle on your debt yourself but still can’t seem to make any headway? First of all, it’s OK and there’s nothing to be ashamed about. If you find that you just can’t get back on track yourself, there are people out there who can help. At the same time, you must be careful when selecting your help because there are those who prey on people in debt and seeking help. Some programs may end up costing you a lot of money to simply do what you’ve already been doing, and others are downright scams targeted at taking advantage of you.

To help you understand what type of help is out there, we’re going to talk about the different assistance programs typically offered, what kind of services they provide, and what you can expect from them. There are four basic types of resources to help you get a handle on your debt:

1. Debt Settlement Companies

Debt settlement companies negotiate with lenders to accept only a portion of the amount owed and forgive the remaining debt. They often charge a considerable fee and claim to be able to obtain an immediate reduction in monthly payments. The reality of debt settlement is that the consumer is told to stop paying bills and make payments for a few months while they negotiate with the creditors. The debt settlement company then tries to negotiate a payoff amount with each creditor and uses the threat that you’re heading into bankruptcy as a negotiating tool. This often appears legitimate since you’ve been missing more payments, so it can help reach a settlement with the creditors for an amount much lower than what you owe. Then you use the money that you hopefully saved over the past few months to pay off the negotiated payoff amount.

For example, let’s say you owe $10,000. Instead of making your regular monthly payments on this debt, you stop and put that money aside and find you’re able to save up $2,500 over the course of four months. The debt settlement company charges you a $500 fee to negotiate this debt on your behalf and is able to get the creditors to agree to settling the debt for $2,500. That’s great, right? You were able to get out of paying most of your debt! Not so fast. Remember how you were told to stop making payments on the debt? Those negative marks usually aren’t going away and have now caused significant damage to your credit history and will be there for seven years. And the fact that you settled the debt doesn’t make it appear as if you paid off your debt. That alone will show up on your credit report as “settled” and is also a significant negative mark on your history that will be with you for years. Unless your credit score is already at rock bottom, you’re already months behind on your payments, and you’re staring bankruptcy in the face, this is usually not a good option.

2. Bankruptcy

That brings us to the next ugly alternative — bankruptcy. Under bankruptcy, all or a portion of your debt can be absolved by the courts. Bankruptcy is typically held as the last resort since a bankruptcy will stay on your credit history for ten years and make it quite difficult to obtain lending for a while. In addition, the legal fees associated with filing bankruptcy can be fairly steep. You’ll often hear stories about people who are too broke to even afford to file bankruptcy because the attorney fees alone can run into the thousands of dollars.

Things can get complicated depending on whether you have secured or unsecured debt, own property, have equity, and what type of investment accounts you have, and what chapter bankruptcy you file. The potential complications and legal issues surrounding bankruptcy go far beyond this article, so it’s certainly worth your while to consult legal assistance if you feel that bankruptcy is your only option.

3. Debt Consolidation

So, we’ve talked about two of the least attractive options, but now it’s time to focus on the two potentially better options. First, you may be considering debt consolidation. Here, you’re not negotiating out of any debts, settling for a smaller amount, or absolving yourself of any debts through legal proceedings. Instead, you’re simply consolidating all of your debts into one or two more manageable payments.

We’re not magically fixing any debt problems, but just making it easier to make payments and hopefully reduce the amount of interest paid. For example, if you have six outstanding credit cards with interest rates from 20-30%, consolidating these into a single loan or credit card that has a 12% interest rate can not only reduce the number of payments each month, but it could potentially save thousands in interest.

A few words of caution. Be careful when seeking out a debt consolidation company. Some will advertise debt consolidation only to pressure you into some sort of debt settlement program after meeting with you. Others will offer a consolidation loan that doesn’t have a very good interest rate and may be lined with fees that make it so you aren’t actually saving any money. And finally, the biggest problem when consolidating debt is that people don’t change their behaviors and end up right back where they started and in even more debt a few years later. Remember, debt consolidation doesn’t pay off your debt, it simply shuffles it around. If you consolidate your debt and now have all of this available credit on your credit cards, you have to make sure you don’t start using that credit or you’ll find that you’re going to be in even more trouble.

4. Credit Counseling Services

This brings us to credit counseling services. There are two different ways that a credit counseling service can help you if you are burdened with debt. First, a good credit counseling service works closely with you to help provide financial education and tools that can help you get your finances under control. They may work with you to create a budget and assist in helping with the emotional baggage that comes with excess debt.

The second method of assistance is through a debt management program, or DMP. Through a DMP, the credit counseling organization works with you and with your lenders to find a way to manage the debt and pay it off. Unlike a typical debt settlement, a DMP will usually focus on working with the creditors to reduce interest rates, waive late fees, and establish a more affordable monthly payment before trying to negotiate the amount of the debt entirely. Because of this, being on a DMP generally won’t hurt your credit score. Even so, there may be a note on your credit history indicating that you used a DMP to assist in paying off the debt, and future lenders could use this to decide whether or not to extend credit to you. At any rate, this is still better than having months of late payments and a debt being shown as settled on your credit history. After all, in the end it’s all about lowering your overall debt and utilized credit ratio that will ultimately help you improve your credit.

The problem is that not all credit counseling services are created equal. First, there are two primary types: for-profit and non-profit debt counseling services. For-profit services are almost always a bad idea, and in some states for-profit credit counseling companies are illegal. So, your first step should be to determine whether or not you’re looking into a non-profit agency or not. Unfortunately, just finding a non-profit counseling agency is not enough. Every organization is different and there will be different fees and services associated with each. In some cases you may be able to have the fees waived, but you certainly want to make sure you understand what you’re getting for your money if it does cost anything. Be wary of any company that promises a lot but charges a high monthly fee.

More about Debt Management Plans

As I mentioned above, many credit counseling services will offer a debt management plan (DMP) to help you in getting out of debt. One thing you need to understand is that these plans aren’t typically like debt settlement companies and won’t cancel out existing debt, nor is it a consolidation loan. It’s actually a plan put together that helps the creditors get their money while allowing you to make payments on time.You’ll also want to note that most DMPs will only address unsecured credit, so if your primary concern is a home or auto loan, there won’t be much a credit counselor can do other than help you budget those payments.

With a DMP your credit counselor will work directly with each of your lenders to see if they accept a DMP and if they can work with you to make sure that you stay current on your payments and possibly even reduce the interest rate. In some cases a credit card company will temporarily reduce the interest rate while on a DMP. I’ve seen people get their rates reduced all the way down to about 6% in the past.

The other benefit of a DMP is that it can often simplify your monthly payments. Most credit counseling services will take over sending monthly payments to each individual lender so you’re left with only making one single payment to the credit counseling agency. They usually schedule these for monthly or bi-weekly through automatic debit with your bank account so it can ensure you don’t miss a payment. As you probably know, it’s a lot easier to make and keep track of one or two fixed payments a month rather than a bunch.

A Few Final Thoughts

As you can see, there are options out there to help you manage your debt problems if you find you can’t handle it yourself. Aside from bankruptcy, you can accomplish most of the tasks that these services provide on your own for little or no extra cost. Understandably, not everyone has the time or resources available to follow through with their plans and this is when seeking assistance from a third-party can be beneficial.

While you explore your options, be sure to look at all the alternatives and make sure you’re dealing with a reputable company. There are people out there who realize the amount of stress someone with debt problems is under and they will sometimes try to take advantage of this situation. If anyone is promising seemingly incredible results, know that there is no magic bullet for getting out of debt. Each avenue has its own pros and cons, and some may have a lingering impact on your credit history that will be with you for years, so don’t take the decision lightly.

Debit cards have increased in popularity at a record pace in recent years, and for good reason. Unlike credit cards, they are tied to your checking account and when you swipe that plastic you’re instantly pulling from money you have available. There are obviously a few drawbacks to this when compared to credit cards in terms of security and protection, but many people have ditched credit cards entirely in an attempt to rid themselves of debt and manage their finances better by only spending what they have in the bank.

Well, there’s a possibility that may change. Part of this whole financial reform issue that’s been going on for a year has to do with preventing banks from gouging consumers, and to a large extent the changes are good. Unfortunately, there’s one change that’s causing a lot of resistance and banks are ready to fight back.

Interchange Fees

It’s all about the fees, baby. Banks were delivered a stiff blow last year by new regulations that limit many of the fees banks were previously able to get away with charging customers, but there’s still one fee change looming. In April, the Fed will be issuing the final rules on these fees which would then be expected to go into effect in July. Although, there is some talk just recently that the implementation of these rules may be stalled for further study. So, what are interchange fees and why should you care?

Wikipedia probably explains it best:

Interchange fee is a term used in the payment card industry to describe a fee that a merchant’s bank (the “acquiring bank”) pays a customer’s bank (the “issuing bank”) when merchants accept cards using card networks such as Visa and MasterCard for purchases.

In a credit card transaction, the card-issuing bank in a payment transaction deducts the interchange fee from the amount it pays the acquiring bank that handles a credit or debit card transaction for a merchant. The acquiring bank then pays the merchant the amount of the transaction minus both the interchange fee and an additional, usually smaller fee for the acquiring bank or ISO, which is often referred to as a discount rate, an add-on rate, or passthru.

Basically, it’s what the bank gets every time you swipe your debit card to make a purchase. Right now these fees often average between 1 and 2 percent of the transaction amount, but the Fed wants to cap fees at just 12 cents per transaction. That’s huge, because if you take a simple $50 debit card transaction and have even a 1% interchange fee, that’s 50 cents. Under the proposed rules the new cap would slash those fees tremendously. Since these fees account for billions upon billions of dollars each year it’s pretty obvious to see why banks are fighting back so strongly.

Bad News for Consumers

Banks are retaliating by threatening to cap debit card transactions to just $50 or $100. Not all banks have spoken out about this, but many of the largest banks such as JPMorgan Chase and Bank of America are certainly quite vocal about it.

The problem is that if this happens, all of the progress made in financial reform for consumers will largely be thrown out the window. We’ve been trying to get people to kick the credit card habit for years and finally debit cards have provided the relief many consumers were looking for, and now there’s a chance banks will deliver a blow to financial responsibility.

Obviously, if you’re someone who uses credit cards or cash already and pay off your bill every month this will have little effect on your spending, but for countless others who rely on debit cards for daily purchases, they may be put in a bit of a bind. When you consider filling up a tank of gas will often be over $50 and no doubt the weekly trip to the supermarket can top $100, a lot of transactions would be declined thanks to this limit.

So what are the options? It’s pretty simple, really. Debit card users will have to:

1. Keep transactions under the specified limit or,
2. Use a credit card
3. Use cash
4. Write checks

Is it the end of the world? No, of course not. Money is money no matter how you spend it, but what is gone is the convenience factor. In this increasingly digital and cashless age, the idea of writing checks or carrying a wad of cash with you feels like stepping back into the stone age. But the real problem comes when people who switched to debit cards to keep themselves  from going into debt revert back to credit cards for their transactions. They may be able to pay off those transactions in full every month, but if they’ve had problems with debt in the past there’s a good chance spending could once again get away from them and unravel everything they’ve worked so hard to control.

It’s an even bigger issue because thanks to credit card companies tightening their belts they have cut credit off to many lower credit consumers, and even reduced credit limits for those with good credit. I know a few of my credit cards that I used dropped my credit limit in some cases down to just $500! That’s not very practical if that’s your only option. For many others, getting a new credit card is out of the question, although CreditLoan does provide a few cards that are easier to get approved for.

It’s easy for people to say just use a credit card and then immediately, or weekly go in and pay everything off, but this is difficult for many. So if these rules do eventually go into effect and banks do start limiting debit card transactions to some ridiculously low dollar amount, the so-called financial reform will backfire and put more people back into debt.

Credit Card Options

It still isn’t clear if these rules will go into effect or if banks are just using this as a scare tactic, but if you’re a big fan of using plastic now might be the time to prepare and get the best credit card to handle all of your daily spending. If you have to use plastic and are responsible by paying your bill every month, you might as well get the most cash back or rewards you can to stick it back to the banks. For everyday purchases the new Discover Clear card is a pretty good option. 5% cash back all year long on rolling spending categories.

If you’re a fan of getting cash back on your regular purchases, then here’s a card for you. It’s the American Express Blue Cash Everyday card and it offers some of the highest cash back rebates in the industry. I know a lot of people and even experts urge you to shy away from credit cards completely, and I concur to some degree. If used improperly and not paid off in full each month they can destroy your finances. But if you’re careful about just using the card for regular purchases and then paying off the bill each month you’re basically leaving money on the table by not using a credit card.

An additional benefit from a card such as the AMEX Blue Cash Everyday card any other credit card is the added protection. I was personally reminded of this just a few weeks ago when somehow my debit card information was stolen and somebody racked up a bunch of fraudulent charges. Yes, the bank caught it and blocked the card, but not until hundreds of dollars were withdrawn from my checking account. Of course, debit cards also carry some protection against transactions like this and I did get my money back, but it’s the inconvenience that was more of an issue than anything because it took a few weeks to get that money returned. Obviously, this was relatively minor compared to someone who may have their entire account emptied, overdrawn and triggering massive fees, and so on. So, sticking to a credit card would have helped minimize the possibility of this happening.

American Express Blue Cash Everyday(SM) Features

So, what makes this card so great? Well, the cash back, obviously. To put it simply, this is what you can get with the card:

This is one of the few cards out there right now that offers those cash back rates. In addition, there is no annual fee on this card, so that just sweetens the deal. So, just how much cash back could this really mean for you? Well, let’s look at an example.

Using fairly common expenses let’s assume you spend $100 a week on groceries, $75 a week on gas, and maybe $50 a month at a drug store. Then let’s say you spend another $500 a month on the card by purchasing other miscellaneous items, paying your cable, phone, and electric bills with it, etc. Over the course of a typical year like that you’ll easily get a few hundred dollars in cash back just for using the card to pay for the things you’d be paying for anyway. If you’re feeding a family of four or have a long commute to work you’ll obviously see the benefits increase even more as you spend a higher amount on things like gas and groceries.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

American Express has been a leader in business cards for decades, and they have come a long way since the days of a charge card. Now you can often enjoy the benefits of deferred payments alongside generous reward programs. Of course, credit cards are still something to use wisely even if it is for your business. Bad spending habits can still cause you to dig yourself into a debt hole that may not only sink your business, but put your credit at risk as well. And there isn’t a single card that’s best for everyone. As you’ll see below, some cards reward those who do a lot of air travel, others give you big discounts for paying off your balance early, and others simply give you up to 3% cash back on purchases. So, depending on your needs you are likely to find one that works for you.

Starwood Preferred Guest® Business Credit Card from American Express OPEN

If traveling and luxury hotels are your thing, it goes without saying that the Starwood Preferred Guest American Express business card should be at the top of the list. Just signing up and making a few initial purchases will give you enough bonus points that you’ll already have two free nights at an amazing hotel. Here are a few highlights of the card:

• Get up to 25,000 Starpoints®. Receive 10,000 Starpoints after your first purchase, and another 15,000 bonus Starpoints when you spend $5,000 in 6 months — enough for 2 free nights at a Category 5 Hotel like the W San Francisco or the Westin New York at Times Square.
• Redeem Starpoints at over 1,000 hotels and resorts in nearly 100 countries, and for flights on more than 350 airlines. No blackout dates.
• $0 introductory annual fee for the first year, then $65

Gold Delta SkyMiles® Business Credit Card from American Express OPEN

The Gold Delta SkyMiles® Business Credit Card from American Express OPEN is designed for businesses with good credit that would like to earn free travel for business-related expenses and travel regularly on Delta Airlines.

▪ Earn 30,000 bonus miles toward Award Travel – when you spend $500 on the Card in the first three months from account opening
▪ Check your first bag free–for up to 8 people on your reservation–on every Delta flight
▪ Receive double miles on Delta purchases and 1 mile for all other eligible dollars spent
▪ Priority Boarding and 20% In-Flight Savings
▪ $0 intro annual fee for the first year, then $95
▪ No annual fee for Additional Cards
• Save 3% to 10% automatically on business expenses from FedEx, Hertz®, OfficeMax®, and more with OPEN Savings®

The Plum Card® from American Express OPEN

The Plum Card® from American Express OPEN is for business owners who would like to use an American Express charge card with added flexibility. This card carries a $185 annual fee which is waived for the first year. You can earn a 1.5% discount by paying your full balance within 10 days of your statement closing date. You can also take up to 2 months from your statement closing date to pay your new balance in full, without penalties or interest. Just make an initial payment of at least 10% of your balance. The Plum Card® from American Express OPEN will prove to be a convenient option for business owners with additional options for special savings.

SimplyCash® Business Card from American Express OPEN

The SimplyCash® Business Card from American Express OPEN is designed for those with very good credit and who plan to take advantage of the cash back reward program with no additional fee. You’ll earn a 5% rebate on office supplies and wireless servcies, a 3% rebate on automobile gas, and a 1% rebate on all other purchases. Rebates are automatically credited to your statement each month, and there is no limit to the amount of cash back that can be earned. The card has no annual fee, and it has a 0% introductory rate on purchases for up to twelve months, plus you’ll receive many benefits including travel accident insurance, purchase protection, and special discounts from select retailers.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.