Last week, I hung out at a friends house and his kids college friends were hanging around. We chatted a little and when they found out that I ran a credit card review site, they started asking me some questions. It was then that I realize that many students are so ignorant about simple (to me anyway) basic finance and credit card terms that I thought I would address them here.

Thinking that paying off minimum balance is good enough – Some of the college students asked me things about minimum payments. Many of them simply thought that all they had to do was to pay off their minimum payments and everything would be fine. That was their concept of using credit cards – which is to pay for something you do not have enough money for and just paying a fraction back every month. I then took out a calculator and showed them how much interest they would be paying if they just paid the bare minimum and how long it would take them to pay it back. Many of those college kids were shocked and vowed never to carry a balance again!

Having no idea of how much they are spending every month – Aside from not understanding about the concept of pay in full and carrying a balance, most of the college kids around the table did not know how much they spent. They said they kind of have an idea, but cannot pin down exactly how much they spend each month.

Not aware of rewards – Many of the college kids are not aware that credit cards have reward programs. When I explained to them what reward points were and that they could earn cash back rewards, they were shocked.

Many are not aware that proper use of credit cards can build a credit history – The college kids I talked to had no idea about building a credit history. Yes, they have probably heard about FICO scores or freecreditreport.com, but most are ignorant as to how to build a credit history and what they have to do to get a good score. They do not know what constitute a good credit score. They cannot name the three major credit bureaus.

No idea of when they will pay off their college loans – Many of them also have no idea as to how they are going to pay off their student loans. All they know is that they are stuck with a bunch of loans and that have to be repaid. I guess most are living day to day and trying not to worry too much money matters (at least for now).

Some have already gotten into credit card debt – I guess this is the saddest part of the night. Which is that some of these kids have gotten into debt on their college student credit cards. They are even asking if there low apr student credit cards to transfer a balance!

It is a sad state of affairs that most college students do not understand basic financial matters like credit cards and yet they are all using them! At times, their lack of knowledge is simply mind boggling. But on reflection, I do not blame them. After all, how many parents really teach their kids about money? How many schools actually have classes on “money” and “finance”? Hardly. So why should I be surprised at what I heard over at my friend’s place? But this incident certainly made me want to teach my kids about money!

Verdict: The Chase Sapphire(SM) Card is a decent rewards card, although the rewards program isn’t quite as good as what some others such as the Discover More Card have to offer. Overall this is an ideal card for people who spend a lot on airfare and want to earn rewards, because of the fact that you earn double points on all airfare purchases through the chase travel booking tool.

Overview:

The Chase Sapphire(SM) Card is a rewards credit card that allows you to earn one point for every dollar spent, on all of your purchases. You also can earn double points for all airline ticket purchases you make through the Chase Travel Booking tool, which is basically Chases version of Orbitz.

One nice feature of the Sapphire card is the Blueprint program, which allows you to customize how you manage and pay back your balance. With Blueprint you can choose to pay your everyday purchases in full each month to avoid paying interest on them, while opting to pay for bigger purchases over a set period of time.

As I mentioned in our review of the Chase Slate card, this works out really well for people who like to micro manage their finances. Although some other critics are claiming that this doesn’t really save you that much money, I think that in the end it really can help a good deal because you’re paying back your balance on your own terms.

How This Card Works:

Like most rewards cards out there, with Chase Sapphire you earn 1 point for every dollar you spend. You can also earn double points for certain things such as airline ticket purchases, and you can earn up to 10 points per dollar when you make online purchases through more than 300 select stores in Chases Ultimate Rewards Mall.

Travel and Shopping Benefits:

Ultimate Rewards Online Mall
As I said above, you if you choose to make your online purchases through the Ultimate Rewards Mall which is available exclusively to Chase cardholders, you can earn up to 10 bonus points for every dollar you spend. Now obviously this varies depending on the store, however this is where you can really rack up points if you spend enough.

Trip Cancellation Insurance
This one is huge – If you purchase your airline tickets, hotel rooms, and certain other travel related items with your Chase Sapphire Card, you qualify for trip cancellation insurance which reimburses you if you end up canceling the trip due to certain circumstances.

Lost Luggage Reimbursement
If you purchase your airline ticket with your Chase Sapphire card you are automatically covered if your luggage is lost or stolen.

Trip Delay
If you get delayed for more than 12 hours due to an event that’s covered, Chase will reimburse you for meals, hotel rooms and other expenses that occur because of the delay.

Pros:

• Earn 10,000 bonus points after your first purchase, this can be redeemed for a $100 gift card.
• No annual fee.
• No travel restrictions or blackout dates.
• Chase Blueprint allows you to customize repayment.

Cons:

• Rewards program isn’t as good as some other cards.

Fees

There is no annual fee associated with The Chase Sapphire card. This card has a 12.24% APR as well as a balance transfer APR of 12.24%. There is a 3% transaction fee for balance transfers and cash advances as well as a $15 late payment fee for balances up to $100, a $29 late payment fee on balances from $100 up to $250, and a $39.00 late payment fee on all balances $250 and over. There is a grace period for repayment of at least 20 days.

Apply for the Chase Sapphire(SM) Card.

Verdict: Slate(SM) with Blueprint from Chase® can be a good card for those who like to micro manage their finances. This card allows you to separate out larger items from the smaller purchases on your statement, so that you can avoid paying interest on every day items. Slate also has a 0% introductory APR for a full year after signing up. The downside to this card is the lack of a rewards program.

Overview:

Slate(SM) with Blueprint from Chase® is anything but a traditional credit card, solely because of the Blueprint program. It appears as though the new Slate card was designed around the idea that some customers want more customization when it comes to repayment and tracking of their balance. For this reason, they released the Slate Blueprint card that allows customers to customize their payment terms to their liking. Everyone uses their credit card a bit differently, which is why it perplexes me that most card companies don’t have a program like this already.

For those of us who use our card for large purchases we with to pay off over time, and smaller every day items, this card provides more control over what you want to pay off, which can result in paying less interest over time.

How This Card Works:

Although it may sound complicated, using the Chase Slate credit card is fairly simple. You have several options to choose from:

• Full pay. With this option you can avoid costly interest charges on particular items by paying in full. Items that fit into this category will be separated from the rest on your statement.
• Split. This option gives you the ability to payoff large purchases on terms that best suit you. You have the ability to set a monthly payment or a goal date in which you want to have the item paid off by.
• Finish it. This allows you to pay down your balance as quickly as possible. You set a goal or date, and we make sure you stay on track.
• Track it. Chase Slate gives you the ability to track your progress, while also seeing how close you are to reaching your goals.  

Membership Benefits:

To fully understand the most important benefits of the Chase Slate credit card, you do not have to look any further than the “How This Card Works” section above. The main benefit of the card is the ability to customize payment terms to best suit your financial situation.

Also, don’t overlook the benefit of having a tracking feature. This is not something that directly saves you money, but being able to see the progress you are making allows you to stay the course until you reach all your goals. 

Pros:

• Zero percent introductory APR.
• No annual fee.
• The ability to customize your “blueprint” for free.
• Separate items on your bill so you can pay some in full while leaving others.

Cons:

• Chase still sets the terms at which you have to abide. In other words, no matter what purchases carry over you still have to pay interest.
• Some people will see this as a “plain Jane” credit card disguised as something more.
• No rewards program.

Fees

There is no annual fee associated with Chase Slate. Some fees to be aware of include: three percent of the amount of each balance transfer; three percent of the amount of each cash advance; late payment fees of up to $39; and an over-credit-limit fee of $39.

Apply for Slate(SM) with Blueprint from Chase®.

What goes into comparing credit cards? Here are the details that you need to think about:

• Purchase APR. This is one of, if not the most important detail to compare. The purchase APR will determine how much you pay in interest on your balance. Lower numbers are better here. Along with this, make sure you know if the credit card has a fixed or variable rate. With a fixed rate your APR will stay the same, month after month. With a variable rate you never know how much you will be paying, and you will be forced to stay on top of this at all times to avoid surprises.
• Fees. Many people will not opt for a credit card that has a lot of fees attached. In fact, some people do not ever want to get hit with a fee that they do not deserve. The most common is the annual fee – this is money you pay every year for the right to keep your card active. Does this sound fair to you? If not, cards with this fee are not a good choice.
• Introductory offers. Some credit card companies will give you a great introductory rate to get you onboard. For instance, the Blue for Business card from American Express offers zero percent APR on purchases for 6 to 15 months depending on your credit rating. This is a great way to borrow free money.
• Rewards. Are you only searching for credit cards with rewards? You are in luck. These cards are continuing to grow in popularity. Of course, not every reward program is the same. With some, you may earn 1 point per 1 dollar spent. With another, you may receive up to 3 points. Also, compare what you can trade your points in for.
• Service experience. It is not always easy to carry a credit card regulated by a company with bad customer service. There will come a time when you have a question or need assistance. Will the company be able to assist you? Or will you be on your own?

Now, instead of pondering what goes into comparing credit cards you know exactly which details to look into.

Verdict: Current by Discover is a debit card for teens. While this card is designed specifically for teens, parents will love the many benefits that it offers. With this card, parents and teens are forced to work together to set a reasonable budget while developing responsible spending habits.

Overview:

Parents who are looking for a way to monitor their child’s spending do not have to look any further than Current by Discover. It is your job to decide how much your child can spend. This is done by setting daily, weekly, or even monthly spending limits. Believe it or not, you can even decide where your teen uses the card. For instance, you can easily restrict purchases at hotels, liquor stores, or anywhere else your child should not be frequenting. 

How This Card Works:

The way the Current by Discover card works is quite simple.

1. Set it. Add money to the card and set controls, such as spending limits. This is the job for you, the parent.

2. Use it. This is when your child comes into play. Current by Discover can be used at all approved stores, ATMs, and online destinations.

3. Track it. For parents, this is the biggest benefit of the card. You have the ability to track spending, both the amount and locations, via the internet including email and text.

Membership Benefits:

There are many benefits of the Current by Discover, both for teens and parents. For parents, the ability to set spending limits is very important. This ensures that their teen does not go overboard. Of course, being able to add money to the card is also very important – this helps to avoid mass amounts of debt. On top of all this, parents can track everything that is done using the card. Did your child book a hotel room? You will know how much they paid, when they stayed there, and much more.

What about for the person using the card? Teens are sure to love the Current by Discover as well. With the card they have the freedom to shop both at land based stores and online. And while they may not realize it is a benefit, the card also helps to keep them financially safe.

Pros:

• Set spending limits.
• Deposit money from another credit card or bank account.
• Restrict shopping categories.
• Track how your teen is using the card.
• Safe alternative to traditional credit cards with which debt can be accumulated.

Cons:

• Fees. Just like most credit cards, Current by Discover has some fees associated with it. For further details, see the “Fees” section below.
• You have to constantly load your teen’s card with money. With a traditional credit card this is a step that is bypassed.

Fees:

There is a participation fee of $5/month. Other fees include $.50 for ATM withdrawals after the first four, $3 to receive a new card, and $5 to receive a paper statement via mail. The Current by Discover does not have an annual fee.

Apply for Current by Discover.

Pre-authorized payments can also be setup to pay other bills such as your cable or phone bill by automatically charging your credit card each month. Although the purchases are now getting charged to credit, it works the same way. If you decide to close a credit card account and have pre-authorized payments getting charged to the card, always be sure to cancel them before you cancel the card.

Although pre-authorized payments can be convenient, before you set them up it’s important to make sure that you’ll have an adequate balance available every month for the automatic payments. You don’t want to get stuck with any overdraft fees from your bank for having a negative balance, or fees from the credit card company for going over your limit due to the automatic deductions.

It’s important to note that this only works if your going to pay down your debt in that 6 – 12 month grace period, because for many cards there is a fee associated with transferring the balance. This fee generally ranges from 2 to 5% of the amount you transfer to the card. Although this may sound like a lot of you have a large balance, the amount you save in interest over the 6 – 12 months with 0% APR makes it worth it. You also need to make sure to always make your payments on time. If you can’t pay on time, it’s not worth transferring your balance because one late payment could land you with an interest rate that’s just as high as your current card.

Credit card companies created the 0% APR balance transfer option as a way to bring in new customers. Although it may seem like a marketing ploy at first, it can be an extremely effective strategy to cut down your credit card debt quickly if you take advantage of paying off as much of the debt as you can during the 0% APR period.

When you look into the balance transfer cards you’ll find that some cards will offer the 0% APR rate for a longer period of time, with a higher initial balance transfer fee, while others will have lower initial balance transfer fee with a shorter introductory rate. I recommend taking advantage of the cards with a higher transfer fee. Discover Card has just brought back a 0% APR for 12 months rate on their Discover More American Flag Card. This is currently our choice for best balance transfer credit card because it’s the out there with a 12 month 0% APR rate.

If your looking to take advantage of using 0% APR balance transfer credit cards, be sure to check out our list of best balance transfer credit cards for 2010.

Important: Most cards give you an option to transfer the balance of your existing cards when you apply. I recommend holding off on this at first and transferring your balance after you are approved for the card. We’ve found that you have more of a chance of being approved for the new card if you opt out of the balance transfer option initially. Discover gives you up to 2 months to transfer a balance and take advantage of the 0% rate, so you have plenty of time if you decide to hold off.

Many people who are stuck with a mountain of credit card debt have that debt on more than one card. To effectively use balance transfer cards, you want to figure out which of your current cards have the highest interest rates, and transfer the balance from those cards first. The idea is to eliminate your highest interest cards, and although another card may have a higher balance – the card with the higher interest rate may be costing you more in the end.

Finally, after you transfer your balance from your existing card or cards, you want to consider keeping the old accounts open. Closing active credit card accounts can have a negative effect on your credit score, so as long as you don’t have to pay an annual fee you probably want to leave the accounts as they are for the time being.

Always keep in mind that not all credit cards were created equal, so always make sure to do your research and read the fine print before you apply.

1. Increased rates. More so today than ever before, interest rates are out of control. This can hold true no matter if you have a 550 credit score or one above 800. Consumers are finding their rate going through the roof. In fact, some have received notice that their rate will reach 35 percent or more. What would that do to your monthly payment?

2. Minimum payments on the rise. There used to be a time when most credit card companies would only require a minimum payment of one to two percent of the overall balance. For some, those days are long gone. Now, some consumers are facing a minimum of five percent.

Two percent on a $10k balance is $200. Five percent on the same amount is $500. Would you be able to swing this increased minimum payment? For many, the answer is no.

3. New fees. Annual fees are still in effect, but there are many others that are joining the game. Some credit card companies are charging an inactivity fee. This is nothing more than a fee that is charged if you don’t use your credit card for an extended period of time. Other companies, such as Citibank, are hitting consumers with fees for not charging at least $2,400 (or more) per year.

4. Bye-bye to rewards. For many, the only good that comes from using a credit card are the rewards they receive. It is a shame, but many credit card companies are cutting back in this area. For instance, instead of giving three percent cash back on qualified purchases this was cut back to one percent.

5. Limits being cut. Do you rely on a high credit limit to get by? If so, you could be in trouble. Credit card companies are slashing limits by up to 75 percent, while also canceling accounts that are not beneficial to them.

What can you do?

It is important to know the current terms of your credit card, as well as any changes that your company makes. Remember, you will receive a notice in the mail if the terms and conditions of your account are changing – don’t take this lightly.

A great way to teach your kids (when I say kids, I really mean teenagers, you probably don’t want your 5 year old running around with a credit card) how to spend responsibly, and keep track of what they are spending money on at the same time is by getting them a Prepaid credit card.

Getting your kids a Prepaid credit card is great idea because:

1. Unlike a normal credit card, your kids can only spend up to a certain limit, which you set. This can teach kids how to maintain a balanced budget, which is extremely important, especially later in life when they have a lot of credit available to them.

2. You can easily keep track of how much money your kids are spending and exactly what they are spending the money on. No more money for food that’s really going to buy video games etc..

3. Although this won’t help your kids credit score, it won’t negatively effect it either. This is good because if they make a mistake and spend too much, the purchases weren’t really on “credit” and there is no money to pay back. This prevents them from getting into trouble with the card companies, however not so much with you.

If you’re already giving your kids a weekly or monthly allowance, a prepaid credit card is something you definitely want to consider, especially if they are in their mid teens. This way, before they go of to college and get bombarded with credit card offers, they understand the risks, possibly implications, and responsibilities required when dealing with credit.

Current by Discover is the best prepaid credit / debit card out there for kids and parents alike. With this card you can:

• Add money easily to your teen card and set spending limits and e-mail or text message activity alerts.
• Withdraw cash at ATMs and temporarily disable the teen card if you lose it.
• Track purchases and access exclusive discounts online.

Another good card is the Wired Plastic Prepaid Visa because it has no bounced check, NSF and overdraft charges and allows you to “recharge” it at over 100,000 retail locations worldwide. You can also sign up to get free email and mobile alerts, so you know when the card is being used.

To avoid buyer’s remorse, as well as increased credit card debt, consider these tips:

1. Don’t take your credit card with you to the store. This is one of the easiest ways to rid of this problem. If you don’t have your plastic you have no way of using it. In turn, experiencing buyer’s remorse is much less likely. Sure, you can still use cash but at least you are not getting yourself into debt.

2. Avoid impulse buying. Some people head to the mall with no idea of what they are looking for. Does this sound like you? If so, you are probably all too familiar with the idea of impulse buying. This is when you see something you like and purchase it without thinking of the long term pros and cons.

Tip: the bigger the purchase the more research you should do. In other words, buying a pack of gum on impulse is much better than a big screen television.

3. Know the return policy of everything you buy. Even though you should not purchase something with the idea of returning it, you never know what will happen. Can you return the item and receive all your money back? Can you only get store credit? Do you need the receipt? How long do you have to make the return? Every store is different – make sure you are well aware of the return policy and all the finer details that govern it.

4. Are you having a hard time deciding whether or not to buy something with your credit card? If so, it is time to run out of the store. It is better to do without something for the time being than to make the wrong decision and face buyer’s remorse. If you change your mind you can always go back to the store at a later date.

Anytime you are carrying a credit card in your wallet you are at risk of making a bad decision. Buyer’s remorse is a serious problem, and one that you do not want to face.