Are you under the impression that consumers all over the world generally adhere to the same consumer banking practices? If so, you are way off. And By comparing consumer banking practices in the United States and Australia, you will quickly see that there are some major differences. This does not mean that one country is better than the other or that one nation and group of people has a stronger grip on their money. However, it clearly illustrates that consumers in both countries take a different approach to their personal finances.

Here are several ways to look at how consumers bank in the United States and Australia – many of which show some very important differences.

Availability of Online Banking Tools

Before we go any further, it is important to note that both US and Australian based banks are at the forefront of the online banking industry. In other words, financial institutions in both countries are making major strides in their online services.

When doing a head to head comparison, it would be next to impossible to say that one country is ahead of the other. Both are deeply invested in online banking, making it simple for consumers to move their money around via the internet while also offering advanced features such as e-statements.

Mobile Banking Apps

If you live in the US or Australia you have probably heard the buzz associated with mobile banking. Those with a smartphone, either iOS or Android, probably realise that this is an option.

At the present time, US based banks have the edge in this department where more institutions are offering mobile banking apps. According to a recent study by KPMG, 40 percent of Australians are not aware of whether or not their bank offered mobile capabilities. However, it should be noted that Australian banks are working hard to bridge the gap and inform customers of new apps for mobile banking with all the ‘big four banks’ offering at least an iPhone app.

Saving vs. Spending

Due to the recession and more Americans being forced to live payday to payday, the savings rate has dipped. In fact, some experts put the rate as low as 0 to 1 percent – making things as bad as they have been for quite some time.

Although it is widely believed that the savings rate in Australia is higher, this is not saying much. Most experts put this number at approximately 2 to 3 percent. Australia is every bit the consumer economy that the United States is.

Personal Indebtedness

Australia has a major problem when it comes to personal debt. Not only does the country come out on top (which is not a good thing) when compared to consumers in the United States, but it goes one step further: it leads the world in terms of personal indebtedness.

If you compare Australia’s position to that of the United States, you will see just how bad things have become. Currently, the average Australian adult has debt of roughly $56,000. This is compared to the average debt of an American of $44,000.

When you add together personal loans, credit card debt, and mortgages, it totals more than AUD$1.2 trillion. To put this number in comparison, it is 71 per cent higher than it was just five years ago.

Real Estate Value

While the United States may be doing better in terms of personal debt, they are taking a huge step back in the real estate department.

In the last year, Australian home owners had no trouble, in general, making mortgage payments. In fact, nearly 50 percent overpaid on their mortgage. On the flip side, while the real estate market in Australia had been booming for years with a steady increase in property valuations, many analysts now think that the market is now on the edge of a precipice. It’s well known that in the United States, the housing market and mortgage industry has taken a huge hit over the past five years. More than 2.9 million home owners received foreclosure filings in 2010 alone. Along with this, there are currently 5.5 million home owners in the United States that are at least 90 days late on their mortgage. In short, this means that one out of every five home owners are late.

Chris writes for the CreditCardCompare.com.au comparison website, one of Australia’s leading impartial comparison services where they rank the best credit cards to make it easier for users to quickly identify the best money-saving or most rewarding offer based on their personal financial circumstances.

With all the credit card debt out there, it seems like it would be helpful to define what appropriate credit card usage is.

This begins with a preliminary observation. That is simply this – credit card usage is a choice. Thus, if you’ve proven to yourself that you can’t use them appropriately, then you’re better off (and so is your bank account) if you simply stop using credit cards.

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1. Always pay off your balance in full every month.

Good guidelines always have good consequences. In this case, I suggest that if you ever go beyond this rule that you should either stop using credit cards for a six month period, or stop using them all together.

Credit cards in the hands of people who don’t pay off their bills are a very dangerous thing.

2. Never purchase anything over $100 (or a similar threshold) on a credit card unless you decided to buy it before you left the house.

This has been a long standing rule in our home. If I’ve left home with the plan to buy a TV for $300, then I can use the credit card because it is not a spontaneous purchase. If, however, I’m standing in front of a nice new TV, I cannot use the credit card because I may be tempted to go beyond my budget.

3. Never purchase anything over $100 (or a similar threshold) on a credit card without discussing it with your spouse.

Discovering a larger than normal purchase when looking over the bill at the end of the month is not an appropriate way to find out about a household expense. Communicate with your spouse beforehand.

4. Always review your monthly statement.

One of the keys to credit card usage is paying attention. I remember a few years ago when I noticed a charge on our credit card bill. I came to find out that I had signed up for something that would continue charging me every month until I cancelled. By reviewing my statement I was able to catch this discrepancy.

5. Always purchase electronics on your credit card.

One of the nice benefits of credit cards is that they offer certain purchase protections and warranties. You can review the terms and conditions on your card to see what benefits you have. If you pay with cash, you’ll lose out on this benefit that is included with your card. Remember, you should follow this in line with the other appropriate usage tips above.

6. Always maximize your credit card rewards.

If you are responsibly using credit cards as I’ve outlined above, you may as well be getting some credit card rewards out of your spending. This can be in the form of cash back rewards, travel rewards, or both. As an example, the Chase Sapphire Preferred card allows you to earn Ultimate Rewards points. Those points can be used to buy gift cards, purchase travel, or transfer to select frequent flyer mileage programs.

What guidelines do you use to help regulate your credit card spending?

This is a guest post by Craig Ford. At Help Me Travel Cheap Craig teaches people how to find the best travel credit card sign up bonuses so they can get free travel.

A recent article on Yahoo Finance referenced 7 credit card traps to watch out for.  It was a good article outlining a few of the traps out there with credit cards.

Personally, I find credit cards to be extremely helpful as a business owner, and in our personal finances, but that comes only after a toilet-cleaning campaign wiped out $10,000 of credit card debt and after much-needed self control was applied to my use of credit.

Credit cards can be a slippery slope, and I can assure you that if you want to become a millionaire, you’ll have to get the plastic under control quickly!

These first seven credit card traps are the ones referenced in the Yahoo article by Tal Boldo, and the last three are my additional traps to avoid.

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1. Application and Balance Transfers

Tal says, “There are two credit card traps to avoid here. Be sure to include your balance transfer request with your application, and be sure to transfer funds from a credit card in your name, rather than a spouse, as the loan officer reviewing your application will see that your debt-to-income ratio will remain unchanged, which will increase your chance of being approved.”

2. Fixed Promotional Rates

Tal makes a great point to understand the promo rate.  Sometimes the card company can pull one over on you without you even knowing it.  She says, “To avoid this credit card trap ask the customer service representative helping you with the balance transfer whether the fixed rate applies “for the life of the loan.” Otherwise, find out when the rate will expire and what the new rate will be.”

3. Variable APR Rates

Variable rates are the bane of any credit-card-debt-carrying consumer!  A simple nudge upward in the rate can send your payments skyrocketing.

Tal says, “This credit card trap can be avoided by applying for a credit card with a fixed APR, or balance transferring to a fixed APR promotional rate.”

4. Transaction Fees

Fees, fees, fees. It seems like every company has enacted a fee for something.  Tal says, “Most credit card companies that offer attractive balance transfer offers also often charge a transaction fee of between 3% to 5% of the total amount transferred. This fee is added to your total debt at the moment of transfer.”

The sneaky part used to be that the card company wouldn’t apply any future payments to your high rate existing debt, but rather to the new low interest rate balance transfer. What that meant was essentially that you were racking up interest charges at a rapid pace.

5. Membership Fee and Cash Back Bonuses

Tal says, “Avoid credit cards that require membership fees unless other services like life insurance, travel insurance or higher cash back bonuses make the membership fee worthwhile.”

I refuse to pay a membership fee for any card.  I don’t care how great the rewards are, it just doesn’t seem worthwhile to me.

6. Hidden Information

Tal mentions, “A common credit card trap involves the confusing presentation of information.”  Just like with the sneaky balance transfer payment method, there can be hidden tricks these cards are using to get you to keep spinning your wheels with your debt.

7. Pay Off High Interest Debt First

Tal says, “Until the Credit Card Accountability Responsibility and Disclosure Act of 2009, credit card companies would apply your monthly payments to your lower interest rate loans first. Many consumers are not aware that this is no longer the case. You can now make use of balance transfer promotional rates even if your credit card has a high interest balance on it already. When you send your monthly payments in they will apply to the higher interest balance.”

8. Extended Credit Limit

Card companies have tightened up with the credit limits since the 2008 meltdown.  This is still something to watch out for – where the card company extends your credit limit because of your great payment history.  If you don’t have the self-control to handle such a move, you’ll find yourself thinking you’ve just gotten a raise!

9. Minimum Monthly Payment

This might be the trickiest trap of them all!  Card companies love when you only pay the minimum payment.  And that amount looks so attractive doesn’t it? I mean, who wouldn’t want to just pay $50 on a large debt amount!? But, if you continue paying the minimum, it will oftentimes take decades to pay off your debt!

This is what suckered me when I first used credit cards in college. I ended up paying the monthly payments thinking I would just pay it all off when I earned more money. Two IRA withdrawals later, which resulted in IRS penalties and the wiping out of my savings, I learned my lesson.

10. Free “Checks” Received in the Mail

I remember the first few times I received these in the mail thinking I had just won some promotion or contest! I nearly cashed a check until I read the fine print. That’s when I realized they essentially counted the check as a cash advance (which naturally has higher interest rates), which results in your charges adding up faster than a Paris Hilton shopping spree!

Credit cards are not for everyone. You need to have the self-control and ability to pay the debt.  But, if you’re able, credit cards can be a great tool.  Either way you slice it, watch out for these 10 traps!  Card companies are just waiting for you to trip up!

What other credit card traps would you include?

This was a post originally posted on Christian PF. You can view it here.

We all know there are tons of credit cards on the market which offer extra rewards for certain types of spending, such as gas and groceries.

However what you may not know is that a handful of rewards programs give you extra rewards for charity donations, too.

istockphoto.com/pcatalin

Here are the 3 most popular rewards programs that I am aware of:

1. U.S. Bank FlexPerks Travel Rewards Visa

As the name implies, this is a travel rewards program. It gives 1x points on regular spending, 2x on the category you spend the most (gas, groceries or airline travel), and 3x points on charity donations. Its annual fee is $49.

This has a tiered redemption structure when you cash out your rewards program. Let me demonstrate this by showing you the first two tiers:

20,000 FlexPoints = Up to $400 ticket value
30,000 FlexPoints = Up to $600 ticket value

As you can see, your rewards program has the potential to be worth up to 2 cents per point (which is amazing) but if you are stuck with a plane ticket that costs, say $405, the value you get per point drops dramatically.

Regardless though, this rewards program will still probably give you a reward value that’s significantly above 1.0 cent per point. That means the 3x points on charity donations will essentially be earning you at least 3% and possibly much higher (up to 6%).

2. Chase Freedom

Chase heavily promotes this credit card so there’s a good chance you already know quite a bit about it. The Chase Freedom rewards program gives 5% cash back in categories which change every quarter. After you exceed $1,500 in spending for the 5% categories during a given quarter, the payout drops to 1%.

During the 4th quarter of 2011, one of the 5% categories is charities. That means in theory, you could earn up to $75 on a $1,500 charity donation, assuming you didn’t spend any money in the other 5% categories that season (which are dining, movies, and department stores).

Because it only offers 5% on charity donations for one quarter out of the year and it imposes a rewards cap, I would say this is not the best choice for a rewards program for charity donations. The card from U.S. Bank would be a much better idea.

3. AAdvantage Mileage Program

Although it’s catered to those who have the AAdvantage credit card, you don’t actually need it to earn these rewards. To the best of my knowledge, you can use any credit/debit card! You will earn miles for every dollar donated to participating charities, when you use this link.

Right now, the USO, Susan G. Komen for the Cure and the National Foundation For Cancer Research are offer 10 miles/per dollar. This is quite good, considering the fact that each mile is usually worth more than 1 cent. The U.S. Fund For UNICEF is also listed but I do not see mention of how many miles are awarded for it. If you are passionate about these particular charities, then getting up to 10 miles per dollar is certainly a very generous incentive.

The Pros and Cons of Rewards Programs for Charity Donations

We’ve gone over the rewards programs, but now let’s review the possible drawbacks that may be involved by using these programs for your charity donations. Let’s look at the pros and cons…

The Cons

1. Processing fees
Without a doubt, the biggest drawback will be the cost incurred by the charity. If they have to pay 2.5% to process your cards, then that means only 97.5% of your donation is going to the charity.

2. Distortion of organization’s financial picture
Like many people, the most important thing to me when considering a charity is its efficiency. Which percentage goes towards the cause and which percentage goes towards administrative and fundraising?

My concern here is that depending on the accounting method used, it might make an organization look slightly less-efficient than it actually is (by increasing the fundraising costs). In turn, this could affect its ratings on CharityNavigator, GuideStar, etc.

With that said, if payments are handled 100% entirely by an intermediary company, then maybe it won’t affect the charity (because the charity would only count the money they get from the intermediary as the donation amount). Ultimately, this is something you will need to investigate if it concerns you, because I do not have the answer.

The Pros

1. Might be more efficient
For smaller charity donations made via check, the amount of time it takes for the charity to open the envelop and manually process the donation also costs them money. So for larger donations I would say check is always the way to go. But for small amounts, credit cards might be more efficient.

2. Rewards encourage giving
Some people say rewards programs encourage spending. Well, if that spending is on donations to good charities, that probably isn’t a bad thing. If the higher rewards plus the added convenience of a credit card means you will be more inclined for charity donations, then in my opinion that’s a positive thing.

This guest post was written by Mike, who is the founder of CreditCardForum. He has been writing credit card reviews for years, including a recent review of the Freedom card by Chase. On the topic of charities, his favorite is World Vision.

Starting a business necessarily involves significant amounts of capital spending. The industry, and the product or service the business seeks to provide, may dictate purchasing equipment, factory or office space and hiring employees.

Entrepreneurs who want to start a business and work at building it full-time have little choice but to go into debt. The alternative is to issue shares of stock to investors in anticipation of future dividends. Since a new business is not likely to attract venture capitalists, financing the creation of a business through debt is the only option.

A new business has access to several potential sources of credit. The business owner can apply for a business loan from a bank, preferably one with whom the owner has a prior relationship. This is risky because the owner may be turned down and have to look elsewhere for credit.

Credit cards may be the answer to his dilemma. Charles Huang of Harmonix maxed out his credit cards to finance the business in 2007. The popular video game series, “Guitar Hero,” grew of his efforts. The founders of the search engine Google, Sergey Brin and Larry Page, also used their credit cards to fund the start-up in the mid 1990s.

[Side note from Jason: There are hundreds of examples of credit cards backfiring as well.  A business credit card can get you through times when cash flow is tight. As always, you must have a solid business plan to grow your sales and increase your revenue]

Personal Credit Cards

The quickest way to starting a business is to use personal credit cards. This route is a fast track to either success or failure, depending on the start-up idea and execution. The trade-off is to go into debt now in order to make enough money to pay it off later. The entrepreneur borrows from his future success in order to start the venture and get it going. The primary motivation for these businessmen is the chance to try something big and turn a hobby or a crazy idea into a profitable enterprise.

Using personal credit cards to do this is fraught with pitfalls. Creditors may get jittery when faced with rapidly increasing debt loads and suddenly lower credit limits. Alternatively, using so much available credit increases the credit utilization ratio, which can also trigger negative consequences. The ratio is a useful indicator of the risk of default. The higher the ratio, the higher the risk of default, at least in the minds of creditors.

Small Business Credit Cards

The differences between personal credit cards and business credit cards do not mean that entrepreneurs should treat them differently. For a start-up with no capital and no history, creditors view it as indistinguishable from the owner. The owner’s credit history becomes the business’s credit history. All the steps borrowers can take to clean up their credit report will help them get approved for a business credit card.

The risks are different with small business credit cards than with personal credit cards. The regulations and rules of the Credit CARD Act of 2009 do not apply to small business credit cards. Entrepreneurs have more flexibility for their funding needs at the cost of increased risks, like a sudden rise in interest rates or lower credit limits. The advantages of small business credit cards can help compensate for these risks. Some cashback credit cards are specifically tailored for business purchases and can offer as much as 3%.

But with anything, you must be sure to weigh the costs, and make an informed decision.

Anothony Benedict writes for CreditDonkey.com, a credit card comparison site.

When selecting a credit card or a charge card there are myriad options and features to consider. You must compare rates and fees, decide what type of rewards you want (in any), and determine from which issuer and on what network your card will be.

The breadth of this process is ever-changing as features, products and even credit card companies emerge and fade away. One feature that has surfaced and garnered significant attention recently is called No Preset Spending Limit (NPSL). Visa Signature credit cards, World MasterCard credit cards, and the charge cards from both Chase and American Express all have this feature, but what is NPSL exactly and should you get a credit card with it? Let’s find out.

No Pre-Set Spending Limit (NPSL) Defined

NPSL merely means that a card’s limit is variable, changing on a month-to-month basis in accordance with spending habits, demonstrated payment responsibility and trends in the overall economy.

Therefore, contrary to popular belief, cards with NPSL do not have limitless spending capabilities. In fact, NPSL card limits really only differ from those of standard credit cards in that they change regularly and users don’t know what they are.

Credit card companies don’t release their NPSL cards’ limits because doing so would bust the myth of unlimited spending power that serves as one of the primary reasons many people get such products. Therefore, in terms of spending capabilities, all an NPSL card will really provide relative to a standard credit card is uncertainty.

You never know exactly how much available credit you have at your disposal with an NPSL card, which increases the likelihood that your card will get declined unexpectedly and makes it difficult to budget or feel confident in making large purchases.

Pure spending utility is not the only measure of a credit card though. It is also important to evaluate the NPSL feature’s effect on a user’s credit standing. According to an NPSL Card Study by CardHub.com, in most cases, NPSL issuers report proxies to the credit bureaus in place of their card’s true spending limits, again with the intent of preserving the myth of unlimited spending.

NPSL Cards and Your Credit Score

This practice is significant because FICO (the most widely used credit score) and lenders both incorporate information from the credit bureaus into credit-risk evaluations. As a result, proxy limits can provide a misleading sense of your fiscal responsibility.

For example, a proxy limit that is lower than your actual credit limit will make it seem as if you’ve exhausted more of your available credit than is really the case. Since high credit utilization is negatively regarded by creditors, using an NPSL card could thus result in your credit score falling through no fault of your own.

NPSL issuers also use a variety of different proxy limits, making the effect they have on your credit often unpredictable. In addition, they sometimes simply choose not to report information about their cards’ limits, making it seem as if your card doesn’t provide any revolving credit. In contrast, for their non-NPSL cards, issuers tend to report actual credit limit information, meaning that if you have one, your credit score will only reflect your usage, not a credit card company’s secrecy.

NPSL Cards Not Worth the Hype

By now, it’s becoming pretty clear that the NPSL feature provides no real benefit. This sense is elucidated even further when you consider the fact that excellent credit is required for NPSL card approval.

In comparing NPSL products to other spending vehicles for people with excellent credit, such as traditional rewards credit cards, the answer to our original question becomes quite obvious: No, you should not get a credit card with NPSL.

This article was written by Odysseas Papadimitriou, CEO and Founder of CardHub.com, a website that helps consumers compare credit cards and buy discount gift cards.

Many financial planners and credit score experts recommend that you do not cancel your credit cards because doing so will lower your credit score.

While they are technically correct, I am not listening to conventional wisdom. In fact, I am cancelling my credit cards largely because I have always had more credit cards in my wallet than the average person.

If you care about your long term credit score, financial health, and reducing your risk of identity theft, you should follow my lead and cancel all but one credit card.

Canceling Your Credit Cards Hurts Your Credit Score

Closing credit card accounts does have a temporary negative effect on your credit score. Your credit score is based on a host of factors such as length of credit history, amounts owed, types of credit, amount of new credit, payment history, and other factors.

The longer you have had old credit card accounts typically means you have a long credit history.  This information is held with Fair Isaac Corporation, which issues a FICO Score, the most widely used credit score in the nation.

So, if you close a long standing account, you will receive a small ding on your credit score because it will look like you have not been trustworthy for a long time.

Closing a credit card account will also raise your credit utilization rate which is also referred to as the percentage of your credit limit that is available for use. 

For example, if you have four credit cards with credit limits of $10,000 each and you have one card with a $5,000 balance and three with $0 balance, your credit utilization rate is 12.5%. But, if you close the three credit cards with zero balances, your utilization rate will jump to 50% lowering your credit score based on the formulas the credit bureaus use ($5,000/$10,000 = 50%).

Why Buck The Trend And Cancel Your Credit Cards?

There are several reasons why you should consider canceling all but one credit card…

1. The hit on your credit score is temporary

When you cancel a credit card and close the account, depending on how long you have had the card, your credit score will see a slight dip because it may now look like you have not had credit in your name for as long a period.

These factors only account for a small piece of your credit score, and you can see your score continue to rebound from that small dip as you hold your remaining cards longer. The dip is only temporary. Over the long term, you will see your credit score improve and return to a high level.

2. Reduces the risk of identity theft

Having fewer credit cards reduces your chance of identity theft. I move around a lot to different cities with my job, and had a horrible time keeping up with changing my mailing addresses because I had so many credit cards.

Eventually, I began getting tagged with credit cards that changed their fee structures including annual fees. I thought the credit cards had zero balances.  But they didn’t, and annual fees and late fees were racking up because I had too many cards to keep track.

3. Keeps you from spending money you don’t have

Research shows that people spend more using credit cards despite paying off the balance every month. People spend 12-18% more when using credit cards than when using cash.

Fast food giant, McDonald’s, found that the average transaction rose from $4.50 to $7.00 when customers were allowed to use plastic instead of cash in its restaurants.

There is a risk that you will spend more money if you have more credit cards in your wallet and more available credit to your name. Keeping the number of credit cards low is one way to keep your spending in check.

The benefits of closing credit cards that you do not use far outweigh the negative consequences. The experts are right, your credit score will suffer a bit in the near term, but it will soon recover. 

You will have fewer credit cards, be less tempted to overspend, and more protected from identity theft in the long term. The average American has over four credit cards in their wallet. Nothing good can come from having that many.

The fewer credit cards that you have are better, and that is why I am canceling all (but one) of my credit cards.

This is a guest post by Hank Coleman who is a staff writer for CreditScore.net.  Hank is the founder of several financial websites and a staff writer for several blogs as well. He holds a Bachelor’s Degree in Business Administration, a Master’s in Finance, and is currently studying for his Certified Financial Planning (CFP) credentials. Be sure to follow Hank on Twitter.

If you don’t pay off your credit cards in full each and every month, there’s no point in using them…

The credit card rewards and benefits won’t outweigh the finance charges.

However, if you’re the type of person that always pays your balances off in full, there’s some serious money to be made through their credit card rewards and cash back programs.

Below are three powerful tips for maximizing your credit card rewards.

Tip #1: Get a card that gives higher cash back on regular spending

When it comes to your regular purchases, most credit cards give rewards which equal out to be a 1% rebate. However there are a few on the market that give anywhere from 1.5% to 2% – unlimited – on all purchases.

The most famous is probably the American Express Blue Cash, but unfortunately the first $6,500 spent each calendar year doesn’t earn you 1.5%.

For that reason, my personal favorite is the Fidelity Retirement Rewards American Express. There’s no annual fee and you get a 2% rebate on all spending which is deposited into your Fidelity account, whether that’s a 529 college savings plan, an IRA, a brokerage account, etc.

Other options include the Capital One Venture card and Discover Escape card, both of which give you a 2% rebate which can be applied towards any travel purchase, but the drawback is they both charge a $60 annual fee.

Whatever the case, I strongly advise against settling for only 1% on your regular credit card purchases. There are plenty of credit card deals on the market that give higher than that, so you might as well take advantage of them.

Tip #2: Use different cards for different categories of spending

As we all know, with many cards, certain categories of spending earn higher rewards. If you’re crazy like me, you can have a whole collection of different cards to cover the broadest selection of categories.

However I actually don’t recommend that, because that means you will have a bunch of different bills to juggle every month! But in addition to your card for regular purchases that gives 1.5% to 2%, I do recommend one other card that gives higher rewards in the categories you spend the most.

Going back to the example of the AmEx Blue Cash, after $6,500 is spent in a calendar year, the card gives you 5% at gas, groceries, and drugstores – categories that most us would really benefit from.

So if you’re a big spender and can hit that $6.5k threshold fairly fast, that’s one card to definitely consider. For me personally, I’m a bachelor so I tend to eat out a lot. For that reason, I use the Citi Forward card and the Costco credit card, both of which give higher rebates on eating out.

However you can only get a Costco credit card if you have a membership there, so between the two, the Citi Forward card is probably the better choice. Then there are several cards that give 3% to 5% on office supplies, cell phone bills, and many other categories. The key is to figure out which categories you spend the most and then go find the card that would be best suited for those.

Tip #3: Use the credit card companies’ online shopping reward programs

Many of the major card issuers – like Discover, Citi, Chase, Bank of America, and others – have these programs that give cardmembers additional rewards when shopping online.

They all basically work the same way, but I’ll use Discover’s program as an example. Cardmembers simply login to their online account and from there you can click on the following:
ShopDiscover – Earn 5% to 20% Cashback Bonus just for making purchases at top retailers through our exclusive online shopping site.

As their description states, you can earn 5% to 20% extra in rewards when you enter the online retailer’s website through Discover’s shopping portal. Their program has around 200 popular retailers and service providers participating.

A couple weeks ago I needed to re-order my contacts, and by simply accessing 1800contacts.com through the ShopDiscover portal, I got an extra 10% cash back on my purchase.

Conclusion?

With a little strategy, it’s possible to get credit card rewards that average at least double what most people get. But as a reminder, please only use cash back credit cards if you pay your balances off in full. Remember, due to the confusing way a credit card grace period works, even carrying part of your balance for just 1 day past the due date can cost you almost a full month of interest… or more! The bottom line is it’s simply not worth earning 2% or 3% cash back if you can’t pay the charges in full.

This was a guest post from Michael, who writes about credit card deals on his site CreditCardForum.com, which is a message board and blog for all things related to credit cards. He is fanatical about not just credit card rewards, but saving money in general.

The best credit card?  Well, it depends of course…

Who doesn’t want a travel rewards card that spits out free flights and has a 24 hour concierge?

And who doesn’t want a low APR card with no fees and unlimited 0% balance transfers?

Unfortunately nothing like this exists.

Out of the thousands of credit cards in America, each one has a different set of features, and trade-offs that go along with them.

So to filter through this universe of credit and truly understand which is the best credit card choice for you, you first have to understand yourself.

So let me ask you, “How do you use credit?”

•re·volv·er•

Someone who holds a credit card balance month-to-month, using the revolving credit line rather paying it off each month.

If you fall under this category, your main priority should be keeping interest rates and fees as low as possible.  Cards with no annual fees aren’t hard to come by, and the lower the APR you can manage, the better.

Forget about those rewards I mentioned, because those cards generally come with higher rates, which would wipe out any money you make from the rewards.

If you are already carrying balances on other cards, or any other type of debt that you want to consolidate at a lower rate, then a 0% balance transfer offer would probably be the best credit card for you.

These kinds of cards will let you go interest-free for anywhere from 6 to 21 months, just make sure you’re careful about the ongoing rate that will take effect after the intro is over. If you think you can get rid of your balances before the intro ends (be honest!), then it’s not an issue.

Otherwise, you need to grab a calculator and work out what your effective finance charge will be over a longer horizon.

Also realize that these cards generally charge 3% of more of the balance as an upfront fee, so you also have to calculate whether you will actually save money by going this route.

Now, if you don’t have any balances to transfer, then the purchase APR that will be charged on future spending is your only real concern.

Very much like the balance transfer offers, there are cards that offer initial periods with no interest. Also like balance transfers, these cards can come back to haunt you after the honeymoon period if you don’t pay attention to the new rate.

So again, a little math will help you figure out how much you’re actually paying over a longer time period.

•trans·ac’tor•

Someone who uses credit cards solely as a convenience, and pays off the balance each month.

A transactor’s only focus should be keeping rewards high. Many people are opposed to paying annual fees, but that really isn’t important if you can get juicier rewards to make up for the fees.

Just take these fees into account when deciding how much you will realistically make in rewards. And when deciding on the best credit card with rewards that is right for you, there are three important features you should be take into account.

The first feature is the introductory bonus. Just like how low interest credit cardshave low intro APRs, cash back and rewards credit cards often give upfront bonuses of extra miles or points.

In many cases, these bonuses will cover any annual fees by themselves, and might even get you free flights or hotel nights. The only question is whether you’re getting the bonus at the expense of a lower reward rate.

The next important feature is the base rewards rate. The industry standard here is usually something like 1% cash back, or 1 mile per dollar, but some of the better cards actually pay 2% flat rewards on all purchases.

Just be aware that some may require you to hit a certain minimum level of spending before you are eligible for the full rewards, so they’ll say things like, “Earn 0.5% on the first $6,500 per year and then 1.25% after”. This means that your base rate may be lower than 1%, depending on how much you manage to spend.

Finally, the real meat is in the bonus rewards that some cards pay for purchases in categories like travel, dining, groceries, and drugstores.

A huge number of different bonus categories exist, and these types of cards can pay up to 5% rewards for bonus categories.

So when you pick a card, make sure it matches your spending habits (so don’t get a gas credit card if you don’t own a car). Of course there’s always a catch –bonuses often have caps, and most don’t give bonus rewards for purchases at warehouse stores like Costco and Sam’s Club.

This is a guest post from Tim Chen, CEO of NerdWallet. NerdWallet helps you find the best credit card, sorting and filtering nearly 600 credit cards by best rewards and lowest APRs.

Tim also writes about credit cards for the Forbes Moneybuilder Blog, Huffington Post, and the Christian Science Monitor.

Excessive credit card debt is the bane of credit card users in America.

Revolving credit is easy to get, and tough to get out of.   Unfortunately, our credit card debt was well in excess of the average, and we needed credit card help.

It came to the point where the minimum was all we could pay each month and something had to change.

There were not many options that we could see, as a family that would not kill our credit rating.

So, my wife and I decided to do something positive toward paying off that debt which would have taken us 12 years to pay off (if we were lucky) making minimum payments and keep our credit rating decent.

A second mortgage on the house was not acceptable or even possible then because the wife was pregnant and not working.

We decided to cut back our expenses instead and see how big a chunk this would take off our debt. I can tell you now it has not been easy but we do see the light at the end of the tunnel and honestly, we had a lot of money going out to what we realize now, were non-essentials.

So how did we do this?

Step One for Credit Card Help – Use Cash

This was the hardest part; we cut up the credit cards. We knew that we could save all the money in the world but if we continued to pile up debt on the credit cards, well it was not going to be a winning situation for us.

Instead, we used all cash.  We used and still use our bankcard but unlike the credit cards, you cannot spend what you do not have in the bank.

Step Two for Credit Card Help – Cut the Non-Essentials

This too was something that was difficult. It is strange how much we have labeled as “essentials” that are not essential at all.

Though my wife loves to have her nails done (I am not sure why) we decided that perhaps that was something she could fore-go for a while or at least have those fake nails put on less frequently.

Coffee on the way to work was $25.00 a week for me and now, I bring a mug from home for the drive to work.

Lunch out at the local restaurant was at least $10.00 to $15.00 a day and over the month, I would spend around $200.00 a month eating at work.  My wife packs a tasty lunch now and our family saves $200.00 a month.

We did not eat out every night but pizza once a week and a night out at a nice restaurant was running us well over $250.00 a month. We cut eating out down to once a month and it has made an incredible difference.

Groceries were another place we changed things around to cut savings.

Prepared foods were costing us an amazing amount, but now dinnertime at our house we prepare our own salads rather than having them come out of a bag.

The wife makes real mashed potatoes rather than boxed. With just a few changes we are eating just as well but a lot healthier and saving around $150.00 a month on groceries.

Step Three for Credit Card Help – Stop Big Ticket Purchases, For Now

As most people once the new line of cars come out each year, we always started thinking about replacing our older car that normally was only one to two years old.

We have cut this out, though the newest and best model is nice, it is not living frugally. Instead, we plan to replace our three-year-old car next year when our debt should be about paid off.

It is easy to get in the habit of living in a disposable world, at least for us it was. It is harder to break that habit.

We have not redecorated in three years though before our decision to cut expenses the wife would totally redo the house and furniture each year.

To tell you the truth I do not miss the redecorating or the expenses that go with it at all. Adding a new patio and that holiday abroad, all those can wait, they will still be there when we are debt free and we will be a lot more able to enjoy them.

Step Four for Credit Card Help – Consider Your Options and Choose a Plan

Although we had cut our budget a lot and had more free cash to use towards our credit card debt relief goal it wasn’t going as quickly as we hoped. So, my wife and I sat down and did some calculations as to whether we should try a balance transfer.

Here was the math for us, though it could be different for everyone.

Balance transfers were available to us because we had stepped in quickly before our credit rating sank too far.

However because our debt was such that we could not pay if off in the 6 to 9 months allotted for a no interest rate offer, and the transfer fee simply added to the amount borrowed we decided to stay where we were.

This could vary with everyone but we decided to keep paying on our moderate interest credit card and not incur any further fees.

What works for one family might not for another, but spending more on anything is never a good idea if you want to live frugally with excessive credit card debt.

Sometimes the best step in living with a high revolving credit debt is to stick it out if we could have seen a quick payoff from the transfer we might have taken that step but, it wasn’t for us.

I cannot say this will work for everyone but with modification, it can certainly help cut down the pile of credit card debt anyone has accumulated.

It is more a matter of deciding what is essential to your quality of life and what things are really luxuries you can do without to have a better life. Now, she and I see the end to our debt and plan never to get that deeply in debt again.

Mirsad writes for Think Credit Cards, a consumer oriented site where you will learn how to pick a credit card that suits your needs.