MONEY credit cards

How Does Amazon’s New 5% Cash Back Card Measure Up?

Amazon Prime
Alamy

Amazon has a new store credit card that offers Amazon Prime members 5% back on qualifying purchases. But how does it compare to the competition?

Amazon and Synchrony Bank released a new credit card offer for Amazon Prime customers last week, offering 5% cash back on qualifying purchases and even promotional financing for orders over $149.

The store credit card is a credit product you may be familiar with at bricks-and-mortar retailers. Often, these cards offer a discount at sign-up, and promises of exclusive discounts or or coupons in the future. With the 5% cash-back offer on all purchases, is the new Prime card a good fit for frequent Amazon shoppers?

How This Card Works

Subscribers to Amazon’s Prime service are eligible to receive 5% cash back on qualifying Amazon.com purchases as a statement credit. Or, they can receive a variety of promotional finance offers. For example, cardholders will pay no interest on charges of $149 or more if the balance is paid in full within six months of purchase. Otherwise, the standard interest rate of 25.99% will apply. In addition, new applicants will receive an Amazon.com gift card loaded into their account instantly upon approval.

This card is offered by Synchrony Bank, and is not affiliated with any payment network, so it is only valid for purchases from Amazon. Applicants must be members of Amazon Prime, which costs $99 per year and includes free two-day shipping and access to their streaming video and music services. There is no annual fee for this card, but cardholders must be current Amazon Prime subscribers to receive the 5% discount or the promotional financing offers.

There are other store cards and credit cards that also allow you to save money on Amazon purchases. Here are a few offers so you can weigh your options.

Amazon.com Rewards Visa Card From Chase

Chase offers this card that earns 3% back for purchases from Amazon.com, 2% back at gas stations, restaurants and drugstores, and 1% back on all other purchases, and is accepted anywhere Visa is. New cardholders also receive a $30 Amazon.com gift card applied to their account at the time of approval. There is no annual fee for this card.

Sallie Mae MasterCard From Barclaycard

This card offers 5% cash back on the first $250 cardholders spend each month on gas and grocery purchases, and the first $750 spent each month on eligible book purchases. Interestingly, Amazon.com is coded as a book store, a legacy of their early origins as just a book retailer. Cardholders earn 1% cash back on all other purchases, and there is no annual fee for this card.

SimplyCash Business Card From American Express

Another strategy for getting discounts from Amazon purchases is to use Amazon gift cards, which can be purchased at some office supply stores. The SimplyCash Business Card from American Express offers 5% cash back for purchases at U.S. office supply stores and on wireless telephone services. It also features 3% cash back on a category of your choice including airlines, hotels, car rentals, gas stations, restaurants, advertising and shipping, and on all other purchases. There is no annual fee for this card.

Blue Cash Preferred Card From American Express

This card offers 6% cash back on up to $6,000 spent each year at U.S. supermarkets, which often sell gift cards for Amazon. In addition, this card offers 3% cash back for purchases from select U.S. department stores, and 1% cash back on all other purchases. There is a $75 annual fee for this card.

Before you apply for any credit card, it can be helpful to check your credit standing so you can target your search to credit cards that fall within your credit range. You can get two of your credit scores for free on Credit.com, and they’re updated every 30 days.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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This article originally appeared on Credit.com.

MONEY Credit

Woman Is Sent 300 Credit Reports By Accident

overstuffed mailbox
Christie & Cole Studio Inc.—iStock

A woman reportedly requested her free credit report and got 300 strangers' reports instead.

A woman in Maine came home to a funny sight earlier in March when her mailbox was stuffed with more than 300 envelopes, each containing a credit report.

Here’s what’s not so funny: None of them belonged to her.

Katie Manning contacted a local news station (WGME 13 TV in Portland, Maine) after she realized she had all of these strangers’ sensitive information, and the station put her in touch with the state Bureau of Consumer Credit Protection.

Manning had requested her credit report from Equifax earlier in the month, she told WGME, but she received others’ reports instead of hers.

“I’m not supposed to have this information, this is unbelievable, someone has messed up,” Manning told WGME.

Equifax did not immediately respond to requests for comment from Credit.com, though Equifax’s Vice President of Corporate Communications Tim Klein told WGME, “This is a high priority. Obviously this is a serious situation. I’m going to get our security and forensics teams involved.”

William Lund, superintendent for the Maine Bureau of Consumer Credit Protection, told Credit.com the bureau is sending the credit reports to Equifax attorneys so the agency can complete its investigation. Lund said his primary concern is that those affected by the breach — mostly consumers along the East Coast — are notified.

“I’ve been in touch both with in-state attorneys here and out-of-state firms for the company, and they are working hard to figure out what happened and to prevent it from happening again,” Lund said. “They have told me that they have identified the issue and that there is no evidence of an ongoing issue with this particular situation.”

Credit reports contain all the personal information someone would need to steal your identity and commit credit fraud — they include Social Security numbers, names, birth dates, addresses and employers, among various credit data.

Regularly reviewing your credit reports is one of the best ways to find out if you’ve been a victim of fraud (looking at your credit scores is another), which makes this situation a bit ironic, considering how this error could have resulted in a lot of fraud.

Despite the seriousness of what happened, it’s still important to request your free annual credit reports as part of your regular financial practices. In between those checkups, you can use your credit scores as fraud indicators, looking at the same scores periodically to see if there has been a sudden change, which may be a sign of fraud. You can see two of your credit scores for free every 30 days on Credit.com.

More from Credit.com

This article originally appeared on Credit.com.

MONEY cash

You Could Get $1 Million for Busting Software Pirates

CDs labeled in Sharpie marker
Jan Miks—Alamy

If you happen to know a software thief, you could earn some serious money for turning them in.

When you were a kid, you may have heard that nobody likes a tattletale. That isn’t true. BSA The Software Alliance loves tattletales.

If you report software piracy to BSA and your information directly results in a legal settlement between the alliance and the offending party, you can get a significant cut of that settlement. BSA advocates for the software industry, and some of its members include tech giants like Adobe, Apple and Microsoft. It encourages people to report companies using unlicensed versions of software, incentivizing these reports with the possibility of getting thousands of dollars in return.

No Piracy, the BSA initiative to compel reports of unlicensed software use, markets the program as a way for people to get extra cash and even pay off debt. A No Piracy post to Facebook on March 3 reads, “Looking to pay off your credit card debt? If you know a company using unlicensed business software, file a report today to be eligible for a cash reward.” In fact, most of the No Piracy Facebook posts from the past few months appeal to consumers’ need for “extra cash,” whether it be for holiday gifts, a vacation or spending money.

BSA receives about 2,500 reports in the U.S. each year, said Roger Correa, BSA’s director of program coordination for the Americas. Only about 40% of informants request a reward. Last year, BSA awarded about $250,000 total, the smallest award being about $500 and the largest about $22,000.

A report has to meet certain terms and conditions in order to be eligible for a reward. BSA defines piracy as when a company or organization “installs unlicensed software on computers that it owns or leases for its employees to use in their work.”

Because payment is contingent on BSA reaching a settlement with the company, it may take several months to receive a reward, and there’s no guarantee you’ll get anything:

“The decision to pay a reward based on your report and the amount of that award shall be within BSA’s sole discretion. A reward may be payable only if BSA pursues an investigation and, as a direct result of the information provided by you, receives a monetary settlement from the reported organization,” the No Piracy terms and conditions read. Correa said BSA needs to get at least $10,000 in settlement revenue to be able to give a reward, and it takes an average of 6 months from report to payout in the U.S.

“It’s not fast cash,” he said. “These are very thorough investigations.”

While reporting piracy may not be your ticket out of debt, it’s a strategy you can consider if you happen to know about a company using unlicensed software. The online report form says all complainant information is kept confidential.

Should your anti-piracy fight not result in a windfall (the commission is determined on a sliding scale up to $1 million, depending on the settlement amount), you’ll have to figure out how to face your debt somehow. There are many strategies, but the most important thing is to start tackling the debt as soon as possible, avoid adding to it and keep it from growing.

The lifetime cost of debt is staggering, especially if you have bad credit. You can see where your credit scores stand for free on Credit.com.

More from Credit.com

This article originally appeared on Credit.com.

MONEY credit cards

Can You Pay Your Mortgage With a Credit Card?

best travel rewards credit card
Robert Hadfield

Sometimes, lenders allow you to pay one debt with another, but there are a lot of things to know before you charge a mortgage.

You can use a credit card to pay many kinds of bills, and if you have a rewards credit card you pay in full every month, you can use those payments to increase your rewards. It’s a common strategy.

Still, just because you have the ability to pay a bill with your credit card doesn’t mean it’s a safe tactic. Some consumers are tempted to use their credit cards to make mortgage payments, if they have that option, because large transactions generate more rewards, but doing that might actually cost you, rather than save you money.

It’s not very common to have the option to pay your mortgage with a credit card, but if you have the ability to do so, you’ve probably wondered about the risks and rewards of paying a loan with a credit card.

What to Ask Your Lender

If you can use your credit card to pay your mortgage, find out if there are fees associated with the transaction. Credit card transactions can be very expensive to process — it depends on the card you’re using — so the lender may charge you that fee so they don’t have to foot the bill

If there’s a fee, compare that to the rewards you might earn by charging your mortgage payment. Say you’re using a card that offers 1.5% cash back on all purchases — any processing fee exceeding 1.5% means you’re paying to pay your mortgage.

You should also ask how that transaction will be processed. A Reddit user recently posted about paying a mortgage with a credit card, and the payment went through as a cash advance on the card. Cash advances start accruing interest as soon as the transaction clears, which means they can get extremely expensive. Also, cash advances generally carry a higher interest rate than normal credit transactions, hitting you with a double-whammy of higher interest that starts accruing immediately.

Should your lender not charge fees in excess of your rewards, and if it codes the mortgage payment like a regular credit transaction, the strategy could work in your favor.

At the same time, you may set yourself up for some serious financial damage if you miss a payment on the card and have to pay interest on what might end up being a very large balance. You can see how your mortgage is impacting your credit scores for free on Credit.com.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Kids and Money

The Best and Worst Ways to Give Your Teen Credit

When your kid needs access to serious money, what kind of plastic is best for the job?

When your children’s concept of pocket change involves actual change, helping them keep track of their money is pretty easy. But when they start needing serious coin to gas up a sports utility vehicle, or travel abroad, you need more sophisticated financing alternatives like a credit card.

Keith Singer saw the light when his teenage son’s backpack was stolen at school, and he realized there had been $300 in his wallet. “He lost all his money,” says Singer, a wealth manager from Hollywood, Florida.

Here are some options, along with what you need to know before you give your teen access to credit:

Your Credit Card

Pros: Adding your child as an authorized user should take a simple phone call, and the child will have her own card to use. You can usually get a separate accounting of their charges.

Cons: The card will have your credit limits. Plus, no restrictions will be imposed on spending. Also, U.S. cards do not always work in foreign countries. They often have high transaction fees abroad, especially for cash advances.

Parents say: It’s hard to trust a teen with your own credit. Curtis Arnold, editor-in-chief of cardratings.com, added his two oldest children as authorized users on his accounts, but never gave them the cards. “We’ve never felt comfortable handing them a card other than for one-time use,” he says. His top fear: they would lose it.

Bank Account with ATM Card

Pros: It may take an in-person visit to a bank to open up an account for a minor, but then you can link it to a parent’s account to easily transfer funds. The ATM card makes it easy to get cash while traveling and can be used as a credit card. If you do not sign up for overdraft protection, transactions will be denied when funds are not available.

Cons: Beware that fees can rack up if the account does go negative or below a required minimum. Debit cards do not offer all the same consumer fraud protections as credit cards. They may incur overseas transaction or ATM service fees, and they require parental attention to keep adding funds.

Parents say: When one of Elizabeth Powell’s 16-year-old triplets went to England last summer, he opened up an account at his dad’s credit union. Then she transferred in several hundred dollars a month. The teen was able to use the debit card for his needs in British pounds, with minimal fees. “The system worked perfectly,” Powell says.

Keith Singer says one additional benefit for the bank account he opened for his son, who is now 17, is that it encouraged the teen to deposit his summer earnings.

Prepaid Debit Card

Pros: Getting one is easy, and most have slick mobile interfaces. As they are not linked to any bank account or credit line, there are fewer worries about overspending, loss or identity theft. Some cards, like Oink, allow parents to restrict spending in certain categories, like alcohol.

Cons: Some prepaid cards come with lots of hidden fees just to access your own money. They do not help build a credit history.

Parents say: Arnold likes the Bluebird card offered by Wal-Mart and American Express because, he says, “it’s like a credit card on training wheels.”

Most of all, he likes the relative safety of it. His oldest son had a credit card that was compromised while he was a senior in college. “With a prepaid, you don’t run that risk because they could wipe out the account, but not the whole checking account,” Arnold says.

Personal Credit Card

Pros: Building a credit score at 18 is smart. A typical newcomer does not start at zero, but rather at around 600, says Greg Lull, head of consumer insights at Credit Karma. That is in the middle range between the top of 850 and the bottom of 300.

Cons: If your young adult is not ready to handle the responsibility, his credit score will drop, and he will build up debt. Most young adults bottom out at age 21 before turning things around, says Lull.

Parents say: When our kids are ready, we’ll go for it. Arnold says of his third child, who is now 17: “Once he gets through freshman year of college, maybe we’ll do regular debit card, and then as an upper classmen, get a student credit card for him.”

TIME Social Security

Flawed Social Security Data Says 6.5 Million in U.S. Reach Age 112

Social Security I.D. Cards
Duckycards—Getty Images Social Security Cards

In reality, there are only 42 people that old worldwide

(WASHINGTON D.C.) — Americans are getting older, but not this old: Social Security records show that 6.5 million people in the U.S. have reached the ripe old age of 112.

In reality, only few could possibly be alive. As of last fall, there were only 42 people known to be that old in the entire world.

But Social Security does not have death records for millions of these people, with the oldest born in 1869, according to a report by the agency’s inspector general.

Only 13 of the people are still getting Social Security benefits, the report said. But for others, their Social Security numbers are still active, so a number could be used to report wages, open bank accounts, obtain credit cards or claim fraudulent tax refunds.

“That is a real problem,” said Sen. Ron Johnson, R-Wis. “When you have a fake Social Security number, that’s what allows you to fraudulently do all kinds things, claim things like the earned income tax credit or other tax benefits.”

Johnson is chairman of the Senate Committee on Homeland Security and Governmental Affairs, which plans a hearing Monday on problems with death records maintained by the Social Security Administration.

The agency said it is working to improve the accuracy of its death records. But it would be costly and time-consuming to update 6.5 million files that were generated decades ago, when the agency used paper records, said Sean Brune, a senior adviser to the agency’s deputy commissioner for budget, finance, quality and management.

“The records in this review are extremely old, decades-old, and unreliable,” Brune said.

The internal watchdog’s report does not document any fraudulent or improper payments to people using these Social Security numbers. But it raises red flags that it could be happening.

For example, nearly 67,000 of the Social Security numbers were used to report more than $3 billion in wages, tips and self-employment income from 2006 to 2011, according to the report. One Social Security number was used 613 different times. An additional 194 numbers were used at least 50 times each.

People in the country illegally often use fake or stolen Social Security numbers to get jobs and report wages, as do other people who do not want to be found by the government. Thieves use stolen Social Security numbers to claim fraudulent tax refunds.

The IRS estimated it paid out $5.8 billion in fraudulent tax refunds in 2013 because of identity theft. The head of the Justice Department’s tax division described how it’s done at a recent congressional hearing.

“The plan is frighteningly simple — steal Social Security numbers, file tax returns showing a false refund claim, and then have the refunds electronically deposited or sent to an address where the offender can access the refund checks,” said acting Assistant Attorney General Caroline Ciraolo.

In some cases, she said, false tax returns are filed using Social Security numbers of deceased taxpayers or others who are not required to file.

The Social Security Administration generates a list of dead people to help public agencies and private companies know when Social Security numbers are no longer valid for use. The list is called the Death Master File, which includes the name, Social Security number, date of birth and date of death for people who have died.

The list is widely used by employers, financial firms, credit reporting agencies and security firms. Federal agencies and state and local governments rely on it to police benefit payments.

But none of the 6.5 million people cited by the inspector general’s report was on the list. The audit analyzed records as of 2013, looking for people with birth dates before 1901.

President Franklin D. Roosevelt signed the Social Security Act in 1935, and the first old-age monthly benefit check was paid in 1940.

Many of the people cited in the inspector general’s report never received benefits, though they were assigned Social Security numbers so spouses and children could receive them, presumably after they died.

The agency says it has corrected death information in more than 200,000 records. But fixing the entire list would be costly and time-consuming because Social Security needs proof that a person is dead to add them to the death list, said Brune, the agency official.

Brune noted that the inspector general’s report did not verify that any of the 6.5 million people are actually dead. Instead, the report assumed they are dead because of their advanced age.

“We can’t post information to our records based on presumption,” Brune said. “We post information to our records based on evidence, and in this case it would be evidence of a death certificate.”

“Some of those records may not even exist,” Brune added.

Nearly all the Social Security numbers are from paper records generated before the agency started using electronic records in 1972, Brune said. Many of the records contain errors, with multiple birthdates and bits of information about different family members.

“We did transcribe paper records into the electronic system and over time that information’s been purified,” Brune said.

“But our focus right now is to make sure our data is as accurate and complete as it can be for our current program purpose,” said Brune. “Right now, we’re focused on making sure we’re paying beneficiaries properly, and that’s how we’re investing our resources at this time.”

MONEY CFPB

CFPB Says Mandatory Arbitration is Bad for Consumers

two hands pulling $100 bill and ripping it
Mike Kemp—Getty Images

You may have unwittingly ceded your rights to sue your credit card or bank.

Consumers who have serious beefs with their financial institutions can’t get much relief these days, according to a study released today by the Consumer Financial Protection Bureau.

The research looked at mandatory arbitration clauses in contracts for credit cards, prepaid cards, payday loans, checking accounts, private student loans and mobile wireless contracts.

These clauses state that either the company or the consumer can require any dispute over the product or service to be settled through arbitration rather than the courts—and generally allow companies to block class-action lawsuits, which tend to be a more lucrative means of getting redress.

The Bureau found that arbitration clauses were prevalent in the six consumer product markets it looked into. A full 92% of the prepaid cards obtained by the CFPB were subject to arbitration and 53% of the market share of credit card issuers, for example. And while only 8% of checking accounts have these clauses, that percentage represents almost half of insured deposits.

Meanwhile, three quarters of consumers surveyed didn’t know whether any contracts they signed had an arbitration clause, and only 7% understood that they could not sue their credit card issuer if their contract does include such a clause.

Why Mandatory Arbitration is Bad for Consumers

The arbitration practice is generally preferred by financial institutions since it reduces legal expenses.

But the CFPB notes that class-action suits tend to provide greater renumeration than other routes of seeking restitution, and that “larger numbers of consumers are eligible for financial redress through class-action settlements than through arbitration or individual lawsuits.”

In the 1,060 arbitration cases filed with the American Arbitration Association in 2010 and 2011, consumers received less than $400,000 in relief and debt forbearance, compared to the $2.8 million companies received (mostly for disputed debts).

The CFPB also noted that only about 1,200 individual federal lawsuits are filed by consumers per year in the consumer markets studied.

Comparatively, the CFPB found that more than 160 million class-members were eligible for some kind of relief in class actions taken over a five-year period—equating to about 32 million a year. This resulted in $2.7 billion in settlements.

One argument against class-action lawsuits is that litigation leads to higher costs for financial institutions—which could then be passed down to consumers. The CFPB, however, found no evidence to suggesting that arbitration clauses led to lower prices for consumers.

What Happens Next

The study was mandated by the Dodd-Frank Act, and the CFPB has the authority to issue regulations regarding arbitration clauses.

The CFPB says it will be meeting with stakeholders after they have had a chance to read the report, and invites comments regarding its findings.

Consumer advocates have long called for banning mandatory arbitration clauses.

Getting rid of a financial institution’s ability to use them “gives the consumer the ability to decide how they want to decide the case,” says Pew Charitable Trusts’ consumer banking project director Susan Weinstock.

By avoiding arbitration, she says, consumers aren’t subject to the rulings of arbiters who are often selected by the financial institutions, who may not hold law degrees and whose rulings need not be made public.

Even some in the industry are not fans. “Mandatory arbitration has proven to be a thorn in consumers side,” says Adam Levin, chairman and co-founder of Credit.com. “These clauses are biased towards the company.”

MONEY credit cards

Credit Agencies Will Let Humans Review Your Billing Disputes

Experian, TransUnion, and Equifax promise to improve their error-correction processes and be more patient about medical bills.

MONEY credit cards

Check Out the Insane Rewards Offered by this New Credit Card

150304_FF_discover_2
Rudyanto Wijaya/iStock

You can get 3% cash on everything you buy, at least for the first year.

We don’t get too excited about new credit cards around these parts. So the fact that I’ve personally already signed up for Discover it Miles should tell you something about this card.

The new addition to Discover’s “it” platform, announced late last month, is geared toward consumers who want to earn travel rewards without having to participate in specific airline loyalty programs. To that end, it’s joining into a competitive pool that already includes the Capital One Venture, the Barclaycard Arrival Plus World Elite and others.

Discover it Miles rewards program is unusually generous, but not in the way it’s marketed. According to my analysis, this travel rewards card can actually provide the best cash back value of any card on the market. At least for a year.

What “it” Offers

Discover it Miles is positioned in the non-branded travel rewards credit card space. That means that rather than earning miles for, say, United or American’s loyalty programs, customers instead rack up miles on their card that they can then transfer as a statement credit for travel purchases.

Such cards typically offer better value for your charging dollar, since airline programs have been devaluing miles and making it harder to redeem for tickets.

With Discover it Miles, cardholders earn 1.5 miles for every dollar spent, no cap. Every mile earned is worth one penny, so $10,000 spent equates to $100 in rewards.

Most travel cards offer some kind of signup bonus as an incentive. For example, if you spend $3,000 in three months on the Capital One Venture, you’ll receive 40,000 miles.

But Discover it Miles doesn’t do this. Instead, the card doubles all of the miles you’ve earned at the end of the first 12 months. So $10,000 in spending translates to 30,000 miles, or $300, after a year.

Other perks include no annual fee, no foreign transaction fee, and up to $30 in credit for in-flight Wi-Fi charges. Discover also waives late-fee charges on your first missed payment.

How “it” Compares as a Travel Card

To be fair, the Discover it Miles offers better terms than other no-fee travel cards.

But if you’re someone who spends at least $475 a year, and you’re looking for travel rewards, you’re generally better off going with Barclaycard World Arrival Plus Elite, one of MONEY’s Best Credit Cards.

While Barclaycard holders endure an $89 annual fee after the first year, they also receive a 40,000 signup bonus, two miles for every dollar spent, and a 10% rebate when miles are used for a travel credit. The signup bonus alone is worth $440 if used for travel purchases.

So $10,000 spent on the Barclaycard would net you 60,000 miles (including the signup bonus), which equates to $600 off on travel statement credits. Throw in the 10% rebate, and you’re looking at $660 for that first year. That’s far more than what you can get by using the it Miles as a travel card.

How “It” Compares as a Cash Card

But you shouldn’t think of Discover’s new card as a travel-rewards product. Think of it instead as a cash-back card that nets you 3% (!) on all purchases for the first year.

How? Besides letting you redeem the miles on your statements for travel purchases, the Discover it Miles lets you claim them as a direct deposit into your bank account. So if you accrue 30,000 miles, you get $300 or 3%.

This is a major boon for consumers looking for cash back. Right now, the highest flat-rate uncapped rewards comes from the likes of Citi Double Cash and Fidelity Investment Rewards American Express Card, which offer 2% for all purchases. The Discover it Miles is a full percentage point better.

That’s a big deal. For $10,000 in spending, the Discover it Miles earns you $300 vs. $200 for the 2% cash back cards.

There are mutual funds on our MONEY 50 list that haven’t returned 3% over the past year!

The doubling miles feature is only good for the first year, so the card is less valuable than other products after the first 12 months. After that, you’d be better off using Citi Double Cash. But since there’s no annual fee on the Discover It Miles, there’s no harm in getting the card, using it as your primary for a year, then holding onto it.

You might actually see your credit score improve, especially if you keep your spending at the same level: A lower credit-utilization ratio is a major plus in the FICO scoring formula.

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MONEY Credit

5 Ways You’re Accidentally Wrecking Your Credit

pieces of credit card in hands
Roy Hsu—Getty Images

Certain actions, like closing a high-fee credit card, might seem financially savvy. But there could be consequences for your credit.

It’s one thing to knowingly make decisions that hurt your credit score. We’ve all been there, and sometimes tough decisions must be made. But it’s an entirely different situation to accidentally wreck your credit.

In some cases, we make decisions without realizing the impact on our credit. In other cases we may know that certain decisions can hurt our score, but we don’t appreciate the severity of the impact. Either way, maintaining good credit requires more than casual attention.

It is entirely possible that you could be accidentally wrecking your credit, and here are some of the ways that you could be doing just that.

1. Not Paying Attention to Your Credit Balances

Good credit is about more than just paying bills on time. About 30% of your credit score is based on your amount of debt, which includes your credit utilization. That’s the ratio of how much you owe on your credit lines divided by the total credit limit of those lines. For example, if you have total credit lines of $40,000, and you have a total outstanding balance of $10,000, your credit utilization ratio is 25% ($10,000 divided by $40,000).

If that ratio exceeds 30%, it can have a negative impact on your credit score. If you are casual about your credit balances, they can slowly creep up to 40%, 50%, 60% or more. At that point, you may see your credit scores begin to sink.

2. Closing Accounts

A lot of people make it a habit of closing out any credit cards that they pay off. From a credit perspective, however, this can have a negative impact. Though it seems counter-intuitive, a paid in full line of credit or credit card is a positive contributor to your credit score, even if you stopped using the account.

This brings us back to credit utilization. If you pay off a credit card that has a line of $5,000, that available credit is contributing to the total amount of credit you have available. That will improve your credit utilization ratio. Closing the card will lower your available credit, increase your overall credit utilization, and potentially lower your credit score.

3. Co-Signing Loans

Co-signing loans is another area where people are often very casual. They often assume that they are just doing a good deed to help a friend or family member, and may even mistakenly believe that it’s simply a one-time event.

But when you co-sign a loan, you will be involved in that loan and that loan will be on your credit report until it is fully paid. In the event that the primary borrower makes a late payment, this will have an impact on your credit score. Worse, should the loan go into default, this will also show up on your credit.

4. Applying for Too Many Lines of Credit

If you have good credit, it’s likely that you are getting bombarded with credit offers in the mail on a weekly basis. If you are in the habit of applying for the better ones every month or so, you could be unknowingly hurting your credit.

Credit inquiries account for 10% of your overall credit score. While this is the least significant factor, these hard pulls — as they are called — can ding your credit. Consider the impact these inquiries can have the next time you consider a 0% credit card offer or bonus miles sign-up deal.

5. Not Monitoring Your Credit Scores

One of the best ways to know if you are hurting your credit is by monitoring your credit scores. Credit scores change on at least a monthly basis, but typically stay within a tight range. A significant drop in your scores, say more than 25 or 30 points, is an indication that something is wrong. You won’t know about the drop, however, unless you are paying attention to your credit scores on a regular basis.

A significant drop in your score could be an indication that your credit utilization ratio is getting too high. It can also indicate an unsuspected late payment. Errors are also possible when it comes to credit. And at the extreme, a big drop in your credit score could be an indication that you are the victim of identity theft.

You won’t know any of these unless you are monitoring your credit scores on a regular basis. Unfortunately, ignorance is not bliss when it comes to your credit. You shouldn’t obsess about it, but at the same time, you should never be too casual about it, either. Bad things can happen when you’re not paying attention.

Fortunately, there are a number of ways to obtain and monitor your score for free, including through Credit.com.

More from Credit.com

This article originally appeared on Credit.com.

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