MONEY College

4 Best Credit Cards for College Students

Mom helping her daughter move in to college dorm
Make sure she's packed one of these cards. Blend Images—Alamy

Send your kid off with one of these options this fall, and you'll sleep better at night.

You’ve no doubt heard harrowing stories of college students applying for their first credit cards, then racking up thousands of dollars in debt. It’s the stuff of parents’ worst nightmares.

The CARD Act of 2009 lessened the potential trouble students could get themselves into. The law mandated that, in order to qualify for a card, applicants must be over 21, get an adult to co-sign or prove they earn enough money to make payments.

But it’s left many parents of underclassmen with a tricky decision. Do you sign on the dotted line for your kid—thus putting your own credit score on the hook if your kid doesn’t pay the bill?

Shielding Junior from having his own credit card may seem sensible, but it’s penny-wise and pound-foolish. Length of credit history accounts for 15% of one’s FICO score. So by protecting your son or daughter from plastic, you are inadvertently hurting his or her creditworthiness. You also miss out on the opportunity to handhold him or her through an important financial lesson.

Of course, striking a proper balance between the value of credit and the dangers of its excess is paramount. Revolving debt hurts a credit score, too, and can be very costly to a kid living on a ramen budget—with APRs averaging 15% and as high as 23%.

Three options for you to consider, depending upon how much risk you think your newly emancipated child can handle:

The Training Wheels: A secured card or a low-rate, low-limit unsecured card.

If you are worried that terms like “credit limit” and “due date” will be lost on your child, you might want to sign him up for a secured card, which uses cash as the credit limit collateral.

The benefit is that Junior won’t be able to spend beyond the cap, so it’s a good way to give him practice using a card of his own without doing a lot of damage to your finances or your credit score. The downsides: You’ll have to front the cash. And unless you set a large credit limit, he may use a high percentage of his available credit, which is bad for his credit score (ideally he should use no more than 20%).

Alternately, if you don’t want to put up your cash as collateral—or your kid has enough income to qualify on his own—you might start him off with an unsecured card that has a low rate and a low credit limit. This also pens him in until he demonstrates reliability.

Once he proves himself able to handle either of these cards, have him shift to one of the advanced cards in the next category.

The picks: MONEY’s Best Credit Cards winners Digital Credit Union Visa Platinum Secured or Northwest Federal Credit Union FirstCard Visa Platinum.

The APR on Digital Credit Union’s Visa starts at a low 11.5%. To apply for this secured card, you do have to be a member of the credit union, but that be accomplished with a $10 donation to Reach Out for Schools.

The FirstCard’s rate is even lower—a fixed 10% APR (most cards today are variable rate). This card, which has no annual fee, is designed for people who don’t have a credit history: It requires applicants to take a 10 question quiz on credit knowledge and has a credit limit of just $1,000.

The 10 Speed: A rewards card

Cards that offer rewards typically have higher APRs than those that don’t. So if you child revolves debt on one of these cards, he’ll likely erase the perks earned.

Thus, rewards cards are best reserved for those students who’ve already proven themselves capable of paying off a secured or low-limit card in full and on time for a year or so. These are also good choices for those students who are over 21.

The picks: Capital One Journey Student Rewards Card and Discover It for Students.

The no-fee Journey gets your kid 1% cash back on everything, but the reward is bumped up by 25% every month he pays his bill on time. “This is a good card for incentivizing students to have the right behavior,” says NerdWallet.com’s Kevin Yuann. There’s no foreign transaction fee (a plus for those studying abroad), but a late payment fee of up to $35 and a steep 19.8% APR should scare away parents who aren’t sure about their child’s bill-paying vigilance.

The It, which also has no annual fee and no foreign transaction costs, gets your kid 2% cash back on the first $1,000 at gas stations and restaurants each quarter, and 1% for everything else. Because of the extra rewards for gas, the It is a good card for commuters, says Yuann. Cardholders also receive a free FICO score, derived from TransUnion data, on monthly statements.

While there is no fee on the first late payment, your child will pay up to $35 after that; and after a six-month no-interest window, the APR ranges from 13% to 22%.

Whichever card you end up co-signing for your child, definitely make sure you ask to get account access—and sign up for balance alerts so that you know when you need to swoop in for a teaching moment.

RELATED:
Best Credit Cards of 2013
Money 101: How Do I Pick a Credit Card?

 

MONEY Credit

WATCH: Credit Score Calculations Just Changed In Your Favor

FICO is decreasing the impact of medical debt on credit scores, which should make it easier for consumers to get loans.

MONEY Credit

Here’s Why Your Credit Score Is About To Improve

Sunlight coming out from behind a cloud
A Schneider Mark—Getty Images

Unpaid medical bills will carry less weight on FICO scores -- and late bills that get paid off won't count at all.

A change in the way credit scores are calculated means consumers may soon have an easier time getting a loan and could begin paying lower interest rates on their credit cards.

Fair Isaac, the company behind the widely used FICO credit scores, announced Thursday that it will no longer reduce a consumer’s score for late bill payments if those bills have been paid off.

It will also reduce the impact of unpaid medical bills on FICO scores. Under the new model, which will become available this fall, consumers with a median credit score would generally see their score rise by 25 points if their only major late payment is an unpaid medical debt.

“The new ruling looks great,” says Credit.com’s Gerri Detweiler. “These are changes consumers and consumer advocates have been hoping for for a long time. The one big warning is that these changes won’t happen over night.”

The changes comes after May report from the Consumer Financial Protection Bureau found that consumer credit scores are “overly penalized” for medical debt, which it said often does not accurately reflect their credit worthiness.

“Getting sick or injured can put all sorts of burdens on a family, including unexpected medical costs. Those costs should not be compounded by overly penalizing a consumer’s credit score,” said CFPB director Richard Cordray in a statement at the time. “Given the role that credit scores play in consumers’ lives, it’s important that they predict the creditworthiness of a consumer as precisely as possible.”

It also comes two weeks after the release of a study by the Urban Institute found that more than 35% of Americans have debt that has been reported to collection agencies.

Related:

9 Ways to Outsmart Debt Collectors

Money 101: What is my credit score and how is it calculated?

Everything You Need to Know About Managing Credit and Debt

MONEY credit cards

The Dark Side of Retailer Credit Cards

140806_FF_HighPriceCards_2
Department store cards carry hidden dangers. Alamy

That pushy salesperson won't tell you about a retail card's exorbitant interest rate or the potential damage to your credit score.

Look, we get it: When you’re living on a budget, every discount helps.

So it’s no wonder that you’re tempted when the salesperson at your favorite store asks, “Would you like to save an additional 15% by signing up for our credit card?” A study from earlier this year by CreditKarma found that one in five Americans said yes at least once over the previous two years.

Next time, though, think twice. A new analysis by CreditCards.com reveals just how much damage retail cards can do to your budget.

The average annual percentage rate on these cards, the study found, is a massive 23.23%, up from 21.22% in 2012. That compares to 15.03% on general-use cards today.

If you pay your bill off in full every month, you’ll never be affected by that subprime-like rate. But if you carry a balance, notes John Ulzheimer, a credit expert at CreditSesame.com, “whatever discount you got at the register will be eaten away really quickly, and you’ll end up paying more for the merchandise than you would have if you’d used a general-use card.”

CreditCards.com ran the math, and someone who charges a $1,000 TV and pays only the minimum would need 73 months to pay off the debt and incur $840 in interest charges over that time. With the average card, it’s 56 months and $396.

So much for that $150 discount. Instead of getting the TV for bargain rate of $850, you’d be paying $1,690.

The Really Long-Term Cost

There’s another downside to retail cards: They have the potential to cut down your credit score.

First off, a few points are shaved off every time you apply for new credit. Then there’s the fact that any new card will reduce the average length of your credit history, and this makes up 15% of your FICO score.

But the greatest impact these cards can have on your score is due to something called your utilization ratio, or how much of your available credit you’re using both on each card and across all your cards. A hefty 30% of your FICO score is based on your available credit. Problem is, store cards have very low limits, making it very easy to leverage these cards to the hilt.

If a store card is your only card, and it has a $750 credit limit and you’re using $500 of it, you’ve got a 66% utilization ratio, which could send your score south of the benchmark required to qualify for the best terms on loans. “And if you’ll end up with a higher interest rate on an auto loan and home loan, that $20 in savings [from the upfront discount] is not worth it” says Ulzheimer. You could end up paying thousands more over the life of a loan.

As an example, let’s say you were taking out a $200,000 on a 30-year fixed-rate mortgage. With a 760 FICO score (out of 850) you’d qualify for the lowest rate of 3.83%, according to FICO. If your score were 100 points lower, your rate would be 4.45%—and you’d pay an additional $25,662 over the life of the loan.

“Comparatively $500 on a total available credit limit of $20,000 is a 2.5% utilization, which is immaterial,” says Ulzheimer. It probably won’t affect your score.

Who Can Risk It

So if you’re someone who’s already got a stable of cards and is vigilant about paying them all off in full, adding a retail card is probably fine once in a while. But reserve it for those times when you’re making a really big purchase—like buying a mattress or closing out your wedding registry—when the discount will add up to real money.

Or, get a card from a retailer you really do purchase a lot from anyway, since you could benefit from ongoing perks. Of the 36 retailers that CreditCards.com surveyed, 22 offered low-rate introductory financing, instant rewards, or both. Several offered special deals available only to cardholders.

No matter what, definitely don’t open an account within a month of refinancing or applying for a mortgage.

Related:

Money 101: How do I improve my credit score?

Money 101: How do I pick a credit card?

Money 101: How do I get rid of credit card debt?

TIME Spending & Saving

Why You Have to Start Paying Down Your Credit Cards Right Now

140601_EM_CreditCard_LeadImage_1
Steven Puetzer—Getty Images

Federal Reserve meetings aren’t high on most people’s list of interesting things, but if you have a credit card and carry a balance, you should probably start paying attention to what America’s top money policymakers are talking about, because it’s going to affect your monthly bill.

During last week’s Federal Open Markets Committee meeting, analysts were listening closely to tease out a sense of when the central bank will raise interest rates — always an endeavor that’s one part math, one part reading tea leaves.

A rate hike might not come right away: CNN points out that Fed chair Janet Yellen wants to see higher wages along with lower unemployment. Although unemployment is ticking down, wages are stuck in a rut.

“There are no such signs evident yet, but we expect that to be the big story in the second half of this year,” Capital Economics chief U.S. economist Paul Ashworth tells CNN.

But a hike might come sooner than expected, CNBC argues, if either the labor market gets better faster or if Fed members get spooked about inflation. “I think pressure is really growing to do something in January,” Peter Boockvar, chief market analyst at the Lindsey Group, tells CNBC. .

Bottom line: It’ll probably happen sometime next year. This means you have, at maximum, maybe a year and a half before your credit card bills jump.

The reason why is because most of us these days have variable credit card interest rates, with our APRs tied to the prime rate. The prime rate is the Federal Funds rate plus 3%, and today, prime is a mere 3.25%. Then the card issuers tack on a percentage they determine, and we swipe away.

Banks dropped fixed interest rates en masse in advance of the CARD Act kicking in a few years ago because the law prohibits them from hiking fixed rates on existing balances except with a few exceptions. Banks wanted to be able to raise what they charge us when interest rates rise, so they switched over to variable rates.

After the Fed makes its move, rate increases will happen quickly. “Within a few months after the prime rate eventually starts going up, card holders will also likely see their APRs going up,” says John Ulzheimer, president of consumer education at CreditSesame.com.

Ulzheimer says it’s most likely issuers will adopt a straight pass-through of any hike in the prime rate; in other words, if the rate goes up by 0.5%, your APR will, too. And credit card companies aren’t required by law to give you a 45-day heads-up that a jump in your interest rate is coming.

Obviously, the bigger your balance, the more this will affect your monthly payment, so it’s a good idea to start chipping away at that debt now.

MONEY identity theft

If Your Credit Card Information Was Stolen from P.F. Chang’s, Here’s Your Best Defense

Wallet exposing social security card
8.3 million: How many private records have been exposed to thieves so far this year. Olivia Locher; Prop styling by Linda Keil

Millions of private financial records have already been exposed this year. Follow this simple plan to stay safe.

Updated: August 4, 2014

If you’ve eaten at a P.F. Chang’s restaurant anytime since last October, you could have been the victim of a data breach. According to the company, consumer credit and debit card information has been stolen from 33 restaurants in the U.S. (You can find a full list of the affected locations and dates of possible incidents here).

Today, CEO Rick Federico issued a formal statement apologizing to customers and assuring them that their data has been secure since the restaurant chain identified the breach in June. In light of that news, we’re resurfacing a post from earlier this summer, with advice on how to protect yourself in the event you think your personal data has been hacked.

At least 8.3 million private records have been put at risk in 250 separate data breaches revealed this year, says the nonprofit Identity Theft Resource Center. One upshot of the leaks (up 23% over 2013 through late April): greater awareness of the threat of identity theft. Follow this three-tiered plan to defend yourself.

1. Take Advantage of Free Tools

Visit annualcreditreport.com every four months to get a credit report from a different one of the three major reporting agencies, advises Ed ­Mierzwinski at advocacy organization U.S. PIRG. And sign up for any no-cost service your bank or credit card issuer has for notifying you of activity in your account.

2. Warn All Lenders

Afraid your data has already slipped out? Put a free 90-day fraud alert on all your credit reports by contacting Experian, Trans­Union, or Equifax, says Paul Stephens of the nonprofit Privacy Rights Clearinghouse. That tells companies to use extra caution before issuing credit in your name. For confirmed identity-theft victims, alerts last seven years.

3. Lock Down Your Credit

For top security, freeze your ­credit, advises ID-theft consultant Robert Siciliano. Opening new lines of credit will require your password. Visit each of the big three bureaus online to launch it. Costs—up to $30 to place a freeze and $12 to lift it—vary by state.

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MONEY Savings

5 Ways to Keep a Crisis From Crushing You

Falling anvil with inadequate parachute
A majority of Americans are unprepared for a financial emergency. Michael Crichton + Leigh MacMill; Prop Styling by Jason MacIsaac

What would you do if you suffered an emergency that's bigger than your safety net? These strategies can cushion the blow.

You’ve no doubt diligently socked away a chunk of cash for a rainy day. But chances are it isn’t enough to keep you from worrying about being swept under by a passing financial storm. In a MONEY survey of 1,000 Americans conducted earlier this year, 60% of respondents said they didn’t feel they had enough emergency savings.

They’re probably right to be ­concerned: A new survey by Bankrate.com found that the majority of Americans making $75,000-plus have less than six months of emergency savings on hand. Meanwhile, experts typically recommend having at least that much and often as much as 12 months’ worth—lofty goals even for those who are otherwise well-off.

While you’re in the process of bulking up your kitty, lessen your anxiety by figuring out how you’d quickly lay your hands on cash if the roof fell in, literally and figuratively. “The goal is to reduce long-term damage to your finances,” says Scottsdale financial planner Brian Frederick. Putting the bills on a credit card can be a reasonable option for those able to pay off their debt in a jiffy, but carrying a balance for longer gets pricey when you’re talking about a 15% interest rate. Instead, keep these five better options in the back of your mind:

1. Crack a CD

In hopes of discouraging customers from fleeing when rates rise, banks have been hiking penalties for tapping a CD before its maturity date—six months’ interest is now common on a one-year certificate, and six to 12 months’ is typical on a five-year. Even so, “the interest is so small these days that a six-month penalty is almost meaningless,” says Oradell, N.J., financial planner Eric Mancini. On a $100,000, five-year CD at 2%, you’d give up just $100.

2. Sell Some Securities

Ditching money-losing stocks is clearly a better move than borrowing, says Frederick, given that you can use losses to offset up to $3,000 of capital gains for this year and carry any overage into future years. Everything in your portfolio on the up and up? While you’ll pay a 15% capital gains tax on the profits from any security you’ve held for more than a year, it might make sense to pare back on winners if your allocation has gotten out of whack.

3. Take Out a 401(k) Loan

Most plans allow you to borrow half your vested amount, up to $50,000, with generous terms: no setup fees and a 4% to 5% interest rate, paid to yourself. Moreover, as long as you keep making contributions, you probably won’t sacrifice much growth. A five-year, $20,000 loan against a $250,000 401(k) would reduce your balance by just $9,000 after 20 years, assuming you continued to save $500 a month during the loan term. But should loan payments require you to pull back on contributions, your nest egg will take a hit (see the graphic). Another risk: If you leave your job for any reason before repaying, you must cough up the entire balance within 60 days, or else you’ll owe income taxes and a 10% penalty on the funds. “You can end up feeling stuck in your job,” says Edina, Minn., ­financial planner Kathleen Longo.

the 20k loan

4. Tap the House

Whether or not you have a home-equity line of credit already, you’ll benefit from today’s low rates. The average on a new line is about 5%, but if your credit is nearly perfect, you can get closer to 3%, with no setup fee, Bank­rate.com reports. Plus, interest payments are usually tax-deductible. The caveats: It may take a few weeks to open a new line. Also, HELOCs are var­iable rate, so your payments may rise if the Fed hikes interest rates. Finally, some banks charge a fee if you close the line early; look for one that doesn’t.

5. Borrow from a Stranger

Those who don’t have adequate home equity can still beat rates on credit cards and personal bank loans by nabbing a loan from a peer-lending site like LendingClub or Prosper. Rates on those sites can be less than 7%, plus an origination fee of 1% to 3%. Peer loans are a good option for those with sterling credit histories, says Steve Nicastro, investing editor at NerdWallet. Check what rate you’d get using the sites’ tools. Look good for you? After you fill out an online form, the sites will take a few days to verify your info, then send your loan out to prospective lenders. Most loans are funded within a week.

More on building a stronger safety net:

TIME Money

Study: 35% of Americans Facing Debt Collectors

The word "Bankruptcy" is painted on the side of a building in Detroit on Oct. 25, 2013.
The word "Bankruptcy" is painted on the side of a building in Detroit on Oct. 25, 2013. Joshua Lott—Reuters

The delinquent debt is overwhelmingly concentrated in Southern and western states

(WASHINGTON) — More than 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies, according to a study released Tuesday by the Urban Institute.

These consumers fall behind on credit cards or hospital bills. Their mortgages, auto loans or student debt pile up, unpaid. Even past-due gym membership fees or cellphone contracts can end up with a collection agency, potentially hurting credit scores and job prospects, said Caroline Ratcliffe, a senior fellow at the Washington-based think tank.

“Roughly, every third person you pass on the street is going to have debt in collections,” Ratcliffe said. “It can tip employers’ hiring decisions, or whether or not you get that apartment.”

The study found that 35.1 percent of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records. The study points to a disturbing trend: The share of Americans in collections has remained relatively constant, even as the country as a whole has whittled down the size of its credit card debt since the official end of the Great Recession in the middle of 2009.

As a share of people’s income, credit card debt has reached its lowest level in more than a decade, according to the American Bankers Association. People increasingly pay off balances each month. Just 2.44 percent of card accounts are overdue by 30 days or more, versus the 15-year average of 3.82 percent.

Yet roughly the same percentage of people are still getting reported for unpaid bills, according to the Urban Institute study performed in conjunction with researchers from the Consumer Credit Research Institute. Their figures nearly match the 36.5 percent of people in collections reported by a 2004 Federal Reserve analysis.

All of this has reshaped the economy. The collections industry employs 140,000 workers who recover $50 billion each year, according to a separate study published this year by the Federal Reserve’s Philadelphia bank branch.

The delinquent debt is overwhelmingly concentrated in Southern and Western states. Texas cities have a large share of their populations being reported to collection agencies: Dallas (44.3 percent); El Paso (44.4 percent), Houston (43.7 percent), McAllen (51.7 percent) and San Antonio (44.5 percent).

Almost half of Las Vegas residents— many of whom bore the brunt of the housing bust that sparked the recession— have debt in collections. Other Southern cities have a disproportionate number of their people facing debt collectors, including Orlando and Jacksonville, Florida; Memphis, Tennessee; Columbia, South Carolina; and Jackson, Mississippi.

Other cities have populations that have largely managed to repay their bills on time. Just 20.1 percent of Minneapolis residents have debts in collection. Boston, Honolulu and San Jose, California, are similarly low.

Only about 20 percent of Americans with credit records have any debt at all. Yet high debt levels don’t always lead to more delinquencies, since the debt largely comes from mortgages.

An average San Jose resident has $97,150 in total debt, with 84 percent of it tied to a mortgage. But because incomes and real estate values are higher in the technology hub, those residents are less likely to be delinquent.

By contrast, the average person in the Texas city of McAllen has only $23,546 in debt, yet more than half of the population has debt in collections, more than anywhere else in the United States.

The Urban Institute’s Ratcliffe said that stagnant incomes are key to why some parts of the country are struggling to repay their debt.

Wages have barely kept up with inflation during the five-year recovery, according to Labor Department figures. And a separate measure by Wells Fargo found that after-tax income fell for the bottom 20 percent of earners during the same period.

MONEY Travel

When Airport Clubs Are Worth the Money (and When to Save the $500)

The Sky Deck at the Delta Sky Club
Flight delayed? An airport club like the Delta Sky Club in Atlanta can ease your pain. courtesy of Delta

True frequent fliers can kick back at an airport lounge for free. Some high-end credit cards give you access too. For everyone else, that privilege comes at a high price.

When you fly several times a month, as Gabriella Ribeiro Truman does, finding a comfortable place to wait for a flight and grab a snack can make traveling a lot more enjoyable.

She used to have free access to co-owned American Airlines and US Airways lounges through her American Express card, but with that program over, she now pays $500 a year to be a member of American Airlines’ Admirals Club, which gets her access to private airport lounges around the world through the oneworld alliance. “It was worth it for me to pay for it,” says Truman, 39, a New Jersey-based travel marketing executive.

Travelers have a wide range of options when it comes to the airport clubs, whose lounges can offer some peace from often chaotic, warehouse-like airport terminals. Snacks and drinks are available for the taking, seating tends to be more comfortable, and there’s free Wi-Fi and lots of power outlets.

But whether it is worth it for the cost depends on how you are getting access and whether you are paying extra for it. Airport lounges are run by either airlines or a handful of private operators. While some are restricted to top-tier flyers, most allow travelers a variety of ways to get in.

  • Membership through airlines or airline alliances: For instance, if you achieve gold status in the Star Alliance (which includes United Airlines, Air Canada, and Lufthansa ), you are permitted access to more than 1,000 lounges worldwide as long as you fly on a member airline. Otherwise, you will pay about $300 to $700 a year, plus initiation fees (air miles can be used).
  • A day pass: Prices are typically about $50, but advance-purchase deals for some can cut that in half.
  • Route-specific: Some travelers are given entry to an airline’s lounges along the route they are flying if they fly internationally on a first-class or business-class airline ticket or on certain transcontinental flights.
  • Membership through cards: Fewer credit cards offer the perk now. Among those that still do: the American Express Platinum Card, through which you receive a complimentary membership to Delta’s Sky Club network when flying on that airline, and you can apply for a free membership in the independent Priority Pass lounge network (worth $399) as part of the card’s $450 annual fee. Also, Citi Executive/AAdvantage card holders get a membership worth $500 in American’s Admirals Club included as part of their $450 annual fee.

What You Get

At the estimated 2,000 lounges worldwide at more than 500 airports, services and amenities vary. One way to keep track is with a free app like LoungeBuddy, available for iPhone and Android, with data on nearly 1,800 lounges. Users can input their travel information and get ratings, lists of amenities, and photos for the lounges they can access.

For food, U.S. clubs will typically offer basic snacks like carrots, pretzels, and apples, with a bit more in the mornings like pastries and yogurt, according to Tyler Dikman, founder of LoungeBuddy, who says he has personally visited 600 to 800 lounges. Beer and wine will be free, but travelers usually have to pay extra for top-shelf liquor domestically. Nearly half of lounges will have showers, he adds.

In smaller airports, marketing executive Ribeiro Truman says she finds that many lounges resemble hotel bars—not much more than a separate seating area with some snacks.

But in larger airports, expect to find more, especially overseas.

At Cathay Pacific Airlines’ The Bridge Lounge in Hong Kong, for example, there is an enormous, elegantly decorated space divided into two wings, and spacious shower suites. Food includes fresh-baked bread, pizza, soups, and sandwiches on one side and a range of high-end hot and cold food for self-service on the other.

Access to that lounge is available to Emerald- and Sapphire-level members of the oneworld alliance, which includes American Airlines.

Private shower rooms, in particular, win wide praise from those who have used them. “It’s something you’ll find in a nice hotel,” Dikman says, who has enjoyed plush towels and fancy toiletries.

For the infrequent traveler or someone stuck waiting a long time for a connection, buying a day pass to a lounge could be a big benefit, particularly if you have work to do. Road warriors report that paying about $500 a year is money well spent to regroup when it is inconvenient to check into a hotel.

Sonita Lontoh, a Silicon Valley technology executive who flies regularly to Asia and Australia, prizes her lounge access. She says after being on a plane for 15 hours, having a place to decompress and take a shower is a real benefit.

On the other hand, Becky Pokora, 28, the Richmond, Va.-based writer of The Girl and Globe blog, says her credit card just discontinued free access to lounges and her 15 round trips a year do not warrant paying extra.

“The value proposition was different when there were lounges in nearly every U.S. airport participating in their program, but now I doubt I’ll be renewing the card when next year’s annual fee comes due,” she says.

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