There’s no doubt that collecting credit card points can be exciting. The more you acquire, the more discounts you can receive on your favourite goods and services. However, it can be frustrating and confusing trying to figure out precisely how to use them. Naturally, you want to get the best bang for your buck, especially since you did all that shopping to amass them in the first place!

Luckily, it won’t strain your brain to master the rewards points game. In fact, by knowing just one easy formula, you’ll be able to instantly see whether you’re getting a good deal or not.

Here’s how you can use your credit card points like a true professional – and get maximum value each time you redeem.

How to identify a solid deal

Suppose you’re not well acquainted with your credit cards rewards program. In that case, you should devote some time to studying it, as redemption policies surrounding points can be a bit tricky.

You can redeem points for various things, such as airfare, hotels, gift cards, clothing, groceries, electronics, and more. However, your points’ value will differ based on what you exchange them for. By understanding your card’s redemption rules, you’ll be better equipped to assess the value of each rewards deal and whether it’s worth giving up your points to obtain it.

The secret formula for determining whether you’re using your points optimally is as follows: you must receive a minimum of 1:1 value for the redemption. What this means is that each point should translate to at least one cent in value. A couple of examples will help clarify this concept.

First, suppose you’re wondering if you should exchange your points for an item worth $50, which requires 3,000 points. Here’s the calculation you would do to determine how good of a deal you’re getting:

$50 / 3,000 points = 0.016 cents per point.

Since this amount exceeds the 1:1 ratio, you’re getting a favourable deal and should consider redeeming your points for the item.

Now, suppose there’s another item you’re interested in worth $70, which requires 7,500 points. The calculation works out as follows:

$70 / 7,500 points = 0.009 cents per point.

In this case, paying for the item by converting your points isn’t ideal — you’d be better off using cash or credit.

You can apply this handy formula to any reward offered by your credit card’s loyalty program.

The best way to use your credit card points

When it comes to getting the most out of your points, you almost can’t go wrong with travel rewards. Generally, points are more valuable when you redeem them for travel-related expenses, including flight tickets, car rentals, vacation packages, and hotels.

You could further boost the redemption value of your points if you book your travel plans through your card’s online travel portal, where exclusive deals abound.

Still, you should employ the formula discussed previously to ensure it’s worth converting your points for specific travel rewards. Redemption rates vary widely depending on the destination you’re planning to fly to, so it’s best to save your points for high-cost routes where you can realize substantial cost savings.

It’s also prudent to compare different categories of travel rewards. For example, redemption rates for airline tickets may differ significantly from hotel bookings. You may find that you’re better off converting your points to cover a plane ticket rather than a few days’ accommodations or vice versa.

If you’re not planning a trip anytime soon, another great way to use your points is to redeem them for a gift card. Most of the time, you’ll receive far more value out of a gift card as measured in dollars than if you used your points to purchase merchandise directly.

The worst way to use your credit card points

In general, redeeming your points for merchandise is a bad deal. You’ll likely not receive the 1:1 value as you would with travel rewards and gift cards. Applying your points to retail items can devalue them considerably.

You’re better off paying for merchandise by cash, or using your credit card, so you can earn more points rather than relinquish them.

Another redemption strategy some people employ is using their points to pay for purchases during checkout to receive an instant discount on their balance. However, if you were to crunch the numbers, you’d quickly see that this isn’t exactly an ideal option, either, as the value of each point will be worth much less than one cent.

Opting for a statement credit is also an enticing option. In rare cases, the redemption rates for credits are decent but still nowhere near as profitable as those typically offered on travel and gift cards; you’ll usually get less than 1:1 in value.

Statement credits are valuable when redeemed on cashback cards, but not so much on points cards.

The post Learn How to Use Credit Card Points Like a Pro appeared first on The Motley Fool Canada.

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Well, it can! Getting your hands on more credit card points is easy-peasy once you learn a few tricks and shortcuts. And you don’t have to strain your wallet to do so — you can collect a whole bunch without spending an extra dime!

Here are 12 ways you can boost your point-earning power, free of charge.

1. Use temporary bonuses to your advantage

Be on the lookout for temporary bonuses that allow you to garner extra points for a limited time. Earning these points will entail shopping at a specific merchant or making purchases in a particular spending category, like supermarkets or gas stations

2. Add another authorized user to your card

Depending on the type of credit card you own, you may be able to add another authorized user to your account. This move can instantly increase your spending power and the pace at which you collect points. Just ensure you trust fully the person you designate as your spending sidekick — you’re still the one responsible for paying off all the charges each month!

3. Buy gift cards for merchants you plan to purchase from in the future

Some credit cards offer substantial bonus points if you attain a minimum spending requirement, usually within the first few months of opening your account. A clever hack to reach these spending targets is to purchase gift cards for merchants you frequently patronize (provided your credit card allows you to earn points from gift card purchases). That way, you make enough purchases to meet your minimum spending requirement while stashing away the gift cards for future use.

4. Make purchases through online shopping portals

Some rewards programs allow you to earn additional points simply by shopping through online shopping portals. These “virtual malls” will enable you to buy items from hundreds of merchants partnered with your card’s loyalty program. Deals that originate from these online malls are often exclusive and offer more points than brick-and-mortar locations.

5. Use your credit card to pay for expenses covered by insurance

If your employer provides you with health insurance, you can leverage it to accumulate more points. Pay for health-related expenses using your credit card and then submit the claim to your employer’s insurer for reimbursement.

6. Transfer your points to another rewards program

In some cases, you can receive a bonus for transferring your existing points to another rewards program. For example, if you have hotel rewards points to spare, consider moving them to a frequent flyer program that temporarily offers bonus miles for transfers.

7. Make purchases for friends and family

Ask your friends and family if you can make purchases on their behalf using your credit card. Then, they can reimburse you, effectively netting you additional points for free.

8. Use your credit card for work-related transactions

Suppose your boss sends you to another city to attend a training seminar — a function for which you’ll be entirely reimbursed for your travel costs. In this case, you can use a personal credit card to pay for the flight and accommodation, thus collecting points without spending any of your own money.

9. Make large purchases with your credit card

If you’re planning on purchasing a big-ticket item, like a used car, inquire with the seller if they accept credit cards as a payment method. This tactic will undoubtedly bring in a nice chunk of points — just be sure you can pay off the balance on time!

10. Collect referral bonuses

Some cards will reward you with extra points for sending more business their way. Suppose your friends or family members are looking to acquire a new credit card. In that case, you can persuade them to apply for one using your referral link.

11.  Apply for a new credit card with no annual fee

Look for credit cards that come with no annual fee; that way, you can use them to earn additional points for nothing. In cases where there’s a yearly fee, you may be able to convince the card issuer to drop it. When scouting for a new card, prioritize those offering lucrative welcome bonuses to maximize your points.

12. Charge every bill you can to your credit card

Whenever possible, opt to pay for bills with a credit card. You can start with your phone, internet, cable bills, and various subscriptions, like Netflix, Amazon Prime, and Spotify. Then you can try adding your car and home insurance. If you own a Triangle Mastercard, you can use it to pay for utility bills, property taxes, and tuition expenses, enabling you to acquire points on things typically off limits for credit cards.

The post 12 Ways to Earn More Credit Card Points (Without Spending Extra) appeared first on The Motley Fool Canada.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon and Netflix. Tom Gardner owns shares of Netflix. The Motley Fool owns shares of and recommends Amazon and Netflix. The Motley Fool recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Fool contributor Mark Gregorski has no position in any of the stocks mentioned. 

Obtaining a credit card couldn’t be more straightforward: you fill out a few details on an application form and wait for the card issuer to approve it. No big deal, right? Even your cat could do it.

Well, that’s not the case if you’re looking to acquire a specific ultra-exclusive credit card people typically associate with high-class business moguls, celebrities, and those rich enough to purchase a yacht on a whim.

This card instantly conjures images of glamour and prestige. It’s considered a premier symbol of illustrious status and immense wealth. The perks it offers will make you feel like royalty. And it’s so elusive and exclusive there’s no official application form. You actually have to receive an invitation from the card issuer to have the privilege of owning one!

So, what is this mysterious credit card, and what does it take to get a hold of one?

The most difficult credit card to get approved for in Canada: The AMEX Black Card

The American Express Centurion® Card, informally known as the AMEX Black Card, is the most exclusive and prestigious credit card available. Aimed squarely at those with enormous bank accounts who live extravagant lifestyles, it offers a broad array of benefits that go above and beyond your typical credit card.

First introduced by American Express in 1999, the posh card is sure to make an indelible impression when plunked down at a table. Given its rarity and exclusivity, it speaks volumes about the wealth and status of anyone who holds one. The card is even referenced in popular culture, appearing as a prop in film and television shows and mentioned in songs by artists like Kanye West.

How to qualify for the AMEX Black Card

While the terms and conditions of the AMEX Black Card are freely available online, there’s no official application form. Card membership is by invitation only at the discretion of American Express.

Details about the eligibility criteria are scant, but over the years, reliable sources have assembled a list of attributes that may qualify you for the luxurious card. You must

• Have an existing AMEX Platinum Credit Card account;
• Spend a certain amount every year on your current AMEX credit card — rumoured to be anywhere from US$250,000 to US$500,000;
• Have a sizable net worth (think in terms of millions of dollars);
• Possess an impeccable credit score — but you probably already knew that!

However, these eligibility requirements are more speculation than fact — the real ones are shrouded in secrecy. American Express has never disclosed the actual “secret” for obtaining the Black Card.

How much does the AMEX Black Card cost?

The Amex Black Card is a pricey piece of plastic. There is a one-time initiation fee that will set you back $10,000. After that, your annual fee obligation is $2,500. The card charges an interest rate that’s equal to the prime rate + 12.74%, which is in line with other AMEX credit cards.

Features and benefits

The Amex Black Card is no slouch when it comes to exceptional features and lavish perks. Here are SOME of them:

• No spending limit. Since it’s a charge card, you have the freedom to splurge. Just be sure to pay off the balance by the due date of each statement — the interest can really add up!
• Hotel upgrades. Instantly attain Elite status at hotel brands such as Fairmont, Hilton, Marriott, and Relais & Châteaux.
• Vehicle rental upgrades. Rent limousines and exotic luxury vehicles, such as Bentley and Lamborghini.
• Around-the-clock concierge service. Have your very own 24/7 concierge to help you book reservations, arrange travel plans, make last-minute gift purchases, etc.
• Airport lounge access. Gain complimentary access to more than 1,000 airport lounges worldwide, including Priority Pass airport lounges and Delta Sky Clubs.
• High-end shopping perks. Receive $1,000 in credits per year at Saks Fifth Avenue and exclusive offers from luxury retailers as part of the Centurion Shopping Program.
• Equinox membership. Gain instant membership in this high-class gym chain with locations in Canada, the U.S., and U.K.
• Flight upgrades. Receive a yearly airline fee credit worth $200, free Wi-Fi while flying, first-class flight upgrades, free companion airline tickets, priority status during check-in and boarding, membership in AMEX’s International Air Program, etc.

Oh, and did we mention that your AMEX Black Card is fashioned in anodized titanium? This material makes the card as tough as steel but still remarkably light — just don’t rely on it to double as a bulletproof vest!

The post This Is the Most Difficult Credit Card to Get Approved for appeared first on The Motley Fool Canada.

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American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has no position in any of the stocks mentioned. Fool contributor Mark Gregorski has no position in the companies mentioned.

Credit cards are supremely convenient tools – when they work, that is!

Picture this: you’re at a cash register with a purchase, credit card ready in hand, and expect things to go off without a hitch. Then, suddenly, the cashier informs you that your card has been declined (gulp!). The dreaded message no shopper wants to hear!

Whenever a credit card transaction fails, it’s always a bit of an unsettling experience. You may suspect that your card has been cancelled, or worse, that you’re a victim of fraud. Luckily, most of the time, the reason behind a declined transaction is not serious and doesn’t warrant any stress. And in most cases, you can resolve the issue in just a few minutes.

No matter the reason for your declined credit card, follow these three easy steps to bring it back to life.

Step 1: Stay calm and consider your options

While your credit card being declined may induce some anxiety, you should do your best to remain calm and focus on the task at hand: how you’re going to handle your purchase.

It’s unlikely you’ll figure out then and there why your credit card is being so stubborn. So consider an alternative payment method. Can you use your debit card? Do you have some spare cash handy?

If you have no other means of payment, and it’s not a time-critical purchase, it’s wise to postpone the purchase. There’s no point in getting flustered and desperately probing your brain for a solution. Live to fight another day!

Step 2: Review your card details

Do a quick checkup to see if you’ve mistakenly punched in the wrong numbers. It’s easy to accidentally switch digits, especially if you’re in a hurry or distracted by something.

Have a peek at the expiration date on your card, as well. If your card has recently expired, expect a new one to arrive in your mailbox soon, if it hasn’t already.

If you’re conducting an online purchase, ensure the card details on file with the merchant match any recent changes made to your billing information. You may have to do the same if you recently acquired a replacement card.

One last tip: if you’re using a new card, make sure it’s properly activated.  You can usually activate your card through your online banking or your card provider’s mobile app.

Step 3: Contact your card provider

If none of the above resolved the issue, it’s time to contact your card provider and ask for assistance. Call the customer service phone number, conveniently listed on the back of your card. The agent will be able to identify the problem and inform you of the next steps to take.

Below are some commons reasons your card may have been declined:

You’ve reached your credit limit

Ask your issuer to verify if your credit limit has been lowered, which may occur if you use your card sparingly. You can also inquire if they can raise it to provide you with more of a spending cushion.

Your spending activity triggered a fraud alert

Credit cards have built-in safety measures to detect fraudulent activity. Transactions deemed suspicious will trigger the card’s fraud-detection system and freeze your account. Conducting a transaction abroad, making purchases incongruent with your typical spending patterns, or entering your card details too many times consecutively at checkout can trigger a freeze on your account.

To reactivate your credit card, you simply need to confirm the transaction’s validity with your card issuer.

You’re the victim of fraudulent activity

If genuine fraud is detected, your card issuer will deactivate it to prevent any further unauthorized charges. They will then cancel your account and issue you a replacement card. However, it’s up to you to dispute any fraudulent charges, which may entail working with your card issuer and the credit bureaus as well.

Your credit card account has been closed

Yup, your card issuer may be the culprit behind your declined transaction. They may have closed your account for a variety of reasons:

• You’ve missed too many payments
• You rarely used your card
• Your credit score has taken a dip, and you no longer qualify for the card
• You rejected a change in the terms and conditions of your contract

In most cases, your card issuer will cooperate with you to rectify the problem. Still, you’ll have to flex your negotiation skills. Be honest, polite, and courteous when speaking with your creditor’s representative. Propose a sensible plan to pay off any unpaid debts, set a fair credit limit, etc. By doing so, your credit card will be restored sooner rather than later.

And at the end of it all, if the right solution is to look for a new credit card, we have compiled a list of our top credit card picks for Canada.

The post What to Do When Your Credit Card Is Declined appeared first on The Motley Fool Canada.

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Have you always thought that making one late payment on your credit card isn’t a big deal (it’s only one, right?). Well, the truth is that even a single missed payment can put a dent in your credit score, despite what your forgetful roommate told you!

Credit card myths like this can wreak havoc on your finances, which is why identifying and staying clear of them is so crucial.

Luckily, I’ve saved you the trouble by assembling some of the worst offenders and put them in their place! Learn from them, and your bank account will thank you.

1. Getting a card credit will hurt your credit score

A credit card, if used responsibly, is one of the best tools for building or improving your credit score. By making regular purchases using your credit card and paying off the balance promptly, you can go a long way in enhancing your credit standing.

2. Closing a credit card account with unpaid debts can improve your credit score

False. Shutting down a credit card account with unpaid debt doesn’t magically erase those transactions from history and let you start from scratch. These detrimental details can stay on your credit report for up to seven years.

3. Balance transfers save you money

Not always. Sometimes, the balance transfer fee can be steep enough that the arrangement isn’t financially feasible. Low or zero percent interest rates on balance transfer cards also have a short window of opportunity, after which the default (often exceedingly high) rate kicks in.

4. Carrying a balance on your credit card improves your credit score

Nope. Simply maintaining a balance on your card won’t result in any upgrade to your credit. However, keeping your card active with sporadic purchases is a wise move, as it shows lenders that you’re using credit. A monthly or quarterly transaction will suffice. 

5. You must pay the fees stated in your credit card contract

Surprisingly, credit card companies may be willing to work with you to reduce your fees – but it’s up to you to initiate the conversation. Be reasonable, friendly, and courteous when negotiating, and you might land a great deal. 

6. One missed payment won’t reduce your credit score

Wrong! Even a single missed payment can inflict significant damage to your credit score. This is especially true if you previously possessed an impeccable payment history – the higher your credit score was, to begin with, the harder it will fall. And the more late the payment, the more substantial the impact on your credit score

7. You can build credit quickly once you get a credit card

Never. Building a solid credit profile is a gradual process. It could take months or years and depends on your circumstances. Your credit score reflects your ability to manage bill payments and other credit products you may currently use, such as personal loans and lines of credit. A credit card is only one piece of the puzzle. And while a credit card — if used correctly — can help you build credit, there are additional ways to build credit without a credit card.

8. Your APR will never increase

Not necessarily. Your APR may very well rise over time. It may be due to a change in your card issuer’s policy, in which case your powerless to do anything about it. Other reasons for APR hikes include an expired introductory rate or a decline in your credit standing.

9. Getting multiple credit cards won’t affect your credit score 

It will. Every time you apply for a credit card, the card issuer will perform a hard credit check on you. Essentially, this means they will access your credit report to assess your creditworthiness (the risk of lending to you). Racking up too many hard credit checks in a short time adversely affects your credit score, as lenders will perceive you as being desperate for credit and more likely to default.

10. You can spend as much as you want as long as you pay off the balance on time

Not without unpleasant consequences. Excessive credit usage can put a severe dent in your credit score, as this is one of the factors credit bureaus assess when setting your credit score. Exceeding your credit limit is not prudent as well, as you may incur over-limit fees and a costly penalty APR should you fail to pay on time.

11. Credit cards are less safe than debit cards

Not necessarily. Credit cards typically come equipped with superior security features and liability protection compared with debit cards. Since credit cards are essentially thief magnets, card issuers have no choice but to respond accordingly or risk losing customers. The federal government agrees: if you’re the victim of fraudulent transactions, federal law caps your payment liability at $50.

The post 11 Myths About Credit Cards appeared first on The Motley Fool Canada.

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