What is a secured card and how does it work?

If you’re trying to rebuild or establish your credit, you’ve likely been told that a secured card is a great way to get started. For borrowers with limited or no credit, a secured card is a simple way to get a major credit card, and can often be obtained quite easily.

Secured credit cards are an excellent resource for borrowers with poor credit looking to improve their credit score or receive a line of credit. Concerning purchasing capabilities, secured cards work in the same manner as unsecured cards do. If your card is branded with MasterCard or Visa, it can be used anywhere that MasterCard or Visa is accepted.

In fact, the primary difference between secured and unsecured cards is that secured cards require a collateral deposit, rather than a credit check upon approval. This is because this type of credit is designed for people with credit scores of 600 or less or who may not qualify for unsecured credit.

Secured Credit CardsSecured Credit Cards

What is a Secured Credit Card?

A secured credit card or secured line of credit is backed by your own cash when you open the account. The deposit you choose to make is generally your credit limit. So, if you make a deposit of $300, your credit limit is also $300.

By securing the card with cash collateral, the credit card issuer’s risk is limited. If you miss a payment, the issue can merely reduce the money from your deposit. The reduced risk allows lenders to give credit capabilities to people with no credit and poor credit.

What happens to your deposit if you follow the terms of your agreement? According to your contract with your lender, you will eventually get your deposit back. If you use your secured card responsibly, your credit may improve enough to qualify for an unsecured card – one that does not require a deposit.

Some lenders may allow you to upgrade your secured account to an unsecured one. If your lender doesn’t have an upgrade path, you will need to apply separately for an unsecured credit card and close the secured one. When you close a current secured card, the bank will refund your collateral deposit.

The minimum and maximum amount you will need to open a card will vary by card issuer, but borrowers should be prepared to come up with between $200 and $300 for a deposit.

How Secured Credit Cards Work

Once you pay your initial deposit, secured cards work just like unsecured cards do:

  • You can use your secured card anywhere that credit cards are accepted.
  • You can rebuild or build your credit by paying your balance on time and using your card responsibly.
  • If you carry a balance, your secured card will incur interest.

Most major lenders and card issuers offer both unsecured and secured credit cards. If you can’t get approved for an unsecured credit card, a secured credit card is an excellent tool to improve your credit. Keep in mind, that a secured card is just as significant of a responsibility as any other bill or loan that shows up on your credit report. Your ability to manage your secured card will reflect on your credit report for years to come.

Unsecured Cards vs. Secured Cards

Whether or not you will need a secured card to build your credit will come down to how good your credit score is.

Unsecured cards don’t require a collateral deposit and therefore pose a higher risk to the card issuer. To be approved for a secured card, lenders will generally require a minimum of an average, good, or excellent credit history.

Some unsecured cards advertised specifically to those with no credit and poor credit. However, these credit cards often come with fees that are incredibly high. Experts recommend applying for a secured card and building your credit history, rather than an unsecured card that has high-fees.

Source: creditabsolute.com

Are Hotel Rewards Credit Cards a Bad Idea?

Hotel Credit Card RewardsHotel Credit Card Rewards

If you are an avid traveler, it’s likely that you’ve been tempted to apply for a hotel credit card at one time or another. The best hotel cards out there offer a variety of benefits for everyday and travel spending, giving consumers the opportunity to earn rewards such as free hotel stays and upgraded accommodations.

But are these rewards all they are advertised to be? Let’s explore what hotel rewards credit cards are and how this type of loyalty program may or may not benefit consumers.

What are hotel rewards credit cards?

Hotel credit cards enable the holder to book free nights at a variety of hotels around the world. They advertise fantastic rewards and exclusive cardholder perks (late checkouts, loyalty program status upgrades, free in-room internet, etc.) to enhance your travel experience. When searching for the best hotel credit card that is going to give you the most for your spending habits, experts recommend keeping these criteria in mind:

  • Available introductory point bonuses and your ability to meet the card’s initial spending requirements.
  • Rewards for different spending categories, and how this fits in with your day-to-day spending.
  • Hotel upgrades, add-ons, and perks to make your stay more enjoyable.
  • Annual, as well as foreign, transaction fees. Will the card give you enough value to justify these fees?

What’s the big deal?

At this point, you may be thinking that a hotel rewards credit card sounds like a pretty great deal – but is it really? The travel industry is one of the largest industries in the US, contributing a total of 1.5 trillion dollars to the GDP in 2015. While it may seem that they certainly have enough money to give away a night or two, that’s just not how big business works. In fact, with the amount of money that it costs to simply maintain a luxury hotel, they aren’t likely to start giving away rooms for free anytime soon.

Generally speaking, rewards cards often have the highest APRs, in part to help pay for all of the points, fancy hotel stays, and miles they are dishing out. As such, hotel rewards cards probably aren’t the best idea if you find yourself in a situation where you need to carry a revolving debt for a period of time. In fact, experts say that in some circumstances the fees can far outweigh the benefits of reward and loyalty credit cards.

When is a hotel reward credit card a good idea?

While anyone who chooses to join a rewards or loyalty program should do so with caution, there are steps that consumers can take to make the most of out of their hotel rewards credit card. Before you apply for a credit card, it’s important to understand the offer, along with the card’s terms and agreements. Read through the fine print before you apply to help you understand just what type of contract you are entering into.

Whenever possible save large purchases for low-interest cards. You may feel like you are missing out on your “rewards,” but you’ll probably save more than that free night stay would have been worth anyway. You know that your “frequent-flyer miles” are far from free, so save your reward cards for small purchases that you know you can pay within the month’s billing cycle.

Conclusion

Different people have different opinions about what the “best” hotel credit card is. No card is universally superior to another. Just like any other credit card you apply for, you’ll want to understand your commitment and make the best choice for your spending habits and style.

Source: creditabsolute.com

Is it smart to use balance transfers to pay off credit cards?

Credit Card Balance TransfersCredit Card Balance TransfersAccumulating a significant balance on a high-APR credit card can be frustrating, to say the least. A significant portion of your monthly payment goes to interest, and you only see a slow chip away at your debt. In this case, a balance transfer may be a good idea. Many lenders and credit companies offer products with interest rates as low as 0% on balance transfers (based on your credit score) in order to attract new customers and clients.

Balance transfer fees are common, generally 3% of your total balance, although this can often be waived through special promotions. Many companies also limit the amount that you are able to transfer.

Applying for a Balance Transfer

If you can find a credit card with low-interest rates offered for a period of time in which you could pay your balance, little to no balance transfers fees, and a credit limit high enough to accommodate your balances, then a balance transfer may be beneficial. When you do a balance transfer, more of your monthly payment is contributed to the principle, rather than that majority of your bill payment going toward interest.

In many cases, you need good or excellent credit history in order get attractive introductory offers. Although you may be eligible for a balance transfer if you apply and qualify for a new card, interest rates will generally be far above the 0 to 5 percent introductory rate many lenders advertise.

In general, balance transfers are not a good way to improve your credit score or avoid late payments. Balance transfers themselves can take up to two weeks before they are completed. During this time period payments will have to be maintained to the creditor that still holds your balance.

Living with a Balance Transfer

So you’ve qualified for a balance transfer and transferred your debt to your new low-interest account – now what do you do?

Ensure that the accounts that held your previous balances have been paid in full by receiving a statement from your old creditor. Once your balances have been successfully moved, it’s a good idea to keep these cards open. Charging very little on your cards and paying off the balances in full every month is a great way to give your credit score a boost while you pay down your debt. If you still have a remaining balance on your card, continue to make your payments in full and on time.

In the meantime, you’ll want to tackle your balance transfer debt prior to the introductory period expiring. If you make insufficient payments or fail to make them on time, your intro rate could disappear.

Conclusion

Before applying for a balance transfer and a new credit card it’s a good idea to review the creditor’s terms of service. Every credit company is required to disclose their full rate plan to the consumer. This documentation should tell you the amount owed at each credit level for bank-to-bank balance transfers and how long the advertised rate will last. Keep in mind that missing payments can void your introductory agreement and rate.

If you’re not sure if a balance transfer is a right move for you, don’t hesitate to call the issuing company you want for your balance transfer and ask questions. Before the call, it’s a good idea to get familiar with your credit score and be prepared to discuss any negative terms found on your credit report. With the right information, your credit card company’s representative should be able to give you detailed information about the offers available for your particular situation.

Source: creditabsolute.com

Pros and Cons of using Gas Credit Cards

The choice on whether to go for gas credit cards or use other financial tools at the pump is not an easy one. This cashless system is marketed as a convenient and easy way to fuel your car. That said; there are high rates and other limitations to contend with. To help you make an informed decision, here are the pros and cons of using gas credit cards.

Pros

Discounts on Purchases

Gas Credit CardsGas Credit CardsOne of the driving factors of having a gas credit card is the discounts associated with their use. With most of these cards you get to pay less per gallon than the fuel pump price. Considering the ever increasing gas prices, this cash backs can go a long way in saving you money which can go towards other purchases.

These programs are structured in a way that you get larger discounts during the first few months after card issuance. For example, the ExxonMobil fuel card offers 12 cents off per gallon for the first 2 months and 6 cents off thereafter.

Accumulating Reward Points

Another incentive to using a fuel card is the reward program. These are points per gallon that you accumulate with each gas purchase. A typical reward of 1 point per gallon gives the average American driver about 540 points yearly. This calculation is based on an estimate of 25 Miles/Gallon and 13,476mi which is the average annual miles per driver. Reward points can be redeemed once they accumulate to 100 and over. These can be used for gas or other needs like snacks and carwashes at select businesses.

A Hassle-free and Convenient Payment System

When using cash, one has to line up at the till to pay for gas. This can lose you precious time from your busy life. However with a gas card, all you need is to pull up at the gas station, fuel and swipe at the pump and in a few minutes you are back on the road.

Another plus on using a gas card is the convenience that it offers. This comes in handy because you may not always have cash to fuel your car. Just like other credit cards, you get billed at the end of the month for your purchases. This helps you in keeping track of your gas bill; essentially making you stick to your budget.

Cons

High Interest Rates

One of the major disadvantages of using a gas credit card is the high interest rates that they attract. On average they charge 24% on interest. That is 9 percentages points more than the average rate for all credit cards which is currently at 15% APR. A card whose balance is not cleared at the end of the month can end up accruing a sizable debt. This may be much more than the discounts and rewards can make up for.

Simply put, continued misuse of the card can lower your credit score. One of way to mitigate this is going for cards with a 0% introductory offer. This will at least cushion you for a few months as you get your gas budget in order.

Ease of Spending

When using cash, you can’t gas your car with more than what is in your wallet. A gas card on the other hand eliminates this ‘inconvenience’. However the card can lead to uncontrollable spending with total disregard to your budget.

Think of it this way; without gas money, you will probably have to do with public transport. This will unconsciously save you money when you are cash-strapped. But why would you go through the hassle if that small plastic card can fill up your tank?

Usage Limitations

If you depend on your credit card for all your fueling, you may find yourself with fewer options on where to buy. This is because the cards are mostly issued by gas stations to be used in their own branded outlets. This puts you at a disadvantage if you move or drive to a state where the brand doesn’t operate, or has few outlets.

Bottom Line

Gas credit cards are a convenient way of fueling your car. They come with reward points and can save you money via their discount programs. The advantages can however be diminished by high interest rates and the danger of overspending. It is therefore advisable to weigh both the pros and cons before you make your decision.

Source: creditabsolute.com

Americans Take on Nearly $1,000 in Credit Card Debt After the Holidays

Credit CardsCredit CardsWith the 2018 holiday season behind us, many people are now trying to pay off that debt months after the tree has been taken down. Let’s look at how much credit card debt the average person racked up during the holiday season.

Amongst Consumers That Took on Credit Card Debt, Average Amount Was $998

LendEDU asked 1,000 Americans who took on credit card debt from their holiday spending some questions about their level of debt and what it will take to pay it off.

On average, those surveyed increased their credit card debt by $998.36 and are expecting it to take 10.28 months until that debt is paid off. The increased debt load was expected by the majority of those surveyed, with 70.90 percent saying they anticipated their credit card debt was going to go up because of the holidays.

Some of that debt wasn’t put on general credit cards, but rather on store-branded cards. More than half, 52.60 percent, placed some of that debt on a store-branded credit card. This type of credit card generally carries higher interest rates than general credit cards, although, at times, you may have deferred interest offers.

Not Surprisingly, Credit Card Debt-Induced Stress Common After the Holidays

With greater debt usually comes more stress, and 56.80 percent of the survey respondents said their higher debt load was causing them stress. Another 37.60 percent said they weren’t feeling stress from the increased credit card debt, while 5.60 percent said they weren’t sure.

Sometimes after the glow of the holidays has faded, some people regret spending as much as they did. Out of those surveyed, 42.30 percent said they regretted getting into more credit card debt because of their holiday spending. But a higher percent, at 49.80 percent, said they didn’t regret the extra debt, while another 7.90 percent said they weren’t sure if they regretted it or not.

More Than One-Fifth Intend to Restructure or Refinance That Debt

The majority of those who were surveyed, 59 percent, have no plans to refinance their credit card debt by taking advantage of a balance transfer offer, using a personal loan, or employing any other credit product. A much smaller percentage, 21.50 percent, were planning to refinance their credit card debt using one of those methods or another credit product. Another 19.50 percent weren’t sure if they were going to refinance their debt.

If you are still trying to recover from your holiday spending and you have more credit card debt than you’re comfortable with, here are some ways you can whittle away that balance.

  • Snag a lower interest rate: You can do this in one of two ways – through a balance transfer to another card, which will result in an introductory APR that may last up to a year, or by calling your existing credit card company. While calling your current credit card company won’t necessarily guarantee a better APR, it may result in a small reduction which could save you a fair amount of money as you pay off the balance.
  • Stop using your card: It’s time to stop the bleeding. Avoid using your credit card for any new purchases as you work to pay down that balance.
  • Shop around on your other expenses: Now might be a good time to get quotes on switching insurance companies, cable providers, or cell phone and internet carriers. You can use your savings to pay off your credit card balance faster.

Credit card debt can feel overwhelming, but if you’re motivated to pay it off, you’ll succeed in the long run. And in the meantime, be watchful of your spending and consider putting any cash windfalls you receive toward your balance.

Learn some helpful tips on how to pay off those pesky cards quicker. 

Source: creditabsolute.com

Credit Card Facts & Myths to Help You Manage Your Credit

The credit cards subject is surrounded by myths that may keep you from reaping their maximum benefits. On the other hand, not familiarizing yourself with certain credit card facts may land you into credit troubles that might not be so easy to come out of. With this in mind, we have debunked a few of these myths and asserted some important facts to help you properly manage your credit.

Credit Card Myths & FactsCredit Card Myths & Facts

  • Myth: Credit Cards Should Only Be Used For Emergencies

Credits cards come in handy during emergencies. However, they are not reserved to be used for such times only. According to experts, using these cards for most of your daily spending is a very smart financial move; they help you track your expenses and account for your monthly expenditure, something which is harder when dealing with cash.

Credit cards offer price protection. If for example, you buy an item for a specific price say $70, then it drops to $50 between typically 60 -90 days, you are entitled to be refunded the difference.

It gets even better; regular use of credit cards attracts the benefits of reward programs. For regular purchases, you accrue cash back incentives and other reward programs.

Having debunked the myths, is it true that regular use of your credit card can improve your credit score? Yes, this is because it shows and establishes that you can do on-time payments, consequently increasing your creditworthiness.

  • Fact: Less Than Minimum Payments on Your Credit Card Are Considered As Missed Payments

Indeed, failing to meet your total minimum credit card payment will be reported as a missed payment by your credit card company. If you can’t afford to pay your credit balance in full, make sure you at least make your minimum payments before the due date to protect your credit score.

That’s not all; it is very advisable to pay more than just the minimum payments. This helps you reduce your debts and helps you to escape from the interests accrued from the remaining balances. These interests are some of the ways credit card companies earn their money.

  • Myth: Getting a Credit Card Can Hurt Your Credit Score.

This is a big credit card myth, getting a credit card doesn’t lower or worsen your amazing credit score. In sharp contrast, getting one is a step towards building your credit score especially if you have good spending and payment habits. If your credit card is well managed, getting loans becomes easier as your credit score keeps rising. As a matter of fact, a credit utilization ratio of below 30 percent works favorably for your Credit Score.

So, when can having a credit card affect your credit score? It happens when you rake up huge unpaid bills each month and fail to pay them on time. To avoid this, get a card with low top limits. It will greatly help you to keep your spending in check.

  • Fact: High Credit Card Limits Are Very Good

Many people are put off from getting a credit card with higher limits as they seem risky. However, higher credit card limits can be advantageous as long as you manage it wisely. Just make sure you keep your balances very low in order not to lower your credit score.

30% of your credit score is calculated from your debt-to-credit ratio. This is the ratio of your debt proportioned to your total credit limit. So the only way that a higher credit limit can affect your credit score negatively is if your debt-to-credit ratio is high. Given the above points,  you should embrace the idea of getting a credit card with higher limits. 

  • Myth: Old Credit Cards Hurt Your Credit Score.

It is a general misconception among many that old Credit Cards hurt your Credit Score. What happens is exactly the opposite, old cards improve your score, but only if they don’t have unpaid outstanding balances.

So, if your old credit cards have healthy financial statistics, it is advisable not to close them; they add more value to your credit history. Credit History is one of the factors that are examined when you are applying for loans in financial institutions.

Old credit card accounts are great sources of reliable statistical evidence accrued over time that prove you have good money management skills.

The Take-Away

With the above-debunked myths and vindicated facts about credit cards, managing your credit should be easier. Don’t be discouraged by a few financial horror stories if you want to start using credit cards. One important truth to hold onto is that credit cards are as good as the spending and payment habits of the person who uses them.

Source: creditabsolute.com

Part 2. Credit Scores Broken Down – Credit Cards – How Credit Scores Work

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In the second part of Derick Vogel’s YouTube series on “How Credit Scores Work”, he discusses credit cards and how they impact your credit score.

Credit cards, having the biggest impact on your score, can either be a way to dramatically increase your score or be one of the quickest ways to destroy your credit. Credit cards make up about 30% of your total score which comes out to 165 points. This makes having and properly maintaining your credit cards one of the most important things you can do for your credit score.

Three Types of Credit Cards

There are three types of credit cards to be aware of:

If you are working on perfecting your credit score it is vital that you have a credit card, and more than one. Ideally, you’ll want to have and maintain 2 to 3 credit cards at the very least. You should also have a combination of credit cards, such as two regular cards and one charge card. This will help to improve your credit mix (mortgage, car loan, credit cards, etc…). Having a mixture of different credit types looks better to credit bureaus and makes you look more creditworthy.

There are certainly many people who refuse to use credit cards for various reasons but if you ever hope to achieve a max credit score, you will have to use them as they make up 30% of your score. Only having a car loan, a personal loan, or even just a mortgage will not give you the credit mix you need to achieve a top score.

Maintaining a Positive Credit Card Balance

Many people are aware that they need to maintain a low balance on their credit cards, however, few people tend to realize what the correct percentage is to maintain a positive balance. Most people, when asked, state that they should keep their credit card balances below 30% of their limit. That is somewhat true, however, it’s not an ideal percentage for maximizing your credit score.

Ideally, you will want to keep your balance below 10% (studies show that individuals with top scores average 7% utilization on credit cards). That being said, keeping your balance below 30% is still helpful, it’s just not great. Additionally, allowing your balance to go over 50% can have a negative impact. Anything below 30% is positive, anything below 10% is ideal.

Statement Date vs. Due Date – IMPORTANT

When it comes to credit cards and achieving a high credit score, probably the most important thing you should know is the difference between the Statement Date and the Due Date.

If you have credit card accounts you will want to find out what your statement and due dates are for each account. You may already know your due dates but you’ll also want to make sure you know what your statement date is as it is more important than the due date.

Let’s say your statement date is the 5th of each month and your due date is on the 15th of each month. Now, you may be thinking, as long as I make a payment before the due date then I’m fine. Well, unfortunately, that isn’t always the case.

If, for instance, you were to max out your credit cards, or even just bring up the balance above 50% of your limit, expecting to pay it down before the due date, once the statement date comes around your balance gets reported to the credit bureaus. So, even if you pay down your balance below 10% on say the 10th of the month – 5 days before the due date but after the statement date – you will still get reported as having a higher balance. That’s why it’s so important to know when your statement date is because whatever your credit card balances are on that date, that’s what gets reflected in your credit report.

If you have any questions about your credit score or need help improving it, please give us a call today.

Source: creditabsolute.com

Understanding credit card security codes

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Credit card security codes are an important security measure to prevent fraud and identity theft. They add an additional layer of safety when making purchases and help ensure the buyer is, in fact, the cardholder.

These security codes—often called CVV codes, short for “card verification value”—are three- or four-digit codes located directly on your credit card. They’re typically, but not always, asked for when making card-not-present transactions, such as those made online and over the phone. Here, we detail where to find them, how they work and why they’re important for consumer protection.

Where to Find Your CVV Code

The location of your CVV code depends on the credit card issuer:

  • Visa, Mastercard and Discover: The code will be three numbers on the back of the card to the right of the “authorized signature.”
  • American Express: The code will be four numbers on the front of the card above and to the right of the card number.
Where to locate your card's security code.

How to Find Your CVV Code Without the Card

Credit card security codes were designed to ensure that the person making a purchase actually has the card in their possession. Because of this, it’s impossible to look up your CVV code without having the physical card. This is why it’s important to have the physical card on hand if you need to make a purchase that requires a CVV code.

If an identity thief obtains your credit card number—for example, via shoulder surfing—may try to call the bank and pretend to be you in order to get the CVV code. However, banks typically don’t give out this information. Each financial institution has their own policies, but if you can’t read or access your CVV code, they will usually issue you a new card.

While most retailers require a CVV code when making card-not-present transactions, many don’t. In these instances, crooks would still be able to use your card.

How Are CVV Codes Generated?

According to IBM, CVV codes are generated using an algorithm. The algorithm requires the following information:

  • Primary account number (PAN)
  • Four-digit expiration date
  • Three-digit service code
  • A pair of cryptographically processed keys

Other Names for CVV Codes

Depending on the credit card company and when your card was issued, your security code may go by a different name. Even though there are many different abbreviations, the basic concept remains the same. Below are all the abbreviations and meanings for credit card security codes:

  • CID (Discover and American Express): Card Identification Number
  • CSC (American Express): Card Security Code
  • CVC (Mastercard): Card Verification Code
  • CVC2 (Visa): Card Validation Code 2
  • CVD (Discover): Card Verification Data
  • CVV (All): Card Verification Value
  • CVV2 (Visa): Card Verification Value 2
  • SPC (Uncommon): Signature Panel Code

Credit Card Security Code Precautions

While CVVs offer another layer of security to help protect users, there are still some things to be aware of when making card-not-present transactions.

  • Sign the back of your credit card as soon as you receive it.
  • Keep your CVV number secure. Never give it out unless absolutely necessary—and if you fully trust the person.
  • Review each billing statement to ensure there are no transactions you don’t recognize or didn’t authorize. If there are, contact your financial institution immediately and consider freezing your credit.
Credit card security precautions.

Protecting your identity requires constant vigilance—but emerging technology may have the potential to mitigate some of the risk of credit card fraud.

Shifting CVVs: The Future of Credit Card Safety?

Since chip-enabled cards replaced magnetic stripes, in-person credit card fraud has taken a big dip. Crooks are turning toward online and card-not-present methods of fraud. CVV codes are good at combating this type of fraud—but shifting CVVs, also referred to as dynamic CVVs, may be even better.

The technology works by displaying a temporary CVV code on a small battery-powered screen on the back of the card. The code regularly changes after a set interval of time. This helps thwart fraud because by the time a hacker has illegally obtained a shifting CVV code and tried to make a purchase, it will likely have changed.

Despite the security benefits, shifting CVVs haven’t been widely implemented due to high cost, and it remains to be seen if the technology and process can scale. Financial institutions have many measures in place, such as fraud alert, to notify you of potentially suspicious activity.

If you suspect you’ve been a victim of identity theft, call your credit card company, change your passwords and notify any credit bureaus and law enforcement agencies. By regularly checking your credit card statements, being careful about who you give your information to and being vigilant when making purchases, you’ll help do your part in keeping your identity secure.


Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.

Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

Sephora Credit Card Now Available (4% Rewards At Sephora)

In March it was announced that Sephora would be launching co-branded credit cards with Alliance Data. Those cards have now launched and are available for sign up. Currently there are three cards available:

  • Sephora Credit Card (store card)
  • Sephora Visa® Credit Card (and Visa signature)

Card Benefits

  • Card earns at the following rates:
    • 4% back in rewards on purchases at Sephora
    • 1% back in rewards on purchases outside Sephora (Visa cards only)
  • 15% off your first card purchase at Sephora
  • $20 Sephora credit card reward after you spend $500 outside Sephora within the first 90 days (Visa cards only)

Our Verdict

Overall this card is fairly basic, the 4% back in rewards on Sephora purchases is nice but using the card outside Sephora doesn’t make any sense at all because other cards earn 2%+ cash back on all purchases. I guess if you spend a huge amount of money at Sephora signing up for this card could make sense, but realistically you will be better off signing up for a card with a large sign up bonus instead.

Source: doctorofcredit.com