There were rumors that credit card debt holders would not be receiving credit extensions, unless they were top flight customers. This bill is to unfreeze that situation from happening to individuals.

What is FICO anyway?

FICO stands for Fair Isaac & Co., which is the name of the accounting company that pioneered credit scoring in the late 1950s. The FICO score utilizes mathematical models to determine a single, numerical value that represents your credit history.

How do credit card companies use my FICO score?

The answer to that question depends on the specific credit card you are applying for. Different cards require different FICO scores for approval. These requirements can generally be divided into three categories: Any, Good and Excellent FICO scores.

What does Any mean?

Any means that almost anyone – regardless of their FICO score – can get approved for this type of credit card. However, keep in mind that a low FICO score indicates a higher degree of risk to the creditor – i.e. you are less likely to be able to pay back the card balance. In such a case, the bank or credit agency will cover its risk by adjusting the terms of the offer to their favor. Even with a card that accepts any FICO score, expect an inverse relationship between your score and the card’s interest rate and late fees. Applications for business credit cards will also have FICO score requirements.

Bottom line: The lower your FICO score, the higher the fees and interest.

What does Good mean?

A good FICO score is a minimum of 675. To have a good score, you must have verifiable and steady employment, a respectable annual income, no more than one late payment and a fairly low ratio of utilized credit to available credit. If your FICO score falls below 675 but you not have incurred any late payments in the last year and your total debt burden is small, you may still be eligible for approval of a card with a good FICO score requirement.

Bottom line: Most credit cards are available to you if you maintain a responsible approach to managing your credit.

What does Excellent mean?

An excellent FICO score is 720 or higher. Excellent scorers have low debt utilization, a fairly high annual income and no late payments within their credit history. Creditors will often woo those with excellent credit scores by offering them low annual interest and cash-back rewards.

Bottom line: Perfect credit will earn you access to the most exclusive credit cards.

Whatever your FICO credit score is, keep in mind that the decision to approve or deny a credit card application is not a purely objective one. Even those with an unblemished credit history may be denied a credit card if they already have a high debt load. If you have been denied credit, request a free copy of your credit report to make sure there are no mistakes on it.

Check your own Credit Score at Experian!

1. American Express Centurion (AKA the American Express Black)

The Centurion is the ultimate high-end card, with less than 10,000 issued worldwide. You can’t apply for the black card – it’s offered by invitation only. Usually though it’s been rumored that acceptance is based on a $200,000 per year spend with never missing a payment. The annual fee is $2,500 and you have to charge a minimum of a quarter-million per year. Besides being able to rub plastic with celebrities and fellow millionaires, what perks does the Amex Black give you?

• The card itself is total bling. It’s made from pure titanium, which will definitely get you noticed at the airport, since it sets off metal detectors!
• Recognized worldwide as the most prestigious credit card.
• Access to a 1-800 number linking you directly to a personal concierge, at your beck and call 24/7/365. There’s nothing your concierge can’t do – from basics like booking concert tickets to more personal services like getting you backstage at the Rolling Stones.
• Free companion tickets on international flights if you’re flying first class (and why wouldn’t you be?) plus 4 free domestic companion tickets every year.
• Bonus points for using Centurion’s personal jet and limo services.
• Free upgrades at the Ritz Carlton and Four Seasons Hotels.

2. American Express Platinum Card

Although not as exclusive as once thought to be, this card still packs in the perks. *Check your credit score before applying as to not embarrass yourself over the phone.
• Starwood Preferred Guest Automatic Gold Status which is good for room upgrades, bonus points, and more.
• Airport club access. Get access to airline clubs for Delta Crown Room, American Airlines Admirals Club, Northwest Airlines WorldClubs, and Continental Airlines Presidents Club around the world. Check the Amex site for locations.
• Premium Car Rental program status – good for upgrades when possible.
• When flying in the U.S., purchase a qualifying coach-class airfare on one of six major U.S. carriers, and receive complimentary airfare for a companion with the same itinerary as your own, up to four times a year.

3. Citi Chairman Card

The Citi Chairman Card offers alot of perks different from the Amex Plat and Centurion cards.
• Priority Pass – Access over 500+ international airline clubs around the world. Excellent for the global traveler.
• Automatic HHonors Gold Status – Instant gold status is good for perks such as room upgrades and free breakfast when staying at Hilton Hotels.
• Cleveland Clinic HealthLink complimentary membership – Memberhsip entitles you access to world-class medical services. 24 hour access to Cleveland Clinic professionals, Facilitated access to appointment scheduling and medical expertise and more.

4. Mastercard World

While no other card can touch the Centurion, Mastercard is certainly trying with its World Card. Offered exclusively to the company’s top 3% of card base – both in terms of income and annual spending – the World Card will run you less than $100 in annual fees. Some of the perks include:
• 24-hour concierge service
• 5 percent cash rebates on travel
• Free doubled warranties on purchases
• No limit on spending

5. Visa Signature

Not to be outdone, VISA has its own exclusive card, the Signature. If you take home $125,000 a year, you may qualify for this chi-chi card. Fees vary, from $0 – $95, depending on the issuer. Perks include:
• 24-hour concierge service
• $1 million in travel insurance
• 1 travel point for every dollar spent, which can be redeemed for free air fare with no blackout dates
• Free room upgrades and late checkout at the Ritz Carlton
• Free airport parking anywhere in the continental United States
• No spending limit

If you’re in the market for one of these cards – or at least trying to wrangle an invitation – make sure your income, spending power, credit score and credit history are all in the zone. To be an exclusive cardholder, you’ve got to prove you can afford to live the perk-filled lifestyle.

The Starwood Preferred Guest program is one of the most advantageous credit cards to charge purchases on because of the ability to exchange Starpoints for either free airline tickets or hotel room nights. Plus you don’t have to worry about the airline you racked up all your miles with going out of business. Hotel chains are less likely to go away anytime soon in comparison with the recent bankruptcies we’ve seen in the airline industry.

The Starwood Preferred Guest Credit Card is a great Airline Card Too

I know it doesn’t make sense. A hotel rewards card that is ranked best airline card? Why? Well with some partner airlines,
members can transfer their Starpoints from their SPG account to an airline account and receive a 25% bonus. That right, a 25% bonus. So for every
20,000 Starpoints you transfer to say American Airlines, you will receive 25,000 Aadvantage airline miles.

Another reason frequent flyers love the Starwood card is because you can transfer Starpoints on a 1:1 basis with most airlines. Try that with other cards.

For one, a student with a credit card in his name enjoys more independence, which, in turn, could lead to greater responsibility. There is nothing wrong with teaching a student these values and a student card may be the perfect opportunity to do so. Secondly, by owning a credit card, the student will develop good credit habits early on in life. As our world moves more and more towards the little plastic card, you will be doing the student a favor by teaching him good credit skills and creating a good credit record to boot.

By arming the college student with a credit card, you will be able to have a certain peace of mind that he/she can make instant payments in case of an emergency. Many students live away from home, sometimes in another state, and it helps to know that they can deal with sudden medical problems, car repairs and so forth, without having to wait for money to be transferred from your account. Otherwise your son/daughter can be stuck up creek without a paddle in an emergency situation!

So what can you do to help the student learn about responsible credit card use? First of all, lay out the ground rules and insist that they must be adhered to at all times. This could mean specifying what the card should and should not be used for (for example, for food and school supplies, but not clothing and partying). Secondly, help the student create a sound money management system so that he/she knows when to pay the bills, how much to budget for and how to keep track of expenses during the month. Make sure that he/she knows when to settle the debt and encourage him/her to do so in full and on time so that he/she does not incur extra expenses.

Finally, teach the student to look beyond the pretty words and marketing hype, and to read the small print very carefully. A free hat should not be a good reason to apply for a certain card, especially if a competing card offers better interest rates!

Check out these student credit card offers that we have listed on our website.

Watch your Interest Rates

Many credit card users aren’t even aware that different interest rates exist at a single company. Some credit companies charge higher for cash advances, while others will charge punitive rates for late payments. Try to negotiate a rate that suits you and your spending habits by speaking to the company’s representative, and don’t be shy to be a little forceful when making a request for lower interest rates. You’d be surprised how much you can achieve with a little chutzpah! If you’re not happy with your rate you should look at cards offering intro balance transfer rates. This allows you to transfer the amount you owe to another company for a lower introductory interest rate. Some people consistently bounce from one lower rate to the next, however, this can have an effect on your credit score.

Curb Unnecessary Spending

This one requires a lot of willpower! Don’t fall prey to impulse buying. Paying with plastic is easy and hassle-free. Especially around holiday time, it is very tempting to go into a mall, buy all the great things you see and then push the payment issue out of mind by putting all expenses on your card. However, payment day will soon come around and you’ll find yourself saddled with a debt that leaves you in tears. There are certain things that you can do to avoid this scenario. If you need to shop for gifts, make a list and stick to it. If you are shopping for clothes, sort through your wardrobe first and decide exactly what you need. Don’t get sidetracked by great – but unnecessary – sale goods. If you find that you still cannot control your impulses, try to limit the use of your credit card to the basic necessities (food, gas, bills) and pay for clothing, gifts and entertainment in cash.

Pay your Bills on Time

Even if you are one day late in paying those bills, you’ll be slapped with late payment fees by your credit card company. Learn to pay your bills even earlier than the last date, even if you have to make use of a diary or calendar to remind you to do so.

Prove Your Worth

By paying your bills on time and not exceeding your credit amount, you will soon create for yourself an excellent credit record. Not only is this a good thing to have in other areas of life, but it will also prove to your credit card company that you are serious about financial management. When you have created a good enough record over a certain length of time, approach the company and ask for better terms on your card. In today’s world, where so many people abuse the credit line given to them, financial companies naturally value their good customers and will do all they can to keep them on board.

How do you make the most of these programs?   Here are five easy tips.

#1 Ask yourself: Do I carry a monthly balance?

If the answer to this question is yes, even sometimes, then reward cards are probably not for you. The price to a reward card is usually a much higher APR. If you can’t pay off your balance at the end of each month, then the interest alone will far exceed the value of any possible rewards.

#2 Use your discount privileges.

Even before you’ve charged enough to earn a reward, most cards will entitle you to exclusive discount privileges.  Some offer online coupon codes, while other give discounts on gas and even groceries at selected stores.  Be sure you know what your privileges are.

#3 Exercise caution when racking up charges.

Sure, you need to spend money to earn rewards.  But spending beyond your means puts you in danger of carrying a monthly balance (see #1).  Instead of using your reward card for discretionary spending, try using it for budgeted expenses, such as utility bills.  You’ll know you have the cash to pay them off each month and you’ll still rack up reward points.

#4 Be a savvy consumer.

There’s a reward out there for just about every consumer.  If you’re a frequent flyer, then miles rewards are a great option.  Of course, if getting on a plane puts you into a panic, then gasoline rewards are a better pick. Although, make sure your card’s selected vendors are located nearby-otherwise you might pay more to get there than you’ll earn from your free tank.

Are you saving for a new car? Then check out the GM card, which lets you earn 3% toward the purchase or lease of your new vehicle.  What if you’re a saver, not a spender?  Cash-back cards are a great option.  And so is the Citi card, which rebates 6% of all your utility bills and applies it directly to your mortgage principal.

#5 Look before you leap.

Before you sign on the dotted line, you need to run some numbers. For example, if you put $5,000 a year on a miles reward card that charges a $60 annual fee, it’ll take you 5 years to earn a free ticket.  Meanwhile, you’ll have shelled out $300 in fees for a flight you might have gotten for cheaper anyway on a discount travel site.

#6 Utility.

Check to see how what you can use the rewards or points for. One of my favorite cards is the Starwood Preferred Guest Card from American Express, because you get 3 points for every dollar you spend at a Starwood property and you are able to transfer those points to many airlines. Depending on the airline, you get a 25% transfer bonus for transferring Starwood points to your Frequent flyer account. Some examples are American Airlines AAdvantage and Delta Skymiles.

The morale of the story is: don’t just jump at the first offer that comes in the mail.  Get on-line and do some research.  There are at least a dozen sites offering credible reviews of virtually every reward card out there.  Some even have a reward cards calculator, which can recommend your best choice based on your monthly spending patterns.

One of the easiest ways to keep track of what your statement will likely look like is to simply keep a record of your expenditures. There are a number of very straight forward ways to do this. One way is to simply carry with you a small notebook in your bag or piece of paper folded in your wallet – when you sign for a purchase or enter your pin number, simply jot down the amount you’ve spent, where and on what. If this isn’t convenient for you, you can instead keep all your credit card receipts and every day or couple of days you should make a list with all the above information. This will serve three important purposes: you will know exactly how much you have spent and so your next credit card statement will contain no surprises, equally if you see you are nearing your spending limit you have plenty of warning and can cut back if necessary. Secondly, you will have a detailed list of what you spend your money on, placing you in an excellent position for reviewing your finances if and when necessary. Finally, when your credit card statement comes you will have an easy reference to check it off against in order to confirm all the details are correct.

Another highly recommended way of controlling your credit card spending is to set yourself a credit card allowance each month. If you already have an outstanding balance on your credit card you should factor monthly repayments into this allowance.  With a set spending limit per month you will find yourself considering individual purchases more carefully and with an ongoing tally of your monthly expenditures you will be able to moderate, and pace your spending.  Large one-off purchases can pose a problem – a $1500 suite for example will probably not be covered by one month’s card allowance; that’s okay. Spending large amounts is no problem, and is one of the major advantages of a credit card, but only if you have a plan for paying it off. For example, having purchased the $1500 couch you should factor in monthly re-payments of $200 per month for the coming 8 months. Most importantly; if you genuinely can’t afford something don’t buy it. Credit cards delay payment – they don’t make it free: you know exactly how much you earn, if you can’t realistically cover an expenditure don’t purchase it!

Moreover, always look at your bills and be sure to understand the valuable information they contain – in the long run it will save you money. Credit card statements will have a section detailing the APR of your agreement and charges that will vary depending on the amount repaid from your monthly balance. This information should be taken into account when making each repayment decision as an extra $10 repayment could be the difference of several percent in charges.

Ideally one would always be able to pay off their balances in full each month, but that is simply not realistic. Credit cards are a great tool for making your money go further and so long as the minimum payment each month is met and you have a well thought through and reliable plan for payment, you will find that you are successfully controlling your credit card spending.

Finally, check out Mint.com and set yourself up with an account. Mint allows you track all your finances in one place including your different credit cards. They are relatively new so they might not have every financial institution in their database, but most likely yours will be listed. Mint shows you how you can save money, where your spending is going the most, your spending trends, and the ability to track all your credit card spending under one roof.