One thing that I want to start preparing for is upping my credit score to get it as high as possible to make sure that I would qualify for the best rates. My credit score is not bad by any means, but I want to do everything in my power to get it as high as possible.

One item that I thought might be affecting my credit score is that my wife and I throw every possible purchase each month on our credit card in order to earn rewards points. This makes us about $50 a month in rewards. We pay the balance off in full each month, but I usually set the payment to hit about 2 days before the due date, because I like the feeling of using their money for free as long as possible.

The problem is, whenever I run a credit report on myself it looks like I always have a $1000-$2000 balance on the card because the payment doesn’t process until the middle of the following month. So even though I’ve never left a balance on a credit card in my life I look just like any other credit card junkie that does not pay off their balance each month.

I am assuming the credit card companies report balance information at the end of each month so I figured if I just paid the card off in full before the end of each month this should help my credit score. In the past I’ve always hesitated from paying it off before the statement came out because I worried I would not get credit for my rewards points, but I’m pretty sure this is not the case and will try it out.

Thoughts on this? Does anyone know when the credit cards report balances to the credit agencies?

In the past, you may have earned 5 points on purchases made at superstores, warehouse clubs, and discount stores. Since these merchants are not recognized as gas stations, stand alone grocery stores, and drug stores, purchases made at these stores will now qualify to earn 1 point per $1 spent. This change will be effective your May 2007 statement. Please be assured that your maximum point accumulation and other rules for your rewards program remain unchanged.

I knew this was too good to be true and would come to an end some day, but I guess I’m just glad it lasted for the 2 years or more that it did. I’m sure Wal-Mart isn’t too excited about this change as I’m sure I’m not the only one who knew about this little glitch in the system and I’m sure people are now going to change their shopping habits (at least grocery). Which to be honest, Wal-Mart’s produce never seemed to be that high quality so grocery shopping somewhere else won’t be the end of the world for me. It’s just getting 5% back on a TV, wheel borrow, or basketball hoop that I’m going to miss.

Irregardless it’s still probably the best rewards card available as the days of 5% rewards on anything for any longer than an introductory period are gone. Unfortunately I don’t think you can get the Chase Cash Plus Rewards card anymore from Chase. They took it off their website a long time ago and the only way you could get it was by applying at a local Chase bank branch. I’m not sure you can do that anymore either. Either way short of this change, they seem to be honoring the terms of the original program and 5% back on all groceries, gas, and drugs is still a good deal.

• It’s common sense, but I’m an idiot – realized how to do simple math to decide whether to pay off HELOC or not
• $100,000 by Age 30 – came up with my first financial goal. It’s been a popular post for me.
• PFBlogs.org – Site was born about this time last year and MFJ has been a friend of ever since – best aggregator around
• Credit cards better for my net worth than high yield savings like ING Direct? – Realized the joys of rewards cards
• Wal-Mart wallet photos for a whole lot less – Method I came up with to save money on wallet photos.

Well that got me thinking in theory if I was an unethical person I could simply take my cash rewards cards and load them up with high end purchases at Super-Walmart and then return them to normal Wal-mart, pocketing 4% on each transaction. Even though I sort of kind got screwed over returning things the wrong way I won’t be using my rewards cards this way as I already max them out and well sooner or later someone would figure it out and I don’t want to wreck what is already a good thing, but just food for thought.

I just applied for the Citi Platinum Select MasterCard, and we’ll see how that goes. It has 0% interest on purchases AND balance transfers for 12 months, there are no fees even for balance transfers, and you can manage everything including the balance transfer request online. I didn’t get instantly approved, but hopefully I get this card, I just ran my credit score recently and it wasn’t too bad. For those of you that have done balance transfers, how do they determine what kind of credit limit to give you on the new card, I’ve seen some people out there with pretty signifigant credit limits and was just wondering how they went about getting them, the people at Chase wouldn’t budge anything over $10k for me.

Anyone know of any other good balance transfer cards as long as I’m in the mood? Also if I apply and am approved do they automatically open me an account and send me the cards or do I have a chance to decline them if say the credit limit isn’t high enough?

Edit: Also applied for a Citi Dividend American Express Card which is very similiar to the Chase Cash Plus Rewards Card.

The great thing about this card is that it pays 5% back on gas and groceries and 1% on everything else. What’s even better about this card is that it treats every single purchase at my local Super Walmart as Groceries and thus I get 5% back on all my Walmart purchases. Seeing as how I am already a Walmart junky this comes in very handy.Also when signing up for the card I tried to pin the guy down about the future of this card, and he assured me that while Chase may phase out offering this card in the near future it will grandfather me into my existing program and I will be able to keep using it under these terms even if they kibosh the program. I don’t believe a word he told me as credit card companies can change their terms and conditions any time they want and likely if they are killing the program it wasn’t very profitable for them and they really have very little reason to grandfather the rest of the people in.

I also asked about the initial balance transfer optoins, bt as far as balance transfers go this card really stinks. When the new card comes I will get 0% interest on all purchases for 12 months, but they charge you 3% on all balance transfers and they would only preapprove me with a $10k credit limit. So I guess I will just use my two cash plus rewards cards for all my spending, I should be able to get about $600 a year in free money doing this and if I decide to play the balance transfer game I will use a more friendly company like Citi to do that.

Anyway if you like this card you can still get it by stopping in at a local Chase bank, personally I would probably recommend the Citi cards due to their flexible terms and ease of use (like requesting balance transfer online through web page and no fees), but I do all my other banking with Chase so I had some motivation to try to make things work within the Chase world. Unfortunately Citi does not have any banks that I know of in my area.

Now don’t get me wrong, I’m not in dire financial straights and looking to take out a balance transfer just to help pay the bills. I could easily pay off the HELOC if I wanted to, but that means I would either have to delay/skip maxing out my and/or my wife’s Roth IRAs in 2007 or lower my 401k contribution percentage below 17.5%. Basically I’ve got about $18,000 a year that I am putting away for retirement, so I’ve got a little wiggle room if things get tight. But the point is I don’t ever want to get to the point where I need to descrease or for that matter stop increasing my retirement contributions. If some credit card company will give me free money to play with I think I’ll take them up on it.

I have no credit card debt, nor have I ever or will I ever have any credit card debt (above 0%) and really I think I’ve just strung our household income to the limit with the amount I am contributing towards retirement. Currently that $18,000 makes up 32% of our household income and every penny of that $18k is after-tax money, add in Mortgage/Heloc and we really aren’t living on much.

If anything I will just take out a balance transfer for 12 months, pay off the HELOC, and put the extra in a high-yield savings account. Keep adding to the high yield savings account throughout the year as money frees up, and then worst case scenario I wasn’t able to come up with any extra money to pay off balance transfer in entirety, I’ll just pay of the balance transfer card with the HELOC, or do another balance transfer (BTW I doubt this will be the case). No matter what it will save me the $42 a month I’m currently paying on my HELOC and any interest from the extra money. That’s still a minimum savings of $500.

Anyway MyMoneyBlog seems to be the balance transfer expert so I am reading up and learning over there. It looks like Citi is the best company to do this with, but if possible I’d like to use Chase as the rest of my accounts are with them. We’ll see and I’ll keep you posted as I go through the process.