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John over at Wallet Blog hosted the Carnival of Personal Finance this week and I just want to thank him for including my article about how credit card interested is calculated.

The theme for this week’s Carnival was New Year’s resolutions for 2011 and John did a great job on it!

This post is a guest post by Matt Gartland. Matt, a good friend of mine, spends his life pushing people to live boldly and shatter low expectations. He’s launching his blog today – including his inspiring mission to chronicle “10,000 Random Acts of Greatness“ – to worldwide fanfare. He’s so amazing, he even created a welcome page *just* for Man Vs. Debt readers!

New Year’s day… January 1st… A moment of magic.

You’ve felt this magic before. It lights you up like your still ornamented Christmas tree. The emotions, in fact, may feel like Christmas morning. These are positive emotions to be sure – for hopes, dreams, and enchantments are very necessary turn-keys in the engine of your potential.

They leave you alive with ideas for new year conquests of improved health, strengthened relationships, world travel, and countless other adventures.

Alas, this magic can (and often does) backfire with deflating consequences.

This “dark magic” is the empty contact-high that many befall from the flip of the calendar. Lofty new lifestyle designs are drawn with no infrastructure to support them. Why then are we shocked and horrified when our goals and dreams crumble to ash?

We shouldn’t be. The truth was obvious from the beginning…

…we suck at forging New Year’s resolutions.

So let’s stop the sucking.

The antidote to this dark magic, though simple, is not easy magic.

This bold potion requires equal parts deep introspection and inside-out thinking with a dash of craziness mixed in.

If you’re not a brave witch or wizard then you may wish to abandon this brew right now. But if you’re bent on making 2011 a year of transformation and remembrance, then I suggest you settle in for some wicked, non-Ministry-approved lessons in the defense against the dark arts!

Wands at the ready!

The Fallacy of January 1 and The Art of (Un)resolutions

The fabled January 1 mystique is dark magic for a deceptively simple reason – it’s a lie!

There is no earthly reason why you should wait for the clock to strike midnight on January 1st before crafting resolutions to improve your wellbeing. Those that do wait for 1/1 forfeit 364 days (8,736 hours; 524,160 minutes) of life-changing potential. Does that sound like a smart choice to you?

Sure, these other days may be spent engaged in last year’s resolutions. And if such resolutions were architected thoughtfully, then this assumption might be true. But it’s a risky assumption to make. Why? Because by-and-large we’ve become a consumeristic society addicted to the fallacy of over-night successes and the allure of instant gratifications. That’s a deadly spell that will curse any resolution, well-intentioned or not, quickly bringing it to its knees.

In truth, the best day to begin fresh life change is today! Such is the art of (un)resolutions.

(Un)resolutions are exactly what you think they are – the antithesis of conventional resolutions…

• Resolutions are New Year’s day centric – (un)resolutions are everyday centric

• Resolutions are driven by external rewards – (un)resolutions are inspired by intrinsic motivations

• Resolutions focus on “what” – (un)resolutions concentrate on “why”

• Resolutions are rooted in “quick-win” hype – (un)resolutions are baked in long-term effectiveness

Here’s your choice: 1) Subsist in our age of distraction by lumbering through the year with shallow resolutions that ultimately fail. Or, 2) stop sucking at resolutions and start creating lifestyle goals in the art of (un)resolutions.

Good choice! Now it’s time to delve deep into the charms of (un)resolutions!

Motivations: Intrinsic vs Extrinsic

What motivates you most to do your best work and achieve your goals?

It’s a tricky question. Many, including most conventional behavioral scientists, will answer “rewards and punishments.” That’s the safe answer of course. This belief in rewards and punishments is what Daniel Pink calls “Motivation 2.0″. According to Pink, it goes something like this…

“The Motivation 2.0 operating system has endured for a very long time. Indeed, it is so deeply embedded in our lives that most of us scarcely recognize that it exists. For as long as any of us can remember, we’ve configured our organizations and constructed our lives our its bedrock assumption: The way to improve performance, increase productivity, and encourage excellence is to reward the good and punish the bad.”

Here’s the funny part. Motivation 2.0 is the popular answer by far. It’s also wrong.

A focus on rewards and punishments is a belief in the extrinsic. This is precisely the formula most apply when crafting conventional New Year’s resolutions – e.g. if I lose 10 pounds I’ll reward myself with a new clothes shopping spree. But as Pink masterfully illustrates in DRIVE: The Surprising Truth About What Motivates Us, these extrinsic factors actually decrease one’s motivation for the goal at-hand…

“Rewards can perform a weird sort of behavioral alchemy: They can transform an interesting task into a drudge. They can turn play into work.”

In sum, Motivation 2.0 is outdated, unstable, and unreliable at best. So, if you desire to attain your New Year’s (un)resolutions, then you must upgrade to Motivation 3.0 – your third (inner) drive programmed in the language of intrinsic motivations…

“Human beings have an innate inner drive to be autonomous, self-determined, and connected to one another. And when that drive is liberated, people achieve more and live richer lives.” – Pink, DRIVE

I’m a classic case-study of this extrinsic vs intrinsic paradox.

I was bewitched by the dark arts of Motivation 2.0 in my earlier years. I searched far-and-wide for (and spent a pretty penny on) physique-boosting wonder products. The lust that drove this mindless quest was the greater social acclaim and attraction (extrinsic rewards) that would elevate my self-esteem.

The result? My external health did improve (though not thanks to the snake-oil crap). And my internal health rooted (including IBS challenges, medical complications and mental health).

A paradox indeed!

I escaped my self-inflicted darkness via a commitment to internal health and happiness (intrinsic motivators). This (un)resolution took time – seven years in fact because I dug my ditch so deep. But I prevailed. And I have Motivation 3.0 to thank for it. The bonus? I’ve never been in better physical or mental health in all my life

The Moral: when creating your (un)resolutions, build them upon the interests and challenges that ignite a ranging inferno of passion within.

It’s about the satisfaction you gain from the creative task itself. Specifically, target pursuits that foster autonomy, mastery, and purpose – which are the three key ingredients in your intrinsic motivation potion.

Alas, proper motivation alone is insufficient for attaining the (un)resolution results you want. In fact, you must bypass wants completely and tunnel into whys.

Why vs What: The Golden Circle of Success

Simon Sinek has discovered life’s secret to success. And he’s telling…

Sinek’s breakthrough, which he calls “probably the world’s simplest idea”, converges human brain biology with behavioral science. The result is the Golden Circle.

The Golden Circle works like this…

The what, how, and why circles map precisely with the very different layers of the human mind. The outer layer is responsible for our rational thought and language. The inner layers are responsible for our emotional intelligence and decision making.

Conventional thought, action, and conversation flow from the outside-in…from what, to how, to why. In other words, from the easiest and most obvious (whats) to the most nebulous (whys). Unfortunately, this is unoriginal, uninspiring, and unremarkably average because it emphasizes features, widgets, and data.

Now flip the formula.

When you think, act, and communicate from the inside-out…from why, to how, to what…you’re conveying beliefs and establishing shared values. This is unconventional, highly memorable, and incredibly inspiring. Why? Because if fosters trust and loyalty at a deeply-seeded emotional level.

Said differently, this approach talks to the parts of the brain that drive human behavior.

Such stroking of your emotional mind is paramount to creating meaningful (un)resolutions that have a chance for success.

Mainstream New Year’s resolutions are all about the wants – e.g. I want to get fit, I want to get out of debt, I want to travel the world. These examples are quite pathetic. Marginally better ones are more specific – e.g. I want to lose 10 pounds, I want to eliminate all my credit card debt, I want to visit Amsterdam. But such goals are still fatally flawed because they don’t convey any emotional catalyst.

The magic happens when you begin to weave in emotions – or as Sinek would say, “what you believe.”

I tried this experiment last year with my family. I love my family. And by-and-large they’re astute enough to make their own meaningful developments. But I had begun to sense a rut of non-adventure over recent years. So I posed this challenge, “pursue zen in 2010″.

It was cute. It was memorable. And it worked!

Note that my challenge wasn’t specific at all. But it was entirely emotionally-driven…to attain more moments of zen. My family members were left to themselves to devise their own specific (un)resolutions. But they all had to support this “why.” If an idea didn’t somehow lead to this outcome then it was nixed.

Mind you, not every (un)resolution was achieved. And some family members faired better than others. Such is life. But the challenge got them out of their rut. Meaningful zen-like progress was made. And their lives are the better for it.

Want to explore the world of why deeper? Then please watch Simon Sinek’s provocative TED Talk (below). It’s worth every minute!

The Moral: the what of your (un)resolutions are important, but not nearly as vital as why you want them.

The smart witch or wizard will include both in their (un)resolution brews. Just be mindful of your actions. After all, as Simon says, “What you do simply serves as the proof of what you believe.”

Alas again, because your not-sucky (un)resolutions are still missing an important ingredient. And you do desire to achieve world domination, right?!

Effectiveness vs Efficiency: The Path to World Domination

Chris Guillebeau needs no introduction around these parts But if you do fancy a refresher about this lovable non-conformist, I suggest you glance at The Essential Power of Like-Minded People, The Art of Non-Conformity Book, and How NOT to Suck at Blogging.

Moving on…

Chris believes that efficiency is overrated. He’s one who’d know because traveling to every country in the world (all 192 of them) is no picnic. From “fun” airline logistics, passport snafus, travel visa mishaps, political unrest, the occasional Guillebeau mistake (blasphemy I know!), and other lovely details – international travel of the most epic proportions can be a royal b*tch.

In fact, as Chris exclaims…

“Visiting every country in the world is getting difficult. I’ve almost completely ran out of ‘easy’ countries. These days I spend as much time arranging visas as I do planning the actual trip. It takes time, energy, and money: even with my best travel hacking strategies, I expect the overall cost to increase in the final two years of the project.”

And keep in mind that visiting every country in the world isn’t his only endeavor. He’s founded a booming lifestyle business, publishes new articles on his blog like clockwork, is a newly crowned published author, leads an animated small army that numbers in the tens of thousands, and is married. Crikey is right!

So why does he do it? Because he loves the effect, which is to say, the adventure!

As Chris puts it…

“Don’t worry about trying to live the most efficient life or become the most optimal human. Instead, embrace life as a meaningful adventure. Pursue adventure and passion instead of efficiency.”

Your New Year’s (un)resolutions should have the same orientation.

Sure, a whole bushel of little, easy goals that are quickly accomplished may give your ego a contact-high. But really, where’s the fun in that?

Moreover, if you aspire to make impressive improvements in your life – whether it be health, relationship, career, or travel related – then these little ego trips won’t carry you to where you want to go. They just don’t generate enough momentum.

Don’t be wasteful of your resources. That’s not the point.

Splashes of efficiency here and there are fine. Plus, efficiency is well-tailored for linear, non-creative tasks that have a pesky knack of needing done. But for those larger-than-life (un)resolutions that are audacious pursuits of big dreams, opt for the effective road.

I’ve decided to plunge into the deep-end of lifestyle effectiveness with my own legacy project – Random Acts of Greatness. My crusade is to chronicle 10,000 Random Acts of Greatness in 5 years from people like you.

A Random Act of Greatness is any little, magical moment that leaves a positive and everlasting imprint upon the lives of others.

I’d be grateful if you’d share a little story to help the cause!

My quest won’t be easy. I have no guarantee for success whatsoever. And you’d better believe that it won’t be efficient. But it’s a mighty adventure that I’m glad to embark on. And maybe, just maybe, I’ll achieve my own flavor of world domination along the way!

The Moral: be effective without being wasteful. Simplify down to the endeavors that matter most to you. Odds are these should be audacious pursuits that captivate your imagination and unleash the best you. Such ventures won’t be efficient. But they’ll be crazy fun!

The Whole is Greater Than the Sum of its Parts

“Meaningful achievement depends on lifting one’s sights and pushing towards the horizon.” – Daniel Pink, DRIVE

Your magic brew of (un)resolutions is now complete. And if you haven’t guessed already, the whole of your potion is greater and more rewarding than the sum of the contributing parts. Let’s review why…

Motivation is essential to achieving any worthwhile endeavor. Intrinsic motivation is the purest and most stimulating form. But it doesn’t exist in a vacuum. This “third drive” fuses with all manner of your character, including your courage to be effective in pursuit of “why” goals.

Indeed, motivation is interlaced with effectiveness and the notion of why. For one thing, you have little hope of achieving mastery (a core element of Motivation 3.0) of any task or talent without a concentrated focus on why you desire such mastery.

But that’s not all. With this focus intact, you still require the gritty effort time and time again to become effective.

Daniel Pink applies the metaphor of a three-legged stool to the trinity of components within your inner, third drive. So it is with this trinity of (un)resolution ingredients – motivation, why, and effectiveness. Short or weak in any leg and your stool will stumble and likely fall.

Don’t stumble. Don’t be weak. And don’t suck. You no longer have any excuse not to.

Now go forth and do great things!

Matt Gartland is an anti-hero avenging injustices of creativity. His legacy project is to chronicle 10,000 Random Acts of Greatness in 5 years. And he shares bold ideas for confidently living above low expectations on his Modern Audacity blog. Learn more about Matt’s audacious pursuits to spark change!

*****

I received a raise for the first time in over 2 years! Our organization froze all salaries in 2008 but a few months ago… they changed the rules.

Sure it’s not the 10% my husband’s was, BUT, I’m perfectly happy with my 2%. At least I’m heading in the right direction!

My boss approved the maximum allotted by our organization (2% was the max this year) and I couldn’t be more grateful. And, since the raise came a little late, they are back paying me the increase from my anniversary date in November. Maybe February’s debt payment will make up for the lousy one last week.

I’m turning up ‘Shake Your Groove Thing’ on my iPod and running off some of this excitement.

Q: I would like to report this store in my town for violating the credit card minimum purchase law. How do I do this?

A: This topic has been brought quite a few times on Credit Card Forum. There has been a lot of misinformation out there about this and now that the Dodd-Frank Wall Street Reform and Consumer Protection Act in effect, there is even more confusion about minimum purchases for credit cards.

How it used to be…

For starters, there was never a credit card minimum purchase requirement. It was never illegal for a store to set a minimum. However, doing so was blatently against their merchant agreements with Visa, MasterCard, American Express and Discover – all of which said a minimum purchase amount was not allowed.

If a business violated that rule, a customer could call up Visa/MC/Amex/Discover and report them. However in the several years leading up to the reform, they were very lax in enforcing this rule when a complaint was received.

How it is now…

An amendment of the Dodd-Frank reform went into effect in September 2010 that made it legal for businesses to set a credit card minimum purchase amount. Here’s the law so you can see for yourself:

(3) LIMITATION ON RESTRICTIONS ON SETTING TRANSACTION MINIMUMS OR MAXIMUMS.  (A) IN GENERAL.—A payment card network shall not, directly or through any agent, processor, or licensed member of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability (i) of any person to set a minimum dollar value for the acceptance by that person of credit cards, to the extent that (I) such minimum dollar value does not differentiate between issuers or between payment card networks; and (II) such minimum dollar value does not exceed $10.00

This might be beneficial for small businesses that were sick of processing fees, but for us the consumers, the drawback is that now we can’t always use our credit cards for small purchases. However don’t panic – the law has been in effect a while now and I have yet to encounter any changes. For example, the Chinese-run dry cleaners down the street from me still has their credit card minimum purchase sign on the counter, the only difference now I guess is that they aren’t breaking the rules by doing it. I have yet to come across any new businesses implementing minimum purchase amounts.

I see big businesses encourage credit cards for small purchases
Small businesses like to whine about the processing fees, but if they were smart, they would realize it’s sometimes worth the cost. Why? Because those customers paying with credit cards are likely to buy more.

For example, when McDonald’s started allowing credit card payments, they found that the average purchase size increased from $4.50 to $7.00 (source: NPR). A broad study across multiple industries conducted by Dunn & Bradstreet found that purchase sizes were 12% to 18% more when paid for with credit card. This is why all the major fast food joints actually encourage and promote credit card payments.

If the cost of goods is low (i.e. convenience store cup of coffee) and it was my business, I would rather take the hit on the fees if it meant selling an extra-large $1.99 coffee instead of the $1.29 size. That’s just my two cents, anyway.

Conclusion?
A credit card minimum purchase requirement of $10 or lower is allowed now, so make sure you keep some cash in your pocket just in-case.

Q: How long do credit inquiries stay on your credit report?

A: When ever a lender is authorized to pull your credit report, a credit inquiry is done. How long that remains on your credit record depends on the type of inquiry…

For soft inquiries
Also known as a soft pull, this refers to an involuntary credit check that was not initiated by you. Things like pre approved credit card offers and account reviews use soft credit inquiries. They typically stay on your credit report for at least one full year.

For hard inquiries
Called hard pulls, these are credit inquiries initiated by you. There are many things that can result in a hard credit inquiry that you may not even be aware of. Most of us know applying for a mortgage, credit card, or loan will result in one, but did you also know things like opening a bank account, getting cable/satellite TV, or a new cell phone provider can all result in hard pulls?

With Experian, hard inquiries will drop off your credit report at the end of the month following two years. With TransUnion and Equifax the hard inquiries will fall off exactly two years later.

How much will they affect your credit score?
Instead of asking how long do credit inquiries stay on your credit report, you really should be more concerned with how long they impact your credit score?

With soft inquiries there is no impact to your credit score, so they are not something to worry about. On the other hand, hard inquiries will impact your credit score – the exact amount of impact depends on a number of factors (which are not all public because the FICO formula is secret, but they have said there may be a greater impact for those with shorter credit histories and few accounts). It is often presumed that the higher your score is to start, the more of an impact a hard credit check will have.

Although the hard inquiries remain on your credit report for two years, they have the most impact during the first six months. After a year has passed an inquiry will reportedly no longer be counted in the credit score, but it will still be visible to those who view your report.

Why do credit inquiries lower score?
According to FICO, there is a direct correlation between credit risk and the number of inquiries a person has. They state that those with 6+ hard credit inquiries on their report are up to 8x more likely to file bankruptcy than someone with zero credit inquiries.

Personally, I feel it is unfair that credit inquiries for things like utilities or a savings account can hurt us, but sometimes we have no choice but to take the hit.

Ask your question on Credit Card Forum

Q: Is the Citi student credit card any good? What are the requirements?

A: Citibank offers some pretty sweet credit card deals for college students, and I’m not just saying that because this site advertises them (we advertise most other major banks, too). Don’t believe me? Take a look at Citi’s current college student credit card offer and see for yourself.

So what makes them great?

Here’s what I like best about Citi student credit cards – they offer a lot of perks and benefits:

Rewards – One thing I can’t stand about the college student credit card industry is that a lot of the cards don’t have rewards. I guess some banks think that just because you’re a student starting out, you don’t deserve cash back or points.

But Citi on the other hand DOES offer student cards with perks. In fact, as I’m writing this, there is a Citi student credit card that gives 5x points on restaurants, fast food, movies, music and bookstores.

No annual fees – I’ve never known Citi to issue a student credit card that had an annual fee. Of course there is a chance that may change down the road (after writing this) but I highly doubt that. They didn’t even charge annual fees on student credit cards during the Great Recession so I can’t imagine they would start now.

Reasonable approval – If you are just starting out in the credit world and have limited credit history (or no history at all) you may very well still be approved.
Judging by the forum posters, it sounds as if Citi is lenient in the approval process to students who are new to credit (however if you already have bad things on your credit file, that’s another story).

Compare credit cards for students from Citi and others

Citi student credit card requirements
At the top of the credit card application it lists:

• You need be a college or graduate student
• You need to be at least 18 years old
• You need to have a valid Social Security number

The credit card reform that went into effect back in 2010 also adds a couple stipulations to getting a student credit card.

The reform says that applicants under 21 must either have a cosigner – or – or have sufficient income themselves. But what exactly is “sufficient income” anyway? Well the rule is vague. It says “the ability to make the required minimum periodic payments on the proposed extension of credit.” It’s up to the credit card issuer to determine what qualifies.

Still confused what qualifies? So am I and most others – most banks don’t disclose that information. Reportedly there are major credit card issuers out there that have publicly stated the “sufficient income” amount starts at just $2,000 per year.

Since most banks allow things like parental contributions and scholarships to be included in that amount, the sad reality is that the reform has had little effect on the student credit card industry. It seems just as easy to get a student card as before, but that’s not necessarily a good thing considering that not every student knows how to manage their money responsibly.

Regarding the Citi student credit card requirements, unfortunately I don’t have access to any specifics about their approval guidelines. But based on feedback I have read they sound to be very reasonable and accommodating.

3 tips for using your new student Citi credit card

Here are three things you will definitely want to consider…

Tip #1: You don’t have to carry a balance to build great credit
One of the biggest misconceptions about credit cards is that you have to carry a balance in order to build your credit history. Guess what? That’s completely false! In fact, carrying a large balance is actually bad for your credit score.

What’s reported to the credit bureaus is the amount due on your monthly credit card bill (before payment is made). So there simply is no need to carry a balance, because your monthly charges will still be reported.

Tip #2: Using too much of your credit limit is a bad thing
Another big misconception is that using more of your credit limit is better for your credit score. This is also false.

The FICO score formula takes into account what percentage of your credit limit on revolving credit accounts (a.k.a. credit cards) you use. It’s actually bad to use a high amount of your limit at any given time – it makes you look closer to maxing out. Using too much will actually hurt your credit score.

For this reason it’s typically recommending that you should never use more than 20 to 25% of your credit limit at any given time. So if you get apply for a Citi college student credit card and are approved for a $1,000 limit, it would be best to never use more than $200 to $250 of it.

Tip #3: Understand when interest charges actually begin
Both students and adults are often surprised when they learn that if they carry a balance, they will be charged interest going back all the way to the date of the purchases.

When you are sent your bill, if you pay the entire amount before the grace period is up (typically 21 to 25 days from date of statement) you won’t be charged any interest. However if you choose to carry any balance forward, you will be smacked with interest charges going back to the date of purchases (but it won’t show up until the following statement).

That means even carrying a balance for 2 or 3 days past the grace period can cost you big time in interest! So make sure you pay off your balance in full every month. This doen’t just apply to Citi student credit cards… all credit cards work this way.

Reviews of credit cards for college students

Merrick Bank specializes in bad credit credit cards, although they also issue some for fair credit like the Hooters MasterCard.

According to their website they have 900,000 cardmembers, but should you really be one of them?

Merrick Bank credit cards fall under two categories:

• Merrick Bank secured credit card - This is a secured Visa geared towards those who can’t get approved for an unsecured card.

  At the time of this review (Jan. 2011) the Merrick Bank secured Visa has a $36 fee for the first year and $3 per month after that. The interest rate on purchases was 17.45% variable. The credit line can be from $300 to $3,000 (it’s equal to whatever your security deposit it).

• Unsecured Merrick Bank Visa / MasterCard: These are various entry level unsecured cards.Unfortunately I could not find the details for these cards on their website.

  To see an offer you have to click “Respond to a mail offer” and enter the “acceptance certificate number” contained in your mailing to see the details online. From the reviews I have read, it seems to be a common practice for them to send out the Merrick Bank credit card application to those who are a likely fit for it.

Merrick Bank credit card reviews: the good & the bad

It seems that cardholders either love their Merrick Bank card or they absolutely despite it. After spending hours reading dozens and dozens of reviews online, here’s a summary of what I found.

The good…

• Relatively easy to get – compared to cards from “normal” banks, a Merrick Bank credit card is much easier to get.
• Credit limit increases – one recurring thing I saw in the customer reviews is that it is reportedly not too difficult to get your credit limit increased. That being said, it sounds as it might not be quite as easy today (credit requirements tightened up during the Great Recession).
• Secured cards have reasonable annual/monthly fees – the fees on the Merrick Bank Visa secured card are very reasonable. As far as the unsecured cards are concerned, they sound to be reasonable but without current fee details available I don’t want to say for sure.

The bad…

• High interest rates – one of the biggest Merrick Bank credit card complaints I saw over and over is that they charge extremely high interest rates. So carrying a balance on one of their unsecured cards would be bad idea.
• Customer service - the comments on the customer service seem to be a mixed bag; there are a number of complaints about purported bad customer service but on the other hand there are those who don’t feel it’s an issue.
• Account closure for going over limit – on Consumer Affairs one posters alleges that Merrick Bank closed his account after he went over the limit twice and there was no notification of closure in advance.
• New annual fees for longtime customers - I saw multiple complaints about longstanding Merrick Bank credit card customers suddenly getting hit with an annual fee, when they were never charged one before. Eric of Pine Bluffs, Wyoming claims this happened after having his card for 5 years without a fee.

Verdict?

Credit Card Forum does not advertise Merrick Bank credit cards (at least at the time I’m writing this) so I have no biased reason to defend them. However in all fairness, I think a lot of the complaints are unwarranted or at least comparable to other credit cards in this category. Yes, the fees and high APRs are bad, but that is an industry wide practice now across the entire banking industry. I’m not saying a Merrick Bank credit card is spectacular, but I do think they are okay for what they offer (a bad credit credit card).

Better Alternatives?

If you would like to check out some alternatives, below are our sponsored rankings of the best credit cards for rebuilding credit:

Compare credit cards to rebuild credit

Here’s the gist: people can create and submit a video of them destroying one of their credit cards. As an alternative, they can simply record a video explaining *why* they decided to ditch a credit card this year and cut it up on camera. Either a video resolution or a creative method of destroying the card. You choose.

After submitting, you can share your video with your friends and family and have them vote for you. The weekly video with the most votes gets $50 – not too bad. The video which finished the competition with the most total votes gets $1000 – even better!

When you submit a video, you’ll be able to list “Man Vs. Debt” on the form. I don’t receive anything, but they’ve given me a $25 gift card to send to the top video submitted by members of this community!

So that means, if only one of you takes the time to submit – you automatically win $25. If you are up for the challenge, don’t procrastinate – make it fun and be sure to let me know what you submit! If we get enough from this community, I may even share them in the future here on the site.

Note: There is a current video that is called “Man vs. Debt” that was previously submitted. I have nothing to do with that video and it is *not* from a member of this community. Boo!

I’m all for blowing up your credit cards!

For those of you that are more new around these parts, Courtney and I make an intentional choice not to use credit cards. We’ve been credit card free for nearly two years now.

If you’re interested in why – or my opinions on the matter – here are some past articles that have stirred up some passionate comments:

• Screw Robin Hood: Credit Card Rewards Take from the Poor and Give to the Rich
• Bend Over… I’ll Show You Where You Can Stick Your “Rewards”
• Yet Another 4 Reasons to Hate Credit Card Companies
• 3 Habits of Highly-Responsible Credit Card Users
• Is Your Credit Card a “Tool”… or Are You?

You up for Ditching a Credit Card this year?

Here’s what you need to do:

1. Pick a credit card you hate.
2. Cancel it.
3. Destroy it as aggressively as possible (or be civil – your choice).

That’s it!

Now if you want to enter the contest on ShredYourCreditCard.com, that’s simple too.

1. Tape your creative destruction OR video yourself giving why you are ditching the credit card.
2. Submit it on the website above.
3. Put “Man Vs. Debt” if you want a shot at the $25 for our community (I get nothing, just enables you to win).
4. Encourage friends/family to vote for your video if you’d like to increase your chances (once per day max).

The most important commitment is to ditch a credit card, but while you are at it – why not tape it and try to make some cash?  :-)

How many credit cards do you own?

Could you do with one less?

It’s time to check your free credit report at www.annualcreditreport.com.

Every four months, I check my credit report to make sure no one is messing it up but me. This time (in case you are copying me) – Experian. I went through my usual steps of checking what accounts are open, closed, and the current payment standing then clicked on the ‘Who is looking at your credit report’ tab.

This tab features two parts. The first is credit report checks to gain new credit initiated by you. The second, only viewable to you, is a listing of all the credit cards interested in your credit… so they can offer you more.

In part one, the gain new credit (bad) part, was the vet loan. Ugh – at least that is paid off! It was the only credit check visible to other agencies.

In part two, the part I like to call the ‘credit cards who want to date me’ part, I had a whopping 47 inquiries. Thank goodness none of those are visible to anyone but me and don’t count against my score. I’d look like a credit card floozy.

Check your credit. Make sure all is on the up and up…and…

Laugh at all the credit cards who miss you.

Q: Where can I apply for bad credit business credit cards?

A: Business credit cards have always been a different breed than regular credit cards. Here are some things you will NOT find with business credit cards…

Secured business credit cards?

If an individual has bad credit, they can just get a secured credit card to rebuild their credit (where their credit line is equal to their security deposit).

Unfortunately, this same option doesn’t exist for businesses. I do not know of a single secured business credit card that’s available in the United States. However there are many banks that offer secured loans. For example, you can take out a $10,000+ business loan on a $10,000 savings account/CD as collateral at Bank of America. But as far as bad credit business credit cards that are secured, I have yet to come across one.

Approval with average business credit?

During the 90′s and 00′s small business credit cards were often available to businesses with limited credit history. That all changed after the economic collapse and the Great Recession, unfortunately.

Nowadays, in order to have your business credit card application approved under your business credit alone (with no personal guarantee) typically your company must have been in business for 2+ years, meet certain revenue requirements, and already have a good business credit history established.

There were no bad credit business credit cards available before the Great Recession, yet during that time, as many as 1 in 7 business credit card accounts were defaulted on. For this reason, we really can’t blame the banks for being more strict today.

What are your options today?

Getting a bad credit business credit card unfortunately is not an option. That being said there are a couple different routes you can take to get credit:

Rebuild business credit using loans & credit accounts
As mentioned above, a secured business loan might be a good way to rebuild your company’s credit if you have cash collateral to put up.

There are also credit accounts available at some office supply stores, building supply stores, etc. that may be more lenient towards bad credit. If you go this route, make sure they actually report your account to Dunn & Bradstreet (via your DUNS number).

Get a great business credit card using a personal guarantee
If your personal credit is still okay, then you can apply using your SS# as a personal guarantee. This is actually a technique I have personally used and am glad I did.

If you do it just remember you will be personally liable for any debts on the business credit card. Also, make sure your card issuer actually reports your company’s credit history to Dunn & Bradstreet. Much to my dismay, I found out that AmEx business cards do not report. However Chase does, which is why I recommend them as the best business credit card for building business credit. Check out our sponsored rankings below to see their current offers:

Compare the best business credit card offers