I wasn’t even aware the International Brotherhood of Teamsters had their own credit card until someone mentioned it in another discussion on here. So should you apply for the Teamsters MasterCard? Well, review the good and bad to decide for yourself…

The Good

U.S. Based Customer Service – These days many credit cards give overseas customer service. However the Teamsters credit card has made a commitment to only have U.S. call reps 24/7.

Accident Insurance – This is a unique benefit provided by the IBT. As a cardholder you get $10k of workplace and $2k of all-accident protection. Of course these limits aren’t very high in this day and age, but if you want you can buy additional coverage of up to $200k more. Either way, the first $10k is free.

The Bad

No Rewards Program – I reviewed everything on the card’s website and didn’t see any mention of rewards or cash back, so I called up customer service and they confirmed it: there are no rewards on spending.

The phone rep at HSBC (who yes, was an American and very nice to me) said there is a tiered rewards program for spending on gas/grocery/drugstore but it is an invite-only offer. You can’t apply for it unless HSBC/Teamsters decides to send you an application in the mail.

Mediocre APRs –  The interest rates aren’t a ripoff, but they’re not the bargain I was expecting either. Depending on your credit score and history, you will get either 14.99%, 16.99%, or 19.99%.

Lack of Benefits – Not only is there no rewards program, but there’s not much when it comes to benefits, either. The phone rep told me it’s just a basic MasterCard so there are no bells and whistles with it. I would have expected to see credit card perks like this but as it currently stands, they’re not giving you purchase benefits like free extended warranties and protection.

Low Minimum Credit Limit – The rep told me the minimum credit limit is only $500. Obviously though if you have good credit, you will end up with a limit significantly higher than that.

My Opinion?

I was really expecting a lot more with this credit card from Teamsters. Is that really the best they can do for a labor union of 1.4 million members? When even the basic credit card nowadays gives you at least 1% rewards, then why does this one give you nothing?!

The Teamsters and HSBC really need to up the ante with this – because as it stands now – this credit card is doing a disservice to members.

If you want something better check these out…

• If you want rewards then try your hand at the Freedom card and its 5% cash back.
• If you want a low APR then the Simplicity has some good 0% promotions with it.
• If you want fuel discounts get a card that saves money on gas.

Written or last updated Jan 2012

With so many “free” credit score offers being peddled these days, it’s not always easy to know which ones are legit and safe… and which ones are scams. How does CreditSesame.com measure up?

What is Credit Sesame?

Launched in 2010, they’re a venture-capital backed website that is touted as a free tool for managing credit.

You register by filling out your personal information and Social Security number. Once you do that, they come back and provide some info about your creditworthiness (I’ll discuss that in a moment).

Is Credit Sesame really free? Yep… You won’t have to provide your credit card number or pay anything to use the service.

Obviously though, they have to pay for the service somehow and they do that be providing sponsored offers for mortgage refinancing, credit cards, loans, etc.

My personal review…

After filling out the forms, I was taken to a page with some basic information:

Note: The reason I blocked out the numbers is because payment amounts are actually used as security questions to verify your identity when checking your credit.

Obviously the first thing I noticed is the credit score of 771. Is that accurate or not?

Being that I recently checked my score yet again on MyFICO.com I know exactly what it is… a 790 FICO. So why is Credit Sesame telling me it’s 771?

Because Credit Sesame does not use FICO scores!

The homepage was silent on the matter, but after creating an account the sidebar has an FAQ which blatantly tells us a “different scoring model” is being used.

It doesn’t specify which model is being used but a quick hop over to Wikipedia answers that question for me: Experian National Equivalency Score

So you are getting an imitator to FICO, not the real thing. My guess is this is what largely makes it possible for the Credit Sesame service to be free, because the FICO formula costs money to license (one can presume this imitating model is much cheaper for them to license).

The Experian National Equivalency Score runs on a 360 to 840 range, rather than the 300 to 850 range for FICO.

However beyond the number differences, it’s important to remember that we are talking about two different scoring models, which means the various components are counted differently in each.

In short, you can’t compare the two as apples to apples.

And what else does it do?

I was actually looking forward to doing this review of Credit Sesame, because I was hoping I would discover a robust tool chest of free tools to use.

But instead, I was left a bit disappointed.

The information they give you is very limited. Now in their defense it is free, so I suppose I shouldn’t complain. But I don’t think this would help me much with managing my credit and here’s why…

When I click on the “My CreditWorthiness” tab, it presents a screen giving me 4 “key factors” that are impacting my score:

1. Number of Credit Inquiries

It shows me that, but tell me something I don’t already know? What I would like to see here is the number of inquiries, not a definition of what credit inquiries are.

2. Amount Owed on Mortgages or Lack of Mortgages

I have no complaints on this factor. I live in an apartment and therefore lack a mortgage, so I know that’s not the best for my credit score. There’s not much more for them to say about this.

3. Amounts Owed on Credit Cards

Now this one I got a chuckle out of. As you see in the highlighted text, it says I may be close to maxing out my credit cards. That’s funny considering that in a different section, they show a pie chart stating my credit usage is 3%.

So which one is it… 3% credit utilization or I “may” be close to maxing out?

For the record, I have dozens of cards and in any given month I may use 4 or 5 of them, depending on the rewards programs which suit my needs. They are always paid in full every month and during any given month, the utilization on a single account typically will never exceed 15-20% between the billing cycles.

Also, MyFICO reports my credit utilization on my revolving accounts (credit cards) at being 6% and that being “very good.” MyFICO classifies 7% and under as the best tier.

So I can’t think of any accurate reason for Credit Sesame to list this as the #3 reason my score isn’t higher?

4. Average Age of Accounts

No real complaints about this one. It tells a basic definition about average age of accounts and why they impact a credit score. I don’t really expect them to say anything else, since there’s not much to say on this matter.

However, I suppose it might be nice if they actually told me what the average age of my accounts are?

And the final verdict?

Is Credit Sesame really free? Yes, and for that reason my complaints are all relative. Since you are not spending any money, Credit Sesame is safe – it can’t be a scam or ripoff since a dime isn’t being paid.

But is it actually useful? That’s the question to consider.

If you don’t know what your creditworthiness is – then yes – this service is a good useful way to check for free how you measure up.

But if you want to know your true FICO score (not a FAKO) and want a more in-depth analysis of what’s on your credit report, than unfortunately Credit Sesame falls short since its score accuracy is close but not the same as FICO.

I probably won’t do another Credit Sesame review until [if] they make it a more robust platform. If they ever add more features like telling the number of credit inquiries, average age of accounts, and other useful info, then I would be interested. But for now, I’ll be closing my account for the remainder of 2012.

For decades Citibank has been synonymous with MasterCard, so why did 2012 usher in the Citi Dividend Visa? And is it better or worse than the previous version?

You see up until a few years ago, banks were not allowed to issue credit cards under both payment networks. For example, Bank of America was a member of the Visa network – and hence – all the cards they issued were Visa.

However lawsuits and litigation during the last decade changed all that. Now banks can – and sometimes have to – issue cards from multiple payment networks.

And that brings us to the new Citi Dividend Platinum Select Visa (which was formerly a MasterCard).

The rewards, deconstructed

Those generic bullet points used in advertisements don’t always tell you much, so let me explain in-depth how the rewards program works.

5% cash back on quarterly categories of spending – As you may recall, 5+ years ago the Citi Dividend card gave 5% and then they ended it around ’06 to ’07 (I don’t recall the exact year).

Well in 2011 Citi brought back the 5%. You can enroll in the categories each quarter and they consist of department stores, hotels, healthcare, and more. During any given quarter there are typically 3 types of spending that can qualify for the 5% cash back.

5% cash back through Citi Bonus Cash Center – This is NOT to be confused with the above. The Citi Bonus Cash Center is another program that lets you earn 5% cash back (on average) at over 400 retailers. Mostly online stores, but there are a few brick and mortar retailers participating, too.

1% cash back on everything else – You get 1% for everything else you buy, plain and simple.

The rewards cap is different than most competing credit cards on the market. With something like the Chase Freedom or Discover More, the amount of category spending eligible for 5% is capped – $1,500 per quarter.

So for example if the category is department stores, with the Freedom and More card, only $1,500 in spending at department stores would qualify for the 5% during that quarter.

However the Citi Dividend Platinum Select structures it differently: rather than a quarterly cap, there is a yearly cap. Between your 5% categories and 1% on everything else, you can earn up to 300 Dividend Dollars ($300 cash back) during any calendar year.

The biggest advantage here is that it allows you to really milk your 5% without worrying about maxing out. For example during Q1 of 2012 healthcare was a 5% category – let’s say you had to get a root canal and dental implant that cost you $4,000. You would be able to earn 5% on that full amount, instead of just the first $1,500.

Obviously you can see why even if you have those other 5% cards, the Citi Dividend Visa fills a unique void.

The benefits reviewed

The Dividend Platinum Select comes with quite a few perks:

• Extended Warranty: For eligible purchases with a manufacturers warranty of one year or less, Visa will provide extended coverage of up to 1 additional year free of charge.
• Trip Interruption/Cancellation Coverage: You will see this on some fee based cards, but it’s rare to find it on a no annual fee credit card. You get up to $1,500 in coverage with this benefit on eligible travel.
• Lost Luggage Coverage: For checked luggage on common carrier travel (such as airlines) you get up to $3,000 in coverage if they are lost/stolen/damaged.
• Price Protection: The number of credit cards on the market that include this I can count on one hand, maybe two. It will pay the difference under some circumstances if the advertised price of a purchase drops within 60 days. The drawback is there are a lot of fine print restrictions so it’s not the most useful benefit, but still better than not having it at all.
• Retail Purchase Protection: If you an American Express card then you may be familiar with this. Citi’s version for their Platinum Select Visa card is similar: up to $1,000 in coverage for 90 days after purchase in the event of theft/fire/accidental breakage on qualifying items.
• Common Carrier Travel Accident Insurance: This pays out for death/dismemberment during common carrier travel accidents. Odds of using it of course are quite slim, but it doesn’t hurt to have it.
• Car Rental Loss & Damage Insurance: Keep in mind this is secondary coverage and you will have to decline the rental car company’s collision, loss/damage waiver.
• Travel Emergency Assistance Hotline: You can call this number up anytime you need info/advice for emergencies, ranging for everything from lost passports to locating a doctor or clinic in a foreign country.

Note: Check with Citi for the rules and restrictions surrounding each benefit.

Yes or no?

The benefits and rewards are equal to the predecessor version. The only real drawback (with both the old and new) is that there is a $300 cap per year on the rewards. But when you consider that:

$300 = 1% of $30,000 in normal spending
$300 = 5% of $6,000 in category spending

The chances of you maxing out are unlikely, especially if your spending is spread across multiple reward credit cards. And being that the Visa Dividend Platinum from Citi has a $0 annual, it makes sense to add it to your cash back card arsenal.

Being that I have a credit card blog, it may sound ironic for me to talk about how to build your credit without a credit card. Does that make any sense?

Yes, actually it does.

I understand credit cards aren’t appropriate for everyone. For me and vast majority of the forum members, we use them in a very disciplined matter. So for us they’re great, but for you they might not be if you overspend with them.

And you know what? If you don’t have the full self-control to use them the right way, then I commend you for admitting that! Most people won’t admit problems, so to acknowledge credit cards are not for you shows you’re being realistic about your strengths and weaknesses.

What won’t build credit?

• Phone/utilities do NOT build credit – I can’t even tell you how many people I talk to who believe that their cell phone, power, and gas bills build credit. Unfortunately they don’t. You see the reason the cable or phone company check your credit when you open a new account is because they want to make sure you will pay your bill. If your credit comes back as sketchy, then they probably will ask for a security deposit. What they won’t do is report your accounts to the credit bureaus… unless you stop paying. When that happens, they will report your account as a delinquent/bad debt. So in short, these bills can hurt your credit, but they can’t help it.

• Having no credit = bad credit – I’ve heard some people say they go without a credit card because they wrongly believe it actually helps them. Well if you’re going to screw up your credit cards – in that case – it is better to have none at all. But whether it’s credit cards or another type of credit… the bottom line is you need some sort of credit accounts to build credit history.

• Debit & prepaid cards don’t help – The same usually holds true for those rent-to-own places, too. Sorry, but these things won’t do diddly-squat for your credit. And if you’re wondering why they asked for your Social Security number when you got a card? That’s because of the Patriot Act – banks are required by law to verify your identity. They were not asking that for credit reporting purposes.

• Rent is useless – Just like utility bills, rent generally won’t be reported unless you break your lease and flake on paying.

What will build credit?

Building credit scores and history without credit cards isn’t always the easiest, but that’s only because it’s using the road less traveled. And what road is that? Well I’m going to tell you about 5 different ways you can go. In no particular order, here they are…

1. CD Loans

Do you have some money held in a CD at a bank? You might be able to “borrow” the money and help your credit in the process.

In short, you are borrowing money from yourself. The bank uses your CD as collateral and loans you the money. Typically the rates are low since you are essentially assuming all the risk – i.e. borrowing $2k from a $2k CD.

Not every bank and credit union offers these, so you may have to hunt around. When you find one that does, make sure they actually report your loan to the credit bureaus (otherwise it will be pointless for building credit).

2. Car Loans

Auto loans are probably one of the most common ways to build credit without a credit card. The good news? Even if you have limited credit history, you may be able to still get approved.

The bad news? The less credit you have, the higher interest rate you will pay. For this reason, you really need to be careful.

Plus let’s not forget… it’s sometimes just as easy to rake up debt on a car as it is on a credit card. Don’t let the salesman sweet talk you into buying more than you need.

And most important of all, pay attention to the price you are paying, not the monthly payment. The amount of your monthly payment can be manipulated to seem high or low, based on the length of the loan.

3. Student Loans

The price of tuition sucks, big time. But on the brightside, at least the loan will show up on your credit report.

However I should point out you can’t use that as justification to get bigger loans. Whether you have $10,000 or $50,000 in student loans, the impact it will have on your FICO score will probably be exactly the same. What matters is how you manage it, not how high or low the amount is.

4. Secured Cards

Obviously this article is about building credit without a credit card. So why the heck am I talking about secured credit cards then? Because they aren’t your normal credit card.

A secured credit card works on the same principle as the CD loan mentioned above. You give money to the credit card company, which becomes a security deposit. You are only allowed to spend up to that amount. Then when you decide to close your account, you get your deposit refunded.

Since a secured credit card builds credit, it is a good option to consider. But keep in mind that even though you won’t be able to spend more than your deposit, if you don’t pay your bill each month then you will be charged interest.

5. Parent’s Account

This is not a route I recommend (will explain why in a moment). But regardless, it’s still a way how you can build credit so I will talk about it and let you decide. Yes, it still involves a credit card, but it’s without a credit card of your own (sort of).

If a parent adds you to their credit card account, then that will show up on your credit report. That is, assuming they add your Social Security and not just request a secondary card in your name.

There are a couple reasons I don’t like this:

• What happens if your parents screw up? If they make late payments or otherwise experience financial problems in the future paying their account, then it will screw up your credit too!
• Money is one of the biggest causes of arguments, right?

For other reasons I am against this, you can see my post about adding an authorized user to a credit card.

I’ve received quite a few questions about the Visa Infinite credit card so I thought it was time to explain what’s fact and what’s fiction.

What is it?

So what is Visa Infinite? Well as you know, Visa issues cards in different tiers. While most of us know the Classic, Gold, and Platinum levels. On Visa’s website they categorize these into 3 different types:

• Traditional Cards
• Traditional Cards With Rewards
• Premium Rewards Cards

In the US, that last category is a synonym for the Visa Signature cards. However not every country uses the “Signature” branding. In some countries, the top credit cards are Visa Infinite instead.

Either way, both the Signature and Infinite have comparable benefits.

Where can you get it?

Here is a list of all the countries that use the Infinite name for their top-tier of Visa cards.

As you will notice, absent from the list is the United States and United Kingdom, yet interestingly enough you can still find the branding used in neighboring countries.

For example, even though the US doesn’t have them, there is Visa Infinite in Canada (from CIBC, TD Bank, RBC, and Scotiabank).

How exclusive is it?

Most of the emails I receive about this card are people asking if it’s uber-exclusive, like an American Express black card.

The truth is just because a card is Infinite, it doesn’t mean it’s exclusive. Now there are some that are exclusive, like the one from Canada’s RBC for private banking clients, but there are plenty which are relatively easy to qualify for.

For example, the CIBC Dividend Visa Infinite Card (Canada) has minimum income requirements of $60k per year and the annual fee is modest at $79.

So will you at least have to be middle-class to get approved? Yes. But to make a blanket statement and say all of the Infinite cards are prestigious or exclusive would be incorrect.

Just like the Visa Signature cards here in the US, some are exclusive while others are extremely common. In short, the tier of the Visa doesn’t determine its exclusivity. Rather, it’s the issuing bank who determines what a card’s requirements are.

What are the benefits?

Like I said if you’re familiar with the Signature, that’s more or less what you can expect on the Infinite. The benefits do vary a bit by country but on average here’s what you will probably find:

• Phone concierge service
• No pre-set spending limit –or– a preset limit of $20k or higher
• Privileges and perks through the Visa Infinite Luxury Hotel Collection
• Invites to food/wine events
• Various insurance benefits for rental cars, common carrier travel, lost/stolen luggage, etc.
• Emergency replacement for lost/stolen cards
• Emergency cash (it’s not free money, the amount gets charged to your account)
• Hotline to assist you in finding emergency medical or legal help

As you see, most of the benefits aren’t too exacting, with the exception of the Visa Infinite Luxury Hotel Collection. It gives you some extra bells and whistles at participating hotels. As an example, here’s what Canadian cardmembers get:

• Best available rate
• Automatic room upgrade when available
• Free valet – or – internet
• 3 pm check-out if available
• Continental breakfast for free
• $25 certificate for food/beverage

Good benefits, but keep in mind you aren’t going to get them staying at the Holiday Inn. The participating hotels are places like Montreal’s St. Paul Hotel, Vancouver’s Sangri-La, and other high-end places. There are hotels all over the world that are part of this program.

Conclusion?

In the US, Visa Infinite credit cards would basically be on par with our Signature tier. You definitely get some nice advantages, but those who think that all Infinite cards are super exclusive is sorely mistaken.

If you live in the U.S. and want something comparable, my recommendation would be the Chase Sapphire Visa Signature.