Q: I am a 19 year old freshman in college and want to start building credit, but my dad refuses to cosign for me. Not for any particular reason, it’s just that he and I are not that close. Can I apply for a student credit card by myself?

A: You’ll be happy to hear that you actually do not need a cosigner. That was a myth that sprung up a few years ago when lawmakers passed the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act for short).

It’s true that the law says those under 21 need to have a cosigner, but not under every circumstance.

In a nutshell, you can apply independently by yourself if you have the means to pay back the credit card charges on your own. In other words, if you have income then you probably won’t need mom or dad to cosign.

What counts as income? And how much?

The CARD Act was pretty vague on this. As a result, banks have largely came up with their own definition/requirements as to what constitutes “ability to pay” for a student. As of 2013, most will let you include the following in the amount of your income:

• Your job
• Scholarships
• Financial support from parents

I’m not sure why the last two on the list are viewed as income, but nonetheless, most student cards allow it to be included. However keep in mind the rules may vary by issuer.

It’s also surprising just how little income it takes to be approved. I’ve heard from many college students who make as little as $2k per year, yet that was enough income to get approved without a cosigner.

The bottom line: it’s possible to apply on your own

Unless you have no job and no other qualified sources of income, getting a student credit card with no cosigner won’t be a problem for you.

Check out my favorite cards for students in 2013

Applications for the Blaze credit card are being mailed to people with histories of charge-offs and bankruptcies, but what’s in the fine print?

To the best of my knowledge, First Savings Bank only markets this card through targeted mail. In fact if you go to their website, you can’t even access the application without providing the “reservation number” and “access code” which is included in the mailings.

Why are they so secretive? My guess is because they probably know that if their card was compared side-by-side to other credit cards for bad credit, this one would fall flat on its face if you receive this offer:

• Annual Fee: $75
• Authorized User Fee: $20 annually if applicable
• Credit Limit: $350 minimum
• Interest Rate: 29.9%

With bad credit, it’s to be expected that you will probably have to pay an annual fee in order to get an entry level Visa or MasterCard. But in this scenario you are paying $75 only to get a credit limit as lows as $350.

That means just the price of the annual fee alone might be over 20% of your card’s limit. Seems a bit excessive, right?

It’s not as bad as the First Premier cards which charge a $100 annual fee and $95 processing fee for a measly $400 credit limit. Regardless, paying $75 for a $350 limit is still a waste of money.

Don’t apply unless you get this version…

The aforementioned sounds like it’s the most common version being sent to people, at least based on the Blaze MasterCard reviews I’ve read. However some people do end up receiving a better offer:

• Annual Fee: $0
• Interest Rate: 15.6%

If you received an invitation for that version, it’s actually a decent deal for people with low credit scores.

But unfortunately I haven’t heard of anyone receiving this version of the Blaze credit card lately. Their website still has the T&C’s for it online, but my guess is that they probably just have it up for old accounts who were grandfathered in with those better terms.

Some even receive worse terms than the first version. I know that a few years ago that Blaze was mailing out offers with $95 “issuance fee” and a $25 fee for the first time you increase your credit limit.

What are your other options?

Just because your credit is in the dumps, it doesn’t mean you have to pay nosebleed prices to rebuild.

Option 1: Get a partially or fully secured card
With these types of credit cards you can put up a refundable security deposit as low as $200 and pay an annual fee less than half of what the Blaze card charges. That will save you money.

Option 2: Try for entry-level unsecured
Is your credit not good enough to get “normal” cards for prime credit, but it’s not downright terrible either? Then give these a shot and see if you can get approved for something basic.

This review was written or last updated May 2013

High interest rates and 0% promotions with retroactive interest charges are just a couple reasons why I hate store credit cards.

But there’s something even worse… bankruptcy.

No, I’m not talking about you going bankrupt, but if the store goes bankrupt.

What happens to your store card in BK?

Back in December of 2011, RoomStore filed for Chapter 11 bankruptcy. Then in June of 2012, the judge changed it to a Chapter 7 – that means liquidation and going out of business.

So what happened to the customers who made advance payments for furniture orders?

For customers who made those purchases on credit cards from other banks, the process would usually be pretty simple: they would file a dispute and since they did not receive the furniture, the bank would reverse the charges.

In the case of the Roomstore credit card, it’s messier. The store was still taking furniture orders right up ‘til the last days before bankruptcy. Customers were using the store’s card to prepay for orders, only to be left empty handed with no merchandise… yet they were still expected to pay back the credit card!

To get their money back, customers were told to file claims with the bankruptcy court. How many of those succeeded is unknown, but as recently as March 2013, the Daily Press (a local newspaper in the company’s home state) reported that RoomStore was still drawing complaints.

This situation reminds me a lot of when Boston Apparel Group, who owned Chadwicks and Metrostyle, went bankrupt a couple years ago and their credit card holders were left stranded.

This is one more reason to not use store cards

By making your purchase on a bank credit card that’s unrelated to the store, there are checks and balances in place since you’re dealing with a different company:

• If the store goes bankrupt, you may at least have some recourse through a bank credit card.
• If you have a dispute about the quality of the goods and services, an unrelated credit card company won’t have a bias (but if the store is also the card company, that might not always be the case).

The simplest advice would be to just avoid using store cards which are issued by financially troubled retailers, but of course that would be impossible to do.

Often times these bankruptcies happen out of the blue, without any advance notice. And if it’s a privately-owned company, it’s anyone’s guess as to what their financial health may be. Those who used a RoomStore credit card account had no way of knowing what lay ahead.

Is JCP next?

While I wouldn’t say there’s an imminent danger, one major retailer who has been going through tough times lately is JCPenney. Their CEO, Ron Johnson, recently stepped down and the company is hemorrhaging cash.

JCP is currently trying to raise money (and I have no doubt they will succeed) but on a longer term outlook of one or two years in the future, I would say there is an above-average risk of bankruptcy and therefore I would recommend not using the JCP credit card for special orders of pricey items like furniture.

Need a good bank credit card?

No matter what your credit score is, I would recommend you try out this sponsored tool to find out if you are pre-seleected for any card offers.

This article was written or last updated May 2013

Q: When my father-in-law paid for dinner he accidentally pulled out a Honda rewards credit card from his wallet, which he then quickly put back in. I didn’t say anything at the time but the next day I tried to look it up and can’t find any evidence of this card even existing! Can you still apply for this in 2013 or has it been discontinued?

A: There are 3 Honda cards that exist today so what you saw must have been one of these…

(1) Honda FCU credit card

The Honda Federal Credit Union is for employees of the company. They offer a “Visa Classic” and “Visa Gold” but they’re hardly exciting. Even if you are a Honda employee, I would not recommend either of them!

(2) Honda Power Equipment Visa card

This can only be used to buy their “power equipment” which includes the following items: lawnmowers, generators, pumps, snowblowers, tillers, and trimmers (or at least that’s what they show on their power equip website).

This Honda credit card is issued by Wells Fargo and the financing promotion on it when I checked was 18 months deferred interest.

Keep in mind that is NOT the same as 0% for 18 months. Read the small print on the application and you will see that it’s possible to be charged interest retroactively with this offer. With an APR of 27.99% that would definitely hurt if it happened.

(3) Honda Rewards Visa

This is not a credit card! You may have seen someone use this and at first glance, it may look like a credit card. But this is actually a prepaid card that the manufacturer gives out for certain incentives (i.e. Buy a new car and get a prepaid Visa worth $X).

Honda even says this on the FAQ section of their website. Here’s a copy/paste of it:

“Is the Honda Reward Card a credit card?
No. The Honda Reward Card is a stored-value Visa card that carries an award-dollar amount based on participant achievement in Honda-sponsored incentive programs. Each time the recipient uses the card, the purchase amount is deducted from the available balance.”

Conclusion: They don’t have a “real” credit card in 2013

If you want an everyday credit card to go along with your Civic or Accord, sorry but there’s not one that exists in 2013.

While some other manufacturer’s like Subaru and BMW offer credit cards, Honda doesn’t. Back around ’07 they used to have one thru Chase (pictured right) but that was discontinued years ago.

If you are looking for a credit card that has no annual fee and good rewards, here is a sponsored signup offer that I recommend:

Surprisingly, fans of Carnival Cruises may not be getting the best deal with their branded card.

Just about every travel-related company has their own branded card. The Carnival Fun Points MasterCard is one such example, but how does it really stack up against an unbranded travel card such as the Sapphire?

	Barclays Carnival MasterCard	Chase Sapphire (standard version)
Annual Fee	None	None
Rewards Program	Carnival FunPoints, which are redeemable for cruises and on-board amenities	Chase Ultimate Rewards points, which are redeemable for any travel purchase, cash back, gift cards, and merchandise.
Rewards on Regular Purchases	1 point per dollar	1 point per dollar
Rewards on Categories	2 point per dollar on Carnival Cruise Lines	2 points per dollar on restaurants and fast food. Air and hotel booked online through Ultimate Rewards will also earn two points per dollar.
Point value	1 point = $0.008 (based on 12,500 pts = $100 onboard credit)	1 point = $0.01 towards travel rewards and cash back
Signup Bonus	5,000 points	Earn 10,000 bonus points (after spending $500 in first 3 months)

I wish I could say this is unusual, but it’s not. A lot of these co-branded credit cards (which includes store cards) are not in your best interest. With the Carnival MasterCard you are getting 2x points on their ships, but given the lousy point value that’s hardly worth it.

In fact if you do the math, those double points on Carnival purchases is like getting as little as 1.6% cash back. And if you apply that same point value to the signup bonus, it’s like getting $40. I think most of us would agree that is about the most boring bonus offer ever!

And when these points are redeemed, I found these caveats about them in the fine print:

• To redeem rewards for onboard amenities, you have to order 15+ days in advance – Per their own wording: “Orders for onboard amenities will be accepted up to 15 days prior to the passenger’s cruise departure date.”  Examples of onboard rewards are things like Robert Mondavi wine (3,700 pts), a terry cloth robe (7,200 pts), and chocolate + champagne (6,100 pts). Booking those things in advance is fine for most, but if you’re like me sometimes you just like to play it by ear on your vacations so you won’t know in advance the exact day and time you want these things.

• Rewards are subject to availability – Oh this is super… the whole reason we get frustrated with airline frequent flyer programs is because of their blackout dates and restrictions. The Carnival application is vague as to what “subject to availability” actually means, but they do say on the website the following: “Certain rewards are available only during the time periods described in the Program communications. Merchants participating in the Program are subject to change. Some rewards have limited availability.”

Benefits? What benefits?

Now sometimes these types of cards make sense if you are getting extra benefits with the company. Much to my surprise, when I pull up the application for their MasterCard I see NOTHING listed specific to Carnival.

It’s almost as if the only thing they have to do with it is slapping their logo on the card. Aside from that, there is practically nothing that differentiates this from any other ol’ card.

The one good thing is that at least it’s a World MasterCard, which includes perks like concierge and a free emergency assistance hotline. But in my opinion the similar Visa Signature tier of cards is better because you get more benefits with less restrictive rules attached to them.

Is it worth it for the zero percent?

Now this is interesting. When I looked at the card on Barclaycard’s website, there was no 0% offer mentioned. However when I go to Carnival.com and click on the application from there, it loads with this zero interest promo on purchases:

12 months is hardly anything special. And it’s only applicable to purchases, NOT on balance transfers. You can find 0% offers a lot longer elsewhere.

Winner: Use a non-branded travel rewards card

Don’t be fooled… no matter how much you love their cruises, the Carnival MasterCard is not in your best interest. This is one of the few cards on the market where I honestly can’t think of one logical reason to apply for.

Even some store cards which are equally terrible I can recommend to people with bad credit because they’re easy to get approved for. But with Carnival, BarclayCard says you need good credit to qualify. Well if you have good credit that means you will be able to score something a lot better elsewhere!

My favorite travel card of 2013

When it comes to non-branded travel cards with no annual fee, this sponsored offer has an excellent program:

This review was written or last updated May 2013