While talking credit cards over the weekend with an old friend of mine from Michigan, she mentioned that she was going to apply for a Peebles credit card (if you’re not familiar with them, they’re a department store).

Unless you have subpar credit that won’t qualify you for a normal credit card, I see little reason to get a card like this…

Problem #1: You need to earn 750 points for the extra benefits

There’s the Peebles VIP Gold card, Silver card, and Bronze card. However, you don’t start off at any of these levels.

So it’s not until after you’ve earned 750 points with their credit card that you start getting the perks.

• VIP Bronze card – To get this you must have earned 750 or more points within a single year
• VIP Silver card – Have to earn 1,000 or more points annually to get this
• VIP Gold card – Requirement of 1,500 points or higher

Since there’s only 1 point earned per dollar and you only start off with 250 points, that means after you apply for the credit card you will typically need to spend $500+ annually to get the other benefits.

Problem #2: The rewards and benefits suck

So what do you get for these points? Not much.

There will be chances to earn double or triple points during some “special events.” But whether you accumulate a little or a lot of points, the benefits are pretty boring and seem to fall under these two main categories:

(a) Peebles coupons and sales
(b) Discounted or free gift wrapping

With most credit cards, points are converted into cash back or reward certificates. For example at department stores the Blue Cash Preferred earns you 3% rewards.

However that’s not the case with the Peebles credit card. Instead, the number of points just dictates what tier the account is at. There’s no cash back or gift certificate coming your way for all that spending.

Problem #3: The card is of little use

Forget using this thing to finance a purchase. Why? Because the interest rates are way up there at 24.99%.

And because it can only be used for purchases at a Peebles department stores (and affiliated stores) it’s a card that will be taking up real estate in your wallet, while serving little purpose.

And don’t even get me going on the issuing bank’s customer service and how applying for unneeded cards can affect your credit score…

Written or last updated January 2012

Every once in a while you will come across a card that’s a hidden gem… it has some good benefits but since it’s issued by a local or regional bank, not many people know about it. A case in point are the Plains Commerce Bank credit cards.

Plains Commerce Bank has 6 branches in South Dakota. So when it comes to banks, they are about as small as you can get. So what makes their credit cards unique?

Reason #1: They’re issued and managed in-house

You may be surprised to learn that most small and regional banks (even the bigger ones like KeyBank) outsource their credit card portfolios to the big boys like Citi, FIA Card Services (BofA), etc.

I figured that would be the case, but after examining the Commerce Bank Visa card application, it’s quite obvious they are managed in-house! Heck, you even apply for their credit card the old fashioned way by mailing your application to a branch.

Reason #2: The interest rate is low

All of their cards have the same rate… a flat 12% fixed. Even on cash advances!

Obviously many of the big banks offer APRs that may start at 10.99% or 11.99% but you need the best credit to get that rate. Contrast that to Plains Commerce, who is giving everyone that is approved the same low rate.

Reason #3: They use fixed interest rates, NOT variable

Over the past 5 years or so, fixed rate credit cards have virtually gone extinct. Almost every card that previously offered fixed has been converted to variable, which means it’s tied to the U.S. prime rate. So when that goes up, your rate will go up.

On the other hand, Plains Commerce Bank has stuck with fixed rate on their credit cards.

Old fashioned is good for some but not all

While reviewing the applications I actually reminisce to my childhood. Why? Because the names of the cards are a blast from the past.

Their top tier offer is the Plains Commerce Bank Visa Gold card and next down on the list is the Visa and MasterCard Classic. Except for AmEx Gold, when was the last time you’ve seen a gold tier credit card? I got a chuckle out of that. By the way they used to offer a secured credit card but I don’t see it listed, so apparently that’s no more.

Another aspect that’s old school is that there is no rewards program on these cards. Normally I would criticize that, but given the low fixed interest rates I will let it slide this time.

Verdict?

The credit cards from Plains Commerce Bank is what used to be offered… locally issued and managed cards. For the person who carries the occasional balance, the benefits of a lower rate probably outweigh the lack of rewards.

Meanwhile for those who carry pay their bills in full, they would be better off with the high cash back offered on the AmEx Blue Cash (no annual fee) or any number of other reward cards out there.

Last but not least, since you have to have an existing banking relationship with Plains Commerce to apply for their credit card, so unfortunately it’s mainly for those in South Dakota only.

Written Jan 2012

How does the Fingerhut credit card work and help you build credit?

The process of building or rebuilding credit is a catch-22. You can’t build your credit without having credit accounts, and you can’t get credit accounts without a good credit history. A Fingerhut credit account can help you break out of that cycle.

Here are the advantages:

• Easy Approval - Fingerhut often says yes when others say no. The process is quick and easy and after approval you can start shopping right away. Their website says you may get a Fingerhut credit application decision in as little as 5 seconds after submitting!

• Your Account Is Reported To Credit Bureaus – Your account is reported to multiple credit bureaus. By making your payments on time, you build a good history. This potentially may help boost your credit over time. Your good payment history can also earn you greater spending power from Fingerhut.

• No Hidden Fees - Credit cards for people with bad credit can sometimes cost hundreds per year in fees. This often makes it hard for people to rebuild credit. However a Fingerhut credit account charges you no annual fees and no application fees.

• Low Monthly Payment Option – You have the ability to buy what you want now and spread out the purchase into monthly payments.

Go here to find out how you can get a credit decision in as little as 5 seconds

Frequently Asked Questions:

Q: What type of products does Fingerhut sell?
A: Fingerhut sells thousands of products in all sorts of categories – electronics, apparel, health and beauty, jewelry, tools, sports, and the list goes on. Many of their items are unique and you probably won’t see them at your local store.

Q: Is the Fingerhut credit card like a regular credit card?
A: No, you use your Fingerhut credit account for purchases made from the their catalog and website. Your account information will be printed on a card for your convenience so you reference the information while ordering.

Q: Can I set up automatic monthly payments with Fingerhut?
A: Yes! You can set up automatic monthly payments from your checking, saving, bank debit card, or bank credit card. It’s highly recommended to do this if you think you might ever forget to mail your payment on time.

Q: Does Fingerhut do credit line increases?
A: Fingerhut reviews customer credit accounts on a regular basis to see if they are eligible for a credit line increase. Things like your payment history, your external payment history, and credit score might help in obtaining a possible increase.

Here are the disadvantages:

• As mentioned above, this can only be used for purchases from them. So think of this as you would a store credit card, not a Visa or MasterCard that can be used everywhere.
• The APR is high. Like department store and gas station cards, expect the interest rate to be in the mid-20′s. So pay your balance in full to avoid interest charges.
• Depending on what you buy, the price may not always be the lowest out there. However there are many items which are a good deal, it just all depends on what you’re shopping for.

Verdict?

Is everything perfect about it? No. But at the end of the day, the ability to apply for Fingerhut credit, even if you have bad credit, is a major advantage.

Since it has no annual fee and a quick application process, I recommend getting an account with them and using it for credit building purposes.

These days there are few major credit cards available to those with poor credit and the ones that do exist usually charge very high fees. So a Fingerhut credit account is a good tool to use for building credit history.

Here is the current Fingerhut signup promotion for 2012

Almost all of the FINA gas stations are in Texas, but they also have a few locations in OK, AR, LA, AZ, NM, & CO. But regardless of your state, here’s how the FINA credit card operates…

FINA “Flash Cash” gas rewards vs. the competition

The FINA gas card’s “Flash Cash” program operates is sort of confusing, so please bear with me.

You earn 1 point per dollar spent at FINA gas stations. This is what you get for them:

• 500-999 points = $5 coupon
• 1,000-1,499 points = $10 coupon
• 1,500-1,900 points = $15 coupon

The coupons come with your monthly statement and $15 is the most you can earn per month. Unfortunately the points expire at the start of the 4th month so if you’re only spending one or two hundred per month on gas, your points might start expiring before you have enough to get a coupon.

If you run the numbers on the rewards, here’s the biggest drawback with the FINA credit card:

• You are only earning a maximum of 1% cash back.
• Ironically, your rewards are worth less than 1% for spending more in some situations. For example, spend $500 and get 500 points = $5 coupon. But if you spend $900 and get $900 points, you still only get a $5 coupon.

To sum it up, the FINA card is earning you a maximum of 1%. Meanwhile most reward credit cards on the market give you at least 1% so you would probably be better off using the card you already have.

If you want more than 1% there are several credit cards with 5% gas rewards.

FINA card = only worth it if you have bad credit

If you have bad credit then you probably won’t get approved for any of the gas credit cards that give a 2-5% rebate. In fact, there will be very few major credit cards that you will qualify for.

So if your credit is a mess, then applying for this card for FINA gas stations might be OK if you want to use it as a stepping-stone to building credit. The advantage is it has no annual fee, however there are several disadvantages to keep in mind while using it:

• Can only be used at FINA stations.
• Carries a high APR of 24.99%.
• The card issuer, WFNNB, doesn’t have the best reputation for customer service.

Written or last updated Jan 2012

Q: Does Chase have a secured credit card? The website doesn’t show the application.

A: Chase has always favored above-average credit scores, but over the last few years they have really ratcheted it up even further.

With the exception of their Slate card (for average credit) these days the credit score requirements for their credit cards are basically on par with American Express; you need to have excellent credit to be approved.

The Chase secured Visa and MasterCard was discontinued several years ago. I asked my local branch if Chase plans on bringing it back in 2012 and they said there are no plans for a secured credit card. Being that the last time they offered it was in 2005, I think it’s safe to conclude that we won’t be seeing one again.

My recommendation? HSBC, Capital One, and others offer secured cards with low fees and security deposits. Go here to compare secured credit card reviews.

When JP Morgan Chase acquired Washington Mutual a few years ago (2008) there was a brief period of time that a secured credit card was available through WaMu. However within just a couple months of the acquisition, Chase axed the card and mailed refund checks to the inherited cardholders (refunding their security deposit and pro-rated annual fee).

So is there any chance we will see a secured credit card from Chase bank again? Very highly unlikely and here’s why I say that:

• With the Fed keeping interest rates at all-time lows, deposit accounts are no longer money makers for the banks. Why would they want to pay you interest when instead, they can borrow from the Fed for next to nothing? For this reason, having a secured card with a deposit of say, $500 to $2,000, is no longer enticing for banks. Simply put, there’s more money to be made elsewhere… such as with premium credit cards.
• When it comes to premium cards, in many regards Chase is tied with American Express nowadays. Because of the heavy advertising I’m sure you already know about their Sapphire, but they also issue cards for luxury hotels Hyatt and Ritz-Carlton and a high card called the Palladium. In short, the Chase brand = premium cards, so I doubt they would issue secured credit cards because that might dilute the perception of their brand.

If a Chase bank secured credit card ever does come out, I will definitely update this post. But don’t hold your breath.