By Adam Jusko, ProudMoney.com, adam@proudmoney.com

One of the concerns people sometimes have with credit cards is that their account might be closed for good behavior — namely, paying off the full balance on their credit card each month. After all, if you’re always paying off your balance in full, the credit card company isn’t making any interest money off of you, right?

Well, the bank that issues your credit card might prefer if you carried a balance every so often, but in truth you are still a valuable customer to them even if you don’t — and you still make them money. (And as long as you make them money, they won’t close your credit card account!)

Credit Card Companies Do Make Money from Full-Balance Payers

As long as you are using your credit card each month, you are making money for the credit card company, even if you always pay off your balances. Why? Because the bank that issues your credit card doesn’t only make money from interest that is charged to you. They also make money from the merchants that accept your credit card.

Every time you pay with a credit card, the bank gets a little bit of money from what is called an interchange fee. The grocery store or gas station or online retailer or even medical doctor that you pay with your credit card agrees to have a small piece of that transaction deducted from what you paid and be sent to the bank as a way to compensate the bank for processing the transaction.

For example, if you bought $120 of groceries from your local supermarket, the interchange fee on that purchase might be 1.5%, or $1.80. In that case, the supermarket gets to keep $118.20 of the $120 they charged you, and that $1.80 interchange fee gets split between the card processor (Mastercard, Visa, etc.) and the bank that issues your credit card (Chase, Bank of America, etc.).

So, even if you pay off your full balance each month, you can see that the credit card companies are still making money, it’s just not coming out of your pocket! (Although you could easily argue that those interchange fees cause merchants to slightly increase prices, creating a sort of “invisible” charge to the customer.)

(This is a regularly updated post; last update 1/14/21.) Credit cards from retail stores often give customers instant approval. In fact, they often will approve you instantly, and even incentivize you to use that card the same day by giving you an immediate discount on your first purchase. Below is a list of store credit cards that may approve you instantly, along with information on any extras they might give you as a new cardholder:

• Amazon Rewards Visa / Amazon Prime Rewards Visa – According to the Amazon credit card’s terms, “If you respond via the Internet, the majority of applications are responded to in less than 15 seconds.” Assuming you are approved instantly, you’ll get a $50 Amazon gift card (with the regular Visa) or a $70 Amazon gift card (with the Prime Visa) loaded into your account immediately, and then you’ll also earn rewards on all your purchases: 3% at Amazon and at Whole Foods (5% if you are an Amazon Prime cardholder), 2% at restaurants, gas stations and drug stores, 1% everywhere else.
• Amazon Store Card – This Amazon credit card can only be used at Amazon, and is geared toward financing for large purchases. The website says you can get an “instant credit decision in as little as 15 seconds.” If you’re an Amazon Prime member, you’ll get a 5% rebate on Amazon.com purchases made with the card.
• Apple Card – Apple (and card issuer Goldman Sachs) may approve you and let you use the card instantly, although at first you’ll only be able to use it from your iPhone or other Apple device. (You can also get a physical card but you’ll have to wait for that in the mail.) This cash-back MasterCard gives you a 3% rebate on your Apple purchases, 2% on most purchases when you use the card with Apple Pay (some Apple Pay purchases give 3%), and 1% on everything else.

By Adam Jusko, ProudMoney.com, adam@proudmoney.com

American Express reports your payments and balances to the major credit reporting bureaus once per month, on the last day of your card’s billing cycle. To know exactly the day of the month your card’s information was reported, you’d have to know when the last day of the billing cycle is for your card.

You can find the last day of your billing cycle listed either on your paper statement or online when you log in to your American Express account. For example, in the picture below, you can see that this card had billing periods that ended on either the 9th or 10th of each month in the recent past. Information about the account would have been reported on July 10, August 10, September 9, October 9, November 9, and December 10.

Reporting Date is Different for Each Card

Note that American Express is going to report to the major credit reporting bureaus — Experian, TransUnion, and Equifax — on the last day of the billing period for that specific card. If you have a second American Express card, it could have a different billing period that ends on a different date, so the reporting date on the second card would also be different.

This makes sense, because if American Express reported every single credit card on the exact same date each month, it would be a massive job to get millions of accounts reported all at once. And, even if they could, the credit bureaus would probably not be able to actually record all of this information at the same time. (Not to mention all of the information coming into the credit reporting agencies from other credit card issuers!)

By Adam Jusko, ProudMoney.com, adam@proudmoney.com

If your credit card has been stolen — regardless of whether it has been physically stolen or someone has stolen the card number while you still have the card in your possession — it is very unlikely the police are going to do anything to pursue the criminal. Even filing a police report will usually be a waste of your time and theirs, unless your credit card company absolutely demands it (which they won’t in almost every circumstance).

Here’s why. Finding a credit card thief is extremely difficult, and the police won’t see the crime as harmful enough to be worth the effort. In addition, most credit card companies will shut down your credit card quickly if they believe there is fraud, long before enough can be spent with the card to make the crime truly impactful. As soon as the card-issuing bank sees purchase behavior that doesn’t seem to coincide with your regular purchases, they will either stop new purchases from being approved, or they will contact you to be sure the charges are legitimate. (And if they can’t reach you, they’re much more likely to decline new charges than to wait around for you to reply.)

Credit card theft is a cost of doing business for the credit card companies. They know a certain amount of theft will occur, so they put in as many safeguards as possible on their end to stop criminals before they can spend much. But the money they believe you and other cardholders will spend on the cards far outweighs the fraudulent purchases from theft — so they are willing to take the bad with the good. History has shown credit cards are extremely profitable for the banks, even after the costs of theft are factored in.

Also, under federal law, you can not be held responsible for more than $50 of fraudulent charges if your card is physically stolen, and none at all if the number is stolen while you still have the card (such as via the Internet). Most credit card issuers never pursue even that small amount from their cardholders — keeping you as a happy cardholder is more important (and more profitable) than trying to get 50 bucks from you for unauthorized charges. So, if you essentially have lost nothing from your card being stolen, why would the police spend any time investigating the theft?

By Adam Jusko, ProudMoney.com, adam@proudmoney.com

A 650 credit score puts you in the “fair credit” or “average credit” or “non-prime/near-prime” zone, meaning you’re definitely not going to get the best interest rates on an auto loan. But you won’t get the worst interest rates, either.

Interest rates on car loans vary with the condition of the overall economy, so the answer to what interest rate you’ll get with your 650 credit score is not fixed in time. The rate you’d be able to get today could be very different a year from now (or from this time last year).

• The rate you can expect on an auto loan with a 650 score in late 2020/early 2021 is around 6.51% for new cars and 10.13% for used cars.*

Updated December 22, 2020 – If you’ve ever been pitched on opening a new credit card at a retail store while making a purchase, you know that some stores are more than happy to give you instant credit — you apply on the spot, get approved, and you can use the card immediately. Below we offer a list of such cards, including regular bank credit cards as well as retail credit cards. Apply online and get shopping today. (Note that instant approval is not guaranteed.)

• American Express Cards – Most American Express credit cards and charge cards now offer the possibility of an “Instant Card Number” upon approval. Your “eligibility is based on our ability to instantly validate your identity.” If you are eligible, you’ll get an Instant Card Number that you can use even before you have the physical card in hand. Note, however, that you may not be able to access your card’s complete credit line instantly.
• PayPal Cashback Mastercard – One of our very favorite credit cards on the market also lets you use your card today if you are approved instantly. Here’s the language they use to describe the process: “If you’re approved, in most cases, a temporary credit line will instantly be added to your PayPal account and you can start using it on PayPal right away – – even before you receive your card.” Beyond the instant approval, this card gives you a 2% rebate on everything you buy with it — which is the top of the market for cash-back cards with a flat rate on all purchases.

By ProudMoney.com Staff

This is the cut-to-the-chase list of our Top 10 credit cards, based on overall quality, which could mean any combination of rewards, low interest rates, or other features that we choose. Which is the best credit card? We’ll give you our #1 choice, but you’ll be proud to go into financial battle with any of the others, too:

#1. PayPal Cashback Mastercard – You get 2% cash back on every purchase with this card, which is accepted anywhere that takes Mastercard, both online and offline. Your cash rebates are deposited straight to your PayPal account (you’ll need to establish a PayPal account if you don’t already have one), where you can use that cash toward online purchases or have it moved to your bank account. No annual fee and a generous, easy-to-understand rebate formula puts this newer credit card right up at the top as the everyday cash-back choice in today’s market. No foreign transaction fees, either. (The only downside is high interest rates over 20%, so don’t carry a balance!)

#2. Blue Cash Preferred – If you have a big grocery bill every month, this American Express credit card is for you. The card has a $95 annual fee, but it very well could be worth it. You’ll earn a 6% rebate on your supermarket purchases (on up to $6000 per year on groceries), 6% back on streaming services, 3% at U.S. gas stations, 3% on transit (taxis, tolls, trains, Uber/Lyft), and 1% on any other purchases. If you’re spending over $3000 per year on groceries, this is a great rebate on those purchases even with the annual fee. (If you’re not spending that much on groceries, you may want to look at the no-annual-fee Blue Cash Everyday, which gives you 3% back on those groceries as well as 2% cash back on gas.)

By Adam Jusko, ProudMoney.com, adam@proudmoney.com

Consumer Reports has long been a respected name when it comes to reviewing consumer products and choosing the best of the options in the marketplace. Its coverage of cars & trucks is especially well respected, because it offers reviews of new vehicles as well as used vehicles, including information on which cars have the most problems (and fewest problems) and how long you can expect a certain make and model to last.

To us, it is established that Consumer Reports provides value. But the question is: how much value? Is it worth it to be a paid subscriber?

How much is a subscription?

Let’s talk first about what Consumer Reports actually costs. You can get an online subscription for $39 per year, or you can choose to get that online subscription at $10 per month if you want to test it out for a shorter term. (But note that it will automatically renew each month unless you stop it.)

By Adam Jusko, ProudMoney.com, adam@proudmoney.com

You’ve got money to invest but you’re not sure how much to put in stocks vs. bonds. Plus, how much to keep in cash? Or, maybe you’ve been investing for a long time but you’re not exactly young anymore. Should you be lowering the amount of stocks you own?

The best asset allocation at any age is going to strike a balance between being aggressive enough to get the upside of the stock market while also protecting some of your money through bonds or other fixed-income assets. The more risk tolerance you have, the more you should put in stocks. If you are leery of putting too much in stocks, you can dial back a bit on those and still have a portfolio that performs well.

Common Asset Allocation Formulas

The 100 Minus

In the past, a suggested formula for how much of your investing dollars to put into the stock market was this:

100 – your current age = % in stocks

In other words, if you were 25:

100 – 25 = 75% of your portfolio in stocks

If you were 55:

100 – 55 = 45% of your portfolio in stocks

What movies make you want to get out there and make something happen? We’re not just talking about great stories of overcoming long odds, but instead movies that make YOU want to do something NOW! Below we offer our list of the 7 best motivational movies of all time:

Rocky – There’s a reason people are still running up the steps of the Philadelphia Museum of Art, pretending to be Rocky 40+ years later. Even if you hate boxing, the idea of working your butt off to contend on a level where no one believes you have a chance is super motivating. When you are done with Rocky, you are ready to get outside and start being GREAT.

The Shawshank Redemption – Even when you are literally trapped, never stop looking for a way out. Tim Robbins stars as a man sent to jail for a crime he didn’t commit, who then becomes rather valuable to a corrupt warden. Morgan Freeman is Robbins’ jailhouse friend (and movie narrator) in a memorable role.