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Refinancing after a bankruptcy can be your first step toward reestablishing your credit. With your loan secured by your home, you can qualify for relatively low rates. Improving your application with time, assets, and terms will also help lower rates.

1. Get Your Credit Report In Order

Before starting your search for a refi lender, make sure that your credit report is up to date and accurate. Often with a bankruptcy discharge, there can be mistakes or errors regarding account standings. To qualify for the best rates, it’s important that all information is correct. Notify the reporting agency if you notice any problems.

You can get a free copy from one of the credit reporting agencies or through a credit monitoring company. At this time you may also want to request your credit score to see where you stand. Scores of 650 or above qualify you for conventional rates, while anything below falls into subprime lending.

2. Enhance Your Application

Time is the best way to decrease the significance of a bankruptcy. Optimally, waiting two years allows you to qualify for conventional mortgage rates. But even waiting six months to a year can trim two to four points off your loan.

Other ways to boost your qualifications is to have little debt, significant cash reserves, and a large income. Selecting favorable terms, such as an adjustable rate mortgage, can also help.

If you simply want to cash out your equity, look into other types of loans, such as a line of credit or a second mortgage. These types of credit have lower closing costs with different tax deduction benefits.

3. Search For The Best Financing Offer

Almost any one can get approved for refinancing, even after a bankruptcy. What you really want to focus on is getting the best financing offer. So extend your search to include regional names and broker recommendations.

Ask for loan estimates on rates and closing costs. Compare the numbers and read the details. Select only the loan that offers you the best deal possible. The time invested now will pay you dividends in savings for years to come.

Visit www.abcloanguide.com to find a list of reputable online lenders for refinancing a mortgage loan after bankruptcy. Also, view our recommended sources for a free copy of your credit report.

It wasn’t all that long ago that lenders blatantly discriminated when it came to approving credit for women and minority groups. Women were actually asked personal and demeaning questions like, how many children do you plan to have in the future or are you on birth control?

Despite the fact that they were entering the workforce in record numbers, single women were often required to get a cosigner or denied credit altogether. Members of minority groups were denied credit as well, even though they were fully qualified.

Today thanks to the Equal Credit Opportunity Act, millions of consumers from all walks of life are given and equal chance to obtain and use credit to finance educations, buy or remodel homes or get small business loans.

The Equal Credit Opportunity Act, which was passed by congress in 1973 first banned discrimination in credit access on the basis of sex or marital status and was later amended to include race, religion, national origin and age. Of course, this doesn’t mean all consumers who apply for credit get it. Factors such as income, expenses, debt and credit history are considerations for credit worthiness.

But the law protects you when you deal with any creditor who regularly extends credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Anyone involved in granting credit, such as real estate brokers who arrange financing, is covered by the law. Businesses applying for credit also are protected by the law.

When You Apply For Credit, A Creditor May Not.

Discourage you from applying for credit because of your sex, marital status, age, race, national origin, or because you receive public assistance income.

Ask you to reveal your sex, race, national origin, or religion. A creditor may ask you to voluntarily disclose this information, except for religion if you’re applying for a real estate loan. This information helps federal agencies enforce anti discrimination laws. You may be asked about your residence or immigration status.

Ask if you’re widowed or divorced. When permitted to ask marital status, a creditor may only use the terms: married, unmarried, or separated.

Ask about your marital status if you’re applying for a separate, unsecured account. A creditor may ask you to provide this information if you live in community property states, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. A creditor in any state may ask for this information if you apply for a joint credit account or one secured by property.

Request information about your spouse, except when your spouse is applying for credit with you. Note: your spouse will be allowed to use the credit account. You are relying on your spouse’s income or on alimony or child support income from a former spouse; or if you reside in a community property state.

Inquire about your plans for having or raising children.

Ask if you receive alimony, child support, or separate maintenance payments, unless you’re first told that, you don’t have to provide this information if you won’t rely on these payments to get credit. A creditor may ask if you have to pay alimony, child support, or separate maintenance payments.

A Special Note To Women

A good credit history, a record of how you paid past bills often is necessary to get credit. Unfortunately, this hurts many married, separated, divorced, and widowed women. There are two common reasons women don’t have credit histories in their own names: they lost their credit histories when they married and changed their names, or creditors reported accounts shared by married couples in the husband’s name only.

If you’re married, divorced, separated, or widowed, contact the credit bureaus to make sure all relevant information is in a file under your own name.

Copyright © Credit and You | All Rights Reserved |

To find additional rights you have, what a creditor may not do: when deciding to give you credit or evaluating your income for credit and what to do if you suspect discrimination visit http://www.creditandyou.com/yourcreditrights.html it’s free information website!

The competition to get your credit card business has heated up so extensively that banks are literally paying you to take a credit card from them. Nearly every major issuing bank now offers a credit card that gives you bonuses for using their card. Consider the following offers you can find today on Internet sites where you can apply for a card online.

Cash Back Credit Cards

These cards return money to you in the form of checks. Many of the cards offer deals like 5% cash back on purchases at grocery stores, drug stores, and gas stations. In most cases, the stores are the major chains where you probably shop anyway. On top of that, these cash back cards usually offer 1% cash back on all other purchases. Some cards offer even higher cash back percentages for specific gas stations or for buying specific grocery or drug store products.

A quick bit of math will prove how valuable this cash back proposition can be. Let’s say you’re a family of four with two cars. You spend $600 a month at grocery stores, $100 at drug stores, and $200 at gas stations. If you pay for these purchases using your credit card instead of cash or a paper check, that’s $900 per month on which you get 5% cash back. That comes out to $45 per month returned to you. Let’s say that in addition, you use your card to make another $500 in other purchases that qualify for 1% back; that adds another $5 to your coffers, for a total of $50 per month, or $600 per year back to you. Not too shabby for just using a credit card.

Rewards Credit Cards

Some credit cards offer you rewards such as bonus points that count toward gift certificates redeemable at top name stores, such as Best Buy, Home Depot, and Macy’s. Other cards offer you rewards in the form of Frequent Flyer Miles to use on any airline.

Let’s say you use your card to charge $1000 per month on items that you normally would pay cash for. Rather than simply spending your money, now you also get gift certificates to buy merchandise, or frequent flyer miles to tune of 12,000 per year. And some of the cards also offer you a bonus the first time you use the card - so in the case of miles, you can get an extra 15,000 miles, for a grand total of 27,000 miles in one year — enough for a free ticket to anywhere in the US.

Maximizing Your Card Usage

Of course, the key to taking advantage of such cards begins with choosing the one that best fits your normal purchasing habits. Compare online credit card offers and find the offer that makes sense for your lifestyle. If you have a large family and buy lots of groceries, maybe the 5% cash back cards are the best. If you fly often and can benefit from the frequent flier miles, apply for those cards.

Then be sure you maximize your card usage to boost your returns. Use your card everywhere you can. Arrange to pay your regular bills using your credit card, such as your gas and electric utility bills, your doctor and dentist bills — as many regular monthly bills as possible using your credit card.

Still More Amazing — Sign Up Perks

What’s truly mind-boggling is that many banks are also offering great incentives to sign up for their card. You can find offers where you not only will you get cash back and/or rewards, but the bank also has 0% APR financing for 12 months on new purchases and sometimes on balance transfers, and to boot, no annual fee.

All in all, today’s credit card issuing banks are hungry for your business and have become highly competitive in creating promotions to attract you to apply for their card. It is truly impossible to imagine why anyone would not apply to get one of these cash back or rewards credit cards when you have everything to gain, and nothing to lose.

Copyright 2005 Ed Vegliante.

Ed Vegliante runs the web site www.credit-card-surplus.com , a popular, well organized credit card directory enabling the consumer to compare and apply for a variety of credit card offers including cash back credit card offers. Find links to secure online credit card applications.

One of the most important factors when deciding which credit card to choose is a comparison of the APR, or Annual Percentage Rate. This is the cost of credit, the actual interest rate, determined on an annual basis and expressed as a yearly rate. By comparing the APR of credit cards, you can determine which card will cost you most, barring fees such as late payment charges, ATM fees, or cash advance charges. The APR offers a standardized way to compare yearly interest rates, whether the interest is computed on a daily, monthly, or yearly basis.
Under the federal Truth in Lending Act, credit card companies must provide you with information about the APR. If you understand the APR, you have a better chance of making your money work for you. When it comes to calculating the APR, you will have to do a little math, but it is well worth the effort to know exactly where you stand, financially speaking.

If you look at your credit card statement, you’ll find that the finance charge, interest, is expressed both as a periodic rate and an annual percentage rate. If you divide the annual percentage rate by 12, you will come up with the monthly periodic rate. It is important to recognize that when you sign up for a credit card, you are signing a contract. If you understand how the interest on your account is calculated, you are much more likely to use your credit card wisely.
There are other things you need to know about the APR. Your card may, in fact, carry different APRs for various transactions. For instance, regular purchases might be subject to an APR of 16 percent, while cash advances carry an APR of 19 percent. Also, if your card has a variable rate, it can be altered throughout the year. You should consider reading your credit card agreement and talking to a customer service representative to find out more information about your card’s APR.
You should also consider selecting a card with an APR that is appropriate to your needs.

For example, if you are able to pay your balance in full at the end of the month, select a card with a low annual fee. In such a situation, you can afford a card with a higher APR, since you will not be carrying a balance. However, if you will not be able to pay off your balance at the end of the month, select a card with a lower APR.
You can also use the APR to your own personal advantage. If you carry a balance on your credit card, pay more each month. That way, even if you face a high APR, you can minimize the interest you pay on the card. It’s important to recognize that, if you only pay the minimum balance each month, you will have to pay more interest. It will also take you longer to pay off your debt.

Ron Goodpaster is the Senior Staff writer for http://www.cheapcreditoffers.com. He has been writing various articles on consumer credit for HTTP://http://www.cheapcreditoffers.com since May 2005.

Credit scores: all lenders use credit scores to determine interest rates and credit limits.

The credit scoring system was developed in the early 1950’s. However, it was not widely utilized until the early 1980’s, when it was overhauled by Fair, Isaac & Company. At that time the 3 major credit reporting bureaus, Equifax, Experian and Trans Union, worked with FICO to create three separate credit models, one for each bureau.These agencies still use their own criteria to rate credit holders but the numbers have been normalized so that a score of 650 at Bureau A is equal to a score of 650 at Bureau B, etc.

Simply put, a credit score is a mathematical equation calculated by the review of a potential applicants credit history. It is based on factors such as income, instances of late or missed payments, types of debt owed, number of credit inquiries on file and the percentage of available credit that is actually being used.

Credit scores generally range between 300 and 800. The average credit score lies somewhere between the 600 and 700 range. As a rule, in order to receive a standard, lower cost loan a score of 620 or above is required. A high score indicates a low credit risk, meaning those with high scores find it very easy to obtain credit.

It is important that credit issuing companies indicate a credit holder’s limit on their credit report. Failure to do so will usually result in a lower credit score. This is due to the fact that most scoring models plug in the highest balance from another listed account, when a credit limit is missing. This is an action which causes it to look as though a greater percentage of an individuals total available credit is actually being used. To avoid this type of situation, deal only with lenders who include this specific piece of information in their bureau reports.

There is a law which requires each of the three major credit bureaus to provide you with a no-cost credit report, once a year, should you request it. There is no such law pertaining to credit scores. Credit bureaus are allowed to charge consumers a “fair and reasonable” fee, for them.

There is an exception to the law above. Consumers are eligible for a no-cost credit score when applying for any type of home loan. As long as the mortgage lender uses a credit score when making an approval determination, he or she must supply that information to each applicant who requests it.

The questions you should be asking.

1: How do I order my free report?

2: What information do I have to provide to get my free report?

3: Are there other situations where I might be eligible for a free report?

4: What is a credit score, and how does it affect my ability to get credit?

For the answers to these and many more questions visit www.usacreditinfo.com

Cornelius P Crumpacker
http://www.usacreditinfo.com

Secured Credit Card is similar to a prepaid credit card since the funds you are using are actually yours and not the issuer of the credit card. Generally people who apply for secured credit card or prepaid credit card are people with poor credit or unemployed. Prepaid Credit Card spending limit is the amount of money you loaded to the card. There are no interest or finance charges on a prepaid card. With secured credit card, your credit line could be from 50% to 100% of your deposit depending on the institution giving you the secured credit. Therefore the company giving you the secured credit card has zero risk.

Secured credit card can be very beneficial because it gives you an opportunity to rebuild your credit history and you are able to make purchases just as if you had an unsecured credit card. Many companies require that you have a credit card to make purchases, such as car rental, airline tickets, etc. Ensure that the company issuing the secured credit, routinely reports customers’ payment history to any of the three main credit bureaus namely Experian, Equifax and Trans Union. This reporting to the credit bureaus will rebuild your credit history over time.

Closing unnecessary accounts and consolidating your bills to make payments more manageable could be an advantage financially. By not applying for too much credit within a short period of time is another factor that will help in rebuilding your credit rating. Additionally, even though secured credit is like prepaid cards, they do have certain fees attached.
Benefits are similar to that of an unsecured credit card, such as usually being paid interest on your balance in the bank, using Automated Teller Machines (ATM) to make deposits, withdrawals, and making purchases at participating merchants. Following the above steps will strengthen your credit rating.

Unsecured Credit Cards are issued to individuals with good to excellent credit rating. Credit ratings depend on certain criteria, such as one’s ability to repay loans. These criteria include payment history, employment history, and financial stability. Individuals with excellent credit will most likely receive a lower interest rate. A major factor in maintaining excellent credit is making your loan payments on time thus avoiding late fee penalties.

Customers should read the credit agreement to ensure that they understand their obligation to the creditor. Making payments on time will strengthen your credit rating. Unsecured credit cards has numerous advantages such as low interest rates, high credit limit, business name options, no annual fees, and low APRs on balance transfers up to 12 months. Closing unnecessary accounts and consolidating your bills to make payments more manageable could be an advantage financially. By not applying for too much credit within a short period of time is another factor that will help in maintaining a good credit rating.

Rebuilding your credit takes time, patience, and consistency. If you consistently pay your bills on time, you will see an improvement in your credit ratings over time. There are no quick fixes for improving your credit report except for mistakes or inaccuracies that can be corrected, hopefully in your favor. Your credit information is maintained by the credit bureaus namely Experience, Equifax, and Trans Union for seven years. Therefore poor credit information will remain on your report for seven years. The good thing is that as negative information disappears with positive information, this will definitely rebuild your credit rating.

Applying for secured credit card can be very beneficial because it gives you an opportunity to rebuild your credit history, and you are able to make purchases just as if you had an unsecured credit card. Many companies require that you have a credit card to make purchases, such as car rental, airline tickets, etc. Ensure that the company issuing the secured credit, routinely reports customers’ payment history to any of the three main credit bureaus namely Experience, Equifax and Trans Union. This reporting to the credit bureaus will rebuild your credit history over time.

Business Credit Card
Business credit cards are very popular for small business owners because of the many benefits they offer. Benefits includes 0% Intro APR on balance transfers, no annual fees, high credit limit, low interest rates, cash rewards, bonus miles, free online account management to choosing card design etc., At iCreditOnline.com we have some of the best business credit cards from American Express, Advantage, Chase, Bank One, Bank of America, Discover, Citibank, Household Bank and more, with online credit card approval. Why waste time going to a bank when you can get a decision in less than 60 seconds with secure online credit card application. Online Credit Card Approval with Online Credit Card Application is fast and easy!

Student Credit Card

Having a student credit card while still living at home or attending school away from home can be an advantage. It gives the student the opportunity to establish credit at an early age and to start asserting their independence. It comes in handy in case of emergency, it is less trouble and safer to carry a student credit card than to carry cash. Parents find student credit cards to be very convenient. They are able to make deposits to their children’s account while they are away from home. Students should be careful with their credit card receipts to avoid identity thief.

If you consistently pay your bills on time, obtaining students credit cards is a good way to established credit rating and start building a good credit history while in school. Establishing and maintaining a good credit rating will make it easy to purchase a car, a home or obtaining a personal loan in the future. For students who are not committed to their financial obligation, getting a student credit card is not a good idea. Running up balances, finding yourself in debt, unable to make monthly payments will destroy your credit rating.

Student’s credit cards generally have high interest rates. At iCreditOnline.com we offer some of the best student credit cards from Chase and Discover with 0% APR introductory rate for 6 months, no annual fees and online account access. Online credit card approval with online credit card application is fast and easy!

Explanation of some of the credit cards we offer:

0% Intro APR Credit Card or Balance Transfer Credit Card gives you the benefit of using this credit card without making any interest payment on the principal for a stated period of time. This credit card is marketed to individuals with good credit rating who want to transfer balance from a high interest credit card to a 0% intro APR credit card.

Cash Rewards or Cash Back Credit Card earns a percentage on purchases made. This reward or cash back is credited to your account.

Debit Card takes the place of carrying a checkbook or cash. This card is used like a credit card with certain limitations, such as not being able to rent a car. Purchase transactions are contingent upon having enough funds in your checking or savings account to cover the purchase. Verification of funds requires entering your Personal Identification Number (PIN) at a point-of-sale terminal.

Low interest credit card saves you money. Having a good credit rating qualifies you for some of the best low APR credit card offers.

Prepaid Credit Card spending limit is the amount of money you loaded to the card. There are no interest or finance charges on a prepaid card. Therefore the company giving you the prepaid credit card has zero risk. Generally people who apply for prepaid credit card are people with poor credit or unemployed.

Secured Credit Card is secured by the amount of funds you have in your account. Your credit line could be from 50% to 100% of your deposit depending on the institution giving you the secured credit.

Unsecured Credit Card is issued to individuals with good to excellent credit rating. Credit ratings depend on certain criteria, such as one’s ability to repay loans. These criteria include payment history, employment history, and financial stability. Individuals with excellent credit will most likely receive a lower interest rate and can receive instant online credit card approval. A major factor in maintaining excellent credit is making your loan payments on time thus avoiding late fee penalties.

Travel Rewards Credit Card benefits may include travel accident insurance, free rental car collision/loss damage insurance, rebate on gasoline purchases, frequent flyer points or bonus miles towards airline flights, free quarterly and annual account summaries.

About The Author

David Hall owns http://www.iCreditOnline.com. He offers free downloadable, high quality guides on credit repair, credit ratings, credit scoring, debt consolidation and more. He has tools for finding a wide range of financial services including secured and unsecured cards, student and business cards, auto loans, and more from the most reputable companies in the industry. You can also compare multiple credit card offers, securely complete an online credit card application, and receive a credit decision in at least 60 seconds. Visit David’s site today: http://www.iCreditOnline.com

About Search Entries:

Every time a lender checks your credit history from your credit file (i.e. each time you apply for a loan), your credit-file will have a record of this. These records are known as search entries. The search entries do not generally say whether you were approved or denied credit, but they do reveal the name of the lender(s) processing previous applications. Lenders automatically impart this information back the credit bureaus and see it as an important tool.

As you can imagine, with this information other lenders can see if you have been applying for many, many loans. The lender dealing with your current application would expect to see a few search entries, but if there are more than, say, 20 in a few months he will be very wary, and may reject your application. (Of course he will be adding one more entry to your credit-file himself in the process!).The original reason for a credit search entry being inserted into credit files was to check for fraud, but lenders have since found much value in watching the habits of consumers applying for credit.

There is no specific number of searches that would cause an application to be turned down flat, but as above, too many unrelated credit searches on your credit file will certainly not be helpful in your quest to get approved for credit.

Limiting credit search entries:

Try to limit search entries by only applying for 1 or 2 loans a month. If you see duplicate searches appearing on your credit file for the same loan, these should be removed. Write to the credit agencies to ensure they are. All searches should expire after 2 years, so check that they are deleted after this time and if not you can insist this is done too.

Once your credit file contains a minimal number of credit search entries then you can be sure that you have the best chance for getting approved for your next loan.

Jack Miles, Author of “The Complete U.K. Credit Repair Guide”, produced the guide to help people restore a poor credit rating and enjoy the benefits of good credit. The guide shows subscribers step by step how to repair bad credit history, how loan application forms are scored, how to remove court judgments (CCJ’s) and also how to best fill apply for loans to gain the best chance of approval.

For more information please visit The Complete UK Credit Repair Guide at http://www.creditsecrets.co.uk

Here’s a dirty secret, today’s “non profit credit counselors” are often just front organizations paid lucrative commissions by creditors to keep consumers from declaring bankruptcy!

In the “debt collection biz”, creditors will sell your outstanding debt along with the debt of hundreds of others to a collection agency for cash up front.

The collection agencies will work this debt until they’ve made all the money they can.

Then they’ll keep selling this block of business to whomever will buy it.

This explains why you can stop being pestered by a bill collector for a while then a completely different bill collecting psychopath will start calling your house or sending you threatening letters out of the blue when you thought they were finished.

The Fair Credit Reporting Laws have put some damper on their crude activities, as have the bankruptcy laws.

But yesterday’s bill collectors have gotten wise.

If people go bankrupt, the creditors get virtually nothing.

So why not figure out a way to get people to voluntarily pay much more than they would otherwise by going through bankruptcy?

So today, yesterday’s bill collectors often masquerade as “non profit credit counselors”.

Business must be good for these “non profits” because they’re out on the internet paying $10 per lead for potential debt consolidation clients!

Their “come on” to the consumer is “Don’t declare bankruptcy! It will RUIN your credit and cost you money! Use our FREE service instead.”

There’s no such thing as a free lunch of course.

What unsuspecting consumers DON’T KNOW is that using these services may ruin their credit anyway.

And these “Free Services” are being paid handsome commissions on every dollar the collect from you!

Then they report exactly what they’ve done to the credit reporting firms and potential creditors in the future MAY consider you a potentially WORSE candidate than a formerly bankrupt person because if they extend you credit and you fall on hard times again, you stil have the option of going through bankruptcy!

Learn your rights.

It’s possible for ordinary people with a computer and printer to use the law to “lick bill collectors with a stamp!”

Without giving up your privacy, without having a credit counseling firm “rat” on you, it’s possible to achieve the same results that others have used expensive attorneys to achieve - when you know your rights!

Cleaning your credit report is something you can do.

Paying off debts for pennies on the dollar is something you can do.

Educate yourself at sites about free credit repair techniques like http://www.CreditRepairDude.com … and beware today’s Bill Collector Wolves in Non Profit Sheep’s Clothing!

About The Author

Chuck Huckaby is a freelance writer in Lawrenceburg, TN USA and publishes http://1stHowToWorkAtHome.com and http://www.CreditRepairDude.com

Credit card applications nowadays have begun to provide clients with an instant approval feature. Meaning, the person applying for a credit card would easily know whether he or she is eligible for applying. This process of instant approval is basically used online or through the internet.

To be able to prevent confusion in dealing with a credit card instant approval, you should know these facts:

* The credit card instant approval and the credit card application are two different processes. The approval of your credit card does not necessarily mean that your card would be delivered to you as soon as possible. It only means that you are qualified to apply for the credit card. The credit card application will be your next step once you have been given the “go signal” by the bank.

* The instant approval of credit cards is made to target customers with good past credit records. Although because of the high credit market today, the banks are willing stretch their limits and offer this program to different kinds of people. This may depend on the bank you’re applying the credit card on.

* Majority of banks provide customers with a credit card application form online. These credit card companies make use of this program with secured connection software for your information’s protection.

* The information you need to give for your credit card’s instant approval include: your name, your current address, your social security number, and if there are previous address you may have over the years. This is the most common information asked on the instant approval feature of the banks.

* The main advantage of getting a speedy approval for your credit card applications is the elimination of the major trouble caused by guesswork on whether the company thinks that you deserve a card or not more instantaneously. Unlike the old-fashioned way when you have to visit a bank in person and ask if you’re qualified then knowing you’re not, this time it’s a lot more convenient.

* The approval of your credit card online would only take you a few minutes to know your evaluation. It would be your choice to continue your credit card application.

And lastly, when you have been approved on your credit card application, don’t just go splurging thinking that instant approval also means instant money. Instant approval is more tantamount to instant debt. Think about it.

David Riewe is a Publisher and Online Marketer. Visit his Credit Resources Blog Below: www.push-button-online-income.com/creditcards/

Cash back credit cards are now being made available in a variety of new options. However, it is important for consumers not to skip over the process of researching all details of a card before applying. Cash back credit cards, although useful credit card solutions, also frequently carry with them several “catches” (targeted reward categories, high credit necessary to apply, potentially capped rewards) that consumers need to inform themselves about in order to maximize their effective use of the cards.

In a world of rising gas prices and falling employee compensation, it’s more true than ever that a small amount of cash can go a very long way. This, at least, is the logic behind the variety of new cash back credit cards that now flood the market from many major providers. These cards offer a number of different cash back plans for several types of purchases: cash back for retirement, for charity, for affiliate products. All are designed, at least in part, to encourage credit card use by returning some percentage of the purchase price to the consumer at the end of the year. It sounds like–and can be–a good deal, the literal truth of the classic adage “spend money to make money.”

But in addition to the good deal, cash back credit cards carry with them hidden hooks and lines. The card application always lists these plainly, but customers who just want to cash in on the promise of quick percentage rewards can often overlook the most crucial caveats of all. More savvy customers, however, should ask themselves maybe the most important question anyone can ask when considering a new credit card: what’s the catch?

The first catch is that the high-end cash back rewards don’t usually apply to entertainment, housing, or luxury items. Since these make up a large portion of most people’s paychecks, anyone who believes that a hypothetical 5% cash back guarantee will apply to everything purchased with that cash back credit card will be in for a rude surprise. The higher fees are typically targeted toward fundamental goods in our society: supermarket purchases, drugstore runs, gasoline. Most of the best cash back credit cards offer a flat 1% fee on other purchases, which can be substantial by the end of a year, but still possibly not what the customer who only glanced through the brochure expects.

Another big catch is the high credit rating necessary to get one’s hands on any of the best cash back credit cards. The most popular cards all require at least a good credit rating, with many asking for excellent. The effect of this is to push the target market of typical cash back credit card consumers toward two groups: first-time credit card applicants and the very financially prudent. And it is a nice bonus for people with good credit (or at least no bad credit) to be able to earn typically 1% of the purchase of price back on most goods, but for anyone in dire financial straits looking to put together some extra money through cash back rewards, it would be wise to look elsewhere.

The biggest catch of all, though, is that the promised rewards may run out sooner than the uninformed customer thinks. Depending on the individual card, percentage rewards in some cases only apply after a certain amount of money has already been charged to the card in a given year ($2000 and up, in the low range), or more alarmingly: rewards may stop applying after a certain amount of money has been put toward the products that generate the highest percentage of rewards ($1,200, to quote one of the high figures.) If a customer spends a large amount of money on fuel in a year, expecting cash back options to alleviate some of the sting of current high gas prices, that customer may find the rewards less rewarding. In some cases, the number of cash back rewards earned through using a cash back credit card can even be capped at a certain figure, at which point what the customer has left is just a credit card like any other.

So yes, the percentages sound good, initially, and do help to offset typical expenses. But, as always, it’s wise to look carefully at the fine print of an agreement before signing, and to remember that there is no hook without a string attached. Cash back credit cards can be a powerful tool for consumers to get something back for what they put into the economy, but without informing themselves and doing the research, they may just find themselves caught up in trouble of their own making.

For more information on cash back credit cards available in the marketplace, Robert Alan recommends that you visit CreditCardAssist.com