Remember how I get an effective reward rate of over 3% from my credit card? Well I take those gift cards and turn them into cash, giving me more cash than the 2% cards that top the cash back charts.

Here’s how I do it.

I use a great little service called Plastic Jungle. It’s a website that buys your unwanted gift cards and resells them to people who do want them. It’s arbitrage at it’s finest. It’s not like eBay where you are responsible for the transaction. Plastic Jungle gives you money and you’re done. No waiting, no annoying buyers, no hassle.

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You know why you should switch bank accounts. You also know what to look for when switching. But how do you switch banks?

I’ve received this question several times already from readers. I get it. It’s a scary thought moving a large sum of money.

I’m here to give you a sense of how one actually switches banks. Armed with this information, you’ll feel confident in switching banks if you so choose.

Spoiler: it’s very easy, low-risk, and there’s virtually no downside.

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Now is the perfect time to make some small improvements to your finances. If you’re a student, you’re probably on summer break. If you’ve just graduated, you may be receiving your first paycheck soon. And if you’re a veteran full-timer, then there’s nothing like catching some rays and managing your money.

Here are 3 simple, yet effective ways you can improve your finances:

1. Get a Better Savings Account

Your savings account probably sucks. If you hold an account at one of those banks everyone’s heard of (i.e. Bank of America, Chase, etc.) then you’re probably getting close to nothing in interest**.** I’m talking less than 0.1%. Expect to get a penny every once in a while.

If you’re going to save money, you might as well earn some interest on it. I have less than $5,000 saved, but I’m still making $0.10 a day in interest. The bank is giving me a dime a day**.** That’s pretty cool if you ask me.

Read my guides on savings accounts if you need a place to start.

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Before applying for my first credit card about two years ago, I spent several weeks browsing and comparing all the credit cards out there. There may be a different selection of credit cards offered today, but I hope that my thoughts on picking credit cards can help you choose your first card.

Objective

To maximize my rewards. I will never carry balance month-to-month.

Where do I start?

Check out some of the websites of the credit card companies you may already be familiar with and see what they have to offer. Remember those credit card ads you’ve seen on TV? Go see what they’re all about. You just want to get a feel for what’s out there to make an informed decision. You wouldn’t want to pick a credit card only to find out there was a much better one you could have gotten instead. To speed up your research efforts, check out websites such as CreditCards.com or nerdwallet.com. Both give you a comparison of many credit cards across different issuers. This frequently updated forum post also has a nice list of current offerings.

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You’ve decided you want to apply for a credit card, and you plan on paying the bill in full every month. Great! You are on your way to building a strong credit history.

Now what card should you choose?

Since you’re paying the entire credit card bill every month and not carrying a balance, you should be looking for a credit card that gives you lots of rewards. You don’t care about the APR (or the interest rate) because you won’t be charged any interest! You are going to want a card with no fees and the most rewards. If you do plan on carrying a balance even occasionally, then there are totally different considerations in choosing a credit card.

The Three Types of Rewards

There are three types of rewards you can receive through a credit card: points, cash back, or miles. With points, you accrue points from purchases that you can redeem for a whole host of items. With _cash back cards, the credit card company will actually give you a certain percentage of the money you spend back to you in the form of a check or statement credit either at the end of the month or at the end of the year depending on the card. Lastly, there are the cards that reward you with miles_. Most of you are probably familiar with this, but it works just like the points do, only you redeem the miles for flights.

All of them sound enticing, but a credit card will employ only one type of rewards system.

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I recently received a request from a reader to do a post on an email he received regarding his student loans. I figure some of you out there may have received something similar and the deadline for acting is June 30th, 2012. This does not apply to students who are still students.

The email goes something like this:

Dear Student Name:

We haven’t heard from you regarding this limited-time opportunity offered by the U.S. Department of Education to consolidate your eligible federal student loans. Join thousands of other eligible student loan holders in making the repayment of your loans as manageable as possible. Applying is easy!

How this benefits you:

• One servicer and one payment for all your eligible federal loans,

• A potential lower combined payment amount, and

• Up to 0.50% interest rate reduction!*

The Department of Education has prefilled your application and it’s waiting for you at StudentLoans.gov. Just sign in using your Federal Student Aid PIN and click the link in the Alert section on the right to complete the application.
The Department of Education has been sending emails to qualifying students since January of this year, and if you have recently received one of these notices listen up!

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Happy Father’s Day everyone. I hope everyone is enjoying their day.

I’ve recently received a bunch of requests for me to talk about investing. A couple friends (Hi Hannah & Juan!) have asked me where they should start learning about investing and to review brokerages.

I’ve been following a bit of a linear path in my posts. I have a clear sense of how I want to to talk about banks, then credit cards, then investing. But I think I’ll change it up a bit to make this blog more interactive and cater it to the readers.

My posts may jump around from topic to topic occasionally, but I’ll keep things organized so you can still browse by topic if you click on one of the menu items above.

Let me know what you think and if you have anything you want me to cover via the comments or the Facebook page.

Enough of that.

Here’s a question I received a couple days ago.

“If I wanted to start learning and investing in stocks, where should I begin”?

Look at ETF’s. ETF stands for Exchange-Traded Funds. Have you heard of mutual funds? These are the same thing, only they charge less fees.

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Here’s the funny thing. Credit card companies check your credit history to see if you should be approved for your first credit card.

But how in the world are you supposed to build up any credit history without a credit card!?

With the recent backlash against credit card companies from the government and general public, the days of easily accessible credit are gone. Companies hold credit card applicants to higher standards in deciding whether an application be approved or denied. This is a good thing for most consumers, but a slight annoyance for us informed users.

There are credit cards designated for college students. These cards are typically easier to obtain, but they start at a very low credit limit (they don’t let you spend a lot on it). You will probably want to focus your search efforts on these types of cards in starting out.

I did that. I looked at all the student credit cards, compared the rewards/benefits of each, and picked the right one for me. I put in my application and waited. After about a month of waiting, my credit card arrived in the mail.

It was pretty simple and I began my journey with my first credit card.

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Sorry for the short hiatus in posts. I was busy with graduation, moving out, reminiscing, etc.

Banking Broke is back in full force! Stay tuned.

Here’s a cool little infographic for new graduates courtesy of Mint.com (an awesome service by the way).

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For better or for worse, we are all numbers. When you walk into the bank looking for a loan, the bank representative will pull up your number from the computer and tell you how much it will cost you to borrow from them.

What is it?

That very important number is your credit score. It tells the bank how creditworthy you are. If your credit score is higher, it signals to the bank that you are more likely to pay back the loan than someone with a lower credit score.

Credit scores range from 300-850. There are three major credit bureaus that report credit scores: Experian, TransUnion, and Equifax. All three calculate your credit score slightly differently, but in theory these three bureaus should report very similar credit scores. The bank is likely pulling your credit score from one of these three bureaus.

The most common type of credit score is the FICO. Here’s a breakdown of how your credit score is determined:

Link

You have the ability to actively improve your credit score with a credit card. By using your credit card responsibly, you are showing other lenders that you are capable of borrowing and paying back. The algorithms that calculate your score give you a higher score for making payments on time over a long period of time (the longer the better). They also like to see that even though you have access to a large amount of credit, you’re only using a small percentage of it (some say 30% is the sweet spot).

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