Why Bitcoin? Part 4: Banks Versus The World

So far we’ve taken a look at the history of money; the notion of Bitcoin as ‘digital gold’; and some of the macro-economic forces that shape the global …

In this series on Bitcoin and money, Crypto Briefing takes a deep dive into the complexities of the modern monetary system and how Bitcoin, as the ultimate hard money, can serve as a solution to many of its problems.

In Part Four of the series we examine the banking system: how banks make money, and how Bitcoin and other cryptocurrencies empower ordinary citizens.

The full nine-part series will be available here.


Bitcoin and Money – Recap

SIMETRI ResearchSIMETRI Research

So far we’ve taken a look at the history of money; the notion of Bitcoin as ‘digital gold’; and some of the macro-economic forces that shape the global economy.

In our last exploration, we posited that the current global monetary system is rife with problems that have enormous consequences, which we see coming to fruition in today’s global economy.

It should be no surprise then, that today’s conglomeration of banks and financial institutions has taken full advantage of these flaws to enrich themselves and their closest allies and friends, at the expense of the rest of the world’s population.

This begs the question: How might a sound monetary foundation instead be used for the benefit of many?


Fees And Inescapable Debt

Many people wonder, how exactly do banks make so much money? The answer is more complicated than first imagined. There was a time that the bulk of a bank’s revenues would have been gathered via fees and loan interest. Over recent decades, however, we have seen banks expanding their reach, extending a broader umbrella over much more economic activity.

While fees and loans do make up a pretty hefty sum of a commercial bank’s revenues, it’s really just scratching the surface of the money that banks can access and thus control.

The key concept that carries through all of the tools that a bank uses to make itself wealthy is that money gets continuously concentrated into greater density, funneling into an ever-tinier proportion of the population.

Fees are certainly one of the major ways banks do generate substantial revenues, often at the greatest expense of those with the least money. One can observe, just by examining fee structures alone, that an inversely proportional relationship exists between banks’ revenues from clients and the economic status of those clients.

To sum up the relationship; the lower the income of the bank client, the higher the proportional cost of accessing bank services tends to be.

The lowest income-earners might even forego using a bank account entirely due to the basic monthly fees that can be unaffordable to those on the socio-economic fringe. Many major banks charge monthly fees to clients who don’t keep a balance of at least $1,500, for example.

Such a potential client might resort to instead using cash or perhaps buying prepaid debit cards with high fees. Any borrowing activity would be of the payday loan nature, where users are often charged predatory interest rates. Such loans, of course, are not of the forward-thinking investment variety, but are instead usually borrowed to cover emergency expenses or basic living costs.

While payday and other unsecured loans have traditionally been under the purview of businesses outside the banking system, the market for these sorts of loans is changing. Not wishing to leave such profitable potential returns languishing on the sidelines, more banks are beginning to offer such lending options to their most financially-vulnerable clientele.

Payday LoansPayday Loans
source: wusfnews.wusf.usf.edu

Moving up a step from the lowest rung of the economic ladder, a bank account holder with limited to moderate means may get access to basic credit cards.

Charging upwards of 15% on any borrowed funds, payment schemes on credit cards are often designed to encourage low-income borrowers to make minimum payments that will squeeze out the maximum amount of interest charges over the longest period of time.

Penalty interest rates charged to these clients for late payments often approach the maximum legal amount of 29.99%. These same clients are often encouraged to increase their credit limit and are enticed with “You’re richer than you think” ads that conflate access to credit and its subsequent debt with actual wealth.

You're richer than you thinkYou're richer than you think
source: blogspot.com

Add to this the cost for overdrafts, penalties for moving accounts or mortgages, commissions on investments, and application fees for any of a wide variety of services, and it’s easy to see how banks can maximize their profits by leveraging the needs of the most vulnerable and, sadly, the most financially inept.

Without meaningful regulation, banks have proven time and time again to be willing to lend well beyond the means of borrowers. These businesses have often been shown to lure clients into unmanageable debts, especially for cars and homes, that they have no business having in the first place.

It rings consistent with the adage of “buy now, pay later” that is so predominant in modern culture. This has resulted in an economy that accepts extreme levels of national and personal debt, teetering on the edge of collapse as it attempts to endure through decades with little hope of escape.

Sadly, however, this is just the tip of the iceberg when it comes to how banks really pull in massive revenues.


Betting Against Clients And Workers

To be fair, banks are businesses; not charities. And they should indeed make money for their shareholders. One could make a fair argument for the justification of fees and the imposition of higher interest rates on higher-risk borrowers. Yet, no such argument can be made to support the reckless “investments” banks have been known to dabble in since being given the freedom to do so.

When Goldman Sachs hedged against an imminent housing collapse in 2007, it did so at the expense of its own clientele. Essentially, the firm pawned off bad debt to trusting investors who then were left with the losses.

Goldman went so far as to “sell short”, or bet against these bad debts after shilling them to clients, and then made off with huge profits when their bets paid off. Deutsche Bank and Morgan Stanley, among others, also participated in this nefarious activity, costing American investors billions.

Sylvain R. Raynes, an expert in structured finance, assessed the clear conflict of interest in this all-too-common scenario: “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.

Banks and other financial institutions were in on the action, working together to their own benefit, at the expense of the larger population. Unfortunately, when left to their own devices in their constant quest for further deregulation, such entities often do not compete for the betterment of the market at large.

Adam Smith, the father of modern economics and writer of “The Wealth of Nations”, warned of this problem when he explained that businesses will collude, not compete, if left unfettered, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

Goodbye, Toys R Us
source: www.engadget.com

Similar predatory behavior is exhibited by private equity firms, which remain free to feast upon the assets of what have been long-standing retail companies, at the expense of their workers.

These financial predators take advantage of near-zero interest rates to borrow funds and purchase companies, not as an investment, but merely to consume them. After hollowing out the subsequently bankrupted companies by selling off their assets and seizing their pension funds, these parasitic institutions have brought an end to many a household name from Sears to KMart to Toys R Us, leaving workers bereft of jobs and deprived of what would have otherwise been secure retirements.


Banks And Criminal Behavior

Again, while banks should indeed be free to profit from legitimate activities, such freedom does not excuse banks from acts of fraud, collusion, and money laundering. Without going into a comprehensive list, here’s just a few recent samples of occasions where banks were caught in criminal behaviour:

  • Wells Fargo was fined for multiple account abuses, stealing funds from their own clients in a series of scams ranging from insurance and mortgage fraud to creating fake accounts and then charging customers fees for the created accounts.
  • HSBC was caught money laundering for Mexican and Colombian drug cartels, essentially acting as a willing accomplice in large-scale crime, drug addiction, and murder. Netflix has a documentary about it.
  • JPMorgan Chase has been fined for corruption and fraudulent behavior numerous times, most infamously for their involvement in Bernie Madoff’s Ponzi scheme. They even managed to pay some of their fines with money that was raised fraudulently.
  • The Bank of America has been bailed out by taxpayers after committing fraud against investors, homeowners, and other clients.
  • Citigroup, Goldman Sachs and other banks are also in on the criminal action.

And these are just examples of the times these criminals have been caught!

Banks have paid billions and billions of dollars in fines… yet the cost of committing these crimes is massively outweighed by the profit in continuing to accept fines as a cost of doing business.


Beating The Drums Of War

Since the innovation of fiat as a monetary system, easy money has gained the capacity to be weaponized, particularly when hostile economies choose alternative currencies that do not fall under the sovereignty of certain military powers.

Libya, Venezuela, and Iran again serve as reminders of this system, whereby the United States uses the dollar as a weapon, via sanctions. Excluding countries from the global monetary system commences a stranglehold that often leads to violent resolution. Thus, weapons, vehicles, and military forces can be produced and deployed, funded by infinitely printed fiat currency.

Weaponizing The DollarWeaponizing The Dollar
source: www.globalresearch.ca

Global authority and acceptance of the dollar is thereby enforced, first through sanctions, but eventually in many cases, through war.

Because the fiat currencies of the world have no genuine market value, sanctions and violence are the necessary means of coercion for maintaining a market “value” for such currencies. Thus, central banks and their allies continuously push for war in an effort to maintain the status quo.

This is performed in an effort to stave off economic slowdown and, importantly, to maintain the authority of fiat.

The enforced acceptance of easy money in the place of genuinely valuable hard money, which can instead be freely accepted by willing market participants, contributes to the corruption of monetary priorities in government policy.

This monetary perversion is most evident when one observes the astronomical government spending, nearing a trillion dollars annually when all components of military spending are counted, on America’s military industrial complex.

Military Expenditures By Country 2018Military Expenditures By Country 2018
source: wikimedia.org

Through taxation and highly effective inflationary tools like quantitative easing, American citizens are forced to fund a military that consumes more than half of all annual discretionary federal spending.

This totals an amount greater than the next ten countries spend on their military programs together.

To put this further into perspective, consider that the second highest spending priority in America’s discretionary federal budget is Health and Human Services, which includes Medicare, Medicaid, and the Affordable Care act. At a budget under $90 billion, less than 10% of what is spent on the military is spent on these programs.

Federal discretionary spending on education stands at $70 billion.

Trump Discretionary Budget Request 2019Trump Discretionary Budget Request 2019
source: nationalpriorities.org

Yet, the same spending policies continue from year to year, from term to term, and from government to government. With a constant stream of military contractors voraciously lobbying the government and convincing citizens of the ongoing need for more war, defense is no longer a priority.

Instead, perpetual war is the order of the day and, frankly, is necessary to keep the dollar on top against all competitors. Orwell had a point.


The Cantillon Effect

The undue influence of central bank fiat production and manipulation emerges most damagingly in what is referred to as the Cantillon Effect. In summation, central banks create buying power at the top amongst those who first have access to funds at no cost, with newly printed currency being filtered down through the economy as it gradually diminishes in value against assets.

This phenomenon results in inflation as the currency eventually trickles down to those at the bottom. Those who first receive the newly created money see a rise in income while those who receive it last experience a decline in purchasing power.

Because central and commercial banks, along with other financial institutions, hold a monopoly on the production and initial acquisition of previously non-existent money, they can purchase goods, services, and assets prior to the devaluation of the currency. This results in the lion’s share of the economic benefit concentrating further towards these institutions at the expense of the rest of the market.

The Cantillon Effect causes a sort of modern feudalism whereby an oligarchy of financial institutions has become the new “landowner” class, gathering up ownership of the vast majority of real-world assets, with the working citizenry taking on the role of the serfdom:

In the same manner as the landed aristocracy of times past extracted rent by virtue of monopolistic ownership of land, so today the financial oligarchy extracts interest and other financial charges by virtue of having concentrated the major bulk of national resources in their hands in the form of finance capital.” – Ismael Hossein-Zadeh and Anthony A. Gabb.

These modern-day feudal lords are able to acquire virtually interest-free money, enabling them to hoard real-world assets at the lowest possible cost. They can then profit from lending out the wealth at higher interest, returning even greater wealth back to themselves in an oppressive feedback loop that is predicated on the creation of fiat currency from thin air.


How The Monetary System Could Work For Individuals

It’s clear that the global monetary system needs a complete reboot. But such an enormous shift can’t be of the top-down nature. Clearly, it is against the interests of a tiny minority of extremely wealthy and powerful financial authorities to see such a monetary transformation take place.

This is a change that must happen organically. It can only be accomplished through the principle of decentralization.

With the creation of decentralized money, namely Bitcoin, no central authority can directly produce and enjoy the benefits of money creation and its initial distribution at the expense of all others. Competition and the freedom for anyone to participate in its production, distribution, and acquisition is baked into the protocol.

With hard money as the base layer, quantitative easing becomes impossible, allowing citizens to retain value in their money.

Decentralization of money production also negates the Cantillon Effect. With hard money as the base currency, easy money can not simply be fabricated out of thin air and doled out to those with the privilege of having first access to the funds. Decentralized, free-market money thus ends modern monetary feudalism by enabling “serfs” to become “landowners” themselves.

The benefits do not end with the abolition of quantitative easing and the Cantillon Effect. With wealth no longer being controlled strictly “at the top”, commercial banks can no longer gamble away client investments on bad debt, nor can they bet against the economy with the same degree of knowledge and influence previously available to them.

Even problems as simple as exorbitant fees can be minimized, as there would be no need for funds to be held in traditional bank accounts. Fees would be of the free-market nature, required for confirmation of transactions and to cover the costs of other financial services.

Borrowers could complete applications for loans via smart contracts, with decentralized lending made available on a broader scale. Clients could choose a lender with far greater market competition and freedom, rather than depending on a select few central authorities to approve loans.

Decentralized money also succeeds in removing the capacity for central and commercial banks to collude against clients. Without direct control of the currency, the technology significantly reduces the capacity of banks to commit acts of fraud or money-laundering. Banks can no longer so easily act as the laundry machine of cartels, with the distributed open ledger of Bitcoin being visible for all to examine and scrutinize.

The implications even reach into the corrupt lobbying of political systems and the current militarized condition of the world. No longer would a military industrial complex have the same undue influence on the government as it currently does with its access to easy money.

A political campaign funded by Bitcoin, for example, would be transparent and accountable, with donations being tracked and known. This eliminates the “you scratch my back, I scratch yours” mentality of the current political campaign lobbying relationship.

Money can no longer be weaponized as it is with the current fiat system, since a decentralized monetary system holds no sway on a nation’s ability to trade with another nation. Thus, the capacity for military aggression and war diminishes.

In a decentralized monetary system, citizens enjoy financial sovereignty. Hard money, by nature, incentivizes saving, wiser spending, and investment.

As funds for unwanted costs cannot simply be siphoned away by banks and financial institutions via the printing of easy money, citizens can choose instead to spend on societal benefits and their own free market choices, without the need for any form of coercion by central powers.


In Part Five of this series, we move into more political territory, considering the thesis that political extremism inevitably results in greater centralization: in a highly-controlled markets such as under a Communist government, that may be a nepotistic oligarchy; while under unfettered free-market capitalism, it might manifest as a corpocracy.

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Community Spotlight: Jon Moore is on a #PayWithLitecoin Mission

Recently, we caught up with Jon Moore, VP of Nationwide Merchant Solutions, about the mission he’s been on to get businesses to accept Litecoin.

Recently, we caught up with Jon Moore, VP of Nationwide Merchant Solutions, about the mission he’s been on to get businesses to accept Litecoin. With deep roots in the credit card processing business, Jon has a unique perspective on the hallenges merchants face when it comes to traditional payment options.

This expertise has made him a great bridge for businesses looking to free themselves from the constraints of the payments status quo and tap into the transformative power of cryptocurrency. As you’ll see, his knowledge of the industry is only rivaled by his passion for LTC and relentless commitment.

How did you first get involved in Litecoin?

I first got involved with Litecoin after working in the credit card processing business for many years. When I initially discovered Litecoin I saw right a way that it was an exciting payment alternative and I wanted to learn everything I could about it. After digging in some more, I quickly realized that Litecoin was a great option for my customers as a way to avoid one of the most hated things in payments: chargebacks.

Chargebacks occur when a customer disputes a transaction with a merchant. If the customer is right in his or her dispute, the card company takes the money from the merchant’s bank and puts in back in the customer’s account and a fee is incurred. However, with Litecoin, transactions are more like cash sales. Customers decide exactly how much to transfer to a merchant, and because the blockchain is virtually immune to hacking risks, merchants don’t have to worry about payment fraud. This also gets rid of the despised chargeback lag — the 120 days a customer has after a transaction to file a chargeback. This lag wreaks havoc on a merchant’s balance sheet and bottom line, and affects their ability to do business.

How many businesses have you talked to about accepting Litecoin?

I have probably talked to well over 1,000 businesses about Accepting Litecoin, and over 100 of them have implemented Litecoin as a means of payment.

Based on those conversations, what are the main concerns you hear, and what do say to alleviate those concerns?

The main concern businesses have comes from the fact that many people don’t realize that Litecoin or Bitcoin can actually be used as a payment type. Much of the buzz about crypto has been as an investment, which in reality, is only a small part of the technology’s value. They also have concerns about accepting crypto for payment because of price volatility, and most people don’t understand that they can convert Litecoin into US dollars.

My answer to them is simple, when you accept Litecoin for payment you have the freedom to do what you want with it. So you can convert it immediately into US dollars, you can hold it, or you can use Litecoin as real money to buy goods and services. I often show them the Abra App which has a big BANK TRANSFER button — this helps them visualize that with the touch of a button the LTC can be transferred into their bank account. There are also services like Aliant Payment which allow the business to Accept Litecoin and receive an automatic deposit of US dollars.

Once they see the bridges that exist between the traditional financial world and crypto they generally start to feel more comfortable and warm up to the idea.

Can you tell us about a notable example of a merchants that you have helped accept LTC?

I stopped by Tracks Smoke Shop in Elmwood Park to make a purchase of #CBD and #PayWithLitecoin!! I bumped into Mannie #Litecoin hanging out while I was there chilling in a LTC shirt and a #RAW hat! pic.twitter.com/LHmkHmQAbT

— Jon Moore (@jonnylitecoin) September 10, 2019

One recent example was setting up Tracks Smoke Shop in New Jersey to accept Litecoin as a form payment. The business didn’t know much about Litecoin, or cryptocurrency in general, but after explaining the advantages they were willing to try accepting LTC. Once they were set up, we shot a quick video that we posted on Twitter.

The next day, several people that saw the video online ended up coming to the shop and paying in Litecoin. A few of their existing customers also switched to using cryptos. Since then, tracks has embraced Litecoin and the crypto community so much that they’ve decided to put a Bitcoin/Litecoin ATM in the shop.

In 2-3 sentences, make the most compelling case you can for why every merchant should accept LTC.

Merchants should accept Litecoin because it gives them an option to accept an easy payment form that eliminates chargebacks. They also save money in fees with LTC compared to those incurred from processing credit cards and other methods like PayPal. On top of that, when you accept Litecoin you often gain new and loyal customers by tapping into the fiercely loyal Litecoin community.

What are you most excited about for the future as it pertains to LTC?

I am very excited for the future because this is just the beginning. More and more products are becoming available that make it easier for people to obtain and use Litecoin. Apps like Spedn are letting people #PayWithLitecoin at businesses across the globe, and in doing so more and more merchants will realize the advantages of Litecoin and cryptocurrency payments.

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What to Do if Your Credit Score Drops

With the ease of services like Credit Karma and Credit Sesame, it’s easier than ever to go online to check your credit score. Fluctuations of a few points …

Illustration for article titled What to Do if Your Credit Score Drops
Photo: Shutterstock

With the ease of services like Credit Karma and Credit Sesame, it’s easier than ever to go online to check your credit score. Fluctuations of a few points up or down, say, from 720 to 725, or 680 to 670, are normal, but a sudden massive drop of 30 or more points could be cause for concern. What do you do if you find your credit score has dropped drastically overnight?

First, you have to figure out why your score dropped so you can figure out what to do.There are only three factors that can cause a sudden decrease in your credit score: you didn’t pay your bills, you’re using too much credit, or there’s a security issue. That’s according to Adam Levin, a cybersecurity expert who spoke at CardCon, a conference about the credit card industry that I attended last week.

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Let’s break down each one of those potential culprits so you know what to do if you check your credit score online only to find it far lower than you anticipated.

You didn’t pay your bills

Check your inbox and that pile of mail on the kitchen table for any unpaid bills that may have slipped past.

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Since credit card issuers, lenders and other companies report your payment status to the credit bureaus monthly, you often have a little leeway with a late bill before it hurts you. But any late payment beyond 30 days is fair game to show up on your credit report. Your credit report will not show your score, but it shows all of the information that’s used to calculate that score, including seriously delinquent bills.

If you haven’t used up your three free passes for the year (one from each of the three major credit bureaus), go to AnnualCreditReport.com to pull a fresh one. If the culprit of your score drop is unpaid debt, you’ll see it on the payment record for the account in question.

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If you’ve used up your freebies, a free credit monitoring service will note whether your accounts are in good standing.

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What to do: If one of your financial accounts is showing up delinquent when you swear you paid the bill, check with that lender or utility to check your status. If that’s all clear, you can dispute the error on your credit report. If you truly didn’t pay your bills, it’s time to get caught up ASAP. You may see an instant boost to your score by a few points as soon as the lender reports that you’ve paid up, but it could take several months before your score fully recovers.

You’re using too much credit

The second-biggest chunk of your credit score, after your payment history, comes from credit utilization, or how much debt you have. If your ratio of credit used (balances on credit cards, for example) to credit available (what the limit is for all your cards put together) is too high, your credit score will drop. Experts say to keep your utilization below 30%, and the lower that ratio is, the better your score will be.

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If you recently put a large purchase on a credit card or recently took out a new loan, you’re likely to see your score drop.

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What to do: As you pay your balances down, your score will go back up. If you can pay off large balances in full, that’ll provide the fastest boost to your score and you’ll see that change within three months (delinquencies often show on your credit report faster than paid loans).

When you pay off a credit card, don’t close it! Having that credit available makes you look very attractive to future lenders, and the lower your utilization is, the stronger your score will be.

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There’s a security issue

Go back to that credit report you pulled. See anything unusual? An account you don’t remember opening, or a credit card bill that seems unusually high? You may be the victim of identity theft.

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What to do: First, call the credit card company or other lender to report the fraud or theft. You’ll want to place fraud alerts on all your other financial accounts. You should file a police report, contact the Social Security Administration and the IRS to report suspected identity theft, and file a police report.

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Getting everything straightened out and back to normal will likely take months, so buckle in for a frustrating ride. In the meantime and long after the problem has been fixed, you’ll need to be vigilant, monitoring each of your financial accounts for delayed fraud activity.

If everything looks legit on your credit report, take a moment to make sure your identity and credit are protected from fraudsters by freezing your credit with each credit bureau—it’s free!—to make sure no one opens new credit accounts in your name, and by setting up security alerts with each of your credit card issuers. It may seem like the most boring task now, but it can give you major peace of mind in a world ripe with data breaches.

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You’ll have to unfreeze that credit whenever you want to make a big purchase with new credit, and freezing doesn’t prevent criminals from stealing your current credit card info. For that, see if your card issuer allows you to lock your card, which you can do as often as you wish online or through your card’s app. Doing so prevents anyone—including you!—from making purchases on your card unless you unlock it.

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What credit score do you need to qualify for popular rewards credit cards like the Chase Sapphire …

Credit Karma can be a good tool in this research — when you look up a card on its website, you’ll see that many reader reviews include their credit …

If you’re new to rewards credit cards, you may wonder whether your credit score is sufficient to obtain the card you want. And it’s a good question — after all, many of these cards are aimed at luxury travelers.

You might expect all rewards cards to require a high credit score, but not all do. Every card issuer has its own underwriting criteria, which isn’t based strictly on credit score. Other factors can include employment, income, and any existing relationship with the bank.

What credit card issuers look at in your application

Although no banks make their underwriting criteria public (in fact, banks consider this a trade secret), consumers are free to report their experiences applying for credit cards. Online forums (such as /r/churning on Reddit) contain hundreds of posts with anecdotal information.

Keep in mind that this is “anecdata.” Underwriting criteria for the banks can change at any time, and general criteria may not apply to your specific situation. For example, it’s not unusual for banks to tighten lending requirements in a slowing economy, or to have tighter lending criteria for people working in historically volatile industries. Remember that the bank is ultimately making a calculation about risk, and specifically how high of a risk you will be.

Read more: The best credit card sign-up bonuses available now

How to determine what credit score you’ll need to open a credit card

You won’t find one definitive answer to what credit score you need to open a given card like the Chase Sapphire Preferred. Instead, you can get a sense of the range of scores of successful applicants.

Credit Karma can be a good tool in this research — when you look up a card on its website, you’ll see that many reader reviews include their credit score at the time of their application

Here are the five categories of credit score according to FICO:

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very good: 740-799
  • Excellent: 800-850

Chase Sapphire Preferred

Credit score of successful applicants, as reported on Credit Karma: High 600s to 850

What’s a good consolation prize if you have great credit, but won’t qualify for the premium Chase Sapphire Reserve? The Chase Sapphire Preferred, which comes with many of the same excellent benefits and a higher sign-up bonus than the Chase Sapphire Reserve: 60,000 Chase points after you spend $4,000 in the first three months vs. 50,000 points with the same spending requirement.

The Sapphire Preferred has a minimum $5,000 credit line. Although a credit score of 720 or above is typical for successful applicants, the underwriting criteria are more relaxed than for the Chase Sapphire Reserve, and even college students with income from a part-time job have been approved for this card. You must fall under the strict Chase 5/24 requirements to obtain this card — that means you can’t have opened more than five new credit card accounts in the last 24 months.

Our verdict: If you fall under the 5/24 requirement, the Chase Sapphire Preferred is one of the best travel cards to put in your wallet.

Click here to learn more about the Chase Sapphire Preferred from our partner The Points Guy.

Read more: Chase’s 5/24 rule — what it is, and what it means for your credit card applications

Chase Sapphire Reserve

Credit score of successful applicants, as reported on Credit Karma: Low 700s to 850

Chase is a notoriously strict card issuer, but for the Chase Sapphire Reserve, it really takes it to the next level. This card is a Visa Infinite card, with a credit line minimum of $10,000.

You’ll need an excellent credit score (typically above 720) to qualify for this card, along with a sufficient income to service an account with this large a credit line. You also must meet the infamous Chase 5/24 rule.

Should you apply if you don’t meet these criteria? Maybe. The best way to apply is with a Chase banker in a branch, who can work to understand your personal financial situation and advocate for you with underwriting.

Another option is to apply for the Chase Sapphire Preferred (which is easier to get) and ask to upgrade after the first year. This is often possible.

Our verdict: If you have a high income, a high credit score, and fall under 5/24, this is one of the best cards to put in your wallet. It’s hard to get, and worth keeping if you do!

Click here to learn more about the Chase Sapphire Reserve from our partner The Points Guy.

Read more: Chase Sapphire Preferred vs. Chase Sapphire Reserve

Capital One Venture Rewards card

Credit score of successful applicants, as reported on Credit Karma: Mid 700s to 850 (but very few data points)

Unlike most card issuers, Capital One provides detailed information on credit quality required to open its cards. And yes, we did say credit quality; it isn’t looking just at your credit score, but how you use credit.

To Capital One, “excellent” means: “I’ve never declared bankruptcy or defaulted on a loan; I haven’t been more than 60 days late on any credit card, medical bill, or loan in the last year; I’ve had a loan or credit card for 3 years or more with a credit limit above $5,000.”

The Capital One Venture earns 2x miles on all purchases, plus 10x miles on paid hotel bookings made at hotels.com/Venture. You can redeem miles to offset travel purchases on your statement, or transfer them to airline partners like Air Canada and Etihad.

Our verdict: Capital One makes its underwriting criteria clearer than most issuers. We recommend not applying unless you meet these requirements.

Click here to learn more about the Capital One Venture from our partner The Points Guy.

American Express cards

Although American Express is perceived as an issuer with tough underwriting criteria, some online forums disagree: As long as you’re currently in good financial shape, it’s believed to be relatively easier to get an American Express card than other cards.

That being said, not all Amex cards follow the same underwriting criteria. It’s generally harder to get approved for cards like the Platinum Card® from American Express that have higher credit lines. Meanwhile, even college students (with no adverse credit history) have reported being approved (with a low credit line) for lower-tier Delta cobranded cards like the Gold Delta SkyMiles® Credit Card from American Express.

Our verdict: If you have terrible credit, you probably won’t be approved for an American Express card. But you might be approved (albeit with a low credit line) if your credit isn’t perfect, especially if your recent credit history is good and your income and employment meet the criteria.

Alaska Airlines Visa Signature credit card

Bank of America has an unusual approach to the Alaska Airlines Visa card. It has a Visa Signature version of the card, which has a minimum credit line of $5,000. It also has a Platinum Plus version, which has slightly different card benefits and a credit line below $5,000.

When you apply for the Alaska Airlines Visa, your application will be evaluated against the criteria for both cards —meaning that if you don’t qualify for the higher credit line of the Visa Signature card, you could still be approved for the Platinum Plus card.

The sign-up bonus and companion fare offer used to be different for both cards, disappointing many applicants. Fortunately, this has now changed and you’ll receive the welcome bonus you expect (and the companion fare you expect) if you’re approved for either credit card.

Bank of America is relatively lenient when it comes to approval for the Platinum Plus card, offering this card even to people with limited credit history. Accordingly, this may be one of the easier travel rewards credit cards to get.

Our Verdict: One of the easiest rewards cards to get, and one of the best airline programs in which to bank points. What’s not to like?

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How to improve your credit score for loan applications

You can use an online credit reference agency such as Equifax, Experian or Credit Karma to check your credit file for free. On your credit file, you will …

Applying for loans can be stressful, especially if you have a low credit score. Whether you’re applying for car finance, a mortgage, credit card, personal loan or any other type of credit, you’ll usually need a good credit score to be accepted for a loan.

If you’ve ever been refused car finance in the past or any other type of loan, you’ll know how disheartening it can be. Your best chance of being accepted for different types of loans is to increase your credit score. There are a few easy ways in which you can increase your credit score.

Check your credit file

The first thing you should do before you apply for any sort of loan is check your credit file. Before you can start rebuilding your credit score you should know where you stand. It can also be surprising if you don’t know how good or bad your credit is. You can use an online credit reference agency such as Equifax, Experian or Credit Karma to check your credit file for free.

On your credit file, you will get access to a credit score, personal details, a list of your credit accounts, any financial partners, public record information such as County Court Judgements, electoral roll information and previous/current addresses. All of this information can be viewed by yourself and is sometimes available to some potential lenders, depending on the type of search they provide on your credit file.

Improve your credit score

Register on the electoral roll

Many people don’t know that this is an easy way to increase your credit score. In the UK, the electoral roll is an official list of people in a certain area who are entitled to vote in an election. Even if you don’t care about voting, being registered on the electoral roll can increase your credit score. This information is provided on your credit file and lenders use this info to very that you are who you say you are and your current address. Lenders tend to favour people who don’t move around as much so this can strengthen your applications.

Pay all your bills on time

This may seem simple, but it can be quite hard if you have had trouble in the past making repayments on time. However, even a few months’ worth off meeting all your financial deadlines can increase your credit score. Your credit score is all about future predictions, so showing evidence to potential lenders that you are a responsible borrower can work in your favour. If you struggle making repayments, why not set up direct debits for the day after you get paid or use payment reminders on your phone or calendar? You should also try to make your payments in full as making the minimum payment requested on credit cards or store cards may indicate to lenders that you are struggling to handle your current credit.

Check your file for mistakes

As mentioned, the first thing you should do is check your credit file. When you check your file, you should make sure all your information listed is accurate and up to date. Even an incorrect address history or spelling mistake can affect your credit score. You should also look for any fraudulent activity. If you suspect any fraudulent activity, you should contact your credit reference agency as soon as possible. Your identity could be used to build up debt which you will be liable for. You should also ask the credit reference agency to make a note of any corrections on your credit file to make it clear that the activity was not your fault.

Check for any financial partners

You can take out joint credit with other trusted partners to strengthen your credit applications. For example, many people who are search for bad credit car finance many be worried about being accepted so providing a joint application can increase your chances of being approved. If you have taken out credit in the past with someone as a joint application, you may still be financially linked. If you no longer have an open application with someone else, it’s best to disassociate yourself. If your financial partner has credit difficulties, this can also drag your score down too. You should contact the credit reference agency to make a note of the dissociations on your credit file.

Keep your credit utilisation low

When you take out credit, you will have a credit utilisation which is the amount of available credit which you actually use. For example, if your available credit is £1,000 and you’ve used £500, this means your credit utilisation ration is 50% Usually using less of your available credit can be seen a positive thing to lenders. As a general rule of thumb, you should only use around 30% of your available credit. This indicates to lenders that you are responsible with the money you have borrowed.

Don’t make multiple credit applications

When you apply for any sort of credit, potential lenders will usually check your credit file. If you are shopping around for the best loans, it’s best to stick to companies who only provide a soft search on your file. A soft search is recorded on your credit file but won’t affect your credit score and isn’t visible to lenders. A hard search however is recorded on your credit file so lenders will be able to see when you have been declined for credit. Multiple hard searched in a short space of time can lower your credit score and affect your chances of being approved for loans.

Consider a credit building card

If you have a low credit score because you have no credit history, you could consider a credit building card. A credit building card is designed for people who have little or no credit and can also help people with bad credit. You can use these cards to make a few payments each month and then pay them back on time and in full, this can provide strong evidence that you are able to make your repayments. However, you should only consider a credit building card if you are confident you can make your payments on time. Never take out a credit building card if you are unsure about repayments as this may result in more debt if you can’t keep on top of your payments.

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