Archive for the ‘Credit Cards’ Category

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Credit Cards Replacing Paper Money

Monday, August 2nd, 2010

Credit Cards Replacing Paper Money

Credit Cards Replacing Paper Money

A credit card is a small piece of rectangular plastic that is no thicker than a sheet of paper, though it cannot be folded. Initially credit cards were metal tokens in the shape of coins, then they changed to metal plates to celluloid then fiber and now plastic with perhaps a photo of the holder and a magnetic strip on the reverse containing security information such as a personal identification number enabling the card to be used at money dispensing machines (ATM’s) and merchant establishments.

What is meant by ‘Credit’?

Credit is the system of buying some produce or service without having to pay for it at the time of the transaction. The payment is made at a pre-determined later date with the addition of a fee to the bill amount. This is like loaning someone money to buy something without actually giving them the cash but instead giving them the product they want to buy. So, the system of credit is not new to humanity in fact, it is as old as civilization itself or perhaps even older. The entrepreneurs of the inhuman kind have been proclaimed responsible for identifying human needs and wants as a rollicking business, and so they invented the credit card system. Though, disputed by many, The Diners Club is credited to be the ones to invent the credit card in 1950.

When Were Credit Cards Invented?

In contradiction to the theory that ‘The Diners Club’ started the credit card system, the Encyclopedia Britannica records the origin of credit cards in the United States as far back as the 1920’s. During this time firms such as oil companies and hotel chains started issuing credit cards to their regular and valued customers who were free to use their services and pay them at a later date. These cards were only useful for purchasing goods and services from the companies and establishments that issued the card. However, references to credit cards have been found as early as 1890 in Europe. It was only in the late 1930’s that companies started accepting each other’s credit cards and this is when things began to get complicated for accountants.

Computers Promoted The Use Of Credit Cards

In the beginning there were no computers to record the credit card transactions and the process of verifying the credit balance of the card was done manually through a regularly updated credit card directory, much like a telephone directory. This system was time consuming and tedious and provided many loop holes for credit card fraud. Today, with computerization, the use of a credit card is instantaneous. All one needs to do is to ‘swipe’ the card through a slot machine and the amount entered. If there is adequate balance in the account of the holder the transaction is completed and the customer billed a month later. Usually credit cards allow for a 50 day credit free period. If the outstanding bill is paid during this time the customer does not have to pay any interest on the transactions, else there is a whopping 2.9% charge per month on the bill amount.

Who Issues Credit Cards?

Banks and financial institutions are the main issuers and promoters of credit cards. The invention of the first bank-issued credit card is credited to John Biggins of the Flatbush National Bank of Brooklyn in New York. This was the year 1946 and Biggins did not know at the time that he had hit upon an idea that would take the world of credit by storm in times to come. From this first credit card called “Charge-It” many cards have flooded the market such as the all famous “American Express” credit card and the Diners credit card. The Bank of America issued the BankAmericard in 1958. This card is now known as the “VISA” card. Around the same time the popular MasterCard came into being. These are the two prevailing cards being used today. The era of plastic money had begun.

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Credit Card to Repair Credit-Where Can You Find this Today?

Sunday, August 1st, 2010

Credit Card to Repair Credit-Where Can You Find this Today?

Credit cards are considered debt by economists even before you begin the first swipe of the card. When people get credit cards, they often have a misconception that this is extra money that can be spent. But in reality it’s not. It’s a debt that you have to pay with interest. Credit card companies earn revenues from the interest rates and fees that they get from credit card users and the interest rates from one credit card to another varies. Paying the principal amount with the interest can be hard and put people into bad credit standings.

Having a credit card has its perks. It is usually one financial statement that can reflect how good you manage your finances if you are able to make the payments in time without incurring any bad debts. Once a person has bad credit ratings or no credit record, their loan applications or credit card applications may get declined. But there are credit card companies that offer credit cards to repair credit or create a credit report. Online credit card review sites have a section for those with good credit and bad credit standings. Banks can also provide credit card to repair debt together with a secured or maintained savings or checking account.

These credit cards are either secure or unsecured credit cards. The secured credit card only allows a limit that will be computed based on how much a person has in his bank account. While unsecured credit cards allow consumers to transfer their balances to credit cards that have lower interest rates. There are some unsecured credit cards that offer zero percent interest for the first six months, before they apply the regular interest rates. There are also debit cards that allow consumers to pay with the conveniences of a regular credit card.

The credit card companies that offer these bad debt credit cards report to financial credit offices if you are able to make the monthly payments in order to bring your credit standings back to good ratings. They can also provide a credit report for those without credit histories like students.

The only catch to these types of credit cards are that they have higher fees and may have higher interest rates. So it is also important to check the interest rates before applying for a bad debt credit card. There are a lot of online sites that will give you a comparison of different credit cards to repair credit.

Even if a person with a bad credit history is able to get a credit card to repair credit approved, it is still up to them in order to make sure that they pay their monthly dues. These credit cards are only avenues for people who want to regain their good credit standings back. It is still up to the self control and money management of a person that will determine if they can repair their credit standings or not.

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Why Get a Prepaid Canadian Credit Card?

Saturday, July 31st, 2010

Why Get a Prepaid Canadian Credit Card?

Also known as secured credit cards, prepaid Canadian credit cards are especially created for residents of Canada. It is interesting to note that there is a difference between secured credit cards and prepaid cards. One major difference is that a prepaid credit cardholder is not given a credit line.

Instead, the prepaid cardholder is required to submit funds to his/her account to be able to use the card for purchases. On the other hand, a secured credit provides its holder with a credit limit just like a regular credit swipe card.

However, in order to get approved, the cardholder must first submit a security deposit to his/her account which will be used in case of defaults in payments. This gives the card issuer the assurance that the cardholder will not default his/her debts.

Below are the four main reasons why Canadians may opt to apply for a prepaid Canadian credit card.

1. Get a guaranteed approval. Those who cannot get approved for a standard credit can be sure to get a guaranteed approval with a prepaid credit card. In fact, you can be sure to get a prepaid one in Canada regardless of your credit score.

Even without credit history, you can qualify for a Canadian prepaid credit card. Yes, providers of these cards do not do a credit check on their clients. There’s no need to worry whether or not you have good or bad credit.

2. Rebuild your credit score. Prepaid credit cards for Canadians are wonderful tools in rebuilding credit history. If you’re living in Canada, you can work on improving your credit score by acquiring this type of credit.

If you haven’t yet established your own credit history, a prepaid credit card can help start building your credit rating. While regular credit cards often require good to excellent credit rating, a prepaid card doesn’t. It gives consumers the chance to start building or rebuilding their personal credit history without any difficulty.

3. Enjoy the convenience of having a credit swipe card. Having a credit swipe card can come in handy especially if you’re frequently on trips or on the road. A credit card can be used for purchasing anywhere without the need to bring cash so it’s a lot safer to carry around.

It also gives you the option to shop over the internet from merchants anywhere in the world. All you need to do is deposit an amount that matches your shopping budget and you’re all set to use your prepaid credit card. If you’re wary about overspending, deposit only a limited amount to your account.

4. Requires a low security deposit. Unlike other types of secured credit cards, most prepaid credit cards require a security deposit of only . The difference with a secured credit is that your credit limit is often determined based on the amount of security deposit you’ve submitted. The security deposit required for a secured card can range from 0 to as much as 00. If you don’t have that cash available, you can opt to apply for a prepaid credit card instead.

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Learning About Credit Cards – What Are Student Credit Cards?

Saturday, July 31st, 2010

Learning About Credit Cards – What Are Student Credit Cards?

Student credit cards are directed towards students who want to have some extra spending money when they are at school and also so that they have money in case of emergencies. Before students apply for credit cards, they should learn as much about not only the student credit cards, but also credit card borrowing in general.

There are two types of student credit cards that you can use – a secured credit card and an unsecured credit card. Credit cards that are secured hold a bank account as collateral. These types of student credit cards usually offer the lowest interest rate and do not have the danger of you overspending. Students who want to use credit cards are wise to choose secured cards as they will not only build up the credit rating of the student, but will also not allow the danger of overspending.

The other type of credit cards issued to students is unsecured credit cards.  These credit cards have a spending limit, a higher interest rate and are not held against a bank account. These student credit cards can be co-signed by a parent or applied for by the student alone. They also offer a student a chance to establish credit and come in handy in case of a financial emergency.

When obtaining student credit cards, you should look for those with the lowest interest payments as well as the lowest fees. You can find out all you need to know about credit cards as well as which one is right for you by going online and discovering about the different cards that are out there.  Before signing up for any student credit cards, it is important that you do your homework and investigate the different choices you have when it comes to credit cards.

You also need to learn about credit. You should only use credit cards when needed and with the intention of paying off the bill every month. Using a credit card for all of your purchases is fine, as long as you are aware of the budget that you are on. You should never spend more than you can afford when you are using a credit card. This is important for anyone to learn, but especially for students credit card holders as they are just starting out in the credit world and do not want any black marks on their credit. It can be very difficult to control spending habits for those who just get a credit card.  There is a temptation to get more credit cards and to spend as much as possible on student credit cards, including buying things that you do not need or cannot afford.

Students should use the student credit card responsibly and develop good budgeting habits that will help them use their credit cards properly in a way that will help them establish good credit that will follow them for the rest of their lives. When ready, a student can apply for student credit cards right online and have a sense of security as well as a way to build their credit score.

Student credit cards are credit cards used to help students develop credit as well as help out in times of financial emergencies. You can apply for a student credit card by going to Extra Credit Cards.

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Did You Know That You Can Get a College Credit Card?

Friday, July 30th, 2010

Did You Know That You Can Get a College Credit Card?

As its name would suggest a college credit card is simply a credit card which has been specifically designed for college students and which is perhaps more commonly known as a student credit card. The idea behind student credit cards is that they allow students to learn all about credit cards and to experience the benefits of credit cards early in their lives. In effect, a college credit card is an introduction to the world of credit cards and, although s student may have had experience of using a supplemental card on a parent’s credit card account, represents the first credit card which the student will have in his own right.

To all intent and purpose college credit cards operate in exactly the same way as normal credit cards but there are a few differences which you need to know about. These differences arise because the credit card companies are taking something of a risk by extending credit to people who will generally not have any credit history and thus need to protect themselves from the increased risk of debt on student credit cards.

The first important difference is that the credit card companies require a parent or guardian to co-sign the student’s application for a card, so that the parent or guardian is aware that the student is applying for a line of credit, and will also require the parent or guardian to stand as guarantor for the account. In other words, if the student defaults on the card then the parent or guardian will be legally liable to make good on the debt.

The second difference with a student credit card is that the credit limit is set at a lower level than that seen on normal credit cards and typically at between 0 and ,000. This limit is also set at a reasonably low level because this is considered to be sufficient to meet the needs of the vast majority of college students.

Finally, the credit card companies also offset their risk by setting the interest rates on college credit cards (the card’s APR) higher than normal to try to stop students from overspending on their cards and to encourage them to keep their spending within the amount which they can afford to pay off each month.

On the surface college credit cards may not seem very attractive to those of us who are used to using normal credit cards but in fact they can be a very useful tool for teaching youngsters to handle credit responsibly and have the added benefit of providing students with the ability to build up a good credit record, which they will find very useful once they leave college.

College is a very expensive time for most students and there are very few students who will make it through college without a mix of parental support, grants and scholarships, federal loans, private loans and a part-time job. This is hard enough in itself to manage and all too many students have problems coping with this and end up having to refinance their loans, often through student loan consolidation. If we now add a credit card into the equation we might just be providing the straw that breaks the camel’s back for some students.

Whether or not college credit cards are a truly good idea or simply another marketing ploy by the credit card companies is something which you must judge for yourself but, whatever your view, they are certainly something which must be approached with both eyes open.

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