Archive for Standard credit cards
Why Credit Card Abuse Causes So Much Debt
Posted by: | CommentsCredit cards, when used properly, are convenient and a great budgeting tool. If abused, though, credit cards can be the start of a years-long nightmare and unbelievable stress. Most households that have credit cards have and use an average of eight cards.
First, let’s look at the cost of a credit card. If you sign up for a credit card and pay off the balance each month you’ll be building good credit and won’t pay any interest or fees on your purchases. If you’ve shopped around and found a card with no yearly fee, even better.
Carrying a balance, though, is very costly. Interest rates can be as high as 21% and by paying the minimum payment per month (usually about 2% of the balance) credit card companies are quite happy to loan you money for your purchases. Buying something such as a refrigerator on a standard credit card and paying the minimum payment can make that appliance very costly.
A $1200 refrigerator would result in a monthly minimal payment of $24. At that rate, it will take you nearly five years to clear the debt and interest and that appliance will have an actual cost of nearly $2,000! Your credit card might fulfill an emergency need but as you can see, it would be wise to either transfer that debt to a low or no interest credit card or pay it off as soon as possible.
The example of the refrigerator illustrates how consumers get into debt and stay there. Obviously, if you don’t have an emergency fund (and many of us don’t) you will have to depend on your credit cards if your car breaks down or unexpected necessary expenses arise. Paying off these balances should be one of the first priorities in the budget, both to avoid interest fees and to have that credit limit available.
Obviously, it’s best to pay your credit card balance in full every month. This will save you hundreds of dollars a year in interest charges and fees, as well as keeping the card clear in case you have a true emergency. The average cardholder has $9800 in credit card debt and pays only the minimum monthly payments. They pay nearly $1000 per year in interest on that debt. So how do you avoid becoming a statistic?
A smart credit card holder uses the card the same as cash when something is charged on the card, they subtract it from their checkbook register. At the end of the month, they can retrieve those entries and pay the balance on their credit cards. They’ve already marked the money as spent so they haven’t overextended their budget. The well informed consumer also knows his or her limitations; if they just can’t live without that bracelet or new suit, they’ll buy it but only after a cooling off period of a few days. These strategies help keep people out of debt and financially healthy.
With a little restraint and common sense, avoiding impulse purchasing and paying off your card balance in full each month, your credit score will stay healthy and so will your budget!
Rebuild your Credit History With Prepaid Credit Cards
Posted by: | CommentsSo you’ve had some debt problems – maybe due to something outside your control such as a divorce. Now you’re getting your life back on track, but there’s a problem. Because of your bad credit record, no-one wants to lend you money any more.
Well, don’t despair! With prepaid credit cards, no credit checks will be made against your name when you apply. As long as your age, residence and social security number check out, approval is normally guaranteed.
Here’s how prepaid credit cards work. You apply just like any other credit card, but with prepaid credit cards you also deposit a sum of money in a linked bank account. Initially at least, the amount of money in this account then becomes your credit line.
Obviously this means that, to start with anyway, you can’t use a prepaid credit card to borrow money. However, the best cards report to the three main credit reference agencies (Experian, Equifax and TransUnion) every month. As long as you use your card responsibly, your actions will help to repair your credit record, or indeed to establish one for yourself if you haven’t had credit before.
Within a few months, if you have shown that you can use your card responsibly, you are likely to be offered a bigger credit line by your card issuer. With your ever-improving credit history, you may also be able to apply successfully for a standard credit card or other forms of credit, such as a bank loan.
Your prepaid card can be used just like any other credit card to buy things, whether on-line, over the phone or in person. There is nothing on the card to reveal that it is prepaid. The only people who will know this are you and your card issuer. So if you need to buy things using a credit card and can’t otherwise get one, a prepaid credit card could be the ideal solution for you. And all the while you will be rebuilding your credit history as well!
One drawback with prepaid credit cards is that, unlike ordinary credit cards, you may be asked to pay a processing fee when you apply. This is in addition to the money you will have to deposit with the issuer as security. If you regard this as a stepping stone to establishing a good credit record, however, this one-off fee is literally a small price to pay.
Prepaid credit cards are available from a growing number of issuers. One example is the New Millennium Bank, which offers a prepaid Platinum Visa® or Mastercard®. As well as the benefits mentioned above, the NMB card offers $100,000 travel accident insurance, extended warranty protection, and a special high introductory savings rate on your deposit.
As with all credit cards, however, it is important to shop around and not simply apply for the first prepaid card you see. Different cards offer different combinations of terms and conditions, and the best card for one person may not be the same as for his or her neighbor. Credit card comparison sites such as http://www.finest-credit-cards.com make this easier for you by listing all the best current credit card offers, and also have a range of articles offering independent advice and information.
0% APR Credit Card – Which One Is Right For You?
Posted by: | CommentsThe first thing that comes to mind with credit cards is the interest rate. Most people want to stay away from credit cards because interest fees can amount to a lot of money. Nevertheless many people have at least one or two credit cards in their wallets, all with varying interest rates.
If you’re a credit card holder, you should know about 0% APR credit cards. Simply put, a 0% APR credit card has a 0% interest rate for a specified period of time. These types of credit cards offer the convenience of a standard credit card and can help save you money for a period of time.
During the 0% period, you won’t pay any interest on debts you may have incurred. Usually, revolving charges add a certain percentage of interest to your balance each month. This can make it much harder to pay off the debt, especially if you can only afford to pay the minimum payment. 0% APR credit cards can help you get out of debt faster when you transfer the balance from an existing card.
What Kind Of 0% APR Credit Card is Right For Me?
If you’re looking for a smarter way to use credit cards, just check your mailbox. Everyday many people receive a variety of offers from different banks willing to extend credit. Look for ones that offer 0% APR. Be sure to read the terms and conditions so that you understand what is meant by the zero-interest time period and any related fees that you may have to pay. In many cases, banks offer 0% interest for one year or more. If you don’t receive any 0% APR offers in the mailbox then have a look online or visit credit card websites.
If you already have credit card debt and are looking for a way to save money on interest, look for banks that offer 0% APR on balance transfers. Some banks offer a low APR on regular purchases while at the same time, allowing you to transfer balances from other credit cards at zero interest for a specified period. Many banks offer this type of deal, which means they are making some money – read the small print. Over time, you can save money and pay off debts quicker with 0% APR credit cards if you are careful.
Who Offers 0% APR Credit Cards?
There is no shortage of banks offering people 0% APR credit cards. Popular credit card companies like Capital One, Washington Mutual, American Express and Discover generally extend 0% APR to new account holders throughout the year. Check the bank websites to see which offers are available or search online companies for a listing of all the offers. Keep an eye on your mailbox for credit card offers, as many of them try to entice you with free offers like 0% APR for one year or longer.
Summary:
If you’re a credit card holder, you should know about 0% APR credit cards. Simply put, this type of credit card has a 0% interest rate for a specified period of time. During the 0% period, you won’t owe any interest on your debt. If you’re looking for a smarter way to use credit cards, just check your mailbox. You’ll see a variety of offers from different banks willing to extend credit. In many cases, banks offer 0% interest for one year or more.
Tips In Choosing The Best Bad Credit Card
Posted by: | CommentsHaving bad credit does not mean one can never apply for good credit cards. Because of so many people having problem with their credit, credit card companies saw the potential in providing service for this people. Thus, credit card companies came up with bad credit credit cards. As the name suggest, these credit cards are especially created to cater people with less than perfect credit history.
Bad credit credit cards or secured credit cards do come with higher interest rates and fees to make up for the risk from customers who have a poor credit history. When compared with standard credit cards, these cards also impose lower credit limit for its card holders since they were not able to present impressive credit.
However, this doesn’t mean that credit cards are inferior since these cards can be a tool for people with bad credit to regain their credit reputation. Just how is this possible? By submitting regular payments on your account, secured credit cards report to the major credit bureaus to ensure that your credit report is updated.
Understandably, not all bad credit cards are offered in the market are great and it is up to you to do your choosing carefully. One of the first things you should look for with a credit card is whether it reports to the major credit bureaus. There are some secured credit card providers that do not have this important provision. This is crucial in helping you rebuild your bad credit history.
Of course, just because you don’t have an excellent credit doesn’t mean you have to settle for unreasonably high rates that credit cards impose on their clients. It is possible to find secured credit cards with interest and fees that do not take advantage of your poor credit.
Another important factor to check about secured credit cards is the minimum amount of deposit required to get an approval. This security deposit is held in your account in case you default on your debts, thus giving the bank a guarantee that they can use this money to pay for the debts your defaulted. Take note also that some banks place this security deposit in an account that bears interest. Make sure that you’ll be able to claim this security deposit along with its interest after building your credit.
The use of your security deposit may also differ depending on your bank. Some creditors will take your deposit if you miss a single payment in your account while some banks allow at least 5 to 6 months before deciding that the card holder has completely defaulted his debts.
Most importantly, choose a secured credit card that allows you to convert your account to an unsecured one after a certain period if you can prove that you are submitting all your payments dutifully and timely. This way, you can enjoy the privileges that unsecured credit card holders enjoy such as lower APR, higher credit limit, and less restrictions.
Deep Look at a College Credit Card
Posted by: | CommentsEach person has different financial requirements and hence credit card companies have devised various kinds of credit cards, so that they suit individual financial requisites. For instance, for businesspersons, there are business credit cards, similarly for self-employed people there are personal credit cards. Then, why not for students? Of course, student credit cards too exist alike other types of credit cards. They are available from banks and financial institutions.
These credit cards are devised especially for students to manage their routine expenses of college and to build good credit scores before they graduate from their respective universities. These cards are very useful incase of any emergency for students.
Things to Know:
In recent days, credit cards have almost become an essential thing to carry. At times, people end up in debt problems due to improper usage of credit cards. However, in case of student credit cards, you need to beware and use them only for expenses related to studies and academics. There are many instances, wherein students use these cards for personal use and eventually fall under huge debts.
Usually, keeping in mind the students, most credit card companies have designed credit cards for students with lower interest rates. Hence, you are less likely to end up in heavy debts. Nonetheless, pay all your monthly bills regularly, as these cards also have late payment charges as standard credit cards hold.
A latest study revealed that around 80% of college students possess student credit cards with a normal balance of $3500. A worrisome thing to consider here is that, when students make use of these cards to purchase things, they fail to see how much they spend on their cards. Another worrisome trend is that many students use these credit cards to reimburse their loan amounts.
Always remain be cautious for your spending habits with these credit cards, because if you spend excessively or fail to pay the dues on time, certainly, you may end up disbursing additional interest charges. This may also damage your credit standings. This may also influence a loan application in the near future.
Alternatives:
If you think that these credit cards are a bit expensive according to your budget, why not consider prepaid credit cards designed for students like you. They are risk free and help to manage your financial conditions well.
For these kinds of credit cards, there is a certain credit limit imposed, so you cannot spend more than what you have. Thus, you do not have to pay any additional charges for extending overlimit.
You can apply for such types of credit cards online. You get the application processed within a matter of hours with a response from the online credit card company within a few minutes.
Even though student credit cards are both trendy and practical, you need to use these cards prudently. In recent days, there are numerous rewards available on these credit cards, hence it is wise to select such cards to gain maximum benefits out of them.