Gas Reward Cards
May 26, 2008
Bad Credit Credit Cards Alternatives
January 7, 2008
Couple of days ago, on a major news agency, I read an interesting article about the worst credit cards. This article pointed out some very interesting facts about bad credit credit cards.
Let’s review some of these items.
The first was an application fee of $29.00 to open the account that may seem reasonable to a person who is desperate to rebuild his or her credit.
The next point covered was annual fees. According to the author of the article, one credit card company charges $150 per year for the privilege of allowing the members carry their card. And finally the $6.50 per month fee in addition to the annual fee.
Ouch and double ouch! We haven’t even begun talking about the interest rate charges. The impact of bad credit should be limited to that - bad credit - and not necessary spill over to cloud your judgment to make bad decisions as well.
My suggestion is to take a deep breath, move away from the computer, grab a cup of coffee or tea, get a notepad and a pen and go to your dining table. Begin with writing down why you are looking for a bad credit credit card. Don’t judge yourself or your motives. This is a brain storming session and not a self worth analysis.
A few examples of what you may come up with are:
<ul><li>I want to reestablish my credit.</li><li>I have maxed out my credit cards and need a new credit card to pay the old one.</li><li>I cannot take advantage of online bargains without a credit card.</li><li>I need a credit card as a form of identification when I write checks.</li><li>I need to fix my bad credit. </li></ul>
This list is different for everyone and based on your answer, you may have options you have not considered before.
Let me give you couple of alternatives to bad credit credit cards.
If you need to take advantage of online bargains, you can apply for a debit card from your bank, savings institution or credit union. A debit card works just like a credit card but it is secured by the funds in your account.
If you need to reestablish your credit, you can use catalog unsecured credit cards that allow you to shop with thousands of merchants. Most of these cards do not even require employment verification and do not check your credit history.
Most people with bad credit history have not learned how to manage money and planning is part of money management. A note pad, a pen and the time to think through things and put them on paper is one of the best money management strategies.
Secured Credit Card Scams
January 7, 2008
A page from ftc.gov site begins with the headline Secured Credit Card Marketing Scams and then it places a copy of an advertising sample that reads, “ANYONE CAN QUALIFY FOR A MAJOR CREDIT CARD! Separated? Divorced? Bankrupt? widowed? BAD CREDIT? NO CREDIT? NO PROBLEM!”
You notice that the ad is designed to appeal to a wide variety of clientèle with one thing in common, which is a hardship has placed them in a vulnerable spot and they want to believe there is a way out.
Government sites are there to let everyone know that there is a solution but at the same time, you the customer, need to do your homework. So what is this homework?
First of course is keep a cool head, then get information and check the secure credit card offers with a bit of healthy skepticism.
Let’s start with what is a secured credit card?
Most credit cards are give you a line of credit based on your credit history. They do not ask you to place anything on the line except your good name and your signature.
But what if your good name is tarnished and your credit report shows it? Then cash is required. A secured credit card issuing company requires you to open, fund and maintain an account as security for your line of credit.
This required savings deposit could be as much as several thousand dollars. And your credit line, the amount you can use, could be as low as half of what you deposit.
Hopefully you get an interest on that deposit but when was the last time that the savings account deposit even came close to the charges on your credit card.
You may also have to pay application and processing fees to get started.
Does this mean to avoid a secured credit card at all costs? Not at all, it just means to watch out for scams. Don’t send money to an organization you know nothing about. Don’t call a 900 number for information. Read the fine print and above all, keep a cool head.
Credit Counseling Organization
January 7, 2008
What you want to get from a Credit Counseling Organization, to start with, covers the following:
- Are they licensed to offer you services in your state?
- What are their set-up fees?
- What are their monthly fees?
- Are there any other fees or contributions required?
- What are the qualifications of their counselors?
- Are their counselors accredited and/or certified by an outside organization? If so, by whom? If not, how are they trained? Third party certification adds an independent unofficial auditing that is helpful.
- How do their counselors get compensated? You want to avoid anything that resembles commission.
- What assurance do you get that your private information remains confidential and secure?
- What services do they offer? Debt management is just a part of the debt issue and you may need other services to help you accomplish what you need. Look for a wide range of services without bias. If an organization says they have a wide range and then push a particular service such as debt management plan (DMP), then they are biased.
- How can they help you with both the immediate debt problem as well as long term plan to help you stay on track?
- Will you have a formal written agreement or contract with them? You need everything in writing and you need time to review them before you sign. Consider verbal promises invalid.
Once you get the information in the mail you need to confirm that the credit counseling organization is both legitimate and reputable. You can check their legitimacy by contacting your state Attorney General, local consumer protection agency, and Better Business Bureau. See if there are licensed and if there are any complaints against them filed by consumers. Remember that a clean record is just a start and does not guarantee service.
Online Credit Card Application Allows Fast Comparison
January 6, 2008
© Vishy Dadsetan
The traditional method of shopping for credit cards by contacting credit companies one at a time, getting information and then filling out their application sheet may be a thing of the past.
Intense competition between credit card companies for your business along with the wonderful development of new software and security protocol have created sites that allow you to compare credit cards fast before you apply for one.
With each credit card company providing new bells and whistles every day, you really need a two stage comparison. The first should be a short side by side comparison that covers the basics of each offer. For example, the introductory rate, annual fees, APR, etc.
The second stage is to expand your research by going to a more detail information about each credit card with pros, cons, reviews and ratings.
You should also have the ability to search for credit card offers based on your requirements.
In using the credit card application search forms, remember that the displayed results depends on your input so in a sense you are putting your credit card knowledge to test. For example in searching for a credit card for people with bad credit you may focus on the lowest annual fee because you have heard that to be a major issue. So, the search result shows you the credit card with the lowest annual fee.
But what about the APR and the cash rewards and so on that reduce the over all cost of a credit card?
In this case, I use search forms but I also look category that shows all the credit cards suitable for those with bad credit, you can then select the one with the lowest annual fee or even go with the one with slightly higher annual fee and much lower APR.
I prefer both methods for a simple reason that if I do not ask the right questions, the search results may not show the credit cards I am looking for. By having pre-determined categories, I can check several categories fast and find the exact credit card I am looking for.
To see the side by side comparison of bad credit credit cards visit bad credit credit card and to see how a credit card application search engine works visit online credit card application
Credit Score Calculations
January 6, 2008
The FICO (Fair Isaac & Co.) credit score calculations consider the following factors:
Your payment history 35% : Do you pay your bills on time? Have you ever been delinquent, or are you consistently late? How about collection notices and bankruptcy? The answer to these questions account for about 35% of your credit score.
Total debt : How much do you owe lenders compared to the total amount you can borrow impacts about 30% of your credit score. If your credit cards are close to being maxed out, it may indicate looming financial problems and a possibility of default and it drops your credit core.
Length of credit history: Approximately 15% of your credit score calculation depends on how long you have had your accounts? Three days, six months, ten years? The longer credit history has a positive impact on your credit score.
Taking on more debt: Are you taking on more new debts? Even applying for too many new cards too quickly may be considered as financial difficulty and impacts your credit score in a negative way. This builds about 10% of your credit score.
Types of credit in use: About 10% of your credit score depends on the type of credit mix you have. High ratio of credit cards and installments loans in relationship to mortgages has a negative impact on your credit score.
Choosing A Credit Counseling Organization
January 6, 2008
The following eleven questions can help you with choosing the right credit counseling organization.
First, you are looking for firms who are willing and open about themselves and their policies and ask them to send it to you in writing. If they hassle you for an appointment or want too many details from you before they send you anything, go elsewhere.
What you want to get from a Credit Counseling Organization, to start with, covers the following:
- Are they licensed to offer you services in your state?
- What are their set-up fees?
- What are their monthly fees?
- Are there any other fees or contributions required?
- What are the qualifications of their counselors?
- Are their counselors accredited and/or certified by an outside organization? If so, by whom? If not, how are they trained? Third party certification adds an independent unofficial auditing that is helpful.
- How do their counselors get compensated? You want to avoid anything that resembles commission.
- What assurance do you get that your private information remains confidential and secure?
- What services do they offer? Debt management is just a part of the debt issue and you may need other services to help you accomplish what you need. Look for a wide range of services without bias. If an organization says they have a wide range and then push a particular service such as debt management plan (DMP), then they are biased.
- How can they help you with both the immediate debt problem as well as long term plan to help you stay on track?
- Will you have a formal written agreement or contract with them? You need everything in writing and you need time to review them before you sign. Consider verbal promises invalid.
Parents against College Credit Cards
January 6, 2008
Some parents either through hard personal experience dealing with credit cards or through education have taken a hard line against college credit cards. If you, as a parent, find yourself in similar dilemma, there are steps you can take.
For example you can add your child’s name to your own credit card. If you do this, you may not want to do it with your platinum card and $50,000 limit. Add them to credit cards with lower spending limits.
You can also check with your credit card company to see if they are willing to have a separate and lower limit on that specific credit card.
This solution allows you to review the newly acquired budgeting and spending habits of your children.
The other option is a debit card. Consider debit cards a plastic reusable check. Instead of presenting a check to the merchant, you present the debit card. Instead of signing the check, you enter your personal identification number. In the end, when your child uses a debit card, the funds are transferred from the bank account.
Debit cards force the user to spend what they have in the bank and no more. And since they typically carry a Visa or Mastercard logo, they can be used anywhere those credit cards are accepted.
You should also check the daily spending limit of a debit card. Most debit cards have very low daily spending limits like $500 or $1,000 regardless of how much you have in your bank account. You can have $10,000 in your bank account and get declined for a $650 purchase if your debit card limit is $500.
What are prepaid credit cards?
January 6, 2008
Prepaid MasterCard cards and/or prepaid Visa cards look exactly like a regular credit card. Neither you and your friends, nor the merchant who accepts MasterCard and Visa will be able to identify it as a prepaid credit card.
You obtain these prepaid credit cards by “pre-loading” them, which means you deposit cash into your account up-front, similar to a pre-paid calling card. Then you use your prepaid MasterCard or Visa anywhere these cards are accepted.
Prepaid Credit Cards are more practical than cash for many with previous credit problems since you pay for your purchases before you even buy anything. This helps you plan your purchases better and avoid impulse buying. Prepaid credit cards offer other advantages:
They are easy to get since they do not require stringent credit check or income verification.
They can be purchased online and at many retail stores.
They have very short credit card application.
They do not have any interest charges since you are not borrowing money.
They cannot lead into credit problems due to inability to pay borrowed funds.
Again, you are not borrowing money. Prepaid MasterCard or VISA have world wide acceptability virtually any anywhere VISA and MasterCard are accepted.
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Identity Theft Prevention
January 4, 2008
Identity theft and need to feel secure in an increasingly insecure world drives millions of Americans to checking their credit report. Still not enough do this and those who do may not know what to look for.
The common information in a credit report are: Personal Information including your name, address, marital status, your current and former employment information.
Reported monthly accounts is where many of the identity theft issues seen. This section includes status of your debts to finance companies, commercial lenders, charge card creditors, larger department stores, etc. The type of account, your credit limit, outstanding balance, the age of your account and your payment habits show up here. Also if you are in default and have not paid any of these accounts, it will show up here.
Public records section is where you find past and present law suits, bankruptcies, liens, and court judgments. As of writing of this article this is the first section you will see in your credit report from ©Experian.
Inquires section shows the detail requests made about your credit history and identifies the who and the when for the last 12 months. Potential lenders interpret too many inquiries as a potential financial disaster looming in the horizon and may shy away from extending you credit or may charge you more to do so.
When you get your credit report, go through it with a fine-tooth comb. From the correct spelling of your name and address to all the inquires made. From your employment information to the the amount you owe on your gas card.
Is your marital status correct? Are they reporting closed accounts correctly by showing “closed by consumer?” Do account show up more than once? Is the history of payments, late or otherwise, reported correctly?
If you find errors, it is your responsibility to report them. The Fair Credit Reporting Act offers a great deal of consumer protection but all of it is no good if you don’t take the steps necessary. Communicate in writing and through certified mail-return receipt serving as proof that they have received your dispute. Follow up after thirty days is you did not receive a response.
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