Credit Cards : A Curse or a Bane

Credit Cards – a curse or a bane?

It seems to me that the majority of people own at least one credit card, and use it regularly. Is this a good thing or a bad habit? Well, it all depends on who you talk to. The older generation typically feel that credit cards are an evil invention that should not be used, ever. If you should happen to succumb, then you should make a payment immediately to clear the balance. How many times have I heard “If we couldn’t pay for something, then we just had to do without”, and this included food.

Nowadays the scene has changed dramatically, and credit cards can be used in a few ways, none of them evil!

Credit Cards can be used:

to pay for goods, saving you from having to carry large amounts of cash around with you, and thus saving you frequent trips to the bank

to pay just one bill, albeit larger than individual ones, rather than lots of little ones

to save you from banking fees when cheques and transactions are charged for

to buy something you need, and then you pay for it later when your credit card statement arrives, and hopefully, you have just got some more income!

to pay for emergencies, be it a car breakdown, or medication in the case of illness, or a flight to a sick relative, or… (fill in your own!)

to treat yourself if you have a rewards card, provided you don’t buy things on your credit card that you wouldn’t normally buy!
Surely those are not all bad things?

Credit Card Applications

With so much else to do these days, consumers want the least possible hassle when they are applying for credit cards, and along with this, they are looking for a short processing time and few, if any, related fees.

But one question that jumps to mind is the question of acceptance. Are you assured a credit card once you apply? Provided you comply with the requirements of the credit card company, then there should be no problem. So, make sure that

you are of the correct age


your income is above the minimum required


you give all your recent addresses, with dates


Once you have applied for your credit card, you can expect your credit ratings to be given a thorough review. The card issuer needs to know whether you pose a risk to them or not, hopefully not! So they will make sure that you pay your monthly bills regularly and on time, whether that means rent or mortgage payments, or any other loans. If you have a history of late payments, then this will not help your application, as it will have an impact on your credit rating.

You can also expect that the card provider will check for delayed payments with utilities and phone companies, as they want to make sure that you will pay their bills on time. And you should realize that companies that have a low interest for their credit cards are more likely to have more restrictions, as they will obviously be more popular for consumers.

Make sure you review credit card applications carefully, so that you know ahead of time all the terms and conditions you will have to abide by for each credit card. This means knowing

annual percentage rate


free or grace period


transaction fees


annual fees


balance transfer rates, and the length of time at this rate


Now what can be rather nice is to receive a pre-approved application form for a credit card in the mail, because this means that you are more or less certain to receive that card, provided you meet their minimum requirements. But make sure you check these requirements before you send in the form. A declined application gets noted on your credit rating.

Of course, nowadays it is very easy to apply for a credit card online any time of night or day, but as usual when using the internet, you need to exercise caution when giving out personal information of any kind. So make certain you are at the website of a major credit card company, and then you should be fine.

Credit Score

  • an important number to know!

For most of us, credit cards, loans and the like are a part of everyday life, and as such it is important to know what your credit score is.

Ok, let’s back up a little. What is a credit score anyhow?

Your credit score is a number which takes into account all kinds of information to help decide whether or not you are credit worthy. The credit score looks at the following:

Your payment history ( what accounts you have on file, for example mortgages, loans and credit cards, and whether these payments were made promptly, how late past due items were etc. )
Any amount that you owe on your accounts, including the percentage of your balance to your total credit used.
The length of your credit history, and how long your accounts have had activity in them.
Whether you have opened any new accounts recently, and the activity on those accounts.
The types of credit you use, whether it is all credit cards, or mortgages, or car loans.

It is also important to note that although your credit score only takes into account your financial information, lenders will also look at your employment history and income level to help them decide whether to approve you for a loan.

Because your credit score takes into account so much of your credit information, you need to make sure that it is accurate, You can do this by contacting a reputable credit bureau like www.equifax.com or www.experian.com, but keep in mind that you do have to give them some of your personal information for them to be able to confirm that you are indeed requesting your own report.

Once you know your credit score, then you can start improving it. Never panic if you discover your credit score is low, it’s a good thing to know, so that you can start improving your credit score, and take advantage of these money-saving techniques.

Increasing Your Credit Limit

There are times when you need help paying your bills because of an unexpected expense, due to a car breakdown, or illness, or, whatever. First of all, don’t feel badly about this. It happens to most of us at one time or another, when income just will not meet outgoing expenses. At those times you may want to consider asking your credit card company for an increase in your credit card limit to help you through a difficult time, but note that this will not necessarily be an automatic increase, and it does depend on your credit history with the company.

So keep in mind during the good financial times that credit card companies will consider the following before increasing your credit limit.

Your credit card worthiness.


Do you really look like a good proposition to them?


Have you paid finance charges on your card in the past? (this attracts positive attention from the credit card companies, provided you pay back on time!)


Did you pay them back regularly?


Have you stayed within your credit limit?


Have you used your card regularly to prove you can stay within the credit limit and pay back on time?


Do you pay more than the minimum each month? Obviously it is better if you can pay the balance in full each month, but most of us have months where that just is not possible.


Avoid late payments whenever you can. If you are going to be late, then a call to the credit card company to explain the situation might just go in your favor.

So to summarize, the best and simplest strategy to being able to increase your credit card limit, when times are tough, is to use your credit card wisely, keeping in mind that credit card companies keep a record of your transactions and payment pattern so they always know payment habits. Try not to carry a balance, but if you do, try to pay more than the minimum each month, and regularly. Your performance in dealing with your bank and your credit card companies will determine whether you’ll get that increased limit on your credit card or not. Then phone them up, explain the situation, and see if you can get that increase. And good luck to you!

Applying for a Credit Card Online

I don’t know about you, but our mailbox keeps getting applications for credit cards stuffed into it on a regular basis. And with all this paper, the process of sorting through brochures and application forms can become daunting to say the least!

This is where the advantages of applying online for a credit card comes in. It’s so much easier to make head-to-head comparisons, because you can obtain the latest information about possible credit cards for you online, whenever you want. Once you’ve made your choice of card, you can then apply quickly and easily online.

So, what do you need to know when searching for a good deal for a credit card online? Here are a few questions to consider:

What do you need the card for?

Where will you most likely use it?

Will you need to transfer balances from another card?

Are you going to be carrying a balance, in which case you will be looking for low interest rates, or will you be looking for a rewards card with no balance ?

Make sure you:

Deal with a reputable company – remember you will be giving them all your personal information when you apply for a credit card.

Read the fine print – always good advice before agreeing to anything! Make sure you know the answers to all of your questions before you apply. If you can’t find the answers on the website, you could try phoning, or else email your question.

Make sure your computer is secure. This is a sophisticated techno-world we live in, so make sure your computer has software protection – it’s worth the investment. And when you have applied, make sure you clear the cache so if your computer is stolen, no one can find out your information that way.
The Internet

Credit Card Pitfalls

These days it is a common occurrence to see people using credit cards every day to pay for their purchases, whether it be gas for the car, lunch out, prescriptions, groceries, clothes or whatever. It makes life so much easier, because you don’t have to carry huge wads of money around with you, just in case you see something you need to buy on that particular day. In fact, you don’t even have to have any money at all the day you use your credit cards! The majority of stores, restaurants etc accept payment by credit card, so there really is very little need to use money to pay for anything these days.

However, (I bet you were waiting for that!) you do have to be aware that everything you buy on your credit card has to be paid for when you get your next credit card statement, and if you do not pay the balance in full by the due date, then you really pay for it in the form of interest payments!

You have to remember that credit cards are not free money. You have a responsibility to pay back the money you borrow, and to do so promptly, and to remember that it is your responsibility, not your parents or spouse, or the next door neighbour! You use the card, you pay the bill. So, when applying for a credit card, make sure you know about all the charges, like

the finance charge, which is interest charged on the unpaid portion of your monthly bill;
the annual membership fee, if any;


the late payment fee, which is charged if you fail to pay at least the minimum fee of your monthly bill by the payment due date. And be aware that the rate charged for this can be high.


If you have credit cards, make sure you get organized, and stay that way, paying your credit card bills on time, in full if possible. If you pay by cheque and mail in the payment, make sure you allow for the time this takes to be delivered and processed. Nowadays, with so many bank transactions possible online, it is much easier just to pay the bills as soon as they arrive in your home, by just going online for a few minutes.

If you can get in the habit of doing this, then, if you are carrying a balance, you will reduce your finance charges a little by paying it at once. If you have to wait for your next pay cheque, then as soon as this has cleared your bank, pay your bills. It feels good to get them paid, and removes some of the worry of receiving late fee penalties by forgetting about them.

Here are some tips to help you manage your credit cards:

Be credit card smart. Apply for a credit card that suits your needs at this time, ie a low interest rate if you expect to be carrying a balance for a little while, or a rewards credit card if you are hoping to treat yourself later and will be paying your credit card bill in full every month.


Use your credit cards wisely. Only buy the things on credit card that you would be paying for in cash, if you carried cash around with you.


Use credit cards, only if you are sure you can repay it.


Try to avoid impulse shopping on your credit card.


Use credit cards for a cash advance only in emergency situations – the interest charged for a cash advance is high!
Seek credit counseling if you see financial problems beginning.

Online Approval for a Credit Card Application

Credit cards have become a common means of paying for goods and services than cash these days, and I often wonder how we coped without them.

There are advantages to having a credit card, namely:

Security. You don’t need to carry a large amount of cash around if you can pay by credit card.
Convenience. If you need to purchase an item immediately and you have run out of cash for the month till your next paycheck gets banked, you can use your credit card and pay that off when your bank account has the cash in it.
Cash advances. Purchases that require cash payments may still be accommodated by the credit card through the cash advance feature. This works like a regular ATM transaction but of course there is generally a high interest rate charged for these transactions.

As with most things, there are disadvantages to owning credit cards:

Interest rates. Unlike purchases made with cash, credit card charges come with a corresponding interest (unless paid before the due date).

The consumer should be aware that these interest rates are different with each credit card company, and each individual card, so you need to make sure that you have the best credit card suited to your needs at this time. Be aware that your needs may change, and you may need to contact the issuing company to see if they have a card that better fits your needs at that time. You need to choose the method of payment (plus the interest rate) that best suit your needs. So keep reevaluating your situation.


Overuse. For some people it can be tempting to use their credit cards to buy things they like and want but don’t really need, just because they have the means, a credit card, to buy them. That’s ok if you have the means to pay for everything when the credit card statement arrives, but is a problem if you are struggling to make ends meet. Make sure you are not one of these people!


Annual fees. This fee varies a great deal between companies, and typically each credit card company offers a variety of cards with different annual fees and different interest rates. Check carefully to get the one most suited to your needs.


Other charges. If you are late with your monthly payment you will be charged a late fee, which can be a significant figure, so try to make sure you pay promptly, and preferably at least a few days before the payment is due, so that you keep your credit record in good shape.

Online approval for a credit card application is generally easier and quicker than a manual application that you then have to mail or fax to the company. And for a faster credit card online approval, take into consideration the following:

Make sure you fulfil the requirements of the credit card company, with regard to age and monthly income.
There’s no point in applying if your income is not at the level required, although you could speak to a representative to see if they have a different offer that is more suitable to your needs.


Do not leave any line unanswered, especially those marked with a red asterisk.


After completion of the online application, immediately send either through email or facsimile the additional requirements needed.


I have heard that credit card companies prioritize the applications of the following group of people:


married couples
persons with a mortgaged house or car
-persons with several dependents


And if you think about it, these are the types of groups credit card companies want to use their services, because they are likely people with many monthly expenses. The more financial obligations a person has, the more likely they are to use credit cards, and the more likely they are to have to pay interest on their balances, or so the thinking goes.

Choose credit card companies that have a promotional offer in the application process, because the chances are that these promos are being offered due to a low application rate, and thus your application is likely to be approved, provided you fulfil all the requirements.


So if you are looking for a credit card then online approval for a credit card application is the way to go.

Low APR credit

The interest rate is definitely a key factor consumers consider before signing up for a credit card. This is especially true for those people who are carrying balances, or suspect they will be, as a card with a low rate will generate significant savings over the months or years it takes to pay off the balance. Thus, the credit card companies offering MasterCard, Visa and other types of cards, are now competing in terms of their low APR (annual percentage rate) packages.

The huge market for credit card shoppers has also made banks and other companies tie-up with credit card companies so that there are now numerous cards that you could apply for, and with so many different cards available, there are many different interest rates, annual fees and late payment fees.

One such option is Citibank’s Dividend Platinum Select card. The offer targets individuals seeking to transfer their balances and earn a reprieve from soaring interest rates – giving the consumer 0% APR for up to 12 months. As an incentive, users of the Citibank card will also be reimbursed for as much as 5% of any cash purchase they make at pharmacies, supermarkets and gas stations and 1% for purchases at all other stores and shops.

American Express also offers 0% APR for initial purchases over a 15-month period with its American Express Blue Card, which features a 3.99% interest rate fixed for the balance of the product. JP Morgan Chase is also offering a cash-back incentive and 0% interest rate for up to 12 months on balance transfers with its Chase Cash Plus Visa.

Of course these rates and special offers are subject to change at any time, so make sure you know the deal before you apply for their credit card. And make sure you read the fine print so you know all costs involved, and penalties should you be late with a monthly payment.

Now if you apply for a credit card with a 0% annual percentage rate, or a low APR credit card for a certain number of months, make sure you know when this rate expires, and try to pay off the balance before this deadline. If you are unable to do so, you will find that the amount of interest that you have to pay each month is sizeable. So also check in advance what your new card rate will be so you can adjust your finances accordingly.

Prepaid Credit Cards

What are prepaid credit cards?

Basically they are credit cards that have been paid for in advance. For example, you may have prepaid your credit card with, say $500. You will then be able to use your prepaid card, just like a credit card up to the $500 limit. And you can prepay at any time.

As with most things there are pros and cons for these cards.

For people who have a poor credit rating these cards can be very useful, because typically they will have a tough time getting a regular credit card because of their poor credit history. But a prepaid card bypasses this problem, because you pay in advance.

And for some people this prepaid card will make life so much easier. To purchase anything online, you need a credit card, and these prepaid credit cards would enable you to do that. The cards look like regular credit cards, and can be used in the same way.

In this high-tech era of computers and machines, the purchasing power of people is mostly based on credit. Nowadays, credit cards are almost indispensable in almost any business transaction. For example, it is very difficult to purchase anything online without a credit card.

People who have a poor credit history though, will have a hard time getting or renewing their credit cards. This is where prepaid credit becomes useful.

There are lenders that offer prepaid MasterCards and/or prepaid Visa Cards. Both these cards can be used like a regular credit card. It is even hard to distinguish which card is prepaid or not, by simply looking at it or even using it.

This is basically how prepaid credit cards work. When an account is opened, the card should be “pre-loaded” with cash up-front. This is like paying for a pre-paid calling card.
Prepaid MasterCards or Visas can be used anywhere as long as these cards are accepted.

Advantages of Prepaid Credit Cards :

Prepaid credit cards can be easily purchased online or in local retail stores, and they do not require any credit check or proof of income, because you pay in advance. The only thing to do is to fill out an application, pay a small for set-up fee for the account and prepay the card with cash. The amount of cash paid will be the “credit limit”.


There are no interest charges, because if there is no money in the account you cannot use the prepaid credit card.


There are no credit or financial problems with Prepaid Credit Cards.


Prepaid cards can be used almost anywhere.


Disadvantages of Prepaid Credit Cards:

There is usually a set-up fee of 5 to 50 dollars when an account is opened. Then another fee of $5 or more is paid every time more money is loaded onto the card. You need to check this amount before you go ahead with this card. This is different to regular credit cards which do not usually charge a set-up fee but they do often have annual fees.
Cash is needed up front before any purchase can be made with a prepaid credit card.
This can be an advantage for some, since it can help avoid impulse spending.
Conclusion:

It seems to me that prepaid credit cards have the advantage of making sure you have funds available before you purchase anything, and this will be a big help to those who have poor credit ratings. It will enable these people to purchase items they need online, but keep their spending under control because of the limit.

So if you decide that prepaid credit cards are the way to go, then you need to do some research to find the prepaid credit card that works the best for you.

MasterCard Information

That good old piece of plastic called a credit card is a very useful thing to have around. It is great especially if you are travelling, because the credit limit on the card means that you can access funds up to that limit, no matter where in the world you are travelling or living.

MasterCard is one of the main credit cards in this market. And life today is made even easier by the Automatic Bill Payment service that MasterCard offers. This enables you to preauthorize those companies you choose to charge your card on a monthly basis for the amount you owe them.

This includes your insurance companies, your cable provider as well as your electric and water companies, and many telephone companies. These charges in turn are billed on your MasterCard statement, and you then pay that one bill – promptly of course! – by your normal means, either at your bank, or by sending a cheque in the mail, or through online banking. Nice and simple, and with some cards, you get rewards points for these items too.

So what are the advantages of owning a MasterCard Credit Card?

  1. You reduce the number of cheques you need to write each month, thus saving time, and in some cases bank fees.
  2. Your payments will be made on time, so no more late fees.
  3. Your money stays in your bank account longer, so if you have an interest account you will gain some interest on that money.

Now, choosing the right MasterCard that would best suit your needs is a must, so you need to know the types available.

  1. Standard. This is the basic card and the best to start with. Whether you’re a student or just starting with a credit card, this will help you establish a good credit record – provided you use it wisely!
  2. Gold. Once you have established a good credit history, you will be able to move from your Standard Credit Card to the Gold Card and enjoy added benefits perhaps of a higher credit limit, or extra rewards, or a lower interest rate for those times when you carry a balance.
  3. Platinum. This card offers the best every card has to offer. Typically you will have held a credit card for many years and shown that you are a responsible individual, paying your bills on time etc. You can also earn points that could be exchanged for rewards whenever you use your Platinum MasterCard.
  4. World. This is the premium card that offers a no pre-set spending limit and it has other new personalized benefits, but you’ll need to show you are responsible financially before you are granted this status.

MasterCard offers you various rewards and discounts, like a second night free when you pay for the first night in a hotel using your MasterCard Credit Card in selected destinations.

And of course there are other discounts and special offers too for master card credit card holders. We all enjoy getting these discounts, and all it takes sometimes, is remembering to use your master card to pay for your goods or services, and then watch the rewards points grow.

Inside Credit Card Articles of Interest

Hidden Costs in Credit Cards
It is essential to pay attention to the hidden costs in credit cards when searching for a suitable credit card for all our needs and purposes, otherwise we could pay a great deal in extra fees!


Bad Credit Rating?


There was a time, when credit cards were only approved for the financially secure people around, but fortunately, even if you have a bad credit rating it is possible to obtain your own credit card.


Stop Credit Card Application Mailers


The time has come to stop credit card application mailers as there are now other ways to apply for credit cards without having to rely on the mail!


Credit Card Debt


How many people actually use cash for their purchases these days? Not that many, and while this number has gone down over the years, the number of people with credit card debt has increased. But all is not lost, you can eliminate credit card debt, if you try!


Problems with Credit Cards


There are many advantages to owning your own credit cards or card, but there are disadvantages for some people too. Learn what to look out for!


Credit Card Rates


When it comes to credit card rates, you do have some say in the matter. Credit card comoanies prefer you to have the highest rate, obviously, but what can you do about it? Take a look here to find out more


Southwest Airline Credit Card Air


Southwest airline creditcard air rewards can make flying a much more pleasant experience. Take a look here for more information.


Creditcard Nonpayment


Is creditcard nonpayment the best way to deal with your finances? Do you have an alternative? Not paying creditcard bills might be a huge mistake. Take a look here to find out more.


Low Interest Cheap Credit Cards


We could all do with low interest cheap credit cards but do you know how to go about applying for one? Do you actually need to apply? Learn more here!


Business Credit Cards with Travel Miles


If you have to purchase items, or travel a lot for business purposes, then a business credit cards with travel miles may be just the right thing for you – and your boss!


Apply for Free Credit Cards Bad Credit Not a Problem


You know it is possible to apply for free credit cards bad credit is not always a problem. Take a look here to find out more.

Horrible Credit Instant Credit Card

Despite horrible credit instant credit card may still be a possibility for you and is certainly worth checking out further right here.


Credit Card Rates


Credit card rates come in all shapes and sizes, depending on the creidt card, the bank and of course your own needs at any particular time. Learn more here!

Hidden Costs in Credit Cards

As with most things, you need to take care and always read the small print, so that, in this case, you know the hidden costs in credit cards. These are not necessarily noticed by most credit card holders – who has the time to read all that tiny print, in a language that isn’t easily understood even if you can read it?

So, what do you need to watch out for? The following are a few of the credit card charges that you should be aware of:

finance charge – this is the interest charged for the unpaid portion of your monthly credit card bill, so you want this to be as small as possible.

annual membership fee – self-explanatory as the fee you pay every year for the privileged of owning a company’s credit card. Some cards have a higher fee, but offer a lower monthly finance charge.

late payment fee – this fee is charged every time you are late with a payment, and in some cases, the credit card company will increase your annual interest rate if you are late with just one payment.

currency conversion charge – if you travel, this one can cost you a lot. Should you travel and use your credit card to purchase items in another country, the credit card company will charge you a conversion rate to change these costs into your currency, and this will be higher than what you’d be charged by your bank for obtaining currency or travellers cheques ahead of time.

But some times, it is has to be, and it’s not the end of the world, really! It’s only money. But it’s just that money seems to be in short supply, especially in some people’s bank accounts! As long as you are aware of the hidden costs in credit cards, and you can keep your spending within the limits of your income, then you shouldn’t have a problem.

For more information, go to Inside Credit Cards.

Nearly 20 years ago I worked for a small consumer advocacy organization in Washington, DC. Each week we received sacks full of mail from consumers across the country requesting our list of credit cards with low interest rates and no annual fees. If you wanted a low interest rate on a credit card back then, you often had to apply to a bank in Arkansas where interest rates were capped by state law.

Those were the good old days.

Now, interest rates range from zero percent to a high 39 percent. It’s tougher to find (and keep) a good credit card than ever before. That’s because there are many new traps that can snag unsuspecting consumers.

At the top of the list is the “universal default clause” which allows issuers to monitor you credit report and raise your rate if you are late on any bill that appears on your credit report. One major issuer, for example, will hike a 0 percent rate to 24.99 percent if you slip up!

In fact, true “fixed rates” are rare. Many consumers don’t realize that a “fixed” credit card rate isn’t the same as, say, a fixed-rate mortgage. In most states, card issuers can raise the interest rate on a fixed-rate credit card with just fifteen days’ written notice. The new rate can typically apply to existing balances as well as new purchases.

Fees are also on the rise. Take late fees, for example, twenty years ago a late fee on a credit card was still fairly unusual, and typically wasn’t charged unless you were 15 days late with a payment. Now you often must get your payment to the issuer by a certain hour in the morning or you’ll be charged a late fee of as much as $39. Go over the limit and you’ll not only pay more interest, but a steep over limit fee as well.

Foreign travelers are often charged a “currency conversion charge” of 1 – 2 percent of the amount of their purchase. As the result of a class action lawsuit, Visa and MasterCard were ordered to provide refunds of those fees in certain circumstances. The problem wasn’t that the fees were illegal, but it was determined they weren’t properly disclosed. The case is being appealed.

Here are some findings from the nonprofit Consumer Action’s annual survey of credit cards (www.consumer-action.org):

— The vast majority of surveyed cards have significantly higher penalty rates that are triggered by one or two late payments in a period of six months to a year.

— One-fifth of surveyed issuers have shifted to tiered late payments, which Consumer Action interprets as a deceptive way of charging higher-than-average late fees.

— The number of cards with $35 late fees has more than doubled from last year.

— More than half the cards surveyed require cardholders to pay only 2 percent of the monthly balance each month – a disturbing trend that dramatically increases the overall interest paid by cardholders.

— More than one-third of surveyed institutions will not provide a firm annual percentage rate (APR) until they have screened the applicant’s credit history. Instead, they give only a meaningless range of rates before screening, which makes comparison shopping difficult if not impossible.

Don’t get me wrong – I am not saying that credit card companies should not make money. In fact, easy access to credit has helped fuel our economy, especially when the going gets rough. But many consumers now are literally trapped by high-cost debt with few options.

I’ve spoken to consumers who feel they have no choice but to file for bankruptcy because their credit card companies all raised their interest rates to between twenty and thirty percent, and they simply cannot manage to pay the balances down. With all the landmines out there for credit card users today, the best strategy is still to pay down debt as quickly as possible and limit yourself to a couple of cards to avoid problems.

Sometimes, of course, that’s easier said than done!

Bad Credit Rating? Do Not Panic!

In days gone by, if you had a horrible bad credit rating, then that was just hard luck, you just didn’t apply for credit cards with a bad credit rating. There was no hope for you. But nowadays, with so many people in debt of some kind, the credit card companies have decided that it makes sense for them to help those people – please note that this is not the credit card companies being kind, but rather they have realized that they can make even more money from folks with bad credit!

Anyway, whereas in the past there was no hope for those with bad credit, now there is hope, although as you’d expect, you have to pay for it!

It is possible for those with horrible credit to obtain instant credit cards, but whether this is the right way to go, only you will know. A prepaid credit card might be just what you need, as it’ll enable you to use a credit card, say to buy products online, but it also helps to make sure you have the cash available first. To find out more about Prepaid Credit cards, go here.

Credit Cards For People With Bad Credit Scores

Sometimes life lands you in a situation that causes your credit to suffer. A job loss or illness can send your credit rating south leaving you with nothing to do about it. Some creditors may let you slide a month or two, but your records will still show a delinquency. A stolen identity can also leave you feeling violated and unable to resume a normal life with credit. It is during these times you may have to search a little harder to find companies that wan to deal with people who have bad credit. There are a handful of lenders who will help you re-establish your creditworthiness by using one of their credit cards.

The price you will pay

Searching the Internet will give you a good idea of what types of credit card companies will deal with bad credit. Companies like Capital One, Orchard Bank, Providian Financial and even Citibank have plans to help you get back on your feet again. But at what price will you have to pay? The price is interest. Interest rates from these companies can be up to 25-30% annually. So it is important to manage your money and credit more wisely.

One of the many benefits of using one of these preferred lenders is that they report positively to the major credit scoring repositories. That means if you make timely payment it will be in your favor and will help boost your credit rating back up. The interest you pay is a small price to pay to get back on your credit worthy feet.

The secured credit card route

Most of the major banks and lending institutions may seek a deposit matching mechanism called a secured credit deposit before backing a credit card for you. This card is used the same way that a normal credit card is, however the cardholder must fund it before using. If the cardholder deposits $100 into the interest bearing account their credit card is funded at 100% of their deposit.

Some credit cards can at their disposal issue double or triple matches to boost the amount the creditor can spend. The deposit of $100 can return $300 in credit terms. Secured credit cards also report positively to the credit agencies and will eventually become normal revolving accounts and the balances held for deposit are credited back to the cardholder’s account. A very positive way for people with bad credit to obtain the financial vehicles they need.

Stop Credit Card Application Mailers

The time has definitely come to stop credit card application mailers don’t you think? In case you’re not sure what I am talking about, let me explain. For years now, people have been receiving credit card applications through the mail, but just lately, there seem to have been a lot more of them. Sometimes these people have been pre-approved for credit cards, sometimes they have not, and while some may approve of these mailings, I suspect there are a growing number of people who never even open these, but just trash them unopened.

You may ask “why is my child receiving credit card applications?” The answer is that the credit card companies have a mailing list of names of teens of suitable ages, and know that a large number of these teenagers are looking forward to their first credit card, and are likely to apply. Some companies even offer a free shirt with credit card application. These free credit cards for teens are a huge gain for the banks, as the likely hood of a teen fully understanding the rates, fees, late fees etc is not exceptionally high, and they are likely to make some profit from this.

If the credit card companies stop their mailings, it will save the need for hundreds of trees to be cut down to supply the paper needed to print these, and it will save a lot of unnecessary expense, expense that credit card holders have to pay for to keep these companies in profit!

There are other alternatives to mailing these days. With the growing use of computers in everyone’s lives, it is so easy to find credit card information online, and it even gives you a choice – perhaps this is why credit card companies keep on mailing, to try to limit us to their card!

There is more information here at Online Approval for Credit Cards.

4 Steps You Can Take If Your Online Credit Card Application Has Been Refused

Help! I’ve Been Turned Down

You received an envelope in the mail with a great offer for a low interest credit card. You read all the details, even the boring small print and decided that this card fit your needs to a tee. You filled out the required forms and anticipated the day that the card would arrive you even got to pick which background you got. However, what came in the mail was not an acceptance and a brand new card but a denial. What is your first reaction? Perhaps anger. Perhaps sadness. Perhaps fear. Yet none of these will help you get a card!

So, what should you do?

  1. The first thing to do is read the letter carefully. Two important pieces of information must be included in the letter you receive when you’re credit application is disapproved: The specific reasons you were denied credit, or information on how to obtain those reasons, and, if a credit report was used in making that decision, the name and address of the credit reporting agency. Here are some possible reasons for denial:

Haven’t lived at your current location long enough
Haven’t been employed at your current job long enough
Your income is not sufficient to meet this particular creditors minimum income requirement
Information supplied by the credit bureau

  1. If the reason for your denial is unclear to you, then call the company for clarification. What were the exact reasons? What were the exact standards that you did not meet? This information is important to know and understand. If you apply for credit again and are turned down, then this reflects poorly on your credit report. The best advice for this situation is to wait at least 6 months if you have been denied by two different companies in quick succession.
  2. If you’ve been denied credit because of information supplied by a credit bureau, federal law requires the creditor to give you the name, address, and telephone number of the bureau that supplied the information. You should contact this agency for a copy of your credit report. Federal law states that you are entitled to a free copy if you’ve been turned down. Once you receive your report, check it for accuracy. Up to 40% of reports have errors. If you find an error, then you need to report this to the bureau in writing. Be sure to send along whatever proof you may have. Getting the credit bureau to investigate an error will not cost you anything and will save you a lot of time and frustration when it is corrected.
  3. If mistakes on your report led to the rejection of your application, ask the credit bureau to send a corrected copy to the lender. Then you can ask the lender to reconsider your application. If however, you were denied because of a poor rating, only better spending habits and time will help you get the credit you desire.

Eliminating Credit Card Debt

I can just hear my mother now, saying that the best way of eliminating credit card debt is to not get in debt in the first place! Hmmm, how is that supposed to help? Financial problems have a way of sneaking up on you, especially if you suddenly find yourself out of a job, or have medical problems in your family that need those costly prescriptions. How can you not put yourself in debt if a loved one has an illness that needs expensive medication? You cannot stand by and let them suffer, just because you don’t have the funds.

Then before you know it, you are in over your head in credit card debt. But don’t give up. You can eliminate credit card debt, if you want to! But it will take some work.

How To Eliminate Credit Card Debt

There is almost nothing more troublesome than having too much debt to pay each month. Consumers incur debt for many different reasons. Sometimes illness, accidents, or just bad luck can make it seem impossible to

get finances under control. Other times it is simply because we spend more money than we earn. The first step toward taking control of your financial situation is to learn how to eliminate your credit card debt.

Develop a budget. Start by listing all sources of income. First list fixed expenses such as mortgage payments, insurance premiums, and auto loans. Next, list the expenses that vary from month to month such as utility bills, recreation and clothing. If there is any hope of controlling your credit card debt you must create and stick to a budget.

There are different kinds of debts. Mortgages and auto loans are debts secured by collateral. In the event of default on a secured debt, a lender may foreclose on your home or repossess your car. Unsecured debts are loans with no collateral and often have variable interest rates and are assessed a fee for late payments. In the event of default on an unsecured debt a lender may report to a credit-reporting agency, contact the debtor repeatedly by mail or telephone, and in general make life miserable for those who find themselves in financial trouble.

If you are among the millions who have found themselves in a financial crisis, consider your options – budgeting, debt consolidation, or bankruptcy. Which works best for you? It depends on your level of self-discipline, how much debt you have, and your future financial prospects. While eliminating debt may seem next to impossible, your life does not have to go from bad to worse.

Self-help may be the easiest, cheapest way to eliminate debt. First, stop charging now. Incurring more debt will only compound the problem. Make a list of all your credit card bills starting with the smallest. Pay as much above the minimum payment as you can afford on the card with the lowest balance. Continue until this debt is paid in full, and then proceed to the next card. Systematically paying off your credit cards one by one will reduce your debts dramatically. The fastest way to eliminate credit card debt is to put every penny you can towards paying off your credit cards. Do not underestimate the effect an extra five or ten dollars paid repeatedly over time can have on eliminating debt.

You may be able to reduce the amount of your combined monthly payments and lower the interest rate by obtaining a home equity line of credit or a second mortgage. Think carefully before taking this route. Your home becomes collateral with these loans. If you make late payments or miss payments you could lose your home. These types of loans may provide certain tax advantages but the fees can really add up. The same goes for debt consolidation. You eliminate or reduce interest rates and the amount of your monthly payments, but the length of the contract and the fees can be more than your original debt.

As a last resort, bankruptcy could be considered. A bankruptcy remains on your credit report for 10 years, making it difficult to obtain credit, get life insurance, or buy a home. However, it can be a fresh start for those who cannot otherwise satisfy their debts.

Problems with Credit Cards

We all know how useful credit cards can be in times of emergencies, but some people have problems with their credit cards. But how can you avoid these problems with credit cards?

It is so easy to use credit cards to purchase anything, from the weekly groceries, to cars (if your limit is big enough!), from prescriptions to holidays. After all, who does not want to use these credit cards? Especially if you get rewards for using your card! Everyone likes to get gifts or rewards, don’t they?

So there is always plenty we can buy with our cards. The problem is that many people tend to use them to buy whatever they want, without thinking about the consequences – that being that when the credit card statement arrives, they need the cash to pay that bill in full, otherwise they will have to pay a (probably high) interest rate on top of what they already owe.

Once this spending pattern has taken hold, it can be very difficult to get out of. Credit cards have to be used responsibly, and if they are, then all is well. This means that you should not be buying things you cannot afford. So it is a good idea to make out a budget, and stick to it!

Remember that credit cards do not provide free money. Whatever you buy with the card has to be paid for, along with other fees like the annual fee, late fees and finance charges if you do not pay the balance in full by the payment date.

So, if you are going to use credit cards, be smart.

Use your credit cards wisely and sparingly.
Only buy what you can afford, or in other words, use credit cards only if you are sure you can pay the bill when it arrives.
Pay your credit card bill on time, or at least make the minimum payments in a timely fashion.
Use credit cards for cash only in a real emergency.
Seek credit counselling if you seem to be getting in over your head with your finances.

Credit Card Rates can be negotiated!

Let’s face it, none of us are perfect, and we all have our problems. When it comes to credit cards, you have to know that there are people at the other end of your phone that you can talk to. Credit card companies want to keep your business, and they want you to keep their credit card. Sometimes the best thing to do is just pick up that phone and ask for a credit card with a lower interest rate. It can be done, and although it may increase your annual fee a little, it may still be to your advantage to make a lower monthly payment.

Negotiating Rates with Your Credit Card Company

Ok, lets face it, everybody hates high credit card rates, and they drain hard earned money out of your wallet. As a valued consumer, it is apparent that you learn how to negotiate to get the absolute best rate that you possibly can. The good news however is that it doesn’t have to be a difficult or time-consuming process. In fact, it can be very easy indeed if you know what you’re doing. In this article we will discuss the ins and outs of credit card negotiating to ensure that you get the best possible rate with the least amount of effort.

First and foremost, you should figure out if you even want to continue using your current credit card company. Are you pleased with the overall service that you are receiving? Do you like their benefits? If the answer is yes then you can proceed. If not, you should stop reading this article and start looking for a better company.


Second, you should evaluate your paying history and make sure that it is positive before you call to negotiate. If it is positive then you have power and if it isn’t then you’ll be negotiating from a position of weakness and that might not be good. Instead, you should wait until it is more positive before you call them to negotiate rates.

Third, if you have a good history then remember this when you call. In essence, you’ll have extremely high negotiating power. The company needs your business in order to be successful and with clients they lose big time. Therefore, you should always display this take them or leave them attitude while conducting your negotiations.

Draft up a script and memorize it. It can be as simple as Hello, my name is Bill and I have been a cardholder for X years and I consistently pay my bills on a time. Well recently I have been receiving all types of credit card offers from XYZ bank indicating that I qualify for an extremely low interest rate of X and am considering leaving you and going there if you cant offer me a lower rate. Is this something that you can help me with?

Practice, practice and practice some more with your script until you are completely and totally used to it. Once you are, contact the company. Read your script and see what happens.

If you get a hard nose customer service representative then don’t threaten her. Be agreeable and ask to speak to his/her supervisor. If that is not possible, be nice to her and try again she may have some leeway. If you like your present company, you can even try negotiating interest rates, annual and even those yucky late fees.

However, if you’re fed up, have an alternative company in the wings, and your current company wont budge with their rates then be willing to take your business elsewhere. After all, you hold the power so don’t be afraid to use it! They key however is to not bluff but to follow through with your threat. Close the account, ask for them to send you notification in the mail, cancel the credit card and use another card.


In conclusion, you can be successful with the negotiating process if you follow the above mentioned tips. If your current company is unwilling to cooperate then you should simply take your business elsewhere. You’re better off with another credit card company that values your savvy negotiating skills!

Southwest Airline Credit Card Air

There are a large number of companies who now have their own credit card for customers, and so it is that the Southwest airline credit card air rewards card was introduced. Southwest Airlines is one of the biggest international airlines, and as such offers their own Southwest Airlines Rapid Rewards Visa Cards. The company has teamed up with Chase, a well known credit card company to produce a card that allows Rapid Rewards Members to receive credits toward a round trip Award on Southwest Airlines!

This program is somewhat different to other programs in that it counts the number of round trips, not the number of miles flown, or the cost of the tickets. This means that with just 8 round trips you receive 16 credits (within 24 months) , and an award valid for a round trip flown on Southwest Airlines. This Award travel is naturally subject to the government-imposed September 11th Security Fee which is about $10 per round trip.

Bank One and First USA operate the Chase credit cards, credit cards that are flexible, and can be trusted. They also have excellent customer service. Along with Chase, Southwest Airlines offer two types of credit cards:

Southwest Airlines Rapid Rewards Visa Signature Card and Southwest Airlines Rapid Rewards Visa Business Card.
The Rapid Rewards Visa cards have a good reputation, and offer high value and low cost. It only takes 19,200 Reward Dollars to receive a round trip Award, whereas $25,000 is required by other airline credit cards. Their cards also have a low annual fee, currently set at $59.

The Southwest Airlines Rapid Rewards Visa Signature Card offers various benefits, as do other cards, like zero liability on unauthorized purchases if your credit card is stolen, and that applies if your credit card number is lost or stolen too. Your purchases are protected against fire theft or damage, and you receive special dining privileges and discounts at various restaurants. You can also obtain roadside assistance, towing or locksmith services, if need be.

The Southwest Airlines Rapid Rewards Visa Business Card is ideal for small businesses, as it can separate business expenses from personal expenses. There are special incentives to use the card, such as a chance to win a round trip reward every time the card is used. All purchases can be used to collect reward dollars. This card has a low annual fee too.

So basically, the Southwest airline credit card air rewards card are recommended as good credit cards to possess.

Creditcard Nonpayment

Creditcard nonpayment is probably not just due to a forgetful memory. Not paying credit card bills more than likely results from insufficient funds, something that is not always within our control. The first thing to do is to realize that you are not the first person in this situation, and it’s extremely unlikely that you will be the last!

Some people are extremely fortunate to go through life without a huge financial stress, but others are not so lucky. In today’s world, it doesn’t take much to upset the financial balance of income and spending. All it takes is a family crisis, the illness of a family member, an unavoidable trip, unexpected car repairs. Well, you know there are lots of scenarios!

It is so easy to use your credit cards to deal with these emergencies, but if you are on a fixed income, and you do not have the funds to pay off these creditcard bills, then that is when the problems start to escalate rather quickly, as you probably know.

So what can you do about creditcard nonpayment? Are you getting letters from your creditors, or worse still phone calls?

The first thing to do is to take a deep breath, actually make it a few. This is something you can control easily, and it will make you feel better. The next step is to not panic, and don’t make matters worse by going on a spending spree to make you feel better!

Then you might like to try the following:

Try to put away those creditcards, and pay with real money so that you do not make your credit card debt any worse.
Make a budget – this might not be your favourite way to spend time, but it will really help you get a hold of your true financial situation. You can do this by:


making a list of all your monthly expenses, and that means absolutely all.


make a list of all your income see what the difference is At this point if your spending is way more than your income, then you need to consider which costs you can reduce. Maybe you have been eating out a lot, so buy eating at home more you can easily reduce your expenses, which will enable you to get to paying something off your credit cards.

Contact your credit card companies. You may be able to get your interest rate reduced, and by talking to them, this sends the right impression. State clearly why you are finding it difficult to pay your credit card bills, and ask if there is a revised payment arrangement that could be made to help you through this difficult time.


Go for credit counselling. There are many groups out there nowadays and their purpose is to assist people like you when you have credit problems. It may help you to talk to someone about your particular situation.
How To Use Your Credit Cards Wisely

Are you one of the thousands pulling your hair out trying to figure out how you’re going to pay your credit card bills? Using your credit cards wisely and sensibly will help you avoid financial problems and establish a strong credit rating, so here’s some information to help you get your credit card problems under control.

Credit cards are convenient for buying things now and paying later. Credit card companies are in business to make money. Don’t forget that every time you use your credit card you are borrowing money. You will pay a finance charge if you don’t pay off your balance each month.

Millions of people use credit cards to avoid carrying large amounts of cash, for emergencies, to track spending, etc. However, charging more than your income allows can be worrisome and potentially devastating to your finances and your credit rating. The pitfalls of credit card use are the accumulation of large amounts of debt and the inability to make more than the minimum monthly payment.

It’s important to look out for your own interests. Some credit card companies have lowered minimum monthly payments to less than two percent of the balance. It could take 30 years or more to pay off your credit cards if you pay only the minimum payment. Debit cards should not be confused with credit cards. There is no credit extended with a debit card. The money is deducted directly from your savings or checking account. The bottom line is don’t spend more than you can afford to pay on a monthly basis.

Limit the number of credit card applications you fill out. There will be an inquiry into your credit report for each application you submit. Your credit report contains a record of every company or institution that has evaluated your credit. It reflects negatively on your credit score if you have an inquiry that does not lead to the issuance of a credit card. Obtaining too many credit cards can affect your ability to finance other purchases as well, such as homes or automobiles. Too much available credit can cause suspicion in the eyes of a lender as to your ability to repay your potential debt.

Consider what you are looking for in a credit card such as the interest rate, annual fee, grace period, and credit line. Be wary of companies offering cards with a low introductory interest rate that often lasts for only a brief period of time, after which they become considerably higher. The average interest rate for credit cards is over fifteen percent. Choose a credit card with no annual fee.

Credit card issuers are paid a percentage from the vendor each time you make a purchase. Many companies have waived the annual fee to attract customers. Avoid cards offering a high credit limit. There is great potential to overspend. Instead, pay down your balance before using your card to make additional purchases. Send in your payment well ahead of the due date. Issuers may charge late fees, and late payments could result in a considerably higher interest rate than the advertised rate.

So the bottom line is by using your credit cards wisely you can reduce adverse effects of credit cards and maximize the benefits by spending wisely, using self-discipline, and paying off your balance as quickly as possible to avoid unnecessary fees.

Low Interest Cheap Credit Cards

We could all benefit from low interest cheap credit cards – at least those of us carrying balances could! – but we do not all have that option, or do we?

If you are one of the minority that do not yet own a credit card, then you have the option of shopping around to find the best deal available for your new card, based on your present needs. For more information take a look at Credit Cards Online so that you know what to look for.

If you already have a credit card, or several, and you are carrying a balance, ie you are not paying your balance in full every month, then you need to make sure you are not paying more in monthly interest than you need to. These rates vary tremendously from rates like 2.99% per month to a whopping 29% or more on some department store cards.

Always make sure you know what your rate is, and if it is high see if you can get it reduced.

How? Credit card companies would like to keep you as a customer if you are carrying a balance – after all you are paying them a nice amount of interest every month! This means they are often amenable to reducing your rate, but this will depend on your credit history. Provided you have been paying your monthly minimum amount on time, at least this minimum, and your credit history is good, meaning you are not late with payments, don’t go over your available credit limit etc, then a phone call to your credit card company asking if they have a credit card with a lower interest rate that you could switch to, could be very beneficial to you.

You should be aware that they may charge you a higher annual fee than you presently have – if you are charged an annual fee at all – but this is often very worth while considering the amount you will save in interest fees on your outstanding balance.

In the unlikely case that your bank does not offer you a credit card with a lower interest rate, consider switching banks. You can often get the transfer fees waived if you switch companies. Transfer fees are the fees charged when you transfer an amount from one bank to another, and as with all bank fees, these are different for each card never mind each bank, so make sure you know in advance what you are likely to be charged.

Banks often have introductory fees of 0%, meaning you do not pay interest on any outstanding balances, but make sure you read the fine print. Banks sometimes cancel this rate if you are late with a payment, or do not pay the minimum due, and they put up the rate considerably, which defeats the purpose of obtaining a low interest rate card in the first place!

Make sure you deal with reputable banks like American Express, Citibank, and JP Morgan Chase. Consider the following:

What are the interest rates? Check out how long these rates are offered for – is it a 6 month introductory period or 12 months? Or less?


Is it a fixed rate or likely to change?


Is there an annual fee? How much is it?


Are there late fee penalties? What are they? When do they come into effect?


When you do have credit cards, make sure you use them responsibly, and do not buy things you cannot afford, whether it is on credit or not. And always look around for low interest cheap credit cards.

Business Credit Cards with Travel Miles

An advantage for both businesses and their employees is to obtain business credit cards with travel miles as this helps everyone. Business expenses can be kept separate from personal expenses, and travel reward miles are useful for both personal or business use.

These credit cards work like your normal credit cards except for the interest rates and features which are optimized for small businesses. They can help small businesses with their cash flow and finances, just like regular cards, as items are summarized on one bill and paid monthly. Or, of course, the minimum monthly amount could be paid, and a balance owed just like personal credit cards.

These cards are being used more by companies these days, and recent reports have indicated that 66% of small businesses use these cards to help with their purchases and finances. The travel rewards received can of course be used towards flights for business, thus reducing costs for those companies that need their employees to travel.

Advantages of businees credit cards with travel miles

Allow businesses to build up their credit worthiness.


Purchases can be paid for in instalments if cash flow is a problem at any time.

Help reduce the number of transactions, as monthly statements summarize activity on the card, and this helps to keep all expenses together.


Build up credit limit over a period of time.


Rewards miles can be used by the company to reduce their expenses.

As with all credit cards, business credit cards with travel miles should be used responsibly by all employees. Themonthly bills should be paid promptly and at least the minimum payment made. This will help improve the company’s credit rating, which could be important in the future when the company needs to apply for a loan.

Credit cards are generally easier to obtain than loans, saving both time and effort. Loans need annual audited statements, which are not always readily available, whereas credit card applications are fairly straight forward. However they do generally depend on the income of the president of the company, or whoever from the company is applying.

Apply for Free Credit Cards Bad Credit not a problem

In times gone by, it was unheard of to apply for free credit cards with bad credit not a problem. If you had bad credit, there was absolutely no way you could obtain a credit card. But the credit card companies have now realised that there is a lot of money to be made form people with horrible credit in the form of instant credit cards, or secured credit cards, otherwise known as prepaid credit cards.

These are credit cards that you pay for in advance, and are useful to have if you don’t possess regular credit cards for those times when you need to purchase something online, for example, or over the phone. They are treated just like ordinary credit cards, but you do have a service charge for each deposit to your account.

Secured Credit Cards- Consumer Tips

Whether you have no credit or damaged credit, secured credit cards are a good tool for building a good credit history.

Several months ago Tom, a member of CreditBoards.com, filed for a Chapter 7 Bankruptcy. Now he is in the process of rebuilding his credit history. Its a task that is not easy, but with patient persistence he is seeing progress already. Daily he checks his credit score and is slowly seeing improvement. 1 In addition to correcting every mistake, even the smallest ones, on his credit report, he is using a secured credit card. 2 This secured card is an important tool in the overall process of building or rebuilding credit.

Who should consider a secured credit card?

Someone who has no credit history.

Someone with a damaged credit history.

What is a secured credit card?

Secured cards are credit cards opened with a deposit into a savings account, money market or certificate of deposit. The amount of deposit required varies from card to card, but generally minimum amounts range from $250 – $500. These funds are considered your security and will even earn a little interest since they are being held in a savings account. Your credit limit is determined by the amount you deposit into the savings account. Sometimes the limit will be for the full amount of the deposit; other times it will be a percentage of the total.

It is important to keep in mind that a secured card is a credit card, not a debit card. If full payments are not made each month, then interest is charged on the outstanding balance. And the lending institution uses the security money to pay off the debt only as a last resort. Even though the card is secured, it is still possible to damage credit.

What are the benefits of a secured credit card?

Establishing credit. If you have never had a credit card, a good first step in establishing good credit is applying for a secured credit card. Assistant Professor of Economics at Austin Peay State University in Clarksville, TN, Jerry Plummer says, A secured card is most useful for the person starting out on their credit history, since it says that the person is willing to take the extra step to establish credit.

Reestablishing credit. If your credit history is damaged, you may only be able to qualify for a secured credit card. Using this secured card appropriately and within the set parameters will help rebuild your credit and qualify you for an unsecured card. If you have had to file for bankruptcy, however, you may not qualify until it has been discharged.

Preset limit cannot be exceeded. If poor spending habits were part of the cause for bad credit, then a secured credit card will help keep spending in check.

Useful for transactions that require a credit card. Hotels and car rentals require the use of a credit card. If you don’t qualify for an unsecured card but you do for a secured card, then you are still able to make the transaction.

What should I look for or avoid when shopping for a secured credit card?

Fees. This is the area you will really want to research when shopping for a secured credit card. Some cards will come with fees that run into the hundreds of dollars, eating away much of the credit you secured with the savings account. Professor Plummer says a card with no fee is the best, but a small one-time fee can be okay. Annual fees for attractive secured cards typically range from $20-$35. Be sure to watch out for hidden fees such as registration charges and setup fees.

Interest Rate. Just because you have no or poor credit doesn’t mean you have to settle for the highest interest rate. Interest rates for attractive secured cards should not exceed 19%. Shop around and get the most competitive rate available.

Read the fine print. Linda Tucker, Director of Education for Consumer Credit Counseling Service for Arkansas and Memphis, TN, stresses the importance of reading the fine print. Doing so will let you know your exact obligations to the issuing company: for example, the grace period, what happens if you don’t make a full payment, and what fees are attached if you don’t make the full payment. Understanding these details will help make sure you are not further damaging your credit.

Fraudulent Offers. As with unsecured cards you need to watch out for fraudulent offers. The Federal Trade Commission gives the following advice to protect yourself from credit card fraud:

Offers of easy credit. No one can guarantee to get you credit. Before deciding whether to give you a credit card, legitimate credit providers examine your credit report.

A call to a ‘900’ number for a credit card. You pay for calls with a ‘900’ prefix — and you may never receive a credit card.

Credit cards offered by “credit repair” companies or “credit clinics.” These businesses also may offer to clean up your credit history for a fee. However, you can correct genuine mistakes or outdated information yourself by contacting credit bureaus directly. Remember that only time and good credit habits will restore your credit worthiness.

When will I qualify for an unsecured credit card?

It can take several months to see an improvement in your credit history. Bank-rate says its a good indicator when you start receiving flyers in the mail for unsecured cards that your credit is improving. However, its a good idea to continue taking things slowly. Using a secured card will help you learn healthy habits so that when you do get an unsecured credit card you remain in control of your spending and credit.

Where can I find a secured credit card?

credit cards

Other tips

Tom recommends sticking with only one or two cards and keeping spending to a minimum. The goal is to pay the card off each month.

Tucker emphasizes the importance of paying the amount due each month; otherwise late fees can be charged, interest rates raised, privileges lost, and credit history negatively affected.

Make sure you are getting a credit card as opposed to a gas card or a department store card.

Make sure a reputable bank or credit union, even a local one, is issuing the card. And, don’t automatically assume a bank is issuing the card.

Not all issuers report to the three major credit agencies (Experian, Equifax, and TransUnion). Its important to get a card that does report to all three agencies; otherwise you will be wasting your time. Fortunately, secured cards normally report to the credit agencies just like unsecured cards (you should verify this before applying).

If you have filed for bankruptcy, you may need to wait until it has been discharged before qualifying for a secured card.

Get one only if you cannot get credit, since you have no credit record; or if you have poor credit. Plummer says, Many companies will not even count them as credit, such as automobile F&I (Finance and Insurance) people, although they will not admit it. So, if you don’t really need a secured card, you will be doing more harm than good.

Finally, whatever situation you are in, no credit or poor credit, the best way to build good credit is to set up a budget and then stick with it.

1 You can pay membership fees to any one of the three credit bureaus Experian, TransUnion, and Equifax- to be able to check your credit score online daily. Visit our Credit Information section for more details. Tom recommends purchasing Microsoft Money 2004, which comes with a one-year membership to Experian (value of $99.00).

2 To find out more about correcting errors on your credit report, read our article How to Correct Mixed or Split Credit Reports.

Horrible Credit Instant Credit Card

If you have horrible credit instant credit card may be just what you need. Basically this works just like a regular credit card, but you pay in advance. This can be very useful if you have a poor credit history, but wish to make an online purchase. For this you would need a credit card, so if you don’t have one that can be a huge disadvantage.

So, an instant credit card puts money on your card, as much or as little as you like, and that is then your credit limit. You will not be able to spend more than this amount. It is like a phone card, where you pay in advance, and can only use that dollar amount.

You can obtain prepaid mastercard or prepaid visa cards, and these can be purchased online or in stores. An advantage of these is that there is no credit check since you are paying with cash, so that horrible credit you have doesn’t matter in this case. You will have to fill out a application form of course, and pay a small fee for setting up the account, and then other fees when you make a payment to load the credit card, but it is worth it to start getting a better credit history.

Using prepaid credit cards, or secured credit cards as they are also called, will help reduce that impulsive tendency to purchase items on your credit card, because you have to have the cash available and on your card before this is possible.

For more information go to Prepaid Credit Cards.

So in conclusion, horrible credit instant credit cards can be a good way to go to help improve your credit rating, and gives you the advantage of owning a credit card even if you are unable to own a normal creditcard.

Credit Card Rates

What are credit card rates? Credit card rates are what the credit card companies charge you if you do not pay your balance off in full each month. This can range from 0 per cent up to 19%, 21% and even as high as a whopping 28% for some department store cards!

These rates have always been an issue in applying for a credit card, and are what everyone should know before choosing one credit card company over another. Shopping around for the best rates will give you the best deal, provided you pay attention to the terms of service.

For you to own a credit card, you should first know what the credit card rates are. What is an APR? What are the different kinds of rates?

Credit card rates are used to determine the interest of your credit card. It is used to know how much you would pay if you hold a balance on your account, if you have a cash advance or loan, and if you transferred a balance from other credit cards. The credit card rates are usually computed annually.

1) APR. The APR signifies the annual percentage rate of the interest. The APR is used by the bank to know how much would be charged on your bill on a yearly basis. There are two kinds of APRs:

Fixed. This kind of APR is an interest rate which has been arranged by the bank. The fixed APR would not be changed unless the bank or the credit card owner amend the contract of agreement. The majority of credit card accounts that have fixed rates do not change very often.


On-going. This kind of APR is the kind of interest rate that could change even after the signing of contracts and the grace period.


Note: Both the fixed and APR rates depend on consistency of the bill payments you make, and if you fall behind on your payments, you are extremely unlikely to be able to receive a lower interest rate!

2) Interest rate.

Fixed. A fixed interest basically means that your rate cannot be changed unless the bank informs you that there have been some changes in the policies.


Variable. A variable interest rate changes automatically whenever the basic rate of the bank increases or decreases. Note: Both the fixed and the variable rates could be changed by the bank at any time. This means that any bank could alter the terms and conditions of your credit account after a fifteen-day notice, however, most banks will give you more notice than this, and some credit card companies give several months notice of an increase. Naturally there are more increases in the credit rate than decreases!

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