A lot of people associate credit cards with just personal credit card which an individual posses and uses for shopping etc. However, there is another category of credit cards and that is called small business credit cards. As suggested by the name itself, the small business credit cards are meant for small businesses or people running small businesses.So how does the small business credit card differ from the other credit cards in general?The very obvious difference is that small business credit cards have the credit account in the name of the small business and not any individual, though the benefits indirectly accrue to the business owner. The other difference is with the terms and conditions that come with the small business credit cards. Finally, there are some subtle benefits with small business credit cards which would not be applicable to personal credit cards. Let’s check all these things one by one.We know that the credit cards provide a lot of convenience and security for an individual and a lot of other benefits too. Most of the benefits related to personal credit cards apply here too. What is interesting here is the indirect benefits that ensue from using a small business credit card.The indirect benefits associated with small business credit cards are so great that it makes them almost indispensable. The most important benefit is that you can easily segregate your business and personal expenses. So if you have been wasting a lot of time keeping track of your business bills and trying to keep them separate from personal bills, small business credit cards could help. You just need to ensure that you always make all your business payments using your small business credit card. When the credit card bill comes at the month end, you will have itemized account of all the business expenses as a single document. Thus small business cards reduce (and in some cases completely remove) the need for bookkeeping for a small business. The credit card company does that for you for free, although indirectly.Another important benefit comes from rolling credit. If you have to pay for your purchases upfront and still invoice your clients later (a situation faced very often with small businesses), you can roll the credit, you are providing your client with, to your credit card. Moreover, since these purchases are mostly urgent, arranging for money immediately can sometimes be a problem. In such cases, the small business credit card is the one which can bail you out. Well, if you are thinking that your personal credit card could do the same for you, you are a bit off the track on two fronts. Firstly, you want to keep your business expenses separate from your personal expenses and secondly, the APR on business cards is generally lower as compared to personal credit cards. A lot of the small business credit cards don’t require you to pay an annual fee even.So if you run a small business but haven’t got a small business credit card yet, it’s about time that you considered this wonderful option.
I am delighted to say that I am a credit card deadbeat! In fact, some of you might already be credit card deadbeats too, if so, I commend you for your excellent work! Now, as for those who don’t know what a credit card deadbeat is, before you start thinking I have a screw loose, you may want to continue reading!When I say that I am a credit card deadbeat, I don’t mean that I avoid my credit card bills. To the contrary, a credit card deadbeat is the insider term used by credit card company executives and refers to all of the credit card users who pay off their bill each month promptly; in doing so, such customers pay no interest and prevent the creditor from making any profit! That’s me! I love being a credit card deadbeat!The alternative to being a credit card deadbeat is what credit card executives call a revolver. A revolver is a credit card user that constantly carries a balance and is charged regular, monthly interest on their charges. Credit card companies love revolvers because they, in essence, increase the bottom line for the credit card company and make them a nice profit. Further, from an insider perspective, the best customers not only carry a balance, but also make their payments late, triggering extra fees and a higher interest rate.Okay, so I’ve been a credit card deadbeat for awhile now, but last year I went even further in improved my deadbeat ways. Not only did I hang onto my hard earned cash by refusing to line the wallets of the credit card companies, but I also happily lined my own wallet with their money, to the tune of $1,402. Yes, that’s right, they paid me $1,402 to use their cards; continue reading to find out how!Cash Back Credit CardFirst, I applied online for a Cash Back Credit Card and I was instantly approved. My new cash back credit card arrived to my house the following week ready for me to use. This card offered me 0% APR for 12 months and carried no annual fee; With it, I made all of my gas purchases, as well as grocery and drugstore purchases and earned 5% back cash back on the gas purchases and 1% back on all other purchases. I have a family of four and the gas purchases included gas for my spouse’s car as well. My average monthly purchases and cash back earnings were as follows:Monthly Gas Purchases $325 x .05 = $16.25Monthly Grocery Bill $1,200 x .01 =$12.00Monthly Drugstore Purchases $160 x .01 = 1.60Total Cash Back Earnings From Credit Card $ 29.85 x 12 = $358.20Airline Rewards Credit CardI also applied for an airline rewards credit card and again was instantly approved online. Like the cash back credit card, my new airline rewards credit card arrived the following week, came with a 0% introductory APR for 12 months and had no annual fee. This credit card earns 1 frequent flyer mile for every $1 charged.I charged many of my miscellaneous expenses, including major purchases and business expenses, on my new Airline Rewards Credit Card. As a result, the qualified expenses came to an average of $2,250 monthly or $27,000 for the year, earning 27,000 frequent flyer miles, more than enough for an airline ticket to Hawaii: a $500 value!0% Introductory APR for 12 Months Now here’s the kicker. Since both credit cards came with a 0% introductory APR for 12 months, I paid only the minimum payments on each card and placed the money for my purchases into a savings account earning 2.5% (rates have gone up since). Using averages for simplicity, I made 12 monthly deposits of $3,935 into a savings account earning 2.5% interest compounded monthly. By the end of the year, I earned $544 in interest!My Total Credit Card Earnings for the YearSo here is my total earnings from the cash back credit card, airline rewards card, and interest earned.Cash Back 12 x 29.85 = $358Free Airline Ticket $500Savings Account Interest $544Total Earned $1,402Just to make sure I maintain my deadbeat ways, now that the 0% introductory rate has expired, I’ve paid off my balance from the money I deposited into my savings account during the year. To be a credit card deadbeat you need persistence, determination, and discipline. I did it, and so can you!
The tidal wave of consumer debt accumulating from unchecked personal credit card debt threatens to overwhelm our nation even as the lenders themselves reap the benefits. Americans have grown addicted to spending without care for their own income and budgets are something our grandparents used to employ. As a nation, we have almost lost track of the notion of saving for the future – aside, of course, from the exceedingly wealthy who no longer bother with banks within the United States – and our economy suffers as a result. More to the point, our citizens suffer as well from the drop in property values and rise in unemployment that are direct results of the consumer debt explosion. Credit card bills are killing this country, and it is past time that we do something about it.It is more than understandable how this all happened. Just turn on the television: every other commercial advertises either the untold benefits from plastic purchasing (The sheen! The class climbing! The convenience!) or the consumer credit counseling surgical practicalities (The desperation! The condescension! The oh so marketable convenience!). Somehow, along the way, the average American household managed to rack up around eight thousand dollars in unsecured debt almost wholly from credit card usage. The past decade, as home appraisals skyrocketed and well paying jobs could be plucked from the vine, there was not much reason to worry. This was the American millennium, after all, and things would never change.Somehow, an unprecedented period of economic expansion came to an end, and the real estate bubble finally burst. And, more to the point, a good number of borrowers found that they were having trouble making even the minimum payments upon their various credit cards. Who knew? The tyranny of unsecured debt has at last seeped into the household accounts of most of our citizenry and the effects are everywhere. Beyond the new budgeting, though, and the tightening of belts, families need to take a close and educated look at their credit card problems and see what can be done. There are a number of debt managements solutions that have arisen in the past few years purely to deal with such situations although the simplest debt relief is the most annoying: a halt to purchases. Serious attention paid to expenses and savings accounts are the foundation of any lasting credit card debt relief.Above all else, families must stop spending without regard to the future. Heads of household should collect all credit cards and, while not necessarily setting them aflame, at least keep them tightly locked away from the grasp of misguided purchases. One of the greatest problems facing consumers is this culture of commercialism. Credit cards really are an addiction, and otherwise ordinary people will find themselves driven to buy something they do not really want simply because they are depressed or worried. This is precisely the sort of action that the credit card companies are counting upon. This is the reason that the credit card companies offer new accounts at rock bottom rates to borrowers just exiting Chapter 7 debt elimination bankruptcy even if the borrowers successfully washed away debts owed to the same credit card companies. They figure the borrowers will be all too likely to resume past spending habits – this time, without hope of bankruptcy protection for near a decade – and, more’s the pity, the credit card companies tend to be correct.Obviously (as you would hope, actually) credit card debts are dealt with according to their debtors’ credit ratings. The Fair Isaacs Corporation devised the FICO credit scoring system more than fifty years ago expressly to guide lending institutions toward equitable treatment of borrowers regardless of rage, gender, income, or, really, anything beyond the borrowers’ history of payment and capacity of credit. To this day, the exact equations remain a mystery – and they grow more complex by the moment – but the overall methods remain a sorta miraculous triumph of democratic capitalism. No matter their earnings, consumers that maintain excellent FICO ratings will always be able to garner credit balances well above what they should ordinarily deserve.Unfortunately, that availability of credit card debt leads untutored applicants toward significant debts they have no hope of soon paying off. At this point, debt management solutions are necessary. They come in a few different flavors, but all of them contain severe disadvantages. The ideal debt management solution is – yeah, that’s right, we know – to never get yourself in debt. Careful budgeting, spending only when needed, cutting out wasteful expenses, and all proper household financial techniques will do more to prevent credit card debt from overtaking consumers’ lives than a string of limos carrying debt professionals. Alas, since you are already reading this article, we are going to presume it is too late to apply preventive measures, but there are still steps available to successfully deal with the credit card debt problems as they stand.As your credit card companies will explain (along with many, many other credit card companies that you have never heard of), the easiest solution would be to just transfer all existing credit card debts onto a single account. Presuming your credit rating has not dipped to fraudulent levels, virtually every credit card company should be eager to take on your existing debts for initial rates nudging zero percent. At the same time, every representative of every credit card will urge such a change in debt and mollify the borrower by insisting they will pay off the balances well before the adjustable interest rates would rise.Of course, the very reason most borrowers are in this state is precisely because they cannot guarantee they could repay their debts and the last thing such debtors need is more capacity to spend. Remember, not only are the borrowers consolidating their credit card debts upon a single card risking the interest rates rising to over twenty percent should they fail to repay their obligations within a specific time, but they are also allowing themselves more space for foolish purchases upon the cards that remain. It is not a double edged sword; it is a ticking time bomb. The number of credit card victims genuinely served by credit card consolidation within credit cards could be counted… well, it would resemble that initial rate offered.For some borrowers, debt consolidation loans that are not themselves tied to credit cards may make a bit of sense. Unfortunately, in order to get any sort of decent interest rate, these sort of loans tend to be secured. Low interest unsecured credit accounts do exist, but, alas, they tend to only be offered to those without credit or income issues and tend to be only above six figures. Secured debts are almost always available, witness the current sub prime mortgage lending crisis, but most debtors haven’t much significant collateral to offer beyond their own primary residence. In other words, debt consolidation loans may as well be considered home equity loans, and this creates a whole new sort of problems.Whether you first think of a consolidation loan walking through your bank and noticing the ever present advertisements or listening to the sweet sounding pitch of a telephone salesman, there is no worse way to rid yourself of credit card debts. To be sure, the rates will be lower – they would have to be – and the payments, stretched to ten or thirty or however many years, will surely be much lower. At the same point, though, the eventual money paid for that original debt will be exponentially higher considering the wonders of compound interest, and, as with debt consolidation through other credit cards, this still leaves open other credit accounts without penalty or reason to curtail destructive spending habits.There is, as every borrower knows, one worse option when eliminating credit card debts. Despite the legislative carnage wrought the past few years, Chapter 7 bankruptcy protection does still exist as a palliative, but anyone who has seen friends or family suffer the effects knows just how little Chapter 7 bankruptcies could not consider this actual protection to any borrower’s life. Above all else, the 2005 congressional alteration of the United States bankruptcy code effectively forced anyone thinking about declaring bankruptcy to surrender all assets (even cherished items handed down through generations) to threat of seizure by government authorities for court auction so as to repay the original lenders for a trifle of their actual worth. Nowadays, the court trustee must consider the filer’s assets as according to replacement value rather than, as formerly, the resale value. To fully imagine the distinction, look around your living room and imagine the worth of the items when sold at estate sale compared to the cost should they be purchased at mall stores absent haggling. The Internal Revenue Service was heavily involved in the passage of this legislation, if that needs to be said.One can always talk directly to representatives of the credit card companies and plead for forgiveness. In the case of sincere and demonstrable (and, most importantly, tragic) mishaps, they will sometimes shrug away partial debts so as to avoid the bad publicity, but one shouldn’t expect forgiveness from lenders. There are also several state and federal government programs, dizzying in their numbers, that apply to various borrower predicaments, but, at the same time, one should never expect consumer debts to explicitly fit into statutory regimens. It is not exactly a hard life for this generation of borrowers. Even thirty years ago, this sort of credit availability and (relative) unaccountability would have been beyond imagining.Still, there is a financial burden and the lenders will eventually demand payment. Should the payments be of sufficient worth, the lenders will have no choice but to start legal proceedings to attempt to recoup their losses. However, it is important remember that such action are extremely expensive and the absolute last resort of multinational corporations. More than anything else, these sort of businesses are terrified that their debtors will simply disappear or (hard as it is under current circumstances) declare Chapter 7 bankruptcy. It’s virtually impossible to declare bankruptcy these days, but company guidelines are famously slow to notice the evolution of consumer practices and still worry over the dissolution over promised obligations.In the wake of our sudden credit card debt crisis and the limited powers bankruptcy protection now holds (and, more to the point, the limited understanding of such among credit card companies), other financial services have come into their own which play with that slight threat yet existing. As long as Chapter 7 bankruptcy still has the potential to eliminate credit card debts, borrowers still have one ace in the hole when arguing cases with their lenders, and a new business has developed to enable the singular advantage consumers retain. Debt settlement isn’t so terribly different from Consumer Credit Counseling. The debt settlement professionals have essentially the same approach when dealing with credit card debts, but, unlike the CCC hordes, they actually work on behalf of the debtors.The ugly little truth about Consumer Credit Counseling companies is their dependence upon credit card companies. There’s a reason they have the advertising budget to blanket late night television with ever more desperate commercials, after all. The CCC industry will – at pains – lower interest rates for their favored customers as well as waive past due fees and over limit charges that never should have been assessed in the first place, but they won’t ever even try to lower actual debt balances. Consumer Credit Counseling isn’t much of a lie, really. They do counsel consumers about credit. It’s just rarely counsel that the consumers should follow.Certified debt settlement specialists, on the other hand, work solely for their debtor clients. Moreover, they place the burden for financial burdens squarely upon the lenders. This isn’t the same thing as borrowing the price of a carton of milk from the nearby store, after all. These are massive conglomerates whose profits depend upon not only convincing naïve borrowers that they can buy whatever they want without consequence but also allowing them the credit to do so. The borrowers, admittedly, are not without fault, but the lenders themselves have institutional malfeasance that must still be addressed. Fortunately, for the moment, anyways, this is where debt settlement comes into play.Debt settlement companies negotiate on the part of the borrowers in attempts to lower the overall balance originally owed. Seems too much to ask, but credit card companies regularly let loose more than half of their promised funds in exchange for a payment schedule vouchsafed by a respectable debt settlement firm. Credit cards, by their nature, as with anything that could charge twenty percent annual percentage rates, assume a certain risk that is backed up by the guarantee of tax write offs for delinquent borrowers. Otherwise, they would never lend so much to so many with so few resources. These credit card companies are conglomerates betting on fractional chances of profit one way or another. All traditional notions of ethics and morality should seem as irrational and disparate as that of someone going to war for a Klondike Bar. Credit card settlement really is a different sort of system, and owing has nothing to do with it.
Various people have different needs. So the credit card suppliers too have designed different type of cards. Besides the normal credit cards, there are small business cards for small business and then there are student credit cards which are designed especially for students.Now, what is different about the student credit cards?You could say not much, since all credit cards work in pretty much the same way and are used for more or less same purposes. However there are 2 main differences with the student credit cards and these differences are on the 2 main aspects i.e. Credit limit and APR.The credit limit for student credit cards is generally very low. This typically ranges from $500 to $1000 per month. Some people might argue the reason for such discrimination. Well, the reason is very clear and obvious. Most of the students applying for these credit cards have never used a credit card in their life so neither do they have a credit rating and nor the knowledge about credit cards. While the former is what the credit card suppliers look for before supplying the credit card, the latter is what the credit card holder would like to acquire. Both the purposes are met by keeping a lower credit limit. The credit card supplier reduces the risk that they are taking by issuing a credit card to someone who has never used one and has no credit rating. It’s good for the credit card holder too since this reduces their risk of damage which can be caused by limited or no knowledge of credit cards and by bad spending habits. Moreover, this credit limit would be sufficient for the needs of a student in general.The APR on the student credit cards is generally higher than that on the normal credit cards. Again the reason for this is same as that for lower credit limit i.e. the credit card company or the credit card supplier is after all into business and has to take steps to mitigate any possible risks including the risk arising from issuing a credit card to someone who is naïve in terms of credit card knowledge.The credit card companies might also keep some stricter terms and conditions on the student credit cards and generally require a parent or a guardian’s signature as a guarantor.Since credit cards are more of a necessity than a convenience in today’s world, the student credit cards are much recommended, especially as a learning tool in getting the students prepared for the life. Due to their inherent characteristics of low credit limit etc, student credit cards cannot lead students into a totally irreversible debt situation. Students should read all the instructions supplied with their student credit card. This first credit card will teach them how to protect themselves from credit card fraud, where all to use their credit card, how to control their spending, what the various membership benefits are etc. The earlier they learn these things the better it is.Moreover, the student credit card will also help you in developing a good credit rating. You shouldn’t take the student credit cards lightly. If you overspend on your student credit card or default on your credit card bill payments, you will not only end up paying interest on your credit card balance but also spoil your credit rating. Remember that a bad credit rating will not only hamper your chances of getting another credit card later in your life but will also lead to problems in approval of your mortgage/car-loan applications etc.So student credit cards are a surely a good way for students to start with credit cards.
“Bad credit card card” is used to refer to credit cards that can be obtained even with a bad credit rating. The bad credit card cards provide opportunity to people (with bad credit rating) to improve their credit rating. In that sense, bad credit credit cards act as rescuer for such people. So, bad credit credit cards also act as necessary a training ground for people who have not been able to control their spending urge in the past.Bad credit card cards are commonly known as secured credit cards. The bad credit card card (or secured credit cards) requires the individual to open up an account with the credit card supplier and maintain some cash balance in the account. Why is that required? Well, credit cards are a business for the credit card suppliers; so how can they trust someone who has defaulted on his/her payments in the past? After all, a business is about profits and such risks are a threat to profits. The bank or the credit card supplier will generally pay interest on the balance in your account. However, it’s best to check this with the bad credit card card supplier/bank. The credit limit on the bad credit card card is determined by the cash balance in the account and is generally between 50-100% of the cash balance. These bad credit card cards are also referred to as debit cards, owing to the fact that they work less in a credit-giving manner and more in a debit-giving manner.There are plenty of bad credit card cards available in the market. When searching for the bad credit card card that is best suited to you, you should consider 4 things in particular: the minimum balance that you are required to maintain in the bank account, the credit limit that you will receive (i.e. the percentage of your bank account balance that you are allowed to spend on your bad credit card card), the fees/other-charges applicable to the procurement of bad credit card card and the rate of interest that you will receive on the balance in your bank account. An ideal bad credit card card would have no fee/other-charges associated with it and would require zero or a very small amount as minimum bank balance. It would also have something like 90-100% of bank balance as its credit limit. Moreover, an ideal bad credit card card would also offer a good interest rate on the bank balance.Bad credit card cards are really a good concept that provides respite to people with bad credit rating by letting them enjoy the benefits of credit cards while they mend their credit rating.
If you have had difficulty keeping up with your bills, you can rest assured you are not alone. Many people have run into trouble or a shortage of cash flow from time to time that has resulted in the inability to make all of their payments in full and on time. However, just because you don’t have a perfect credit history does not necessarily mean that you will be unable to obtain a credit card. It’s no surprise that a person with a low credit score will have more difficulty and less options when trying to get a credit card in their name, but it is not completely impossible because creditors do take more than just your credit score into consideration when deciding whether or not to give you a credit card. The important thing to remember is you do not want to apply for every credit card out there- every time you apply for a credit card, you are further hurting your credit rating. When you have a low credit score and a poor credit history, you need to do your research before you start applying, and only apply to the handful of credit cards that are designed for individuals with a less than perfect credit history to make sure you limit the number of credit inquiries that are placed on your credit report.When a credit card provider is deciding whether or not to extend credit to an individual, the lenders take several things into consideration. The credit score is always a factor, as is your overall credit history of how many times you’ve made late payments, and how much credit you currently have available to you, and how much debt you currently owe. In addition to these issues, a credit card company will also consider the length of time that the individual has been employed at their current job, and will look favorably on people who have held a steady job with a decent income for a long period of time. If your debt to income ratio is manageable, meaning you make enough money to comfortably pay for the amount of debt you currently owe, sometimes a lender can still extend you credit even though you have made late payments in the past.Chances are, if you’re working to improve your credit score for your future, you’re sending as much money as possible to each of your creditors each month as you are trying to pay down your overall debt. Because of this additional money being sent out, there will be less money available to you on a regular basis, and having a credit card can give you some security in the event of an emergency. What happens when your car breaks down, or a health issue comes up and you just don’t have the money to pay for it because you’ve been sending all your extra money to each of your creditors? Having a credit card can be the security you need for these emergency issues. Credit cards for individuals with poor credit histories will almost always carry a higher interest rate than a traditional credit card, but the benefits of having a credit card for emergencies, or to use as a second form of identification, or even for renting an apartment make having the credit card advantageous over not having the card at all. Some landlords may require a credit card be on file in the event you are late with your rent payment, so that they have the additional security of knowing they can get their money by billing your credit card.The most popular option for people with poor credit histories is to obtain a secured credit card. A secured credit card allows the cardholder to make a cash deposit on the card, and then whenever the card is used, it deducts the amount from the amount of the deposit you made. It’s much like a bank debit card, but a secured credit card deposit will earn interest, and help earn money when you aren’t spending with the card. In addition, as you continue to make deposits to the card to cover your purchases, you are helping to improve your overall credit score.
Your credit is bad. Perhaps you have a string of unpaid bills haunting your past. Maybe you declared bankruptcy within the past 10 years, or defaulted on a student loan.All of the above can block your access to obtaining a major credit card, such as VISA or Mastercard.But bad credit is not the only reason you can be denied a major credit card. Some people simply have never used credit. People who like to pay cash only, have never financed a car, taken out a college loan, or a mortgage may have zero experience with credit. In that case, most card companies will reject your application, not because you have bad credit — but because you have no credit rating.Many women who marry young and do all their borrowing under their husband’s name often find themselves with no credit rating after they are widowed or divorced. Thousands of women have been denied loans and credit cards on that basis.Still other people carry too much debt to be considered a good risk. If you have a car loan, a student loan, a mortgage, two or three — out cards, you are unlikely to be granted another credit card.But in any and all of the above cases, you can still obtain a credit card. No matter how bad your credit, and even if you have declared bankruptcy, you can still be granted a VISA or Mastercard with a limit as high as $5,000, if you know the right company to call, and how to make your application.We are going to reveal these card companies and the methods by which you can obtain a VISA or Mastercard later in this report, but first, let’s talk about some of the other things you really should know about credit cards, including annual fees, interest rates, credit reports and more.Your Credit RatingHow do credit card companies decide if you are a good credit risk or a bad credit risk? Well, it’s sort of a Big Brother thing. There are several large agencies in America which track the borrowing and buying behavior of just about every single American who has borrowed money at one time or another.The four major credit rating agencies are:CSC Credit Service: (Phone: 800-392-7816)TRW Information Sys.: (Phone: 800-392-1122)Equifax: (Phone: 800-685-1111)Trans Union Corp.: (Phone: 800-851-2674)When you send in an application for a credit card, the card company contacts one of the above agencies, which pulls your file, if one exists, and let’s the company know if you have any bad debts in your background.If you have never borrowed money or used credit of any kind, your name will not appear in the data base of any of the above. If you have, there will almost certainly be information about you. If you have ever defaulted on a bill, or walked away from a debt owed, that information will be available. If you have never defaulted on a loan, but have made frequent late payments, that is recorded, too, and goes against your credit rating.25 Percent Error RateIf this sounds a bit like Big Brother, most would agree with you that it is. It’s scary to think that some large anonymous corporation is keeping a file on you, but it’s true. Furthermore, they will share your file with any lending institution that wants to know something about you. That’s the price you pay to obtain credit. You’ve heard the statement, “there ain’t no such thing as a free lunch.”When it comes to the game of credit, the lunch is definitely not free, neither in the monetary sense, or in the realm of personal freedom.To top things off, credit agencies make errors in as many as one-fourth (25 percent) of all their reports. At this minute, false information about you may be ruining your credit rating.To check your credit rating for errors, call the agencies at the numbers I provided above. They will request that you send them a written letter asking for a copy of your credit report. They will send you a copy of the information they have about you.Now let’s look at how card companies make the big bucks — interest rates.Interest RatesA few decades ago there were laws against charging the kinds of interest rates credit cards get today. Exorbitantly high interest rates were called “usury,” and were forbidden by federal law. Just 30 years ago loaning money at 20 percent would have landed any banker in prison. Such rates were the territory of loan sharks and organized crime.Today, however, it’s standard business. Some cards have rates approaching 21 percent. Some product manufacturers, such as Apple Computer, have credit plans that push a whopping 23 percent.Most credit card companies attract customers with super low interest rates, sometimes as easy as 5 percent. But what they only tell you in the fine print, which few people bother to read, it that the interest rate jumps back up after six months. Many cards that start you out at 6 percent soon jump to 18 percent, or higher. By that time, most people have chalked up a balance and are stuck. Most people simply fail to notice when their rate increases. Credit card companies count on that. They like who take no interest in details. If you don’t watch them, they’ll watch you — and your wallet — and dip into it in the most insidious ways.No Annual Fee CardsSome credit card companies charge no annual fee for use of their card. Annual fees range from $18 to $55. You pay it every year simply for the privilege of using the card. Other companies charge no annual fee. You might think, then, that this is a better deal. Most often they are not. Cards with no annual fee almost always have a higher interest rate. If you leave a monthly balance, you’ll always pay more than the annual fee in interest charges. Only if you never leave an unpaid monthly balance can you benefit form a card with no annual fee.Perks and FreebiesOne of those insidious ways is the offer such perks as frequent flier miles or annual rebates. Use the card so often, and get X amount of frequent flier miles. Use your card, and get credit toward the purchase of an automobile. Is this a good deal? Hardly ever. As you might have guessed, the offer of rebates and gifts is simply an inducement for you to pay super high interest rates. Unless you are a big spender and travel a lot, you’ll rarely benefit from this kind of promotion.Be ChoosyIn short, never sign up for a credit card until you compare rates. Shop around. Credit card companies are just as competitive as any other kind of business. That means interest rates that vary widely. In general, never go for a card that is five percent higher than the current prime rate.How To Get A Lower RateWhat if you are already on the hook with a major credit card with an agonizing rate of interest? Pick up the phone, call your card company, and get tough. Often, if you ask for a lower interest rate, you’ll get one — it’s as simple as that.As further incentive, you can threaten to transfer your balance to another card company with a lower rate. Many card companies are more than willing to take you on as a customer by paying off one of their competitors for you. Of course, you are then beholden to them. That’s okay if you score a lower interest rate.How Anyone Can Get a Credit CardNow what about all of you “hopeless cases” out there. What if you have deplorable credit, or no credit rating at all. You may have already been turned down by a half-dozen card companies. What can you do?First, you should think long and hard about why you want a credit card in the first place. If you have a history of bad credit, a credit card may be the last thing you need. Many people feel that credit cards and the debt they lead people into is a modern form of slavery.Credit cards are almost magically deceptive and alluring. They get at the deepest psychological lever of the human mind — a lever which allows people to have the feeling they are getting something for free, when in fact, they are paying two, three, four, even ten times as much for that product because of the interest they will pay on each purchase.On the other hand, not having a credit card is becoming less and less practical in modern America. You can’t rent a car without a credit card. Carrying cash is dangerous. Checks are not accepted everywhere — and traveling to another city or country is extremely difficult without the confidence and identity a credit card brings.A Secured CardIf you decide you really need and want a credit card despite your past problems with credit, you should get what is called a secured credit card. Even people who have declared bankruptcy are granted secured cards.A secured card works this way: you pay a lump sum of cash upfront either to your bank or the card company itself, usually from $200 to $2,500. The card company will then grant your credit for up to 150 percent of the amount of your deposit. If you pony up $500, you will be granted a $750 credit line. If you put up $1,000, you will get $1,500 in credit, and so on.Your deposit money will earn a very nice 4 to 5 percent interest while it is held as collateral by your bank or the card company. The deposit money acts like a buffer for the lender. In the event you default on your card debt, the lender gets to keep your money. They may still incur a net loss, but the risk is far less.Additionally, the interest you gain on your deposit will offset the interest on your monthly balance if you have one. If you get a secured card with an 18 percent interest rate, you can feel good about the fact that your pre-payment is earning 5 percent.Which card companies offer secured credit card plans?The following:(At the time of writing, these details are correct. If they change by any chance, you’ll have to look up the institutions in the Yellow Pages, or simply do a search online.)CitiBank — Minimum deposit is $300, which earns 4%.Call: 800-933-2484Federal Savings Bank — Minimum deposit is $250, which earn 2.5%.Call 800-285-9090Orchard Bank — Minimum deposit is $400, which pays 4%Call 800-873-7307Key Federal — Minimum deposit is $300, which earns from 4% to 5%.Call 800-228-2230Signet Bank — Minimum deposit is $200, which earns 5%.Call 800-333-7116.Using a secured credit card can also help repair your credit rating if you use it responsibly over a number of years.Even if you do not have bad credit, a secured credit card is recommended for anyone who wants the safety and convenience of a credit card. Secured cards are a safe, responsible way to control your spending, and you actually earn money though interest on your deposit while you enjoy the use of your card.
There are thousands of Americans out there who may not be aware that there is such a thing as a prepaid credit card. If you are one of these people, don’t worry. Yes, there is such a thing and if you read on, you’ll quickly learn of its advantages of a prepaid credit card.It’s important to possess a credit card – even if you don’t plan on using it. Why – because it establishes a credit rating and everyone single person has a rating. A credit rating is designed to let banks know what your financial situation is like, and your ability to repay debt. Nowadays, more and more people are shopping online. Have you ever tried purchasing something without a credit card? This scenario is probably unlikely. If you want to purchase something big, like a car or a home, it is next to nearly impossible to do it without some form of credit. For those of you who have had credit problems in the past, there is hope. That hope comes in the form of prepaid cards, which allow you to open an account (like a bank account) and load the card as you wish. The process is similar to using debit cards, except with this form of credit card, you are helping your credit rating to improve rather than to deteriorate more.If you have no credit, chances are, it’s because you are young and starting out in today’s society. It is also possible that you have less than perfect credit, forcing you to start re-establishing your credit history, once again. Since it is important to establish a good credit history, owning a credit card is a good start, but only under certain conditions. Regardless of what anyone might say, if you have bad credit, you’ll need to take immediate steps of action to erase the debt that’s causing your credit to go from poor to bad. It goes without saying – building good credit is so important today, especially for young adults wanting to buy a house or a car one day. Most young adults don’t have the cash upfront to afford a home. That is where having good credit comes in handy. If you have good credit, a bank will be more likely to approve you for a mortgage on a house or a lease on a car. If you have bad credit, you may be stuck in no man’s land.You can’t erase bad credit, but there are things you can do to change it for the better. As previously mentioned, getting a credit card to help with bad credit is a wise move. Every month, your credit card company will send credit reports to credit bureaus, which are designed to help you re-build credit. It is important to note that once you receive a credit card, the responsibility is on you. You’ll need to make sure that you’re paying off your monthly balances in full. It may also be helpful to get a secured credit card – that way, you’ll have to maintain a certain amount of money in your account at all times. It’s also good to obtain a copy of your credit report to track positive (and negative) changes being made.There are many advantages to using a credit card, such as these. First of all, they work like regular credit cards. This means you can use them worldwide. You’ll also get superior customer service and protection as you use your card. Prepaid cards are also easy to get. You can pick them up anywhere – whether it’s online or at the local retail store. There are also no interest charges. That’s because you’re not borrowing anyone’s money. You’re using your own. This also means that you won’t go into debt by using your prepaid card. It’s simple to use and effective in today’s world where it’s easy to spend too much when you may not have the cash to pay for it later on. Be smart and consider a prepaid card.
Credit – and by association the credit card – has become a cornerstone of the American way of life. Each American household is estimated to have among them at least 10 credit cards, not counting charge cards or house cards, and carries an average of $13,000 in credit card debt. This is however not a recent phenomenon.It was only inevitable that Americans would invent the credit card. Americans have always been comfortable about using credit. The Europeans who started colonizing America in the 1600s came from countries that had put aside old prejudices about borrowing and lending, and the new attitudes toward credit were transplanted on North American soil.Americans have also always needed credit: borrowing to buy land, to establish a business, to travel west in pursuit of valuable animal furs or in search of precious metals. Others went into debt in order to get to America in the first place — as the colonies’ indentured servants did — or stumbled into debt, and were released by royal decree to join English general James Oglethorpe in establishing the colony of Georgia.By 1800 the United States was an independent nation, with debt being a way of life for many of its citizens. New York City pawnbrokers gave out loans against 149,000 separate pieces of collateral in 1828 — versus a population of only around 200,000. In rural areas, people bought horses, carriages, plows, seeds, clocks and household furniture on credit. Many promised to pay in full at harvest time; others relied on open-book credit.Open-book credit was used to purchase inexpensive necessities of life such as food and clothing. A shopkeeper allowed customers to take home the goods they needed, and to pay what they could afford to, paying in part but not all of their balance each month — much like many credit card owners do today. Yet very few fell into drowning debt. Both credit card debt and open-book credit are classified as revolving credit.Early 19th century merchants also offered a non-revolving type of credit, the installment plan. These plans were limited to well-to-do customers who purchased expensive items like a piano or a carpet. By the turn of the century, installment buying was no longer limited to the rich, and even working class families could purchase “discretionary” goods on installment. It got so that installment buying became associated with the needy. A further refinement on installment plans came early in the 20th century with the introduction of the department store house card or the charge card.The charge card was first offered, like installment plans had originally been, to buyers of luxury goods. Up market stores provided the house card to their prized customers, which naturally made them very happy. The house card was convenient: they didn’t have to carry large amounts of cash or undergo the identification hassle if they paid by check. The customer merely presented the house card to a clerk for recording of the sale, and received a bill once a month for thirty days’ worth of purchases. The customer settled the bill in full each month. The store charged nothing for the service, but gained customer loyalty. This charge card made it easy for the store to keep track of sales, but, the biggest advantage was that the charge card increased sales per customer.The history of credit took a big turn with a new development: growing automobile sales.Autos were necessary but expensive to buy as a single purchase. Everyone needed the auto, and everyone was forced to buy cars with credit. Installment buying for automobiles gave respectability to buying on credit.The other significance of automobiles on credit was that they allowed people to go long distances in a short time, to places where they were total strangers. And what if the car broke down? That was common with the early autos. Drivers could wind up far from home, in need of costly repairs, and without enough cash to pay for them.To solve that problem, oil companies came out with their own type of credit card. This credit card could be used to buy oil, gas, and mechanical service. Unlike the department store charge card or house card, the oil company credit card could be used everywhere around the country.Thus, by the 1920s the essentials of the modern credit card were at hand:o Oil companies showed the charge cards could be used nationwideo Automobile buying needs showed buying on time was respectableo Americans had felt comfortable with credit for centuries.It took another thirty years before the credit card as we know it was invented. Three men finally accomplished this over lunch in a New York City restaurant in 1949.They were convinced that there was money to be made in consumer credit, and tried to find a way to tap it. The charge card or house card boosted sales and customer loyalty, but without interest, the charge accounts by themselves did not generate revenue. Installment sales did produce interest, but that was meant to cover the seller’s costs, and not to earn income.Suppose, the three wondered, that a third party inserted itself between buyers and sellers. Suppose this third party promised the sellers many customers, those who would not have gone to them otherwise. Suppose the same party offered affluent people with good credit records a diverse choice of establishments (not just one department store or a chain of gas stations) where they could charge what they bought, no questions asked. Wouldn’t these well-heeled spenders be more inclined to patronize those establishments where they had credit? Wouldn’t business owners, seeing their sales increase and their profits soar, be willing to return a small percentage to the third party that helped provide them with the new customer base? Wouldn’t those small percentages add up to a small fortune?They sounded out the restaurant owner, asking how much credit card business that went his way would be worth. The owner replied, “Seven percent.” And, Diners Club was in business.The early Diners Club credit card looked like miniature books. The owner’s name was on the front of the credit card booklet; inside were the names of establishments that had agreed to accept the credit card. Owners didn’t pay any interest or annual fees, but they paid off their entire credit card bill every month.By 1951, Diners Club had gone international and shown its first credit card related profit. Four years later, the familiar plastic credit card replaced the original paper credit card. In 1950, Diners Club had begun charging an annual $3 fee and had a selection of 300 businesses for over 35,000 credit card holders. By the mid-1960s, restaurants, hotels, airlines, retail shops and the like were happy to accept the Diners Club credit card. The founders’ dream of a universal credit card, used for various purchases all over the world, was being realized.Diners Club had its imitators. In 1958, American Express issued its own credit card and the Hilton Hotel chain introduced Carte Blanch. All three were known as travel and entertainment credit cards, distinguishing them from another type of credit card, the bankcard.Seeing Diners Club’s success, banks entered the credit card market during the early 1950s, and by 1955 over one hundred US banks offered credit cards to their customers. They were slowly making money, but they had no national credit card distribution because the law restricted interstate banking. In 1958, the largest US credit card operation belonged to Bank of America, but its BankAmericard could be used only in California.To expand the newly fledged credit card’s geographical usefulness, Bank of America pioneered the national interchange that would enable all banks all over the country to offer BankAmericard. This credit card association later metamorphosed into Visa.This move solved the credit card distribution problem. It also prompted large banks in the east to form a rival national credit card network, Interbank Card Association which became Master Charge, and later, MasterCard. Despite initial resistance from department stores, and other house card and charge card issuers, the two credit card associations eventually signed them up in the 1980s. The credit card industry had come of age.Today, it is a rare business that does not display the Visa and MasterCard logos, along with those of the other credit card companies.
You probably don’t need me to tell you credit cards are easy to get a hold of; at least, that is so in the US and UK. How many weeks pass without a glossy brochure promoting a credit card popping through your letter box? And that’s just your mail; the tv advertising budgets for credit card promotion are enormous, with some famous faces often adorning your screen, smiling beautifully as they tempt you. How does anyone resist that promotional onslaught, coupled with the peer pressure, and the “have now, pay later” culture in which we live? Well, the fact is, few people do resist. If you are credit worthy and have no credit card, you are something of a rarity.Credit cards are almost as easy to get as your fruit and vegetables from the local supermarket. The thing is, you can have a bad credit history, and still get deluged with offers of easy credit. Even if you have just filed for bankruptcy, you may still get more offers of credit cards than you know what to do with!Because of the ease of availability, credit card debt is all too easy to get into. Not just once, but over and over again. Partly it’s psychological, as we may not feel like we are spending real money. That is, until the chicken comes home to roost, and the bill comes. By then, of course, it’s too late; you have a debt for which you are legally responsible. The credit card companies have slick marketing departments who know we are weak, and that we may easily fall prey to temptation.It is often recommended, when trying to establish a good credit report, that it is a good idea to get a credit card, and then use it to spend wisely. Experts will advise us to pay our bills on time, and never to exceed the credit limit. However, when you get you first credit card, nobody really goes to any real trouble to warn you, bluntly, of the pitfalls:1. It is easy to be lured into spending up to the credit card’s limit; before you know it, that one moment of weakness a month has taken you up to the limit.2. You may have a low interest rate to begin with, but that was an introductory offer; a lure; a bribe; to get your business and your money and tempt you more and more. Soon, the permanent interest rate will kick in. How does 20% pa sound? It could be that much. Were you warned how quickly that builds up? How the monthly interest alone may make it difficult for you to pay your monthly repayment every time, on time?3. Close on your credit limit and with high interest charges, you miss a payment and go over the credit limit. Unknown to you, you are now getting black marks on your credit reportUnfortunately, when times are difficult, over use of credit cards is far too easy. If you are short of cash for any reason, it is easy to reach for the credit card. But if you find yourself tempted to use it for day to day expenses, then you are on the route to credit card debt problems that will mar your credit report for a long time to come. That can affect mortgage applications, car loan applications, and even your desire to move to a new apartment.Always bear in mind that credit card debt has long term risks. If you have got this far without a credit card, think long and hard if you really need to apply for one. It is true that if you use credit cards wisely, you can build a credit history that brings rewards instead instead of risks. But the temptation is always there. Always remember that you are paying the bank for the privilege of having a credit card, and you are paying a high rate. If you think you may succumb to temptations too often, then be different: save as much as you can each month, and then if you hit upon hard times, you have the option of reaching for the savings account instead of the credit card fix. For non-cash convenience, you can use a debit card rather than credit card.