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Debtwizards.com |
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All About
Credit Cards
In This Chapter:
Avoiding late fees and other credit card tricks, types of credit cards, where to
find online applications. If you have a credit card or are considering getting
one, you must read this section. We will give you some helpful hints and advice
that can save you some money.
Types of Credit Cards:There are
two main types of Credit Cards- Secured and Unsecured.
UNSECURED CREDIT CARDS
Unsecured credit cards are the ones that most people are familiar with. You do
not have to put down any collateral. The cards that advertise themselves as
"unsecured cards", are really aimed at people with less than prefacer credit.
Because of this, there may be an annual fee or a higher interest rate than
regular credit cards. This is how the banks cover some of the risk associated
with offering cards to people with imperfect credit. A normal credit card is
usually not advertised as non secured, but you usually have to have a good
credit rating to get them.
BE VERY WARY OF
SECURED CREDIT CARDS
To obtain secure cards you must have some type of collateral.
Many are scams, or you have to have money in the bank to cover them, or you can
only buy products from their catalog, which you know is not at Wal-Mart prices.
Even if you do have bad credit, there are companies who will give you unsecured
credit cards. But if your credit is really bad and you are deep in debt, you
should really give a second thought to whether you really need to apply for a
credit card. Always consult your personal credit advisor, which hopefully you
have if you have a bad credit problem. You want to avoid a secured card if
possible.
Department Store Credit Cards
One thing you should never do is obtain credit cards from ANY
department store or other retail stores. They'll probably scratch us off their
Christmas list for saying that. The APR on these on department store credit
cards is 18-21%, and most people don't bother to notice that it's much higher
than their MasterCard or VISA, which is 5-15% typically. Sure the stores reel
you in saying "we'll give you 10% off today's purchase if you join, you can just
pay it off in full so you don't get the interest". Only problem is no one ever
pays it off in full when the bill comes, now you're paying 18% APR. I don't have
a single department store card, everything goes on my 6% APR credit cards. |
Concerned about credit card fraud?
One way to keep fraud under control is to
closely monitor your credit report.
A great way to do this is with Equifax Credit Watch. They give you unlimited free
copies of your credit report so you can check it whenever you need to, online Monthly Monitoring Alerts to inform you of changes and new black marks, inquiries into
your credit, and possible credit fraud, dispute information to help you deal with inaccuracies in your credit report, a newsletter with tips for managing your good
credit, and articles to help you stay on top of your credit. They also offer the
Equifax Credit Watch
Gold with 3-in1 Monitoring program. This package includes monitoring of
all 3 credit reporting agencies. |
Getting the Credit You Deserve
The credit card you apply for depends on your credit situation.
If you don't know your credit history you
should first get a copy of your credit report. |
If You Have Good Credit Apply To These Cards:
Discover®
Platinum Card
The Discover® Platinum Card is for people with good credit who want to
get something back for using their credit card. You can earn up to $500 per year by using this card.
Click
here to get the Discover® Platinum Card.
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If You Have Fair Credit Try These Resources:Credit Card Finder
Instead of applying to different credit cards and getting turned down which can hurt your credit try this cool credit card finder.
Just answer a few simple common questions, and they list all the credit card banks who are guaranteed to issue unsecured credit cards to people matching your
criteria of "less than perfect credit". It's like pre-qualifying, WITHOUT the credit check. Don't forget that every time a creditor checks your
credit it will appear on your record. Other creditors will be turned off if they see that you've applied for credit many times and not gotten any. |
If You Have Bad Credit Try These Resources:
Credit Card Finder For People With Bad Credit
Don't apply to different credit cards, get turned down, and have your credit ruined even more, try this cool credit card finder. Just
answer a few simple common questions and they list all the credit card banks who are guaranteed to issue unsecured credit cards to people
matching your criteria of "less than perfect credit". It's like pre-qualifying, WITHOUT the credit check.
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If You Are Rebuilding Your Credit
Use the card to buy gas or food, and pay it off in full each month to establish a pattern of responsibility.
You can't get blood from a stone and the moral of the story is to not get into these situations to begin with. The way to build solid credit is to pay your
credit bills on time. So how do people with bad credit get into these situations? By not taking their financial pulse and making a budget. You must have a budget
and stick to it. Remember our Credit Rule #1? If you don't know how much money you owe your creditors, you have a credit problem. End of Sermon.
TRICKS TO AVOID CREDIT CARD FEES
If you have good credit and normally pay your bills on time but one month something happened and you were a little
late you should try this. A friend of ours actually did this and was successful. Call up you credit card company and explain that the
payment just slipped your mind and due to your past history you think that they should remove the late fee. If they do not give in simply
threaten to close your account and transfer your balance elsewhere. If you are a good customer this will get their attention. The only way
for them to make money is to have accounts with balances each month. The last thing that they will want to do is loose yours if you normally pay on time.
Are you tired of paying those annual fees? Here's
something you should try. Call up the credit card company and tell them that you have many other cards which don't charge annual fees.
Tell them that unless they remove the annual fee you will cancel the account. If they really want your business, they'll oblige. If not, be
ready to cancel the account. But if you have credit problems or have been late with your payments more than once, you may not have a chance with
this one. It's still worth a try.
Credit card offers you get in the mail with low APR
Make sure to read the fine print. You must know when the introductory period will end, it's usually a 6 month program with most offers. It
may save you quite a bit of money to transfer your balances to a card with an introductory low APR (of course, you shouldn't be carrying any balances
to begin with) but make sure to watch that introductory period ending date. As that date approaches you should contact your other cards to see if
they'll allow you to transfer your balance at a lower APR. Keep moving your balances around to your accounts that have low APR transferred balance
offers. Most low APR offers are usually 6%-10% depending on the economy. By moving your higher APR balances to these lower APR offers,
you'll avoid ever paying the typical 18% APR that most cards have, for about 6 months. This whole process is like your grandparents going to
different banks every 6 months, moving their CD's to whichever bank has 1/10% higher rate that day.
Alternatives To Credit Cards
A great credit card alternative is called a check card. A Check Card is like a combo ATM
card and credit card from your checking account. The check card acts like a credit card, but the transaction amount is deducted from your checking
account, just like using your ATM card in the grocery store checkout. To make a purchase at a restaurant or store, just give them the card and
they treat it as though it's a credit card, and when the transaction is complete, the money is taken directly out of your checking account.
For example, the NationsBank check card has a VISA logo on it. It's not a VISA card, but any store that accepts VISA can process these
cards. By using the check cards, the money comes right out of your bank and thus there is no interest. This can save you thousands
of dollars annually because it forces you to pay for it on the spot, and you can never spend more than what you have in the account, preventing you from
running up a high credit card debt. This is a great alternative to secured credit cards. Just make sure you save all your receipts, and don't
forget to enter them in your check book. Also be careful no to spend too much money with a check card. It's not like running up a balance
with a credit card. On a check card by "running up a balance", you are actually running your checking account down to zero, so be careful.
You don't want to be blindly spending and then suddenly find out you have zero in your checking account and now you can't pay your rent check
tomorrow.
DebtWizards.Com Recommended Supplemental Reading |
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This site has different chapters covering your personal debt. Click on a chapter below:
Credit Cards,
How To Get Credit Reports and Credit Scores,
Debt Consolidation,
Credit Repair Tips,
How To Establish Credit,
Dealing With Harassing Collection Agencies,
Credit Counselors,
College Student Debt Info Page
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