Secured credit cards may be an answer for those with little or no credit that can’t get a normal credit card at a bank. With a secured credit card is easier. You can determine your credit line by depositing money into an account. This way your own money provides the “security”. If you put, for example $500 into an account that means that you have a $500 credit limit. The money has to remain into the account and as long as they do you can use the credit card for convenience.
This way you won’t amass a huge balance every month because if you set a limit at a certain amount of money, that is all that you can charge each month. More than that, this encourages you to pay off the balance each month and helps develop good credit card habits. The down side is that you have to pay a rather high percentage rate on balances and an annual fee of around $60 or less.
If you want a secured credit card you can ask at your bank for information. If they don’t provide this kind of service they may direct you to other banks that do. Credit unions may also offer secured credit cards. You may also search the internet for testimonials, to see what others say about their experience with this type of cards. One recommended site is the consumer’s affairs database. You can search the name of the company or just secured credit cards. Don’t mistake these credit cards with an advance fee credit card. These companies charge a large upfront fee for carrying their cards. Unlike secured credit cards, which is backed up by your own money and such a fee isn’t necessary.
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A student credit card isn’t really different from a regular credit card. They work the same. They might look a little different as credit card companies have tried to appeal to the students by either allowing them to personalize the card with a picture, initial or by choosing a few preset options. But the small plastic cards still enable the student to purchase goods and services on credit, with the promise to pay at a later date.
The card issuer can be a bank or other financial institution, or the cards can be issued by the retail store or service company for their specific product. The card issuer sets a limit to the card holder and based on how payments are made, the card holder may raise or lower that limit.
Having a student credit card can be a great way to establish a credit history. But these credit cards often carry a high interest rate. A quick perusal of rates showed that percentages varied widely from a credit union credit card of under 10% with no fees and no reward offered, to cards with an interest rate of over 21%.
Credit Card versus Charge Card
Student can get either a credit card, or a charge card. Even thought the terms are often used interchangeably, there is a difference. A charge card requires you to pay the total balance of money charged to the card at the end of each month. They usually have an annual fee, offer rewards and if you pay the entire bill each month, there is no interest charged. An example of this type of card would be the traditional American Express Green Card.
A credit card would allow the student to carry a balance forward and pay anywhere from the minimum monthly payment, to the full amount charged to the card. With a credit card, interest accrues each month on the balance left over after a payment is made.
New Rules And Regulations
There are new rules and regulations that will take effect as of August 2010 that specifically address student credit cards. An adult cosigner is now required for all students or anyone that is under 21 years old, unless the under 21 year old can prove they have consistent means to pay for the credit card. The adult co-signer will be asked to assume responsibility for the credit card payments and to prove that they can afford to make those payments if the student defaults.
Another rule that affects students under the new laws is that the credit card companies will no longer be allowed to market on or near campus if they offer promo items like free pizza or gifts if the student fills out a credit card application.
These new regulations are designed to stop students from getting a credit card, defaulting and leaving their parents liable for the credit card debt when they didn’t even know that the student had a credit card.
Secured Credit Cards
One option often offered to students is a secured credit card. This type of credit card requires a security deposit on the account. That deposit generally equals the credit limit. The deposit is held in a special savings account; it does accrue interest, but can’t be accessed by the account owner. The credit card can be utilized for any purchases and after having the secured credit card for a year and establishing a history of on time payments, the card issuer will generally re-evaluate the card holder’s status. At this time if the payments have been made on time, the security deposit is released and a credit limit assigned to the card holder.
Prepaid &Credit-Cards"
These cards are not actually credit cards but are a type of stored value card. There is no credit check done for these types of cards. The parent or student simply makes a deposit that stores money on a card. These prepaid cards carry a credit-card brand like Visa, Discover or American Express, and can be used just like any credit card. The money stored on the card is reduced each time the card is used.
Prepaid cards can be given to students as young as thirteen years of age. There is no interest on these cards, there is sometimes a fee to purchase the card and there may be monthly fees or "non-use" fees if the card is not used in a specified period of time. As with any type of credit card, make sure you verify all the fees.
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Event if the 20% discounts on these store credit cards are tempting the advice is not to open such an account. The stores are interested in having as many customers as possible owning this kind of cards because we are surely spending more money when we are using a credit card. More than that, on these private credit cards they earn a lot of money. There is a big difference between private credit cards, or store credit cards, were we pay an average interest rate of 24%, and the prime credit cards, like visa or master card, were the interest rate is around 12%.
Even if the Credit Card Protection Act of 2009 will go into affect in February, things won’t change a lot regarding the predatory practices. It won’t change anything about the interest rates. On the other hand the big plus is that it changes the transparency and the disclosure around the debts and conditions. From February on, you credit card statement will show you how many moths it will take to pay off that balance if you only paid them in a month and it affects how quickly fees and terms and conditions of the credit card can be changed, but it won’t stop any of this from happening.
Just signing up for such a store credit lowers your credit score. Because they like to see longer, older credit history, a new credit card makes your credit history younger, so for them it represents a higher risk. The other thing that lowers your credit score is utilization, when you utilize almost all the credit you have been given. The advice is to cancel all extra credit cards even if your credit score will take a hit, it will repair itself over time.
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The importance of business credit cards has increased significantly in the last 18 months. They can be very useful if you use it the right way. It is very important to make the distinction between a business credit card and a credit card that has your business name on it. The first one has the underwriting decision made on the employee identification number of your business while the second has the underwriting decision made on your social security number.
A personal credit file is generally made as soon as you are born and by the time you are 20 there is some credit information about your credit or use of credit, in short your credit history. It is wrong to assume that your business credit file starts the day you open your first corporation. For such a credit file to make sens you have to create and work on it.
The business operator files done in the Brad street and the D&B service tracks business credit versus FICO scors which is personal credit, also called paydex. Just like personal scors, business scores are important. The same way, but on another scale, if your paydex score is 80 or more you can get business lines of credit of different forms, based on you EIN.
The fastest way to built business credit is to get some straight lines of credit. Staples or office Depot, or Home Depot, or Lowes are the easiest way to get them. Use your credit card, pay it off a couple of times and that is going to built your line of business credit score, also called trade lines. There are many lenders that have business credit cards, based on EIN. A web site were you can go to find more is www.Rex.SBCAlliance.com . They offer you a number of cards for which you can apply and get your answer in a few days.
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You always want to bring as much joy as you can with few costs and this is also valid for gift cards. Recent surveys indicate that at least 60% of us will be giving at least one gift card this year, even tough the percentage is smaller than last year. More than this, most of us won’t spend it foolishly. There have been some changes in what people buy in gift cards, from jewelry and luxury items, in the past, to more common things like gas or groceries gift cards.
No matter what type of gift cards you have you should pay attention to three important things. One of them is to avoid activation, redemption or other fees were this is possible. For this kind of information there are free web sites were you can check the terms.
Another suggestion is to pay attention to stores that offer gift cards when you reach a certain amount of money spent. You should look for the best deals, but be careful not to over spend just for a free gift card. Also you have to watch out for stores that may go bankrupt. You should always beware to buy gift cards from a stable company, because if it goes bankrupt you loose your gift.
Some companies could also offer to personalize your card by adding a photo or greeting, but there is another fee for this. But you can put it yourself with another gift or besides a greeting card and save some money.
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