Credit Cards - Friend Or Foe?

At one time or another most all of us apply for and get more credit cards than we need. We feel like we have to be able to purchase almost any type of item at anytime, whether we can really afford it or not. Having several credit cards allows one to buy products and services at will. Is that a good thing or bad?
There are many companies offering credit cards and loans online, but all may not fit everyone's needs. A credit card is a great financial tool that needs to be used wisely and cautiously. Never allow yourself to get so far behind on your creditcard balance totals that you can only afford to pay the minimum payment amount or small amounts each month towards the reduction of your debt. That is the interest rate trap. Once your cornered on paying minimum amounts, you will most likely be stuck there for years if not for a lifetime.
However, having credit cards can be a positive, productive personal finance tool and does not have to be a negative to your credit status or your lifestyle. A couple of key points:
• Convenient to use and carry• Offers valuable consumer protections• Use it with caution and good judgement• Pay off your monthly bill in full each month,• which eliminates interest charges
Having credit cards is a priviledge and huge personal responsibility. You must utilize and manage your credit rating wisely and carefully at all times. The saying ' if you can't afford to pay cash, then you can't afford it ' is a true statement and we should all take heed to its warning. Using creditcards in this manner makes them your friend and not your foe. Having credit cards in your name is not bad just take care not to go into debt for more than can repay. Doing so will only serve to damage your credit rating and it can and will create larger credit problems for yourself into the future that may be difficult or impossible to repair.
When shopping for a new credit card, comparison shopping is important, because it can save you money. Be sure to consider all of the costs and terms of each of the credit offers. These can make a real difference in how much in fees and interest charges you will possibly be paying each month. Be sure to compare these costs with any of your existing financial instruments, cards, loans, mortgages, etc. You may be able to replace some of your current debt with less expensive options. Some of the costs and terms to consider are the annual percentage rate (APR) for goods and services as well as for any cash advances you may request, the annual fee, and the grace period. Also compare other fees, late-payment charges, and over-the-limit spending fees.

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Bad Credit Credit Card- Offered By Many Companies

Check-books and paying with cash is becoming less frequent as more people are using plastic to pay for purchases. Checkbooks are being replaced by debit cards and the use of credit cards is rising. Online shopping has helped fuel the need for a credit card. Unfortunately people with bad credit are normally not approved for a credit card. It is not hopeless, there are avenues for those with bad credit histories to enter or return to the world of plastic.
Bad credit - credit cards are offered by many companies. This became a necessity since individuals with low incomes or credit problems would be declined for a low interest, no fee credit card. Many of these companies use what is called Risk Based Pricing. What this does is they have several types of offerings with different interest rates. The rate they offer is based on your credit score. So if you apply for one card you may get declined but offered a card with a higher rate. This is an excellent way for someone with a bit of a negative credit history to be approved for a bad credit, credit card.
So what about those individuals with no credit or extremely negative credit? They may need to look at another type of bad credit, credit card. There are several companies that target these types of people. They offer what is called a starter card. This type of card has a very high interest rate and very low credit limit. There are also a substantial amount of fees normally connected with these cards.
These cards pale in comparison to the more normal type of credit card offers but the acceptance rate is high. By using, one of these bad credit, credit cards and keeping with the terms of the agreement, making payments on time in a period of time your credit rating will be more positive. This will allow you the opportunity to apply with a better chance of acceptance for a lower rate and more favorable term credit card.
There are some individuals with such critical credit problems, a recent bankruptcy for instance, that a starter card would not be an option. If this is the case the only solution that would be left is a prepaid credit card which is sometimes called a secured card. The fact they look like a credit card it the only similarity. They need to have funds deposited to use them. You are virtually guaranteed to be accepted for this type of bad credit, credit card.
They work the same as any Mastercard or Visa but you can only spend the amount of money you have deposited. This leaves very little risk to the card issuer since you can not incur any debt with them. Because the issuer of the card will not be making any money on monthly interest rates for the balance they make their money in other ways. The can charge a fee for applying, a annual fee, an administration fee even a small percentage for every time you purchase something with the card. You will want to research several companies before applying for this type of bad credit, credit card since these fees can vary greatly.
Basically what all this means if even with a bad credit rating, nearly everyone can find a bad credit, credit card. It may take some research but it can be accomplished.

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Avoiding Credit Card Penalties

It is a sad fact of life that credit card companies are very willing and fast to slap a penalty charge on your account for every mistake, delay and slip up you cause, immediately and without a second thought. These penalty charges can amount to millions of dollars taken from consumers each month. They are a necessary part of all credit card operations and are fair in the sense that it means that customers who do everything correctly and on time are not penalised for the extra work and expense that other customers cause, but what you will want to do is make sure you are not one of the unlucky customers that is paying for these extra expenses.
The best way to avoid these penalties is to look at the entire situation from the point of view of the credit card company. Really, all they want from you is to keep your card safe, to stay within your credit limit, and to make at least your minimum payment, on time every month. If you manage to do these simple tasks you will avoid ever incurring a penalty on your account.
The problem is that it is very easy to slip up on these things. It’s not easy at all to keep track of your outstanding balance, especially as we use credit cards for more and more things and companies begin placing holds and other such transactions on customers accounts without them necessarily knowing or understanding about them. Then there is the fact that it is very easy to forget or become late on a payment. Every one has busy periods in their life and sometimes we simply have other more important things on our minds than paying our credit card bill on time. Some people are less organised than others and for them it can be very difficult making sure all their credit cards are paid out in full and on time.
If your card is lost or stolen without any fault on your part, and you call your credit card company as soon as you find out, you will only be liable for a maximum of $50 dollars. And if you manage to let the credit card company know before any thing has been spend on your stolen card you will not be liable for any thing. This is also the rule that applies for identity theft and fraud so you can feel safe using your credit card online. Taking a few simple steps can mean you are virtually never subjected to credit card penalties.

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Avoiding Credit Card Fees

Credit card bills can be expensive. Sometimes they can be simply too expensive. Depending on how you use your credit cards, and how much you spend, and how disciplined and controlled you are over your own spending, you may or may not have trouble paying your credit card bills when it comes to the end of the month and the bill arrives in the mail. No matter what your situation is however, there is always one thing you will not, under any circumstances, want to see on your monthly credit card bill, and that is a credit card fee.
There are different types of credit card fee and different reasons for incurring them, but the good news is that many of them can be avoided by simply following a few simple rules and keeping on top of your finances and bills. The most important way to minimise the fees you receive from your credit card company is to pay your bill on time and in full each month. Generally if you do this, you will be charged no interest of finance charges at all, and will be receiving all the benefits of a credit card and over a month of credit absolutely free. If you are one of the lucky customers who can manage to maintain your account in this way, you will be very lucky.
However, many people cannot pay their account in full each month, therefore, they incur the most common of all credit card fees, and this is finance charges. Credit card companies actually charge very high interest rates to their customers so if you have the option of borrowing in other ways that may be cheaper it is recommended that you use these methods if you are planning on needing the money for more than a couple of months. It is far cheaper to pay back a short-term loan than to maintain a large credit card balance.
Another credit card fee is a late fee for when you are late in making your monthly payment. Many people who have more than enough money to make their repayments simply through a lack of organisation miss payments and incur large fees. If you are late in making your repayment because you don’t have enough money to make it you may need some debt counselling or other advice to help you manage your way out of this situation.
There are many other fees that your credit card company can impose upon you depending on the company, but being aware of how they are calculated and what sets them off is probably all you need to know to be able to avoid incurring them in the future.

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Introduction To Affinity Credit Cards

Affinity credit cards are one of the most popular kinds of plastic we carry today, especially as the fashion for balance transfer deals and the like continues to fade. Where once the focus was on how we could save money by shifting our credit card debt around, now more and more of us are looking to profit from our card use, or at least to benefit in some way from our everyday spending habits. This change of emphasis has led to a vast increase in the number of rewards and cashback cards on the market, but where do affinity cards fit in to the picture?
At its simplest, an affinity card is one which identifies the cardholder with a particular company, organization, or field of interest. The card will generally have a visual design to reflect this link, and will also offer some benefit related to the affinity topic in question. A good example is a hotel chain affinity card. If a credit card account holder travels a lot on business or for pleasure, and has a favorite chain of hotels to stay in, then a credit card linked to these hotels can offer benefits such as discounts on room reservations, a points program which lets you build up credits for free meals or use of facilities, or even access to advanced concierge services to make your stay in a new city more enjoyable.
A hotel card such as this is an example of where affinity cards and rewards cards meet and overlap, but the affinity card will have a more tightly focussed reward scheme than the general card.
Another kind of affinity card which has grown in popularity over recent years is a charity credit card. In many ways, these cards can be viewed as variations on cashback credit cards, where a small percentage of everything you spend using the card is refunded. The crucial difference with a charity card is that instead of the cashback being credited to your account or sent to you in the form of a check, it is instead donated to the charity or charities linked to the card. Animal charities are popular, as are health research charities, but the range is huge and you're sure to be able to find a charity card supporting a non-profit that you'd like to support.
Closely related to charity cards are sports affinity cards. These operate in much the same way, but instead of donations being given to charitable organizations, they're instead passed on to the card holder's favorite sports team. By holding one of these cards, you can help support your team financially, while also declaring your support with your teams logo or badge emblazoned on the card itself.
The final kind of affinity card could be loosely termed a lifestyle card, and rather than giving you direct rewards or supporting your favorite organization, they are simply run of the mill credit cards that visually reflect an interest or hobby - for example, your favorite TV show, or work of art. For obvious reasons, these cards are not overly popular these days, as cards offering more concrete benefits have overtaken them in usefulness.
So are affinity cards worth using? In general, they probably won't offer such a great range of features as a market leading general credit card, but if you can find one that closely fits your lifestyle, then they can be very attractive and well worth applying for.

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Analyze Reward Credit Cards Thoroughly

Travel has its payback in the form of reward credit cards. Choosing the best reward credit cards for yourself can be intimidating, and you should be guided by some factors that are personal to you. How do you choose and analyze THE travel reward credit card that suits your needs and lifestyle best? How do you, in fact, analyze reward credit cards in the first place?
Reward Credit Cards Should be Tailor Made for You
For one thing, the travel rewards companies work on the assumption that you want something – and they can give it to you. The problem is that most of us don’t know what that ‘something’ is and tend to lean towards fat, attractive packages that we may never use. For example, a travel reward credit card that offers you discounts on airfares might not be very attractive to a traveler whose airfare is paid for by his company. Then again, a reward credit card that offers exotic holiday cruises may remain unutilized in the hands of someone who does not enjoy sailing!
On the other hand, a frequent traveler might actually benefit from free upgrades on board if his card gives him that facility. Choosing a card according to how you would use it and benefit from the rewards would be most important. Are the rewards offered suited to your lifestyle?
Best Reward Credit Cards Offer Value and Usage
To begin, analyze your travel patterns. If a particular airline gives you special privileges on a particular rewards credit card, and if you frequently use that airline, it makes sense to go in for that credit card. Being faithful to a particular airline would result in accruing rewards that might actually result in much higher value in the form of points, cash back etc. Other credit cards may offer fancy rewards on airlines that you would prefer to avoid or which do not service the destinations you frequent. So choose a reward credit card where the value increases with usage.
Hidden Costs of a Reward Credit Card
The hidden costs need to be worked out too. Travel reward credit cards often come with hefty fees attached. * Does the reward that you are likely to earn over a year cover the cost of maintaining the credit card? * Are you going to be able to cash your rewards? * Is there a time limit for earning and cashing the rewards? * How easy is it to redeem your reward points? * Is there a complicated process or is there an online or phone-based system? The answers to these questions will dictate the kind of card you want.
Research Reward Credit Cards
Do not hesitate to ask such probing questions to the sales rep of the card company. Most prospects will not hesitate to ask for references from existing cardholders. Check forums and blogs online about the public opinion about the card. Do everything in your control to ensure that you are signing up for what you expected.
Reward credit cards come in several shapes, sizes, colors, and forms. It is easy to be tempted by a ‘once in a lifetime offer’. However, try to keep a sensible view of what YOU need from the reward credit card of your choice. The bottom line is - if you are going to travel you might as well make it work for you through the best reward credit cards you can find for yourself. Truth is, if you do not make a reward credit work for you, you may soon see that is working against you. Then, a reward credit card becomes almost equivalent to a penalty card – which should be avoided at all costs.

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Tips To Improving Your Credit Card Reports

Credit is something that some take lightly or give little thought to until it’s really needed. There are 10 things that you can do to make sure that your credit is always in good standing so it will be available when needed.
1) Pay your bills on time. A consistent history of timely payments will greatly improve your credit profile and will, therefore, make you more desirable to lenders. In many cases, a strong payment history in your credit reports will also result in better interest rates.
2) If possible, pay your bill in full every month. This will help to save you money in finance charges, especially credit cards with high interest rates, and will make your credit reports even stronger.
3) Avoid carrying a balance of more than 50% of your total credit limit on any credit card.
4) If you notice any incorrect information on your credit reports, dispute it in writing with the credit bureau immediately. You may also find it helpful to contact the creditor directly, notify them of the incorrect information and ask that they correct it with the credit bureau and on each of your credit reports.
5) If you have recently filed for bankruptcy, start rebuilding your credit with either a secured credit card or one that is known to be bankruptcy-friendly. The latter often requires higher interest be paid, but your credit score will begin to rise after three months of a steady payment history is listed in your credit reports.
6) If you have old accounts that are listed as being open, but are actually closed, call the creditor and send a letter to the credit bureau. Often times, creditors simply never report an account as being closed with the credit bureaus. If you have a lot of available credit on your report, potential lenders may wonder why you need all of this open credit and what your plans are for it’s use. A large number of apparently open accounts with a zero balance may put you in the high risk loan category if the lender suspects you plan to increase your debt load substantially with your unused credit.
7) Avoid excessively applying for credit as this may lower your credit score because of multiple inquiries.
8) Use your credit cards for necessities only and avoid spending more than you could repay within six months.
9) If your credit cards have excessively high credit limits that you never plan to use, call the creditor and ask that they reduce your credit limit to an amount that you are comfortable with. This will not only reduce the temptation of overspending, but will also prevent potential lenders from seeing that you have a lot of available credit and suspecting that you plan to go into serious debt.
10) The best way to improve your credit reports is to review the information filed with each of the three major credit bureaus every six months. These include TransUnion, Experian and Equifax.

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Ways To Get Approved For A Business Credit Card

If you run your own business--whether it's a retail store, direct sales, hobby shop or freelance consulting--chances are you've thought about getting a business credit card. It's probably a good idea, since it makes it easy for you to separate your business expenses from your home expenses, a task that helps keep your paperwork organized and simplifies things at tax time. When you're ready to apply for a business card, follow this checklist:
1. Choose a card
Some cards offer special deals, financing or rewards for small business owners. For example, some rebate cards offer you a percentage back on everything you buy at a certain store, like a warehouse store or online store. Other cards offer cash rebates when you spend at supermarkets, gas stations or home improvement stores. If you travel often, a frequent flier or travel rewards card might get you the best and biggest bonuses. Choosing the right reward card--depending on the type of business you operate and the expenses you incur--can mean extra money in your pocket all year long.
2. Gather up paperwork
You'll need basic information about your company's financial situation, including the name of your business, the tax identification number, the business address, the number of years you've been an owner, the number of employees, the nature of the business, the business' average annual income, and the amount in the business' checking account. You'll also need to know the legal entity of your business, such as whether it's a sole proprietorship, a corporation, a partnership, a non-profit, etc.
3. Fill out the application
You can find applications for almost all business credit cards online, although in most cases you can also call and apply over the phone (a good idea if you have any questions). Depending on your credit rating, you may have to provide extra documentation of your business' current financial status, so be prepared to mail or fax information if requested. After you fill out the application, approval can take anywhere from thirty seconds to a month.
To find business credit cards online, do an Internet search or check the websites of major credit card companies.

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Low Balance Transfer Credit Cards Will Not Last

Have you ever been attracted to a credit card because it promises you an outstanding interest rate that seems just too good to be true? Most of us have at some stage jumped for one of these attractive offers. There are a growing number of credit card providers out there that will offer you 0% deals on either balance transfers or purchases, and sometimes they just seem too good to resist.
Particularly if you have a large outstanding credit card balance that you are currently paying a lot of interest on, these offers will be very tempting. In fact, many 0% balance transfer offers will save you hundreds of pounds on interest that you would otherwise have had to pay on your credit card balance. But no matter how attractive such offers may appear at the time, you should only ever take on another credit card if you have taken the time to review your finances and are satisfied that it is the right financial move for you at this time.
To look at a typical example, suppose you have one thousand pounds outstanding on a credit card that charges 10% APR. This means that over the course of a year, this balance will cost you 100 pounds in interest charges. Now suppose you find a credit card that offers you 0% on balance transfers for six months. Well it is pretty obvious that 0% is better than 10 and if you were to take up this offer, assuming there are no balance transfer fees, then how much will you have saved over the six month interest free period? The answer is 50 pounds. However, what will the interest rate revert to once the interest free period has come to an end? This is something you should be thinking about before you opt for the credit card, and not when the interest free period is about to expire and everything is more urgent. Suppose, for the sake of our example that the interest rate reverts to a rate of 25%. This means that over the next six months you will pay £125 in interest.
While this is a very simple example, it illustrates an important point when it comes to 0% balance transfers. In the example above if the customer had stayed with his 10% card, he would have paid £100 in interest over a 12 month period. In the same period, by opting for a 0% balance transfer for six months that then reverted to 25%, he ended up paying £125.
The point to remember is that just because a credit card offers you 0% does not mean it is the best deal out there. Look at the long term rates that the card will offer you, and compare these to the rates you are already getting from your credit card. If your existing rate is better than the rates that you will get from the new card once the introductory offer expires, then maybe you should remain loyal to the card you have.
So while this is going on you will not be spending on the new credit card, but you will be safe in the knowledge that you are saving the interest payments on the old debt.

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Low Balance Transfer Credit Cards - Too Good to be True?

On the surface, 0% balance transfer credit cards are incredibly enticing, especially if you have outstanding credit card balances. But there are a few details you need to understand before taking the balance transfer credit card plunge.
Some consumers seem to get in trouble overnight with credit cards. Seemingly broke and deeply in debt, some desperate card holders are constantly on the lookout for a quick fix for the credit problems. A 0% credit card balance transfer might appear to be the perfect solution. Many among us desperately jump at such offers without much forethought. 0% deals on balance transfers or purchases might seem irresistible even to the most credit worthy person. But especially if you have a large outstanding card balance (or balances), a 0% credit card balance transfer will seem especially lucrative. And to no surprise, there is no shortage of these type of balance transfer offers currently available in the marketplace.
Regardless of your credit circumstances, you should exercise caution and thoroughly investigate all aspects of any credit card offer that you consider. Despite the obvious attractions of a balance transfer credit card, it is worth giving a second thought before you cut up your old credit card to make room in your wallet for the new one. Companies often fail to clarify the fine print, hiding those rather unpleasant details which could cost you dearly in the long run.
Let us start with a very typical credit scenario. Imagine having a $10,000 outstanding balance on a credit card with a 10% annual APR, translating to $1000 in finance charges on a yearly basis. On the other hand, imagine securing a credit card that offers you 0% on balance transfers for the first year of membership. Transferring your card balance to a 0% balance transfer offer would cut down your annual interest expense by $1000. Exciting, isn’t it?
But did you bother to check what the interest rate would be after the introductory interest-free period? The rate might turn out to be significantly higher than your existing card, and you do not want to be caught on the wrong side of a high APR. Forewarned is forearmed. You will need to plan ahead – and not just a day or two before the interest-free period comes to an end. Some consumers might be surprised to discover that when an introductory APR offer expires that the rate of interest can revert retroactively to an APR of 23% and beyond. If you do not pay off your balance systematically and end up with a large balance when the introductory offer expires, many times consumers are stuck paying out an outrageously high APR because they did not pay down their card balance at all. So above all, make sure to plan on paying off that balance before the introductory period expires or you may regret it.
0% Balance Transfer – Some Pointers
When considering balance transfers credit cards, help yourself by asking these questions:
- What will be the interest rate once the initial introductory 0% balance transfer period is over? - Is it comparable to my current APR or will it be significantly higher? What is the net difference? - Particularly if you plan to carry a card balance over time, what will be the long-term net effect of the difference in APR's? - Do I want to get into the habit of switching from one 0% balance transfer card to another?
If your current credit card offers a better long-term ongoing APR than the new one, it makes more sense to stick with what you’ve got, especially if you have the means to pay off your card balance without incurring large finance charges. A balance transfer card most certainly has its own pros and cons but if you wish to use balance transfers to your advantage, make sure that you understand the net benefits of the card over the long term.

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Credit Card Benefits

You will see many lenders these days offering 0% APR credit cards. If you are thinking of applying for a 0% APR credit card, it is well worth taking the time to research and compare all the offers and benefits available. Although many company's offer 0% interest credit cards, in most cases it is for an introductory period only. You should take the time to compare the agreements and conditions carefully, as these vary considerably from lender to lender. It's also important that you take into consideration the permanent rates that the lender charges. While 0% interest credit cards may look tempting, it's no use entering into an agreement if you struggle to make payments because the permanent rate is too high.
The benefits of a 0% APR credit card may seem obvious, you don't pay any interest! But many of the 0% interest cards also offer other benefits. Some come with reward schemes like rebates, others with cash back offers. The reward scheme applies to your purchases, where the lender may give you a percentage of cash back for every dollar you spend. They may also have a reward scheme where you can accumulate points depending on how much you spend. These points can then be exchanged for merchandise which the companies offer to their customers. While the points on offer are strictly in favor of the card company, you can still save on the retail purchase price of these goods, which is a benefit.
If you are currently paying interest on your current card or cards, why not think about changing to a 0% APR credit card? If you have a few cards the monthly payments can soon become a considerable sum. You can save yourself money by changing to one of the 0% interest cards. Just think, instead of paying out maybe $100 or so a month in interest, you could be paying out a lot less while reducing the amount you owe.
Most banks or credit card companies will allow you to transfer the outstanding balance you have on your current card to one of their 0% interest credit cards. That means you could consolidate all your outstanding balances on your current cards by transferring them to your new 0% APR credit cards. Some lenders may have a limit on the total money you are allowed to transfer. It's important that you read the terms of the offer and understand them fully before committing yourself to an agreement. You don't want to be penalized by any fees you may have to pay if transferring a balance.
The new lender you have transferred your balance to, may have a time limit on their 0% interest credit cards. If you want to keep your payments low, or keep reducing your balance then you should think about changing your card or transferring the balance before the 0% APR credit cards offer runs out. It is worth checking your agreement at this stage just to make sure you will not incur a fee for transferring your balance to another card.
If you've done your homework and chosen the correct card in the first place, this shouldn't be a problem. You should start to look for your new 0% APR credit cards, or card, a month or so before your offer terminates. This will give you time to apply and be able to transfer your balance as soon as your 0% interest credit cards offer ends.
There is an important fact about a 0% APR credit card that most people overlook. Most agreements state you must make ALL your 0% APR credit card payments on time. If you make a late payment on your 0% interest credit cards then the offer becomes invalid immediately.

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