Credit Card Quick

A Look at Choosing Between the Five Basic Types of Credit Cards

Choosing Credit Card

You may become quite overwhelmed at the sheer number of credit cards out there at any given time. Although finding the right credit card for your needs, your budget and your financial situation may be a time-consuming process, you can narrow down your options by first deciding which type of credit card you need or want.

The following is a list of the basic types of credit cards so you can begin narrowing down your credit card options:

1. Secured – A secured credit card is the ideal credit card for an individual with either bad credit or no credit. A secured credit card is a credit card that requires a deposit that is equal to your credit limit. The deposit is like an insurance policy for the credit card company, and they hold it as collateral should you fail to make a payment on your credit card. As you begin establishing a positive credit history through timely payments, you will likely then be able to apply for an unsecured credit card.
2. Unsecured – Unsecured credit cards are credit cards best suited for individuals with a strong credit score. Unsecured credit cards require no deposit and usually come with competitive interest rates. Unless the card specifies that it is of the secured variety, you can assume it is an unsecured credit card.
3. Rewards – Rewards credit cards are the name of the game when it comes to credit cards these days. Rewards credit cards can be anything from gasoline and airline rewards to cash back credit cards. In short, they are credit cards that reward customers for shopping and spending money on their credit cards.
4. Student – A student credit card is one that is marketed and targeted primarily to college students. They will likely come with low credit limits and higher interest rates, but are often a smart choice for young adults looking to build a credit history.
5. Business – A business credit card is one that is used primarily by small businesses. A business credit card will likely come with a higher credit limit and features that allow business owners to better manage their businesses and business expenses.

Understanding Common Features Found on Most Credit Cards

Introduction

Credit cards, although they include any number of features, rewards, interest rates, and terms and conditions, are similar in many ways. If you have a credit card it likely has the following, basic features:

1. Online account information – Accessing your credit card account information is easier than ever, thanks to online credit card account tools. From viewing your recent activity to eyeing your credit limit and interest rate, today’s credit card online account tools make managing your credit card easier than ever. We also like the online account information provided by credit card companies because it allows you to keep a close eye on activity on your credit card, thereby reducing the likelihood of fraudulent credit card use.
2. Online bill payment – If you want a quick and easy way to pay your credit card bill then you must consider the conveniences of online bill payments. We like online bill payments through your credit card’s website because payments post almost immediately, thereby preventing overdue payments and the hassles that go along with them. You may choose to use your credit card’s online bill payment service instead of your bank’s online bill payment service because your credit card payment will likely post sooner.
3. Balance transfer options – Most of today’s credit cards feature balance transfer options. If you have a competitive interest rate on your credit card, or if your credit card features a low, promotional rate, you may want to take advantage of the card’s balance transfer feature and transfer higher-rate balances to your credit card. Pay close attention to the interest rate on transferred balances, as well as balance transfer fees, as they may equal anywhere from one to three five percent of the transferred balance.
4. Convenience checks – If you have a credit card, you have likely received convenience checks in the mail. Convenience checks allow you to do everything from paying bills to buying a car, and are easy to use. Plus, your credit card company will likely offer a special rate or offer with their convenience checks, making them an even more attractive feature of your credit card.

What every College Student should know about Student Credit Cards

Introduction

Student credit cards are a great way to begin building your credit history and a strong, and are an ideal way to begin your life as financially smart adult. However, there are also many factors to consider when it comes to student credit cards. Here’s what you need to know:

• Compare a number of student credit cards before deciding on which one to apply. It is important to remember that, like any other type of credit card, the interest rates on student credit cards can vary greatly.
• In general, you should not need to pay an annual fee for a student credit card.
• Don’t apply for a student credit card until you have carefully read the terms and conditions associated with the card. If you don’t understand something, call the company and ask questions, as the worst decision you can make regarding a student credit card is applying for a card you don’t thoroughly understand.
• Consider opening a checking account before applying for a student credit card. This will allow you to begin building a credit history and will become an easy way to pay your monthly bill. If you have a bank account with a credit union, you will likely be able to apply for a credit card through your credit union, as well.
• Start your search for student credit cards online. There are so many great websites that feature and compare the latest student credit cards, which will allow you to compare the cards’ features, side by side.
• If you don’t have a steady job throughout college, you will likely need to get a parent to co-sign for the credit card. The federal CARD Act has changed the rules when it comes to student credit cards, so you may need the help of your parents to get your first student credit card.
• Make a commitment to always pay off your credit card each month. Now is not the time to carry a credit card balance and create bad credit card habits that will haunt you well beyond your college years. Charge only what you can afford to pay off each month and begin establishing a strong credit score that will help you do everything from purchase your first car to rent your first apartment.

How to Prepare for an Instant Credit Card Approval

Choosing Credit Card

The applications for most credit cards are quite easy, as they allow you to apply for, and be approved, in a matter of minutes. If you are applying for an instant-approval credit card, you will likely do so either by phone or over the Internet. With that said, there are a number of things you should have ready so your application and approval process will go quickly and smoothly. Here’s what you should have on hand when it comes time to apply for an instant-approval credit card:

1. Social security number and other personal information – The most important information required for your instant-approval credit card application will be your social security number, your address and your birth date.
2. Co-applicant information – If you will have a co-applicant on your credit card application, you will need to provide the credit card company with their personal information, as well. You may want to decide before you begin your application whether you want a co-applicant or just an authorized user on your card.
3. Basic household information – The credit card company will likely want your basic, household information; in particular, your household income. Your household income will include not only the salaries brought in by you and others in your household, but also other sources of income, such as alimony and child support. In addition, they will want to know the debts paid by your household, including your mortgage payment and payments on other debts.
4. Other account information and balances for balance transfers – If you want to open a credit card so you can transfer other higher-rate balances onto that card, you will need to have the names and addresses of the other debtors, as well as the account information and the current balances. Regardless of whether you are transferring balances from credit cards, car loans or personal loans, it is important to first determine their current balances or payoff information so you can pass this information along to the credit card company for balance transfer purposes.

The Consequences of Missed Payments and How to Avoid Them

Credit Card Debt

As much as we try to remain organized when it comes to our finances, sometimes the inevitable happens: we forget to pay a bill.

But when it comes to our credit cards, paying a bill late can result in serious consequences. If you think because you’ve made payments on time for what seems like forever, and you have a good credit score, that you don’t need to worry about a missed payment or two, you couldn’t be more wrong.

In fact, credit card companies are now coming down hard on individuals who miss even one payment.

Late Payment Fee

Failing to pay your credit card bill can result in a missed or late payment fee (which can range anywhere from $15 to $35), accrued interest charges, and even a higher interest rate.

Penalty APRs

Although the CARD Act has made credit card companies provide customers with 45 days’ notice of a rate increase, it doesn’t stop them from raising interest rates and penalizing you with the penalty APR – which could be as high as 29.99 percent.

Lower Credit Score

In addition to putting a damper on your interest rate, a missed payment could mean a lower credit score. A credit card issuer can report your missed or late payment to the credit reporting agencies, thereby bruising your credit score.

Lost Points

If you have a rewards credit card and you fail to pay the minimum payment, you could lose any points or rewards you earned during that billing cycle.

How to Avoid the Pitfalls of Late Payments

If you want to avoid a late or missed payment you can set up automatic bill payments with your credit card or bank. This feature will automatically make a payment each month on your chosen date, thereby preventing a missed or late payment. In addition, you may also choose to pay your credit card bill as soon as the bill arrives, thereby eliminating the chance that you might forget about it. Finally, you can set up reminders through your smart phone or other electronic organizer.

Are Magnetic Swipe Credit Cards on their way Out?

News

It’s been a staple in the credit card industry for decades: magnetic stripe credit cards. But it looks like the magnetic swipe may be on its way out.

Invented all the way back in the 1960s, the magnetic strip on a credit card was a huge advancement in technology and was originally introduced for credit cards because of rampant credit card fraud.  Magnetic strips on credit cards took the burden off the store clerks who, up until that point, had to compare account numbers to printed list of accounts the store maintained.

The Magnetic Strip Problem

But fast forward to 2011 – nearly 50 years later – and it looks as if the magnetic strip may have had its run. Let’s face it: the magnetic strip is rather antiquated, as criminals have long figured out how to circumvent this piece of technology.

Europe, it seems, was a bit quicker on the uptake when it came to dealing with the magnetic strip problem, as the Eurozone banks converted their magnetic strip cards to a “chip and PIN” system back in 2005. The chip and PIN system provides an extra measure of security, as it feature microchip-embedded technology.

The Next Steps

Because European card issuers have used a more secure form of payment for the past six years, it only makes sense that they are getting a bit fed up with the antiquated system – and the credit card fraud that goes along with it – still being used by U.S. card issuers. In fact, many European card issuers have hinted that U.S. travelers may begin experiencing problems when using their magnetic strip credit cards in Europe.

Although the European chip and PIN system has been a success for them, it looks as if the U.S. may skip over this technology and develop its own technology to combat fraud. It is expected that the U.S. will adopt smarter card technology, such as the Near Field Communications chip.

Only time will tell how and when the U.S. will develop smarter card technology, but one thing’s certain: the magnetic strip may be on its last legs.

How to know when it’s Time for your First Credit Card

Choosing Credit Card

A credit card is a big financial responsibility.

Make good credit decisions and you can enjoy a strong credit score. Make a bad move or two and your credit score is ruined. But beyond this, you must also be in a good financial situation before applying for a credit card.

If you want to enjoy the many benefits of a credit card, there are a number of things to first consider. In other words, there may be a number of ways to know when it’s time for your first credit card:

• You have a steady job, with at least a few months of employment under your belt.

If you’ve landed a steady job that you enjoy and you feel like your employment there is stable and the hours and salary are predictable it may be time for your first credit card. Applying for a credit card when your employment is on shaky ground is just not a smart move because you could be stuck with a balance you simply can’t cover.

• You have a checking account in good standing.

Most credit card companies will want to see an open checking account for applicants. Open a checking account, keep it in good standing with a positive balance, and you could be ready to apply for your first credit card.

• You are managing your monthly bills, including utilities, rent and student loans.

If you are currently handling a rent payment, utility payments, and even student loan payments each month you are in luck, as these steady payments are what most credit card companies want to see. In other words, your timely payments show a creditor you are capable of handling the responsibility of a credit card.

• You understand the responsibility that comes with a credit card.

Before applying for a credit card, make it a priority to understand the terms and conditions of the card so you can be certain you are making the right financial choice. If there are terms and language you don’t understand, don’t be afraid to contact the credit card company and ask for clarification.

3 Easy Ways to Make your Credit Cards Work for you

Introduction

Credit cards are a great convenience and are a practical way to manage your finances, but they can be much more if you play your financial cards right. You can actually come out ahead in terms of your finances, simply by spending on your credit card. Here’s how:

1. Use a balance transfer offer to pay off higher-rate balances – If you are currently shelling out money on finance charges on any number of loans or credit cards, it may be time to transfer those higher-rate balances onto one, low-rate credit card. Luckily there are a number of great credit card offers that offer zero-percent balance transfer offers. If you plan accordingly and create a payment plan that allows you to pay off your credit card balance transfers within the promotional period, you could pay off your debts and save big on finance charges at the same time! Balance transfer offers are ideal for transferring any number of high-interest-rate debts, such as car loans, personal loans and retail credit cards, just to name a few.
2. Use your card’s promotional rate to charge a large purchase – If your credit card currently has a low, promotional rate (or a low, fixed rate), you may want to charge a large purchase, such as electronics or appliances, as to save money on finance charges. Most retail credit cards and loans offered by appliance and electronics retailers charge come with high interest rates, so you could save big just by using your credit card’s convenience checks with a low, promotional or fixed rate.
3. Charge everyday purchases and rake in the rewards – If you have a great rewards or cash back credit card and you want to see big rewards, charge everyday purchases from groceries to gas. As long as you budget accordingly as to pay off your balance in full each month (and avoid finance charges), you can begin earning big rewards, which ultimately means cash in your pocket. From discounts and cash back rewards to airline miles and free hotel stays, rewards credit cards are a big business and can spell success for credit card customers.

Why it’s More Important than Ever to Maintain a Strong Credit Score

Credit Score

A strong credit score has always been important, but the past, few years have clearly showed us just how important it is.

Just a few years back, banks and creditors were fairly lenient when it came to lending credit to consumers. Often referred to as the housing boom and the credit boom, it was a time of free-flowing credit, and it seemed as if nearly everyone was being approved for everything from credit cards to mortgages.

Because of this easy access to credit, many consumers simply began neglecting their credit. After all, why worry about credit when getting approved for loans wasn’t just possible, but a sure thing?

The credit industry of today, however, has changed dramatically due, in part, to a variety of factors, including: the housing decline, the decline of the banking industry, high unemployment rates, and credit card legislation.

What does this mean for you?

It means banks and creditors are now decidedly more stringent when it comes to approving consumers for loans and lines of credit. In short, if you want access to credit these days, you must have a strong credit score on your side.

If you fail to have a strong credit score, it may be difficult to:

• Get approved for a credit card – Creditors are lending credit to only those individuals with strong credit scores. If your credit is questionable, you may be able to get approved for a credit card, but don’t expect a competitive interest rate.
• Get approved for a car loan – Automotive lenders, because of a large number of repossessions over the last couple years, are now particular when it comes to approving consumers for auto loans. If you are able to get approved for an auto loan with less-than-perfect credit, don’t expect a low interest rate.
• Get approved for a mortgage – Because foreclosures are still a huge problem across much of the United States, lenders are more particular than ever when it comes to lending money for home loans. If you want a competitive interest rate and an attractive loan program, you must come to the table with a strong credit score.
• Get approved for a home equity loan or line of credit – Just like a mortgage, loans associated with a home are difficult to achieve unless you have a strong credit score.
• Get approved for an apartment lease – Getting approved for an apartment lease may be quite difficult to achieve if your credit isn’t strong. Remember: many things in your life may be affected by a poor credit score.

Is it Ever Okay to Carry a Credit Card Balance?

Credit Card Debt

We hear of the evils of credit cards all the time. Pay it off every month! Never carry a balance! Beware of rising interest rates and fees! While it is true that the best rule of thumb is to pay off your credit card balance each month, there may be times when carrying a balance isn’t such a bad idea.

So, the question is: Should you always feel guilty when you carry a balance? Perhaps not.

Here are a few examples of times when it may make sense to carry a balance on your credit card:

1. When your credit card has a low, fixed rate – If you have a credit card with a low, fixed rate, or if your credit card offers convenience checks with a low, promotional rate, you may want to make a large purchase or two and take a few months to pay it off. This may make sense if your other loan or credit options feature higher interest rates. If you know you want to take a few months to pay off your credit card balance, just be sure to formulate a game plan for paying it off in a preferred time frame.
2. When you transfer balances with a low, promotional rate – If you have a number of credit cards or loans with high interest rates, you may find that transferring these loans to a credit card with a low, fixed interest rate is your best bet. Pay close attention to the balance transfer’s promotional period and formulate a game plan for paying off your balance during that time, as the card’s default percentage rate will likely kick in and you’ll find yourself with quickly mounting finance charges once again.
3. When you encounter unexpected expenses or a financial emergency – Credit cards serve many practical purposes, yet are also crucial if you find yourself in a financial emergency. From an inoperable vehicle to a broken furnace, emergency expenses catch us off guard; luckily, a credit card is the ideal financial tool to save us when we don’t have access to quick cash. It is quite reasonable to take a few months to pay off an emergency purchase because the card served a very useful purpose helping you out in a financial pinch.