Credit Card Quick

Your Credit Card Application has been Rejected: Now What?

Credit Repair

You may be quite surprised to find that your latest credit card application was rejected. Ouch!

After licking your wounds, there are a number of things you can and should do following a credit card rejection:

• Even if you applied online or via phone for a credit card, you will receive a written notice in the mail regarding your rejection. It is important to read this letter so you can gain some insight regarding your reason for rejection. If the letter does not give you the answers you are looking for, you should contact the credit card company directly and ask them for a more detailed explanation. After all, you cannot change or improve things if you don’t know what to change.
• You are entitled to a free copy of your credit report once a year; and again if you are rejected for a credit card offer. It is very important to take them up on a free copy of your credit report, particularly if you don’t understand why you were rejected. After you receive your free credit report, carefully examine it for any unknown charges, errors or discrepancies, and immediately report them to the appropriate credit reporting agency.
• Take the information you gleaned from your credit report to better your credit score. Although it stings to be rejected for a credit card, the best thing you can do is work hard to improve your credit score. Often times, simply by paying your bills on time and curbing your credit card debt for a period of as little as six months, you can raise your credit score high enough to be approved for a credit card.
• If you still want the many conveniences of having a credit card, but your credit is not strong enough to qualify for an unsecured credit card, consider applying for a secured credit card. A secured credit card, because it requires a cash deposit typically equal to your credit limit, allows individuals to be approved for one even if their credit score isn’t great. Plus, a secured credit card can help you begin building a strong credit history and improve your credit score.

What to Consider when Applying for a Secured Credit Card

Introduction

If you want to establish or re-establish your credit, a secured credit card is often the way to go. Because a secured credit card requires a cash deposit as collateral, even those individuals with the poorest of credit can be approved for this type of card. Although the terms and conditions of most secured credit cards are relatively straightforward, it pays to really understand what these types of cards can offer.

Before you apply for a secured credit card, it is important to consider a number of factors:

• APR: Although, in general, secured credit cards have higher interest rates than unsecured credit cards, the APR from card to card does vary. In other words, compare the APR of several secured credit cards before you apply for one. Although you will want to compare APRs between secured credit cards, keep in mind that your ultimate goal should be to pay off the card balance in full, each month, as to develop good credit habits and build a strong credit score.
• Fees: Many secured credit cards come with an annual fee, so it is important to check these out when comparing secured credit cards. In addition to an annual fee, you may find that other fees, such as over-the-limit charges, can be quite steep (as high as $25 per transaction). It is important to understand, though, that the credit card company must disclose all fees related to the card, so carefully read the card’s fine print.
• Deposit: A secured credit card will always require a deposit, but the amount of that deposit will vary from card to card. In general, a secured credit card company will ask for a deposit of a few hundred dollars. Few cards – if any – will request a deposit of more than $1,000.
• Credit reporting: One of the most important parts of a secured credit card is their credit reporting to the three credit reporting agencies.  It is therefore very important to find out whether the credit card company reports to just one credit reporting agency or all three credit reporting agencies. In short, only apply for a secured credit card that reports to all three credit reporting agencies so you can use your credit history with the secured credit card to begin building a stronger credit score.

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.

A Great Credit Score is in your Future!

Credit Score

If you haven’t had a chance yet to establish a strong credit score, you may be wondering how to go about doing so. Luckily, there are a number of ways you can begin building your credit score so you enjoy the many benefits of a strong FICO score.

Here’s what you need to do to begin your journey to a strong credit score:

• Order a copy of your credit report from all three major credit reporting agencies. Although you may think your credit report will be virtually blank, mistakes do happen and it’s possible that there are errors on your credit report. You are entitled to a free copy of your credit report from the credit reporting agencies once a year so take advantage of this opportunity and order them today!
• Once you have checked your credit report, you must open a checking or savings account. Lenders of any kind like to see an active bank account, as it shows financial stability. Plus, it provides you with a means to pay on monthly bills and debts.
• Understand the factors that credit reporting agencies take into consideration when determining your credit score. Understanding that your credit score is made up of a number of factors, including payment history, payments and the ratio of debt to income, will better help you build your credit score.
• Start with a secured credit card to begin building your credit history. Secured credit cards are essentially credit cards that are secured with a cash deposit. Once you have established a history of regular payments with a secured credit card you can likely apply for – and be approved for – an unsecured credit card.
• Don’t think just in terms of credit cards when considering your credit score. In fact, lenders and credit reporting agencies look at your payment history on other types of monthly bills, including student loans and utilities, just to name a few. In other words, be responsible when paying any type of monthly bill or debt, as it could reflect poorly on your credit score if you don’t.

How to Secure a Credit Card when you have Bad Credit

Credit Repair

The recent report is staggering: nearly one quarter of Americans have credit scores of less than 600. Credit scores in this range are considered to be very low; although when you consider the number of foreclosures and bankruptcies plaguing America, it becomes quite clear why so many Americans are in this difficult financial position.

A credit score of less than 600 generally means that your chances of obtaining any type of loan or credit are slim to none. However, if you are looking for ways to build your credit back up and begin the process of repairing your credit score, you do have options when it comes to securing credit.

• Look at cards that marketed to people with “fair” or “poor” credit. Although there is a chance that you may not be approved for one of these credit cards, it is a good place to start. However, don’t keep applying if you get turned down, as too many credit checks on your credit report will further lower your score.
• Look at secured credit cards. Secured credit cards are specifically designed for individuals with either no credit or poor credit. A secured credit card works like a debit card, of sorts, as you can only spend as much as you have in a special savings account. The money that you supply to the credit card company acts as their insurance in case you fail to pay your card. In other words, if you supply the credit card company with $500, you will have a credit limit of $500. Make frequent charges on your credit card and pay it off in full each month to begin building a strong credit history. Remember: secured credit card companies report to the major credit reporting agencies in much the same way as traditional credit card companies.
• Ask a spouse or family member to co-sign a credit card for you. If you have experienced a blow to your credit because of unforeseen or unavoidable circumstances, you may very well have a sympathetic family member who is willing to help rebuild your credit by co-signing a credit card for you.

What you need to know about Secured Business Credit Cards

Credit Repair

Most of us are aware of secured credit cards for consumers. However, with the recent climate of tight lending standards, many businesses are now taking advantage of secured credit cards.

Securing the Money you need for your Business

If you own a business that fell on hard times and as result your business now has poor credit and a bad credit history, your ability to obtain a line of credit may be near impossible. As such, you may have wondered if you can get the extra cash necessary to keep your business running by using a small business credit card.

However, once again, your low credit score will probably inhibit you from receiving a small business credit card.

Rebuilding your Business Credit

If you are in desperate need of a way to rebuild your business credit so that you can once again enjoy the benefits of small business credit cards and lines of credit, then you need to consider obtaining a secured business credit card.

A secured business credit card is one of the easiest ways to build your business’ credit card history back up again. In short, a business credit card may serve as a practical tool for rebuilding your credit. A secured credit card will enable you to prove to creditors that you have established disciplined financial habits. It will also give your credit score a much-needed boost.

Although it may be a bit inconvenient to use a secured credit card because it is necessary that you provide the creditor with a deposit in the amount of your credit limit, if you charge purchases and continue to make timely payments your credit score could start to improve in as little as a few months.

Don’t assume that all secured credit cards are alike, though. It is necessary to research your secured business credit card options before applying for one. There are many websites that will compare secured business credit cards, side by side, to allow you to view different secured business credit cards, as well as their APR, terms and conditions.

Important Questions to ask when Applying for a Secured Credit Card

Choosing Credit Card

If you have bad credit or no credit, it may be in your best interest to apply for a secured credit card. In fact, a secured credit card may be your only option for improving your credit. Because credit cards can play a huge role in our lifestyles, it only makes sense to have a credit card on which you can rely.

Secured credit cards, however, are not fully understood and have not garnered a lot of attention in terms of their advantages. There are a number of circumstances that apply only to secured credit cards, so it is important to understand them before applying for a secured credit card.

The following set of questions will help you decide if your next secured credit card is best for you:

• Are secured credit cards tracked on my credit report? Absolutely! Because of this, secured credit cards are a great way to begin building (or rebuilding) your credit. Many secured credit cards will provide monthly reports to the major credit reporting agencies, thereby helping you repair your damaged credit in a shorter amount of time. However, some credit card companies report only yearly. Before applying for a secured credit card, ask the creditor how often they report to the credit reporting agencies.
• How much money will I need to deposit? Because secured credit cards work like a debit card, you can only spend what you have deposited. Therefore, if you want a credit limit of $500, you will need to deposit $500. This money, however, will not be used to pay your credit card; unless, of course, you fail to pay it yourself. Instead, it will be kept in an interest-bearing account.
• How much of a return can I expect on my deposit? Most secured credit card companies offer about the same return as you would get on a savings account. However, there are some creditors that will offer greater returns. It is up to you to find them!
• Will my spending limit ever increase? If you have established a history of making timely payments, chances are the credit card company will reward you with an increase in your spending limit. Your responsible credit card behavior will allow you begin spending above your deposit amount.

Credit Cards as Life Changes

Choosing Credit Card

Each and every person will encounter several different phases of life. From just starting out in in the world as a young adult to being in the midst of what is hopefully a satisfying and rewarding career to the laid back days of retirement, each stage is sure to come. For the average person, this also means changes in finances. If you carry a credit card, it is a given that you will want one that fits well with your financial status. Often, this means that as each stage in life rolls into the next, it might be time to look for a card that fits your needs at that point, as opposed to carrying a card that may no longer suit you. You will want a card that optimizes your credit and your dollar, giving you the best benefits possible.

Young Adults

Young adults are just starting out in the world. Many are college students, some working and trying to get an education; others are simply out on their own, working and trying to make a living. Either way, the budget’s probably pretty tight. At this point in life, most young adults are lucky to be making anything over minimum wage; they certainly have not yet landed that executive level job making six digits a year.

At this stage in life, training wheels are a good idea when it comes to credit cards. A young adult might ask a parent to co-sign or to become an authorized user on a parent’s account. Not a bad idea if the young adult is willing to share the cost of the charges and is exceptionally responsible in the use of said credit card. Still, some parents might fear doing this and taking chances with their own credit, therefore, a prepaid card might be the way to go.

Prepaid cards are attached to cash you have already deposited, therefore, your other cash is not tied up by this card and you can not run up a bill or overspend. Still, since there is no billing cycle, a young adult would want to practice this anyway y regularly paying the card back, in order to get a feel for other credit cards.

Also consider a secured credit card that reports your activity to the credit bureaus or a credit card with a low annual fee and mid-range interest that offers rewards and perks for things you purchase often, especially if you are a student.

Late 20s to Early 30s, Young Marriage, Starting a Family

Even if you’re making decent money, this is the point in a young person’s life where there are plenty of added financial responsibilities and squeezing a nickel becomes an art form. You learn to juggle responsibilities, pinch pennies, live frugally and still save some money. At this point in life, you want to look for a credit card that does not offer harsh penalties for spending. In other words, a reasonable interest rate. Also look for low to no annual fee and no balance transfer fees, as well as rewards that could really benefit you at this point in life, such as college savings plans, mortgage rewards, etc.

The Top of the Career Game

When you are at the top, you have perhaps seen a few things and gained a bit of experience and wisdom. This is the prime earning period, where you are set in your career, earning a reasonable annual salary and are faring well financially. You may not be wealthy, but you’re not really struggling either. Choose a card with an attractive interest rate, low to no annual fee, and decent rewards. If you have to travel for business, a card that offers miles and savings on hotels, rental cars, etc. might be quite rewarding. If you’re not a business traveler, think cards with cash back or some kind of savings plan.

Retirement Days

Retirement in itself is a reward. You have worked hard and earned those days of laid back living. Most people will, by this point in life, have saved a bit of money to live on and will be getting a pension and/or social security every month. Still, for the average person, the money is a bit tighter. It is a good idea to look for a card that can attach to your financial accounts, such as money market and bank accounts, so you can easily transfer money. This is especially good for those who choose to spend their retirement years traveling. If long journeys are not part of your retirement plans, seek a card that offers savings for eating out, seeing shows, purchases, etc., as well as the benefits of cash back rewards. Also remember to find yourself a card with a low or reasonable interest rate and low to no annual fee.

Whatever stage you are at in life, a credit card is a good thing to have. However, you want to make it work for you and work well, without spending tons of cash just to have those benefits.

Alternative Credit Cards Worthy of Consideration

Choosing Credit Card

We all know much about traditional credit cards. Those are the ones that are right in front of our faces in advertisements; the Visa, MasterCard, and Discover;  as well as the use-practically-anywhere-and-get-on- with-your-day-kind-of-cards. However, those are not the only credit options out there. There is a wide variety of options from secured cards to prepaid cards and so on. Here, we will touch base on some  secured options that most consumers do not even think about until it is set before them for one reason or another.

Bank Account Secured

This kind of credit card is a really good option for someone who is able to maintain a reasonable bank balance without overdrawing or overspending. It can help you to control your spending as well. This kind of credit card comes from your own bank and is secured by a deposit you have made into the bank account. The credit limit is equal to the deposit. If you can not make a payment, it comes out of your deposit, lessening the credit limit. This is great for those who have had tough financial times and are looking to rebuild their credit. However, don;t make it a waste of your time and your money. Make sure your card does not charge interest on purchases, has no annual fee and does report to the credit bureaus.

Home Secured

Consumers need to give this option a lot of thought before choosing. While it is, without a doubt, an easy form of credit for a homeowner to obtain, there can be dire consequences. A Home secured credit card is a card that is attached to your home equity line of credit. It is only for the most responsible and financially stable of consumers. You could easily lose you home if you fail to pay the bill. It’s not a bad idea, but not the best either. Consider the options carefully. An alternative might be to simply tap into your home equity credit line – minus the credit company and attached card – with a low interest rate. This option reduces your home’s equity until you pay it back, however, you do not risk your home itself.

Purchase Secured

If you frequently shop at a particular store, this might be a good option, given that you will pay the bill. Unlike the traditional credit card, store cards have their own qualifications and can often be somewhat difficult to obtain without an excellent credit rating. Of course, there are others who do not really check you credit, but extend the credit  with collateral being based the same way. Purchase secured credit cards are store specific cards where the collateral for later payment is placed in the goods you buy. As long as you 0pay the bill, the goods are yours. Failure to pay the bill gives the store the right to repossess your purchases to try and resell to make back their money.

When it comes to credit, there are a lot of options. The important thing is to explore what is out there, choose what is right for you, make sure the option is reported to the credit bureaus and use it responsibly, paying that bill on time, so you will have the credit whenever you need it.

Credit Repair: How You Can Help Yourself

Credit Repair

Maybe you’ve faced some difficult times. Maybe you were, admittedly, a tad bit irresponsible at some point. Whatever the case, you’re credit score doesn’t shine, and you’re probably finding yourself jumping over hurdles to obtain any kind of credit or loan. Once obtained, you are finding yourself paying higher rates, or maybe you’re hearing “No way!” far more often than you’d  like to.

The good news is there are things you can do to improve your credit situation. You have to know what you’re looking at as far as your credit score and debt, be ready and willing to face your credit score and work to improve it, and you must be committed to seeing the process through, as well as maintaining your credits score after improvement.

Hiring a Professional

Hiring a professional to help you to repair your credit is an individual choice. While it is not absolutely necessary – you can repair your credit on your own – it might e a wise idea for those who are not financially savvy or for those who fear treading the muddy water of credit repair alone. A credit repair specialist can advise you and help you to repair improve your credit score; they can even negotiate your payments for you, often saving you money off the original balance. However, the service does not come without a cost, so if you are willing to pay for help and feel you need it, there’s nothing wrong with doing so.

However, should you want to just take care of credit repair on your own, here’s some smart DIY tips to help you pay off your debt and improve your score. Even if you want to forgo the professional credit repair agent, you might still want to consider the invaluable services of a consumer credit counselor. They can help you to better understand your credit, finances and how to create a budget and stick to it.

Keep up with your credit report and score

You are entitled to one free report from each of the three credit bureaus every year. Take advantage of this and stay on top of things. Knowing your score and what’s  in your report will help you tom pay down your debt and substantially improve your credit. Review the reports, highlight important things and dispute discrepancies. You want your report to be accurate and only you can ensure that it is.

Tackle those debts!

Find out what it is that you owe and who it is owed to. Bring accounts that are past due, but not yet charged off, up-to-date.  Pay off those charge offs and work with debt collectors and creditors to make payment plans and pay off what you owe. Remember not to let your accounts in good standing wind up on the back burner while you take care of past due debts. It is not an overnight process. Take things one step, one payment at a time. Pay your current bills as usual and work to make payments you can afford on the rest.

Maxed out? Pay the limit back down

If you are maxed out on your credit cards, it is going to cost you in points on your credit score. Work to pay your cards down below the credit limit and then to pay them off completely. This will substantially improve you score. Remember, your total debt vs. your total available credit makes up 30% of your credit score.

Build that credit up

Once things are paid off, work hard to build your credit back up. Credit cards and loans that are being paid and reported on time are great ways to do this. Another way is to try and open a new credit card account and keep it below the max and paid on time. Only make one or two applications, so as not to impact your credit score with tons of credit inquiries. If your past credit negatively impacts your chances of getting approved for a regular credit card, try going for a store card of some kind. You could also try a secured credit card, which has a slim denial rate, since you pay a deposit for the card.

Follow these steps, and i due time, you will notice a major improvement to your credit score. Maintain it and you will open plenty of doors in the future that you never imagined possible before your credit was repaired.