Some people have the wrong notion when it comes to using credit cards.  Understanding the real deal about credit cards can actually save you from the risk of bad credit.  Are you aware of what these credit card myths are?  Check out the following:

Myth No. 1:  It’s okay to apply for a credit card; you can always back out by not calling the activation number.

Have you applied for a credit card and yet changed your mind later on and decided not to keep it?  If you think that not activating the card will protect your credit score, you’re mistaken. Take note that the moment you send your credit card application, credit inquiry will be instantly made which can affect your credit rating.

If you want to use the credit card to pay a bill, you will need to call the activation number.  However, once your application has been approved, the account will automatically be reflected in your credit report whether you call the activation number or not.  Bottom line?  Don’t apply for a credit card is you’re not sure whether or not you want to keep it.

Myth No. 2: You cannot do anything about unsolicited credit card offers.

There is something you can do to cut down unsolicited mails from credit card issuers.  Call 1-888-5-OPT-OUT to “opt out” which means your contact details will be removed from marketing lists that are sold to credit card companies.

Myth No. 3: You can buy anything you want if you get a card with “no preset spending limits.”

Not exactly.   Some people are made to believe that their credit cards literally have “no preset spending limits” which means they can charge as much as they want to their card.  But the fact is that all credit cards have a limit except that some issuers allow their customers to exceed depending on the cardholder’s income and payment history.  If you are earning minimum wage, don’t expect your borrowing limit to stretch too high.

Myth No. 4: Paying your full balance on time is all that matters.

Aside from timely payment, it’s also important to watch your credit limit usage.  Financial experts recommend not exceeding 50% of your available credit no matter how low the interest rate is.

Myth No. 5:   All reward credit cards are rewarding.

From afar, all reward credit cards may seem to give the best offer.  It is only after you take a closer look at the complete Terms and Conditions that you can see the real deal.  More importantly, choosing the right reward credit card depends on your spending and lifestyle.  Remember, what is ideal for one person may not be the same for you.  To really get rewarded, you must be able to pick the right reward credit card and handle it responsibly.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

For a long time, credit cards have overshadowed debit cards but now, consumers are starting to appreciate the value of debit plastic cards.  In fact, you can find debit cards that offer different reward programs which certainly add up to their popularity.  And as consumers try to steer clear of bad credit, the use of debit cards seems to be favoured today, more than ever.

Let’s take a closer look at the reward programs associated with debit cards:

Debit Cards with Cash Back Rewards

Just as cash back credit cards are a popular choice among consumers, debit cards with cash back rewards are an obvious favorite as well.  Usually, debit card issuers give 1% cash back or 1 point for every dollar worth of purchase.

For example, the debit cash by PerkStreet Financial offers1% Cash Back Rewards on Non PIN-Based Transactions. Pay Pal Debit Card also offers 1% cash back for every purchase as long as the cardholder is enrolled in the PayPal Preferred Rewards Program.

Merchant-Affiliated Debit Rewards

Some debit card issuers partner with merchants to offer more exciting rewards.  For instance, Chase has its own version of a cash back debit card called the Real Cash Rewards Debit Card which offers up to 3% cash back, depending on your monthly spending.  Chase debit cardholders can also earn up to 30% cash back on purchases made from more than 600 retailers that are included in the Chase Real Cash Mall.

MasterCard has also introduced the MasterCard Marketplace for both debit and credit cardholders.  The MasterCard Marketplace features different retailers that sell various products and services.  Mastercard debit cardholders are entitled to cash back bonuses by purchasing from affiliate merchants online.

Visa Debit card offers 3 cash back points for every dollar spent on partner retailers such as Staples, Expedia, BestBuy, Linens n’ Things and up to 20 cash back points on purchases made at selected stores like 1-800-Flowers, SmartBargains, and more.

Special Program Debit Reward Cards

Then there are debit cards that offer special reward programs that appeal to specific niches.  For instance, Citizens Bank has come up with the Green$ense cashback debit card which are sure to attract environmentalists. This debit card offers to give 10 cents for every paperless payment charged to the card.  Green$ense cardholders can earn up $120 each year, plus a monthly newsletter that includes tips for green living.

Choosing Your Cash Back Reward Debit Card

We have discussed the three major types of reward programs offered on debit cards.  Before applying for a debit card, make sure that the reward program matches with your personal lifestyle.  Understand the specific rules of the reward system.  More importantly, check the fees involved in using your chosen debit card to avoid unexpected charges.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

The problem of credit card debt is very real and cannot be overlooked. Statistics show that the average credit cardholder carries an outstanding debt of about $8,000. How can you make sure that you will not fall in the snare of bad credit? In this article, let’s discuss the do’s and don’ts of using credit cards.

The Dos:

Do pay on time. If you want to use a credit card, be sure that you can pay on time. Keep in mind that timely payment is the only way you can avoid additional finance charges.

DO charge only what you can pay. Before using your credit card for any transaction, check your due date of payment. Will you be able to pay your complete balance on time? How do you plan to pay off that particular purchase?

DO pay your full balance. Instead of submitting only the minimum monthly due, leaving it’s best to pay your full balance to avoid interest rate fees and protect your personal credit.

DO check your monthly bill. Do you review monthly billing statements from your credit card issuer? Before posting your payment, make sure that all charges in your account are accurate. If you do not receive your bill on time, call up your Issuer immediately and ask for an update.

The Don’ts:

Don’t maximize your limit. To be safe from bad credit, it’s best to keep your charges minimal. Ideally, do not use more than 50% of your available credit. By doing so, you can make a good impression to potential creditors to whom you have sent applications to.

Don’t carry all your cards in your wallet. If you own a number of credit cards, it’s best not to bring them all, especially if you plan to shop. Having too many credit cards that you can use may only encourage overspending. In addition, you will have a hard time calling up each credit card company in case your wallet gets lost or stolen.

Don’t close old cards. Be careful about closing out your oldest credit card accounts as doing so would mean erasing the oldest parts of your personal credit history. If you have a new credit card with a better rate, you can still keep your old credit card active by using it exclusively for small purchases.

Don’t transfer huge balances into one card. Transferring balances to a zero interest credit card is a good strategy but you need to make sure that you are not maximizing the cards’ credit limit. Remember that maximizing your limit can pull down your credit score.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

Are you familiar with pre paid credit cards?  Perhaps you may notice the ads that promise instant approval for anyone- even for people with no credit history or with bad credit.  True enough, anyone can easily get a prepaid credit card regardless of his/her credit rating.  But is this type of credit card for you?

Who Should Get A Pre paid Credit Card?

While pre paid credit cards offer instant approval, it’s important to understand that these are not the same as a regular credit card.  First, prepaid cards do not provide its holders with a borrowing limit.  Second, these credit cards require the submission of a cash deposit in the cardholder’s account. Third, the cardholder can only use a prepaid credit card if there is an available balance in the account.

However, despite the limitations, those who have a problem with their credit history can use pre paid credit cards to rebuild a poor credit rating.  Through regular use of this card, the cardholder can slowly but surely build up credit history without the risk of bad debt.

Who should apply for a prepaid credit card?  If you cannot qualify for a regular credit card and you want to establish or build credit, then a prepaid card is a good option.  For parents who need to send money to their kids in college, providing them with their own prepaid credit cards is the most convenient and safest way to send and receive cash.   Travelers can also use prepaid credit cards as a safer way to pay for all their travel expenses..

How to Get A Pre paid Credit Card?

Pre paid credit cards can be acquired by visiting your nearest bank or by submitting your application online.  To get approved, the applicant must first open a deposit account and submit the minimum required payment.  The amount can range anywhere from $200 to $500 and above, depending on the prepaid card issuer.  Keep in mind that the amount of your security deposit will also determine your spending limit.

Since charges are automatically paid using the funds in the cardholder’s account, there is no need to worry about additional interest rate fees.  Nevertheless, there are other costs that can be expected such as the set-up fee, maintenance fee, transaction charges, and possible penalty fees.

Can you use a pre paid credit card for establishing credit or repairing bad credit?  The answer is yes as long as your chosen issuer offers credit reporting service to the three major consumer reporting agencies.  Before making choice, check out the complete terms and conditions of the prepaid credit card.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

As debit cards become more popular among consumers, the Federal Trade Commission warns all prepaid cardholders to exercise caution when using these cards for payment, particularly when purchasing from the internet.  How can you avoid being a victim of credit card fraud?  Check out the following safety tips:

Https://. To ensure the security of a web site, make sure that the URL or the website address begins with https://.  You should be able to check this from your browser’s address bar.

Privacy Policy. An online merchant must present its Privacy Policy on its website.  Take the extra time read this important information.  Because every merchant has its own set of policies on protecting their customer’s rights to privacy, you should be clearly aware of how your personal information will be used and what you can expect from the merchant.

Merchant Reputation. It is strongly recommended that you purchase only from trusted merchants online.  Get to know the company’s background and reputation.  Although you can find online stores that offer incredibly low prices, you want to make sure that you are dealing with a legitimate seller who only sells high-quality products.

Seal of Approval. Look for online shops that bear logos or seals of approval from National Business/Merchant organizations like the BBB (Better Business Bureau) and TRUSTe.  Take the extra effort to check the merchant’s record from the BBB.

Fraud Liability Protection. Does your debit card Issuer provide you protection against fraudulent or unauthorized charges made using your account?  Prepaid debit cards by Visa and MasterCard comes with this provision as their standard credit cardholders do.  If you are not sure, review your debit card’s Terms & Conditions before using your card online.

Purchase Protection. What about purchase protection?  For instance, prepaid debit cards with the VISA logo requires online verification before the cardholder can continue with the purchase.  This gives VISA cardholders additional security against fraud.

Check your bill. Review your debit card receipts to make sure that all charges are correct.  If you find errors, call your debit card company immediately.

Check out fees. Some prepaid debit cards carry so many extra charges on every transaction you make, including online purchases.  Before using your debit card to buy from the internet, review the fine print and get to know the possible fees that you may incur.

Check your funds. Make sure that you have sufficient balance in your account to pay for that particular item.  Some debit cards charge overdraft fees and other penalties in case your purchase exceeds your limit.

Do not share your PIN with anyone. You will be required to enter your debit card’s Personal Identification Number (PIN) when making purchases both online and offline.   Never let the cashier or anyone else enter these numbers for you.

Do not use your debit card account for savings. Limit funds in your debit card account and avoid making large deposits.  This way, in case your account gets hacked, it will not be a heartbreaking loss for you and you can always switch to a new account.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

Plastic money or credit cards became very popular over the years. However, not everyone can qualify a credit card that easily, especially those with no credit history or with bad credit. Fortunately, there is another option and that is to get a prepaid credit card.

Prepaid Credit or Debit Cards for Everyone

Issuers of prepaid debit cards give everyone the chance to use plastic money without going through a complicated approval process. Unlike standard credit cards that require good credit history, credit check is not necessary to get a debit card. All that is required is an advanced deposit which will be used for payment.

Just like a regular credit card – you can use it when buying groceries, shopping at malls, paying utility bills, or purchasing from online stores. As long as you have available funds in your account, you can use it to pay for your charges.

Prepaid Debit Card Limits

What makes a prepaid card different from a real credit card? First, we must understand that a debit account does not come with a credit line. Each time a debit card is used for payment, charges are instantly paid off using the deposit in the cardholder’s account.

For instance, if you have made a $300 deposit, you can only use your debit card for charges up to $300. If you want to continue using it for more, you must make a new deposit in your account.

Prepaid Debit Card Advantages

Generally, prepaid debit cards are accepted anywhere credit cards are accepted. Most merchants allow both credit and debit card payments. This is especially true if your prepaid card bears the Visa or MasterCard logo.

Prepaid debit cards are great for people who are often on the road or on trips abroad. Instead of bringing a large amount of cash, they can use a debit card for most of their travel expenses. Students can also benefit from prepaid debit cards since it prevents them from incurring bad debt. For parents, they can conveniently send cash to their kids through their prepaid accounts. Even employers who hire home based employees or freelancers can use a prepaid debit card to send wages or service fees.

Although some people may frown at the thought of not being extended a credit line, those who want to control their spending will find this limitation as a blessing. And because you are not allowed to go over your limit or to pay at a later time, extra fees such as interest rate, overdraft fees, late penalty fees, and other credit card surcharges are completely eliminated.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

Credit cards have been part of many people’s lives. You can use it to purchase items, pay bills, (i.e. phone bills, utility bills, etc.) make airline or hotel reservations or even to rent a car. In addition to this, credit cards are great for people who want to establish credit history.

However, people with low or bad credit scores find it difficult to qualify for a traditional credit card. The next best option for them is to apply for secured credit cards.

FAQs about Secured Credit Cards

What is a Secured Credit Card? A secured credit card is like a traditional credit card except for one thing – a person applying for this type of credit card is required to deposit a certain amount of cash that will serve as guarantee for debts. The deposit will also determine the cardholder’s credit line.

If the cardholder can show an impressive performance for at least 6 consecutive months, the secured card issuer may raise his/her credit line without requiring for additional deposit.

Where can I get one? Check out websites of different credit card companies offering secured credit cards. Most issuers offer free online application. You can also compare the rate of interest and fees online. Another way is to consult your bank.

How much money do I have to deposit? This will actually depend on the credit card issuer. Some issuers require a minimum of $300 while others may require at least $500 for deposit.

What are the other charges or fees I have to pay? You will need to pay an annual fee to keep your account open. Secured credit cards often come with higher fees and interest rates. It is highly recommended to do your own research, shop for possible options and compare.

What are the things I should consider when choosing a Secured Credit Card? First, you have to check the interest rate and fees. Look-out for hidden charges. Second, read and understand the fine print before signing up.

Third, you should always make sure that the credit line you choose fits your budget or income. The last thing you should check is if the credit card issuer you chose reports to all three (3) major credit bureaus. If you are trying to improve your credit score, it is important to make sure that every single payment you make, is well-accounted for.

Are there problems I should be aware of? Using a secured credit card has its advantages and disadvantages.

• Advantages:

1.Anyone can apply even people with bad credit.

2.Great way to rebuild a bad credit history.

• Disadvantages:

Since most people who apply for secured credit cards are individuals with bad credit:

You may be required to pay an upfront fee what they call receiving “guaranteed” credit cards.

The interest rates and penalties are higher than unsecured credit cards.

How long will it take before I can qualify for an unsecured credit card? The average time is about a year. This will, again, depend on the issuer.

How To Use Your Secured Credit Cards to Your Advantage

It is a must to always use your credit card wisely. This type of freedom is sometimes abused. Some credit cardholders purchase items that are not really needed. Although a secured credit card prevents you for spending more than your credit line, maximizing your credit limit is discouraged.

Be sure to pay your monthly bills on time to prevent penalty fees. Since you are aiming to rebuild your credit history, you need to alert about your payment habits.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

Secured credit cards are wonderful tools for people with bad credit and no credit history. These special credit cards can help a person build-up and rebuild credit. In this article, let’s discuss facts about secured cards and everything you need to know about them.

What is a Secured Credit Card?

A person who wants to open a secured credit card account must first make a deposit in his/her savings account. This will serve as a guarantee in case the cardholder fails to pay charges on time. The security deposit required varies, depending on the issuer.

The cash deposit will also determine the value of the cardholder’s credit limit. Some issuers will match the exact value of the deposit while other issuers may offer a slightly lower or higher limit than the amount of deposit made.

Take note that secured cards are different from prepaid debit cards. Thus, if you fail to pay off your monthly balance in full, you will incur the additional interest rate charge.

Why Apply for Secured Credit Cards?

A secured card is recommended for people who yet to establish credit history. Application and approval is easy as long as you can submit the required security deposit. On the other hand, if your credit rating has been damaged, you will need a secured credit card to rebuild it.

What about those who have just filed for bankruptcy? If you have a record of bankruptcy, you may have to wait until it has been discharged before you can apply for a secured credit card. Nevertheless, as soon as you are discharged, a secured credit card is the perfect tool to re-establish your damaged credit history.

Aside from quick approval, one great advantage of using a secured credit card is that it can help keep your spending in check. Because exceeding your credit limit is not option, the cardholder can become more conscious about his/her expenses.

Of course, secured credit cards can be used for payment or purchase anywhere regular credit cards are accepted. No one even has to know that you are using a secured account. That fact is only be between you and your credit card company.

Shopping for the Right Secured Credit Cards

The ideal secured credit card should have minimal fees. Most secured cards do carry annual fees so pick out one with an acceptable annual fee charge. Avoid credit cards that require miscellaneous or hidden charges.

Secured cards are also expected to have slightly higher interest than unsecured cards. By doing comparisons, you should be able to find one with a reasonable APR.

Spend time reading the fine print. You should clearly understand the Terms and Conditions of your chosen issuer before signing up. In addition, make sure that your payments will be reported to the major credit bureaus as it is the only way you can build/rebuild your credit history.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

Credit cards have been around for years and it has proven to be a reliable tool for paying bills, tuition fees of your children or purchasing items or groceries you need at home. However, there might come a time where convenience can also be a cause for worry.

For those who have the habit to overspend or finds it difficult to control spending, owning a credit card can pose a big problem. The best solution is to get a prepaid visa credit card instead.

Definition and Advantages of a Prepaid Visa Credit Card

Prepaid visa credit card is a Visa card you can use to make purchases everywhere Visa debit cards are accepted just like a traditional Visa card. It gives the cardholder a safer feeling because he/she does not need to bring cash especially when traveling to other countries.

The difference is that when you have a traditional Visa card, you can purchase items and pay them at a later time. On the contrary, you need to add funds first to your account before you can start using your prepaid visa card.

Below are other advantages of a prepaid visa card:

• You can avoid over-spending. You only get to spend what you have loaded on the card. Managing your finances is easier and you have full-control of your expenses.

• You can use it to withdraw cash from ATMs worldwide.

• You can easily make purchases everywhere as long as they are accepting Visa cards. It can be from stores, online or by phone.

• People who love to travel can use it to pay for booking fees, hotel reservations, etc.

• You can use it to pay bills and buy gas for your car.

• You can track your spending online.

How to Get a Prepaid Visa Credit Card

1. You can apply for prepaid visa card from your nearest bank or online. You will be charged a considerably low fee to open a prepaid account.  Application is quick and easy since no credit check needs to be done.

2. Register your Visa card in your name by telephone or online and establish an online account with your Visa card issuer.

3. Ask the issuer how you can activate your new prepaid visa card. Usually it is done by registering online or by telephone.

4. You will need to create a Personal Identification Number (PIN) so you can use your card at ATMs worldwide.

5. You can now use your new prepaid visa credit card to purchase items or pay bills. Check your balance at an ATM, by phone or on the internet. Reload your card so you can use it anytime.

Note: Some car rental companies do not accept pre paid credit cards so it is important to ask first if they are accepting prepaid visa cards. It is also important to note that some prepaid cards do not report to the credit bureaus. If you want to use your prepaid card for building credit, make sure that credit reporting service is provided.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!

These days, almost every type of transaction requires the use of credit card- hotel and airline bookings done online are just some examples. Indeed, it can be difficult on the part of those who are not eligible to get a regular credit card because of bad credit history.

However, they can apply for a secured credit card in order to fix their credit Before submitting your application, here are some important facts you need to know about this card:

Fees:

This type of card may involve fees such as processing fees and annual fees. Such charges may also vary from one credit card company to another. You need to check the fees before applying so you can avoid credit cards with very high charges.                                                          

Deposit:

Secured credit cards require a cash deposit which can range from $300- $500. There are secured credit cards with minimum and maximum deposit limits. Some issuers may place your cash deposit in an interest-bearing account. It that’s the case, see to it that you clearly understand the terms of your credit card issuer.

Your credit limit can either be the same as or exceed to the value of your deposit. However, there are instances when your credit limit may be less than your security deposit.

You can add money to your deposit so as to raise your credit line. As an incentive for being able to pay on time, some banks may increase your credit limit after a few months of consistent payment. The cash deposit will be used by the credit card issuer in case the cardholder fails to pay off charges on time.

Qualifications:

For those who want to apply for a secured credit card, the requirements may vary from one company to another. Aside from the security deposit, some credit card companies may impose specific qualifications on age or income bracket.

Payment Reports to the Credit Bureaus:

There are times when the card company does not report your payments to the three major credit bureaus and in such case, it does not help rebuild your credit rating. If you wish to rebuild your credit history, your payments should be reported to the credit bureaus.

Unsecured credit cards have lower fees, fewer restrictions and lower interest rates. Now, if you want to upgrade your secured credit cards to an unsecured credit card, it can be possible after a year of consistent payments.

About the Author

Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!