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!

If you want to apply for  secured credit cards, consider these top ten Frequently Asked questions along with the answers:

1. What is a secured credit card?
It is a type of credit card that is created for people with bad credit or no credit history.  To make up for the risk, the applicant is required to submit a deposit.  The amount of deposit will also define the secured cardholder’s credit line.

2. How do I apply for a secured credit card?
Some banks and credit card issuers offer a secured credit card.  You can personally apply from your local bank or send an application online.  If you are a member of a credit union, you may inquire if your Union offers a secured credit card to enjoy lower interest rate and fees compared to commercial Issuers.

3. What fees should you be aware of?
Some secured credit cards charge an application fee while others may not.  Although all secured credit cards carry annual fees, you should be able to find a card with a reasonable annual fee by doing your research.  Carefully examine the fine print to make sure that there are no hidden charges.

4. How much is the security deposit?
The security deposit may runs from $300 to $500, depending on the Issuer. If you need a higher credit limit, be prepared to raise your cash deposit as well.

5. Can a secured credit card help me get out of bad credit?
Yes.  A secured credit card can be used for rebuilding bad credit but this will depend on the kind of card you choose and how you will use it.  To rebuild credit, you must use your secured regularly.  However, it is important to pay back your charges on time at all times.  More importantly, you need to make sure that your payments will be promptly reported to all three major credit bureaus as it is the only way you can raise your credit score.

6. Will others know that I’m using a credit card for bad credit?
No.  Your card will not show any sign or print indicating that you are using a secured account because you have bad credit history.  That information is exclusively between you and your secured card Issuer only.

7. Will my deposit earn interest?
Some Issuers place the security deposit in a timed deposit account to earn interest.  Before choosing a secured card, understand how long your money has to stay in the deposit account should you want to terminate your secured card.  Furthermore, understand if you can keep the interest your money earned or if it will go to your card’s Issuer.

8. Can I get an upgrade to unsecured credit card?
Some issuers will automatically upgrade your account to an unsecured credit card after a year of consistent payments.  You can also request for an upgrade if you think you have proven your credibility as a cardholder.

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!

A credit score is used to measure a person’s credit worthiness. Whether you are planning to get new lines of credit, apply for a job, rent an apartment or office space, etc., your credit score plays an important role. That is the reason why people aim to have a good to excellent credit rating.

However, there are circumstances that may lead us to bad credit. It is not always because a person has an over-spending habit. Sometimes bad credit is a result of an unexpected events such as illness, divorce, lost of job, etc. Whatever the reason is, there is still a chance to repair a bad credit history.

Secured Credit Cards

Some people may think that getting a new credit card to recover from bad credit is a wrong move. Yet, if done the right way, it can actually be an effective step to rebuild bad credit.

Credit cards for people with bad credit? Yes, this is possible. Many credit card companies are offering bad credit credit cards or secured credit cards.

A secured credit cards are just like a traditional credit card in the sense that you can use it for making purchases or paying bills. However, you must deposit a sum of money which acts as security for your debts. If you cannot pay on time, the bank will use your cash deposit to pay off your debts. The amount you deposited will act as your credit limit as well.

How Secured Credit Cards Increase Your Credit Score

Most secured credit cards offer credit reporting to the three (3) major credit bureaus. Paying on time and avoiding exceeding your credit limit will surely improve your credit rating. Be sure to understand how you are being scored so you can work on the improvement of your personal credit history.

How to Apply for a Secured Credit Cards

The easiest way to look and apply for a credit card for bad credit is to search the internet. Most credit card companies offer online applications making the application processes faster and easier.

Disadvantages of Secured Credit Cards

Due to the high risk involved, most credit cards for bad credit come with higher fees and interest rates. There are credit card companies that charge application fees, processing fees and annual fees.

Is it worth getting a secured credit card if you have bad credit? Yes, it is. Despite having to pay higher fees and interest rates plus submitting a deposit, secured credit cards can really help you repair your credit history.

With regards to higher fees and interest rates, you just need to shop around for choices and compare your possible options before choosing the best deal. Remember to always make payments on time to avoid penalties and incurring negative remarks on your credit report.

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!

If you plan to rent a car on your next trip, you must have your credit card ready. But what if you do not have a credit card? Or what if you do not want to use a credit card to rent a car? Is it possible to use your prepaid debit cards for payment?

Here are some tips on how you can use a prepaid debit card to rent a car without hassle:

Explore your options. Different auto rental companies have varying policies in accepting renters. Do your research online and get to know which companies allow prepaid debit card payment. It is also a good idea to call up different branches of the same company as the rules may vary from one branch to another.

Be prepared to wait in line. Paying with a credit card is the quickest way to make a transaction. If you’re going to use a prepaid debit card, expect that the process will take much, much longer. You may have to wait in line at the car rental counter as your credit history, proof of auto insurance, and other Identifications are verified.

Load up your debit account. Aside from the cost of the car rent, you must have available funds in your debit account. This is known as the “hold” or “block” – funds which are linked to your checking or savings account.

Visa or MasterCard. Merchants and auto rental services only accept debit cards that are supported by major processors such as Visa or MasterCard. If your debit card does not bear the Visa or MasterCard logo, major rental companies may refuse to do business with you.

Check your credit rating. Your personal credit rating will be questioned as well. If you have a history of bankruptcy or if you have a low credit score, you may find it difficult to rent a car using prepaid debit cards.

Prepare necessary documents. You will be asked to submit supporting documents such as utility bill, proof of auto insurance, return airline ticket, itinerary, driver’s license, and valid IDs. The names and signatures on the documents you submitted should match with the name and signature on your prepaid debit 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!

Many people do not want to get a prepaid debit card until they need one. When stuck in bad credit, you will not be able to get approved for credit cards that require a good credit score. In this case, applying for a debit card gives you a guaranteed approval.

Prepaid Debit Cards for Rebuilding Bad Credit

It is good to know that prepaid debit card issuers today now provide credit reporting to the major bureaus.  This means people who need to rebuild their credit history can now use a debit card to do so.  However, prepaid debit cards are not just for people with bad credit.  Below are other benefits of using prepaid debit cards.

Avoid interest rate charges. When you use your debit card for payment, your bills will automatically be deducted from your cash deposit.  Since a debit card payment is as good as cash payment, you will not be charged with any interest rate.

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Avoid late penalty fees. Submit your credit card payment even just a day after your due date and you will incur late penalty charges.  With a debit card, you can completely forget about late fees.

Limit your spending. Credit card holders often fall in the debt trap because of maximizing their credit limit or falling behind on their payments.  Because of its limitation, using a prepaid debit card can help you exercise more control over your spending.

Send or Receive money conveniently and cost-effectively. Do you need to send money to your kids?  DO you have employees that you need to send payment to regularly?  If yes, then using a prepaid debit card is an easier and more cost-effective way to transfer money.

Sending money through Wire Money Transfer services mean paying for a service charge per transaction.  With a debit card, transferring money is free as long as your recipient uses a debit card from the same issuer.  Furthermore, your recipient can withdraw the money only a few seconds or minutes after the transfer was done.

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!