Major problems in life affect the credit records of people. A recent job loss, divorce, accident and illness can inflict damaging effects on people’s credit history. This is because during these unavoidable situations, people usually resort to borrowing funds. And sometimes, they find it difficult to pay back whatever amounts were owed. This inability to pay off creditors is the main reason why people receive bad credit records.

Do you also worry about bad credit? But do you want to re-establish your credit history? Well, worry no more, because this article will discuss what you can do to rebuild credit. This can be done by applying for secured credit cards.

What Secured Credit Cards Are

Secured credit cards, also known as credit cards for no credit, is a credit program offered to individuals who are yet to establish their credit history and to those who may have histories of bad credit.

This credit card program usually requires applicants to provide collateral, in a form of an initial deposit. This initial cash deposit actually serves two important functions. First it serves as the credit limit for secured credit card. This means that you can only charge your purchases and bills on the card only up to the value you have deposited onto the credit card account. If you were required to deposit $200, this will be the maximum amount of credit you can charge to you card. You cannot go over this limit. If you do so, your credit transaction will be declined, and you may be charged with declined transaction fees.

The second purpose of the collateral is for security. Should you default on your payments; the credit card company can tap into your initial deposit to pay for your unsettled charges.

Credit cards for no credit or bad credit usually have the following requirements: a checking or savings account, and a filled out application form. Lenders may also ask applicants for secured credit cards to provide proof of their employment as well as identification papers.

A negative aspect of credit cards for no credit is that some may have high interest rates and fees. Aside from paying processing fees, cardholders must pay significant amounts for interest. Still, it is important to note that such fees and rates may just be temporary. As long as you prove yourself worthy of credit, you can expect a reduction of these rates and charges.

Secured Credit Cards – Beneficial for Bad Credit?

How can you benefit from getting a secured credit card? Well, this card can allow you to succeed in your battle with bad credit. You can re-establish your credit reputation as long as you consistently pay your debt installments on time.

In so doing, you can increase your credit score and this will in turn expand your credit prospects. As long as you maintain good payment habits you can expect to qualify for low interest credit and excellent loan opportunities in the future

Secured credit cards are also excellent tools to help people manage their finances. Through these cards, you can control your spending habits. After all, you can only make purchases as long as there is available cash on your credit card. This will surely help people free themselves from uncontrolled debts and the credit worries associated with them.

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!

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!

Should you transfer to prepaid debit cards? To answer this question, let’s talk about the options that debit cards provide along with the advantages you can enjoy upon using them. But first, let’s briefly discuss what prepaid debit cards are and how they differ from credit cards.

A prepaid debit card looks like a regular credit card. You can carry it with you when shopping at the mall or at groceries and use them as payment. Instead of bringing cash, just bring your prepaid debit card with you and enjoy the convenience. Prepaid debit cards can also be used in restaurants, gas stations, and even at online merchants.

Since they are prepaid, the debit card holder must place enough funds in his/her account before using the card. The purchases will instantly be deducted from the card holder’s debit account so there’s no need to worry about due dates or repayments.

Prepaid Debit Cards vs Checking Accounts

Instead of opening a checking account, having a prepaid debit card offers the same functions that a checking account provides but with less limits. For instance, if you have bad credit, a prepaid debit card is a lot easier to avail than opening a checking account. There’s no need to carry around checks or worry about getting your blank checks stolen. In case your prepaid debit card is stolen, you can simply call your bank right away so that your account can be put on alert.

Using Prepaid Debit Cards for Internet Shopping

Another advantage of prepaid debit cards is they can be used in shopping online even if you don’t have a credit card or a bank savings account. For many shoppers who prefer to shop from the internet, having a prepaid debit card is a great tool because the risk of credit card fraud and identity theft are avoided.

Prepaid Debit Cards vs. Pay Checks

Prepaid debit cards are now used in government offices as well as in private firms as tools for distributing monthly salaries to employees. Prepaid debit cards are easier to use than issuing paychecks. If you have a home based business or a small business, you can use prepaid debit cards in sending your payments to your employees regardless of their location. Now that freelancing is gaining wide popularity among business owners, prepaid debit cards are also enjoying the recognition.

Prepaid Debit Cards vs Credit Cards

Prepaid debit cards do not allow card holders to carry over balances they incur from month to month. With a prepaid debit card, the card holder can only purchase the maximum amount that is available in his/her debit account. Neglecting payment dues and incurring interest rates and penalty fees are also avoided.

This limitation can actually be an advantage especially for those with uncontrolled spending habits. Without the option to carry over balances, a debit card holder is encouraged to use the debit card only for reasonable purchases. If you’ve had trouble with bad credit before, switching to a prepaid card can be a good solution.

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, pre paid credit cards and prepaid cell phone service can save you big money!