The Risks Involved

Many young people have the perception that using a credit card is the same as paying with their bank debit card. They do not consider the extra fees or the risk of building debt. These people think that they can just go ahead and use their credit card for any purchases that they cannot afford at the time. This type of thinking can lead to a huge credit card balance. With young people, this can be particularly dangerous, as they do not have the income to pay off the balance. Credit cards allow young people to dig a financial hole that they do not have the resources to climb out of.

As their credit card debt builds, young people often don’t recognize the problem until it is too late. Eventually their debt gets to the point that the minimum monthly payment only pays off the interest charges. Instead of seeking help with their debt, many young people ignore the problem and, worse yet, they even try to get a second credit card to build more debt. As these young people are trying to prove their independence to their parents, they are often too embarrassed to ask for help. It can lead to a feeling of helplessness.

Education is the Key

The root of the problem is that young people are never taught how to responsibly use credit cards. The school system chooses not to teach such life skills as money management or credit card use. This leaves the responsibility solely in the hands of the parents. Unfortunately many parents are starting to lose touch with their children just when credit education is most necessary. There are also some parents who do not know about responsible credit card use themselves.

Young people need to know how to use a credit card responsibly and how to avoid credit card debt. They need to know to only use their credit card for as much as they can reasonably pay off each month. They need to know all about credit card interest charges too. Without credit education, it is far too easy to make mistakes with your credit card.

The Benefits of Getting a Credit Card Younger

Sure there is the convenience factor of having a credit card when you are just out of high school. More importantly, a credit card helps build credit over time. The earlier you start building credit, the easier it will be to make large purchases in the future. Anytime you need a loan from the bank, the bank will look at your credit history. The longer you’ve built credit, the easier it is to get a loan. Plus you will pay lower interest rates. Without built up credit, you might even get declined for that loan.

Credit cards also give young people the independence that they need. Who wants to phone their parents each time they want to order something online? What about when you sign up for a video rental account or when you register for phone service? A credit card is a must. A credit card can even act as a financial safety net in tough times.

Conclusion

So unless young people get educated about credit card use, there is a good chance that they will have to learn by making mistakes. Help protect their future by giving them the tools to succeed today.

Educating to Prevent Student Credit Card Debt is a post from: Aid Credit

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If you’re not using a low interest credit card, ask yourself why? This credit card have numerous advantages such as the 0% Intro APR (annual percentage rate) that enables the consumer to save on interest expense. These offers may only apply to the balance transfer and not to new purchases and cash advance. Therefore, making purchases and taking cash advance with your promotional offer credit card may result in paying multiple interest rates. Individuals who are planning to make purchases and carry a credit card balance each month may be better off with low fixed interest rate credit cards. Customers will need to decide if a 0% intro APR or a low fixed APR credit card is better suited for their personal needs. It’s not uncommon for the interest rate to shoot up dramatically after the introductory period expires. Therefore, customers should know what the interest rate will be after the promotional period ends.

The main purpose of low interest credit cards is to transfer balance from high interest rate credit cards to interest free cards to save money on interest expense. They are also been used to make large purchases and important to customers who are planning to consolidate credit card loans and carry a balance each month. Credit card issuers charge a fee to do a balance transfer. This fee varies from bank to bank so it is a good idea to shop around for the best deal. Customers with excellent credit can request to have the transfer fee waived.

Low interest credit card can be very versatile because they have similar feature to a standard credit card. Similar features may be cash back, rewards, bonus miles, no annual fee and more. Therefore, comparing credit card features is very important because it allows you to find the card that meets your lifestyle and one that will save the most money on interest expense. The best way to save interest is to pay the outstanding balance off each billing cycle. Credit card companies usually waived the interest charges if the entire outstanding balance is paid on time each month. If the outstanding balance is not paid in full each month then the credit card companies will charge interest on the entire outstanding balance from the date of each purchase. Many customers are not financially able to maximize their interest savings by paying off the entire balance each month. Therefore the next best way to save on interest expense is to use a low interest credit card to make purchases and carry an outstanding balance.

Individuals with poor credit pay very high finance charges and miscellaneous fees. Having a good credit rating will avoid the financial burden that come with having bad credit. Therefore to apply for a low interest credit card requires having a good to excellent credit rating. Credit card companies can change the interest rate on your low interest credit card at any time for different reasons. These reasons may include making late payment, poor payment history with other creditors, applying for too much credit or they can simple change the interest rate for no reason at all. Your financial success depends on how you use and manage your credit cards.

Low interest credit cards are ideally suited to consolidate credit card debts because of the 0% intro APR or low interest rate offered. It can eliminate making monthly payments to various creditors. Do the necessary research before deciding to consolidate because if not done wisely can end up costing more than you would have saved. Because consolidation will extend the term of your loan it may increase the total amount of interest payment paid over the life of the loan. Debt consolidation is an excellent opportunity to keep you out of bankruptcy and get your finances back on track. Consolidating simplifies your paperwork and saves time and energy by only keeping records for a single loan instead of several loans.

Customers should understand the grace period agreement as it relates to their low interest credit card. Credit card agreements usually offer a grace period from 20 to 25 days from the billing date. This is the number of days stipulated in your credit card agreement before your credit card company starts charging interest on new purchases with certain conditions. The monthly payments must be credited to your account during the grace period time frame and you must not be carrying a balance. Usually credit cards without a grace period are charged finance charges immediately on new purchases even if your previous month’s bill was paid in full.

The internet is the number one source to compare credit card offers. Credit card types are listed categorically which makes it easy to find the credit card you are interested in. Submitting your online application is very secure and instantaneous and is a very practical way to obtain a credit card. Customers with excellent credit can get instant online credit card approval within a few minutes of filling out their online credit card application. Once approved, the customer will receive the credit card in the mail within a few days. This is the fastest and most convenient way to obtain a credit card. Customers should make sure the credit card features fits their lifestyle before submitting an application.

Don’t be surprised when you received your credit card bill to find out that you are paying different interest rates on the same bill depending on the type of transaction you are making. While credit card companies may offer the 0% intro offer for balance transfers, there maybe a much higher interest rate for cash advance and new purchase. This is why it is very important to read the fine prints and pay close attention to your credit card statement. This will give you a good understanding about the miscellaneous fees and interest rates to avoid surprises.

Low Interest Credit Card Facts You Can Share is a post from: Aid Credit

Reward credit cards are meant to give you incentives or bonuses for being a loyal credit card holder. However, despite what the advertising says, not all reward credit cards live up to its name. In fact, some reward credit cards may even cost you more than actually save you any money. So how do you spot a non-rewarding credit card? Let this article be your guide in choosing the right reward credit card for you.

Shopping for the Right Reward Card

Today, doing research on credit cards is made easier by finding and utilizing credit card review websites. Here, you can find that credit cards are categorized according to their type and purpose. When you look at the list of reward credit cards, you’ll see that it is further arranged according to the type of reward it offers. It is a good idea to decide first the type of reward program you need.

For instance, would you like to get a Travel reward credit card, a gas reward credit card, or a cash back reward credit card? Are you looking for a business reward credit card? Consider your needs and your spending habits so you can make the right decision on which reward program best matches your lifestyle.

After deciding the type of reward you want, you can see a couple of credit cards offering that particular reward program. This is the time to check on the reviews for each so you can have an idea on which reward credit cards are worth checking out. Remember, reviews often give you the best and weakest features of each credit card, but not the entire terms. Although credit card review sites don’t usually include the disclosure statements of each card, the links to the official websites of the credit cards are included after each review. After you’ve chosen your prospective reward credit cards, go ahead and visit the credit cards website to read the Terms and Conditions in full. It may take time for you to read each of the reward credit card’s agreement form but it’s definitely worth the effort. As you read the fine print, you can compare one reward credit card from the other more accurately.

Features of a Non-rewarding credit card:

Don’t forget to heed the signs so you don’t have to get stuck with a reward credit card that doesn’t work for you at all. Here are the signs that a reward credit card may not be as rewarding as it promises to be.

Expensive annual fees. Some reward credit cards charge from $50 to as much as $100 in the annual fee alone. Think about it. How much value of rewards do you expect to earn from your reward credit card? Is it worth paying $100 a year just to get the rewards? If the reward you can earn in a year amounts to only $50, then the annual fee defeats your purpose of getting the reward credit card in the first place.

Blackout dates. Blackout dates or expiration dates can cost you to lose all the hard-earned points in your account. Some reward credit cards impose a 2 year or a 1 year blackout which means your points are only good to last for 2 years or 1 year. If you fail $to earn enough points during this period, all the points you’ve collected will be forfeited. Thus, it’s best to find a reward credit card that doesn’t impose blackout dates at all.

Reward Limits. Some reward credit cards impose a limit on the maximum amount of rewards you can earn. For instance, your reward credit card may allow only up to $5,000 value of rewards. Afterwards, you won’t be qualified for the reward points any longer.

High interest rates. Some reward credit cards have higher interest rates than non-reward cards. Nevertheless, if you do your search diligently, you can find ones with a reasonable rate of interest.

How to Spot a Non-rewarding Rewards Credit Card is a post from: Aid Credit

To get a world wide known credit card like for example Visa or MasterCard, from a bank with lower interest rates you have to have at least a good credit history. If you have a good credit history you will most probably receive offers from different banks to get a credit card through them. However if your credit history is poor or bad or you do not have a credit history at all it will be more difficult for you to get a credit card. You will have to fill in many credit card applications and wait to see if you are getting approved or not. The good thing about the credit card applications is that they can be done online thus one can find in a matter of seconds if he or she is approved for a certain credit card.

The main question for a lot of people is not related to the type of credit cards available but how they can get a good credit card history or how can they improve or maintain one. Since most of the credit card applications ask you about your credit score and if you have one, you should already know that the better the credit score, the better the terms and conditions that you get with your credit card if you get approved. There are three main companies that asses your credit score and offer history credit reports. The first step towards a good credit score is paying your bills on time, making all the payments on time for a longer period of time is important for your credit score. Also if you get a credit card and use just a small amount of the money available in your credit line rather than a bigger amount, your score will be better. Also the longer your credit history is the better for your score. A fair diversity of credit cards will also help you maintain or increase a good score.

If you do not have a credit history, you should start making one because you need a good credit score not only to apply for credit cards, but also to apply for a loan for a house, a car or any other thing where you need a line of credit. Also once you get a line of credit make sure you make your payments on time and you can do this by setting automatic payments directly from your account. If you got a loan where you have to give back an fairly big amount of money each month a credit card that is prepaid can be a good thing to keep your expenditures in line and thus to avoid lowering your credit score. Also even if you get offers of applying for credit cards without having a credit score or even if you have a bad credit history, remember that in the long run having too many credit cards is not helping you get a good credit score or keep the same credit score you have.

Credit Card or Prepaid Credit Card? is a post from: Aid Credit

Luckily, interest rates are low and balance transfers are a pretty good alternative if your credit card debt is out of control and need some help. This being said there are a few things that you want to look out for when transferring credit card balances from one card to another. The golden rule is that when you use a balance transfer card as an avenue to pay off balances on your other cards let this be your sole purpose. Make a budget and timetable to pay off the debt where there is a beginning and an ending payment otherwise you may get yourself into deeper debt.

Things to look for when transferring credit card balances:

Life of Balance Transfer cards Life of balance credit cards are just what their name implies, they offer a low rate that applies to the balances you transfer within a certain time period. What you want to look for is a fixed rate that will not fluctuate over time. Depending on your credit level these may not be available to you, however if they are we highly suggest that you seek these cards out. The “gotcha” with this class of cards is that they usually will give you an extra thousand or two on your limit in hopes that you spend it at a higher interest rate, and most people do.

Again, we suggest that you use balance transfer credit cards for the single purpose of transferring higher interest credit card balances to a lower fixed rate. Once the transfer is completed, we recommend that you shred the transfer card and the one you transferred from to keep yourself from using them again. Over 75% of people that transfer balances use the transfer card and the old card again and end up owing more money than they did before the transfer. If the cards do not have an annual fee keep the accounts open for emergencies but shred the cards to keep yourself honest.

The Fine Print – If credit card issuers are similar in one area it is most definitely their fees and the fine print. It seems like they have fees for everything including one for on-time payments. Seriously you need to read the fine print and weigh the fees that apply for balance transfers, late payments, grace periods and other “gotchas” like universal default clauses. Over 80% of people that apply for credit cards will not read the fine print from beginning to end only to be surprised when their bill arrives in the mail. Most credit card websites offer handy calculators to help you calculate the best deal considering all of the fees.

Most credit cards have reduced the grace periods for repayment from 30 days to 20 days in an attempt to earn more fees and interest. If you are like most people, including yours truly, you pay your bills at a certain time of the month that usually coincides with your pay periods. The problem with this is that the 20 day grace period is relative to the due date of last months charges and is forever changing. If you pay your bills once a month like I do this will cause you to get late payment fees and could even trip the universal default clause which brings me to my next topic.

Universal Default Clauses – A universal default clause is a nasty little trick that credit card issuers use to jack-up your rates and fees to intolerable heights. If you look at the top of the fine print on each credit card you will usually see the regular APR and one below it that is through the roof. The one below it is the rate you will get should you pay late or even if your credit deteriorates. These clauses range from annoying to nasty and most states are trying to outlaw them but the majority of credit cards still have them.

The only card issuer that I can think of that doesn’t have this clause across the board is Capital One. I’m sure there are others but the clauses differ from issuer to issuer and card to card. Read the fine print for each card you are considering, see what their rules are that will trigger this clause. Some are mild which apply only if you are habitually late, where others monitor your credit and can jack up your rates and fees if your credit is deemed riskier than when they issued the card.

Introductory & Variable Rates – Beware of the asterisks. When you see one of these next to an interest rate you can bet it’s going to change on you. Most cards will advertise 0% interest on balance transfers 12 – 15 months but have cute little asterisks next to the rate. Find the fine print; chances are that your sexy 0% rate is going to morph into a giant wallet munching monster after the intro rate is over. Find out what the adjusted rate will be.The “gotcha” here is that most people know their rate will adjust in the future but they rationalize the transfer thinking that they will have the balance paid off in that time frame. Chances they wont and the credit card companies know this. How else do you think they can offer 0% interest rates?

Variable rates are almost inescapable because 95% of all cards have variable rates. The ones that do not have them are hidden deep within most websites and offer very few frills. The reason they are hidden is that they are a little tougher to qualify for and offer lower profit margins to the issuers. When searching credit card websites take an extra minute to go all the way to the last page in each category, you may be surprised what you will find. Most credit card websites are arranged with the most profitable credit cards on the first few pages, these are rarely the best credit cards.

Reward Cards – If you are using your balance transfer card as you should, the bells and whistles on reward cards shouldn’t concern you. The bells and whistles cost you more, period. They cost the issuer more and they pass the cost right back to you. If you stay true to the purpose and transfer your balances in order to pay them off you should get a plain-Jane generic card without the usual frills hat comes with most cards. The only frills you should seek are the life of balance feature, fixed rate and a manageable or nonexistent universal default clause.

In closing I hope these tips help you get your very best deal should you decide to use a balance transfer card. This category of credit card is becoming more and more popular every day due to the financial chaos surrounding us today. This is generally a good thing though; this causes the card issuers to come up with different cards that offer better deals to keep up with their competition. Just remember the golden rule, only use balance transfer cards with a specific plan to pay off a balance. If you are “robbing Peter to pay Paul” the credit card companies will usually win in the end. Remember, Las Vegas wasn’t built on winners and neither are large credit card companies.

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