Mark Carolin

Archive for the ‘Credit Card’ Category

In the UK consumers can enjoy a very good choice of credit cards, and these days the choice is better than ever, with something to suit everyone. In addition to standard credit cards, where you can enjoy a certain, specified amount of credit and spread repayments, you can now also opt for prepaid credit cards, which may prove useful for certain consumers. Although prepaid credit cards are not yet available from every card issuer, they are becoming increasingly popular in the UK.

Standard cards

With standard credit cards you can use your card to make purchases and cash transactions, and then you can repay what you owe. on the card over a period of time or altogether at the end of the month. If you clear the balance each month you won’t pay any interest, otherwise you will be charged interest on the remaining balance (unless you have an interest free credit card and clear the balance before the interest free period expires).

Pros:

Convenience and flexibility Being able to enjoy a specified credit limit Being able to spread the cost of purchases Enjoying rewards or interest free credit based on type of credit card Being able to avoid interest charged by clearing the balance each month
Cons:

Extortionate interest rate charges on uncleared balances on some cards Possibility of high charges for late repayments or for going over limit Potential to get into high levels of debt Risk of credit card fraud
Prepaid credit cards

With prepaid cards you can enjoy the convenience and ease of making purchases on a card, but you will not actually receive credit. Instead, you have to load the card with cash like a prepaid mobile phone. You can then use the card to make purchases up to the amount that is loaded on to it. This is a very effective way for those with poor credit and who are unable to get a regular credit card or a debit card facility to enjoy the ease and convenience of shopping by card rather than cash and cheque.

Pros:

Convenience and ease of shopping by card No risk of getting into debt No costly charges or interest fees Easy and convenient to load card with money Suitable for those with bad credit
Cons:

Having to have the cash upfront in order to make a purchase No additional benefits and rewards like many credit cards Cannot spread the cost of purchases

Normally, when making an application for the usual kind of credit card, you undergo a credit search which will determine your credit limit. Once this transaction is validated by the credit card issuer, you will be able to use your credit card to make your purchases. And as is the custom, you will receive a credit card statement at the end of each month. If you pay off your outstanding balance every month, you will not be charged any interest. But if you fail to pay off the balance, then you’ll be obliged to pay interest on that very balance that has been carried forward to the following month.

But this is not the case with a prepaid Master Card which you load up with money when making an application. The beauty of having a prepaid Master Card is that a credit search is simply waived aside because your prepaid Master Card is already loaded with money. Not only this, but you don’t have to worry about clearing your outstanding balance and you won’t even receive a credit card statement at the end of each month.

Your prepaid Master Card, unlike the humble credit card, will be your magic wand that guarantees acceptance and opens doors at all participating outlets throughout the world. And as its name suggests, the Master Card will make you the master of your spending habits, knowing full well that you cannot go over the prepaid limit unless you top it up with more money.

As it is with a credit card, your prepaid Master Card dispenses with the idea of carrying large amounts of cash on you. And in the event of a theft, you can be rest assured that you are well protected because of your PIN number which no one should have access to.

If you are sold on the idea of acquiring a prepaid Master Card, here’s how you can procure one. You will have to pay an application fee to obtain a prepaid Master Card. Some prepaid Master Cards issuers may charge a monthly fee while some others may charge an annual fee. Each time you use your Master Card on your transactions, you will be levied a handling fee. Your prepaid Master Card can be topped up either online or through your bank. If you don’t have a bank account, then you can always top it up with ready cash, at Post Offices, shops and garages, throughout the UK.

Consumers today are up to their eyeballs in debt. And many people don’t realize it until their good credit has been devastated.

As a result, many credit repair agencies are popping up all over the internet, on television and in the newspapers making sweeping guarantees that they can erase your bad credit and remove bankruptcies, judgments, liens, and bad loans from your credit history – forever!

Consumers are flocking to these credit repair clinics in droves. However, estimates show that credit repair companies have defrauded consumers in the United States alone out of more than fifty million dollars.

The truth of the matter is that depending on the extent of the damage to your credit history, the best strategy could be a self help strategy – not giving away hundreds or even thousands of dollars in up-front fees to an agency that in the end may do nothing to restore or improve your credit.

After researching the topic quite extensively, I found one great method that works well for some people is a method I call “beating the credit reporting bureaus at their own game”.

I report about it in more detail on my Prepaid Debit Card Site (www.debit-card-guide.com), however, in brief, this strategy involves taking advantage of signing up for prepaid debit cards which offer a built-in credit reporting feature.

A prepaid debit card is a great solution for a lot of people because the money you spend is your own and in most cases you cannot spend over the amount you have in your account.

This is a good solution for people who may have had difficulties with debt or bankruptcy in the past because a prepaid debit card is a great tool for developing invaluable financial management and budgeting skills.

A major bonus of some prepaid debit cards today is that during the sign-up process you are offered an opportunity to sign up for an additional service that will help you rebuild a bad credit history by having your monthly payments reported to one or more of the major credit reporting agencies.

Subsequently, each month your card’s issuer credit reporting partner will process your payment record and verify that your payment is properly posted to the credit bureaus’ records.

There is a small additional fee involved for this service each month, however, the fees are minimal by comparison to the sometimes outrageous fees and interest payment some credit card companies charge people with bad credit.

This fee is usually billed to you through your prepaid card each month and enables you to show a continuous history of activity within the credit system.

These prepaid debit cards help you rebuild your credit so you can get on with your life and is just one of the many self-help strategies that I recommend.

To learn more about rebuilding your credit through the use of a prepaid debit card simply do a search in one of your favorite search engines for prepaid debit cards or visit http://www.debit-card-guide.com for more specific card information.

Prepaid credit cards also called stored value card can be ideal for individuals who are unemployed, have bad credit or difficulty obtaining an unsecured credit card. Prepaid credit cards are also excellent for individuals who have a hard time controlling their spending and prevent the individual from overspending and getting into credit card debt. If your objective is to establish or rebuild you credit over a period of time, make sure the prepaid card issuer reports cardholder transactions to the credit bureaus namely Experian, Equifax, and Trans Union.

It is very easy to obtain a prepaid credit card because there is no credit check or employment verification since the funds you will be using are yours and not that of the prepaid credit card issuer. Prepaid credit card spending limit or credit line is the amount of money you loaded to your prepaid credit card account. Prepaid credit card carries the Visa or MasterCard logo. It can be used anywhere MasterCard and visa is accepted except renting a car at certain car rental companies and setting up automatic recurring payments.

The difference between a prepaid credit card and a debit card is that the spending transactions are deducted from the amount of money you loaded to your account unlike a debit card where the money spent is subtracted from your checking account and could cause Non-Sufficient Funds (NSF) charges. The NSF charges are due to a customer drawing funds from an ATM or making purchases that exceeds the balance in their checking account. With a prepaid card this will never happen since the prepaid card holder is not borrowing any money and can only spend the amount of money loaded to their prepaid account.

With prepaid credit card there are no interest charges because you are using your own money. To obtain a prepaid credit card requires paying a setup or application fee and may charge a fee each time you load more money to your account. Some of the ways prepaid credit card can be funded is with a wire transfer and a cash deposit at certain locations approved by the issuer.

Most people could not live with their credit cards today, using that little piece of plastic for everything from buying groceries to traveling abroad. However, those with less than stellar credit histories may be hard-pressed to find a company that will offer them a revolving line of credit without any collateral attached. This is where prepaid credit cards come into play.

What is a Prepaid Credit Card?

Prepaid credit cards are attached to a checking or savings account. When the card is used to make a purchase, the money comes directly out of the account. The card allows you to continue to charge as long, as there is money in the account. When the balance is gone, the card can no longer be used until cash is deposited into the account once again. Because the card holder is not charging up debt when using the card, there is no interest payment or risk of taking on more debt than you can handle.

Benefits

Prepaid credit cards may be a good choice for someone who is unable to get approved for a standard credit account. Some companies, such as hotels and rental car agencies, require a credit card number to make a reservation. You can use a prepaid card for these purposes without running up debt or paying interest charges on the amount. The card is much easier to get than other types of credit, and you don’t have to worry about the risk of taking on more debt than you can handle and putting yourself in a difficult financial position.

Drawbacks

While prepaid credit cards can be a good option for some, there are some drawbacks to using these for difficult financial situations. First, the funds must be in your checking or savings account in order for you to be able to use the card. This is little help is you are in a tight spot and need a little extra help to make ends meet until the next paycheck. The other problem is that some companies may not accept prepaid cards for payment of monthly expenses because they worry that the money may not be in the account when it comes time to pay the bill.

Alternatives

There are additional options to these credits cards when you are in a financial pinch. An emergency line of credit deposits money directly into your checking account so you can write checks or pay bills without worrying about overdraft or late fees while you wait for the next paycheck to come. These accounts are only used when you need them, and the balances can be paid back in full at any time or in minimum monthly payments for a small finance charge.

The advantage to an emergency line of credit over prepaid cards is that the money you need goes directly into your account. The person or company you write a check to never needs to know that the money came from an emergency fund. This is an excellent choice for covering payments when money is tight.

Prepaid business credit cards are real convenient for business use. You get to control how much money you like to have. This is better than running around with cash. Many services nowadays require some sort of banking account and in my opinion prepaid is the way to go. Don’t you hate credit cards that have so many fees? You are charged with monthly fees, over drafting fees, late fees and interest. This is a lot of money that could be going into your pocket.

Maintenance is kept to a minimal when you have a prepaid business credit card. You will never get a over drafting fee. You only spend what you have fund in your account. This is how you fund your business with your money.

Weighing The Benefits

No interest – never pay a dime on interest rates Online Bill Pay – Set dates to pay expenses automatically to avoid late fees Purchase Online – Be able to buy online or over the phone Security – You have the same protection as the major credit cards Increase Credit Score – By paying bills on time you could increase your credit score No Debt – You only spend what you fund

Applying for a prepaid card is simple and can be done from a store or even online. i recommend purchasing online as it is safe and convenient. This gives you the option to open an online account to track your balance and transactions. These cards are accepted world wide just like the major credit card. You too can be on the road to financial freedom by building you credit score with the credit builder that comes with every new account.