Selecting a credit card

How many "pre-approved" credit card offers do you get in the mail in the average month that seem to shout at you to accept the offer before it expires? If you're in the market for a credit card, take some time to shop all the offers to get the best credit card available to you.

First, look into the credit card terms and conditions. These are the fees associated with making purchases on the card, transferring balances to the card, taking cash withdrawals, and late fees. You can easily compare the annual percentage rate between credit card offers. The annual percentage rate is a way to measure what the credit actually costs you. Beware of variable annual percentage rates - and if you are considering credit card offers with variable APR's, find out how often the rate can be changed, how it effects the finance charges you are billed each month, and what the rate is based on.

Secondly, find out whether or not the cards in question charge an annual membership fee. Annual fees can be anything from $25 to $100 a year, with some platinum credit cards charging several hundred dollars. This is a fee that you are required to pay each year just for having the card in your wallet - even if you never make a purchase or transfer a balance to the account. If you're going to pay an annual fee on a credit card, there should be rewards or low rates that make the fee worth paying.

Look into the grace period of the credit card. Many cards will give you about 56 days to make payments interest free, without finance charges, just by paying your entire balance on time. Cards that do not have this free period can charge you a finance charge from the date you make a purchase on your card, or from the date each charge is posted to the account. Also consider transaction fees, and another fees associated with having the credit card. Just about every credit card will issue a fee if you take a cash advance or make your payment past the due date. Find out whether or not there is a monthly fee charged to the account when you don't make any purchases - there are some credit cards that will charge you monthly even if you haven't taken the card out of your wallet, and those are fees you can easily avoid just by selecting a credit card that doesn't have these additional fees.

You'll also want to consider the reward programs offered from each credit card you are considering applying for. If you are a frequent traveler, it makes sense to look at rewards programs that earn you discounted flights, hotels, and car rentals when you purchase your travel expenses and tickets using the credit card. Over time, your purchases will result in free travel, making the credit card with the travel rewards program a great choice for the frequent traveler. A very popular form of credit card rewards program is the cash back offer. These credit cards will reward spenders with 1% to 5% cash back for all of their purchases - either credited back to the credit card or sent as a check to the card holder. This may be a good card for you if you pay your balances off each month in full - because typically a cash back card will have a higher percentage rate than cards without cash back programs.

The bottom line in selecting a credit card is not to jump on the first offer that comes through the mail. You really need to spend a little time doing your homework and learning about the different credit cards available to you in order to get the best rates and best deals for your credit purchases.

Pros and cons of secured student credit cards

Many college, and even high school, students have a need for carrying a credit card. Often, however, these students are not yet financially responsible for themselves and still rely on their parents to help take care of their financial responsibilities. Therefore, secured student credit cards may be a great option for parents with children who are still in school. Nonetheless, the pros and cons of secured student credit cards need to weighed in order to determine if they are the right choice for you.

Pro: Secured Student Credit Cards Allow You to Monitor Spending

Secured credit cards are different from traditional credit cards in that you put funds on the credit card ahead of time. Therefore, the only money that is spent with the card is the money that is put on to it. In other words, a line of credit is not extended. Therefore, you don't have to worry about your child creating a humongous debt that you have to pay for.

In addition to preventing your child from going into debt, a secured student credit card also allows you to set your child up with an allowance. You can determine how much money you want to give your child to spend each month and you deposit the money onto the card. Depositing money onto these cards is easy. You can set it up so that a portion of your check is deposited onto the credit card each payday. Or, you can send money to the credit card company or deposit the money at select locations. This makes it much easier to get money to your child quickly if needed.

Con: Secured Student Credit Cards have a Number of Associated Fees

Although secured student credit cards allow you to monitor your child's spending habits, there are a number of fees associated with these guards. Generally, there is a fee to set the account up in the first place. Often, there are also annual fees and even monthly fees. In addition, each time you deposit money onto the card, you are usually assessed a small fee. All of these fees add up and can make the student credit card quite costly. Of course, these costs are still less then paying late fees or paying a large debt incurred with a line of credit.

Pro: Secured Student Credit Cards Provide Freedom and Flexibility

One of the best pros of credit cards for college students or high school students is that they allow your child to have the freedom and flexibility that is part of being a credit card holder. These cards do not look any different from traditional credit cards and are accepted at all of the same places. Therefore, your child can use the secured student credit card to purchases necessary items without having to ask you for it or making you have to go out and buy the item.

This is particularly helpful for college students when it comes to purchasing books and other school supplies, as the college may be located pretty far away from home. This makes it highly impractical for you to come to the school to make purchases for your child. Similarly, sending checks can take too long and can make your college student late in purchasing items he or she needs for school.

Pro: Secured Student Credit Cards Teach your Child Financial Responsibility

One of the best perks of a secured student credit card is that it starts your child down the road of financial responsibility. When you deposit money onto the card, your child has to learn how to responsibly use the money provided. In addition, most secured student credit cards report to credit bureaus, and the report will be in your child's name. This helps to build a credit history for your child, which will make it easier for him or her to acquire loans or other credit cards in the future. Before applying for a card, however, make sure it does report to these bureaus in order to receive this added benefit.

Student credit cards why they really are necessary

With more and more reports on student debt increasing to an extent that means graduates are still repaying their debts ten years or more after graduating, you would be forgiven for thinking that you should avoid student credit cards. This, however, doesn’t have to be the case. There are a number of reasons why you may need a credit card and used wisely and carefully, student credit cards can prove to be invaluable assets.

Using A Student Credit Card For Safe Shopping

It’s a fact that more and more people are partaking in Internet shopping of one variety or another. There is a very real chance that you will want to make a purchase over the Internet, whether you are buying your weekly grocery shopping or a birthday present for someone back home. The Internet offers excellent opportunity to purchase items at reduced prices that you wouldn’t ordinarily have access to. A student credit card enables you to shop safely and securely online. Credit cards in general offer a method of secure shopping and many offer insurance against purchases made online.

Building A Future Credit History

Building a credit history is not a simple task for many people but student credit cards enable you to do just that. When the time arrives to buy a house or make a major purchase of a car or other item, you will struggle to find any lender willing to offer you credit unless you have borrowed money before. By using credit cards for college students and ensuring that you make the necessary repayments by the date they are due you will be diligently building a credit history that will benefit you greatly in the future.

Joint Ownership

Credit cards for college students come in various different guises. Possibly the safest option is a student credit card that offers joint ownership between student and parent. This allows parents to repay some or a majority of the credit borrowed but also gives the student the opportunity to repay some of the balance as well. By deciding on a course of action, a budget and spending limits before the card arrives, you can have access to funds when you need them but still be forced to operate sensibly and within your own financial confines.

Limitations And Incentives

As with many cards, credit cards for college students have a set credit limit. Usually these limits are fairly low because students have no or little income to repay the amount borrowed. Again, this can help to manage spending and budgeting effectively. Another feature common to many cards is the incentive program. Credit cards for college students also tend to offer rewards or incentives, although they are usually based around student life and the sensible use of a credit card.

Student life can be a financially difficult time for students and for their parents. A student credit card gives access to money in the case of emergencies or for necessary purchases. Emergency use is the one time when most students and families will see real value in a credit card. By choosing a card that offers joint ownership between parent and child, the spending limit is curbed to some extent and sensible spending and sensible repayment is encouraged.

Use low interest credit cards to get out of debt

Low interest credit cards can provide you with the answers you are looking for when it comes to getting free of debt. If you are like millions of Americans, you are probably having difficulty keeping up with the minimum payments on your credit card. In fact, almost 70% of Americans keep a balance on one credit card or more. Similarly, 45% of those with balances pay only the minimum payment every month. Unfortunately, paying only the minimum on a credit card balance can mean taking years to pay it off.

A Glimmer of Hope

Low interest rate credit cards can provide you with the debt-relief you have been looking for. As an intelligent consumer, you can turn credit cards around and make them work for you rather than against you. Since credit card companies are in such fierce competition to acquire and to keep customers, many offer outstanding introductory offers. In fact, there are several cheap credit cards that offer an introductory APR as low as 0.00%. When used wisely, these low interest credit cards can be your ticket to financial independence.

Finding Cheap Credit Cards

Luckily for you, it is not particularly difficult to find low interest credit cards. In fact, a number of major credit cards send mailings directly to your home to offer you a card membership. On the downside, sorting through all of these credit card offers can be confusing and time consuming. For this reason, one of the best ways to find low interest rate credit cards is visit a web site offering side-by-side comparisons. Here, you can view introductory rates, annual fees, and how long the introductory rate lasts. You can also view the long term rate after the introductory rate is complete in order to determine which of the low interest credit cards will best suit your purposes.

Taking Advantage of Low Interest Rate Credit Cards

After selecting and applying for the low interest credit card of your choice, the first step to getting yourself debt free is to transfer your balances from high interest credit cards to the low interest credit card. This will help you start saving money immediately. In fact, a credit card balance of $9,000 with a 19.99% APR will cost you over $1,600 more per year than a credit card with an APR of 1.9%. Be sure, however, to look into possible balance transfer fees or other fees that might be associated with moving your credit card balance from one card to another. Also, low interest rate credit cards may have a higher interest rate on balance transfers, so be sure to be certain of the APR associated with the transfer.

After saving money with the lower APR provided by low interest credit cards, it is important for you to take advantage of the savings to become debt free. Too many people look at the savings as an excuse to spend more or they use the money elsewhere. Instead, you need to send the money you save back to the credit card in order to pay down your balance. After using the saved money on principal rather than interest, you will gradually start to see your balance disappear.

Creating a Budget

Of course, low interest rate credit cards are not the only answer for getting out of debt. Rather, they are one tool to help you get there. To get out of the red, you will need to create a budget that involves sending regular payments to the credit card that exceed the minimum payment amount. In addition, you need to either quit spending money on your credit card or make sure you have enough money coming in at the end of the month to completely pay for the additional debt placed on the card - and this money needs to be above and beyond what you already have set aside for your regular credit card payment.

Debit card stats outline payday loan flexibility

Research from Apacs released earlier this week provided the news that debit card purchases have, for the first time in history, outstripped cash spending in terms of the amount of money splashed out – underlining the flexibility which people today appreciate when it comes to making everyday buys.

The figures showed that in 2005 people spent some Ј89 billion using debit cards, which was a significant increase of nine per cent on the previous year's amount and eclipsed the cash spending total of Ј81 billion.

Indeed, the cash figure was a four per cent decrease on that of 2004 – emphasising the noteworthy swing in spending habits which has manifested itself over a period of 12 months.

Broken down, debit cards formed 37 per cent of Brits' retail spending over the course of 2005 while cash accounted for 34 per cent. With credit cards added into the mix, card spending as a whole made up some two-thirds of overall retail outlay in the UK.

Sandra Quinn, director of communications at APACS ( apacs. org. uk ), spoke of the path which spending patterns have taken over the past couple of years, saying: "At the end of 2004, we saw total UK spending on plastic overtake cash for the first time, signalling a real sea change in our payment habits.

'This change was mainly driven by debit card use. The 2005 figures show that this trend is continuing with debit card spending in retail outlets crashing through the cash barrier for the first time ever."

She also noted the general cultural change which debit cards have precipitated, observing that businesses are ever more receptive to card purchases and continuing: "However it is also being led by us as customers - debit cards have been around in the UK for almost 20 years so we now have an entire generation of shoppers who readily delve for their debit card instead of cash."

Debit card users who require a payday loan benefit greatly from the fact that My Payday Loan ( mypaydayloan. co. uk ) pays their sum of between Ј80 and Ј1,000 directly into the borrower's account – usually within 24 hours. The convenience and expediency of this allied with the flexibility provided by carrying a debit card is a winning combination for those who require a spendable sum of money swiftly.

Of course, a payday loan is equally handy for those who prefer to make cash purchases – holding an advantage over longer-term forms of credit if your needs are immediate and confined to a relatively small loan. Perhaps you have an unexpectedly high bill to pay or a special event to fund – if so, some short-term cash can come in useful and be spent using a variety of methods.

Interestingly, one such time-honoured method is, according to the Apacs survey, in decline. Amounts spent using cheques fell by 14 per cent in 2005 to a relatively meagre Ј9 billion – showing that, while this is still a perfectly decent means of spending your payday loan, it is perhaps becoming undesirable when placed alongside the swiftness of card transactions, especially with the recent advent of chip and PIN.

Student credit cards -- what you need to know before you sign up

Every college student can tell you that they have seen several offers for student credit cards on campus. These credit card offers are everywhere. They come in bags at the student book store, in the student newspaper, and of course, online. But a student credit card is usually hiding some traps for the unsuspecting college student. If you are thinking about college student credit cards, consider these factors before you sign up.

Pre-Approval

Most college student credit cards lure young people in with the promise that they are pre-approved for the card. This pre-approval process normally involves checking your credit and deciding based on a number of factors that you would be a good candidate for credit. If you have established good credit, the pre-approval process confirms that you are able and willing to pay back your debt on time and in full.

However, most college students do not have any credit. So the pre-approval process simply involves confirming that you are a student. This should make you suspicious. What it means is that the company is willing to gamble that you won’t pay back the debt, providing them with added interest that could be in the hundreds or thousands of dollars.

Interest Rate

This leads us to the issue of an interest rate. For most student credit cards, the interest rate is enormously high. This is due to the fact that they are taking a gamble on whether or not you can pay them back. However, in order to lure you into signing up, they may offer an interest free period.

This interest free period also comes with some traps. If you miss a payment or are late once or twice with your minimum payment, you could be subject to the delinquency rate, which is as high as thirty percent in some cases.

Minimum Payment

Most people will look at a student credit card and think it will be easy to handle because of the low minimum payment due each month. But if you only pay this minimum payment each time, you will end up with an enormous amount of interest due. Think about it this way: If you owe one hundred dollars and the minimum payment due is fifteen dollars, you will rack up interest in the remaining eighty-five dollars. If your interest is twenty percent, that’s seventeen dollars added to your next bill. The interest you accumulate is more than you are paying. So your bill will actually get higher the longer you pay rather than lower. Always pay more than the minimum payment.

Good Credit

The benefit to college student credit cards is that you can build up some good credit history with a good payment record over time. So always pay your bill on time and in full if possible. If you can’t pay your student credit card off in full each month, try to at least double the minimum payment. Student credit cards can be your learning tool for a future of responsible financial management.

What is a credit score

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Whenever you approach a commercial lender for loan, he performs a credit check on you. The loan you have applied for can be home loan, business loan or loan for your dream vacation trip. It is your credit score that will decide whether your application will be accepted or not, if accepted what amount of interest you will be charged. Your credit score will also be checked even when you apply for an insurance cover or you want to rent a house and even when you apply for a job.

What is a credit score? A credit score is a number that signifies your credit information. This score is used by all financial institutions or individual lenders to assess the risk involved in giving you credit.

The credit score is calculated on the base of the following.

• Address.
• Salary.
• Credit Dept.
• Bankruptcies.

Using the above factors an algorithm is decided and using this algorithm a credit score is generated. People with low credit scores are referred as high risk borrowers and people with high credit scores are referred as low risk borrowers. Banks and other lender set different interest rates for high and low risk borrowers.

In general, a good credit score is somewhere in the range of 700-850, while an average score would be around 550-700 and anything below 500 is considered as a poor credit score. Remember, it becomes difficult to borrow loan if you have a low credit score and if you do manage to get loan, the interest rate charged will be quite high. So improve your credit score.

For further details visit Free Credit Score Online

Why owning a 0 apr card could spell disaster

Almost everyone gets the offers in the mail for credit cards that claim to provide 0 percent interest. These offers are incredibly tempting, and on the surface they look like a good idea. You could transfer your outstanding balances, buy that big-ticket item you’ve had your eye on, and get free interest for up to a year. Sounds great, right? Well, beware because there are some hidden pitfalls with these cards that could spell disaster to your pocketbook and your credit rating.

· 0% APR is good for a limited time. Most of these credit card offers last for six to nine months, although some are good for up to a year. This means that you can transfer your balances and make purchases for one year with no interest added to your billing statement. However, at the end of this period, you will be charged interest that is calculated on your credit score and history, so don’t get lazy and forget to check the calendar. If you buy a big-ticket item near the end of your free interest period, you may end up paying more interest on your credit card than you would have with in-store financing.

· 0% APR could be null and void if you make a mistake. There are stiff penalties on most of these credit cards that hold you to very high standards. For example, with some cards, if you are late even one day with your payment, you lose the 0% APR and are immediately moved to a penalty interest rate that can be as high as 24%.

· 0% APR could lead you to outrageously high interest. When the introductory period of free interest is over, you will begin to pay regular interest on your purchases and any outstanding balances. Be aware, however, that this rate may be much higher than you would get with another standard credit card. The average rates after the introductory free interest period is nineteen to twenty-one percent. So if you plan to transfer balances and pay them all off within a year, then go for it. But remember that if you have a job loss or medical emergency that keeps you from making a payment, you will be paying outrageously high interest from that point on.

The enticing trap of credit card debt

It has never been easier for people to live well beyond their means than it is today. Credit is easy to obtain, and in a society obsessed with material gain, credit is sought and used on a basis that is so regular even financial watchdogs are beginning to sound warning bells. The average savings for the United States and Canada over the next few years are actually expected to go into the negative figures, as more people purchase what they cannot afford.

One of the main contributors to this phenomenon is the credit card. Credit cards are very easy to obtain, and most people get them thinking they will be handy in an emergency. This is the case, but what the credit card companies know is that it will not be long before you use that piece of plastic to make a purchase that is certainly not in an emergency situation.

One way that credit cards have succeeded in getting a flood of people to spend beyond their means is to make credit cards available everywhere. The rise of the Internet has fueled a massive increase in the use of credit cards, as it is often the sole means people have to make an online purchase. Anytime you make a credit card purchase, however, there is the chance that you will forget about it. Statements that come out once a month are a great way for credit card companies to make sure their customers rack up the bills to the point where they will not be able to pay them all off in one shot, and thus gain the hefty interest.

Credit card companies also use promotional gimmicks to entice customers to charge all of their purchases on their cards. Most credit card companies have teamed up with auto dealers or some other company in order to give customers points towards future purchases. Visa has the well-advertised “Win What You Buy” campaign. People can be so tempted by this that they place all their purchases in the Visa in the hopes of getting it all for free. The prize, however, is rarer than winning the lottery.

Staying out of credit card debt requires using that piece of plastic frugally. If you don’t have the money in the bank to make the purchase, do not do so with your credit card - it will only cost you more money in the end. If you do encounter an emergency and have to make a payment on your card, pay it off as soon as possible. If you can’t do this, look into getting a line of credit from the bank. This may seem like “stealing from Peter to pay Paul”, but banks often offer a lower interest rate than a credit card, and the advantage of a line of credit is that banks automatically deduct an amount every month out of your other accounts toward your debt. Credit card companies are just as happy to have that debt grow and grow.