Charge Cards

A Charge card is a card that allows the card holder to purchase and custom it for financial uses but the debt is carried by the card issuer, so the issuer is the one who will be indebted.  Although, the cardholder will also have to pay the issuer the debt on the due date given to him or her.  Payment is mostly in monthly basis.  Additional fees may also incur if late payment is done or some penalties may happen like restriction to further using the card.  The difference of a charge card to a credit card is that, credit cards have a revolving credit.  Credit cards usually have credit limits, which differs to Charge cards for they are released without spending boundary.  Unlike the credit card balance that does not have to be paid in full amount every month, Charge card demands the full amount to be paid at the end of every month.  People who are granted charge cards are usually those who have great credit history.   Charge card may offer greater rewards than those of in credit cards but almost all charge cards have annual fees making it more expensive to maintain than credit cards.  Charge card have a much higher credit limit and often it is not limited.  Though charge cards may sound heavy at the side of the consumer, this will instill discipline and proper spending because you always have to consider the fact that you are to pay the full amount of your debt at the end of the month.

 

Charge cards are a little different from credit cards.

Charge cards are a little different from credit cards.

Picture taken from: (http://www.cardhub.com/charge-cards/)

 

A charge card does not have any interest because they require you to clear off your balance every month.  The usual approved charge card users are those with outstanding credit history as mentioned earlier and high income.

The American Express and Diner’s club are famous examples of charge cards.  American Express Charge Card offer membership rewards, and their clients who are Gold and Platinum Charge card members are already part of their Rewards program.  You can choose from their Gold card, Platinum card and American express card.  American express charge cards as they brag about it is accepted around the world.

Diner’s Club charge card also offers rewards to their clients.  They also have car rental discounts, airport lounge access, and other club rewards.  Their charge card is also accepted globally and in partnership with Diners Club and MasterCard, it was it easier for consumers to use their card in more merchant locations.

 

American Express Platinum charge card.

American Express Platinum charge card.

Picture taken from: (http://www.dimascorner.com/2013/heartbroken/)

 

 

Secured Credit Cards

Secured Credit cardare credit cards that require cash collateral.  The amount of the collateral becomes the amount of the credit line.  For better understanding, example your cash collateral is 300 dollars, therefore you can charge up to 300 dollars worth of purchases to your secured credit card.  If you want to increase your credit line then you must increase your cash collateral as well.  Some banks will charge you for an application fee.  Most banks that offer secured credit cards have an annual fee and they vary from one company to another.  Some companies have so many fees so it is beneficial to look around and check the different rates the companies offer.

 

Secured Credit card are credit cards that require cash collateral.

Secured Credit card are credit cards that require cash collateral.

Picture taken from: (http://talentenbank.com/students-get-a-secured-credit-card-first)

Usually, secured credit cards have a minimum deposit of 300 to 500 dollars.  Sometimes a bank will reward you additional deposits in your credit line even if you did not add cash collaterals in your account and that is because you were able to pay on time and in good terms.

If you are interested of getting a secured credit card, a secured credit card issuers list is readily available online.  You can scan through it and just familiarize yourself with the names of the banks or companies that are included in that list.

 

“Helps you establish credit or repair bad credit.”

“Helps you establish credit or repair bad credit.”

Picture taken from: (http://blog.bestlegalcreditrepair.com/?p=138)

Some people may have a hard time getting approved on unsecured line of credit because of a not so good credit history but it is not hopeless because they can apply for a secured credit card instead.  If you have a bad credit history and you are approved of a secured credit card, make sure to get the best deal, in that way you can climb your way back up to a good credit score.  To be able to find the best deal, look for the banks that offer low fees and annual percentage rate.  Some companies also offer bonuses once you sign up with them.

The payment done in secured credit cards are reported to major credit agencies that is why your credit history is carefully recorded and you do not want to mess your credit history because you missed your payment schedule right?

Remember to choose the card that is right for you.  You are in control and it is always your final say that will matter.  Take your time to shop around and study what each bank can offer you and find the best deal you can get.  Find the ones that will offer you the cheapest fees and lowest interest rates without sacrificing its quality.

 

Subprime Credit Cards

Some people may have inferior or substandard credit scores from their credit history and usually the type of credit card given to them is the Subprime credit card.  This type of credit card has usually extra fees and gives a relatively low credit margin.  Subprime credit card usually incurs a much higher interest rate compared to credit cards issued to primary clients.  There were some events that has happened in the past that made this type one of the most controversial type of credit cards.  There were instances wherein a borrower was not aware of all the fees he or she was required to pay.  This type is also not that friendly for at times, when late payment is made, this triggers the interest rate to boost really high making the cardholder exceed his/her credit limit.

 

Subprime credit cards are usually given to people with substandard credit scores.

Subprime credit cards are usually given to people with substandard credit scores.

Picture taken from: (http://www.lowcards.com/data-shows-consumers-subprime-credit-scores-7937)

 

There are factors to consider when you want to apply for a Subprime credit card.  You are qualified to being a subprime when, first, you have insufficient income.  Usually lenders will ask for a written document that will prove that the borrower will be able to afford the proposed loan although this will mean that the debt to income ratio may be adjusted higher.  Second factor is the borrower’s employment.  Having an unsteady employment will make one subprime because for most people income is dependent to the borrowers job or employment.  Third is the event of having insufficient collateral.  Some subprime lenders will allow unsecured credit borrowing.  Lastly, for many banks, the winning key factor is the borrower’s credit score.  Damaged credit history will hinder a borrower from obtaining a normal credit card but will more likely be approved of a subprime credit card.

Since subprime credit cards are for people with bad credit, usually the fees are higher as mentioned earlier as well the interest rate.  This is because having a bad credit will mean more risk for the bank or lender to be paid by the borrower for their assurance of being paid is based on a borrower’s credit score.

 

Credit Card Lenders Embrace More Subprime Consumers.

Credit Card Lenders Embrace More Subprime Consumers.

Picture taken from: (http://blog.equifax.com/credit/credit-card-lenders-embrace-more-subprime-consumers/)

 The banks that offer subprime credit cards are usually the smaller type of banks.  The list of banks that offer such type of credit line are Capitol One Visa, Monument Visa, Vanquis Visa, Aqua MasterCard, MBNA SubPrime Mastercard and many more.  The list is not limited to those banks that were mentioned.  You can easily search in the Internet the banks that are willing to give subprime credit cards.

Business Credit Cards

Business credit cards are helpful to the business if used wisely.

Business credit cards are helpful to the business if used wisely.

Picture taken from: (http://stmikethearchangel.blogspot.com/2012/07/why-entrepreneurs-need-small-business.html)

 Similar to a personal credit card, there is a Business credit card that could be used if you plan to finance a business using a credit line or a revolving line of credit.  Business credit cards gives flexible terms and gives you a breathe from interest rates.  Business credit cards are issued to companies whether owned by a group of people or an individual as long as the credit card is for business use and not for personal use of a consumer.  Credit cards can be very helpful with the monetary flow in the business.  It can be used for finance operations, assisting the staff, purchases and etc.  Same with the standard credit card, the debt will be paid, even just the minimum amount, within the agreed terms of payment between the bank and the borrower.  It also follows the rule that great credit history will entitle you to better interest rates.  Be prepared as well that business credit card providers also have the tendency to look into your personal credit history and this will affect the decision for your application.

 

There are advantages in getting a business credit card.

There are advantages in getting a business credit card.

Picture taken from: (http://stmikethearchangel.blogspot.com/2012/07/small-business-credit-cards-advantages.html)

 

So what are the advantages of these said Business credit cards? One, having a business credit card will give you a convenient way to purchase goods and services and since many of the orders are done online, credit cards are the easiest option of payment that can be done.  Another advantage is that you can keep track of your expenses and the list of where, when and what the card was used for.  Since the credit card agencies keep track of your credit history, your expenses and use of your business credit card is carefully tracked and recorded.  Thus, leading you to the last advantage, that business credit cards are also a good way to build up your credit profile.

Business credit cards also has the feature that you can give your staff or employees a extension of your credit card, but this could only be used for business related transaction.  The good side in this is that, as mentioned earlier, you can keep track of their expenses but there’s always the risk that they might abuse it.

Just like any line of credit, remember to use it wisely.  For this type of credit card, be sure that you ought to use it only with business related purchases and expenses.  A business credit card should never be used for personal consumption and finances.

 

 

Prepaid Credit Cards

Prepaid cards are handy and it safeguards as an alternative to cash or checks.  Prepaid debit cards are loaded with credit and it comes with charges, usually from fees like monthly charges, ATM fees and other fees involved with the card.  There are a lot of banks that offer such and you can find the best deal that offers the least money you will have to spend.  While usual credit cards improve your credit score, a Prepaid debit card does not improve your credit rating.  So if you are after to improving your credit score, maybe you should consider on getting a secured credit card instead.  One must also remember that prepaid credit cards are not cheaper than standard checking accounts.  Although, Prepaid credit cards are better than checking account because checking accounts have monthly maintenance fee, or penalties from overdrafts and etc.

 

Prepaid credit cards can be better than checking accounts.

Prepaid credit cards can be better than checking accounts.

Picture taken from: (http://www.creditcards.com/credit-card-news/study-prepaid-card-checking-account-compare-1276.php)

If you are pondering and is still thinking whether to get a prepaid credit card or not, here are some of the best uses for it that may help you decide. First, it can be used for online purchases.  There are a lot of good deals and discounted items that could be found and purchased online, and having a prepaid debit card can be very useful because most online shops or site accept it as a mode of payment.  Second, you can give it as an “extension” card to your kids.  If your kid/s is/are 18 years old and below, they are illegible to getting a credit card but prepaid credit cards usually allow anyone over 13 years old to avail one.  Lastly, if you want to make sure that your credit bill is always within your budget then getting a prepaid credit card will help you spend just the amount you allotted to be used because if you didn’t load any money to you prepaid credit card, then you cannot use it.

 

Prepaid credit cards make budgeting more easy.

Prepaid credit cards make budgeting easier.

Picture taken from: (http://blog.credit.com/2013/08/credit-cards-best-prepaid-debit-cards/)

 

If you are really set on getting a prepaid credit card, then you must remember these two things.  First, make sure you avail a card that let’s you reload cash and withdraw money in the absence of fees.   Second, always go for a card with the lowest monthly fee but at the same time, has no per-transaction fees especially if you would use it for a long period of time.

Prepaid credit cards made budgeting more easy.  It also makes your finances more manageable.

 

Credit Cards with Rewards

Credit cards with rewards or incentives for its cardholders.

Credit cards with rewards or incentives for its cardholders.

Picture taken from: (http://www.financialblogger.co.uk/tag/rewards-credit-card/)

 

There are a lot of different types of credit cards that circulate today and one of the most famous type are those with a reward system.  You probably hear it often from your friends, colleague and relatives the benefits they are getting from their credit cards.  Rewards go from airline miles, hotel upgrades, gift cards, vouchers to even cash money.  Hearing all of these rewards and benefits surely hooks us all up in getting a credit card with freebies and I know you right now is more than excited to apply for one.  But wait, hold on, let’s first better understand this type of credit card.

This stunt emerged as a reward to cardholders who uses their credit card as their preferred mode of payment.  There are a number of varying kinds of reward programs but all boils down to a same idea that the more you use your credit card, the more number of points you earn giving you more entitlement to rewards.

If you are planning to avail this type of credit card then you must be careful with credit cards with rewards that have a high annual fee and interest rate.  Also, choose the rewards that will be more suitable to you.  If you are a traveler, then choose the credit card which give incentives like free travel and hotel upgrades.  If you are a food junkie, then choose the credit card with rewards that gives you coupon and discounts to the hottest restaurants in the metro.  It is better if you get something that rewards you of something you need and not just want.

If you are already a cardholder of this type of credit card, you must know how to maximize the benefits of your card.

If you are already a cardholder of this type of credit card, you must know how to maximise the benefits of your card.

Picture taken from: (http://www.paradigmsp.com.au/2012/09/the-best-ways-to-maximise-your-rewards-points/)

If you are already a cardholder of this type of credit card, you must know how to maximize the benefits of your card.  Some clients have a technique of not using their reward points right away but instead, they tend to save up their points over time.  As mentioned earlier, it will be more beneficial for you if you choose rewards you need rather than those that you just want.  In addition, always check if you are rewarded with the equal or even greater amount of incentives and do not sign up for a rewards program that will give you less of what you spend.

Remember that interest rates, fees and other charges vary over time to it doesn’t hurt to check once in a while if you are registered to the best deal offered out there.

 

 

 

Advantages & Disadvantages of Credit Cards

Today, it is almost a necessity for someone to have a credit card.  It makes someone’s life a lot easier because payments were made more accessible.  Some companies even offer features that go with your credit card.  As a credit card holder you are able to purchase goods and services and pay it in cash in a delayed date.  If you are interested in getting a credit card, here are the most important things you have to remember.  First, choose what type of credit card do you want.  Do you want a rewards type of credit card, cash back credit card, prepaid credit cards or just the standard type?  Choose the one that will suit best for you need.  After, you can now check online the different banks that offers your chosen type of credit card.  From here, you can research and study the different credit cards that each bank has to offer.  Remember to always look into the interest rates, the annual fees and other charges that you have to pay and get the one with the least amount of payables.  Credit cards are really handy for when you need instant cash; your credit card can readily be used as replacement and then just pay it at a later date.  Having a credit card also adds security because each month you can see the record of purchases you have made using your credit card.  This way you can check your account from fraudulent transactions before settling your balance.  One huge advantage of credit cards is that you can make your payments in terms of installments.  You don’t have to pay the whole amount in one sitting, although interests are added of course.

 

You can make payments for your purchases in installment using your credit card.

You can make payments for your purchases in installment using your credit card.

Picture taken from: (http://www.creditsesame.com/blog/4-smart-ways-to-take-advantage-of-your-credit-card/)

 

The downside of credit cards is that it can be copied and used.  Unlike ATMs, credit cards don’t have pin numbers so the percentage of it being used if stolen is really high.  Some purchases only require your credit card number and some only requires your signature after you swipe it.  Since credit cards don’t have to be funded for it to be used, mismanagement happens to most of cardholders too.  Sometimes consumers just swipe their cards not thinking that they are to pay that balance too at some point.  Some consumers too have the tendency to go beyond their budget because of the freedom they are getting from their credit cards.  So once you get your credit card, do not be giddy and unstoppable in using it and always be a responsible consumer for you do not want to indebt yourself in a big amount of money.

Always be a responsible user of your credit card.

Always be a responsible user of your credit card.

Picture taken from: (http://money.howstuffworks.com/personal-finance/debt-management/revolving-credit2.htm)

 

Credit Card Balance Transfer

Are you familiar with the process of credit card balance transfer?  This process is the transfer of credit card balance. This is encouraged by almost all of the major credit card issuers actively to attract and draw in new customers and credit holders. This arrangement is seen as an attractive perk to most of the consumers through this process, the new bank or credit card issuer will end up offering incentives that are lower than the usual interest rate or at times, an interest-free period which also comes with loyalty credits or points or a combination or tie up amongst the different incentives offered. Another attractive attribute that these transfers have to pull in more consumers is, because upon agreeing to the transfer, a new bond is built between the issuer and the consumer, which will be an additional step to the loyalty between the two.

 

This process is the transfer of credit card balance.

This process is the transfer of credit card balance.

Picture taken from: (http://www.creditcardguide.com/creditcards/balance-transfer/find-best-balance-transfer-offers-1266/)

 In every credit card, there is a specified balance and order of payment or payments that will first be paid at the moment that the credit card is issued.  In almost all the cases, the type of payments that are applied to the lowest-rate balance first, then will eventually lead to applying to the highest-rate last. If there are any balances that are under a teaser rate or fixed rate, these will be paid off even sooner than any purchase that is made or any cash advance that is made, which are usually the ones that have the highest Annual Percentage Rate or APR. To avoid making purchases or taking cash advances at the same time, the borrower may ensure that they will be able to maintain the full benefits of the original balance transfer.

 

Transfer your balance from one card to another.

Transfer your balance from one card to another.

Picture taken from: (http://www.mortgagerefinance.com/Credit-Cards/All/Balance-Transfer-Credit-Cards)

 This process is faster than usual and can conclude within a few hours in some cases, more often than not. The services that are automated are there for the purpose of helping the facilitation of such transfers within the issuing bank. There are however, other similar services that may or may not be used free of charge.

There are Normal rates or Prime rate that are issued with the credit card. These are the rates that are better for the consumer due to the fact that there is a less amount that is required for capital, but this same rate is also what the card companies don’t like because they accumulate less profit for the issuers. Teaser Rates on the other hand are low rates that are lower than usual, that credit card companies offer to new customers to make them feel like they have a good deal and that they are getting their money’s worth.

 

 

 

 

Standard Credit Cards

Standard Credit cards are credit cards with no features.  These are the type of credit cards that are in the simplest form; it has no rewards system but also no annual fee.  They are suitable for a consumer who wants less complicated type of account because it has fewer fees and penalties compared to the other types of credit cards.  It also has a much simpler terms and condition.  It is also usually referred to as “Plain-Vanilla” Credit cards because it’s as plain, basic or bland as a plain vanilla ice cream cone.  Interest rates on plain vanilla cards often have lower interest rates compared to cards that are equipped with benefits.

 

Standard Credit cards are also referred to as Plain-Vanilla cards because they are as plain and basic as a plain vanilla ice cream cone.

Standard Credit cards are also referred to as Plain-Vanilla cards because they are as plain and basic as a plain vanilla ice cream cone.

Standard Credit cards are also referred to as Plain-Vanilla cards because they are as plain and basic as a plain vanilla ice cream cone.

Picture taken from: (http://www.mlvwrites.com/2010/11/chocolate-versus-vanilla-personas.html)

 If you just want a credit card that you can use for simple purchases then this type is the most suitable one for you.  If you are not interested for the rewards and points that you can get then is the definitely the credit card for you.  Other cards may offer free flights, rebates, coupons and gift cards but having a standard credit card would also mean having less charges/fees and it being less complicated which is perfect for the practical consumers.

A debate regarding whether to revive the idea of Plain Vanilla credit cards or not was brought up when discussing the Credit Card Act of 2009.  A recent survey has shown that people are now favoring this type of credit card again than the other forms.  Other types of credit cards may have better freebies and features but since people are becoming more practical with their way of life, they realized that having a standard type is more sensible.

Standard Credit cards satisfy the increasing demand of practical consumers.  You just have to remember that by choosing this type of credit card, you are willing to exchange those rewards and benefit for the sake of uncomplicatedness.

Most of the banks or company that offer this type of credit card gives out a “No Penalty Annual Percentage Rate” which means that this will incur a higher interest rate when a client misses his or her payment schedule.  Slip of the tongue, companies like American Express Clear, Chase Slate, Capitol One, Citi Simplicity and PenFed Promise are some that are part of the list that offers the Plain Vanilla Credit Card.  The list goes on and on and it is not limited to the companies that were mentioned above.

 

A lot of companies offer the Plain-Vanilla credit cards.

A lot of companies offer the Plain-Vanilla credit cards.

Picture taken from: (http://www.creditcards.com/credit-card-news/no-rewards-plain_vanilla-credit_cards-1273.php)

 Distinction and more flavorful credit cards are nice to the palette but if you’re up for the simple kind, it’s always good to go for the Plain Vanilla.

 

Student Credit Cards

Today, it is very helpful for a person to have a credit card.  If you are going to purchase something that is pricy, instead of bringing with you the cash, you can just use a credit card instead.  Also, with just one swipe, you can easily buy something and just pay it at the end of the month and even divide the full amount into staggered payments.  Credit cards may be a big help to students for not all the time they are with their parents and it can help with the safety issue of bringing around big amounts of cash.

College students can apply for Student Credit Cards.

College students can apply for Student Credit Cards.

Picture taken from: (http://www.creditcards.ca/credit-card-news/editors-choice-top-college-student-credit-cards-1279.php)

 Since most of the students do not have a steady source of income or a job, they will need a co-signer when applying for a Student credit card.  Student credit card has the same features with a regular credit card, students who acquired a card with a balance have lower interest rates and those who don’t carry any balance have reward features.

One advantage of having a Student credit card is that you can start setting yourself up for financial record.  A college student credit card puts you ahead in terms of applying for a credit card after college as long as you maintain a good credit history.  This credit history will be vital once they graduate and decide to apply for housing or mortgage loans and is even essential for employment checks.

 

“Having a good credit history can open doors.”

“Having a good credit history can open doors.”

Picture taken from: (https://www.discover.com/credit-cards/student-center/student-credit-cards-information.html)

Student credit cards are not new to this world; there are already a number of Banks that offer such.  Top credit card companies like Citi, Visa, MasterCard and American Express also offer this type of credit card to student consumers.  Though, it is not limited to these 4 companies for many more around the world offer this type of credit loan.   Some companies even offer cash back, free fees and extra services so you just have to find the best deal out there.

If you are interested in getting a Student Credit card, here’s a fast checklist you can use to see if you are qualified to apply and check what are the other requirements you must accomplish for you to be able to get one.  First is that, you must be a Student of course.  Second, you must be over the age of 18.  Third, if you do not have a source of income from a business or a job, you must have a co-signer; usually it is your parents.  Then, shop for the best deal out there.  Go and use the Internet to research and you can even ask your friends or family about the offers that they are familiar with.  Lastly, when you are decided on which company to get a loan with, you can now get an application form.