• Standard Credit Cards
• Prepaid Credit Cards
• Business Credit Cards
• Reward Credit Cards
• Charge Cards
• Store Credit Cards

Each type of credit card has their own benefits to them and depending on your individual circumstances, one may be better for you than another. Examine the features of each type and decide which one is best for you.

Standard Credit Cards
These are traditional cards that are commonly used. You can get them from your bank or other financial institution. They have credit limits, and have balances that carry over each month. You are charged interest on the monthly balance. The amount of interest along with your credit limit will be dependent on your credit score. Standard credit cards also require minimum balances to be paid every month. These also offer you the opportunity to transfer your balance from one credit card to another. When doing this, look for 0% APR on balance transfer deals. Standard credit cards are a great way of building up your credit as well.

Prepaid Credit Cards
If you don’t have a bank account, but would like to use plastic rather than paper, then prepaid cards are an excellent option. You load money onto the card to add to the balance, and you can’t spend more than you have on the card. For example, say you deposit $1,000 onto your prepaid credit card and then spend $100 on groceries. Now the remaining balance on the card will be $900 and once you use that up you have to reload the card with more money. They function like debit cards essentially without being connected to a bank account. They don’t have any finance charges or minimum payments since you can only spend what you deposit. Prepaid credit cards come with a variety of fees often times. Some fees include ATM fees, transaction fees, and withdrawal fees among others.

Business Credit Cards
These are considered specialty credit cards. They are for business use only. One of the main rules of business is not to mix personal spending with business spending so business credit cards will help you substantially. They can be issued to employees and owners of the business. They often include benefits such as expense tracking and rewards. Business credit cards usually become a necessity once your business grows and you find yourself making business purchases with your personal credit card.

Rewards Credit Cards
These types of credit cards are very popular among people who use their credit cards often. They allow users to get something back for their purchases. Most function on either a point system or offer some sort of cash back program. With point systems, you gain points based on the amount of points you spend. And then you can use those points to buy products that the merchant offers or gift cards to stores like Wal-Mart, Target, and CVS just to name a few.

Charge Cards
Charge cards aren’t as commonly used as other types of credit cards. They are more difficult to attain than standard credit cards due to the fact that they have no spending limits. The balance of the card is to be paid at the end of every month, which eliminates the need for finance charges. Typically you must have a high credit score in order to obtain a charge card, as well as meet other qualifications.

Store Credit Cards
If you’ve ever went to a big name retailer and been offered a credit card at the register, you’re not alone. Credit cards offered by stores are very common due to the fact that most consumers find it convenient to have a credit card from stores they regularly shop at. Often times, these credit cards offered by stores come with benefits such as 0% interest on purchases over a certain amount or a discount on your purchases. Old Navy offers 10% off purchases with their credit cards and Best Buy offers a variety of benefits for their credit cards as well.

Related posts:

1. Understanding Credit Card Fees
2. Dissect Credit Card Offers with a Metaphorical Scalpel
3. Why Credit Cards Are Important

Post: Credit Card Types – What You Should Know taken from: Ratelines.com

Benefits of Credit Cards
If you’re using your credit card wisely and responsibly, the benefits that you can get from the card are countless. Some of the key benefits of credit cards are:

• Improved Credit Score: This is probably the biggest Pro of credit cards for most people. Credit cards are a great way to help establish and build your credit. As long as you’re using your card responsibly and wisely, credit cards can really help improve your credit. Make all of your payments on time, and only charge what you can afford. There are two schools of thought for improving your credit with credit cards. One involves charging small amounts and paying off the full balance each month. The other is leaving a slight balance every month in order to show you can pay over a long term. Whichever you choose, make sure your balance doesn’t get out of hand.
• Rewards: A lot of credit cards have started offering some sort of reward system for customers. As you spend more, you get more points which you can redeem for a variety of things such as frequent flier miles, gift cards, or even cash back.
• Proof of purchase: Today it has become common to make big purchases with credit cards because when you use your credit card you have proof of your purchase beyond a receipt. With cash transactions, if you lose your receipt you have absolutely no proof of how much you paid or when you bought your items. If there’s ever any dispute on how much you were charged you can simply look at your credit card statement and you have evidence easily available.
• Makes purchases quick and easy: Credit cards make it very easy and quick to make your purchases. All you have to do is swipe your card and your purchase is complete (assuming your card wasn’t declined). Checks can be time consuming, and the merchant isn’t guaranteed the funds. Cash is also great, but it can be lost, and again, once you have lost your receipt there is no proof you purchased anything.
• Emergency Funds: Sometimes you have unplanned emergencies that you don’t have the cash to cover. For example if you have unexpected issues with your car and it will cost you $500 to fix but it wasn’t in your budget, credit cards leave you with an option to pay for it over time. Be careful to keep control over what you define as an emergency though. A pair of expensive shoes you can’t afford that are only available for a limited time is probably not a big emergency. However, if you need to replace your heater in the winter, then that would most likely count as an emergency so you can justify using your credit card.

Disadvantages of Credit Cards
While credit cards can be very beneficial if used wisely, there is a dark side to them. If they were perfect, everyone would have them and the economy would probably be better off. Here are some of the down sides of credit cards:

• Debt: Millions of Americans have tons and tons of credit card debt that and are victims to high interest rates. Remember, the amount you’re charging has to be paid off eventually. And right now, the interest rate on most credit cards is above 15% on purchases, so keep that in mind if you have a tendency to max out your credit cards. Credit card debt has led many people to file for bankruptcy or seek government assistance to help relieve credit card debt. And if you’re just making the minimum payments, it may eventually start to have a negative effect on your credit score.
• Fees: Everyone hates fees but they come with the territory. Certain fees are mandatory and some are avoidable. Fees for going over your limit, making late payments, or other penalty fees can be saved by making all your payments on time and making sure you’re abiding by the terms of your credit card contract.
• Fraud/Theft: One danger of credit cards is the possibility of fraudulent charges occurring on your account. If someone gets a hold of your credit card information illegally and charges things without your consent, you’ll have to go through the process of filing a claim with your bank or Credit Card Company. This can be time consuming and may leave you feeling unsecured. Card holders do have certain protections that limit their liability for fraudulent charges, provided that they’re reported within a reasonable time frame. If you lose your physical credit card the first thing you should do is call you issuer and cancel or put a hold on it immediately. Also if you feel your credit card information is at risk due to an online transaction, you should again report it to your issuer as soon as possible.
• Can alter your judgment: Some people tend to buy things they otherwise wouldn’t if they didn’t have a credit card available. They feel that they can just charge it and worry about paying for it later. Then when “later” comes they don’t have the funds to pay for it, which puts them in a hole.

Use credit cards wisely and responsibly and you can enjoy the benefits of credit cards while minimizing the amount of disadvantages that may come along with them. Important things to remember to avoid the bad parts of credit cards is to only spend what you can afford and make sure you read your contract.

Related posts:

1. Why Credit Cards Are Important
2. Credit Card Types – What You Should Know
3. Understanding Credit Card Fees

Post: Pros and Cons of Credit Cards taken from: Ratelines.com

• Reward Redemption Fees
• Foreign Transaction Fees
• Annual Fees
• Billing Fees

The other category for bills is penalty fees. These are extra fees that get added on as a result of you breaking any of the rules in the credit card agreement. These include:

• Late Fees
• Activity Fees
• Reward Recovery Fees
• Over the limit fees

Transaction Fees

As mentioned, these fees are incurred as you use your account. Some of these fees are optional so you do not have to have them on your account, but some are mandatory. Make sure your credit card bill clearly identifies what every fee is so that you’ll know which ones you can opt out of.

• Reward Redemption Fees: These are fees are connected with rewards credit cards. While you may have the ability to rack up frequent flier miles or purchase gift cards with accrued points, it may cost you to actually redeem your reward. Not all reward cards charge fees for this service, so it’s important that you check your agreement to find out. These fees can range from $15-50.
• Foreign Transaction Fees: These are fees for doing business with a foreign bank or financial institution. If you make a purchase with your credit card with a foreign bank be prepared to pay this fee. For some purchases the fee is used for currency conversion; however it is now imposed even when making purchases with dollars. The fees are charged as a percent of the purchase. The amount will vary on your bank/credit card company’s policy but generally it’s between 1-5%.
• Annual Fees: These fees are incurred simply for having the credit card. These are usually for charge cards, secured cards, and some prepaid credit cards as well. It’s considered a convenience fee, so make sure you’re getting all the benefits out of your card that it offers since you’re paying for the card. The good thing is that it’s only charged once a year and can sometimes be avoided. Some banks don’t charge you the annual fee if you spend over a certain amount or may only charge it one time. The fee varies.
• Billing Fees: With the move towards a more “green” lifestyle, many banks/financial institutions are charge people who opt for paper bills. Since most banks offer online banking that allow you to view your statements and monitor your usage, paper statements are becoming a thing of the past. However if you prefer to receive a bill every month, most companies charge $1-2 to send the bill.

Penalty Fees

These are the most hated fees; however they are sometimes necessary to deter customers from breaking the credit card contract. Penalty fees are 100% avoidable if you stay within the terms of your agreement. Watch your spending and pay on time and you will stand a good chance of avoiding these fees.

• Late Fees: This is probably one of the most common fees. If you pay after your due date you will most likely incur a late fee. Something that some don’t know is that late fees are also imposed if you make payments for less than the minimum amount. Late fees are used by banks to encourage card holders to pay on time. Late fees are either a flat rate or based on the amount of your balance. Keep in mind that some banks may give you a grace period, but you have to check your agreement to find out whether or not your credit card offers one and how long the period is.
• Activity Fees: These fees get tacked on due to inactivity on your account. If you don’t spend over a certain amount, you may have to pay a penalty fee. This is something you should look into prior to applying for your credit card. If you know you don’t plan on using your credit card often, save yourself some money and go with one that doesn’t have this fee.
• Reward Recovery Fee: Credit cards that offer rewards may punish you for being late on your payment by taking away your reward points. You will have to pay a fee to retain any reward points that you have earned which is usually around $15-30. Some banks completely take away your reward points if you miss a payment and make you start from 0 again.
• Over the Limit fees: Just as the name suggests, this is a fee for having a balance that exceeds your credit limit. If you take out cash advances or charge for more than your limit allows your credit card company will hit you with a fee. Another way to exceed your credit limit is through finance charges. If your interest continues to build and you’re not making payments eventually the amount you owe could be larger than your credit limit.

Related posts:

1. Credit Card Types – What You Should Know
2. Credit Card Legistlation to start February 2010
3. Pros and Cons of Credit Cards

Post: Understanding Credit Card Fees taken from: Ratelines.com

Using Credit Cards to Build your Credit
One of the best uses of credit cards is to help build your credit. Once you turn 18 you’ll probably start receiving tons of offers in the mail every day. While most people just throw them all away because they figure they don’t need one. Even if you don’t plan on buying anything of significant value at the moment, credit cards are one of the easiest ways of helping you establish and build credit. The key is to use them responsibly. The first step is choosing a single credit card to start out with. Do not stock pile credit cards, this will only tempt you use them all. If you don’t have any established credit yet, your credit limit will most likely be fairly low (which is an advantage for you). Use the card for small purchases that you make regularly such as gas, groceries, or cell phone bills. These are things that you will have to buy anyways so you know you’ll have the funds to pay off the card at the end of the month when the bill comes. Avoid falling into the trap of getting behind in payments and only making minimum payments. This could end up causing the opposite effect of what you’re looking for by hurting your credit.

Making Big Purchases
Credit cards allow consumers to buy items they otherwise couldn’t afford. Instead of paying off items at the time of purchase, credit cards allow you to pay for them over time. You may not be able to afford a $1,000 HDTV but making monthly payments of $100 a month might be a little more feasible for you. And if you’re fortunate enough to have a credit card offering a 0% APR introductory period, you can avoid paying any interest on the purchase as well. Some stores will offer you a store credit card that usually come along with deals that allow you to make purchases over a certain amount and pay no interest for a specified length of time as long as you’re making at least the minimum payments.

Online Shopping
One of the most popular ways to buy things today is through shopping online. E-Commerce is one of the largest growing businesses sectors in the world. With sites such as EBay and Amazon.com offering the same products as brick and mortar stores for less, there are more and more people shopping online. The quickest and safest way to make these purchases is with a credit card. Sending checks in the mail is often a slow process and you have to wait for the check to clear before the seller will even ship your product. Using a credit card for shopping online will give you immediate results. One of the main concerns with using your credit card online is safety. Reputable sites use encryption to protect your information when entering in your credit card number to checkout. Also, a lot of websites allow you to purchase through the payment gateway, PayPal which acts as middleman between you and the website you’re purchasing form.

Traveling
If you tend to travel a lot and don’t want to go through the trouble of dealing with currency exchanges, your credit card will allow you to buy things without cash. Of course this is dependent on where you’re traveling to but most major cities throughout the world do accept major credit cards. You can also avoid currency exchange fees by opting for credit cards instead of cash. However, it doesn’t hurt to carry some cash with you for places that don’t accept credit cards.

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Post: Why Credit Cards Are Important taken from: Ratelines.com

A credit score can’t be rebuilt overnight. If you’ve encountered tough times and have seen your credit score drop in recent years, the sad reality is it will take some doing to get it to where it’s respectable again. All the more reason to start rebuilding as soon a possible, here’s how:

Find and correct errors- Credit reports are extremely complicated to compile, even if you know yourself to be in debt, don’t ever assume that a credit report is accurate. There may be errors on it that add to your problem. Often there are debts listed as outstanding when in fact you have paid them. These days, identity theft is also a real threat, there may be debts on your credit report that you didn’t incur at all.

Your credit report is the basis of your credit score, the last thing you want when you are in debt is to have a credit report that is errant to your detriment. Should you find errors on your credit report, you will need to file a written complaint with all of your supporting documents attached. The Federal Trade Commission will investigate the issue and rule within 30 days. Should they find in your favor you could get a boost from between 50 to 100 points.

Settle your balances- It’s a simple and obvious enough tip, but not many realize the actual impact. Your credit utilization ratio comprises 30% of your credit score. This is the ratio between the amount of credit you’ve used, and the amount you’re entitled to. A ratio higher than 30% can really damage your credit score.

Automate all your loan payments- In this day and age, there are few institutions that can lend you a substantial amount of money that don’t provide a means to settle your debt automatically. If you have a lot of bills and debts to pay, it’s easy to lose track of what needs to be settled and when. Set up electronic payments for all your debts, this should prevent you from incurring any additional penalties due to late payment.

Should you manage to follow these tips religiously, you will have a perceptibly better credit score before you know it.

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Post: 3 Ways to Revive Your Credit Score taken from: Ratelines.com

While most credit card offers come from legitimate credit card companies, it’s extremely important to watch out for fraud. By following a few important guidelines, you can distinguish between fraudulent and genuine credit card offers.

Avoid Pre-Approved Cards and Hidden Fees
First of all, be sure you read the fine print. Don’t be seduced by pre-approved cards, and make sure you’re fully aware of the interest rate you’re paying. Also, make sure you know if any ‘teasers’ will increase after a certain period of time. You should also investigate any hidden fees.

Shop Around
Always compare interest rates. You have a right to select the card that best suits your needs. There are a plethora of different cards out there, and they each have perks and disadvantages. Choose a card that has rewards that you’ll actually be able to use.
Never, ever pay fees up front to acquire your credit card. No legitimate credit card company will ever require you to pay anything up front to obtain your credit card. Also, stay away from ‘credit consultants’ that try to help you get a credit card.

The Benefits of Special Types of Credit Cards
Sometimes it’s a good idea to acquire a special type of credit card, such as a secured credit card, prepaid credit card, or premium credit card. You may have special financial needs that require you to place a deposit on whatever card you are using. Don’t consider this a disadvantage. Rather, you should use this as an opportunity to build credit.

If you’re able to successfully manage one credit card, then you’ll be able to increase your credit so that later on you can qualify for a mortgage or some other purchase that requires good credit.

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1. Credit Card Types – What You Should Know
2. Understanding Credit Card Fees
3. Credit Card Legistlation to start February 2010

Post: Dissect Credit Card Offers with a Metaphorical Scalpel taken from: Ratelines.com

Debt seems to define the American population, and in many cases, it is the sole problem most Americans are facing financially, economically, emotionally, mentally. Credit card companies and their high credit card rates do not seem to be helping either. In February 2010, the Credit Card Accountability, Responsibility and Disclosure Act became active in hopes of helping this credit card debt problem.

In May 2009, a bill was passed on credit card limitations to be set into action in February 2010. The bill’s details can be summarized into the soul purpose of eliminating extreme penalty fees from serious credit card owners. In opposition, avid credit card users could be in trouble of some of these regulations.

As a result, many credit card companies are threatening to take away rewards programs to make up for the loss of ROI on the distribution of fees.

The Credit Card Accountability, Responsibility and Disclosure Act covers the following:

Banks must wait 60 days after due dates before charging late fees on late bill payments. This could be a good thing for people who are usually prompt in paying bills right on time. However, if you’re not very good

at meeting the date, this could mean an extra 60 days grace to you, but a higher fee in the end if you miss the date.

Credit card companies now must give a 45 day notice to cardholders before they change the interest rate fees.

Banks and credit companies are required to send a bill 21 days in advance of the due date, to ensure holders have an ample amount of time to get their bill paid on time.

Bill payments counted the day after due to holidays and weekends will not be counted on time to credit card companies and banks.

Payments on multiple bills with different interest rates will now be applied to the bills with the highest interest rates.

Banks now must issue ‘permission’ before ‘allowing’ you the privilege of spending more than your issues amount on your credit card.

Credit card users now must be 21 to issue a card, otherwise a parent or guardian must be the primary cardholder. This can be appealed based on the amount of independent income of an individual under 21.

Dormancy fees on credit card gift cards now must be clearly stated from the issuer to the buyer the day of the purchase, which includes a 10 point font rule on the card and documents.

Related posts:

1. Understanding Credit Card Fees
2. Dissect Credit Card Offers with a Metaphorical Scalpel
3. Credit Card Types – What You Should Know

Post: Credit Card Legistlation to start February 2010 taken from: Ratelines.com