Secured Credit Cards For Rebuilding Credit

Best Secured credit cards are designed to assist people who have never had credit or those who have bad credit, in order to enable them to establish a good credit rating. Secured credit cards are special type of credit cards in which you must first put down a deposit between 100% and 150% of the total amount of credit you desire. Secured Credit Cards are generally used to help people raise their FICO scores, or the line of credit that companies are typically offering them. Secured credit cards are secure for both the lender and the borrower.

Some people are hesitant to apply for a Secured business credit card, thinking that in doing so, they are posing themselves as high risk borrowers. Secured credit cards can be used as a stepping stone to a regular, unsecured credit card. Secured business credit card cards are not just limited for those who have bad credit history. secured credit cards are good for those who are discharged bankrupts or for those who want to control their spending a little more carefully. With a secured credit card, your credit limit matches the security deposit you provide. With good payments you can be considered for unsecured credit card offers.

How to Get a Bad-Credit Personal Loan

A bad credit personal loan is a relatively new offering from financial institutions that recognize that a less-than-perfect credit history doesn’t necessarily mean a borrower is likely to default on loan repayment. To secure a poor credit personal loan, you’ll have to have a clearly defined purpose for the money, which will in turn affect the terms of the loan and its repayment.

Things You’ll Need:

• Credit application
• Supporting documentation (credit report, proof of earnings, notarized list of assets and liabilities)

Tips and Warning:

• Use the opportunity to improve your credit rating. Pay back the personal loan with bad credit promptly, don’t miss any payments and watch your credit score increase.
• The fees, closing costs and interest rates on a personal loan for people with bad credit are usually much higher than standard bank loans.

Tips To Get Credit Card With Bad Credit

Having bad credit will not prevent you from receiving a bad credit card, however it is not easy to get one. Here are tips on how to get a credit card despite of bad credit score.

Things You’ll Need:

• A  job or any other source of income

How to Get a Credit Card with Bad Credit

How to Apply for a Credit Card With Bad Credit

Tips & Warnings

• When you use a secured credit card for bad credit you avoid the high fee’s that the unsecured cards have with them.

• Unsecured cards reward you when you pay on time by raising your total credit line you can’t get more money with a secured credit card.

• Cards that don’t have a major credit card logo like visa or mastercard on them. These cards are shopping cards. They give you a lot of money to spend at their website or catalog. Don’t confuse these with bad credit cards where you can use them anywhere.

One Girl’s Answer to Credit Cards

I have had credit cards since I was in college in 1987 – so, for over 20 years.  I have had fourteen different credit cards over the years, and I still have the first one from college. A NCSU Visa card. My limit in 1987 was $500.  It is now $9,000. I usually have 4 or 5 cards at one time – until now.

Earlier this month, I decided to officially quit using my credit cards – forever.  I do not have a steady income, I do not have a savings account, IRA or 401k.  I do not have a retirement fund. (I will explain those decisions later).  So, using a credit card was a great crutch for me.  If I had a low balance in the bank, I’d put my purchase on the card.  If one card maxed-out, I’d move the balance to another card with a lower balance.  And, despite that I was a one-person income family, I never made one late payment. I always made my minimum payment due, before the due date.

All this did was justify my use of the cards. I was good! I deserve these cards!  They were not getting me into trouble, my head was always above water.  Everyone thought I had everything under control (financially).

A couple of weeks ago, I called a non-profit credit counseling agency.  At first, they were confused.  ”You have five credit cards and none of them are past due. Your credit score is fine. You have no over 30/60/90 posted on your credit reports. How can we help you?”

I made it clear.  I do not want credit cards anymore. I want my interest rates lowered, and I do not want to be penalized for closing my accounts. (Many card companies significantly raise your minimum payment due when you close or stop using your cards). I want to make one payment each month, for all of the cards, and I want it auto-deducted from my checking account. I was now in a situation where I do not make enough money to pay my minimum payments and I want to make a preemptive attempt at straightening this out before things get out of hand.

After a lot of back-and-forth, and a lot of careful explaining, the counselor on the phone began to understand my situation.  You see, I have $31,000 of credit card debt. My minimum monthly payments combined were now over $1500.  And all cards were maxed.  Calling each card company went well, representatives were nice and even used my name frequently, but none would lower my percentage rate or minimum due – unless I lied and said I was unemployed. (I am self-employed and my income is not stable.) So, I decided to call a credit counselor.

I still have my credit cards.  Five cards in 500 pieces. I still have open accounts, but I consider them closed.  The credit counseling agency pays each card every month – each card company agreed to a proposal of a set amount. $600 is automatically withdrawn from my checking account each month to pay these cards.  My credit report is temporarily effected, denotation of my credit counseling beside each account.  But that is okay with me, because I do not intend to use credit for a long time, if ever. And, the notes on my report are not permanent and will be removed once I complete the credit counseling. It does not effect my score.

On my own, without additional spending, it would have taken me 17 years to pay off the $31,000 in credit card debt, at $1500 a month.  For every minimum payment, only a smidgen went towards the balance.  Now, it will take less than 5 years, at $600 a month.  To me, that is one smart financial decision that makes up for the game I was playing with myself over the past 20 years.

Above: Actual invoice showing a payment of $172.00 and finance charge of $154.88. Total loan balance reduction was $17.12.

Some Extra Notes:

1) I have accumulated heavy balances many times over the years.  At some points in my career, I had the wherewithal to pay the balance down significantly or even in full.  This was part of my game.  My ability to do this kept the credit card close to me. A crutch, a savior for when times were hard.

2) My $31k balance that I mention in this post was credit used over a two and a half year period. (scary, I know.)  I traveled, frequently, over the period; I paid for a wedding and reception on the cards; I started a new business using credit as capital; my father was ill and passed and I used the cards to pay for those travel expenses and conveniences as well.

3) I know many people use credit cards and it is advantageous in some form or fashion. An on-going receipt of expenses, a reward program, insurance for purchases made, and fraudulent ones not made, etc. For me, none of this out-weighs the liberation of not using credit cards.contact: onegirlweb@gmail.com

We all get judged every time we want credit. The judge is impartial, has no compassion, and bases all of its decision on numbers. It doesn’t care what has happened in your life, or how you have changed, or how you deal with adversity. All it cares about is a number.

That number is your FICO score.

This little number, in a range from 300 to 850, is a measure of how responsible you are with your credit. It takes into account your past payment history, your credit line to credit used ratio, and public record entries on your report, how recently you have applied for credit, and several other factors. A score on the lower end of the range shows that you are not very responsible with credit, and a score on the upper end is a very responsible credit user.

So, what is a good score? Let’s take a quick look:

• Below 580: This is considered very bad. You will be able to get loans in the sub-prime market, but usually at very high interest rates. Often, you will have to spend time rebuilding your scores before you can get a large loan.
• 580 to 620: You are now in the ‘almost good’ range. In this range, you can get a credit card, or a car loan. You will need to provide extra documentation for many of your credit applications. You have a good foundation, or have cleaned a few things up. Now it is a matter of maintaining your report to make it better. You are still considered fairly high risk for default, but many companies now cater to your situation.
• 620 to 670: Scores above 620 are considered ‘good’. This puts you in the prime market for interest rates on loans. A 620 credit score will allow you to get better offers for credit, better interest rates, and you won’t have to prove yourself as rigorously as you would with a lower score.
• 670 to 720: Scores in this range are considered ‘very good’. You will have access to better interest rates, higher credit limits, and larger loans for mortgages and other high-dollar items. This is where most people with good credit end up.
• 720 to 770: You are golden. This is about the best most people can do. You have a long, established credit history, you take care of your bills, and there are no bad marks on your credit reports.
• Above 770: You are a ‘FICO High Achiever’. You get the best rates, the best service, and overall have a financial picture to be envied. Remember, though, as you get to these rarified heights, a single bad item on your report will drop you faster than at any other level.

There you have it. A quick definition of what a good credit score is. If your score is low, a little work can carry you a long way towards those higher scores. If it is higher, make sure you monitor your credit so you won’t get surprised.

What Are All These Fees On My Credit Card Statement?

Have you ever made a late payment? How about going over your credit limit? Have you ever withdrawn cash from a credit card?

If you have done any of these wonderful things, you probably noticed that your bill was a bit higher than expected. To the tune of about $35.00.

It depends on your balance, of course, with a higher balance getting a higher fee. However, one or all of these fees may have applied:

• Late charges: These are fairly sinister. You forget just ONE payment, and you get hit with a fee. That hurts. The real problem, however, is that the card company is now more likely to raise your rate. To fight this, mail your payment at least 2 weeks early, or make the payment online and pay attention to the posting date. The credit companies LIKE these fees (they are free money for a bank), and may structure the receipt of payments to try to get more of them.
• Over Limit Fees: When your balance goes above your authorized limit, your credit issuer will be kind enough to reward you by charging you a fee. These usually range from $15.00 to about $40.00. The funny thing is that these can be caused by other fees. As an example, you are near your credit limit. You get a late fee for a missed payment. The late fee pushes you over your credit limit. Now, you get an over the limit fee. And, just to add insult, they will probably raise your rates. To avoid these, make sure you stay well below your limit so there is no chance of going over.
• Cash Advance Fees: These fees vary, but if you go to an ATM and get money, you could get charged 3% to 5% of the withdrawal. That means if you get $100.00 out of a machine, your will end up paying at least $3.00. These can add up quickly. To avoid these fees…don’t get cash out of an ATM with an expensive credit card.
• Annual Fees: This should be known as ‘added creditor profit’. The company that issued your card has already incurred any costs associated with you having the account. An annual fee is their way of saying ‘If you want the privilege of using our card, pay for it!’. The first year is probably legitimate to cover their advertising and acquisition fees, but if they insist on charging you for years 2 on, and won’t waive the fee, you should probably look for a new card. Call your creditor to try to get this removed.
• Application Fees: This is a fee designed to recover the cost of getting you as a customer. Now, once you are a customer, you are going to be paid interest, so shouldn’t this be a cost of doing business? Unfortunately, they usually don’t waive these. You are kind of stuck.
• Balance Transfer Fee: I love this one! You get this great offer of ‘0% interest for 1 year with a balance transfer’, so you sign up. They send you checks to pay off your existing bills and transfer the balance. And then, they charge you a fee to transfer the money to them! This fee is often 3%, so while not huge, it definitely takes a bite out of what you can pay on your cards. If you see this happen, ask them to waive the fee. But you should ask them about fees BEFORE you transfer money. If they want to assess a fee, find a different card.
• Returned Payment Fee: If your check bounces, your credit card company will charge you a fee. Like everything else these will vary in cost, but typically they are about $39.00. This is a penalty to make sure you won’t do it again. So make sure you have money in your account, and don’t do it again.

While these fees may seem like small amounts, if you look at them from the same perspective as an interest rate, they are hideously expensive. As an example, let’s say you have a $1000.00 card at 17% interest. Your monthly interest rate is about 1.42% per month, or about $14.20. That $39.00 late fee is 3.9% of your balance! That is nearly 3 times as much paid out for no real reason, other than the fact that you made a mistake. If you do that every month for a year, you are paying 46.8% interest! These fees are a huge cost to you. Avoid them if you can.

What is a Collection Settlement?

When you are talking to a debt collector, they are only interested in getting their money. They have paid a certain amount to buy your debt, and they are really looking for a way to make money from that purchase. They are often willing to be flexible in working with you, as long as they get that money. This flexibility can include a payment schedule (see my blog entry on What Is A Promise To Pay), a settlement, or a full payment. Each of these has a benefit based on your personal financial situation.

One of the things you can offer a collector is a settlement. In fact, they may offer a settlement to you! A settlement is just an agreement that you will pay a certain number of dollars, and the collector will consider the account paid. Typically, they will be looking for 80% to 90% of the original price, but you may be able to negotiate a lower rate.

When you negotiate a settlement, always work from the original balance up, not from the balance including the interest down. In other words, if you had a $1,000.00 credit card balance, and you stopped paying on it, the interest will have gone up. After 6 months, with interest and fees, the collector may claim that you owe $1,500.00 dollars or more. You probably don’t have to pay all of that. The collector probably bought the account based on the original balance. Every collection agency will add interest and fees to the collection amount. You should be able to negotiate many of these fees away. The original principle may be more difficult, but give it a shot.

Again, before you pay, get everything in writing. And remember, a settlement will show up on your credit report as either a settlement notation, or as ‘Not Paid’, both of which will bring your scores down. If you can, go ahead and see if the collector will give you a Pay For Deletion with the settlement. That is a long shot, but it will help your report.

To get a copy of my FREE e-Book ‘The Top Ten Ways You Can Wreck Your Credit’, just click the link.  You will be taken to a page where you can get more information about downloading the e-book.  This book tells you what you should avoid doing concerning your credit, and what negative impacts can occur if you treat your credit wrong.

How Long Will It Be Before I Can Get Credit After My Divorce?

When you are going through a divorce, your finances can get a bit confusing. ‘What money is mine’? ‘What do I have to pay’? ‘What do I do next’?

When I was getting divorced, I never really considered the ‘me’ part of the equation. I was worried about the joint accounts, joint credit, and joint kids, but I didn’t take any time to consider what I was doing to myself financially. I ended up making a BUNCH of mistakes, which I sincerely hope you can avoid. Most of my mistakes revolved around the management of credit, but I also made mistakes regarding WHEN to get credit.

Let me give you a couple of key things to think about:

1) A fairly hefty part of your credit scores, about 10%, revolves around HOW LONG you have had your accounts open. A new account has less power than an older account.

2) When you get divorced, you may not be able to keep some of your credit cards, and you may have to sell or give up your stake in cars, houses, or other assets.

Therein lies the dilemma. If you end up getting rid of a credit card, as an example, that you have had for 5 years, you may take a hit on your credit scores. Your house that you have been paying on for 10 years may go away. In other words, the AGE of your credit may be reduced.

There are a few simple things you can do to fix that. First, call your creditors and ask them if they will issue you a new card. This will start the clock over before you have to give up your old cards. You will still take a hit, but a six month head start can really help.

Second, go ahead and take care of yourself. If you will be losing your car, get another one. You can rent or buy a new house. Just remember that you will be qualifying WITHOUT your spouses’ income, so make sure you overextend.

The simple point here is that you can open credit for yourself AT ANY TIME, as long as you qualify for it. That can happen before your divorce, while happily married, or any time after the divorce. You have to be able to make payments, but if you qualify the credit can be yours.

A final note: If you have filed for divorce, or even separation, and you use your spouses’ information on the application as a co-borrower, you are likely to get in trouble with the courts. You aren’t sharing that money any more, so use what you make and don’t risk the pusishment that may come your way.

Credit Repair: Self Help May Be Best

I found a great article at, of all places, a governement site. This article describes the problem with the debt repair industry, and why you should be doing things yourself, which I happen to really agree with.

Check it out here:

http://www.ftc.gov/bcp/conline/pubs/credit/repair.shtm

To get a copy of my FREE e-Book ‘The Top 10 Questions A Debt Collector Might Ask You’, just click the link. You will be taken to a page where you can get more information about downloading the e-book. This book tells you what you might hear during a call from a collector, how they use the information they get from you, and how you can protect yourself by not divulging too much.

What Does An ‘Open-Ended’ Agreement Mean For My Credit Card?

When you sign a credit card agreement, you are agreeing to an ‘open-ended’ line of credit. What does this mean, and how does it affect you?

Honestly, there is nothing to worry about here. If you think about the types of credit, there are really only two types that will affect most people. The first is credit card debt, and the second is something like a car loan or mortgage. If you think about it, the differences are pretty easy to spot:

With a traditional, or ‘close-ended’ (or fixed term) loan, like a car loan, you will have a payment schedule. Every month you will pay the same amount based on what you borrowed, the interest rate, and the number of months you have agreed to make payments in order to pay the car off. There is no variation in the payments. If you miss a payment, you owe that payment plus the next one as a lump sum. If you end up needing to change the terms of the loan, you will need to sign paperwork with your lender agreeing to what the new terms are. In many cases, these loans are secured by an asset

Let’s look at a credit card account as a contrast to a traditional loan. There is no way you, or your lender, can know exactly how much you will spend, or how much you will pay, on your card. Because there is no set payment schedule, and no amount that you will consistently owe, there is no way to calculate a payment persistently across the life of the loan. In addition, the length of time you will borrow the money is also unknown. Because these are all unknown variables, these types of loans are called ‘open-ended’.

Each state has its own rules for the statute of limitation for an open-ended loan vs. a traditional loan. Other than that, from a collection or legal standpoint, there really isn’t a lot of difference.

To get a copy of my FREE e-Book ‘The Top Ten Ways You Can Wreck Your Credit’, just click the link. You will be taken to a page where you can get more information about downloading the e-book. This book tells you what you should avoid doing concerning your credit, and what negative impacts can occur if you treat your credit wrong.