Credit cards for bad credit

Avoiding Credit Card Debt

Avoiding Credit Card Debt should be the priority of anyone who needs or applies for a credit card to sort out a short term financial problem, bet it to clear an exisitng loan, to repair their home or to pay off other debts.

Credit card companies especially in this dire economic situation many individuals find themselves in; are happy to offer credit cards to many people, knowing that at the end of the day they will make their money back and then some.

Contrary to popular opinion, credit card issuers like the banks do offer credit cards to people who can barely keep up with the payments, their idea customer is someone who can pay, but is struggling to make those payments, so is susceptioble to the never ending cycle of late payment fees, overlimit fees, and usage fees that come as standard with the credit card.

In contrast someone who meets the minumum payment and pays beyonf it every month, and even better clears the entire balance of the credit card once the promotional period is up, is not the type of customer the credit card issuers are looking for as they can hardly make as much profit as they can with someone who is struggling to keep up with their monthly payments.

Credit card companies are also quick to entice new business by offering an attractive promotional rate such as 0% APR (Annual Percentage Rate) for a period, usually 12 to 15 months. Once the promotional period ends, the charges now associated with the credit card no longer makes it worthwhile.

Some individuals have realised that if they cannot clear the balance once the promotional period of the credit card ends, they can apply for a new card with an even better or equal promotional period, and move the balance of the old card to the new card, however this can only work if the applicant has an excellent credit rating, nothing worse than finding out they have been rejected for said credit card, and now have to face clearing it.

The best way to avoid credit card debt, is to clear off the credit card in full once the promotional period is over, and avoid the multitude of charges that makes credit card debt one of the worst type of debts to have.

Visit Debt consolidation for some great info on avoiding credit card debt.

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Credit Cards wth 0 Interest

Credit Card with 0% Interest are some of the best type of credit cards to apply for.

With the vast array of credit cards available, credit card providers and credit card issuers are vying for consumer business more than ever, and one of the ways they hope to entice consumers is by offering them a 0% interest credit card.

The promotional period of 0% APR (Annual Percentage Rate) usually lasts for a year to fifteen months, but within that time all purchases have a 0% rate on the card, which can make the credit card feel like it is worth it, but do bear in mind that once the promotional period ends, the credit card’s normal APR applies, and it may no longer seem like such a good deal.

Credit card issuers also provide a similar promotional rate for balance transfers, but they usually charge a percentage on the balance transfer, as balance transfers is one of the lucrative ways credit card issuers are able to make a sizeable profit, as balance transfers are one of those type of credit card purchases that is treated as a cash transfer, and with all cash transfers with a credit card, the rate is extremely high, and balance transfers are also one of those credit card payments that is applied to at the last; unfortunately many people don’t realise that their credit card payments are not applied in the way they expect them to be, but the least interest accumulating debt is paid off first, while the more interest accruing debt like balance transfers are paid off last.

Many individuals are able to keep ahead of the tricks of credit card companies, by getting a newer credit card once the promotional period on the current card ends, and transferring the balance of the card to the new card as long as it has an equally beneficial balance transfer and 0% APR. However this can only work if the applicant has a good credit rating, and can apply for these cards with a great percentage of success.

Nothing worse than expecting to move the balance of an old card to a newer card with a better or equal promotional period, only to find out that the application has been turned down, meaning the applicant is stuck with the old card, and all the expenses it comes with.

By and large if a 0% credit card can be obtained, and the balance can be clwared up before the promotional period is up, or moved to another card, it is a great way to leverage some of the benefits of having a credit card.

Visit Debt consolidation for some great info on 0% interest credit cards, and dealing with credit card debts in general.

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Credit card payoff calculator

A credit card payoff calculator would be a fantastic help to many people trying to find out how much they owe before their credit card bill arrives.

Unfortunately for many poeple who are eager to only pay the minimum payment on their credit card statement, what they don’t know is that the minimum payment only takes into account the least interest gathering debt, while the larger interest debt is left largely untouched and accumulating more interest.

So it is well recommended to pay as much off your credit card balance as you can, and avoid only paying the minimum payment, which will leave you with a much heftier bill at the end of the day.

Credit card payoff calculation usually takes the form of 3% of your balance or

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Credit card calculator

A credit card calculator would help many people to find out in advance how much they owe on their credit card balance.

What many people are unware of is that the minimum payment from their credit card statement that is usually advertised only takes account of the interest, and the larger more higher interest accruing debt is left largely untouched to accumulate more interest.

So it is always a good idea to pay off as much of your credit card balance as you can, with the inclusion of the minimum payment, to avoid paying a very large bill at the end of it.

The standard credit card calculator is 3% of your balance or a payment of

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Credit card deals

Credit card deals can become confusing for the consumer looking for a credit card that compliments the promotions that they are looking for.

The usual promotions include points to be redeemed as money off grocery shopping, as well as points to use for Air Miles, made popular lately in the movie Up in the Air, where the lead character played by George Clooney gets a personal visit from the pilot as well as his name on an airplane for reaching 1 million air miles; so at least there is soemthing to aim for.

Some of the best credit card deals also have a promotional period, whereby there is a 0% APR (Annual Percentage Rate) on purchases and balance transfers usually from a year to fifteen months, but you need to be aware of how expensive a credit card can become once that promotional period ends and you are unable to keep up with the payments.

What many folks do as long as their credit rating can afford them to do, is move the balance of the card to a newer card equally offering the same or better promotional features, once the promotional period of the current card comes to an end.

There is always the danger that you may not be able to clear the balance on the card, as applying for different cards in a short period of time causes a red flag to be raised against your credit rating, and could adversely affect it, so it’s a little risky hoping that when the promotional period ends you would be able to move the balance onto a newer card.

As well as unsecured crdit cards, which is the main type of credit card being offered by the banks and building socieites, there are also secured credit cards, which are secured agsinst a home or property, and prepaid credit cards, which act rather like a debit card, as the funds must already be there before being debited, this is especially aimed at those with bad credit, as it means the credit card issuer is not loaning them any money, which is basically what a credit card is, a loan on a plastic card; but they are still charged a monthly usage fee.

Regardless of the credit card type, and the various charges that come along with them from, interest charges, to over limit charges, to late payment charges, which can seem a little extortionate, they do come in handy in an emergency, i.e. when trapped in a rural area without a cash machine for miles, but a local grocery store, you can always ask for cashback, although it is treated as a cash purchase with a similar higher rate of interest it can come in handy in an emergency.

Visit Debt consolidation for some great consumer credit counseling services, and dealing with credit card debts in general.

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Compare credit cards

Comparing credit cards need not be a difficult exercise despite the plethora of credit card choices available.

Credit cards especially during the Internet era have made application for them a breeze, all that is required for applying for one can be done online, and credit card issuers are taking advantage of the vast reach of the Internet by obtaining custom from various consumers who may not even bank with them.

Some of the ways credit card companies entice new business is via offering promotions on their cards, such as points for using the card which they can use for points off grocery shopping, for air miles, or off fuel, they also offer a promotional period (usually a year to fifteen months) where their APR (Annual Percentage Rate) is a lot lower than the normal (but users should not get too comfortable with the promotional rate as after the promotional period is over, purchases can seem a lot more expensive).

With so many credit cards on offer, how does one select the best one? Apart from choosing a great interest rate, you should also select a credit card that has promotional features that would benefit you, for example there would be no point going for a credit card with great air miles points if you have no intention of travelling for sometime.

It’s not a good idea to select the first credit card that you happen to come across, the first port of call when choosing a credit card is your own bank, as you already have a history with them, and they can give you a great interest rate compared to others, they can afford to do this as they would like your custom, and some have even faciliated payments to the credit card via direct debits from your current or checkign account.

There are three main type of credit cards, an unsecured credit card, a secured credit card, and a prepaid credit card, an unsecured credit card is the defacto standard, and is usually done after a credit check or report to determine if you are eligible for the card and your limit, a secured credit card is secured against your home or property, and obviously not a good choice for many people, the third option a prepaid credit card is a real money maker for the credit card companies, as it means they don’t have to issue anyone with a loan which basically is what a credit card is, for a prepaid credit card, users fund the card rather like a debit card, but they still get charged usage fees associated with a credit card.

Credit cards generally prove their worth, not only in not handling cash on your person, but also in an emergency, for example if stuck in a rural area with no cash machine in sight, and you are desperately in need for cash, you could go to the local grocery store and ask for cashback, obviously this will be trated as a cash transfer and for cash transfers the interest rates are a little more steep than for standard purchases, but for emergencies this could be a life saver.

Visit Debt consolidation for some great consumer credit counseling services, and dealing with credit card debts in general.

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Credit cards

Credit cards depending on which point of view you look at it can be a necessary evil or the best thing since sliced bread.

A credit card is rather like a standard loan carried on a piece of plastic, as with standard loans there is interest charged at a daily rate, the credit card simply has that interest applied when you use the card for balance transfers and for purchases.

Credit cards as well as providing the convenience of not carrying cash on your person also have a range of promotional offers to entice your custom, such as points for air miles, points off grocery shopping, and points off fuel.

It should be understood that the banks and building societies are the ones issuing credit cards, while the credit card providers such as VISA, Mastercard, American Express, Discover, Capital One make their money from retailers accepting the card, the banks on the other hand make their money from interest charges incurred when you use the card. Certain credit card providers are also their own issuers such as American Express, Discover and Capital One, meaning they make money from interest and late payment charges as well as from retailers accepting the card.

Also with the standard unsecured credit cards, there are also secured credit cards which are secured against your home or property, and since they are secured against your home or property the interest rate may be lower than normal, and as long as you keep up with the monthly payments your credit limit may increase annually.

Ideally an unsecured credit card where the borrower has a long history with the bank is the best type to apply for, as the interest rate can be pretty good, as well as promotional offers with 0% APR (Annual Percentage Rate) for a certain period (usually a year to fifteen months) and points for using the card which can be redeemed as cashback for money off grocery shopping or off gas usage, and even for air miles, but do bear in mind there would be no point applying for a card with air miles points if you have no interest in flying.

Credit cards can prove their worth if you can keep up with the payments, and are able to clear or move your balance to a newer card with an equally good promotional period, once the promotional rate on your current card expires. They can prove especially useful in an emergency, for example when trapped in a rural are without a csh machine for miles but a local store that accepts credit cards, you can always ask for cashback, although this is treated as a cash purchase which means the interest charges are higher than for standard purchases, when you are in an emergency this can be a life saver.

Visit Debt consolidation for some great consumer credit counseling services, and dealing with credit card debts in general.

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Unsecured credit cards

Unsecured credit cards are credit cards that are not secured against a property, such as your home.

A credit card works rather like a loan from a bank that you pay back with interest, the only real difference between a standard loan and a credit card is that that loan is available on credit via the card, and ofcourse certain card issuers offer promotions to encourage their customers to select their credit cards, such as air miles, points off grocery shopping, and fuel.

Secured credit cards are obviously secured against your home or property, and since they are secured against your home or property the interest rates are a lot lower than for unsecured credit cards.

Unsecured credit cards are the standard type of credit cards issued by the banks, and usually require a credit check or credit rating to establish and determine if you will be approved for the card and your credit limit.

It should be noted that the banks are usually the ones that issue credit cards to their customers, while the credit card providers such as VISA, Mastercard, Capital One, American Express make their money from retailers utilizing the card, while the banks make their money from the interest rates charged on the card. In some cases the credit card companies are also the issuers, such as Capital One and American Express, meaning they make money both from retailers and from the interest rates, and charges.

Where you have a long history with the bank, an unsecured credit card is the best option to go for, as you can take advantage of low interest rates, some great promotional offers such as air miles and points off grocery shopping which you can redeem as cashback or towards other goods and services, as well as money off gas, and ofcourse they are not secured against your home or property.

In the hierarchy of credit cards, the preferred choices are usually an unsecured credit card, a secured credit card and a prepaid credit card, a prepaid credit card is rather like a debit card, where you only have access to the funds in your account, and are not taking a loan from the credit card, this has provided a very lucrative avenue for many providers as people with bad credit tend to be approved for only this type of card, and they still have to pay a monthly usage fee, as well as not being given a credit line.

Visit Debt consolidation for some great consumer credit counseling services, and dealing with credit card debts in general.

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Credit solutions

Credit solutions involve debt consolidation companies whose purpose is to collect the debt you owe a bank or an institution, and facilitates the process for the borrower by use of their third party services.

Credit solutions and debt consolidation companies work by contacting the lender on your behalf, after the borrower has contacted them, and would like to consolidate a loan or a debt. The borrower gives a detailed anlysis of their income and expenditure, and the credit solutions company uses this information to draw up a payment plan. Th credit solutions or debt consolidation company thenm contacts the lender and propose terms of payment based on their income and monthly expenditure.

Once these details have been obtained, they approach the lender with a proposed payment every cycle, usually every month, the lender usually does not ignore requests from credit solutions agencies, as at the end of the day, it means they will be getting back their loan, plus any substaintial interest the loan has accumulated over the years.

However for the borrower during this process of consolidating their debts, their credit rating and score is temporarily halted, which is normal, as when they do clear the debt their credit rating and score goes back to an even better position than it was prior to the debt.

It also should be noted that many banks and building societies, will be reluctant to offer extra credit especially if the borrower is undergoing debt consolidation, which does make sense, as you wouldn’t want to be tempted to get into the same scenario with extra credit that necessitated the use of a debt consolidation firm.

The aim of a credit solution company is to reduce the amount of the debt, and the frequency of the regular payments on that debt, although it might take a lot longer than if the debt had been handled conventionally.

Some debts don’t require the use of a credit solutions firm or debt consolidation company as the interest rate is so low it wouldn’t serve any beneficial purpose to consolidate such a debt, such as student loans which are mandated by the government to have low interest rates, since credit solutions or debt consolidation firms could typically add a further 20-30% on the existing debt, it would not be financially wise to prolong a low interest debt at a higher interest rate if you could pay it off at the current rate and save yourself a bundle.

Visit Debt consolidation for some great consumer credit counseling services, and dealing with credit card debts in general.

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Prepaid credit card

Prepaid credit cards can easily confuse many users, although they have the benefits of a credit card they are usually accepted for anyone regardless of their credit rating, and is the first port of call for those who want the benefit of a credit card without many of the risks.

A prepaid credit card works rather like a debit card, in that the money is not loaned to you, but is already on your account, because you have already put it there, so any purchase or transaction is just being taken from your account balance.

Credit card providers have found that it is even more profitable to allow prepaid credit cards especially for those with bad credit, as they can still charge a monthly usage fee, along with all the charges that come with using a credit card, such as a late payment fee, and since hardly any credit check is being done, can also charge a high interest rate for balance transfers and purchases.

For a normal credit card, the issuers of the credit card; usually the banks make their money from the interest charges, and late payment fees associated with the card, while the card providers i.e. Mastercard, Visa, Discover e.t.c make their money from charging retailers for acepting the card, in some cases the issuer is also the card provicer as in Discover, Capital One, and American Express, meaning they have an opportunity to make even more money, add a prepaid credit card to that mix, and seeing they don’t even have to offer a loan, which is basically what a credit card is, the profits can be astronomical .

However with these seemingly extortionate charges from every angle, having a credit card even a prepaid one can prove useful, especially for conducting online transactions as many services require the use of a credit card, even a prepaid credit card since it undoubtedly has the issuer’s logo, which is usually Mastercard or Visa will be accepted.

Ideally a normal credit card from your bank where you have a long standing account with them should be your first port of call, but if your credit rating and score is the issue, then a prepaid credit card can prove it’s worth, if you are looking for all the advantages of a credit card, and less risks of falling into debt.

Generally credit cards prove their worth as most retailers can offer cashback, even if it’s a prepaid credit card, which can come in handy if stuck in a rural area without a cash machine in site, but only the local grocery store which fortunately accepts credit cards. Although these type of transactions are considered cash transaction which generally have a higher interest rate than normal purchases, in an emergency they do prove their worth.

Visit Debt consolidation for some great consumer credit counseling services, and dealing with credit card debts in general.

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