Credit Cards

Credit card insurance. Do you need it?

If you have a credit card, you have probably been asked to purchase some sort of credit card insurance. It seems as if every time I speak to a customer service representative, they always solicit their insurance plan. No matter how many times you say no, they remain adamant and continue the pitch.

Credit card insurance is not for every one of us. Some people take the offer and others don’t. It all depends on the individual and the type of situation they’re in. People who have no problems making their monthly payments usually pass up on the offer while others who struggle quickly sign up.

Before signing up for a credit card insurance plan, there are a few things that you should know. Not all plans are created equal; make sure that you know which plan you are getting and how the policy works.

Types of Plans

Credit Life Insurance - This plan will pay your entire credit card balance at the time of your death, assuming that you have an outstanding balance. The credit card company will pay your outstanding balance only if they are named the beneficiaries on the plan.

Credit Disability Insurance - This plan will cover the minimum monthly payment on your credit card for a specified period of time after a medical disability. The plan does not cover purchases that are made after the disability.

Credit Involuntary Unemployment Insurance - This plan will cover the minimum monthly payment on your credit card in case you are ever laid off or downsized for a specific amount of time. The plan does not cover purchases made after becoming unemployed.

Credit Property Insurance - This type of insurance might already come with your credit card. It protects you from damaged, and in some cases, stolen items that were bought with the credit card.

There are pros and cons about credit card insurance. It is obviously a good thing that your payment will be made in case you ever lose your job or get sick. But how long will they make payments for? Do they give a sufficient amount of time for you to heal or find another job? Another unexpected drawback about getting credit card insurance is that you have to purchase a plan for every credit card you own. If you are like most Americans, you own at least 3 credit cards. Purchasing 3 different credit insurance plans can become quite expensive.

If you do choose to purchase a credit card insurance plan, make sure that you get all the information. Don’t just purchase the plan without asking the proper questions. Make sure that you know the requirements for each policy. What happens if you miss a payment before you lose your job? Will you still be eligible?

Find out if you can purchase one or two plans instead of all four. Different credit cards have different rules. If you don’t ask, chances are you will be spending more money than you need.

You should also know about the rates. How much will it cost to cover you for x amount of months? Can rates change? You should also ask about cancellation policy. Can you simply cancel at anytime? Overall, if you are going to purchase credit card insurance, or any type of insurance, make sure that you know what you are getting into and exactly how much it will cost you over a period of time.

You might decide to get some type of coverage but a lot of people turn this down. For most people credit card insurance is expensive and it rarely ever pays off. For some people, being covered is offers a peace of mind in case of tragedy. The choice is yours.

Credit Cards

Understanding the universal default clause

When you get that credit card solicitation in the mail that guarantees an extremely low APR, make sure that you read the fine print. Your low interest can instantly increase to an extremely higher rate by simply missing one payment. A lot of people take out credit cards without properly reading the terms of service. Reading the terms of service can help you avoid paying a lot of money in fees.

The following scenario is repeated daily throughout the country. You finally decide to fill out that credit card offer that you received in the mail a few weeks ago. The card is great. It includes rewards on purchases, a low balance transfer fee, and best of all, it boasts an extremely low APR; the lowest you have ever seen. Everything goes well with your new card until the day you miss a payment. All of the sudden the card isn’t so perky anymore. You suddenly lose your low APR. What was once 10% suddenly jumps to 24%. You ask yourself how such a thing could have occurred.

The Default Clause

The default clause allows the credit card companies to raise your interest rate if you ever miss a payment. A lot people simply look at the conspicuous 10% APR lettering on the envelope and simply apply based on that. In order to avoid paying higher interest fees, you must be aware of the defaulting rules. The credit card companies are not lenient when it comes to breaking agreements. They will quickly apply the higher rates as soon as you miss a payment. That is how they make their money. They offer you low rates, in hopes of you making late payments that way your rates increase.

The Universal Default Clause

With the universal default clause, you simply have to be late on any credit card payment and your rate automatically increases. If you’ve been making timely payments with your low APR card and unknowingly forget to make a payment on your sears card, your low APR card’s APR can increase because of the universal default clause.

How does the credit card company know that you’ve missed a payment on another card? They simply look at your credit report. If they see you’ve made any late payments on your credit accounts, they automatically increase your rate.

This means that you must pay all of your credit cards on time in order to avoid higher fees. Missing a payment on any credit card will increase your rates.

Tips and Tricks

1. Apply for a credit card that does not have a universal default clause. If you can’t find a card without a universal default clause, find one that has a lower default clause.

2. Pay your bills on time every month. Having your rates increase simply because your payment arrived late is very foolish. If your bank offers online banking, sign up and take advantage of the speedy service.

3. Don’t exceed your credit limit. Try to maintain low balances on your credit cards. In general, try not to exceed 50% of your available credit. The lower the balance on your credit cards, the easier it will be for you to make monthly payments.

4. Take the time to review your credit report. Visit www.annualcreditreport.com and apply for your free credit report. You are entitled to 3 reports every year. Order one every 4 months and check it for accuracy.

If you read the fine prints on your credit card, you will avoid getting into situations that will make you pay higher interest rates. Make sure you review every credit card offer before you send in the applications.

Credit Cards

Guidelines for using credit responsibly

Now that you’ve been approved for a credit card, the real challenge begins. It is how you use that credit card that will determine your level of responsibility toward your personal finance. Here are a few guidelines that you should follow in order to start using your credit responsibly.

Know the terms.
Whether you have a credit card or a loan, it is important that you know the terms of the agreement. Find out what the APR is. Are there any fees associated with the loan or credit card? What about if your payment comes in late? Make sure that you know everything associated with your loan or credit card.

Keep important numbers.
Keep a copy of each credit card and loan account number. You should also keep a copy of the customer service telephone number. Your account number is very important. It identifies you. You should keep a copy of each lenders phone number in case of bill questions, and card cancellations.

Carry only a couple of cards.
Carrying all of your credit cards is a bad idea. If you lose your wallet or purse, you will lose all of your credit cards and increase your risk of being a victim of identity theft. You will also have to call each and every credit card company to cancel your cards, one by one.

Another good reason to carry only one or two cards is that you won’t be tempted to buy on impulse. Believe it or not, many people get into credit card debt simply because of buying on impulse. They buy something they think that they want, only to find out that they really don’t need it.

Make payments.
Never go a month without paying your credit card bills or loans. B not making at least the minimum payment, you will be slapped with late fees, a higher interest rate, a possibility of the missed payment going on your credit report. Make sure that you pay at least the minimum payment, although not advised, making a minimum payment is 1,000 better than not making a single payment.

A better way to go is to pay a little bit more than the required minimum payment. By paying a little more than the required minimum payment, you will pay your debt off in less time.

The best way to go is to pay the balance in full each month. To do this, make sure that you only charge an amount that you can afford to pay off once the bill arrives. By paying off the amount in full, you will less likely eliminate interest charges and you will not have to worry about accumulating debt.

Pay on time.
A lot of people send in their payments on the due date. That is not the case. You should send in your payments well before the due date. The credit card companies are not responsible for the amount of time it takes for a bill to arrive at their door. Make sure that your payment is in the mail at least 7 days before the due date to assure prompt delivery.

If you have access to a computer, sign up for online payment thru your bank. Many banks now offer online bill payment free of charge. If your bank does not offer this priceless service, or if they charge for the service, it is time to switch banks. Online bill payments usually take no more than 2 business days to get to your creditor.

Keep records of payments
Sometimes your account is not credited when payments are made. You need to keep a record of every payment made incase of a blunder on the creditor’s part. Your only defense is the proof that you possess. Make sure you keep records of your payments.

Review your statements.
Every time you receive a statement from your credit card company, sit down and review it. A lot of people simply don’t care to review their credit card statements. Make sure that all purchases that appear on the statement were performed or approved by you. If a purchase that you’ve never made appears on your statement, you should immediately call your credit card company to dispute.

Spend wisely.
Your credit card is not free money. A lot of people think that a credit card is free money but it isn’t. As a matter of fact, if not used carefully you end up paying more for the items your purchase by using a credit card than in cash. Don’t make frivolous purchases with your credit card. Ask yourself if you really want that new pair of shoes, or if you really need another pair of jeans.

The most important thing to remember is that you have to stay on top of your finances and credit. Don’t allow your spending habits to control you.

Credit Cards

Should you take the first offer?

This has probably happened to you; after thinking about something for a very long time, you finally go out and buy it. Before you even get it home you see something that would be even better, but it is too late. You can’t return what you have bought and you can’t afford the new thing. Something that you were so excited about has now become very frustrating and disappointing. If it has happened to you, you are not alone.

But what if your hasty decision wasn’t just disappointing or frustrating, but also very costly? What if your haste was going to end up being very expensive?

This exact situation often happens to people when they are looking for a loan or a credit card. They are excited to have the extra money to spend, or they are desperate for the credit, so they jump at the first offer that comes along without shopping around a bit. They don’t consider the interest rate or the terms of the loan or credit card they are signing up for and they certainly don’t consider the impact that hose rates will have over the long term.

It is really easy to figure that a percentage point or two on a loan doesn’t really matter. It’s just one percent, so what impact can that really have, right? Wrong. Dead wrong. Depending on the size of the loan or the balance that you are carrying on your credit card, just one more percentage point on your credit card can cost you tens, hundreds or even thousands of dollars every year.

People often end up with the wrong loan or card because of what they are offered to sign up for it. Whether it is a t-shirt or hat at a sporting event, a CD or MP3 player, points or rewards for a particular store, or low introductory rates, companies have dozens of ways to convince people to sign up for their loan or card. You really have to look at what they are offering, though. If the interest rate is higher than other similar loans or cards then the extra cost over the long term could be much, much higher than the benefit you received from the prize or reward they gave you to sign up.

Instead of jumping at the first deal that comes along, you should take advantage of the resources that are available. For example, use a website or resource which offers you access to lots of loans or credit cards at once. Shop around to make sure you get the best deal. Understand the interest rate you will be paying and the terms of the loan or card. Putting the time in now to get the best deal is sure to make you happier in the long run.

Credit Cards

Low interest credit cards

If you are in shopping for a new credit card, make sure that you apply for a low interest credit card. Low interest credit cards are good because you end up paying less money to the credit card companies, thus allowing you to save. There are many types of low interest credit cards. Visa, Master card, American Express, Discover card, all have low interest credit cards.

Before you choose your low interest credit card, you must be aware of a few things. Always read the agreement before accepting the card. Here are a few things you should watch for when applying for a low interest credit card.

Be aware of the length of the promotion. There are many credit card companies that offer zero percent credit cards. These credit cards are very low interest cards but they almost always have a deadline. Some low interest credit cards last for 6 months, some even a year. Make sure that you know how long yours last.

Make sure you know the interest rate of your low interest credit card after the promotion expires. Some interest rates go as high as 23% after the promotional period.

Make sure that you do not make any late payment on the low interest credit card. Being late just once usually cancels the promotion and spikes the rates as high as 23%. Sometime the credit card companies also check your credit report to make sure that you pay your other cards on time. Make sure that you pay your other cards on time or else your low interest rate credit card will default and you will be stuck with high rates.

Credit Cards

15 Credit card terms that you should know

If you do not know the proper jargon, credit card offers and statements can lead you to outrageous debt and cause a lot of stress. To help you handle the situation better, here are fifteen frequently used credit card terms.

Average Daily Balance — The average daily balance is the preferred method by which credit card companies calculate your payment due. It is formulated by adding every day’s balance and then dividing the total by the total number of days in the billing cycle. This average daily balance is then multiplied by the credit card’s monthly periodic rate, which is determined by dividing the annual periodic rate by 12. A card with an annual rate of 18 percent would have a monthly periodic rate of 1.5 percent. If that card had a $500 average daily balance it would yield a monthly finance charge of $7.50.

Annual Percentage Rate (APR) — The yearly rate of interest which includes fees and costs paid to obtain the loan. Lenders are obligated by law to show the APR. The annual percentage rate is calculated by taking the average compound interest rate over the term of the loan, that way borrowers can compare loans.

Balance Transfer — A balance transfer is the act of moving your unpaid credit card debt from one credit card issuer to another credit card issuer. Credit card companies often offer very low rates to encourage incoming balance transfers and high fees to discourage outgoing balance transfers.

Cash Advance Fees – A fee charged by the bank for using your credit card to obtain cash. This fee can be stated as a percentage of the amount withdrawn or a flat per-transaction fee. The fee may be expressed as “3%/$10″. This simply means that the cash advance fee will be the greater of 3 percent of the cash advance amount or $10. The bank may limit the amount of that can be charged. The fee may then be directly deducted from the amount you received or the fee may be posted to your bill.

Card Holder Agreement – The card holder agreement is the written statement that displays the terms and conditions of the credit card account. This agreement is required by the Federal Reserve regulations. By law, the card holder agreement must include the Annual Percentage Rate (APR), annual fee if applicable, the monthly minimum payment formula, and the customers rights when disputing billing matters. Changes to the card holder agreement can be made at anytime by the issuer with a written advance notice. The rules for making changes to the card holder agreement vary from state to state. The rules that apply are the rules in the home state of the issuer, not those of the card holder.

Finance Charge – The charge of using the credit card. The finance charge consist of interest cost and other kind of fees.

Floor – This is the minimum possible rate on a line of credit or variable-rate loan, after the introductory rate period.

Grace Period – if a card does not carry a balance, the grace period is the interest free time that a lender allows between the transaction date and billing date. The standard grace period is usually between 20 and 30 days. If no grace period is present, finance charges will accumulate the moment a purchase is made using the credit card. If you carry a balance on your credit card, you have no grace period.

Minimum Payment – The minimum amount that a cardholder must pay in order to keep the account from going into default. Some card issuers will set a very high minimum if they are unsure of the cardholder’s ability to pay. A lot of the credit card companies require a minimum payment of 2 percent of the outstanding balance.

Over-the-limit Fee – The fee charged for going over your credit card limit.

Periodic Rate – The interest rate expressed in relation to a specific amount of time. A monthly periodic rate is the cost of credit per month; a daily periodic rate is the cost of credit per day.

Pre-approved – This term only means that a potential customer has passed the preliminary credit information screening. Credit card companies often send out “pre-approved” junk mail in order to get new customers. The credit card companies can then reject the customers if they don’t like their credit rating.

Secured Card – A special credit card that the cardholder secures with a deposit to ensure payment of outstanding balance in case of non-payment. This is mostly used by people new to credit, or people who are trying to rebuild their credit.

Teaser Rate – This is also called the introductory rate, it is normally bellow the market-suggested interest rate. It is offered in order to attract customers and make them switch credit cards or lenders.

Variable Interest Rate – The percentage that a borrower pays for the use of money. The variable interest rate moves up and down periodically based on the changes in other interest rates.

Credit Cards

Capital one credit cards can open doors

Capital One is Not Just about Credit Cards

Capital One has been offering credit cards as an independent company since 1995. Now with 46.7 million global customers (give or take a few! ), they are quickly rising to the top of the credit card food chain.

You may think that Capital One only offers credit cards, but there’s more to them than that. If you are a homeowner, for instance, Capital One (teamed with Central Capital) can help you find a flexible loan for home improvements or any other purpose. You can borrow up to $60,000 and spread the payments out over twenty-five years if you’d like. A word of caution when it comes to putting your home on the line for other financing - if you don’t repay the loan according to the terms, your house can be repossessed.

Capital One also provides a mortgage service through their Independent Mortgage Review Program provided by London & Country Mortgages, LTD. The Independent Mortgage Review will help you refinance your existing mortgage or find the best deal on a first time mortgage.

I Don’t Want a Mortgage from Capital One, I Want a Credit Card!

If it’s a credit card you’re after, Capital One most likely has what you’re looking for. For those with excellent credit, Capital One offers their No Hassle Platinum MasterCard with a 6.9% variable interest rate. If your credit is pretty good or you have a balance to transfer, you may qualify for their Premier Visa Card with a 17.9% APR. Lastly, if your credit is in bad shape, you may qualify for the Classic Visa Card with a 29.9% variable rate.

Capital One offers several ways to protect their credit card customers from fraud and identity theft. Their customer service department will keep a watchful eye on your account for any unusual activity. You are also 100% protected from fraudulent online activities.

They also warn their customers against hoax emails. The emails will contain a hoax web site and attempt to obtain confidential personal information like account numbers, PIN numbers and passwords. Capital One, Visa or MasterCard will never send emails of this nature - so don’t be fooled!
If Not a Credit Card, What Else Can Capital One Do for Me?

Mortgages, refinancing, credit cards and savings accounts? Yes, that’s right, Capital One offers two types of savings accounts to its customers - a fixed rate savings account and an easy access savings account. The fixed rate account gives you a higher interest rate on the money in your account, but offers little access to the money without penalty. You can elect to have your interest paid monthly or annually and invest $5000 to $1 million.

The Easy Access Savings account offers a lower interest rate and a bonus of 0.5% in your first year. The account offers unlimited free access to your money whenever you choose and annual or monthly interest payments. you can invest $2000 to $1 million.

In a nutshell, Capital One is a diverse credit card company, offering many services to it’s millions of customer. They deserve a look!

Credit Cards

Bad credit cards are not always bad

The Only Credit Card I Can Get is a Bad Credit Card I Feel So Stupid Like I Can’t Take Care of Myself

There is no reason for you to feel stupid because you have a bad credit card. Things happen in life we have no control over or we are not wise all of the time and have a little to much fun wining, dining and shopping. Whatever the reason you are not alone many consumers over spend of run into financial problems for many reasons. If this has happened to you and you have a bad credit card all that means is that you have a second chance at credit and that you are trying to re-establish credit.

There is nothing to feel silly about in doing that. The card won’t be bad forever either. Once you make monthly payments on time for an extended period of about a year you are back on the good credit tract! And you will feel better then so cheer up there is light at the end of the tunnel it just seems far away sometimes!

I Have a Bad Credit Card and It Feels Hopeless That I Will Ever See Good Credit Again

You will see good credit again it will just seem like a long time. If you make your monthly payments on time in about a year you will see that your credit is on its way to being back on track. When this happens you will be able to apply for credit cards with lower rates and higher limits. It is important that you don’t over spend and find yourself in debt trouble again.

A bad credit card can be thought of as a second chance for you to establish good credit so take advantage of the opportunity you have. Don’t feel hopeless because if you make all of your payments on time there is hope in the near future along with good credit!
I Have a Bad Credit Card but I Barely Use It Because I Am Afraid to Go into Debt Again

You don’t have to be afraid to use your bad credit card. What you should do is learn about debt management so you can spend with confidence. Debt management will help you learn about how to manage your debt and how credit works. These are important things for every consumer to know. If you have a bad credit card it is wise that you are cautious of your spending. Actually you should always be cautious of that.

However you don’t have to be afraid to use your bad credit card because it can help you re-establish your credit. Keep your balances low and your hopes high and you will be back on the good credit track again soon. Just be wise in your spending and make your payments on time and you will be in good standing with the creditors and yourself in the near future! Don’t be afraid be wise!

Credit Cards

0% APR credit cards

0% APR credit cards are those credit cards that charge 0% interest rate on your outstanding balance. If you carefully study various credit cards offers you will find that the credit cards that charge a 0% or low APR over a longer period of time are the best. You should carefully study various credit card offers and always look for ones that offer low fixed interest rates.

Low fixed APR credit cards charge a fixed low interest rate on your credit card balance, as they are not subject to changes associated with various financial indexes. Although the credit card company can change low fixed rate any time, they have to notify you at least 15days before the change takes place. Mostly all credit cards offer 0% APR for a limited period of time usually from six to twelve months.

Thereafter they charge a high rate of interest that should be taken into account while applying for a 0% APR credit card. Most of the 0% APR credit cards also offer 0% balance transfer facility that you should avail and transfer your high interest balances to your 0% APR credit card and save money in interest.

You should try to pay off the balances you transfer as early as possible because if you don’t pay them off during or before the end of the interest free period, you may end up paying more in interests and incur losses.

Who Qualifies for a 0% APR Credit Cards?

It is not easy for every one to get a 0% APR credit card, as you will need a very good credit rating to acquire one. You should always check your credit report and your credit score before applying for a 0% APR credit card. You will need other supporting documents such as proof of residences, both past and recent one, proof of employment, copy of photo identity card, copy of any utility bill, etc. 0% APR credit cards are the best when it comes to saving money in interests.
Using Your 0% APR Credit Card Wisely

Who is responsible for using a 0% APR credit card?

You are responsible for using a 0% APR credit card. It is you who is going to pay the monthly payments due for the credit you used. So it is very important for you to know the long lasting affects if you fail to make your payments in time. Credit card companies want you to pay for your new television, car and other purchases by using the 0% APR credit cards.

You decide when to make the monthly payments due and clear the total outstanding balance before the 0% introductory period ends. Because if you won’t then the interest rate charged on your balance amount will be very high. The same applies for the balance transfers. You should pay them in time or you will end up paying more. Don’t overspend. It is totally up to you to use your 0% APR credit card wisely and avoid credit debt.

Credit Cards

Finding the best credit cards

It’s still possible to get good deals and favorable terms.

Credit card holders today are more likely to live fast, max-out young and leave a horrendous-looking balance behind than ever before. This leaves a far bigger dent in their creditworthiness than it used to, since credit card companies are now rejecting applicants in record numbers.

The classic credit card maxim still holds true: those who carry a monthly balance should find the lowest annual percentage rate (APB), while those who don’t should look for cards with the lowest (or no) annual fee. But card issuers are getting more sophisticated at the art of squeezing those couple of extra dollars out of you each month, according to industry sources who follow credit cards.

According to a recent survey by Bankrate.com, a financial advice Website, Wachovia Bank Card Services of New Castle, Delaware, offers the best overall deal, with an APB of 7.75%, an annual fee of $88 and a grace period of 20 days before it begins charging interest.

Shoppers who prefer to wipe their debt slate clean every month would be better off with the Richmond, Virginia-based Capital One Bank card, which levies a 9.9% APB on your balance and has no annual fee. Capital One’s 25 interest-free days can come in handy when you’re stretched thin, too. Wachovia also offers a similar card tailored to this market, with the same APB and no annual fee, although its interest-free period lasts for only 20 days.

If you’ve already snipped up your old card and are thinking about sending away for one with a better deal, industry experts like Consumer Action, an advocacy group in San Francisco, advise consumers to be wary of some common stumbling blocks. If you are tempted to sign up for a card with a suspiciously low introductory rate, pay your bills on time. If you’re late, some issuers will charge you their standard APB and may also add on a higher-than-usual late fee.

Retail store cards are also a great temptation for shoppers because they often come with substantial introductory discounts. “The one instance where I’d advise someone to get a retailer’s card is when someone has poor or no credit. Usually, retailers are a little more lenient [than other issuers],” says Linda Sherry, a spokesperson for Consumer Action. She stresses that other cardholders should be wary of the high APRs that department stores usually charge on their cards, and says that the discounts are often eaten up by the high APRs and late fees tacked on to card bills by retailers.