Articles & News About Your Credit
Develop Your Domain Names
Prepaid Debit Cards Vs. Secured Credit Cards
We get quite a bit of email asking about the differences between these two categories of credit cards so I decided to write a short article to explain the basics of each category. Each of these cards will require funds to be deposited in advance before using them, so what?s the difference? The truth is there are some distinct differences that may work better for people from different walks of life. I have listed these differences below.
Prepaid Debit Cards - Prepaid debit cards are a descendant of the secured credit cards that you are probably familiar with. Prepaid debit cards are just that, debit cards that have the Mastercard or Visa logo on them and are accepted worldwide. Much like your bank debit cards they deplete funds in your account as you use them, they do not require monthly payments and do not charge interest.
The major difference is how you qualify for one and how much it cost to use the card. Prepaid debit cards are not concerned with having card holders qualify for their cards. Most issuers do not verify employment, credit, addresses or even legal residency. This makes these types of cards very popular with immigrant workers in the United States illegally.
Debit cards are also more fee intensive than traditional secured credit cards. They have fees that are usually measured by transaction. Other fees include, loading fees, transfer fees, check deposit fees, annual fees and more. This is the price people have pay for convenience and anonymity. These cards will not report cardholder transactions to the credit bureaus, which is not ideal for those who are trying to establish credit.
In our society it is virtually impossible to live without some type of visa or Mastercard, debit cards fill this void. They offer a "de facto" banking system for those unable to qualify normally. They offer direct deposits for paychecks and many other features to a segment of society that traditional banks have left out in the cold. All in all, prepaid debit cards are pretty cool for some people.
Secured Credit Cards ? are credit cards that are specifically designed for people with bad credit. Most people that apply for these types of credit cards do so to build or rebuild their credit. The other advantages are they appear, look and act exactly like a regular credit card. Most prepaid cards are clearly marked as debit cards with outrageous designs and colors.
The price you pay for rebuilding your credit is interest. The worst thing is that you are paying interest on your own money! Unlike prepaid debit cards, secured cards usually carry pretty steep interest rate, usually around 15%. Secured credit cards are not usually ?re-loadable?. Meaning, once you make your initial deposit this becomes your ?credit limit?. Your payments will bring down the balance giving you more purchasing power.
Secured credit cards report to the credit bureaus exactly the same way a regular credit card does. Creditors that review your credit for purchases have no idea if your credit card is secured or not. Another thing to watch is that most people will fund their cards with money that they intend to use immediately. Meaning they send in $500 and expect to be able to go out and spend that $500 immediately on receipt of their card. This is not good borrowing practices and will actually bring down your credit score.
Credit cards are viewed as liabilities on your credit bureau once you borrow over half of your credit limit. The credit bureaus see this as a sign of credit dependency and discount your credit score 35%. When this happens you are hurting your credit, paying regular credit card fees, paying interest on your money and carrying around a maxed out credit card.
Our advice to borrowers is to save up enough money so that your initial deposit is large enough to show a decent credit limit on your credit bureau, around $1000. Then leave it alone. It will only cost you the price of the annual fee to keep it in their bank. Most people feel the need to charge something on the card to ?prove? they can pay it back. This assumption could not be further than the truth. Credit bureaus do not show monthly payments; they only show the months you have had the account open and any months that you have been delinquent.
When a future creditor sees your $1000 open line of credit, higher credit scores and the financial restraint you have demonstrated you will be much more likely to get the loan. Secured credit cards can significantly help you rebuild your credit and have a positive impact on you overall credit score. Unfortunately most people use them incorrectly and end up hurting their credit more than it was before getting the card.
Aubrey Clark is a syndicated writer for Credit Card Direct who writes frequently on credit cards and financial matters like http://creditcard-direct.com/prepaid/index.html prepaid debit cards and http://www.creditcard-direct.com/ Where to find low interest rate credit cards.
Other Article Sites
findabook.com moneycd.info a-mortgage.info
about-lemon-laws.info aboutstudentloans.info
all-about-publishing.info auctions-articles.info bestcollege-university.com bestispconnection.com
biblefolder.com blogger-website.com books-used.info brokers-guide.info buywindows.info cable-dsl.info
career-miner.com carpel-tunnel.info cashinaflash.info cashloanreviews.info casinobell.com chat-house.info
clearmycredit.info collegeloantips.info crones.info depression-articles.info
dirnic.net dishguides.info
divers-below.com expodog.info
financewizz.com fire-insurance.info getgood.info handleit.net
it-idea.info
health-supplies.info hosting-right.com insidealert.com insurance-facts.info jobs-employment.info
justgood.info lookgold.net
lowcost-travel.info money-source.info myhostzone.info numisblog.com
peoplesearchfinder.info pr-articles.info realeas.com
refinancing-guides.info spyware-remove.info
telelot.info the-law.info
toppaid.info travel-deals.info travelcorrect.com wedding-guide-site.com
your-blog.info your-credit.info
Lowest Rate Credit Cards: You Must Have Good Credit
There are many ways to get lowest rate credit cards, but most of them involve fixing your credit. This assumes that your credit isn’t all that great, which unfortunately is the case for a lot of people. There are many credit card companies out there and they are more than willing to lend you their money for a small fee. That fee is in the form of an interest rate that you pay along with your bill. When your credit isn’t so great, the companies will offer a higher interest rate. That means they don’t trust you as much with their money and want to charge you more to cover the risk. When you have good credit, however, you can often qualify for the lowest rate credit cards and that’s a very good thing.
Credit Card Relief: 4 Steps To Balance Your Finances
Credit cards have become a necessary evil. In the United States and in many other places around the world, you can use credit cards to purchase products or services without the need for cash. This convenience is the main reason why people everywhere have become so addicted to charging their purchases, usually without stopping to think if they have the means to pay for it in the future.
How To Find A Mortgage With Bad Credit
Shopping online for mortgages ought to be trouble free, even should you have poor credit or no credit score. You can nonetheless find a bad credit lender that can facilitate you.
Consolidated Credit Counseling Services Offers Money Management Tips to Reduce Debt after the Holidays
Soon the holiday greeting cards will be replaced by holiday bills. Then what? Money management will be the key to gain control of finances for those who ran up holiday debt. Consolidated Credit Counseling Services provides the tools to tackle debt.
The Overview Of An Airline Credit Card
In recent times, many folks are getting attracted to airline credit cards, since these cards seem to be an ideal way to get free airway miles All airline credit cards feature different ways where they accrue fee airline miles
Addison Avenue Launches 'The Addison Café' to Serve up Financial Messages to Gen Y Consumers: New Online Credit Union Branch Offers Much More Than T
Addison Avenue Federal Credit Union launches The Addison Café--a new online branch created to meet the financial needs of Generation Y. At The Addison Café, members can apply for student and auto loans, mortgages, checking accounts, Visa cards and of course learn more from experts and each other through the Addison Café Blog. For more information on The Addison Café web site and blog, visit http://theaddisoncafe.com.
How To Improve Your Credit Score Before Buying A Home
If you are thinking about buying a home, condo or any other type of real estate, then you should know how your credits score will impact the home buying process. Most people who buy real estate do not have enough money in the bank to purchase a property outright with cash. Instead, most of us need to get a loan (also referred to as a mortgage) from a bank or through a mortgage broker in order the purchase real estate.
How Pci Dss Security Standards Protect Your Credit Card Transactions
Payment Card Industry Data Security Standard (PCI DSS) is a security feature that was developed by the major credit card companies to help businesses that process credit cards prevent credit card fraud through various security vulnerabilities that would exist otherwise All companies that store, transmit, or process credit cards must be PCI DSS compliant in order to process these transactions
How To Avoid Credit Card Fraud?
Wedding loans are also a type of personal loans. Wedding day is the most important day in everyone's life. A wedding loan can make it very special. If you are calling all your friends and relatives, then you have to throw a big party.
How To Claim CHILD TAX CREDIT The Right Way And Add An Extra $2,000 To Your Refund
The U.S.
Ohio New Home Builder, Dominion Homes Inc, Renews Credit Agreement
Central Ohio new home builder secures $35 million revolving line of credit to prepare for growth when real estate housing market rebounds.
Pitfalls of the Credit Industry
The credit industry if rife with pitfalls. If you have ever owned a credit card you probably already have learned this the hard way.
Understanding Credit Card APR
If you have a credit card or are looking to get one, it is important that you understand the ins and outs of credit card APR. Credit card APR is the biggest factor in determining how much you pay for your credit card, and so to get the best deal you need to know what it is and how it works. Here is some advice regarding the ins and out of credit card APR.
Can I Fix My Credit In 24 Hours?
Can you build a house in a day Can you get a college degree overnight
Mediating Debts With Credit Card Debt Collection Training
A large number of people in the US
