A credit card may seem like any other fiat currency you used in making purchases when you are at any store. However, a credit card is much more than that. You need to learn to have a positive relationship with your credit cards. Before applying for any credit card account, understanding the basics will help you have a better use of the credit cards and avoid the credit pit. You need to understand the types of credit cards available and the legalities attached to the usage.
- Types of Credit Card
Just like millions of people out there, you will assume credit card is just one. However, there are different types of credit cards to choose from. We can point out three types of credit cards, the commonest is the general purpose cards mostly issued by banks and other financial institutions. These general purpose cards are also referred to as unsecured cards. There are also private label cards that are usable at the store of the issuer. Lastly is the secured cards which are fully backed by your deposits which the creditor can fall back to in any event you fail to pay.
- Know your Card Interest Rate.
You should know it can range from 0 to 30% depending on your credit rating and history. There are some conditions that determine your credit card interest rate; credit score, payment history, asset, income, economic condition and credit inquiries. You will receive the best interest rate if you have a positive record and early payment of credit. Therefore, to have a good interest rate on credit, you must be in the good books of your creditors.
- No Limit to Number of Credit Card
Averagely, people do have close to 9 credit cards simultaneously. There is no rule that specifies the number of credit card you are entitled to hold at any given time. You can get a couple of multipurpose cards, and also retail store cards of a store you patronize often. Most of the retail cards offer incentives on usage which is why you need to have a couple for grocery and other essential needs.
- Compare Credit Cards Before Settling for One.
Credit card issues range from Banks, retailers, credit unions and credit card issues. You may think that seeing Visa or MasterCard are card issuers, they are not; they are just payment processors. Go online and research the credit card issuer with the best rates, payment plan and their legalities. The effect of this on your credit score will be positive as you won’t be making credit inquiries that can hurt your credit score.
- Be Aware of Annual or Maintenance Fees
This should be done when you are comparing credit card issuers. Being cognizance of the maintenance or the annual fees on the credit card will help position your credit in the right angle. It’s not as if the fees are too expensive, but being aware can help you plan ahead. Don’t be caught up when you are charged your last 100 bucks before pay day as an maintenance fee.
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As a point of entry, two categories of people will benefit hugely by using secured credit cards; those planning to repair credit and the newbies to credit. Some people refer to secured credit cards as last resort but there are actually immense benefits offered. From the name, you must already have a clue to what we are talking about here; a credit card that a lender secures with a collateral. In simple terms, you deposit a certain amount and the creditor lends you credit in like sum. You will wonder why you will want to have such in place? No credit means bad credit score remember? But with a secured credit card you are playing safe and smart.
A survey of most lenders shows that the opening deposit starts between $200 to $500, in any case you default in paying your credit, the deposit will be used to offset such. You should know this though, your credit limit will be increased by the lender in the long run if you are not late with your credit payment. With a regular payment reported by the credit card issuer to the credit bureaus, you are on your way to having a positive credit score that can allow you have more credit options.
In any case, you have no history or bad credit rating, secured credit cards have it advantages which you can benefit from. One reason why many people suggest secured credit cards is the ease of your rebuilding your credit options. Yes! Secured credit cards is a sure way of going from the negatives of credit score in order to be eligible for traditional credit options later.
So also, if you are planning to cut low on your spending, secured credit cards as provided by Fresh Start Credit Repair allows you to have control over this. One aspect of secured credit cards is the lower spending limit, you will have a spending limit on your secured credit cards that prevents you from impulse buying and unnecessary spending. You must also know that secured credit cards have lower fees. Unsecured cards often have a double of the fees of the secured credit cards, you will rarely be charged at the standard credit card rate.
One other sweet benefit of secured credit card you will not believe is the interest rate. Some lenders allow you to earn interest on your deposit for secured credit cards, this alone should cover the low fees that will be charged.
In essence, the ultimate aim of using a secured credit card is graduating to the unsecured traditional cards. You will end up having a traditional credit line with regular payment of your credit as at when due. With a secured credit card, you will have more spending power, this can also be useful in any case of emergency as you can rely on the cards without hurting your credit score.
At Fresh Start Credit Repair, we are poised at helping your repair your credit and providing you with a secured credit cards. Contact us today, we are just a call away.[contact-form][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]