Monthly Archives: August 2013

Credit Unions & Banks Ramp Up New Credit Card Offers While Customers Wonder About Best Deals

At a time when banks and credit unions are offering new credit card offers, financial advisors say it is good news for those consumers with poor credit ratings. Also, it is great news for those with perfect credit because they are able to pick and choose from the many credit cards plans being offered today.

In addition, there are many frequent shoppers who view credit cards as a way to earn rewards and money back on their purchases. For instance, a credit card fan commenting online explained how she uses a mix of seven different credit cards for almost all of her purchases because of the percentage that she gets back on everything she buys. While some would view that using credit cards for money back is easy money, there are others who tend to shun using credit cards even when saving upwards of 3-6% on each purchase.

Credit card offers help people save money

Another aspect of the changing climate in credit cards today is linked to the view that if you don’t carry a balance on your credit card, you won’t have to pay high interest rates. Also, there are many banks and credit unions today that are offering their own brand of credit cards for both personal and business use at 6.5% and 7% interest. In turn, these new credit cards are being offered with no annual fees or worries about credit card limits if you pay your balance off in time.

Moreover, there are new credit card offers that require minimum security deposits of various amounts based on a customer’s credit history and score. For instance, if you are a new credit customer your credit card limit may be around $300 while an increase in your security deposit for this type of credit card can increase your charging ability. Also, the downside of such credit card plans is your credit history is all important when it comes to how much you must deposit. Thus, if you have really bad credit and want a credit card limit of say $4,000 you will need to deposit nearly $4,000 to help secure your card.

Building your credit score over time with credit cards

There are many new and exciting credit card rules today that are aimed at attracting those who either have little or no credit card history or for those who wish to build or repair their credit history. For example, some banks and credit unions are offering an open hand to those with bad credit who are willing to build their credit scores by simply making small purchases with their local bank or credit union credit cards. The goal is to be responsible when using your credit card by never being late with your monthly credit card payment while also keeping the balance reasonably low so as to pay off the balance whenever possible.

Overall, this method of using credit cards to rebuild one’s overall credit score is viewed as both admirable and responsible by the lenders who are taking a leap of faith that you will return to being a good credit borrower.

Tips For New College Students When Establishing A Credit Card This Fall

It is crucial for college students to know that in order to launch themselves as a financially responsible individual, they must establish credit. With a limited budget they can still do this and starting when they are young will only help them in their future.

While opening a checking account will not report on a credit report, it will indicate that the individual can handle their finances independently. At this point in their life they will begin employment and will have an account in which to deposit their earned income.

College students are a prime target for various credit card companies, therefore vendors will often be on campus sites urging students to apply, often enticing them with a free gift. It can be difficult to turn down such a generous offer, so the student wants to first ask the representative some questions as offers can differ dramatically. The student wants to ask what their interest rate is. If it is a low introductory rate, ask how long it is for and when the rate ends. Also ask what the credit limit will start at (some limits may start as low as $100.). Obviously the individual with no credit history will not be approved for a very high limit, but be sure to ask. Ask if the card has an annual fee, if so what is the amount and does it automatically go on the card as a balance before the card is activated.

Another option to establish credit is to become a co-applicant on an account already established by someone (preferably a parent or other relative). If you do become a co-applicant this means that you are equally responsible for paying the bill by the due date. This account will also report to the credit bureaus, thus giving the first time credit card seeker a credit history. However it is critical that the bill is paid on time as late payments will not only report on your newly established credit report but the report of your guarantor (the person who enabled you to become a co-applicant). If you miss one payment, make sure it gets paid so the account becomes current and remains current. Aside from late payments reporting there are usually fees added to the account, bringing your balance due up more.

Once you have that credit card, keep balances low and do not obtain more credit than you need or can realistically handle. It may be tempting to open more accounts, particularly if a department store is offering a discount on the first purchase you make with their card, but you do not want to open too many accounts (many department store cards offer high interest rates which may start around 20%). Try to keep from charging more on your existing card until you have paid the balance off first.

Having good credit is of high importance in today’s world and it will remain with you throughout your life as it will make a difference in whether you get approved for a cell phone, apartment rental or mortgage, auto insurance and more.