Knowing What’s Out There – And What To Choose
The World of finance can be a tricky game for both the seasoned veteran and the novice borrower. Banks can – by accident or design – make even the most simple information seem complicated and through this unwittingly (or not) induce their customers to go for products that might not be best suited to their needs.
Credit, charge, ATM and debit cards are not all alike. Although you might think that they are basically the same thing – a way of making payment for purchases or means of getting cash – they are actually quite different. So as to use these cards wisely, you should know what each one is and how it differs from the others. Here’s some information to help you choose wisely.
Credit Cards
Credit cards can be a great way of paying for a purchase. They are easy to apply for, easy to use, and flexible in their repayment options. However, if you carry a balance, credit cards can be like very expensive loans.
A credit card works like this: the credit card company supplies you with a card; you use that card to pay for items and services up to a certain total amount — your credit ‘limit.’ The store or service provider then collects what you owe from the card issuer, whom you repay. You’re then allowed to pay off as much or almost as little as you like off the balance each month, so long as you pay a minimum amount each time (usually 2.5 per cent).
On the outstanding balance you’re charged interest (which can be as high as 25% or more each year) at the end of each monthly period, unless you pay the full balance each time your bill arrives.
Credit cards are immensely profitable for issuers for a variety of reasons. The high rate of interest yields issuing banks and companies vast profits – in some cases the bulk of an institution’s earnings. In addition to the interest, many companies charge an annual membership fee for a credit card, as well as a plethora of other charges, including late fees, over-the-limit fees and other miscellaneous charges. Companies also profit by charging stores a fee each time a customer uses a credit card in their establishment.
There are three different types of credit card available:
Unsecured Credit Cards
These cards are commonly made available to those with good credit history and credit score. These cards require no bank deposit amounts to secure and usually have no annual fees and low rate of interest.
Higher Risk Credit Cards
These cards are usually given to people who have a lower paying job, and/or poor credit history and credit score. Often these cards charge an activation fee, and also usually charge an annual fee of up to $80.
Secured Credit Cards
These cards are given to people who have a lower paying job, and/or a very poor credit history and credit score. Often these cards require a deposit to be made to the lender, sometimes as much as near or equal to the amount of credit available on the card. If the borrower can prove their credit worthiness over time, that credit limit is then upped. These cards also attract a high annual fee of up to $100 and charge high rates of interest.
Charge Cards
Charge cards (also known as travel and entertainment cards) are slightly from credit cards. The most famous charge cards, such as American Express and Diners Club, have an unlimited credit limit. Normally you can charge as much as you like, but you are required to pay off your balance in full when your bill arrives.
There’s one exception to this: If you charge air fare, cruise fees or hotel charges booked through a travel agent on an American Express card, you have an option to pay off your balance over 36 months. There’s a sting in the tail, however: you’ll be charged around 20 per cent interest and will have to make minimum monthly payments of $20.
The way charge card companies like American Express make their profits is by charging very high annual fees – up to $100 – and by hitting merchants with relatively high charges each time a customer pays using their card.
If you don’t pay your charge card bill in full (unless the charges are travel expenses on an American Express card), you’ll get a one-month period of grace, when no interest is charged. Beyond that, however, you’ll be charged interest, which weighs in at about 18 per cent. After about three months, if your account is still not settled, your account will be closed and your bill sent to the collections department.
Cash Advances
Some people use their credit or charge cards to obtain cash advances. This can be an expensive way of accessing cash. Most banks charge a transaction fee that can be as much as 4% for taking a cash advance. Interest is also charged from the date the cash advance is posted, even if it’s paid back in full when your bill arrives. Moreover, the interest rate is usually higher on cash advances than on ordinary credit card charges.
ATM & Debit Cards
ATM and debit cards offer most of the same functions as credit and charge cards, but the crucial difference is that the money comes out of your bank account straight away. If you don’t have the money, you can’t buy the product.
For some people this is a preferable option: they like to keep track of their outgoings, to keep tabs on what they’ve spent, to avoid any sort of debt – no matter how brief.
There are disadvantages to using debit cards. It doesn’t give you the option of up to a month to settle your statement. You also don’t have the right to withhold payment with a debit card (the money is immediately removed from the account) in the event of a dispute with the merchant over the goods or services paid for. Some banks and merchants also charge transaction fees for the use of debit cards.
Watch the video related to credit card services
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No, if you get the 0% interest for a time period for a balance transfer, they normally charge a 3% fee of the total amount transferred.
Companies like Capital One, Orchard Bank, Citibank can help to repair your credit. One of the many benefits of using one of these preferred lenders is that they report positively to the major credit scoring repositories. But interest rates from these companies can be up to 25-30% annually. http://www.yourcreditoptions.com/Bad-Credit-Card-Offers-870385-page.php
Most of the major banks and lending institutions can offer secured credit deposit before backing a credit card for you. A secured credit card may be the only option for some people with a poor credit history. Since the card is backed by a savings account, there is less risk for the issuer and it is easier to qualify for the card. A secured card has a maximum credit limit set equal to or as a percentage of the amount in the savings account. Before applying for a secured card, be sure to look at the minimum amount you must maintain in your account to be eligible for the card.
http://www.yourcreditoptions.com/Secured-Credit-Cards-870387-page.php
That card from Simmons First National is well-known for having the lowest fixed APR around. They are listed in Money Magazine and other magazines regularly in the list of lowest APR credit cards. You need excellent credit to qualify – most people do not. Of course, "fixed APR" never means permanently "fixed", and they can change the rate at any time with notice, but you can't do better than 7.25%.
With no annual fee, a grace period on new purchases, and a very low fixed APR, that's a very good card.
Make sure you never, ever, ever pay late. I see too many people posting questions here saying their credit card APR just skyrocketed because they forgot to pay the bill or it slipped their mind or they were only late a "couple of times". When you get a good deal like you have with this card, be sure to keep it by always paying on time, every time.
never heard of this company but thanks for letting us know not to sign up for it if we ever come across it! sorry this happened to you! i hope you can get it worked out! but i think you should file a law suit because just the fact that their songs had viruses should be enough to get something out of them! i would stick to buying songs from itunes or amazon. they're more expensive, but at least you know you aren't getting ripped off or getting viruses.
i just opened an account with bank of america a few weeks ago and spoke to a very helpful representative. as long as you pay your bill before the due date you will not have to pay interest or other fees. when opening an account pay careful attention to the information the representative is giving you as some accounts are charged a maintenance fee while some are not.
The best credit card will be a card that has no annual fee, low rates and give you rewards when you use that card, a good example would be Discover card rewards or American Express these cards have these benefits but the only thing is that you have to have some credit to get these cards other wise you will be turn down, so if you have no credit history your best bet is to start off with a lower end card and use it for a few months to build credit and then apply for a higher end card, but if you have good credit I would apply for the higher end cards now, check out http://www.fastcreditcardapprovals.com here you are able to compare them side by side on rates, fees and rewards and credit status, good luck
Cannot recall Effective APR and Corresponding APR, but I can help answer your questions about the standard APR.
non-promotional APR is the regular rate you get charge every time you make a standard purchase. Use your card at a retail store. Most credit cards charge Prime+x%. The current prime rate is 3.25%. So if you apply for a card, or your current card say your rate is Prime+5.99%, then your real rate is 3.25 + 5.99 = 9.24%
Balance Transfer promo are always different. You can find promos that offer 0% for 6 months, or 2% for 1 year. Watch out for the 0%, because they charge a balance transfer fee.
Cash Advances are the highest rate. Normally, cash advance APR is about 23.99% and up.
Also remember, when you start making your payments, the way credit card companies allocate payment is normally paying first the promo or balance transfer rate. Then purchases, and at the end, Cash Advance. If you pay the balance off in full each month, you don't get charge interest for purchases, but you will still get charged interest on the other to APRs.
Let me just tell you first…your score is NOT 584 because of ONE 30 day late showing. Credit scores are determined by many many factors. How much credit, how long you have credit, what is the ratio of revolving balances to limits, how many loans to do you have, how long have you had credit etc…By just fixing one account to show it was paid on time may improve your score or it may not. You need to pay your bills on time consecutively over 12 month period. Don't make too many inquiries, that will drive down your score. Don't open too many accounts too fast, that will also drive down your score. Your score can improve in about 90 days…There is a mortgage company out there SOMEWHERE that will be able to get you a loan. Trust me, I have seen a lot worse. Make sure you are getting the full story if someone is turning you down.
Check this site: http://www.bcsalliance.com/y_debt_sol.html. Credit cards are open contracts. The SOL appears to be 6 years for both open and written contracts. Oral contracts are only 3 years — which is sorta odd.