| Many women who marry young and
do all their borrowing under their husband's name often find themselves
with no credit rating after they are widowed or divorced. Thousands of
women have been denied loans and credit cards on that basis.
Still other people carry too much debt to be considered a good risk. If
you have a car loan, a student loan, a mortgage, two or three -- out
cards, you are unlikely to be granted another credit card.But in any and
all of the above cases, you can still obtain a credit card. No matter how
bad your credit, and even if you have declared bankruptcy, you can still
be granted a VISA or Mastercard with a limit as high as $5,000, if you
know the right company to call, and how to make your application.
We are going to reveal these card companies and the methods by which you
can obtain a VISA or Mastercard later in this report, but first, let's
talk about some of the other things you really should know about credit
cards, including annual fees, interest rates, credit reports and more.
================== Your Credit Rating ==================
How do credit card companies decide if you are a good credit risk or a bad
credit risk? Well, it's sort of a Big Brother thing. There are several
large agencies in America which track the borrowing and buying behavior of
just about every single American who has borrowed money at one time or
another.
____________________________________________________________
The four major credit
rating agencies are:
CSC Credit Service :: (Phone: 800-392-7816)
TRW Information Sys. :: (Phone: 800-392-1122)
Equifax :: (Phone: 800-685-1111)
Trans Union Corp. :: (Phone: 800-851-2674) |
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When you send in an application for a credit card, the card company
contacts one of the above agencies, which pulls your file, if one exists,
and let's the company know if you have any bad debts in your background.
If you have never borrowed money or used credit of any kind, your name
will not appear in the data base of any of the above. If you have, there
will almost certainly be information about you. If you have ever defaulted
on a bill, or walked away from a debt owed, that information will be
available. If you have never defaulted on a loan, but have made frequent
late payments, that is recorded, too, and goes against your credit rating.
==================== 25 Percent Error Rate ======================
If this sounds a bit like Big Brother, most would agree with you that it
is. It's scary to think that some large anonymous
corporation is keeping a file on you, but it's true. Furthermore, they
will share your file with any lending institution that wants to know
something about you. That's the price you pay to obtain credit. You've
heard the statement, "there ain't no such thing as a free
lunch."
When it comes to the game of credit, the lunch is definitely not free,
neither in the monetary sense, or in the realm of personal freedom.
To top things off, credit agencies make errors in as many as one-fourth
(25 percent) of all their reports. At this minute,
false information about you may be ruining your credit rating.
To check your credit rating for errors, call the agencies at the numbers I
provided above. They will request that you send them a written letter
asking for a copy of your credit report. They will send you a copy of the
information they have about you.
Now let's look at how card companies make the big bucks -- interest rates.
=============== Interest Rates ===============
A few decades ago there were laws against charging the kinds of interest
rates credit cards get today. Exorbitantly high
interest rates were called "usury," and were forbidden by
federal law. Just 30 years ago loaning money at 20 percent would
have landed any banker in prison. Such rates were the territory of loan
sharks and organized crime.
Today, however, it's standard business. Some cards have rates approaching
21 percent. Some product manufacturers, such as Apple Computer, have
credit plans that push a whopping 23 percent.
Most credit card companies attract customers with super low interest
rates, sometimes as easy as 5 percent. But what they only tell you in the
fine print, which few people bother to read, it that the interest rate
jumps back up after six months.
Many cards that start you out at 6 percent soon jump to 18 percent, or
higher. By that time, most people have chalked up a balance and are stuck.
Most people simply fail to notice when their rate increases. Credit card
companies count on that. They like who take no interest in details. If you
don't watch them, they'll watch you -- and your wallet -- and dip into it
in the
most insidious ways.
==================== No Annual Fee Cards ====================
Some credit card companies charge no annual fee for use of their card.
Annual fees range from $18 to $55. You pay it every year simply for the
privilege of using the card. Other companies charge no annual fee. You
might think, then, that this is a better deal. Most often they are not.
Cards with no annual fee almost always have a higher interest rate. If you
leave a monthly balance, you'll always pay more than the annual fee in
interest charges. Only if you never leave an unpaid monthly balance can
you benefit form a card with no annual fee.
================== Perks and Freebies ==================
One of those insidious ways is the offer such perks as frequent flier
miles or annual rebates. Use the card so often, and get X amount of
frequent flier miles. Use your card, and get credit toward the purchase of
an automobile. Is this a good deal? Hardly ever. As you might have
guessed, the offer of rebates and gifts is simply an inducement for you to
pay super high interest rates. Unless you are a big spender and travel a
lot, you'll rarely benefit from this kind of promotion.
========== Be Choosy ==========
In short, never sign up for a credit card until you compare rates. Shop
around. Credit card companies are just as competitive as any other kind of
business. That means interestrates that vary widely. In general, never go
for a card that is
five percent higher than the current prime rate.
=================== How To Get A Lower Rate ==================
What if you are already on the hook with a major credit card with an
agonizing rate of interest? Pick up the phone, call your card company, and
get tough. Often, if you ask for a lower interest rate, you'll get one --
it's as simple as that.
As further incentive, you can threaten to transfer your balance to another
card company with a lower rate. Many card companies are more than willing
to take you on as a customer by paying off one of their competitors for
you. Of course, you are then beholden to them. That's okay if you score a
lower interest rate.
================ How Anyone Can Get a Credit Car ================
Now what about all of you "hopeless cases" out there. What if
you have deplorable credit, or no credit rating at all. You may have
already been turned down by a half-dozen card companies. What can you do?
First, you should think long and hard about why you want a credit card in
the first place. If you have a history of bad credit, a credit card may be
the last thing you need. Many people feel that credit cards and the debt
they lead people into
is a modern form of slavery.
Credit cards are almost magically deceptive and alluring. They get at the
deepest psychological lever of the human mind -- a lever which allows
people to have the feeling they are getting something for free, when in
fact, they are paying two, three, four, even ten times as much for that
product because of the interest they will pay on each purchase.
On the other hand, not having a credit card is becoming less and less
practical in modern America. You can't rent a car without a credit card.
Carrying cash is dangerous. Checks are not accepted everywhere -- and
traveling to another city or country is extremely difficult without the
confidence and identity a credit card brings.
=============== A Secured Card ===============
If you decide you really need and want a credit card despite your past
problems with credit, you should get what is called a secured credit card.
Even people who have declared bankruptcy are granted secured cards.
A secured card works this way: you pay a lump sum of cash upfront either
to your bank or the card company itself, usually from $200 to $2,500. The
card company will then grant your credit for up to 150 percent of the
amount of your deposit. If you pony up $500, you will be granted a $750
credit line. If you put up $1,000, you will get $1,500 in credit, and so
on.
Your deposit money will earn a very nice 4 to 5 percent interest while it
is held as collateral by your bank or the card company. The deposit money
acts like a buffer for the lender. In the event you default on your card
debt, the lender gets to keep your money. They may still incur a net loss,
but the risk is far less.
Additionally, the interest you gain on your deposit will offset the
interest on your monthly balance if you have one. If you get a secured
card with an 18 percent interest rate, you can feel good about the fact
that your pre-payment is earning 5 percent.
Which card companies offer secured credit card plans?
The following: (At the time of writing, these details are
correct. If they change by any chance, you'll have to look up
the institutions in the Yellow Pages, or simply do a search
online.)
CitiBank -- Minimum deposit is $300, which earns 4%. Call: 800-933-2484
Federal Savings Bank -- Minimum deposit is $250, which earn 2.5%. Call
800-285-9090
Orchard Bank -- Minimum deposit is $400, which pays 4% Call 800-873-7307
Key Federal -- Minimum deposit is $300, which earns from 4% to 5%. Call
800-228-2230
Signet Bank -- Minimum deposit is $200, which earns 5%. Call 800-333-7116.
Using a secured credit card can also help repair your credit rating if you
use it responsibly over a number of years.
Even if you do not have bad credit, a secured credit card is recommended
for anyone who wants the safety and convenience of a credit card. Secured
cards are a safe, responsible way to control your spending, and you
actually earn money though interest on your deposit while you enjoy the
use of your card.
Here's a GREAT FREE resource with everything you'll EVER need to know
about credit/debt management, credit cards, and applying for the BEST
one: http://www.Direct-Credit-Card.com
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