Posts Tagged ‘credit history’
Credit cards for bad credit are one of the best methods available to overcome your financial black marks. Having a poor score for whatever reasons can be a serious problem for individuals trying to re-gain financial stability and secure loans for mortgages or other long term financial investments. Hundreds of thousands of people in the UK suffer from negative credit ratings with 6% of the population having to make rent or mortgage payments using these cards in 2010 alone. The average UK adult has over 30 thousand pounds of unpaid debt and more than four million people missed a monthly card payment in 2010. With such dramatic figures it is not surprising that more than 10% of the adult UK population has some form of bad credit rating in their financial history. The good news is that there are credit cards for that are specifically designed to help those with poor credit ratings get back financial stability.
A poor credit history is likely to prevent individuals from getting most unsecured loans, credit cards and also will often prevent an individual from successfully applying for a mortgage. Due to the recession increasing the cost of living, prepay cards for bad credit are becoming increasingly prevalent as a means to repair ratings as they offer a number of advantages in building credit history.
Credit cards for poor scores are the best way to repair credit ratings, provided you keep up with the payments, as they show that individuals have regained control of their finances and are exercising good financial monitoring on a regular basis. There are of course downsides to using cards for bad credit which will become apparent as we discuss the pros and cons of these cards.
The advantages of credit cards for bad credit
The key advantage of cards that aim to improve your rating is that you can show a financial stability history to future creditors. This allows you to slowly improve your reputation over the course of months, or years, if you have a particularly bad credit rating to begin with. Gaining a good repayment reputation will encourage creditors to trust you with in the future and therefore you are much more likely to receive mortgages and other unsecured loans.
Other advantages of cards aimed at those with poor credit history are that they are essentially the same as those for normal cards. You get the freedom to make payments immediately for purchases and bills, and get to spend money you otherwise wouldn’t have. In this respect cards for bad credit work in much the same way to normal credit cards.
The disadvantages of credit cards for poor credit history
Cards for poor credit obviously come with severe disadvantages as the companies providing them must secure debt against the risks of non-payment that bad credit entails. For this reason cards for lower scoring citizens will typically have a very high APR (Annual Percentage Rate). The average rate is typically over 20% so if for any reason you fail to make a payment you need to be prepared for a large additional fee. The other disadvantages are that you typically do not receive any of the benefits that other cards offer which takes away some of the advantages of having a credit card.
So should I use credit cards for bad credit?
Cards for bad credit are one of the easiest ways to absolve yourself of bad credit so should consider applying for one if you are secure in your current finances and will predominantly be using it as a means to improve your credit rating; rather than as a means to support yourself or cover unpaid bills.
It may be a shock for you to hear this but there are almost 60 million American people who are not in the position to get credit. And this is why there is a tremendous need for prepaid credit cards.
Shocking no doubt, but also very true
This large number of Americans who do not meet the qualifying criteria to avail of credit mainly consists of the people who are young as well as members of minority groups and unbanked people. These people are almost always faced with one big dilemma – how do they build their credit score if nobody wants to give them the opportunity?
But, there is a solution that is offered to this and it comes from the very same companies that do not offer the people.
The solution lies in the form of prepaid credit cards
There are a huge variety of these prepaid cards that are available. These have been designed so that they can be used as per the needs of various market segments.
These cards are of real great value as they have been made just to meet the needs of those people who fail to meet the qualifying criteria for getting a regular card. Or in other cases, people who have once been eligible for applying for credit cards, but no longer qualify now as they have now lost their credit because they have defaulted in their payments and other kinds of reasons.
There are many advantages to having cards that are prepaid
Having a prepaid card is really great for anyone who does not have a regular credit card or for people who do not have any kind of a credit history or for those people whose credit history is insufficient. In fact this type of a card is also ideal for a person who has a credit rating which has been tarnished.
These types of cards are just awesome as they are a very good and highly effective way of slowly but surely building up a good credit score. Now, this is not going to take place overnight, so do not be misled. But, you can bet that, given time, if you play your cards right, this will definitely help improve your credit rating.
Also you can use these prepaid cards just like you would use any normal credit card to make various kinds of purchases like: buying things online, reserving hotel rooms, purchasing tickets for flights, etc.
There are a lot of criteria to consider when seeking the best current account. The best bank account for one individual may not be the best account for their neighbor. The first step in finding the best account is to make a list of what you are looking for in an account. Only then does the research and comparisons begin. There are several criteria to consider when deciding which bank account is the best one for you. These include:
- The type of account, whether a checking, money market, savings, or another type of account. This article assumes you are seeking the best checking account available.
- Do you want or require overdraft protection?
- If you keep a lot of money in the account, do you want to earn interest on the funds in the account?
- Your credit history will affect your ability to open certain accounts and obtain some services. If you have any bad marks on your credit history, check out the credit requirements carefully for each account evaluated.
- If you need a special type of checking account, such as a business account, determine all the business services offered at a bank. Developing long-term banking relationships is especially important for business people.
- Online access may or may not be important, as well as additional features such as online bill payment, automatic deposits, transfers, etc.
- Some accounts will require a minimum deposit and maintenance of a certain amount to receive the best benefits, such as the highest interest rate or no fee checking.
Some of the banks to consider when shopping for the best current bank account are among the largest UK and foreign banks operating in the UK. Consider starting the search for the best current account by examining offerings from the following financial institutions: Santander, Lloyds TSB Bank PLC, Coventry, NatWest Bank PLC, The Royal Bank of Scotland PLC, Northern Bank Limited, Northern Rock, Leeds BS, and Ulster Bank (NI) Ltd. There are others, but this list will start you on your search.
Be careful of the incentives offered when opening a new account. Many banks proffer inducements to switch accounts, some of which are offered for only a limited time on the new account. The Santander Account will give you 100 pounds when you transfer online. The bank also offers a 5% interest rate on balances up to 2,500 pounds. However after 12 months the interest rate drops to 1%. The bank also requires a minimum monthly deposit of 1,000 pounds to qualify.
When looking for the best current account take the time to research, evaluate, and compare accounts available at the various financial institutions. Investigate all of the incentives, limitations, and requirements when seeking the one which will meet your specific needs. Evaluate and compare the range of accounts, and you will find the top one that matches your requirements.
Mortgage Loans are repaid in several years. So, a borrower prefers to borrow the mortgage loan at the minimum interest rate possible. However, there are many factors that affect the mortgage rates. It is important to note that some of these factors are pre-decided while others are determined by the lender for different borrowers. Here are some of the most important of the factors that influence the mortgage rates.
Existing Market Conditions
The Bank of England decides a base interest rate, depending upon the existing market conditions. For example, factors like inflation, availability of credit and supply-demand forces drive the mortgage rates during a particular period. These factors can’t be controlled by the borrower and are not determined by the lender.
Type of Mortgage
The type of mortgage product you buy also decided the mortgage rate. For example, the adjustable rate mortgages are considered to have lower interest rate than the Fixed Rate Mortgages in the beginning. So, make sure to learn about different mortgage plans to decide the rate that you can afford.
Credit History
A mortgage lender offers low mortgage rates to the borrowers with good credit history. For example, a borrower with good credit score and track record of repaying previous loans on time is considered to be eligible for low mortgage rates. Credit history is a factor that can be controlled by the borrower to obtain decent mortgage rates.
Mortgage Deposit
Mortgage deposit or down payment is the amount that a borrower contributes towards the purchase of the house. Higher the borrower is able to contribute, lower are the mortgage rates offered by the lender. This is because a borrower paying higher deposit is expected to be at lower risk by the lender.
Type of Property
Another factor that decides the Mortgage Rates is the type of property you wish to purchase. Those buying their first home are less likely to default and can expect low mortgage rates. Moreover, a commercial property obtains higher mortgage rate as compared to a residential property. Location of the property is another factor that decides the mortgage rate.
Some other factors that affect the Mortgage Rates are the closing cost considerations, income of the borrower and the amount of money borrowed as mortgage. The mortgage loan term is another factor in this direction.
One good way to find low mortgage rates is by comparing the mortgage quotes offered by various lenders online. You can also hire the services of a mortgage broker who can help you get the desired Mortgage Rates.
Why are there so many card companies that issue reward credit cards? Well, one of the reasons for this is that card issuers keep on competing with banks and lending firms in getting bigger market share. They use unique credit card rewards to attract more consumers to apply for and use the plastic cards they offer.
Not only that. Card companies also use reward credit cards to retain the current set of consumers that they have. Through great reward programs, they can effectively reduce the chances of losing their cardholders to their competitors.
Common Credit Card Rewards
What are some of the usual rewards that you can get from reward credit cards? Well, some business establishments like hotel chains and airlines provide free hotel accommodations and free flights to their loyal patrons. Meanwhile, department stores and shops provide discounts, gift checks and freebies to reward credit cardholders.
There are also card issuers which offer cash-back incentive programs. Through such programs, consumers can receive rebates every time they use their cards in making purchases and in paying their monthly bills.
Pointers on Obtaining and Using Reward Credit Cards
Now, let us tackle four pointers that consumers must remember when they apply for and use a reward credit card.
1. Know your reward preferences. See to it that you only get a credit card reward program that suits your needs as well as your lifestyle. For example, if you travel regularly, then it will be beneficial for you to get a frequent-flier-miles reward credit card. On the other hand if you love to shop, then you might as well get a program that can give you credit card rewards in the form of discounts and gift certificates from your favorite stores and commercial establishments. In so doing, you can have the assurance that your reward credit card will certainly work to your advantage.
2. Determine the terms and rates of your reward program. Before signing up for a reward credit card, make sure that you read and understand first the terms, rates and conditions imposed on your card program. Know also the credit card rewards that you can earn from using your card. This way, you can devise a plan by which you can maximize the benefits you can enjoy from using your chosen credit card program.
3. Know the point system employed by the card program. Inquire about the scoring system used by the card company. And ask where you can redeem your credit card rewards. Knowing these things will give you the motivation to use your card regularly so that you can soon enjoy the gift items or the unique experiences that your reward credit card can give you.
4. Determine the expiration date of your reward points. Some credit card rewards impose expiration dates on the points that their cardholders earn. Thus, you need to know exactly when your points will expire. This way you can convert them and redeem the rewards you want before it becomes too late.
You also need to remember that losing your points to expiration can mean wasting the money you spent to earn them. So always be mindful of the expiration dates of your reward points.
Employ these simple pointers and we assure you that you can obtain and use a reward credit card that will suit your needs as well as your lifestyle.
You have just applied and received your very own reward credit card. You chose to receive shopping discounts and gift checks over the other credit card rewards offered by the card issuer. After all, you love to shop and your preferred rewards perfectly suit your needs and your lifestyle.
Now, you are facing a dilemma. You want to handle your reward credit card responsibly. But at the same time, you want to maximize the benefits which you can enjoy from your plastic card. So, how can you do both? To answer your query, we encourage you to read the next part of this short article.
Reward Credit Cards Tips 1. Never charge more than what you can afford to repay. A lot of consumers think that the more frequent they use their credit cards, the more credit card rewards they can surely get. Although this may be true, charging all your expenses, purchases and bills on your reward credit card can cause you to fall into debt traps. Regular spending with the use of your card may result to uncontrolled debt that will certainly prove very difficult to pay off.
Thus, you need to carefully consider the amount of your purchase before charging it on your credit card. This way, you can avoid incurring large debts as well as inflicting damage to your credit report.
2. Avoid going over your credit limit. Never max out your reward credit card, even if you can afford to repay your credit obligation. Remember that a big percentage of your credit rating depends on your level of debt. So, if you possess a high level of debt because of spending more than your credit limit, for sure you will lose valuable points from your credit score. And this will surely reduce your financial prospects. So you must resolve never to spend more than your credit limit.
3. Pay your credit charges completely. If your reward credit card charges high interest rates and penalties, then you have to make complete payments of your card balances each month. This will help you avoid accumulating large credit card debts and paying a great deal of money on interest.
You should also remember that paying your monthly dues prudently and completely generates a positive effect on your credit standing. Such good credit habits can help you maintain or rebuild your credit history. Thus, you have to see to it that you pay your credit charges on time and in full each month.
4. Have the discipline to put money aside. If you charge a purchase on your reward credit card, always remind yourself to deduct that amount from your monthly budget. Set aside the cash allocated for that particular purchase and use it to pay your credit card balances.
Observe these steps closely and for sure you can maximize the benefits that you can enjoy from your reward credit card. Not only that. By following the tips enumerated above, you can also succeed in handling your reward credit card in the most responsible way possible.