MWC 2018 | All-in-one wallet card to spell end of individual credit card?

A single card that allows shoppers to access various payment options from multiple accounts is being displayed at the Mobile World Congress (MWC) in Barcelona. Jim Drury reports.

source: interaksyon.com

How to Reduce Your Credit Card Interest Rate

One of the most depressing things about having credit card debt is the fact that the high interest rate can mean that most of your monthly payment (if you carry a balance) goes to paying interest, rather than reducing your principal. This can mean a long, slow slog as you try to pay off debt.

However, you might not have to keep paying that interest rate. In some cases it’s possible for you to reduce your credit card interest rate… just by asking.

Steps to Reduce Your Credit Card Interest Rate

Is your credit card interest rate 18% or higher? Call the number on the back of your card, tell them you have seen lower rates and chances are that you can get them to lower it. It’s not always that simple, of course, but it’s a start.

Call and ask to speak to someone about your interest rate. In some cases, representatives are allowed to drop your interest rate by as much as 3% in order to retain you as a customer. If the first representative can’t help you, ask for someone who can help you lower your interest rate.

Your best leverage during the is if you have a recent offer in the mail with a low introductory rate of 0%-10%. Many credit card issuers are willing to drop your rate if there is the chance that you will take all of your money elsewhere. They’d rather have you pay some interest than ditch them and pay no interest at all.


If you don’t have a recent offer, check out the best current offers on low interest credit cards and balance transfer credit cards. Anytime you can offer a concrete possibility for switching to someone else, you have a bit of leverage during the phone call.

If you have been paying your minimum payment on time and they consider you a good customer, they will likely be willing to work with you to negotiate a lower rate. If, even after you have mentioned that you will switch your business, and they still refuse to lower your rate, remain polite and make ready to transfer your balance.

Tips for Speaking with Representatives on the Phone

If you want to reduce your credit card interest rate, you will need to make sure that you have it together on the phone. Here are some tips for speaking with credit card companies:

• Be polite: Don’t get rude. Remain polite and calm throughout.
• Ask for what you want: Be straightforward about how you want a rate reduction. Be clear that is what you want, and ask the representative to connect you with someone who has the authority to make it happen.
• Be prepared: You can create a script, or jot down some talking points. Also, be prepared to carry through on your threat to transfer your balance elsewhere.

If you phone your credit card company and get your rate lowered, please leave a comment and let us know what your rate was and what it’s at now!

source: canadianfinanceblog.com

Venezuela, where a hamburger is officially $170

CARACAS - If a visitor to Venezuela is unfortunate enough to pay for anything with a foreign credit card, the eye-watering cost might suggest they were in a city pricier than Tokyo or Zurich.

A hamburger sold for 1,700 Venezuelan bolivares is $170, or a 69,000-bolivar hotel room is $6,900 a night, based on the official rate of 10 bolivares for $1.

But of course no merchant is pricing at the official rate imposed under currency controls. It's the black market rate of 1,000 bolivares per dollar that's applied.

But for Venezuelans paid in hyperinflation-hit bolivares, and living in an economy relying on mostly imported goods or raw materials, conditions are unthinkably expensive.

Even for the middle class, most of it sliding into poverty, hamburgers and hotels are out-of-reach excesses.

"Everybody is knocked low," Michael Leal, a 34-year-old manager of an eyewear store in Caracas, told AFP. "We can't breathe."

Shuttered stores

In Chacao, a middle-class neighborhood in the capital, office workers lined up outside a nut store to buy the cheapest lunch they could afford. Nearby restaurants were all but empty.

Superficially it looked like the center of any other major Latin American city: skyscrapers, dense traffic, pedestrians in short sleeves bustling along the sidewalks.

But look closely and you can see the economic malaise. Many stores, particularly those that sold electronics, were shuttered.

"It's horrible now," said Marta Gonzalez, the 69-year-old manager of a corner beauty products store.

"Nobody is buying anything really. Just food," she said as a male customer used a debit card to pay for  a couple of razor blades.

A sign above the register said "We don't accept credit cards."

Lines for necessities

An upmarket shopping center nearby boasted a leafy rooftop terrace, a spacious Hard Rock cafe, chain stores for Zara, Swarovski and Armani Exchange.

They were all virtually deserted except for bored sales staff.

Instead a line of around 200 people was waiting patiently in front of a pharmacy.

They didn't know what for, exactly, just that the routine now was to line up for daily deliveries of one subsidized personal hygiene product or another -- toothpaste, for instance -- and grab their rationed amount before it ran out, usually within a couple of minutes.

"We do this every week. And we don't know what we're trying to buy," said Kevin Jaimes, a 21-year-old auto parts salesman waiting with his family.

"What's frustrating is when you get into a gigantic line but they run out before you get any."

The alternative then is to turn to black market merchants who sell goods at grossly inflated rates, often 100 times more than the subsidized price tag.

Jaimes lives with his family of seven, and tries to get by on a monthly salary of 35,000 bolivares -- in reality, around $35.

That sum is too paltry for him to even think about dropping into the cinema upstairs in the center, where tickets are 8,800 bolivares.

If somehow he could, he'd find the same sort of entertainment being shown in American multiplexes: "The Jungle Book," "Captain America: Civil War," and "Angry Birds."

But motion pictures and popcorn, while maybe an enticing diversion, are luxuries Venezuelans these days can ill afford.

source: interaksyon.com

The Best Student Credit Cards of 2016

These days, if you want to be able to buy a house later or get a good deal on your insurance rates, you need good credit. One of the easiest ways to build good credit is with the help of a credit card. If you are responsible in your use of credit, making occasional purchases and paying them in full before you are charged interest, you can build a good credit history.

The best student credit cards in Canada help those who have little to no credit established themselves. You can start building a financial reputation with the right credit card. Below are the best credit cards for students.


Scotiabank SCENE VISA Card – You can build your credit and earn cool movie rewards with the SCENE VISA card. Earn one point for each dollar you spend anywhere, and redeem those points for movie admissions and concessions. You can earn extra points (five for each dollar spent) at participating Cineplex locations.

There is no annual fee with this student credit card, and you get 2,000 bonus points with your first SCENE VISA card purchase. That’s enough for up to two free movies. Buy what you normally would, pay off the balance, and then get your entertainment for free. (Full Review)


MBNA Rewards Student Awards Card – This is a very straightforward credit card that can be used to build your credit history while earning rewards. You receive one point for each dollar that you spend. The MBNA Rewards Student Awards card also provides you with 1,000 points after your first purchase, and you get 1,000 bonus points each year on your cardmember anniversary. Points are flexible, and can be redeemed for merchandise, travel, cash back, and even charitable donations.

This card comes with no annual fee. You are also not capped on how many rewards points you can earn. The interest rate is 19.99% for all transactions from purchases to balance transfers to cash advances.


Scotiabank L’earn VISA Card – Earn up to 1% back every year with the L’earn VISA Card from Scotiabank. There is a tiered rewards system, starting at 0.25% cash back and working up to 1%. If you use your card wisely, though, paying for things you would buy anyway, it’s possible for you to earn rewards quickly and get that cash back faster.

There is no annual fee with this credit card, which means that you don’t have to worry about extra costs. The interest rate is 19.99% on purchases and 21.99% on cash advances and balance transfers. You can also get special discounts with various partners. Scotia bank also offers student credit tips for free so that you can learn how to best manage your credit card. You need to apply for this card at a branch, or by calling 1-888-882-8958.

source: canadianfinanceblog.com

Mandarin Oriental says hackers stole credit card data

NEW YORK — Hackers broke into the Mandarin Oriental luxury hotel group’s database and stole credit card information from “an isolated number” of its properties in the United States and Europe.

“The incident is a direct result of an unauthorized cyber-attack,” the Hong Kong-based group said in a statement Thursday.

“Unfortunately incidents of this nature are increasingly becoming an industry-wide concern and therefore we have also alerted our technology peers in the hospitality industry.”

The hotel group said the breach came from malicious software that was “undetectable by all anti-viral systems.”

Mandarin said it had removed the malware and was “coordinating with credit card agencies, law enforcement authorities and forensic specialists to ensure that all necessary steps are taken to fully protect our guests and our systems across our portfolio.”

The luxury lodging group did not identify the hotels affected but said none of them were in Asia.

“We can confirm that only an isolated number of hotels in the US and Europe have been affected,” the statement said.

“Moreover, from the information we have to date, the breach has only affected credit card data and not any other personal guest data, and credit card security codes have not been compromised.”

Part of the Jardine Matheson group, Mandarin Oriental operates some 45 hotels in 25 countries.

source: interaksyon.com

Debit card issuers told to put in place safeguards against fraud

MANILA - Monetary authorities have ordered banks that issue ATM debit cards to protect their clients from fraud by adopting the Europay Mastercard Visa (EMV) chip-enabled technology.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said its Monetary Board has issued a circular containing the guidelines for dropping magnetic strip technology in favor of the more secure EMV chip for ATM debit and prepaid cards.

Credit and ATM cards that rely on the magnetic strip have been susceptible to fraud schemes, including card skimming. In light of this, the BSP had ordered credit card issuers to migrate to the EMV chip technology no later than January 1, 2017.

The recently approved guidelines pertain to proprietary debit cards as well as to cash advance transactions of credit cards made through ATMs. The BSP's latest rules however don't prevent issuers of co-branded cards from adopting safeguards laid down by international payment networks, as in the case of a local bank issuing a debit card whose transactions are accepted by the Mastercard or Visa payment system.

BSP said its latest guidelines are meant to manage risks while the banking system shifts to the EMV chip-enabled technology without disrupting ATM and point-of-sale transactions.

Monetary authorities have given covered banks 60 days from the date of the latest circular to submit their updated EMV migration plans.

source: interaksyon.com

Banks ordered to provide more detailed info on credit card business

MANILA - The Bangko Sentral ng Pilipinas (BSP) is requiring banks and other financial institutions to submit monthly credit card business activity reports (CCBAR) containing data on credit card issuers, cardholders, complaints, and card use location.

The BSP intends to enhance its credit card database to ensure transparency and availability of information on credit card operations and complaints resolution, and afford analysis of the credit card industry for policy-making.

The new rules are contained in Circular 812.

The CCBAR, which will be submitted in monthly, aims to ensure consumer protection as well as managing risks involved in credit card transactions, banks/quasi-banks including subsidiaries and affiliates.

The BSP aims to capture more credit card data, including the number of credit card holders in the country. To date, the BSP regularly reports data on credit card receivables of banks, including that portion which is non-performing.

Credit card receivables climbed 11 percent to P131.9 billion in the first quarter, from P118.8 billion in the same three-month period last year. Universal and commercial banks held bulk of the receivables at 82.6 percent, with their subsidiaries cornering the remaining 17.3 percent.

Non-performing receivables increased to 11.2 percent of total credit card transactions, but eased to 13 percent of big banks' total amount of bad loans.

Recently, the BSP issued new rules to strengthen the security banks and non-bank financial institutions' electronic products, including credit cards.

The regulation requires BSP-supervised institutions to adopt end-to-end Triple Data Encryption Standard (3DES) for the whole ATM network by January 1 and shift from magnetic stripe technology to more secure WMV chip-enabled cards by August 1, 2017.

source: interaksyon.com

Citibank, Visa launch contactless credit card payment scheme

MANILA - Citi and Visa have introduced the first contactless credit card payment technology in the Philippines.

Called the Citibank Visa payWave, the new product is expected to widen Citi’s share of the local credit card business, which is contributing half of its revenues in the country.

Bea Tan, Citi consumer business manager, said the bank’s sales posted a good double-digit growth in the first half of the year on the back of the country’s sustained economic growth.

“It’s (sales) actually been pretty good. In the first half of the year, our growth has exceeded our expectations. The country is doing well in terms of drivers and profitability. It’s good to see that the country is growing so that we’re introducing innovation to our customers. Hopefully, this will change the payment behavior of our customers,” Tan told reporters during the payWave launch last week.

She said the innovation in the mode of payment for credit card transactions would support growth in the bank’s consumer business.

Tan said the bank’s credit card business contributes 50 percent of its total sales. Citi has 1 million credit card holders in the country, where it has a 20 percent share of credit card transactions.

 “In 2014, we foresee that given that the economy is doing very well for us, we will be able to open up more segments. We’re looking at high double-digit growth for next year in terms of customer acquisition. It will be something we can focus on next year,” Tan said.

Iain Jamieson, Visa country manager, said the credit card transactions would increase significantly, particularly the frequency of credit card use.

“Contactless payments will spur the country’s evolution towards cashless society,” he said.

With the new Citibank Visa payWave, cardholders can simply wave their cards in front of a Visa payWave reader to pay for their goods. The contactless payment would reduce time waiting in checkout queues for everyday purchases such as groceries, fastfood meals, coffee, and movie tickets.

The Citibank card holders don’t need to sign for purchases below P2,000 but are given the option to collect the receipt.

On average, Visa payWave transactions can be up to three times faster than cash payments, reducing queuing times for both cardholders and retailers.

“We are delighted to introduce our clients to a new way to pay with their credit cards where they simply wave, pay and go,” Citi country officer Batara Sianturi said.

Citibank has seven merchant partners so far, including Coffee Bean and Tea Leaf, Eastwood Cinemas, Lucky China Cinemas, McDonalds, Mercury Drug, Newport Cinemas and Robinsons Supermarkets.

Citi also has pioneered mobile-based payments with credit cards, real time account inquiry with SMS and account management convenience with combined credit limit for multiple Citi cardholders.

source: interaksyon.com

My Kid's Drowning in Credit Card Debt! What Do I Do?

If you trusted your son or daughter to keep track of their finances, and they slipped up, what in the world are you supposed to do?

Let's say they've racked up a big, nasty credit card debt -- to the tune of thousands of dollars. Should you pay off their debts to help keep their credit score above water? Or is it better to let them learn from their mistakes and suffer the consequences? Though each individual situation is different, here are your options, what's at stake, and a few pointers to help you plot your course of action.  



A Personal Loan, With a Contract

If you have the means, think about whether or not you want to loan your daughter the money. Sometimes her debt is manageable enough that you can pay it off in the form of a personal loan to your daughter. You can charge her interest as well, so she learns just how much a high APR can cost her.

But you have to examine the situation from a lender's perspective, rather than simply write a check and expect she'll make payments. What is her employment situation? Will she be able to make payments to you without the security blanket of your relationship making her complacent? Has she typically been a responsible spender in the past, or does she impulsively purchase on a grand scale regularly? If you do decide to help protect her credit history, it's a smart idea to sign a contract with your daughter to make your agreement more official and binding.

If You Co-Signed, You're on the Hook

If you co-signed on your son's account, you're responsible for his credit card debt. Because of regulations passed in the CARD Act of 2009, it's more difficult for young adults to qualify for credit cards, so more and more parents are co-signing on accounts and acting as guarantors for their children. If you've already taken that step, you should hopefully have realized that your son's purchases will affect your credit, regardless of your involvement.



 In this case, it may be more prudent to pay off the debt if you can, cancel his account, and work together to come up with a payment plan to rectify the situation and make sure it never happens again. If you haven't co-signed yet, sit down for a serious conversation with your son on your values and financial responsibility.

Lessons to Be Learned?

Bad credit now will impact her financial future later, but so will bad habits. If your daughter doesn't learn from her mistakes now, there could be bigger and more damaging mistakes ahead. Will bailing your daughter out of her financial mess with creditors make her realize the gravity of her mistake? Or will you just end up fostering her sense of dependence on you? You won't always be there, wallet in hand to save her, so if she can manage to take the credit hit, perhaps it's best to let her learn her lesson this time, and give her some tough love.

Communication Is Key

Loaning money to someone you love is always, always messy. While your son should intellectually know that your love is unconditional (which is why your help comes so willingly), for him, it's emotionally very difficult to face your parents when you owe them money. Plenty of relationships have been ruined by debts of personal loans, both from neglected payments and feelings of shame. Be sure that if you choose to help your son, you commit to maintaining an open dialogue and doing your best to keep business and family separate.

Ultimately, each family and financial situation is different. But before you make a plan to tackle your son or daughter's debt, you need to examine the situation from all angles. There are many factors in play, but above all, your relationship and your child's sense of responsibility from this learning experience should be at the forefront of your mind.

source: dailyfinance.com

How to Get Cash Back on Purchases - Without a Credit Card

Rewards credit cards have become so ubiquitous -- and their cash-back rewards so lucrative -- that it's become a common refrain that you're leaving money on the table if you don't have one. But amid all the talk of rotating categories, double rewards and sign-up bonuses, it's easy to forget a simple truth about rewards cards: Many people can't get them.

The truly premium credit cards -- those that provide solid cash-back rewards without an annual fees -- are typically reserved for those with very good credit, which leaves many people without an invitation to the cash-back party. And even if you've got good enough credit to qualify, you might decide you don't want to incur the temporary hit to your credit score caused by opening a new account.

Here's the good news, though: You don't need a credit card to get cash-back rewards. There are a couple of other options.

It Pays to Be Loyal

One is to join store loyalty programs, which usually provide combinations of members-only markdowns and cash-back benefits. CVS (CVS), for instance, has its ExtraCare card, which in addition to discounts also offers 2 percent cash back on most purchases, with the rewards disbursed on a quarterly basis. Safeway (SWY) offers 1 percent cash back on groceries, which can then be used to get as much as a dollar a gallon off your gas purchases. Neither requires you to sign up for a store credit card, so you can get these rewards regardless of your credit situation.

The downside is that retailers like Safeway and CVS are exceptions, not the rule: In general, if you want store-specific rewards, you have to sign up for a store credit card, which can be dangerous to your financial health, especially if you carry a balance.

Cutting Yourself in on the Commission

The other way to get rewards is to go through a website that offers cash-back deals.


These websites aren't selling products directly; instead, they're referring you to products sold on e-commerce sites. One example is FatWallet, which aggregates deals, sales and discounts. If you click on a deal or sale, you're first taken to an interstitial page informing you that you can get cash-back from FatWallet if you make a purchase at the retailer's site.

There's no credit check or extensive registration process: Just create an account with a username and password, and henceforth you'll get varying levels of cash-back when you buy something after following a link from FatWallet. How varying? Anywhere from 1 percent to 40 percent, depending on the destination site and what you're buying there. Most merchants offer between 1 percent and 5 percent; visiting Amazon via FatWallet, for instance, will get you 3 percent cash back, but only if you're buying from the shoe, automotive or Amazon Local departments.

A Win-Win Arrangement

It might sound too good to be true, but it makes perfect business sense for all involved. Online retailers want to encourage other sites to link to their products, so they give out referral commissions -- a cut of the sale to whichever site referred the customer. Sites like FatWallet take a percentage of that commission and give it back to the customer, and everyone wins: The online store gets a sale, the referring site gets a commission, and the customer gets some cash back.

(Rewards cards operate on a similar principle: Stores get a sale, banks get a portion of that sale in the form of a swipe fee, and customers get a cut of that fee.)

FatWallet isn't alone in providing cash-back rewards. There's ExtraBux, which promises up to 30 percent in cash-back deals; current deals include 8 percent cash back from GNC, which is on top of a 15 percent discount offered via coupon code. There's eBates, which says that it has earned members more than $100 million in cash back. Another is ShopAtHome, which currently offers 7 percent cash-back for select deals from Walmart. TopCashback, meanwhile, has a slightly different business model: It says that it passes 100 percent of its sales commission on to the user, instead making its money through Google ads.

These sites can offer even better cash-back rewards than credit cards, which usually offer a standard 1 percent cash-back across the board and 5 percent on certain rotating categories. The downside is that you're a lot more limited on where you can get that cash -- only certain online retailers participate, and those that do may restrict the offer to certain products.

Still, it's nice to know that people with poor or even nonexistent credit can still score cash back just by shopping via one of these sites. And keep in mind that they aren't just for the credit-challenged: If you use a rewards card to shop through a cash-back site, you're getting rewards from both parties.

Isn't it nice to get paid to shop?

source: dailyfinance.com

NBI nabs 6 Taiwanese implicated in credit card fraud

MANILA - The National Bureau of Investigation has arrested six Taiwanese nationals allegedly involved in credit card fraud and the duplication of ATM cards. One of them tried to bribe the agents with P500,000, and was promotly slapped with a separate charge of attempted bribery.

A report submitted to NBI Director Nonnatus Caesar Rojas on Thursday named those arrested by members of the NBI Cybercrime Division as: Cheng-Yen Yu, 25; Chih-Cheng Chang, 35; Chia-Hung Hung, 26; Sen-Yuan Wu, 24; Chun-Kai Tsou, 25 and Wen-Hao Wu, 26, all with address at Unit 4D, Regency Park Townhomes, J. Abad Santos Hi-Way corner E. Aguinaldo Street, Clark Special Economic Zone in Pampanga.

The six have been charged with violation of Republic Act 8484 or the Access, Devices, Regulation Act of 1998 before the Pampanga Prosecutor's Office.

Chih-Cheng Chang is also facing an additional complaint for corruption of public officials for attempting to bribe the NBI operatives.

Seized by the NBI-CCD team from the suspects were the P500,000 cash used in trying to bribe the agents, counterfeit automated teller machine cards and counterfeit credit cards, electronic gadgets used in illegal duplication of credit cards and ATM cards, and documents.

The NBI arrested the six Taiwanese nationals last June 4 after a series of surveillance operations.

Found in the suspects' possession were several electronic gadgets, devices, ATM cards, credit cards, and documents with Chinese characters which were being used and intended to be used in the illegal activities of duplication, unauthorized use/access of credit cards/ATM cards.

source: interaksyon.com

Global $200 million credit card hacking ring busted

NEW YORK — Eleven people in the United States, the UK and Vietnam have been arrested and accused of running a $200 million worldwide credit card fraud ring, U.S. and UK law enforcement officials said on Wednesday.

Federal prosecutors in New Jersey said they had filed charges against a 23-year-old man from Vietnam.

They said in a statement that authorities in Vietnam had arrested Duy Hai Truong on May 29 in an effort to break up a ring he is accused of running with co-conspirators, who were not named in the statement.

“One of the world’s major facilitation networks for online card fraud has been dismantled by this operation, and those engaged in this type of crime should know that they are neither anonymous, nor beyond the reach of law enforcement agencies,” Andy Archibald, interim deputy director of the National Cyber Crime Unit, said in a statement on the British government’s Serious Organized Crime Agency website. (here)

The arrests were coordinated by the three countries, the statement said.

The arrests come as law enforcement officials around the world are cracking down on Internet-related heists. Two weeks ago, authorities raided Liberty Reserve, a Costa Rica-based company that provided a virtual currency system used frequently by criminals to move money around the world without using the traditional banking system.

Earlier last month, authorities arrested seven people involved in a $45 million heist in which hackers removed limits on prepaid debit cards and used ATM withdrawals to drain cash from two Middle Eastern banks.

“It’s rare that you find actual human beings behind these things,” said Mark Rasch, a former cyber crimes prosecutor and now a lawyer in private practice in Bethesda, Maryland. “Usually you can tie them to organizations or hacker handles, but it’s harder to find individual people.”

Rebekah Carmichael, a spokeswoman for New Jersey U.S. Attorney Paul Fishman, said the charges were filed in New Jersey’s federal court because some of the victims of the scheme are residents of the state.

Prosecutors claim Truong and accomplices stole information related to more than a million credit cards and resold it to criminal customers through the websites www.matteuter.biz and www.mattfeuter.com, according to a criminal complaint filed in federal court in New Jersey.

According to the complaint, Truong hacked into websites that sold goods and services over the Internet and collected personal credit card information from the sites’ customers. “The victims’ credit cards incurred, cumulatively, more than $200 million in fraudulent charges,” the complaint said. The scheme began in 2007.

“Like many ‘carder’ cases, this is an international conspiracy,” Rasch said, adding that a recently passed computer crime law in Vietnam had made it possible for Vietnamese authorities to participate in the multinational sting.

Although Truong has been charged in the United States, he does not have a U.S.-based lawyer because he is being held in Vietnam, Carmichael said.

source: interaksyon.com

How to Restructure Credit Card Debt

For consumers struggling to make ends meet and racking up credit card debt and barely making minimum payments, hardship programs might provide a welcome relief.

Many credit card companies offer these programs that target borrowers who have fallen behind on payments. They typically offer debtors lower interest rates as well as reduced payments, fees and penalties. In general, most hardship programs fall into two categories: short-term, which could be for a few months or up to a year, or permanent which is until the credit card balance is paid.

Credit card companies don’t publicize these programs because they hurt revenues due to the lowered interest rates. But for most banks, these programs are a better option than not getting any money back as a result of an individual’s default or bankruptcy.

Delinquency: Not a Good Strategy

There are a couple of things to keep in mind when approaching a credit card company about enrolling in a hardship program. Most creditors will want to look at your income and expenses so be prepared to explain your budget. The company will evaluate your ability to pay your debt to determine your eligibility.

They will also look at your account history, so it is a good idea to inquire about the program before falling behind on payments. Using delinquency as a strategy to get your creditor to work out a deal with you is a bad idea. You’ll get a more sympathetic ear if you approach them prior to missing a payment.

Hardship programs are not designed for reckless spenders who have maxed out their credit cards and are looking for an easy way out. They are aimed at debtors who have been hit by catastrophic, life-altering crises like a job loss, major illness, inability to work or loss of spouse or breadwinner. That is not to say that banks will not work with you if you don’t fit into one of these categories.

Stop the Plastic Habit

Be warned that these programs usually mean you will lose use of the credit card. In most cases, your charging privileges will be suspended or revoked. Some companies, however, have programs that restore your privileges upon completion of the program.

Entering a hardship program could also impact your credit score. Before entering the program it is a good idea to ask what repercussions this could have on your credit. Some companies negatively report this information to credit bureaus. Sometimes the negative references on your credit are removed after the program is completed. When negotiating with your creditor about being placed on the hardship track, it is important to understand the card issuer’s policies and the consequences.

The policy on credit reporting depends on the company. Most short-term plans are no more than a year. Long-term plans can go as long as five years. American Express, for example, doesn’t negatively report borrowers on short-term programs. But those who are on long-term programs should expect large dings on their credit regardless of what bank or issuer you owe.

source: foxbusiness.com

Convenient wallet case for iPhone 5

A durable case that delivers device protection in a smart design, which also features a built-in wallet sleeve for up to three cards and cash. This updated version of  CM4’s Q Card Case is the thinnest yet and comes in classic Black Onyx and Pacific Green, as well as two new colors: Red Rouge and Mahogany Brown.

The iPhone 5 version was specially crafted to fit the new Lightning dock adapter so that users can continue to use their 30 pin accessories. The Q Card Case is an ideal solution for savvy travelers, people on the go, and anyone looking to slim their pockets and purses for a night on the town.


The case is made from soft-touch rubber and a premium fabric wallet sleeve that fits an ID, credit or debit card, and some cash. As a result, the case features a lightweight but secure fit around the iPhone 5. A protective front bezel with lay-flat Screen Guard design provides an added defense for the iPhone screen.

The case is carefully designed to align perfectly with the iPhone 5’s control buttons to maintain full use of the Apple smartphone, adding less than 4.5mm to the already slim device and maintains access and interaction with all the phone’s functions. Available at cm4.com

source: interaksyon.com

Keep Your Credit Card Safe While Shopping Online

I was at Home Depot at 6:07 a.m. on Black Friday. I needed new Christmas décor, and Home Depot had exactly what I wanted at low prices.

So I got up early, thinking that if I didn’t get there by 6:15 a.m., the stuff I wanted would be long gone. You can imagine how surprised I was when I got there and the store was fairly empty. The employees practically greeted me at the door and offered me coffee and donuts.

Well, of course I said yes to the coffee and donuts. I had the sales flyer with me, so I pointed to what I wanted and the employees collected it all for me in a cart. I was back at my car at precisely 6:17 a.m., happy and on an exquisite sugar high.

I went from Home Depot to Target and had a similar experience, but without the donuts (get with the program, Target!). It was clear to me that folks had decided to shop online. My suspicions were confirmed when I saw the recent numbers from comScore, a company that analyzes the digital world.

Their research showed that consumers have already spent $10.1 billion online, which is a 16% increase over last year. They predict, for the entire season, that consumers will spend $43.4 billion online, which is up 17% from last year.

But enough with boring stats. The fact is, if you shop online, you need to protect yourself. It might be the season of holiday cheer, but it’s also the season of credit card scams.

Here are some things you should keep in mind while clicking your way through the holidays. (See also: The 50 Best Deals and Coupon Sites)

Check the URL

Make sure you see "https" instead of just "http" in the web address. The "s" means it’s a secure site.

Now, according to the FTC, having the “s” isn’t a fool-proof method for identifying a fake website because some scammers try to create a fake “s". Good grief! But at least checking for an “s” is a step you can take to make sure you don’t enter delicate information onto a site without the “s” in the address.

Use a Credit Card

Don’t use a debit card for online shopping. A debit card is linked to your bank account, and if the website gets hacked, the thief will have access to your cash.

Sure, you can probably get most of the cash back over time, but you don’t need such trauma during the holidays. With a credit card, you have much better consumer protections, plus your cash accounts aren’t in jeopardy.

Don’t Fall for Phishing

If you get an email asking you to send your credit card account number and password, don’t take the bait (sorry, I had to get in at least one lousy pun related to fishing).

The email might say you need to update or validate your account due to a variety of issues, including suspected fraud. The email might even look like it came from your bank. No legitimate company will ever ask for this type of sensitive financial information via email.

You have to be alert because scammers get more sophisticated all the time. I got an email that appeared to come from my daughter, who is at college. There was a link in the email, and I caught myself just in time. The scammer was clever to know that I might open the link quickly since it came from my kid. That was a close one!

Check Your Accounts Online for Fraud

This an oldie, but a goodie. I know you’re tired of hearing it, but think about how often you use your credit card at a restaurant and your card leaves your sight. Even if you’re shopping mostly online on a secure, well-known site, you’re still exposed in other areas of your life. And what if the reputable, well-known site gets hacked? It happens.

Avoid Public Wi-Fi

It might be tempting to kick back with a latte in your favorite coffee shop while making purchases online, but it’s not a good idea. Hackers are capable of breaking into Wi-Fi connections at hot spots. Better to get the latte to go and shop at home than take the risk.

Use Virtual Credit Card Numbers

These are also sometimes referred to as “disposable” or “one-time use” numbers. Some issuers offer this service and it allows you to use a temporary number that's tied to your actual credit card account. When you buy an item, you use the temporary number assigned to your account.

So if the site you shopped on gets hacked, the thief can't access your real number. They get a bogus one. This keeps your real account number safe. Now, the details for this service vary by issuer. Visa offers this service, and they call it “Verified by Visa.”

It might sound a little tricky to use virtual numbers, but trust me — the steps are usually pretty simple, and best of all, it’s free.

source: wisebread.com

5 Reasons to Use Your Credit Card for Holiday Purchases

Credit cards tend to get a bad rap. Many people focus on the interest charged, but forget about the perks and the protections that come with credit card use. When used with savvy and intelligence, a credit card can be a valuable financial tool.

As the holiday shopping season ramps up, consider using your credit card to make seasonal purchases. You have the opportunity to earn rewards, and you often receive a number of protections that may not be available with debit cards — and that certainly aren’t available when you pay with cash.

1. Extended Warranty

Many credit cards offer extended warranties among their perks. The extended warranty applies on top of the manufacturer’s warranty. If the item breaks after the standard warranty, but before the credit card’s warranty expires, you can still have the item repaired or replaced.

Consider electronics, which are popular holiday purchases. Many electronics come with a one-year warranty. Many credit cards will provide an extended warranty that covers an additional six months to one year. Instead of paying for the extended warranty at check out, you get the coverage free when you pay with credit card.

Make sure, though, that you understand how to use the warranty. You usually need the receipt (so save it), along with other information. There may also be a time limit for making a claim.

2. Price Protection

Some credit cards, especially the premier cards that charge annual fees, include price protection. If you find a lower price on an item you have already purchased, you can be refunded the difference.

This can be very useful when shopping holiday sales and buying gifts for others. However, price protection usually comes with a time restriction. Normally, the lower price has to appear within 30, 60, or 90 days. Check the policy so that you have an idea of the time limit.

You will need proof of the lower price. Save your receipts, and be sure that you document the lower-priced item. A sales ad promoting the lower price is one of your best options, or a screenshot or printout of an online price on the item.

3. Returns

Some credit cards will reimburse you if you want to make a return but the store won’t allow it. So, for example, if you purchase something, then decide later that you don’t want it, your credit card might refund you the purchase price.

Before you can use this perk, however, you have to try to return it to the store. If you can’t return it, you might receive a refund for the item if you show a copy of your receipt. Often, as long as you apply for the refund within the time limit (usually 30 or 60 days), it doesn’t matter why you wanted the return.

Most credit cards limit the dollar amounts you can be refunded. There is usually a per-item limit of up to between $200 and $500, and often an annual limit of between $1,000 and $3,000. Check your credit card terms for policy details.

4. Dispute Charges on Damaged Online Purchases

I do a lot of my holiday shopping online. Using a credit card provides peace of mind, since I know that if an item is damaged in transit, or if it never arrives, I can dispute the charge. If you are doing a lot of your shopping online, consider using a credit card to pay.

The Fair Credit Billing Act provides this protection to consumers when a purchase arrives damaged — or just isn’t delivered. You can dispute the charge fairly easily, and prevent the retailer from being paid.

Realize that the item has to cost at least $50. The law requires that the seller be within 100 miles of your home address, so this can apply to items purchased at local retailers and have delivered to your home (as in the case of a large appliance or piece of furniture). Many credit cards will still let you easily dispute charges even on items shipped from other parts of the country.

However, you do have to try to resolve issues with the seller before turning to your credit card issuer for resolution.

5. Fraudulent Purchases Don’t Come Out of Your Funds

If someone steals your card information and makes fraudulent purchases, you are often better off if you have paid with a credit card rather than a debit card.

Some debit cards also feature $0 fraud liability, but often with restrictions, such as requiring you to point out out fraudulent charges within two days, rather than the 60 you have with credit card purchases. Additionally, a PIN entered at the time of purchase may negate your claim to receive the same level of protection. If someone has stolen your card and knows your PIN, you could liable for some of those fraudulent purchases.

And even if your debit card provides all of the protections of a credit card, the fact remains that the money disappears from your account almost instantly. You don’t get the money back until after the issuer is satisfied that the case truly involves fraud. During that time, you won’t have access to those funds.

When your credit card is stolen and used fraudulently, the money used isn’t actually yours — it’s the bank’s money. Your money is still sitting in your checking account, safe and sound. You can dispute the charges and have them removed from your credit statement without ever putting your money at risk.

Smart Credit Card Use

Use your credit card for holiday shopping, but make sure that what you spend fits into your budget. You want to earn the rewards and gain the protections, but you don’t want to pay interest. Pay off the balance immediately, and you will receive the benefits without having to pay the costs.

source: wisebread.com

What Are Secured Credit Cards?

There's a reason plastic is so prevalent as a payment method. Cards are small, convenient, and accepted at a wide variety of merchants. But even though various credit cards, prepaid cards, and debit cards look similar and are used the same way, they are not the same.

A secured card, unlike an unsecured card, is connected to a bank account. And a prepaid card is different from both types of credit card in that it is actually a form of debit, and not credit at all.

If you are looking for a way to rebuild your credit, and your options are limited, a secured credit card might work well for you. (See also: How to Rebuild Your Credit in 8 Simple Steps)

Unsecured vs. Secured vs. Prepaid Cards

There are three basic types of credit/debit cards available for your use, most of them branded with the logo of a major credit card company (like Visa or MasterCard) so that your transactions are widely processed. Even though the usage is similar, it's important to understand the finer distinctions

Unsecured Credit Card

This is a "regular" credit card. You are extended a line of credit, accessible via your card. There is no collateral for this line of credit, so if you don't pay your bill, the credit issuer can't just seize a connected asset. Your available credit varies as you charge purchases and then pay them off.

Secured Credit Card

As with a regular unsecured credit card, you are extended a line of credit. However, you have to secure your credit with a savings account. The credit issuer requires you to deposit a set amount of money into a savings account.

Some issuers require you to deposit a certain percentage of your credit line, often at least half. Other issuers will only issue you a line of credit that matches the amount of money you deposit. Most secured cards require between $200 and $1,000 as a deposit.

This money acts as collateral in the event that you fail to pay your bill. You still make regular payments — with money that isn't held in the savings account — and your available credit rotates as you pay off your purchases.

Prepaid Debit Card

A prepaid debit card (sometimes referred to as a prepaid credit card) is a different proposition. You do not actually borrow money at all when you use this card. Instead, you deposit a set amount of money into an account, and you draw on that money for purchases. When the money is spent, you cannot use the card again until you add more funds. This is not actually credit at all. A prepaid card won't help you build your credit score and is useless if that is your goal. (See also: 5 Best Prepaid Debit Cards)

Which Card Type Is Right for You?

Those who want the convenience of plastic, but don't actually want to use credit, often use prepaid debit cards.

Those whose credit history prevents them from obtaining an unsecured credit card, on the other hand, often use secured credit cards as a way to improve their situation and — hopefully — transition toward using unsecured credit.

Advantages of Using a Secured Credit Card

While they're not for everyone, secured credit cards can be a great tool for those with credit problems.

1. Ability to Get Credit at All

The ability to obtain a credit card when you might otherwise be unable to is the biggest advantage of a secured credit card. Because the issuer knows that your savings account can be seized if you fail to make payments, you are likely to qualify for a secured card, no matter how bad your credit situation.

2. Rebuild Your Credit Score

Many secured credit cards can help you rebuild your credit because the issuers report to credit bureaus. Not all secured credit issuers report to the credit bureaus, however. If you hope to improve your credit score, you need to find out ahead of time whether or not your payments will be reported. You can ask the credit issuer or read the fine print to find out whether or not the card will actually help your credit situation.

Regular, on-time payments offer the best chance for you to establish a more positive financial reputation. On top of that, if you show good credit habits for 9 to 12 months, some issuers will allow you to convert your secured credit card to an unsecured credit card. At the very least, a secured credit card can help you rebuild your credit to the point that you qualify for an unsecured card from another issuer.

Disadvantages of Secured Credit Cards

If you do decide to use a secured credit card, there are many disadvantages you need to be aware of.

1. High Fees

The biggest disadvantage of secured credit cards is the cost. Because secured credit cards are aimed mainly at those with poor financial histories, issuers mitigate some of their risk of loss by charging more to consumers. Secured credit cards are known for their high fees and high interest rates.

Secured credit cards often require activation fees of between $25 and $50, and annual fees of up to $75 or more. There are even some secured cards that will charge you between $10 and $50 for an application fee.

2. Low Credit Limits

Additionally, the credit limits — even with the collateral savings account — are often fairly low. In some cases, by the time you pay an activation fee and your initial annual fee, half your available credit is instantly spent.

3. High Interest Rates

Carry your balance from month to month, and the high interest charges will further eat into the funds available to you. While some secured credit cards offer rates of between 13% and 15%, you are much more likely to be charged 22.9% or more. In some cases, the penalty rate (if you are late with a payment or go over the limit) can be in excess of 30%.

How to Select a Secured Credit Card

A secured credit card may be the only viable choice for someone with poor credit or someone attempting to build a credit history from the ground up. Before applying for a secured credit card, though, it is worth applying for an unsecured card. Most consumers turn to secured cards only when it becomes apparent that the current credit situation precludes an unsecured card.

If you decide that a secured credit card is your best option, shop around. Just as there are different offers from unsecured credit card issuers, secured cards come with varying terms and conditions.
Here are five things to look for when shopping for a secured card:

1. Fees

Most secured credit cards come with a battery of fees. Compare fees, and try to find a card that charges less in terms of activation, application, annual, missed payment, late, and over-the-limit fees.

2. Interest

If you know that you will be carrying a balance, apply for the secured credit card with the lowest interest rate. Even a relatively low rate is still high with a secured credit card, but you should do what you can to minimize the damage.

3. Credit Reporting

Verify that the secured credit card issuer reports to the credit bureaus. Read the terms and conditions, or call and ask a representative before you apply for the card. The point of using a secured credit card is to help you build your credit; make sure that the issuer will report your positive behaviors to the credit bureaus, helping you improve your credit score.

4. Transition to Unsecured Card

Find out how long it takes to become eligible for an unsecured card. Some secured credit cards transition to unsecured cards automatically after you show good habits for a set period of time. Other issuers, though, require you to request the change. Find out what the process is, and how long it takes for you to become eligible for an unsecured account. Your best bet is often to simply call the issuer and find out what your options are.

5. Yield on Your Savings Account

The best secured credit cards will pay an annual yield on the money held as collateral in the savings account. While the yield won't be very much, it's still nice to know that the money isn't just sitting idle; it's working on your behalf.

Like many financial products, the secured credit card isn't for everyone. Carefully evaluate your needs, and what you hope to accomplish with your credit card. If you are trying to rebuild your credit, and you can't qualify for other lines of credit, a secured credit card might be your best bet.

source: wisebread.com

4 Ways Credit Cards Manipulate You Into More Debt

Credit cards are engineered to make sure you become a long-term, loyal, and indebted customer. Since many of the decisions that consumers make are not rational, card issuers work on those irrational impulses to make sure you spend money with their card without thinking logically about your actions.

Here are four methods that card issuers use to get you to sign up for their cards and keep you in debt. (See also: Which Type of Rewards Credit Card is Right for You?)

1. Appealing to Your Individuality and Creativity

Once upon a time, credit cards all came in the same boring colors. But sometime in the past 20 or so years, banks started allowing cardholders to express their individuality through their credit cards. Suddenly, you could show off anything from your adorable nephews to your commitment to the Humane Society with every purchase you made.

Part of what is going on here is something behavioral economists refer to as the IKEA effect. This effect causes individuals to value something more if they worked to create it. Not only does that mean you’re more likely to keep the inexpensive IKEA bookcase you put together with your own hands for years after you don’t need it anymore, it also means that you are going to overvalue the credit card whose cover image you chose.

In addition, your pleasure at seeing the chosen image will make you want to show it off — that is, use it more often.

2. Encouraging Instant Gratification

The very essence of credit — putting off payment — is something that appeals to a nearly universal cognitive bias called the present bias. (A cognitive bias is an error in logical thinking that is very difficult for an individual to recognize in himself.) Basically, this cognitive bias makes an individual value an immediate experience over future experiences.

The present bias is why it’s so easy to stay up late to watch the "Doctor Who" marathon even when you know you have to get up early the next day for an important meeting at work. Now is so much more important than later in our irrational minds, it can very difficult to make the responsible decision.

This, of course, is why it is so very easy to get into credit card debt and so difficult to dig out of it. Yes, your future self might need to work overtime every week to be able to make the payments on your credit card, but your now self really wants the big screen TV. Card issuers understand this quirk of human irrationality very well, and they do everything they can to appeal to our “I want it NOW!” tendencies.

3. Triggering Your Restraint Bias

Most people tend to overestimate their own impulse control; they believe that they will be able to show more restraint in the face of temptation than is realistic. This cognitive bias is why your grand plans to lose 20 pounds are often derailed by the first box of doughnuts you see. You have overestimated your ability to be virtuous in the face of temptation.

One way that credit cards use this cognitive bias is by offering to raise credit limits. While some consumers are capable of ignoring that temptation, there are others who will run up their balance to the new limit, even after they have convinced themselves that they can easily handle that much credit.

Another common strategy that triggers the restraint bias is the 0% balance transfer. In these cases, cardholders convince themselves that they can pay off the balance before the end of introductory period. However, many of those who take advantage of these offers are unable to show the restraint necessary to pay off their balance before the interest starts accruing.

4. Making You Fear a Loss of Perks

Many credit cards offer perks, from cash back to travel miles to money for college. The problem with these perks is that in many cases, cardholders are spending much more in interest than they are earning through the perks. Why would they do something so clearly irrational? Because of loss aversion.

Behavioral economists have discovered that human beings tend to irrationally overvalue something they already own or have. For example, plenty of investors have held onto tanking stocks for far too long because they are afraid of losing their original stake. They irrationally hope that the clearly dead investment will recover.

Loss aversion is also the reason why cable companies are happy to offer customers a free trial period of premium channels; viewers are much more likely to pay money to keep from losing something than they are to buy it in the first place.

And of course, loss aversion is a major reason banks offer credit card perks. While cardholders who pay off their balance each month are certainly making money on the perks, the majority of cardholders are not able to do that. If they were, banks would stop offering the perks because they would be the ones losing money.

For most consumers with perks credit cards, the fear of losing the airline miles will keep them charging on a card that they probably should have cut up long ago. They are afraid of losing that “free” flight, even though they are clearly paying for it.

Beware Your Irrational Brain

It can be difficult to responsibly use credit because our irrational brains and the manipulations of the credit industry are working against us. The best way to handle credit is to make sure you are conscious of your decisions and your irrational quirks before you whip out the plastic.

source: wisebread.com

Does Your Credit Score Matter If You Don’t Do Debt?

A long time ago I told my friend Brad from EnemyofDebt.com that not paying attention to your credit score is dumb. I refused to listen to him on all his thousand and one reasons why he could care less, and I thought the fact he said he had a score of “0″ (yes, ZERO) was cockamamy. I’m pretty sure I told him it wasn’t even possible, which I later came to find out was kinda sorta untrue (it’s possible to have no credit score, which in essence is kinda like a “0,” even though it’s not).

Here we are though, 3 years later and much wiser in my age, and I’m starting to come around to the idea a bit more :) Not that I’m sold completely on the whole thing – I’m not, and I’ll totally continue to monitor my own ‘cuz I think it’s smart – but I do see where Mr. Brad is coming from more now. His stance can be simply summed up like this:

If you’re never taking out a loan again, why does your score matter?

An interesting take on the whole score game for sure. Especially if you’ve never really thought about it before. Why DOES your score matter if you don’t  have any loans or credit to your name at all? Is your CASH worth less depending on what your score reads? It’s a cool way to think of things mainly because it’s so drastic. When was the last time you decided to never have a loan or credit card?? Haha… for me it’s probably been a good 25 years, like when I was 7 ;)

And just like I thought 3 years ago when first debating against Brad, some of the same questions remain for those who believe it’s just not that possible:

1. How do you rent an apartment without a credit score?
2. How do you BUY a car without being able to take out a loan??
3. How do you get A HOUSE without taking out a mortgage?? Or mortgageS?

All common occurrences in our lives which we’re just so used to these days – something Brad says is part of the problem: Society has deemed taking on credit and loans as perfectly normal, so people rarely stop to consider the alternatives anymore! Nonetheless the consequences.

But what about those questions up there? What do people like Brad (aka the anti-debtors) say about ‘em? I picked apart an email he had shot me a couple weeks ago where he was doing a Q&A with one of his readers (I had told him if he didn’t put it on his blog  I was going to! Haha…), and he answers all 3 of those questions as he is always known to do: with passion and vigor :)

Renting an apartment without a credit score:

“You can definitely rent an apartment without a credit score. You can check out a service called eCredable.com that allows you to build a payment history to show landlords that you are financially reliable. It allows you to track your payments for utilities, rent, etc. It is a great resource! It’s also great to have an emergency fund savings statement showing how much you have saved up.

If you have no debt, can prove you are reliable, and can show you have savings, most landlords would be glad to have you. As a former landlord myself I know for a fact that a credit score really isn’t a reliable indicator as to how good of a tenant someone will be — financially or otherwise.”

Buying a car without a credit score:

“Buying a car is certainly possible without a credit score, assuming you are planning to buy one without going into debt. Having a car payment is one of the worst ways to own a car. You do not need a car payment to own a car as long as you buy a gently used 2-3 year old car that has had one owner who took care of it and can prove it. I do not recommend getting a car using debt — EVER — therefore your credit score doesn’t really matter when buying a car.”

AKA if you’re paying all *cash* for something, your credit doesn’t even become an issue. And I’d even tack on here that you could get a car for CHEAPER too if you presented the “all cash” option during your initial negotiations! Whether you buy it from a dealer, or from an individual. Here’s a good article Lance did for us the other month on paying cash for a car vs. taking out a loan, for what it’s worth. Even though it’s def. PRO-loanage ;)

Buying a home without a credit score:

“If you’re looking to get a house via mortgage one day, then you can do so without a credit score. It’s not as popular as other routes because society is so attached to their credit scores. It’s called “manual underwriting” and there are places that will take your real life information (renting receipts, eCredable reports, credit history (different than credit score), savings, income, and how much debt you have to evaluate your ability to pay a mortgage. (15-year fixed rate) My wife and I are paying cash for our next house so we don’t even need that.”

While pretty extreme, you can see it IS possible to function in this world without worrying about your credit and/or credit score. It mainly becomes an issue whenever you need to take out that loan or get approved for something/etc. (And maybe when you’re looking to get employment too as many companies now check out your credit too, whether you believe it’s right or wrong). If you have no plans on ever doing it though, why should it matter if you can get an excellent interest rate or not?

Brad ends his email to his reader like this:

“Chasing a credit score is a slippery slope and many experts still believe that it’s the only way to function in today’s day and age. It’s not true though and there are plenty of people living debt free without a single worry or care about their credit scores. It’s just a matter of how much you really want to be, stay, and live debt free. You don’t have to play the credit score game. The choice is yours…”

Interesting stuff to think about either way. Could I do it? No way. I enjoy taking advantage of my credit cards and loans to better leverage my money and (more importantly) my TIME, and I also like trying to compete for the best score too ;) As possible as the non-credit lifestyle may be for some, it’s just not that practical in my world. And I’m totally okay with that as long as things keep pushing forward and I don’t make any stupid mistakes ;) I’ll gladly take on a car loan if I can do something better with my cash instead, and I def. don’t want to wait 100 years to save up enough to buy a house cash-free either! Haha… Though I’ll gladly give Brad mad respect for doing so as it takes a LOT more restraint and patience that I’ll ever have, that’s for sure.

At the end of the day, though, I choose practicality and convenience over extremism. ‘Cuz I know myself well, and I’m confident I won’t get into much trouble using credit towards my advantage.  If you DON’T trust yourself though, or you SUCK at managing debt/credit cards/etc, by all means stay away!!  Maybe give Brad’s take some serious thought and slow things down a bit? There’s nothing wrong with choosing either side here as long as it’s the right one for YOU. So definitely consider your own habits when reading info about this stuff online, or wherever. You personality matters a LOT here.

Thoughts? Questions? Concerns? I’ll try and get Brad to watch this thread in case anyone wants to throw some zingers his way and/or give him props ;) He’s one of my best blogging friends I have, and I know he appreciates a good debate! So let’s see what you’ve got.

source: budgetsaresexy.com

Using a Secured Card to Rebuild Your Credit

Sometimes, things happen and your credit takes a hit. Whether you have made some serious mistakes, or whether you have weathered a financial emergency like a job loss or a medical problem, you might need to repair your credit.

Indeed, your credit situation has a great deal of influence on the rest of your financial situation. Loans cost you more when you have poor credit, and even your insurance rates and other costs can be influenced by your credit situation.


One of the fastest ways to rebuild your credit is with the help of a credit card. Because credit card information is regularly reported to the credit bureaus, you can speed up the rate at which you see solid improvement to your score. Unfortunately, if your credit situation is especially poor, you may not be able to qualify for a “regular” credit card.

In those cases, you might need to turn to a secured credit card in order to help rebuild your credit.

What is a Secured Credit Card?

A secured credit card, or a guaranteed credit card, is one that requires you to provide collateral in order to gain approval. Nearly anyone can be approved for a secured credit card, but you have to guarantee your line of credit with cash. Most of the time, you are required to deposit a certain amount of money into an account connected to your guaranteed credit card. If you miss payments, the credit card issuer can take money from your account, and use it to pay what you owe.

Most of the time, a secured credit card requires that you put in an amount of money that corresponds to your credit limit. Some guaranteed cards, though, don’t require you to put in as much. You might only have to guarantee the card with a percentage of your credit line. In any case, it’s a good idea to find out what is required of you before you sign up for a secured credit card.

You should also be aware that using a secured credit card will come with relatively high costs. You will pay a higher interest rate if you carry a balance, and you might be subject to a battery of fees, including activation fees, annual fees, and other fees. You need to be on your guard when it comes to secured credit cards. They can be useful tools when you have no other option for building your credit, but you need to use them carefully.

How to Use a Secured Card to Rebuild Your Credit

Using your secured credit card to rebuild your credit requires planning and patience. First of all, make sure that you are actually getting a secured credit card. A prepaid debit card is not the same thing. At first glance, they might appear to be the same thing, but they really aren’t. A prepaid debit card won’t report your payments to the credit bureaus, so you won’t see improvement. Verify that you are actually using a guaranteed credit card, and that the issuer will report your history to the credit bureaus.

Once you have your secured card, you need to use it. Realize that the money in the savings account is only collateral. You should make your regular payments with other funds, and not rely on the money being held as a guarantee. Make one or two small purchases each month with your secured credit card. Then, pay off the purchases. Make sure you only buy what you already have money for. You don’t want to carry a balance.

After a few months (usually between nine and 12), you can ask if you can convert your secured card to a “regular” unsecured credit card. Many secured cards offer this option to consumers who make regular payments and show themselves responsible. Even if you can’t convert, as long as you make all your payments on time, and you are up to date on your other bills as well, you should be able to try to apply for — and qualify for — an unsecured card.

Responsible financial habits are vital to the process of rebuilding your credit. If you are careful, you can use a secured credit card to demonstrate your level of financial responsibility, and improve your situation.

source: financialhighway.com