credit card

Insuring You Pay Off Your Credit Card

January 20, 2016 by penn

Most people who have credit cards and then life has thrown them a curve, dream of the day that they will have a zero balance on all of their cards again. The system of credit allows for this, but letting it go too long will wreak your credit history. And recovering from a credit crash is much much harder than building credit in the first place.

[Read: Why You Should Pay Off Your Credit Cards]

So what do you need to watch for if you are in this situation? These simple warning signs will point out if you are possibly in danger of creating a situation that will harm your credit. The earlier you catch these signs, the easier a cure will be. The accomplishment of being able to pay off your credit card is a great goal, and will help with your credit rating.

Making only the minimum payment

If you develop the habit of only making the minimum payment on your cards, you have chosen the slowest, most expensive method to pay off your credit card balance. Yes, you are still making the payments, but you are also impacting how much credit you have available (your balance is taken out of your available credit), plus adding penalties and other fees. And you may lose your rewards, and be turned down for an automatic credit increase. These are not fatal to your income, and you will eventually pay off your credit card. But do the math; using one of the various debt calculators, find out fast you are paying off your credit card, and the effect of paying only $5 more than the minimum per month. You may be willing to make your payments higher once you see these numbers!

Continuing to charge on your card

If you pay your credit card, and then go spend that money during the billing cycle, you are making it harder to pay off your credit card. What you have done is keep the balance exactly where it was- which is great if you are able to pay off your credit card that month, but if you aren’t sure that you can, you have only taken the money you spent on the payment, and not actually changed the balance. This is a good time for a credit card vacation- use it for one thing a month, and add that amount to whatever payment you already are making. You are continuing to use the card, and the payment you made actually reduces the debt.

Working without a plan

Having a plan to pay off your credit card is a needed first step, and will help you resist those impulse purchases that like to crop up once you have ‘extra’ money. Many of the best methods have been written about, but a simple one is getting your credit report, and finding the list of debts you have, along with all of your credit card statements. Budget carefully: you need to make the minimum payment on all of your debts. Selecting the one with the lowest balance and adding extra money to that specific debt. If you have many small debts, you may be able to pay them off quickly. Then, take that same amount (the minimum payment plus the extra money you have spent to pay it off), and apply that to the next-smallest debt. With multiple cards, choose the ones that have the highest interest rates to pay off first. And watch your budget to pay off credit card debt without making more problems!

Other warning signs include:

Multiple people on one card. Having two or more people on one card makes it more difficult to budget for payments, and to avoid going into debt. Communicating about when you spend money on the credit card is a simple way to make sure that you are able to pay off credit card balances together.
Having too many credit cards. This is a problem in two ways, not only does it make it difficult to pay off credit card balances, you can fall into the habit of using a higher-interest card to pay for something. This is a path to credit destruction- but be careful about closing out the cards! Simply putting them out of easy reach, and rotating the cards you use will keep your credit score healthy, and avoid getting balances out of the ‘golden zone’ of 30% or less of ALL available credit.
Using credit as therapy. Simply because you are offered the credit is not an excuse to use it: you need to make sure that you can pay off credit card balances at the end of the month. And planning on a one-time windfall isn’t good: a lottery win or other unexpected event may well not happen, and if you budget with this in mind, your entire winnings will be taken to pay off credit card balances and other debts.

The Rewards

One thing that attracts many people to one card or another is the rewards they ‘earn’ for using their cards. This, on many cards, is a problem to keep track of, and having multiple cards makes this task one that gets forgotten about quickly. If you are using a card specifically for the rewards, make sure that you have a simple, user-friendly way to track your rewards.

And in those emails or letters from your card issuer may be a way to increase the rewards, or a complete change in how they are calculated. A few minutes of scanning closely every letter you get from your credit card issuer is worth it.

[Read: The Best Credit Cards for Holiday shopping]

And the real reward? Having the credit card balances something that you can pay off, easily, every month. A plan to avoid problems will let you pay off credit card balances, your other debts, and still have some ‘fun’ money is the goal of a budget- you can do this!

Credit Card Application Denied

January 13, 2016 by penn

Often confusing and embarrassing, the denial of a credit card application can be sign of other things going on, some of which you can fix and some of which you can fix, but not easily. There can be literally hundreds of reasons why you got denied, but really only a few are the most common ways in which you get denied for a credit card. Lets explore some of the main reasons and delve into the ways to help fix them.

Major Factors to Consider

Charge – Offs
High Balances
To Many Accounts
No Credit History

[Read: Why You Should Pay Off Your Credit Cards]

There are major reasons why you are denied credit cards and the major ones are listed above, we will discuss them to follow, but in there will be peppered with many sub categories that have a related effect on why you credit application was denied. Often there are ways to fix them.

1. Charge-offs

Charge-offs are probably the worst thing that you can have on your credit report, they show a complete lack of payment, and collection to the point that your creditor just gave up, and charged it off. This alone can be the sole reason for a denial of a new card, why would they want to give out a new card to you if they feel, based on prior history, that you may not pay. Now over time these accounts will fall off and be out of view, but applying to soon after a charge-off without a real compelling reason, is sure to get you denied. A way to fix that is to pay it off in full, and then once paid off, ask the creditor to remove the negative report.

2. High Balances

High balances on other open accounts too will surely get you that denial letter in the mail, reason being is that you may be extending yourself to far and that you are not able to meet your financial obligations monthly. Or you may have to many inquires on your credit report, these can be from new applications or from existing accounts accessing your report due to a concern for creditworthiness. They may be monitoring your credit report in an effort to determine whether they are going to continue to extend credit, or increase credit. If you really want a new card, perhaps for a better interest rate, you should pay down your debt and apply again once that has been done.

3. To Many Accounts

Having to many open accounts even without high balances will result in a higher denial rate, reason is that if you already have access to open lines of credit, there really is no need for any additional accounts, and will result in the denial of the credit card application. Although, this may not seem like a risk factor in the denial process, it does show a history that could be deemed negative. Try closing out the cards that you no longer need or use, why keep them open if you are not going to use them anyway.

4. No Credit History

But on the flip side of that you may have a completely new or unknown credit history. Everybody has to start somewhere, and unfortunately, sometimes, applying for a credit card is not the place to start. You may want to foster a relationship with a bank or credit union, and establish a history there and apply for a card through them first, and get a record established. Or get an auto loan, which often times is easier to get than you may think, this is a wonderful way to establish your credit before applying for credit cards.

[Read: Reasons for Denials of an Increase in Your Credit Limit]

In Conclusion

As you can see, there are many reasons why a credit card application can be denied, but there are ways to fix them, in the short term, and the long term, some are easy to do, others not so much, but that is only going to help you in the long run. The four major areas are the charge-off accounts; having to many open accounts; to high of balances; and, no credit history at all. Intermixed with all of these you could have factors of late payments, public records (lawsuits, or bankruptcy) or you may have just not filled out the credit card application completely, which is a very common mistake.

But make sure that when and if you get denied, you take head of the denial issues in the letter they send you, it will give you the exact place to start your rebuilding process, and with some hard work and dedication to yourself you can regain your credit report and score to a respectable level, and in turn be able to apply in the future for accounts with the fear of it being rejected.

What You Need to Know Bout the New Chips In Your Credit Card

January 6, 2016 by penn

Security is an important issue with credit cards, and even more so in today’s digital age. Online shopping, swiping and otherwise non human points of sale make the traditional safeguards obsolete, the days when your card was compared to your identification to see if the user was the person who was using the card are long gone, even in those face to face situations the card rarely leaves your own hand and is slid through a machine at the point of sale. Couple this with inattentive sales people and fast paced service, it has been real easy to steal someones credit.

[Read: Hidden Credit Card Charges: Hints and Tips to Avoid Them]

There have been recent advancements in the safety and security of credit cards in the form of EVM chips, or Europay/MasterCard/Visa the companies spearheading the technology. There are things that you should familiarize yourself with when it come to this new technology and how it will effect your everyday life.

Factors to Know

It is safe, for now
It is PIN free, for now
It is easy to use
It is not universal yet

1. You Still Need to Protect Yourself

While the new technology is still being implemented you will still need to protect yourself and your card, and while the liability may be shifting from merchants to banks or issuers to networks and so forth, it is still incumbent upon you to take care of your cards and make sure that they do not fall into the hands of bad people and criminals.

And it is still solely upon you to report fraud if you suspect it, you need to call and immediately report that to them so they can shut down the card and prevent the continued use. If you wait for them to flag your account it may be to late.

2. The New Technology Is Not Everywhere Yet

Although technology spreads at the speed of sound these days, not all merchants are equipped with the new machines that will read the new chip cards. There are a couple of reasons for this, one is that the technology is new, and that the switch over is costly and time consuming, and the second is that smaller retailers may not be able to update to the new technology regardless of the required use, because of the sheer cost.

After the date required for the shift to the new required technology, a merchant could be held completely responsible for the loss due to credit card identity theft, so the shift to the new technology is an important step in the process and the elimination of credit card theft.

3. You Can Still Use Your Old Card

Don’t panic, if you have not been issued a new card yet, you are fine, you can still use your old card until your bank issues you your new one, this may not happen until your next renewal cycle on your card, or it may happen sooner. If you are in doubt, contact your bank and see if and when they are sending you an updated card. In the mean time, you can use your card as usual. There should be no issues.

4. Well, What is It

What is this new technology, and how does it work. This new chip is imbedded in your car, you slip the card into the machine at the point of checkout, and the chip has a new and unique code for every transaction, therefore, if there is technology skimming the machine it may be able to get your number, but the chip, or lack thereof, on future attempts to use the card by the would be thief, will not go through, and, in theory should alert the bank of a potential fraudulent transaction.

Slow to be implemented in the United States is the chip with a personal identification number requirement. It has been in use in other countries, but has not gained popularity here just yet. We are used to using a PIN in our debit card transactions but not so much in our credit card transactions. This form of “two factor” security can only help in the stop of credit card fraud.

[Read: Top Reasons for Credit Card Denial]

Conclusion

Banks and lending institutions need to stay one step ahead of the bad guys. And the EMV technology chip is their effort to do that, and for now this is a sure fire way to stop the thieves dead in their tracks, but the technology is only as good as the end users and their point of sale terminals. For now, it is easy to use, PIN free in use, and safe. It is ahead of the bad guys and will help prevent credit card fraud. But is is not universal and used by all banks and all end users.

Starbucks cashier admits her theft:

How to Avoid Credit Card Danger

December 30, 2015 by penn

Credit cards have the potential to be dangerous, especially for new users who may think of the money they’re spending as “free.” There are other credit card dangers that even the most experienced users can fall into. It’s important to note that there is a way to use credit cards responsibly in order to avoid those credit card traps. For more information on credit card danger, see this article.

[Read: The Best Credit Cards for Holiday shopping]

The Lure of Overspending

Consumers tend to be lured into credit card danger when they spend more money while they’re using their credit cards versus paying with cash, according to some studies. In one such study, participants spent more than twice as much when paying with a credit card versus the amount they would’ve spend if paying with cash.

You can avoid credit card danger and overspending by:

Setting a spending limit for yourself
Living within your means
Setting your limit in accordance the amount you can pay each month toward your bill

Difficult Interest Rates

If you want to avoid credit card danger and interest all together, the best thing to do is pay your balance each month. According to statistics from the American Banker’s Association, only 29 percent of cardholders pay their balance in full each month. I you’re one of the 71 percent who’s not practicing this tip, then a portion of your payments are going towards the interest rate, which increases the amount of time it’ll take to pay off your balance.

How to avoid credit card danger and interest rates:

Pay your balance in full each month
Consider spending less

Debt: Are You Risking It?

If you’re borrowing money, then you’re creating debt. Being in debt can lead to an array of problems that aren’t all associated with finances. Debt can lead to health issues, depression, and major stress.

Being in debt makes it harder for you to reach your other financial goals. You may have to delay your goal to go back to school or take that nice vacation because you need to pay your bills.

How to avoid credit card danger and debt:

Stop using your card
Focus on living within your means

A Bad Credit Score: Are You Risking It?

Its common knowledge that credit cards have a major impact on your credit score. If you use your credit card responsibly, then your credit score will reflect that. If you’re irresponsible with your credit card, like if you miss a payment, then that will put you into credit card danger and cause you to have a lower score.

How to avoid credit card danger and a bad credit score:

Pay your credit card bill on time
Keep balance 30 percent below credit limit
Make less credit card applications

The False Hope of Minimum Payments

You’re only required to pay the minimum payments, but other than making no payment at all, minimum payments are actually the worst way to pay off your balance. By making the minimum payment, you’re sending more money toward your interest than you should, meaning less of your money will go towards the amount that you owe.

How to avoid credit card danger and minimum payments:

Pay your balance in full
Or pay above the minimum payment

Confusing Credit Card Lingo

Although the Credit CARD Act of 2009 has made credit card terms much clearer, the lingo can still be confusing. One credit card has the potential to have many different interest rates. Understanding which rate applies can be puzzling and can have serious consequences like increased fees and/or lower credit scores.

How to avoid credit card danger and confusing lingo:

Understand balances and rates on your credit card
Read through credit card information carefully
Contact customer service if you have questions

Difficulty with Multiple Credit Cards

In order to be financially responsible and avoid credit card danger, it’s important to track your spending. Having multiple credit cards can make this important task difficult to accomplish. This is even truer if you’re using other methods of payment in addition to using multiple credit cards.

How to avoid credit card danger with multiple credit cards:

Create a journal or spreadsheet to track spending
Use personal finance software to track spending
Use fewer credit cards

[Read: 3 Reasons To Break Up With Your Credit Card]

The Risk of Credit Card Fraud

Everyone who has a credit card is at risk of being a victim of credit card fraud. Whether your credit card or credit card information is stolen this can be detrimental to your credit score. Luckily, you’re not always liable for fraudulent credit card purchases, but it’s important that you report these charges in a timely fashion.

How to avoid credit card danger and fraudulent charges:

Closely monitor your credit card activity
Report fraudulent charges immediately

For even more information on credit card dangers, check out this YouTube video:

How Soon Should I Use A Credit Card After Paying Off Debt?

October 14, 2015 by penn

Congratulations! Paying off debt is a huge accomplishment that should not be overlooked. It can feel shameful to have credit card debt and carry a monthly balance, and is not an easy feat. Now that the chapter of your life with debt is closed, it is time to move on to the next step and determine how soon you should begin using a credit card now that you have paid off your debt.

[Read: All about the Best Credit Cards]

Today it is the norm to use credit cards and it can seem difficult to live without one. While you may plan to abstain from using credit cards after paying off debt, many people simply do not feel prepared to make that commitment. I know that would be incredibly difficult for me personally, but it is not a decision that should be made lightly. Before making your final decision, consider the following points.

Take A Moment to Breathe

After paying off debt, you need to take a moment to assess your new debt-free way of life. Consider the following questions:

What should I do with any extra money each month?
What is the best way to make my money work for me?
How can I keep myself financially accountable?

You may have already begun to ask yourself these questions. If you haven’t, now is the perfect time to start considering how to answer them and plan for your future. The most important thing to remember is that you have broken the cycle of debt for good and are ready to move on. Paying off debt isn’t easy, and now you need to plan so that you stay out of debt.

There is No Set Timeframe

It may be tempting to try to “keep up” with friends or neighbors when paying off debt. However, remember that there is no set timeframe in which you must begin using a credit card again after becoming debt-free. This all depends on you, your lifestyle, and your goals. Each person has a different situation in his or her debt payoff plan. There is no set timeframe when it comes to using a credit card after paying off debt. This will depend on your personal situation and the particulars related to your debt payoff plan. If you still have access to credit cards and have not been required to close your accounts, you need to take the time to decide what is best for you. It is crucial to consider whether or not using credit cards will tempt you to overspend. If this is the case, proceed with extreme caution before using credit cards again.

Start With A Plan

Just as you plan for a day at work or a weekend away, you need to have a plan after paying off debt. No matter when you begin using credit again, having a plan is essential for helping you stay out of debt. You may find it best to work this into your overall budget if that helps you visualize your goals. It is also important to instate a spending plan once you begin using credit cards again. This will help you develop discipline with spending and keep you accountable so that you do not overspend.
One way to do this is by allowing yourself one small, planned and budgeted purchase per month. Giving yourself a reasonable limit and sticking to it will help you develop that discipline. As you build confidence in your credit card usage, you can increase the number of small, planned purchases to an amount that brings you enjoyment without blowing your budget.
What works best for me is to have someone I trust (in this case, my husband) keep me accountable for my credit card usage. We document every purchase on a shared spreadsheet. This way, we each know how much the other has spent that month. Since we trust each other to keep the other accountable, we can challenge whether or not we have stayed on track that month.

Long Term Goals

It may feel tempting to cancel your credit card altogether after paying off debt. This is definitely understandable, but may negatively affect your credit score. Although it sounds contradictory, credit companies monitor your score based on how frequently you close lines of credit, so exercise caution here. Your best option may be to store your credit cards somewhere hidden yet safe so that you aren’t tempted to use them, yet don’t affect your credit score. This will ensure that your future isn’t impacted in terms of loan rates, potential jobs, and so forth.

[Read: Ways to Cut the Cost Of Christmas Debt]

What’s most important to remember is that you take your time when making decisions about your debt-free future. Make sure that you make a careful, balanced decision that will have a positive impact on your future.

Hidden Credit Card Charges: Hints and Tips to Avoid Them

January 5, 2015 by penn

Hidden credit card charges aren’t always as hidden as you think. You simply need to make sure you’re smart and savvy and read your statements thoroughly. Keeping on top of them is really important and it’s worth making sure you know how much they are and where they appear on your documents so you can keep track of them and most importantly, make sure you’re not being overcharged for anything. Here is a handy guide to credit card charges and how to avoid them.

Fees on Credit Cards

Some cards come with additional fees. If you use your card abroad, if you fail to keep up repayments, etc. – you’re then likely to incur extra monies which you really could have avoided. Hidden credit card charges like these shouldn’t necessarily be hidden as your provider should be very upfront with you about when to pay them and how much they should be, but it is surprising how many people don’t realise they’re there or feel confused when they feel they’ve been overcharged.

Go onto your provider’s website and read up about excess charges and make yourself aware of what you might be liable for.

Are There Add-On Services You Need To Know About?

There are hidden credit card charges known as add-on services that many people don’t know about. For instance, when you signed up for your credit card you might have been miss-sold services you didn’t want or need. Some credit card companies have been in trouble with the authorities for this after people complained that they had been either bullied into taking the extra services on, or that they were charged extra when they tried to cancel them. Many credit card issuers were forced to offer and pay out compensation to those people that had been affected.

Subscription Services

Some card companies will charge for recurring services and subscriptions. Many trial subscriptions to services will require you to give your credit card number and rely on you forgetting to cancel at the end of the trial period thus meaning that your card then starts to get charged every month. This can come as a shock to people when they get their statement and wonder what all the excess charges are for.

Keep track of anything like this and remember to make notes of any subscriptions you start, so you know if you decide not to go ahead with it, you cancel it before the end of the trial period and thus avoid losing an extra money.

Spotting Hidden Credit Card Charges

BillGuard which is a free credit card monitoring app stated that credit and debit card holders paid an average of $14.3million in hidden credit card charges over the last year. You can download this app if you have an iPhone or Smartphone and check your own accounts to see for yourself, but you certainly don’t need to be tech savvy to run the checks!

Of course, the best way to sort out hidden credit card charges is to check all your statements thoroughly once a month and make notes of any monies you’re not sure about. If you’re in any doubt at any time, contact your service provider to talk to them and get them to explain anything you do not understand. Chances are it will be perfectly legitimate but it is always better to be safe than sorry in cases like this.

If you do spot something that you’re not sure about, go back through your previous few month’s statements to see if the same “mistake” occurs on those too. If it does, again, check with your company to see if they can explain.

For other problems such as trial subscriptions that have taken money from your account without your consent you should always talk to the merchants themselves first to see if they can help you out. The terms of enrolment can sometimes mean you might not get any money back, but cancelling there and then will also mean that they can’t take any more money from you either. If the merchant continues to charge then you must contact your credit card provider to see if they can then help you out.

The best placed person to spot hidden credit card charges is you. You should always be the person who takes responsibility for their finances and keeps a check on where your money goes. Making sure that when you sign on the dotted line for any credit card, you know exactly what the terms of service are, is essential, and before you commit to getting a card such as this you should make sure that you can always afford to make the minimum monthly repayments on anything you buy and that you’re not likely to get yourself seriously into debt by taking a commitment like this on.

Going Overseas? Know How to Use Your Credit Cards Overseas Safely

December 6, 2014 by penn

It’s a simple fact, traveling is very expensive. No matter whether you’re traveling for business, taking a short break or a longer vacation, everything from accommodation to tickets to sporting events or concerts will cost you money. Most of the money you’ll account for will be given over to merchants and shops at whatever destination you’re visiting – which can often pose some questions, such as is it better to take a lot of cash with you, use traveller’s cheques or take your credit cards overseas with you?

It simply isn’t sensible or workable to travel without any cash at all, and you’d be foolish to not have a ready supply of bank notes for emergency use only, or for if you are visiting somewhere that will not take cards. However, for the most part, taking and using credit cards overseas makes much more economic sense. Firstly, it prevents you having to worry too much about currency conversion rates – with a card you’ll automatically get the lowest rate possible. Credit cards are easy to keep safe – whilst it’s not something we necessarily want to think about, pick pockets operate in every country and it is easier to conceal a card than it is money. In the event your card is stolen, you report it straight away, get the card cancelled and hopefully there will be very little harm done.

Before You Go On Holiday

Check your credit (and debit) cards). A lot of banks and financial institutions might charge you a few for using the card abroad. Typically, it might only be 2-3% of each purchase you make, but it can still work out very costly if you do a lot of shopping or make a lot of purchases while you’re in foreign climes. Therefore, it makes sense if you’re using credit cards overseas to look into getting a No Foreign Transaction Fee credit and/or debit card that will protect you from such penalties.

When you get your new card, or if you’re continuing to use your regular card, make sure that well before you travel you contact your card provider to let them know when and where you’re travelling to. This is a must for two reasons.

1.) You’re less likely to have your card suspended if your issuer suspects there have been suspicious transactions made on your card in a foreign country

2.) If you’re stranded or stuck and you need to contact your card provider while you’re away, it makes it easier to do so free of charge, and not to incur any extra costs.

When You Arrive At Your Destination

Make sure you try and avoid a sneaky trick called dynamic currency conversion, when using your credit cards overseas, which many merchants abroad try to take advantage of. You might be offered good and services which the merchant offers to convert to US dollars in price for you, seemingly to be helpful, however, they often do this at a higher and not particularly competitive exchange rate meaning you can end up paying more. Although it might seem like a hassle it is sometimes better to only pay for goods that are displayed in the local currency and refuse to sign any checks that are not expressed in such a way.

In the USA, technology in terms of credit and debit cards is still a little way behind Europe, where things like Chip and Pin are now the norm. This means that using credit cards overseas can be slightly more problematic as the USA still uses the less secure magnetic stripe system which is easier to commit fraud on. You’ll still be able to use your card in foreign countries, but some merchants will demand an extra form of identity if you’re paying for goods, so make sure you always have your passport to hand as further proof of who you are.

Be Safe and Savvy but Still Enjoy Your Trip

All of this might sound worrying, or designed to create stress in a situation that should be enjoyable, but so long as you’re safe and savvy and know what you’re doing there’s no reason it should cause any extra hassle or worry. As long as you take into account the hints and tips in this article, you really shouldn’t have any problems with using your credit cards overseas. Make sure you:

1.) Try and get hold of a No Foreign Transaction Fee Credit Card

2.) Notify your credit card company when you travel

3.) Avoid buying goods for which the costs aren’t expressed in the local currency

4.) Check your statements thoroughly on return

Then you’ll more than likely find that you encounter no problems at all and that it is relatively easy to make purchases in foreign countries whether you’re simply on vacation, taking a working trip or a short break to see a concert or sporting event.

Top Reasons for Credit Card Denial

November 17, 2014 by penn

It could be a very embarrassing experience to try to apply for a credit card only to be told that your application had been denied. You may be left wondering what factors are included in determining your eligibility to get a new credit card. Do not be too alarmed because you are not the only one who has been a victim of credit application denial. In fact, a reported 7% of United States citizens have had their credit application denied in the past year. And, according to the trend, that percentage will continue to increase each year. But still, you may be wondering why you were denied. Keep reading for the 10 most common reasons for credit card denial.

1. Did you complete your application?

It may be a silly question to ask, but a lot of individuals get denied a credit card because their application was not completed. If this is the reason for credit card denial, you will typically receive a notice of it being incomplete or a notice that further action must be taken. Until then, the application will be denied.

2. How many credit cards do you already have?

You may be thinking that it is no one’s business how many credit cards you have. It you are thinking that, you are wrong. If a credit card company sees that you have more than one card, they could think twice about approving you for their card. Just put yourself in their shoes—if a person already owes other people money, how likely are you to let them borrow your money too? This reason for credit card denial is the same reason you may be quick to deny someone the ability to borrow money from you if he or she already owe others.

3. Do you have steady employment?

Having a steady job is a huge factor in determining your eligibility to getting a credit card. So, another reason for credit card denial is because you do not have a steady job or have never had a steady job. No credit card company is going to issue you a line of credit if you have no means to pay it back. You must have a job as proof of the ability to make payments when they are due.

4. Do you have proof of employment?

Saying that you have a job is not enough to get approved for a credit card. Another reason for credit card denial is because of the lack of proof that you have income. Proof of income can come in the form of a check stub or tax documentation. Sometimes, credit card companies allow you just to tell them if you are working or not. Others need proof of income. Your application will specify what documentation is needed to complete the application.

5. Are you old enough?

Like everything else in the world, there is a certain age you must be before applying for your own credit card. Typically, it is required that you be at least 18 years of age when applying. So, another reason for credit card denial could be because you were not old enough to apply for one. In order for a minor to get a credit card, a parent or guardian must place the minor on the card as an authorized user.

6. Have your creditors given up on you?

Another reason for credit card denial is because your credit report has one or more charge-offs on it. A charge-off is when the lender has stopped expecting you to make a payment on the account. This stays on your credit for many years and has a negative impact on your credit score.

7. How good is your public record?

If you public record has bankruptcies, taxes that are unpaid, or court orders to pay money, this could be another reason for credit card denial. Public records are full of information that can affect your credit, in turn affecting the ability to get a credit card.

8. How much is your income?

Another reason for credit card denial is your low income or lack of income. If you do not have enough funds coming in to manage credit card payments, you will be denied very quickly.

9. What is your credit utilization ratio?

If you credit utilization ratio is higher than 30%, this could be another reason for credit card denial. For a good ratio, pay down your previous debts.

10. How many applications have you completed?

If creditors see that you are constantly applying for cards, this could be another reason for credit card denial. It is especially bad if every one of your applications is denied.

It may be an aggravating thing to get your credit card application denied, but the reality is that it happens, and it tends to happen more often than you may think. However, knowing the 10 common reasons for credit card denial will give you an understanding of what can be done to avoid any further denials. Do what is necessary to get your credit back in good standings so that when you apply for your next credit card, instead of being denied, you will be approved.

Reaping Credit Card Benefits

April 2, 2014 by penn

Every month a new credit card bill arrives in the mail, yet you dread going to the mailbox. You may find yourself wondering why you don’t just cut the little piece of plastic in half and all your troubles will disappear. Unfortunately establishing credit is an important part of adulthood, without good credit, it is hard to purchase important things like a car or a house.

However, there is a light at the end of the credit card tunnel that many feel they will never see. This light is called the credit card benefit.

Unknown Credit Card Benefits

What are these benefits? We have a few things below listed that you may want to keep in mind when choosing your next credit card. Below are the top three reasons to have a credit card and be aware of these benefits.

· Fraud

As you know many know accounts come with fraud protection. This valuable benefit protects the card holder from being held liable for any unauthorized charges should your card be lost or stolen.

· Card Replacement

This credit card benefit is probably the most necessary one to retain. If you are on vacation or a business trip and have no cash, but have lost your card, most companies offer emergency cash or they can send you a new one within a 24 hour period.

· Rewards

Many credit card companies offer reward programs for the card holder to take advantage of every time they use their card. This credit card benefit is a valuable tool when it comes to credit card usage. These rewards can get you many discounts on travel, vacation, air fare, hotels, etc. You may even get free stuff, just for using the card. These rewards may sound appealing so choose a credit card that has the best deal for you.

· Returns and refunds

These credit card benefits are a hidden gem and one many are unaware of is possible. For instance, when you make a purchase at one store then find the same merchandise at a cheaper price at a different store, your creditor can refund the difference in the two prices, but beware because their may be stipulations involved. Another perk to having a credit card is the replacement of something that is damaged or stolen, once you have purchased it. Some not all credit card companies will replace the item as long it is within a certain amount of time. If you happen to wait too long to return something your credit card company may offer a longer return of 30 to 60 days.

Sidestepping the Dangers of Using a Credit Card

Despite the credit card benefits that are offered through credit companies, utilizing them will be fruitless if you act irresponsible with your credit card. Keep yourself out of credit card debt by following these simple steps

· Living Beyond Your Means

Credit card debt is still a driving force in many American households today. The main reason is people are living beyond their means. A credit card is easily used as a weapon to gain a lot of material items as well as impressing your friends. Don’t bite off more than you can chew.

· Budget Yourself

Almost all credit cards come with a limit. The limit is the line of credit the company has given you to spend for example Capital One may give you a limit of $500 this means you only have that much to spend. A word of caution do not spend the whole $500 because you have to pay it back with interest. Always include your credit card bill with your monthly budget so you know exactly where you stand financially.

· Pay the Bill in Full

Once the bill comes in the mail pay it in full, this will illuminate the accruing interest and finance charges involved with credit cards. If it is possible only spend what you can pay off.

· Request a Lower Interest Rate

This is the final credit card benefit people are unaware of, credit card companies can raise or lower your interest rate whenever they want, but they must give you notice first. A few things will happen as a result, first they will try to convince you to accept the new rate, second they will agree to not change a thing, third is both parties will come to an agreement to part ways and close the account then settle the remaining balance.

Everything that has been mentioned so far are just suggestions and guidelines to having a credit card. If the credit card is used responsibly these benefits can work in your favor. Use your common sense and try not to spend more than you can afford, so you can reap the benefits and not put yourself in a financial hole. Final thought no matter how much you want to make an impression, it is your credit rating that will be affected.

Understanding Store Cards and Debt

November 5, 2013 by penn

There are a large numbers of stores that offer cards to customers so that they can buy from the store and pay the amount off at a later date. This can be a great way to balance your budget when things are tight but it is very important that you understand the debt that your store cards are putting you into and how much they may end up costing you.

Store Cards and Special Offers

Christmas is the prime selling season for many stores and to help you to be able to purchase the maximum amount many stores will offer you a store card at a great rate. In many cases the initial offer is very good but if you do not meet all the conditions then there can be a very expensive sting in these cards tail.

There are offers of discounts or rebates on purchases as high as twenty percent. This is a huge saving and the more you buy the bigger the saving is. The problem comes if you have not paid the amount off before then payment period commences. High interest rates claw back these savings and many people are stuck paying for their purchases long after they have been given away.

Understand that:

You are signing up to a credit card
Once special offers are finished you could be faced with high interest rates
These offers are designed to encourage you to visit the store as often as possible
The store card can only be used in the store unlike other credit cards

Store Card Tips

You can use this form of credit in a way that benefits you without falling into the traps that are ready to extract the most money from unwary people.

The high interest rate means that you should always try to pay off these debts as quickly as possible.
If you are using a store card for a special offer the pay it off as quickly as possible. You may be able to pay for the item using the store card and then go the service counter and pay out the amount straight away. This will ensure that you do not have to pay interest while still allowing you to get the full discount.
Consider closing the card as soon as possible. The stores use tempting discounts and special offers to entice you to sign up. Once you have used the card to obtain the item you want then closing the card will end the temptation that you might feel every time you enter the store.
Be careful when you are offered coupons for items. In many cases the large discount offered is because the item is old stock, discontinued or a poor seller. These coupons are designed to tempt you into the store with the idea of purchasing.
Budget your purchases
Do not give in to temptation
Remember repayments

The Holiday Season and Store Cards

The peak season for store cards is the holiday season. Offers will stream in to any customer that they have identified so that they are more likely to use the store and to purchase a greater amount. It is a tough balancing act trying to be as generous as possible and not overspending.

Cards supplied by the store try to push you to spend more than your budgeted amount. Even just knowing that you have a large pool of available credit can subconsciously encourage you to buy more than you should.

The holiday season traditionally has many new and exciting things on display and it can be difficult to resist the hefty discounts and easy ability that a card gives you to purchase these items. It is important that you do not give into temptation but stay with your plans. It is a constant battle because there are always big better and more interesting items on display.

It is very easy to forget that for every purchase we make we have to pay back the amount. It is always a good idea to know what the repayments would be. This lets you know that by adding an extra $100 on to your card that you may well have to pay back $125 once the interest is added and it is fully paid off.

There is a tendency to buy and then worry about being able to make the payments. If you are already financially stretched then even adding a small amount of additional debt can make it difficult to make repayments on time.

These are very high interest rate credit cards that are only able to be used in a single store. This makes them something that you need to be very careful signing up for and very careful using. Unless you can pay them off immediately then you should consider then carefully before using them to obtain credit.