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Save Money By Understanding Your Credit Card
around ?6billion a year is lost due to credit card users not understandinghow their credit card works. too many people are dazzled by the latest deals offered by credit card companies and end up paying more than they should, simply because of a lack of any real understanding on how the introductory deal works that they took advantage of.
millions of us have taken advantage of these offers, which include low promotionalrates and the favourite one for the credit card issuers (until it came backto haunt them) the 0% deals on balance transfers or on both purchases and balancetransfers, but recent research has revealed that those of us who do not understandthe workings of these deals, could be costing ourselves ?200 extra ininterest payments.
why am i getting charged interest?
the main reason for this is that most credit card companies always put thepayments that you make towards the cheapest debt first and with many makinguse of the 0% balance transfer deals, where switching your existing debt toone lender to another to save on interest repayments, the lenders will pay thebalance transfer deal first, as this is the debt that is carrying the lowestinterest rate and any new purchases made on the card will mount up, until the0% balance transfer deal is over and in the meantime it has mounted up the interestpayments on these new purchases, which will be the standard apr in which thebalance transfer will revert to when then 0% period is over.
how does this happen?
lets give you an example of this to make it a little clearer, for talking sakesay you have a debt of ?3,500 on your credit card and it consists of abalance you have transferred from another credit card company to the value of?2,000, you have made new purchases of ?1,000, using the card inthe standard way and withdrew cash from atm?s to the tune of ?500,with you paying back your card the money will be put towards the balance transferfirst and the new purchases and cash withdrawals will be taking on the interestcharges right away, which could leave you paying ?200 more in interestrepayments.
earlier in the article i said that most credit card companies work this way,which means there are some that do not, most notably included in those who donot are nationwide and the hsbc black card, who revert to paying the most expensivedebt first, leaving the lower apr debt unpaid until such a time as when themore expensive debt is cleared, which is a fairer and less sneakier way of attributingsomeone?s payments to their debts, where as the others are only takingaway the goodness of the deal that they have offered you in the first place,by giving you in one hand and taking it away from the other.
what can i do to stop paying excess interest?
when dealing with these deals read the small print, as it always makes senseof where you stand when it comes to your finances, as knowing where you arein terms of your repayments will save you the cash that you were trying to savein the first place, though always having a clear balance at the end of eachmonth is always the ideal scenario, but as we all know life and our financesare not always that simple.
some contacts:
nationwide - http://www.nationwide.co.uk
hsbc - http://www.hsbc.co.uk
peter kenny has been writing financial articles for the last five years and offers great advice on credit cards and loans. more information can be found at http://www.freeroller.net/mbs.cgi/mb577675 and http://www.moneywize.co.uk
article source: http://ezinearticles.com/?expert=peter_kenny
Prepaid Visa and MasterCard Debit Cards (aka "Prepaid Credit Cards")
nowadays there are many options to carrying cash, and the one choice that is gaining popularity is the prepaid debit card, also known as the prepaid credit card. although these debit cards are being advertised on television, radio and the internet, their use and purpose is clouded in mystery. we will explain what they are and how to use the prepaid debit card.
terms to know
? branding - adding visa or mastercard logo to a debit card, thereby backing the debit card with the benefits and security of these credit card companies.
? debit - deducting from an existing balance.
? load - adding money to the balance of the card.
? reload - ability to add more money to the balance once the original loaded balance has been depleted.
?prepaid credit card? - debunking the myth
first, we will clear up the most common misconception with these cards. they are not credit cards in the traditional sense. a traditional credit card is a card that draws off a credit line balance with each use/purchase. a prepaid debit card is a card with either a visa or mastercard logo and can be used to pay for goods or services anywhere visa or mastercard is accepted, however all purchases are drawn from a prepaid balance that you have loaded onto the card. once the balance has reached $0, you are no longer able to use the card for purchasing until the balance is reloaded.
evolution of an industry
in the beginning, in terms of banking, there was an automated teller machine debit card. this type of card allowed the holder to access their bank account balance without having to physically go into the bank. the atm card holder was able to go to a new type of cash access point (the automated teller machine) usually located outside their bank and get cash out, debiting from the available cash balance of their bank account. as this new type of bank account debiting system evolved, merchants and banks teamed up to allow atm card holders to access their bank accounts at various locations, such as a grocery store or other kiosk atm machines located around town.
through gradual progression of the financial industry, visa and mastercard got involved and joined the efforts of banks and merchants to brand the atm card with either the visa or mastercard logo. these new visa or mastercard branded atm debit cards now had the ability to be used to pay for goods and services anywhere a visa or mastercard credit card was accepted, while still drawing off the bank account balance the atm card is associated with.
the next step for visa and mastercard was to create standalone gift cards, which were originally loaded with a prepaid balance and could be used just as a visa or mastercard, but purchases were debited from the actual prepaid balance, and required no bank account. these gift cards could not have their balance reloaded.
this brings us current to today?s financial landscape, where visa and mastercard have introduced prepaid debit cards, which operate like a hybrid atm card (minus the bank account) and gift card (but the balance can be re-added to). the card holder can load money onto the debit card, can access the balance anywhere that visa and mastercard is accepted, and can reload money onto the card balance.
the visa or mastercard prepaid debit card
now that you have a good idea of what a prepaid debit card is (and what it isn?t), it?s time to find out what the benefits are of having this new type of debit card.
features and benefits
? no credit check ? a credit check is required when you apply for credit, since you are going to be trusted to pay the debt back. since you are adding cash onto the card, and since the balance cannot go into the negative, you are not going to be in a situation where you are required to pay anything back, or owe any money from exceeding the balance.
? safety and security ? carrying cash nowadays is a risky venture. if you lose cash, you are out that amount of money and cannot conceivably recover the amount. since you can load or reload the balance of a prepaid card with cash (almost anywhere), and since the cash balance on the card is branded by either the visa or mastercard logo, the same security and fraud protection is extended to the prepaid balance. if the card is lost or stolen, the prepaid card holder is not held liable for any fraudulent transactions. your money is safe and secure.
? bank account features ? most prepaid debit cards have bank account features, such as check writing privileges (the amount of the check is deducted from the card balance). you can also have your employer (although employment is not required to apply for card) directly deposit your payroll check onto the card balance. since these are very attractive incentives, most prepaid debit cards have these features.
? reload the balance anywhere ? most prepaid debit cards allow you to reload the balance almost anywhere. you can load via paypal, at most bank branches, any western union or moneygram location and even by cashiers check or money order.
? shopping on the internet ? nowadays, you can?t be too safe when shopping online. prepaid debit cards are a great choice in this situation because you can determine how much to load onto the card and since the balance cannot go into the negative, the chances of someone accessing your card information and running up a horrendous debt are non-existent.
? other benefits and features ? since prepaid debit cards are branded with either the visa or mastercard logs, the prepaid cards have the same perks of regular credit cards. some of these perks include roadside assistance, auto rental insurance, extensions on original manufacturer warranties, automatic bill pay and even merchandise rewards and cash rebates.
the bottom line
the best way to carry cash nowadays is a prepaid debit card. it?s also a great way to give a gift or pay kids an allowance. as a gift, the prepaid card is an excellent choice because the prepaid card is accepted anywhere, and doesn?t limit the recipient to one particular store or service. as a child?s allowance tool its ideal, since the transactions on a prepaid debit card can be tracked and accounted for, down to the last penny. as an online shopping resource, it?s handy because the card balance cannot be exploited. as a straight cash card, it can be used anywhere and just as safe as a credit card.
good luck and remember to read all the facts and find out all the information before making important financial decisions.
this article was written by gus garcia, owner of http://www.freeroller.net/mbs.cgi/mb578616, a free online service offering information about various credit and debit card offers as well as links to credit and debit card applications.
click here to see all prepaid debit cards available at creditcardchoices.com
article source: http://ezinearticles.com/?expert=g_garcia
Best Car Loan Rate - How to Get the Most From Your Credit Score
your credit score is the most important factor to getting the best car loan rate. many shoppers make the mistake of going to the car dealership and applying for a loan before checking their credit report and score. by checking your credit score ahead of time, you will know where you stand before seeking a lender. if you have an excellent credit score, you should expect the best car loan rate possible. do not expect the lender to tell you that you could save money by applying for a loan elsewhere. make sure you do your homework before applying for the loan. the little time that it takes to receive your credit report from the three major agencies could end up saving you a lot of money.
understanding your credit score
your fico credit score is more than just a number. understanding how your credit score is determined can help you to maintain or improve your credit rating. most credit scores will range in number from 300-850 points. the higher your number, the better your credit rating. your credit score will be determined by five different categories. some items will have a greater affect on your credit score than others.
1) how timely you pay your bills carries the greatest amount of weight on your credit rating. while it is a good idea to always pay your bills on time, lenders will look more at your recent payment history.
2) amount of debt- lenders will look at your total debt and the outstanding debt on your credit cards. it is a good idea to keep credit card balances well below the maximum amount allowed.
3) length of your credit history- how long have you had open credit accounts? do you use credit on a regular basis.
4) how many credit accounts do you have open? what types of credit accounts do you have?
5) recent credit inquiries and newly opened accounts ? lenders will look unfavorably upon your credit record if you have had numerous recent credit inquiries or if you have opened several new credit accounts in a short period of time.
to view our recommended sources for auto loans online, visit this page:recommended auto finance companies.
carrie reeder is the owner of abc loan guide, an informational website about various types of loans.
article source: http://ezinearticles.com/?expert=carrie_reeder
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