It is a necessary evil. If and when you decide to buy a house, you will have to have a track record of good credit for a number of years. And with all the sub-prime mortgage loans going under, mortgage bankers are scrutinizing applications with a fine tooth comb.

If you have never had a credit card, get a secured card – meaning you have to deposit the money first and then you will be able to access it. Make some small purchases, pay on time, and add some more money to you account. Once you have done this for at least a year, apply for a ‘regular” credit card. Don’t worry about the size of the limit. It may only be for a few hundred dollars.

Continue to make small purchases and pay on time. You can even pay the minimum amount once in a while. Just don’t make any late payments. Doing this will establish a pattern of on-time payments. Once you have created this history of making your payments on-time, you will find it easier to apply for that home loan.

Applying for credit used to mean asking your neighborhood banker for a loan. Now, with national credit cards and computerized applications, the day of personal evaluations may be over. Instead, computer evaluations look at, among other things, your income, payment history, credit card accounts, and any outstanding balances. Paying in cash and in full may be sound financial advice, but they won’t give you a payment history that helps you get credit.

A major indicator of your ability to repay a loan is your current income. Those who consider income must include types of income that are likely to be received by older consumers. This includes salaries from part-time employment, Social Security, pensions, and other retirement benefits.
You also may want to tell creditors about assets or other sources of income, such as your home, additional real estate, savings and checking accounts, money market funds, certificates of deposit, and stocks and bonds.

If you’re age 62 or over, you have certain other protections. You can’t be denied credit because credit-related insurance is not available based on your age. Credit insurance pays off the creditor if you should die or become disabled.
Read more…

You may have seen the following ads or something similar:

Separated? Divorced? Bankrupt? Widowed? Bad Credit? No Credit?

No Problem

Make the call NOW and get the credit you deserve!

- Even if you’ve been turned down before, you owe it to yourself and your family.

- Your major credit card is waiting.

If you have no credit or a poor credit history, this ad may appeal to you. Using a secured credit card can be an effective way to build or re-establish your credit history. Be aware, however, that some marketers of secured credit cards make deceptive advertising claims to get you to respond to their ads.

Secured and unsecured credit cards work the same way; both can be used to pay for goods and services. A secured card requires security for your line of credit; an unsecured card does not. The savings account for a secured card may range from a few hundred to several thousand dollars. Your credit line will be a percentage of your deposit, typically from 50 to 100 percent. Usually, a bank will pay interest on your deposit.

Also, you may have to pay application and processing fees that sometimes amount to hundreds of dollars. Before you apply, be sure to ask what the total fees are and if they will be refunded if you are denied a card. A secured credit card also often requires an annual fee and has higher interest rates than unsecured cards.

The Federal Trade Commission has taken action against companies that deceptively advertise Visa and MasterCard through television, newspapers, and postcards. The ads may offer unsecured credit cards, secured credit cards, or not specify a type of card. The ads typically are phrased to make you believe you can get a credit card simply by calling a telephone number listed in the ad.

Sometimes the number is not toll-free. A “900″ number service, for which you will be billed just for making the call, may instruct you to give your name and address to receive a credit application, or it may give you a list of banks offering secured cards, or direct you to call another “900″ number at an additional charge to get more information. Be aware that deceptive ads often leave out important information.
Read more…

Also known as AMEX, American Express is easily one of the most recognized names in the world of credit cards. Even though many people have Visa or MasterCard credit cards, they are still interested in AMEX. With Visa, MasterCard, and AMEX being the most popular and preferred types of credit cards, they are all great although there are also differences between them as well.

Both Visa and MasterCard are methods of payment. Both will allow different businesses to accept credit card payments using their systems. Neither of the two issue credit cards on their own behalf, instead they rely on banks throughout the world to issue the credit cards for them, provide the credit, and then charge the interest. Your credit card bill goes to the bank, as Visa or MasterCard doesn’t see any of it.

AMEX, on the other hand, is very different. American Express has their own payment system, and they also issue their credit cards directly to consumers. Unlike Visa and MasterCard, AMEX runs the entire show. Therefore, when a credit card says American Express on it, you instantly know who has issued the card, what payment system it has, and everything else you would need to know.

Even though MasterCard and Visa are used more throughout the world, American Express is always expanding their networks. Visa and MasterCard are used in over twenty five million locations over the world, including third world countries, which makes them global credit card payments. AMEX on the other hand, doesn’t quite reach this degree. It is a great credit card, although it isn’t used around the world in areas where the other 2 dominant credit cards are.
Read more…

American Express, or AMEX, is one of the most recognisable names in the financial world. What many customers who have MasterCard or Visa credit cards in their wallet are interested in, is what is the difference between these two companies and American Express. Well the difference is quite simple.

MasterCard and Visa are both simply payment methods. They allow locations to accept payment using their system. They do not however, issue any credit cards of their own. For this they rely on their partnerships with thousands of banks worldwide who will issue credit cards, provide the credit necessary, and charge clients interest and give them rewards. None of your credit card bill goes to Visa or MasterCard. It all goes to the bank that provided the card. This bank also sets your interest rate, gives you rewards, offers you zero per cent balance transfers, the works.

Visa and MasterCard make their money by charging the retailer a fee for using their payment system, and also sometimes by charging your bank for issuing the card. None of this effects you directly however.

American Express is a very different arrangement. Not only do they have their own payment system, but they also issue their cards directly to customers. So they are running the whole show. If a card says American Express on it, you know instantly who issued it, what payments system it utilises and everything else about the card.
Read more…