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Should Your Teen Have a Credit Card?

admin — Mon, 26 Dec 2011 09:48:18 +0000

The rising number of Americans dealing with outrageous, out-of-control credit card debt leaves many parents wondering if their teen should be trusted with his or her own credit card. There are several advantages to getting your teenager a credit card before they leave home for college. High school is a good time to learn and exercise good credit card usage, rather than waiting until college, when they are out of parental control, to discover the joys, and possible pitfalls, of having their very first credit card.

Your teen should first have his or own checking account, before applying for a credit card. They should be aware of how to write checks, how to keep a check register and how to balance their account every month. These skills will be necessary for making credit card payments. In today's world, ensuring that they know how to make online payments using their checking account is also a good idea. Ensure that they are making their monthly payments on time. Keep a close eye to see that they are not accruing a higher balance than they can pay in full every month. A good credit history can not be built on late payments, or by reaching the maximum credit limit.

You may want to start your teen off with a prepaid credit card. This will ensure that they do not accrue a large balance, while teaching responsibility for making payments, setting a spending budget, etc. Once she has learned to use the prepaid card responsibly, make the switch to a low-limit credit card. Be sure to review and discuss your teen's spending habits and decisions, helping her to learn the difference between a responsible charge and a bad one.

In the event your teen should charge more than he can pay, you'll have to decide as a family what to do about the situation. This decision should probably be made prior to giving your teen a credit card, so that the boundaries and expectations are already in place. This allows for panic-free decision making on mom and dad's part, and lets the teenager know exactly what will happen should a large charge or lack of funds prevent a full payment. Catching and correcting poor spending habits early on, and making your teen responsible for his spending, will lead to the formation of a responsible credit card user in the future.

A teen can establish a good credit history early on, making applying for student loans, car loans and other forms of necessary credit easier and less stressful. Having a good credit history can set your teen up for greater success in the "grown up" world of finances, too. Lower auto and homeowner insurance premiums are also available for those with good credit ratings. The benefits of having a credit card while still being a teen at home can help to build your teen into a responsible, financially prepared adult consumer. Teaching that a credit card is a convenience and a privilege, not an income extension or source of unlimited spending can have great payoffs in the future.Credit Cards Made Simple provides information on helping you make the right choice when choosing low interest business credit cards and understanding the credit card processing companies.

By: Todd Holliday

Source: http://www.articledepot.co.uk/

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admin — Sat, 24 Dec 2011 12:25:02 +0000

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Matching Your Credit Card with your Lifestyle

admin — Fri, 23 Dec 2011 16:09:19 +0000

It can be both an exciting, and confusing experience when you’re looking for a new credit card. Judging as to which credit card to choose can be difficult since all the credit card companies all promise a great deal.

The key here is to decide which credit card suits your lifestyle. Here, we will be focusing on how to choose the ideal credit card based on your lifestyle.

Secured or Unsecured. If you have an excellent credit score, you’ll surely not have any problems in choosing the best unsecured credit cards in the market. However, if you have some issues with your credit score, it would be a safe option to go for a secured credit card.

An unsecured credit card requires a security deposit. Although it imposes more restrictions, the limits can actually help you with building up your credit rating.

Variable or Fixed rate. Credit cards with variable rates offer low, fixed interest rate at first and later on, may vary depending on the index rate in the market. It is always ideal to go for credit cards with low fixed-rate interest rate, so you’ll know how much without having worrying about unexpected changes on yourrates.

Cash Back or Travel Rewards. Consider your lifestyle carefully in terms of credit card privileges. Some people love traveling for free with the use of travel reward credit card. However before signing up, get to know these important information:

• Do you have the freedom to choose your destination?

• What is the yearly fee for the Frequent Flyer credit card and what’s the guarantee that you can get the reward points in time?

• Is there a limit for the period of collecting points?

• Will the gathered points expire after one or two year/s?

• How many points do you have to collect before qualifying for the free travel?

These are just some points that you have to consider before getting a Travel Rewards Credit Card. However, if you are not a frequent traveler, this may not be an ideal option for you. Possibly, a cash back reward credit card would be more advantageous because it allows you to collect "cash points" and exchange them for merchandise or new purchase.

APR vs. Other charges and rates. Sometimes credit cards offer a very low Annual Percentage Rate (APR). Nevertheless, there are other fees that come with your credit card aside from the interest rate. Here are some of the extra charges that you have to know:

• How much is the penalty for late payments and for exceeding your credit limit?

• How much is the annual charge that you have to submit every year to keep the membership activated?

Clearly, comparing the APR with other credit card charges is a must. You have to make sure that you are aware of the exact costs before signing up your application. If you are looking for a reward credit card, check the fine print and be sure that you can abide by the rules of the rewards program without going beyond your spending limit.

Author:

Liz Roberts is a freelance writer and loan consultant. The website BadCreditResources.com offers resources that specialize in providing bad credit loans and credit cards for bad credit.

Article Source:
http://www.articlebiz.com/article/572118-1-matching-your-credit-card-with-your-lifestyle/

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Credit Card Companies Fight To Stay One Step Ahead of Consumers

admin — Tue, 20 Dec 2011 11:55:18 +0000

On Feb. 22, 2010, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 slapped regulations on the credit card industry that, since its inception, placed dubious practices onto consumers. The Act limits many of the more disreputable practices that card companies had become known for, such as arbitrarily raising interest rates without notice and charging large fees for exceeding a credit limit. Yet, even before the regulations came into effect, creditors found ways to trip up consumers while still falling within the new guidelines. After all, the CARD Act ensured much of their revenue would be lost, so companies had to think up new ways to earn money besides their typical interest rates. Now consumers have a whole new set of traps to look out for if they want to keep using their credit cards.

One of the main money-making schemes that card companies have recently enacted is via surcharges and charging higher fees. Last May, Discover began tacking a 2 percent surcharges on all purchases outside the United States. Rolling over a balance once charged a 3 percent fee, but now, issuers like JPMorgan Chase charge customers a 5 percent fee for such a service. In addition, with no limit to the types of fees that issuers can enable, it has caused companies to simply increase fees or enact them for cards that previously had none.

As a consumer, it is important to go back and read the fine print for your credit cards. The Terms and Conditions statement for your credit card is more important to read than ever before. Even on cards that you rarely use, fees may be added which make the cards much less attractive to have in the long run. Fortunately, new laws require card makers to give ample time and notification of changes, but it is important to not ignore mail from your credit card companies. The letter you pitch in the trash could be a notification of fees that run more than $100 a year.

The new laws have also tightened the credit markets, making it more difficult for consumers to obtain credit. Between March and September 2009, the amount of credit available to consumers dropped by $252 billion, or 7 percent. Under the CARD Act, the availability of credit could tighten further. However for some people, whether they know it or not, this is good news. With the average American household carrying $10,700 in credit card debt, it could be good for the financial health of our country if this privilege is limited.

Many people who have gotten into financial trouble at the hand of credit card companies and have turned to debt settlement programs that help them navigate these deep, difficult waters. A debt settlement company settles your debt with a credit card company for less than the amount that you owe. Greenshield Financial Services is a Financial Health Management Company that specializes in a debt settlement program as alternatives to debt relief, debt help, and bankruptcy to help you learn how to get out of debt.

Author:
Brian Reed. debt settlement program Greenshield Financial Services is a Financial Health Management Company that specializes in a debt settlement program as alternatives to debt relief, debt help, and bankruptcy to help you learn how to get out of debt.

Article Source: http://www.ArticleBiz.com

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