Myth No. 1:  It’s okay to apply for a credit card; you can always back out by not calling the activation number.

Have you applied for a credit card and yet changed your mind later on and decided not to keep it?  If you think that not activating the card will protect your credit score, you’re mistaken. Take note that the moment you send your credit card application, credit inquiry will be instantly made which can affect your credit rating.

If you want to use the credit card to pay a bill, you will need to call the activation number.  However, once your application has been approved, the account will automatically be reflected in your credit report whether you call the activation number or not.  Bottom line?  Don’t apply for a credit card is you’re not sure whether or not you want to keep it.

Myth No. 2: You cannot do anything about unsolicited credit card offers.

There is something you can do to cut down unsolicited mails from credit card issuers.  Call 1-888-5-OPT-OUT to “opt out” which means your contact details will be removed from marketing lists that are sold to credit card companies.

Myth No. 3: You can buy anything you want if you get a card with “no preset spending limits.”

Not exactly.   Some people are made to believe that their credit cards literally have “no preset spending limits” which means they can charge as much as they want to their card.  But the fact is that all credit cards have a limit except that some issuers allow their customers to exceed depending on the cardholder’s income and payment history.  If you are earning minimum wage, don’t expect your borrowing limit to stretch too high.

Myth No. 4: Paying your full balance on time is all that matters.

Aside from timely payment, it’s also important to watch your credit limit usage.  Financial experts recommend not exceeding 50% of your available credit no matter how low the interest rate is.

Myth No. 5:   All reward credit cards are rewarding.

From afar, all reward credit cards may seem to give the best offer.  It is only after you take a closer look at the complete Terms and Conditions that you can see the real deal.  More importantly, choosing the right reward credit card depends on your spending and lifestyle.  Remember, what is ideal for one person may not be the same for you.  To really get rewarded, you must be able to pick the right reward credit card and handle it responsibly.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit card and prepaid cell phone services can save you big money!

The DO’s:

Do pay on time. If you want to use a credit card, be sure that you can pay on time. Keep in mind that timely payment is the only way you can avoid additional finance charges.

DO charge only what you can pay. Before using your credit card for any transaction, check your due date of payment. Will you be able to pay your complete balance on time? How do you plan to pay off that particular purchase?

DO pay your full balance. Instead of submitting only the minimum monthly due, leaving it’s best to pay your full balance to avoid interest rate fees and protect your personal credit.

DO check your monthly bill. Do you review monthly billing statements from your credit card issuer? Before posting your payment, make sure that all charges in your account are accurate. If you do not receive your bill on time, call up your Issuer immediately and ask for an update.

The Don’ts:

Don’t maximize your limit. To be safe from bad credit, it’s best to keep your charges minimal. Ideally, do not use more than 50% of your available credit. By doing so, you can make a good impression to potential creditors to whom you have sent applications to.

Don’t carry all your cards in your wallet. If you own a number of credit cards, it’s best not to bring them all, especially if you plan to shop. Having too many credit cards that you can use may only encourage overspending. In addition, you will have a hard time calling up each credit card company in case your wallet gets lost or stolen.

Don’t close old cards. Be careful about closing out your oldest credit card accounts as doing so would mean erasing the oldest parts of your personal credit history. If you have a new credit card with a better rate, you can still keep your old credit card active by using it exclusively for small purchases.

Don’t transfer huge balances into one card. Transferring balances to a zero interest credit card is a good strategy but you need to make sure that you are not maximizing the cards’ credit limit. Remember that maximizing your limit can pull down your credit score.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

Who Should Get A Pre paid Credit Card?

While pre paid credit cards offer instant approval, it’s important to understand that these are not the same as a regular credit card.  First, prepaid cards do not provide its holders with a borrowing limit.  Second, these credit cards require the submission of a cash deposit in the cardholder’s account. Third, the cardholder can only use a prepaid credit card if there is an available balance in the account.

However, despite the limitations, those who have a problem with their credit history can use pre paid credit cards to rebuild a poor credit rating.  Through regular use of this card, the cardholder can slowly but surely build up credit history without the risk of bad debt.

Who should apply for a prepaid credit card?  If you cannot qualify for a regular credit card and you want to establish or build credit, then a prepaid card is a good option.  For parents who need to send money to their kids in college, providing them with their own prepaid credit cards is the most convenient and safest way to send and receive cash.   Travelers can also use prepaid credit cards as a safer way to pay for all their travel expenses..

How to Get A Pre paid Credit Card?

Pre paid credit cards can be acquired by visiting your nearest bank or by submitting your application online.  To get approved, the applicant must first open a deposit account and submit the minimum required payment.  The amount can range anywhere from $200 to $500 and above, depending on the prepaid card issuer.  Keep in mind that the amount of your security deposit will also determine your spending limit.

Since charges are automatically paid using the funds in the cardholder’s account, there is no need to worry about additional interest rate fees.  Nevertheless, there are other costs that can be expected such as the set-up fee, maintenance fee, transaction charges, and possible penalty fees.

Can you use a pre paid credit card for establishing credit or repairing bad credit?  The answer is yes as long as your chosen issuer offers credit reporting service to the three major consumer reporting agencies.  Before making choice, check out the complete terms and conditions of the prepaid credit card.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

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Prepaid Credit or Debit Cards for Everyone

Issuers of prepaid debit cards give everyone the chance to use plastic money without going through a complicated approval process. Unlike standard credit cards that require good credit history, credit check is not necessary to get a debit card. All that is required is an advanced deposit which will be used for payment.

Just like a regular credit card – you can use it when buying groceries, shopping at malls, paying utility bills, or purchasing from online stores. As long as you have available funds in your account, you can use it to pay for your charges.

Prepaid Debit Card Limits

What makes a prepaid card different from a real credit card? First, we must understand that a debit account does not come with a credit line. Each time a debit card is used for payment, charges are instantly paid off using the deposit in the cardholder’s account.

For instance, if you have made a $300 deposit, you can only use your debit card for charges up to $300. If you want to continue using it for more, you must make a new deposit in your account.

Prepaid Debit Card Advantages

Generally, prepaid debit cards are accepted anywhere credit cards are accepted. Most merchants allow both credit and debit card payments. This is especially true if your prepaid card bears the Visa or MasterCard logo.

Prepaid debit cards are great for people who are often on the road or on trips abroad. Instead of bringing a large amount of cash, they can use a debit card for most of their travel expenses. Students can also benefit from prepaid debit cards since it prevents them from incurring bad debt. For parents, they can conveniently send cash to their kids through their prepaid accounts. Even employers who hire home based employees or freelancers can use a prepaid debit card to send wages or service fees.

Although some people may frown at the thought of not being extended a credit line, those who want to control their spending will find this limitation as a blessing. And because you are not allowed to go over your limit or to pay at a later time, extra fees such as interest rate, overdraft fees, late penalty fees, and other credit card surcharges are completely eliminated.

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

BIG MISTAKE

I then had to inform him that I have excellent credit and CHOOSE to use my credit card for emergencies only. I told him that using a prepaid credit helps me to stay on budget and I don’t make impulse purchases the way I used to.

That’s when the lady behind us chimed in, that she had recently read an article in the newspaper on how people were starting to use prepaid debit cards instead of regular credit cards.  Using a debit card doesn’t mean bad credit anymore, its becoming the  card choice of debt conscience people!

About the Author

Tara Tiemann is a credit analyst of Go-prepaid.com and has been a resource site for people who want to live debt free! If your on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

Sponsored by:

Prepaid services are great for anyone who is:

• serious about staying on a budget – with prepaid services you know EXACTLY how much you can spend or how many minutes you have. Once you go through the money on your account you get notified to add more money. You can add the money or not, its up to you. No more surprise bills at the end of the month!
• anyone trying to get out of debt! Credit cards are too easy to run up thus leaving you perpetually in debt!
• they are good for anyone going to college – many of the credit cards have a credit builder function so you can work on building credit
• anyone who wants to stay off the credit radar! Most prepaid services don’t pull credit !
• the prepaid cell phones are great for anyone of any age. My sister gives them to her son so that in the summer when he is at his dad’s he always has a way of contacting her & she has a way of contacting him whenever she wants!

There are many ways of using a prepaid card or cell phone. You can use them for business too, i worked for a company online a few years back that gave us all a prepaid Wired card that they would load our paychecks on every 2 weeks. It worked out great. I could use it to make purchases and when I needed cash, I would just go to a store, buy whatever I needed and get some additional cash out with my purchase.

If you are considering going prepaid, now is the time to do it! I no longer want to be at the mercy of the credit bureaus!