How to Get A Credit Card No Matter
How Bad Your Credit Rating
Your credit is bad. Perhaps you have a string of unpaid bills haunting your past. Maybe you declared bankruptcy within the past 10 years, or defaulted on a student loan.
All the above can block your access to obtaining a major credit card, such as VISA or MasterCard.
But bad credit is not the only reason
you can be denied a major credit card. Some people simply have never used credit. People who like to pay cash only, have never financed a car,
taken out a college loan, or a mortgage may have zero experience with
credit. In that case, most card companies will reject your application,
not because you have bad credit but because you have no credit rating.
Many women who marry young and do all
their borrowing under their husband's name often find themselves with no
credit rating after they are widowed or divorced. Thousands of women have been denied loans and
credit cards on that basis.
Still other people carry too much debt
to be considered a good risk. If you have a car loan, a student loan, a
mortgage, two or three out cards, you are unlikely to be granted another
credit card.
But in all the above cases, you can
still obtain a credit card. No matter how bad your credit, and even
if you have declared bankruptcy, you can still be granted a VISA or MasterCard
with a limit as high as $5,000, if you know the write company
to call, and how to make your
application.
We are going to reveal these card
companies and the methods by which you can obtain a VISA or MasterCard later
in this report, but first, let's talk about some of the other things you should
know about credit cards, including annual fees, interest rates,
credit reports and more.
Your Credit Rating How do credit card companies decide if
you are a good credit risk or a bad credit risk? Well, it's sort of a Big Brother thing. There are several large agencies in America
another.
The three major credit rating agencies
are: Experian, Equifax and Trans Union Corp. :
When you send in an application for a
credit card, the card company contacts one of the above agencies,
which pulls your file, if one exists, and let's the company know if you have
any bad debts in your background.
If you have never borrowed money or
used credit of any kind, your name will not appear in the data base of any of
the above. If you have, there will almost certainly be information about
you. If you have ever defaulted on a bill, or walked away from a debt owed,
that information will be available. If you have never defaulted on a loan,
but have made frequent late payments, that is recorded, too, and
goes against your credit rating.
25 Percent Error Rate
If this sounds a bit like Big Brother,
most would agree with you that it is. It's scary to think that some large
anonymous corporation is keeping a file on you, but it's true. Furthermore, they will share your file with any lending institution that wants to
know something about you. That's the price you pay to obtain credit. You've heard the statement, "there isn’t
no such thing as a free
lunch." When it comes to the game
of credit, the lunch is not free, neither in the
monetary sense, or in the realm of personal freedom.
To top things off, credit agencies make
errors in as many as one-fourth (25 percent) of all their reports. At this minute, false information about you may be ruining your credit rating.
To check your credit rating for errors,
call the agencies at the numbers we provided above. They will request that you send them a
written letter asking for a copy of your credit
report. They will send you a copy of the information they have about you.
Now let's look at how card companies
make the big bucks interest rates.
Interest Rates
A few decades ago there were laws
against charging the kinds of interest rates credit cards get today. Exorbitantly high interest rates were called "usury," and were forbidden
by federal law. Just 30 years ago
loaning money at 20 percent would have landed
any banker in prison. Such rates were the territory of loan sharks and
organized crime?
Today, however, it's standard business. Some cards have rates approaching 21 percent. Some product manufacturers, such as Apple
Computer, have credit plans that push a whopping 23
percent. Most credit card companies attract
customers with super low interest rates, sometimes as easy as 5 percent. But what they only tell you in the fine print, which few people bother to read,
it that the interest rate jumps back up after six months. Many cards that start you out at 6 percent
soon jump to 18 percent, or higher. By that time, most people have chalked up a balance and are stuck. Most people simply fail to notice when their
rate increases. Credit card companies count
on that. They like who take no interest in details. If you don't watch them, they'll watch you and your wallet and dip into it in the
most insidious ways.
No Annual Fee Cards
Some credit card companies charge no
annual fee for use of their card. Annual fees range from $18 to $55. You pay it every year simply for the privilege of using the card. Other companies charge no annual fee. You might think, then, that this is a
better deal. Most often they are not. Cards with no annual fee almost always
have a higher interest rate. If you
leave a monthly balance, you'll always
pay more than the annual fee in interest charges. Only if you never leave an unpaid monthly
balance can you benefit form a card with no annual
fee.
Perks and Freebies
One of those insidious ways is the
offer such perks as frequent flier miles or annual rebates. Use the card so often, and get X amount of
frequent flier miles. Use your card, and get credit toward the
purchase of an automobile. Is this a good deal? Hardly ever.
As you might have guessed, the offer of rebates and gifts is
simply an inducement for you to pay super high interest rates. Unless you are a big spender and travel a
lot, you'll rarely benefit from this kind of
promotion.
Be Choosy
In short, never sign up for a credit
card until you compare rates. Shop around. Credit card companies are just as competitive as any other kind of business. That means interest rates that vary
widely. In general, never go for a card that is five percent
higher than the current prime rate.
How to Get a Lower Rate
What if you are already on the hook
with a major credit card with an agonizing rate of interest? Pick up the phone, call your card company,
and get tough. Often, if you ask for a lower interest rate,
you'll get one it's as simple as that.
As further incentive, you can threaten
to transfer your balance to another card company with a lower rate. Many card companies are more than willing to take you on as a customer by paying
off one of their competitors for you. Of course, you are then beholden to them. That's okay if you score a lower interest rate.
How Anyone Can Get a Credit Card
Now what about all of you
"hopeless cases" out there. What if you have deplorable credit, or no credit rating
at all. You may have already been turned down by a half-dozen card
companies. What can you do?
First, you should think long and hard about
why you want a credit card in the first place. If you have a history of bad credit, a credit
card may be the last thing you need. Many people feel that credit cards and the
debt they lead people into is a modern form
of slavery.
Credit cards are almost magically
deceptive and alluring. They get at the deepest psychological lever of the
human mind a lever which allows people to have the feeling they are
getting something for free, when in fact, they are paying two, three, four,
even ten times as much for that product because of the interest they
will pay on each purchase.
On the other hand, not having a credit
card is becoming less and less practical in modern America
A Secured Card
If you decide you need and want a
credit card despite your past problems with credit, you should get
what is called a secured credit card. Even people who have declared
bankruptcy are granted secured cards.
A secured card works this way: you pay a lump sum of cash upfront either to your bank or the card company
itself, usually from $200 to $2,500. The card company will then grant your
credit for up to 150 percent of the amount of your deposit. If you pony up $500, you will be granted a
$750 credit line. If you put up $1,000, you will get $1,500 in
credit, and so
on.
Your deposit money will earn a very
nice 4 to 5 percent interest while it is held as collateral by your bank or
the card company. The deposit money acts like a buffer for the lender. In the event, you default on your card debt, the lender gets to keep your
money. They may still incur a net loss, but the risk is far less.
Additionally, the interest you gain on
your deposit will offset the interest on your monthly balance if you
have one. If you get a secured card with an 18 percent interest rate,
you can feel good about the fact that your pre-payment is earning 5
percent.
Which card companies offer secured
credit card plans? The following:
Citibank Minimum deposit is $300,
which earns 4%. Call: 800-933-2484
Federal Savings Bank Minimum deposit
is $250, which earn 2.5%. Call 800-285-9090
Orchard Bank Minimum deposit is
$400, which pays 4% Call 800-873-7307
Key Federal Minimum deposit is $300,
which earns from 4% to 5%. Call 800-228-2230
Signet Bank Minimum deposit is $200,
which earns 5%. Call 800-333-7116.
Using a secured credit card can also
help repair your credit rating if you use it responsibly over several years. Even if you do not have bad credit, a
secured credit card is recommended for anyone who wants the safety and
convenience of a credit card. Secured
cards are a safe, responsible way to
control your spending, and you earn money though interest on your
deposit while you enjoy the use of your
card.
No comments:
Post a Comment