February 23rd, 2012
**Today’s guest post is contributed by CreditCardChaser.com.**
What do you do when it comes time to pay for your fast food meal or maybe a new television? What makes you decide if you will use your credit card or debit card? This dilemma has been going on for years.
There are multiple reasons on why one would choose a certain card over another. In the end, it is up to you. However, here are a few general guidelines to keep in mind next time you’re deciding between your debit card or credit card.
Debit Card Over Credit Card
It seems like the debit cards are slowly being overtaken by “buying on credit.” However, Credit.com gives statistics showing that there are almost 520 million debit cards in circulation. So even though buying on credit is becoming very popular, it looks like the debit card is still king. When is a good time to use your debit card, though?
March 14th, 2011
To pay or not to pay off a credit card; that’s a very good question.
Check out this answer to this frequently asked question, and make sure its your credit card paying philosophy!
August 17th, 2010
Credit cards can save you in a financial emergency, or wreck your credit in a moment of financial weakness. The following questions from the Credit Advice Center feature consumer questions on how to handle credit card conundrums and keep your credit score intact.
December 16th, 2009
Swiping your credit card virtually anywhere will soon be possible with a dongle, a phone case that swipes credit cards. The dongle swipes the card and accompanying application which runs the transaction through your iPhone. This high-tech application will make it temptingly convenient to charge to credit anywhere and anytime. Useful gadget or just more incentive to spend? For more on the latest on credit card and debt news, check out today’s round-up:
Credit Card News
- MoneyNing asks, why give my kids a student credit card?
- Associated Press reports that more on-time credit card payments expected in 2010. Is credit management one of your New Year’s Resolutions too?
- As debit cards grow, rewards programs follow, writes SmartMoney; Credit Karma picked up early on this hot topic last week with our own review of a debit rewards program card.
- Enemy of Debt suggests paying an extra 10% towards your credit card balance each month as one of 5 simple ways to pay down your credit card bills faster.
- Is there anything you should be worried about putting on your credit card? Realm of Prosperity tells you how to hide naughty credit card purchases.
- Check out Fox Business’ 8 ways to stay debt free during the holidays.
- Good news on the nation’s personal finances: US household wealth up, debt down reports AFP.
- “Unhook the cable,” Gather Little By Little suggests. Read save $2000 or more this year for more household tips to cut down on spending to cut out that debt.
- The benefits of leveraging debt to create multiple income streams from Rich Credit Debt Loan explains how to use “good debt” to actually help you secure your financial future.
- An Emergency Fund’s tip on credit card’s payment protection plan can help you take advantage of emergency monthly payments that your issuer may offer.
December 1st, 2009
Our new weekly Blog Q & A is for our users to ask any questions about credit and personal finance; we’ll answer and post on the blog for readers to catch up on what our users are asking. Submit a question now, and maybe we will answer your question on our next Q & A post! So, without further ado, here’s the inaugural Blog Q & A.
Dear Credit Karma,
Is a credit card payment paid 5 days late reported as late on a credit report?
A payment that is only 5 days late will not typically show up on your credit report, but you may face other consequences including paying a late fee as high as $39 and an interest rate increase of up to 30% on your outstanding balance. While the rest of the provisions of the CARD Act, effective in February 2010, includes cardholder safeguards against late payment rules such as full disclosure of late payment deadlines and postmark dates on your billing statement, each issuer can set specific payment guidelines that you should know for each of your cards so you know when your payment will be considered late.
Credit card payments posted 30-60 days past due will become a negative mark on your credit report and will temporarily damage your credit score anywhere from 60-110 points, depending on your credit standing (You can see how much a late payment will affect your score at our Credit Simulator). Furthermore, the later your payment and the more frequently you default affects how much your credit score is impacted. At 90 past due, your account is considered delinquent and will remain as a negative mark on your credit report for up to 7 years, which will damage your credit score even more, as well as stay on your credit report for a longer period of time. Avoid at all costs being later than 180 days of less-than-minimum or no payments, at which point your account will be “charged off”; your issuer will close your account, a debt collection agency may pursue you until you pay your debt in full, and your credit score will take an even worse hit due to a closed credit account.
Even though being a few days late may not drastically impact your credit score, paying on time means you’ll save yourself the late fees and higher interest charges. Try to avoid these fees by checking your billing statement for the specific date your payment is due and be sure to send it beforehand, follow payment guidelines precisely, and always pay at least the minimum amount. The best way to avoid being late is to set up automatic online payments so you never miss a deadline.
Dear Credit Karma,
I have an average credit score, but I want to get a credit card without spending 200 dollars. Is that possible?
While it is definitely possible to get a credit card without spending 200 dollars, it depends on where your “average credit score” falls and what type of credit card you can qualify for.
For example, if your score falls in our range of fair credit scores of 550-639, you are much more limited in your credit card options and may only be approved for a secured credit card, which has some fees and costs. A secured card, like the Public Savings Bank Secured Visa, functions like a credit card but also requires a minimum $200 security deposit from the cardholder. On the bright side, this card has no credit requirements and is especially effective at building good credit history for people with less-than-perfect credit. However, like all secured cards, there is a $200 minimum security deposit and this card also requires a one-time application fee of $79. If you aren’t willing to deposit the $200, keep in mind that you’ll get 100% of your deposit back if you close your account in good credit standing. Think of the deposit as an investment in your credit history that will enable you to build your credit and qualify for a traditional credit card. Orchard Bank Classic Mastercard is another good secured card option that has no processing fee, minimum $200 security deposit, and the annual fee is waived for the first year; plus you have the option to upgrade to an unsecured credit card if you qualify.
If you want an unsecured credit card, your score should fall within our good credit range from 640-719. With that credit score, you are likely to qualify for credit cards like the Chase Freedom Card, which is a great cash back card with no annual fee and $100-200 bonus after you make $500 in purchases in your first 3 months from account opening. Another good option is the Citi Platinum Select Card, which has 0% APR for 9 months and low interest and fees. With a better credit score, you’ll have a better chance qualifying for a credit card with low fees and does not require a deposit.
November 18th, 2008
There are stories all over America right now that are talking about college students finding themselves in severe debt. These students find it impossible to tell their parents and are overwhelmed. They are completely unaware of the fact that there ways to come back from debt and bad credit. Rather than seek help, they simply gave in.
The first step in order to improve your credit health is to gain a better understanding of the number that determines your credit worthiness. Your payment history generally comprises about 35 percent of your score, meaning that you need to pay every bill and every credit card payment in advance, rather than just on time. This will tend to tell potential lenders that you are much more likely to pay them off in full and on time all the time without any hassle.
The more recent the mistake is, the worse it will be for your credit report and score. 30 percent of your credit score is based on your current outstanding debt, including how much money is still owed on car loans and home loans, and how many credit cards you have that are at or close to their limits.
You should have a few credit cards, and they should always be 35 percent or less of their limits. This is going to indicate whether or not you are in control, using your limits wisely, and whether or not you are actually living on your credit. How long you have had your credit for also plays a part, contributing about 15 percent to your score. This is because lenders are going to want to know that you have a long standing history of paying as a responsible borrower.
Another 10 % of your score is based on how many inquiries exist for your credit reports. If you are constantly applying for tons of credit cards and loans, then this is going to indicate that you are in financial trouble and may steer lenders away from you.
The final 10 % of your credit score is usually based on what types of credit you have. This should be a mixture of unsecured credit cards and revolving loans, showing that you are capable of handling your money. Improving your credit health should begin with making payments on a timely basis, working your balances down to below 30% of your limit. You’ll also need to improve your credit history by finding out what caused you to fall behind and figuring out a way to rectify the issues. You can usually call your creditors for smaller monthly payments, smaller interest rates, new due dates or longer terms in order to better manage your debt.
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