Archive for the ‘Credit’ Category

No Fee Secured Credit Cards: A Lifeline for a Drowning Society

Friday, November 18th, 2011

Secured credit cards, also known as prepaid credit cards, can be used to rebuild poor credit histories because creditors report the consumers’ credit histories to the reporting agencies. The unique advantage of secured credit cards is that users do not create debt when they use these cards because they’re using the money that they’ve deposited on the card in advance of any purchases. Most of these cards can be used anywhere Visa and MasterCard are accepted and there are many secured cards that guarantee approval with no credit check.

Since debt is strangling the life out of most people these days, secured credit cards could prove to be the lifeline needed to help people rise above their financial troubles. There’s a double guarantee against incurring debt because not only are users spending money that they’ve already deposited on the card, but once that money is spent, the card will be useless to them until more money is deposited. This inspires users to exercise control over their spending habits forcing them to think before they act. The only requirements for obtaining a secured credit card is the applicant must be of legal age and they have to be able to load money onto the card. This means that practically every responsible consumer is eligible to receive a secured credit card regardless of their credit history or score.

However, many secured cards have a start-up fee and sometimes these fees can be substantial. While it’s possible to acquire cards with no annual or setup fees, there are still other fees involved like late payment, over the limit, and additional card fees. Some cards have no annual or interest fees but monthly fees are charged if the purchases made are under the required limits. In other words, there are variations on fees that are and are not charged so applicants will have to read the fine print to familiarize themselves with all the terms and conditions of each card.

The following are examples of secured credit cards that require no credit checks, along with a brief listing of their differing terms and conditions.

1) Applied Bank® Secured Visa® Gold Credit Card: One of the favorite choices because there’s no annual fee, no setup fee, and the interest rate is a low fixed 9.99% APR which is considerably lower than most current card interest rates. Deposits made can be from $200 – $5,000. There are no interest penalties on late payments and this card is especially designed for people with low or poor credit histories.

2) Green Dot® Prepaid Master Card® and Green Dot® Gold Prepaid Visa® Card: No transaction fees on U.S. purchases, no overdraft or penalty fees, no interest fees, and no minimum balance required. However, there’s a monthly fee for any month when less than 30 purchases are made, and there are fees for replacing lost or stolen cards, and for additional cards.

3) Vision Premiere® Visa® Prepaid Card: No overdraft , annual or interest fees but there are activation, monthly, replacement card, and ATM balance and withdrawal fees.

4) Capital One® Reloadable Prepaid MasterCard®: No activation, interest or overdraft fees, and there are no monthly fees as long as $500 per transaction cycle is loaded.

5) Walmart Money Card? Visa® Prepaid Card and Walmart Money Card? MasterCard® Prepaid Card: No overdraft or interest fees, and fees for monthly maintenance, reload, additional card, and ATM cash transactions are minimal.

6) REACH Visa® Prepaid Card: There are activation, monthly and ATM fees but there are no overdraft, interest or any other hidden fees.

When considering today’s economy and the status of many people’s credit histories, it’s understandable why creditors are unable to issue cards that are completely free of charges and fees. However, creditors are attempting to extend their services to as many people as possible by being as lenient as they can be with their terms and conditions. It’s therefore up to consumers to review all relevant information carefully to make an informed decision when choosing the card that’s most suitable for their lifestyle.

What is the Meaning of an R9 Credit Rating?

Thursday, November 20th, 2008

When you view your credit report, you will notice status indicators next to each account listed. With revolving credit accounts, they range from "R0" to "R9". The "R" stands for a "revolving" (charge) account. If the account is an individual account, it will show "I", and mortgage accounts will show an "M".

"R9" means that particular account has passed 120 days late, is very delinquent, and has been written off as a bad debt by that company. The bad debt is either charged off or sent on to collections. This does not mean, however, that you do not have to pay this account, or that the company cannot continue to try to collect the balance due.

R9 credit rating remains on your credit report until it drops off after seven years. Until that happens, you will be unlikely to qualify for any new loans or credit accounts. The "R" scale is progressive, from R0 for new accounts, and R1 for current accounts, and up for each period of lateness, or an R7 payment plan, R8 repossession, or R9 charge off/collection. Where you want to be on every account is in the R1 category.

By showing the "R" scale, potential lenders communicate to each other valuable information about your payment history activity, from which they can determine credit worthiness and risk in repayment of any new loan or credit account. You can pay off an R9 account, and request in writing via certified letter to have the company or collection agency notify your credit reporting agency (one of the "big 3" agencies (Experian, Equifax, Trans Union) to remove the R9 rating.

Giving you an R9 credit rating is mean, but it is required of credit card lenders by federal law to avoid inflating company future earnings projections. You earned it by being a poor credit risk and not paying your balance due. It is unlikely that you can get the R9 removed from your account, even after paying off the balance due. Your report may show “account paid” or a zero balance due, but the R9 classification will remain. Therefore it is in your interest to be informed about the “R” system, and avoid being so late that you are marked with an irretrievable R9.

It is valuable to check your credit reports from time to time. You are entitled to a free report from each of the Big 3 (Experian, Equifax, Trans Union) once a year from www.annualcreditreport.com. If you get one report from one agency every four months throughout the year, you can keep a good handle on your report and its accuracy. If you see anything except an "R1" rating, get right on that problem before it progresses further.

Like anything else on the market, credit accounts are a “buyer beware” situation. Use it carefully and benefit from your good credit score, or abuse the system and suffer the negative results. An R9 credit rating will disappear over time, but in the interim, credit privileges may be harmed.

Example of Letter to Creditor?

Tuesday, February 26th, 2008

We all know that our income may change for the worse when we take out a loan. Rough times contribute to many loan defaults. Is this letter a good example of a change in personal finances or loan agreement? I would not be too quick to judge it but I think it needs more specifics (not that we could post those on here anyway).

To whom it may it concern:

This message is to let you know that due to a change in pay periods other issues with my personal finances, I will no longer be able to make the payments as per the original loan agreement. I have noticed different and varied amounts coming from lenders and I am unable to explain the amounts and to cover those amounts as per the original terms.

I have begun the process of counsel and they will be in touch with you soon to make payment arrangements so that this debt can be paid. Please note that I am not trying to avoid payment, I just need to make alternative payment arrangements and I have every intention of doing what I can to ensure that you are paid the fair amount that you are owed. You should expect that my counsel will be in touch with you in the 30 days.

In the meantime, I have notified the bank of my intent and the are aware that I am working on a way to get all of these items paid. However, the money will no longer be available through ACH debit. Also, I will not be able to be reached at my place of employment. If you need to contact me, you may leave a message on my cell phone and my legal counsel will be in touch with you soon to set up the appropriate arrangements.

Again, this is not an attempt to sidestep any debt, I am earnestly working to get this resolved and get you money that you are owed. Thank you for your patience and again, someone will be in touch soon to get this worked out. I hope that didn’t sound to harsh as I do intend to make arrangements to pay off this debt. Please accept my sincerest apologies.