7 Myths about Credit Cards you need to know

There are a lot of myths about credit cards and it’s important that you learn about them. The more factual information you get on credit cards, the more you are going to get out of them throughout your lifetime. Too many people don’t realize certain things about credit cards that they should. This article will provide you with all of the information you need when it comes to credit card myths so you will know the truth.

1. Writing “See ID” on the signature line will stop thieves

Some people believe that writing “See ID” on the signature line on the back of their credit cards will stop thieves from using them, but this is not the case at all. These people think that salespeople are going to look at the back of the card and ask for ID when they see that “See ID” is written on it. The truth is that an unsigned card is technically invalid, so you will need to put your signature on yours.

2. There is no credit limit on an American Express card

If you think that there is no credit limit on your American Express card, you will want to think again. While American Express commercials claim that there is “no preset spending limit,” the fact is that now AmEx does not issue just charge cards, which are a very effective way to rack up a lot of debt. American Express issues credit cards as well, which allow you to carry a balance.

3. You need to have one of each of the big cards

While some people may tell to you that you really should have one of each of the big cards (Visa, Mastercard, American Express and Discover), the truth is that there is nothing wrong with just having one or two. The more credit cards you have, the more likely you are to go into debt. It is important to keep this in mind as you think about just how many cards you want to apply for.

4. You can boost your credit score by paying more than you owe

Another common misconception about credit cards is that paying more than you owe can actually increase your credit score. The reality is that whether you have a credit of $100 or $1,000, it will still show up as a zero balance when it comes to scoring purposes.

5. Using your credit card wisely can help your credit score

Perhaps one of the biggest credit card myths that exist is that using your card wisely will help your credit score. While it’s true that having a bank account and using it responsibly will demonstrate that you are responsible, it won’t be factored into your credit.

6. Keeping your Balance under 30 Percent of your total credit limit is good for your score

While it might seem like keeping your balance under 30% of your total credit limit could do wonders for your credit score, the truth is that it really doesn’t matter at all. This simply doesn’t make any sense, so you don’t want to get all caught up in trying to do this.

7. You can go over your credit limit and pay it back before the due date but still be fine

Going over your credit limit is never a good thing, and paying back the full amount before the due date simply won’t do anything for you at all. You always want to keep close track of your credit card spending so don’t end up going over your allotted limit.

Conclusion

With so many different credit card myths out there, you will definitely want to make a point of getting all the factual information you can. One of the most common reasons that people fall into credit card debt is because they acted according to the myths that have been perpetuated throughout the years by uninformed consumers. The more time you take to learn these facts, the better off you are going to be. Credit card debt can take many years to get out from under, so you will therefore need to arm yourself with knowledge as much as possible.

A Comprehensive Guide to Secured Loans

A secured loan could be exactly what you need when it comes to getting money for some sort of expense. These days lots of people are getting secured loans because of all the benefits they have to offer. We highly recommend that you take the time to see what secured loans can offer you before making a final decision. When you take the time to learn everything there is to know about these loans, you will be prepared to get one.

Types of Secured Loans

There are numerous types of secured loans that you will be able to take out, and you will definitely want to know what they are.

Mortgages are one of the most common types of secured loans. The house that you purchase acts as the collateral in case you are not able to pay back your loan in full for whatever reason. If you miss payments on your loan, you can go into foreclosure and lose it entirely.

Car loans are secured loans that are attached your car. With this type of loan, you will risk losing your car if you get too behind on payments.

Secured credit cards are also a type of secured loan. A bank will typically require you to attach a Certificate of Deposit (CD) or savings account to this type of credit card. Most banks will do this for customers who are trying to rebuild their credit history. Your credit limit will be the exact same amount as the CD. If you fail to pay, the bank takes the money from the attached CD. It is important to keep in mind that you are not allowed to take money out of the CD or savings account that is acting as collateral for the loan.

A title loan is when you take a car that is already paid off and use it as collateral for another loan. These loans are usually smaller and carry higher interest rates than other more traditional types of secured loans.

Advantages of Secured Loans

There are many advantages of getting a secured loan, and you will want to find out what some of them are. A secured loan typically comes with a much lower interest rate than an unsecured loan, which is a huge plus. If you want to greatly reduce the amount of interest you pay on a loan, this type of loan is probably the best option you have.

It is important for you to be careful when it comes to choosing your collateral for a secured loan, simply because you don’t want to risk losing something that will have a hugely negative impact on your life. While some people are willing to risk losing their home over a loan, you may want to think twice. That being said, a secured loan can be a great way to build your credit if you are trying to repair it.

Disadvantages of a Secured Loan

While it’s true that there are a number of disadvantages associated with a secured loan, there are also some disadvantages and dangers that you should be aware of. The biggest and perhaps most obvious danger associated with a secured loan is the fact that you will risk losing whatever property you put up as collateral. Taking on too much debt may make it extremely hard for you to meet all of your financial obligations, so you will need to keep that in mind. The last thing you want is to end up losing your home or car because you weren’t able to pay back your loan for whatever reason.

Conclusion

A secured loan can be a great idea if you need money for something and have property that you can put up as collateral. There are a few considerations that you will need to make before getting one of these loans, and it will really benefit you to keep them in mind before making a final decision of any kind. Each year millions of people all over the county get secured loans, but many of them rush in without considering some of the more important aspects. You will certainly be glad you took the time to think about these kinds of things.

Is it Worth Getting an Interest Free Credit Card

There are many types of credit cards out there and it can be tempting to try an interest free one. These sound fantastic because you can borrow money for nothing, but it is worth considering it before going for it.

Firstly these credit cards will not be interest free forever. You will find that they will start off interest free and then move onto a variable rate after a few months or if you a lucky a few years. The variable rate of these cards tends to be extremely expensive and so you could soon end up paying as much interest as you would had you gone for a cheaper, standard credit card. It is worth checking what the rates are and comparing them to other cards so that you can work out whether it is such a good idea after all.

Some people take out the interest free credit card and save up the money that they need to pay it off. They will put the money they need to pay off the card each month in a savings account and then after the free interest period runs out they pay it back. This allows them to gain interest on the money that they have saved and they can make a profit out of the card. This is a great idea as long as you know that you have the self-discipline to save the money and pay it back before the interest starts. When interest rates are low, it is less profitable though as the savings account does not accumulate much money.

This sort of scheme is a risk though and you will have to decide whether it is the right sort of thing for you. You will have to make sure that you do save up the right amount of money, that you are not tempted to spend it even if you really want to and that you pay it back when needed so that you do not get charged any interest. Only you know whether you will be able to achieve this as you know how good you are at saving money and making sure that you do not spend it. You will also know whether you are likely to have enough spare money to be able to save up each month.

Some people transfer a balance from a credit card to an interest free one. This can be really useful as you will move the money away from a card where you are paying interest to one where you are not. There is a problem with this though as most interest free cards will charge for balance transfers and so you will need to calculate whether it is still cost efficient to transfer the money. Also you will need to make sure that you pay off the outstanding balance during the interest free period as the interest will be very high once it ends and could mean that it ends up being more expensive than leaving it where it is.

It is also really important to make sure that you are aware of the terms and conditions of the card and any charges it may have. For example as well as knowing when the interest free period ends and how much the interest will be once it does end, it is important to find out what the charges are for using the card abroad, drawing out cash and things like that. If you want to use the card for these things then you could find that it ends up being more expensive than using a standard card. Therefore it is really important to know exactly what the charges will be before you use it.

So getting an interest free credit card can be really useful and save you a lot of money. However, you do need to make sure that you are careful in how you use it. Make sure that you are aware of all of the charges so that you use the card responsibly. You should also be confident that you will not have outstanding debt when the interest free period ends so that you can take full advantage of not paying interest. If you end up paying interest you will find that it is a lot dearer than with a conventional card and so you need to avoid this.