Do You Need to Cancel Your Credit Card?

Knowing when to apply for a credit card, when to use it, how to pay it off and when to tuck it away in a drawer can be a complicated thing. Credit cards can be lifesavers for those in nasty situations, but they can also be akin to a bottomless black void that sucks in the naive and drowns them in debt. If you use your credit card as a safety net for every little expense, it might be time to examine your credit woes. But do you need to cancel your credit card?

First of all, credit cards which aren't used don't do any damage to your credit. Unless you pay an annual fee, you won't be charged anything for your inactivity. It is possible to have a credit card for twenty years, not use it, and suffer no consequences. However, you have to understand how credit cards work, and how credit cards affect your credit score.

Amount of Credit Available
When you apply for a loan or a line of credit, the lender will run a credit check. They will discover whether you have dilinquent accounts, how well you pay your bills, and how much credit you have available to you. Every credit card currently open under your name has a credit limit, which can be anywhere from a couple hundred dollars to several hundred thousand. The amount of credit available to you through credit cards can affect whether or not a lender extends credit.

Credit Card Payment History
A potential lender can also view your payment history and find out if you have any outstanding accounts. If you pay your credit card debt on a regular basis and keep a small or zero balance, then you're more likely to have credit extended to you. However, if you have multiple open credit card accounts but never have a balance on any of them, the lender may view this as a negative red flag. It shows the inability to manage your credit cards and your finances.

Multiple Cancellations of Credit Cards
It can also be a negative red flag if you suddenly cancel several credit cards. Let's say, for example, that you find yourself in several thousand dollars worth of debt. In a panic, you call every credit card in your wallet, thinking that if you don't have the option to spend, you won't. However, the next time you attempt to take out a loan or a line of credit, the lender will see this sudden cancellation of your credit cards. Again, another red flag.

Should You Cancel Your Credit Card?
If you have a credit card in your wallet that you simply don't use, or that you don't want, there is no immediate penalty for cancellation. You won't have a black mark on your credit report. However, you should carefully examine the reasons for cancelling your credit card. Is it because the annual fee is too high? The interest rate is undesirable? You've had problems with the credit card company in the past? All of these are valid reasons for wanting to cancel your credit card. However, if you are just looking to dump avenues of credit, you might want to think again. If there isn't an annual fee, you won't be penalized for leaving the credit card open.

Final Words
Consider evaluating exactly how much credit you have available to you. If you believe it's too much - for example, it might deter a lender - then begin to whittle it down. Don't go out and cancel all your credit cards at once, but slowly begin to weed them out. When you have too much credit available to you, potential lenders might not want to issue you a loan or line of credit in the future. However, don't make any rash decisions. If you're unsure, contact a financial advisor for more information and for an individual consultation of your credit.

Source: Associated Content

How to Guard Against Credit Card Fraud on Your Website

Identity theft is not just a problem for the consumer; it is just as much of an issue for businesses that accept credit cards. Since it is much easier to commit credit card fraud on the Internet than in a brick-and-mortar store, e-commerce sites have to be particularly careful about how they do business. Following are several tips on how to guard against credit card fraud on your website.

Credit Card Fraud Tip #1: Require the Verification Number
By now, you've probably made at least one Internet purchase during which you were asked for the three- or four-digit number on the back of your Visa or MasterCard. This is what is known as the CVV (card verification value), and is meant to protect against Internet credit card fraud. If you offer products for sale on your website, requiring the verification number will help to control the theft of card numbers.

Credit Card Fraud Tip #2: Contact Customers if You Are Suspicious
There is no law that says a website purchase has to remain over the Internet. Hopefully, you have collected the customer's contact information through your website (name, address, phone number, etc.), so you can call that customer and verify the transaction. If you receive a number that is disconnected or if the person who answers doesn't know what you are talking about, you should cancel the transaction immediately.

Credit Card Fraud Tip #3: Pay Attention to Conflicting Addresses
When you sell merchandise on your website, you should be requesting both a billing and a shipping address. If the two are different, it should send up a red flag. Obviously, many of these instances will be completely legitimate; if the customer has recently moved or if he wants the product shipped to another location, the addresses will be different. However, if you have a billing address in California and a shipping address in New Jersey, you might want to go the extra mile to verify.

Credit Card Fraud Tip #4: Use an AVS System
Another way to guard against credit card fraud on your website is to use an AVS (automatic verification system). This matches the zip code entered by the customer with the zip code on his or her billing address. If it doesn't match, the purchase doesn't go through.

Credit Card Fraud Tip #5: Beware Webmail Users
There are plenty of cases of credit card fraud that include webmail users, which means that the customer signs up for a free e-mail account -- such as Yahoo! or Hotmail -- rather than a paid e-mail account. Since these e-mail addresses aren't tied to the user in any way, they facilitate credit card fraud. Of course, I have a Yahoo! account, and so do other legitimate customers. Just beware if there are other red flags in conjunction with a webmail account.

Source: Associated Content

Why Use a Prepaid Credit Card?

Why should anyone consider using a prepaid credit card? First of all booking or ordering almost anything without having a credit card is near impossible, or at least incredibly inconvenient and downright embarrassing! In today's society not having a credit card effectively isolates you from the convenience of the modern economy. if you don't believe me try renting a car, booking air tickets or reserving a hotel room or even theater tickets without one!

The simple fact is that not everyone qualifies for an unsecured credit card (for unsecured credit card read "normal credit card"). Normally this is down to previous credit problems. Everything involving credit comes down to a computer credit score nowadays and unfortunately computers don't care about your divorce problems, that you were laid off last year or that you had some unexpected emergency outlay such as major home repairs - if you have a low credit score then you will not get approved for lines of credit and having a conventional credit card is not an option. Gone are the days when you could perhaps discuss your problems with a friendly bank manager who knew your history, computers decide on your eligibility for credit using raw data from credit institutions.

There are, however, a couple of options if you find yourself unable to get approved for a card. The first and most popular option is a prepaid credit card. this essentially means you have a credit card that is accepted worldwide - such as Visa or Mastercard - but you have to prepay, the credit limit is set at the cash balance remaining on the card. This allows you to have most of the convenience of a credit card and also stops you from getting into any further financial difficulties. Also when you use these cards no one will realise it's a prepaid card, it looks just the same as any other credit card. essentially these cards operate much like debit cards. The only difference is the money does not come directly from your checking account, you have to credit the card with payments first. the only downside to these cards is they will not help you rebuild credit, the payments you make to the card will not show up on your credit file.

To re-establish your credit you need a secured credit card. This works in a similar way with your initial payment setting a credit limit. However this initial payment does not go onto the card as a balance. The payment is kept as security in case of default and the card operates in much the same way as a conventional card, with interest payable. If the card is run in a satisfactory manner then over time the credit limit extended will increase over and above the initial deposit and payments made are reported to the credit bureaus. This can mean an increased credit score and eventually the end to your credit problems. The disadvantage with this type of card is that it is possible to get into financial hot water once again!

Source: Associated Content

Student Credit Card Basics

Most high school and college students will find it difficult, if not impossible, to be approved for a standard credit card. Fortunately, there’s another option. Students can apply for a student credit card, which is not only easier to get, but can help them start building a credit history.

For the most part, a student credit card is just like a standard credit card. But, because this is the students first chance to prove they can be financially responsible, a student credit card might come with added restrictions and limitations.

A Student Credit Card Will Have a Lower Credit Limit
A lower limit is the providers attempt to prevent misuse and abuse. Until the student can show that they can be responsible, and will actually repay the amount they’ve charged on their credit card, the provider will try to limit the amount they could potentially lose if the balance is never repaid. Usually, the limit on a student credit card is between $500 and $1000. Once students have shown that they can be responsible in paying their bills on time, the limit might be raised.

A Student Credit Card Will Have a Higher Interest Rate
This is another way providers try to limit potential losses. The theory is that, since most students don’t have a proven track record of paying their bills, there’s a higher probability that many of them won’t, which could mean a financial loss to the provider. By charging a higher interest rate on every student credit card they issue, the provider is, in a way, making up for the money they could lose on those who might never pay off their credit card balance.

You Might Need a Co-Signer on Your Student Credit Card
This is another form of insurance for providers. A co-signer is someone who agrees to be responsible for the balance on your student credit card if, for any reason, you are unable to pay it yourself. The co-signer on a student credit card is usually a parent or guardian. And, as the co-signer, they will have control over whether or not the limit will be raised.

While there are some restrictions and limitations on a student credit card, getting one can be the first step to building a good credit history. It can also be a great help in easing the financial struggles many students face, especially when they first get to college.

Reasons to Have a PayPal Debit Card

There are many good reasons to have a PayPal debit card. Anyone with an active PayPal account can apply for the PayPal debit card. It is tremendously helpful.

Depending on your bank, it can take up to seven business days to transfer money from your PayPal account to the physical bank. In the meantime, you do not have access to the money while the transition is occurring.

The PayPal debit card works as both a debit and a Mastercard credit card. You know what your account balance is each day. With the PayPal card, you can use it in virtually any store.

You can make purchases online that do not take PayPal. If you want to make a partial transfer, you can have instant access to your other PayPal account funds while the transfer takes place.

If you have a PayPal account that is strictly business you can use the PayPal card for nothing but your business expenses. Record keeping is easier if you use only one account for your business expenses.

The PayPal card can save you time and make life easier in general for you.

Don't Leave Home Without It

Source: Associated Content

How to Effectively Compare Credit Card Offers

Each day there are millions of Americans who are faced with a credit card offer. These credit cared offers make their way into our mailboxes and in our email accounts. The majority of these credit card offers are legitimate; however, that does not mean that a credit card offer should not be researched before it is accepted. Comparing credit card offers have a number of benefits and this is how it should be done to save cardholders time and money.

There are many credit card offers that entice individuals with a low introductory interest rate. What many cardholders do wrong is that they fail to ask how long the introductory interest rate will last. There are some credit cards that offer their introductory interest rates long than others which allows cardholders to same more money in interest. In addition to learning when an introductory interest rate expires, there are individuals who fail to determine what the regular interest rate will be after the introductory interest rate expires. This is what gets many credit cardholders into trouble and into debt. There are many credit cards that have an extremely high interest rate; however, many cardholders do know that before they sign a credit card offer.

Many individuals looking to compare credit card offers often want to transfer the balance from an existing credit card over to a new one. This is often done when a credit card with a high interest rate has acquired a large balance. The majority of credit cards will allow a balance transfer to take place; however, there are some cards that will not. If a new credit card is being obtained solely for the purpose of transferring a balance it is important that individuals verify that this process can be done before being stuck with another credit card.

The credit of a person may also have an impact on the type of credit card offers they get in the mail. Before responding to a credit card offer or looking for one on their own individuals are encouraged to check their credit and try and clean it up a little bit if at all possible. A bad credit score may prevent an individual from even being approved for a credit card at all. There are others who may have to pay higher interest rates or an annual fee. The majority of credit cards do not charge an annual fee. That is something else that individuals looking to compare credit card offers should fully examine. An annual fee is typically less than fifty dollars; however, there are other restrictions that may apply to a specific credit card.

Reward points and reward cards have greatly increased in popularity over the past few years. Individuals looking to respond to a credit card offer should find one that offers them rewards for the products they purchase or use everyday. Many travelers obtain credit cards that offer gas rebates, hotel rebates, or airline miles. Whatever the person there is as credit card offer out there that is perfect for them. Finding that credit card may take some time and a lot of comparing, but there is no reason to settle for less.

Source: Associated Content