Credit Card Helper

Credit cards come in various types: low interest credit cards, cash back credit cards, reward credit cards, secured and prepaid credit cards, and others. Depending on your financial situation, one type may be better working than the others.

If you prefer to have an unsecured credit card, meaning you don’t need a security deposit, you may apply for a standard credit card. It may come with an annual fee and lower interest rate or no annual fee and higher interest rate. The way annual rates are calculated and offered varies depending on the provider. Low interest credit cards are one example of a standard credit card. They come with a low introductory APR or a fixed-rate APR. They are often offered with no annual fee. This credit card is quite useful if you intend to make a large purchase as you will have a couple of months to pay it off.

Rewards credit cards allow card holders to earn bonus points when charging purchases to their cards. The more one uses the credit card, the more rewards points accumulate. Avoid applying for cards that come with a limit on the points you can earn. The points can be exchanged for a variety of items such as plane tickets, accommodation, electronics, gift cards, and more. Promotional offers and reward programs frequently change; so, make sure you check the terms before applying.

Cash back credit cards work on the same principle, with cardholders earning cash back for making purchases on the credit card. Credit cards that limit the cash back to be earned to the amount of the annul fee should be avoided.

Retail rewards credit cards are a type of credit card that is co-branded with some of the key retailers. You accumulate points by charging everyday purchases to the card, earning more points on purchases made from the retailer.

Secured credit cards require that the applicant puts money on the card. A specified amount is deposited in the amount of the card limit and serves as a security deposit. In general, this type of card is for persons with no credit history and those who are rebuilding their credit history.

Finally, prepaid credit cards are accepted in many places while they are not real credit cards. The major advantage of having one is that no finance charges are incurred, and the holder does not run the risk of accumulating debt.

To many people who have recently filed a personal bankruptcy statement, getting a comfortable-rate credit card may seem an impossible mission. The good news is that although bankruptcy casts a really heavy blow on your credit record, it does not last forever. Here are a few simple tips on how one can bounce back after bankruptcy by using credit cards to rebuild one’s credit score.

Check your credit report

First, you should contact your credit bureau and make sure that all of your previous debts have been included in your bankruptcy statement. If you notice any irregularities in your latest credit report, do not hesitate to insist on having them corrected promptly.

Secured credit card

Having settled your credit report, you can now proceed by applying for a secured credit card. You can find lenders willing to give you an unsecured one, regardless of the fact that you recently filed for bankruptcy, but these are usually sub-prime lenders with throat-cutting interest rates. So, another option is to apply for a secured credit card with one of the big chartered banks in your area and be happy if you get one with a limit of $500. The sum may be little, compared to the credit limit of your previous credit cards, but the credit card is now a credit rebuilding instrument, rather than a means of payment.

The thirty-percent rule

Having obtained a secured credit card, which in most cases goes with substantial interest rate and a tiny credit limit, you can start using it to rebuild your tarnished credit score. If you are wondering how exactly you should do that, the thirty-percent rule comes to help you. It is rather simple: it is best to spend no more than thirty percent of your credit card’s limit and always return the used credit in full. Even if you make good money and can afford paying back more each month, it is not a good idea to max out your credit card, as this will harm your budding credit score.

Patience is a virtue

Many want to have their credit score rebuilt fast, but it usually takes up to three years until the lender agrees to convert a secured credit card into an unsecured one. Meanwhile, you may try to apply for a small consumer loan, which you can use to open a Certificate of Deposit. Alternatively, you can open it with your own funds, but you should consider the amount of money that you can afford to block over a period of time.

Some people believe that the way to avoid credit card debt is to give up using credit cards altogether. Yet, having a credit card helps you build a credit history if you don’t overspend. Building a decent credit score is important if you plan to take out a mortgage loan or any other loan you may need. Here is how to properly use a credit card and not borrow excessively.

Do not charge every purchase on the credit card, especially items you can’t afford to buy. Purchase only what you need and can pay for. If you don’t have enough cash to pay for an item, you can’t afford to charge either.

If you think that missing a payment occasionally is not a problem, you are just wrong. Late payments can affect your credit score, and you end up paying at a higher interest rate. The rate will then be equal to the default rate. This is a type of penalty and the highest interest rate you can be charged by the credit card issuer. When you are over thirty days left, the credit bureaus will be notified of that. They will add an entry to your credit report that will stay there for 7 years.

Balance transfers are not always the way to go. If you transfer a balance to a lower rate credit card, this can be beneficial. Otherwise, you will have a higher balance because of the added transfer fee. To avoid credit card debt, you should avoid balance transfers as much as possible.

Pay your balance in full every month. If you want to avoid accumulating card debt, pay off your credit card balance monthly. That way, you will not carry a balance. You do not have to worry about whether you can meet the minimum payment because your credit card has already been paid in full.

This is the way to avoid carrying a balance. You don’t have to worry about meeting the minimum payment when your card is paid in full.

Cash advances are risky and can get you in a lot of debt. Using your credit card to get cash is an early stage of accumulating debt. It is better to open an emergency fund so that you have enough money in case of emergency.