Paying by plastic is the way of the world today, but there are different credit cards that you can get. With credit cards you can pay your bills online, set up payments online using your credit card so that on a certain day of the month the money is automatically taken out of your credit card, use for online games and many other things that you cannot do with cash.
If you are just starting out the best type of credit card to apply for would be a secured credit card. This type of card is also referred to as a “no credit credit card” which means this is the type of card for people who have mediocre credit ratings, no prior credit history, or with defaulted accounts. A secured credit card is made secure with a deposit that is held in an account then used when you default on making your payment. Most of these cards have maximum and minimum deposit limits.
Another type of credit card for someone with bad credit or no credit would be to get a pre-paid credit card. This type of card is created by putting money onto that card and once that money is loaded onto the card you will be used it almost anywhere debit and credit cards are accepted
If you decide to apply for a credit card online there are many that offer instant approval, but that does not mean that you are going to be approved. It just means that you will find out instantly if you are or are not approved for the credit card. When you apply for a credit card using this type of system your application will be reviewed by an automated system. Once it has finished reviewing your application you will get a confirmation email that will contain the account details plus the recommendations that are based on your credit rating. You will know if you are approved or disapproved. If you are disapproved you will receive in the mail a letter telling you the reason why.
There are also cash back credit cards, which is a card that promises monthly or annual percentage rebates that will be either sent separately to the credit card holder in the form of a gift certificate or a check, or it may be refunded to a bank account.
These are just some of the different credit cards that are available to apply for. Just make sure that whatever one you choose is a right fit for you and your lifestyle.
In most major department stores, you see signs inviting you to apply for their store credit card. Some will even offer you a gift just for applying and others may offer you ten percent off your purchase made that day if your application is approved. If you have spent a large amount of money then the idea of ten percent off might appeal to you, but is applying for a store credit card a smart move? For the most part the answer is no for a variety of reasons.
One of the main reasons is that these store cards are offered by many major retailers are through either third party issuers or their own financing company. By using either of these you are going to have a high interest rate, which could exceed twenty percent.
Some stores state that since this type of store cards carry a higher minimum monthly payment the balances are cut much more quickly. The reason that they set the minimum payment at a higher payment is that if the customer is debt free they will do more shopping at their store.
Store credit cards can also be a threat to your credit score. The way that credit bureaus calculate your credit score with store credit cards is a different formula than what is used with a credit card issued from a bank or credit card company. If you are one of those people who have four or five regular credit cards plus a store credit car, it can make you look like a larger risk to credit agencies. If this happens, you will have a lower credit score, which can affect the interest rates that you would pay if you borrowed money for a car or new home.
On one hand have a diverse mixture of credit in your credit history it can aid in having a high score, but if there are too many lines of open credit that can signal danger to any other lender if you apply for more credit. The lenders may worry about your ability to pay your debts.
Before you sign up for a store credit card, make sure that the initial rewards are worth having another open credit card.