Store Credit Cards
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.
How To Prevent Your Credit Card From Being Demagnetized
There is nothing more frustrating than continuously swiping a credit card into a reader without result. When the credit card machines cannot read a card, it is usually because the credit card has been badly scratched or demagnetized.
Unlike those old days when credit cards still used a roller, today’s credit cards use a magnetic strip on the back. It contains small pieces of iron that are arranged in binary form that stores important user information. When a magnet is placed too close to the card, iron particles are demagnetized and will make your card unreadable. When this occurs, the card must be replaced immediately.
Since then, some banks charge a fee for replacement card, the best strategy is to prevent your card from being demagnetized. When magnetic credit cards are introduced 20 years ago, wallets made from eel skins are suspected as the cause of faulty credit card or ATM card. In theory, certain species of eel can create strong electrical current and the skin may still have a residual charge to demagnetize the card. The problem with this hypothesis is that wallets made from eel skin cannot be made of electric eels.
Those who have worked in grocery stores were surprised to see why cards stored in eel skin wallets seem to be more easily demagnetized compared to those made from cowhide. It turns out that the culprit was not the skin, but the little magnets on the clasps. Because eel skin is quite thin, the magnet is not powerful enough to encrypt the data completely.
Magnets erase data inside the card through particles realignment and make them completely unreadable. One way to prevent your card from being demagnetized is to avoid magnetic field. Common appliances such as include television set or speaker have strong magnets.
MRI is one thing that you should consider when visiting a hospital. The MRI scans your body using a strong magnetic field, and obviously it will also go through, protective card holders and wallet. Of course, you wouldn’t bring your wallet during a MRI scan, but you might enter the room or put your wallet near the machine, (for example, when you’re accompanying someone or you work there).
Although magnets are typical means of destroying data, neglect can also ruin the magnetic stripe. Men seem to face more problems with faulty cards than women, the difference are maybe on their habit. Most women use dividers to separate their cards, while men tend to stack them together. Storing your cards back to back may damage or erase the stripes, making them unreadable.
Some people resort to purchasing ppi to help them avoid losses in case their credit cards become demagnetized and a replacement is necessary. Though this may sound helpful, it is important that the cardholder be familiar with the terms of coverage. If ppi does not cover instances of losses arising from demagnetization, then ppi claims may be necessary to assist the recovery of premiums paid.