Credit Cards For Fair Credit

You’d have the term “Credit Cards for Fair Credit” many times, and you’d have likely thought that fair credit means average credit, and let it go at that. But there’s more to the term “fair credit” than you think. Though it does mean average credit, it is important to know the concept behind the term. Here is the lowdown:

Every lender wants to know the borrower’s FICO (Fair Isaac Corporation) score. The FICO score is calculated depending on your financial records that are kept by the 3 major credit bureaus, Experian, TransUnion and EquiFax. If your Fico score is high, you can get a low-annual fee, low-interest loan. If your FICO score is low, you can even be refused a loan.

To initiate a FICO score, you must have at least one financial account that has been in existence, and active, for minimum 6 months. The credit bureaus take the financial activity into account and use it as a base for calculating your FICO score. FICO scores are very important – even your landlord may not agree to lease his house to you if you have a low FICO score.

How are FICO scores evaluated?

FICO scores range between 300-850, with 300 being the worst possible score. Most folks’ score lies between 600 and 700. A FICO score over 700 is considered as a good score and anything below 600 is considered as below-average. So, a fair credit score is between 600 and 700. Many factors are taken into account while calculating the score – payment history, total debt, credit limit, length of credit history, new credit, etc.

Credit cards for fair credit folks

A person with fair credit can be viewed differently by different lenders. Each lender has his own criteria for assessing a borrower, and this due diligence extends beyond the credit score. So, even if you have a fair credit, your credit card application may be turned down. In extreme cases, you may be able to land a low APR (Annual Percentage Rate) credit card though your score is fair. So, it depends from lender to lender, but the key takeaway is that if you have fair credit, you will be charged the regular rates and fees.

How to get a credit card for people with a fair credit score?

You must search online. Many credit card websites now allow you to filter through and compare from a variety of credit cards issued by different credit card companies and banks. These sites clearly mark cards that are meant for people with fair credit, and finding and comparing such cards is not tough because the credit card websites equip you with comparison tools.

Having found a bunch of credit cards for fair credit folks, you must compare these based on APR, fees, features like rebates, balance transfer facility, and more. The comparison will take time, but you must do it because it will help save you money over the short-medium term. Apply for a card that you are sure of getting because if you make multiple applications, your credit score will get negatively impacted. Finally, once you get your fair credit credit card, use it to improve your credit score by paying in full, and on time, and not crossing your credit limits.

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Credit Cards for Balance Transfer: Pros and Cons

A Balance Transfer Credit Card can help you shift high-interest to low-interest debt and make your financial life simple and manageable. If you use it wisely, you can even get out of debt and enhance your credit score.

Credit cards for balance transfer are cards that allow you to shift all your outstanding balances from other cards into one outstanding balance.

You are given the benefit of a low APR, and you have to make a single monthly repayment instead of making multiple payments across many cards. Here are the pros and cons of a balance transfer card:

Pros

1. Many credit card companies offer an introductory 0% APR that’s valid for a few months. This rate’s valid so long you pay in full and pay on time. So, if you have large outstanding balances across many cards and you feel you are caught in a debt trap, you can take full advantage of the 0% APR and consolidate all your balances into one. In this sense, a balance transfer credit card helps save money by charging no interest.

2. The card makes life very simple. It consolidates all your credit card debts into one and you now have to make just one repayment every month. Tracking many credit cards and managing their payment, which often fall on different dates, is a daunting task. The balance transfer card takes this headache away. It increases your focus as well, because you are now focussed only on 1 debt.

3. Most balance transfer credit cards offer rewards. So, you repay your debts and enjoy the rewards programs too.

4. No collateral security (house, car, shares) is required to avail of a balance transfer card. So, you don’t have to worry about losing your home or other assets.

Cons

1. The new card company may charge high up-front balance transfer fees, and these fees can negate the advantages. Fees are charged because the credit card industry is of the opinion that card holders keep switching cards to take advantage of the 0% introductory APR without making a conscious effort to reduce their debt. Credit card companies typically charge 3% as balance transfer fees if the APR is 0%. The fees are lower for a higher APR. Tip: you must take the higher introductory APR and low balance because the APR is charged only when you do not pay in full and are late in making payments.

2. If you do not pay in time, or go above your credit limit, or if your check is returned, the APR will shoot to the maximum level and your credit score will plummet.

As you can see, the advantages of credit cards for balance transfer far outclass their disadvantages so long you are serious about consolidating and repaying your debt. A balance transfer card works very well for people who are financially disciplined, who pay their dues in full, on time, and do not cross their credit limits. So, go in for a balance transfer credit card if you have vowed to simplify your financial life and reduce your debt.

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Card Services Provided by Credit Card Companies

Credit card companies are a much abused lot. Card holders frequently blame the companies for charging a high rate of interest, using strong arm collection tactics, profiteering by preying, and more. However, the issuance of credit cards is a business just like any other business.

The interest rates may be high, but then so is the default rate. Card companies invest time, effort and capital into setting up top class card services that ultimately help the card holder. As a card holder, you must know and understand the effort that goes behind issuing a credit card and satisfying a card holder every step of the way, and so, here is some knowledge about card services provided by card companies:

1. Credit card companies invest in a sophisticated systems and network. Cards are created, their spending is tracked, statements are sent, retailers are paid, money is collected from card holders, credit given to the card holder is monitored and collected, superior customer service is provided 24/7, and so on. All these card services require a massive investment without counting the skilled, specialized and highly-paid manpower that is needed to run these services.

2. Many card holders abuse the system and run up huge debts and then default. These are losses that credit card companies have to bear without passing them on to other card holders.

3. Have you seen a credit card company’s website lately? Most credit card companies’ websites are very user friendly, interactive, and contain a lot of useful information. You can compare many cards in minutes and choose one that’s best for you; you can chat with 24/7 online support and report an issue. If you’re a first time visitor, you can even apply for a credit card and know in a matter of minutes whether your application is approved or not. Creating a simple yet rich-with-content, and highly interactive website and maintaining it takes a lot of money and manpower.

4. Card services include 24/7 customer support. All card companies must invest in a service center and ensure that experienced executives are there to help customers 24/7. These customer support executives require intensive training and so that’s another overhead for credit card companies.

5. Nowadays, card companies have secured their credit card by inserting a microchip that contains vital data. Hackers cannot get through into the microchip as easily as they could get into the older system.

6. Credit card companies also provide free insurance cover to the card holders, and so that is another additional cost.

7. Card services also include creating credit cards with different types of rewards, tying up with other service providers like airlines, gas stations, etc., investing in systems that can manage rewards, and then sending out cash back checks, and more. All this takes considerable investment.

These are the typical card services provided by card companies. So, the next time you feel like abusing your credit card company, think again, because a lot of effort and investment has gone into providing you with a credit card. And, as you know, if you manage your finances well, a credit card can make your financial life simple and easy.

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About Credit Card Machines

You may have seen the rectangular and plastic-y credit card machine in stores that enables a card swipe. But, did you know there are different types of credit card machines for different stores and shopping applications? There’s a machine for every type and style of business. Verifone and Hypercom are among the top-rated manufacturers of credit card machines.

Showroom retailers require machines that can print charge slips because a printed receipt must be given to the customer. Mobile businesses (i.e., businesses on the move, like a plumber) need a wireless machine, which is quite expensive, and dependent upon the cellular coverage. Some merchants who take orders over phone need a regular machine without printing capabilities. There are businesses that need machines that can swipe and also that the keying in of card numbers. So there are different strokes for different folks when it comes to choosing a credit card machine.

Another consideration in choosing a machine is the number of merchant accounts that the business owner has. For such business owners it makes sense to route payments through 1 card machine.

If the merchant’s volume of swipes and keyed-in transaction is equal, then this system can work out cheaper than having 2 credit card machines. One credit card machine can handle multiple merchant accounts and can work very well for certain types of businesses. For example, a spa can have multiple merchant accounts – one account for each therapist.

That way, therapists can easily swipe cards per client and the business can get per-merchant statements at the end of the month. That will ensure that month-end accounts do not get complicated because of the many therapists working in the facility.

Types of merchant accounts

1. Retail merchants need machines that can swipe and print. They may also need dual purpose machines that can also accept keyed-in orders.
2. Mail order or over-the-phone businesses need machines that can key in credit card numbers. They don’t need a machine with printing capability.
3. On-the-move businesses need wireless machines.
4. Internet merchants need online payment terminals.
5. A business-to-business application needs software-supported payment terminal.
6. A not-for-profit organization needs a low cost machine.

Credit card machines and their usage

1. Payment terminals without printers are typically used by mail order businesses or phone-and-order businesses. In such cases, the merchant does not have to issue a receipt to the customer. This type of machine also works well for businesses on the move, like plumbers, electricians, etc. Such machines are priced between $200 and $450.

2. Payment machines with printers are used by retailers. The card is swiped , approval is received and the receipt is printed by the same machine. As there’s a printer built into these machines, they are priced slightly higher. They cost between $275 and $900. The higher-end models come loaded with features. These machines can accept booth debit and credit cards.

3. Wireless card machines are the in-thing. They are equipped with the latest technology, but are more expensive. As these are wireless, they can be lugged around anywhere. Their pricing starts at $400.

That was about the credit card machines available in the market. Pick one that’s best suited for your needs.

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About Prepaid Debit Cards

There are two types of debit cards. The first well-known type of debit card enables spending by a card holder by connecting him to his account at a bank or financial institution. As soon as the card is swiped, the account is debited with the amount spent. So, you can spend as much as you have in your account, nothing more.

White collar workers are the highest users of this debit card. The salary gets credited into their account – the bank gives them a debit card – they use the debit card per their financial planning.

The second type of debit card is a Prepaid Debit Card, which works just like a prepaid phone card. The card holder has to deposit funds with the card issuer and create a balance in his account so he can use the card. This type of debit card works best for people without bank accounts who do not want to lug cash around. It also works for companies where employees have to spend on behalf of the business and get reimbursed. Instead of tallying accounts provided by different employees, the company can equip them with a prepaid debit card.

Advantages of a prepaid debit card

1. People who do not qualify for a credit card can work with a prepaid debit card.

2. These cards can be used by parents to dole out pocket money to their children and then monitor how the child spends his pocket money by checking the debit card statement. The child too then starts spending responsibly and learns about finances.

3. Using these cards works better than writing checks because suppliers/vendors may not supply goods or services to a buyer on the basis of his check because vendors are usually wary of the check returning. Prepaid credit cards can come to the rescue of the buyer (and vendors) in such cases.

4. These cards help cut down on transaction time as well. For example, if a buyer hands over a check, then it does take some time for it to realise. A prepaid debut card transfers funds to the vendor’s account immediately. A prepaid debit card keeps the economic wheels turning.

5. There are no bank charges associated with a prepaid debit card. On the other hand, a credit card statement is adorned with all sorts of charges.

6. These cards help people stay within their budget. Card holders can change their card based on their financial planning and ensure that they do not overspend.

Disadvantages of a prepaid debit card

1. These cards are not flexible – you cannot spend a dollar more than your deposit, and that can be a dampener when there is an emergency.

2. Banks have now started charging over-limit fees and non-sufficient funds fees for such cards (in certain cases).

3. If the card holder’s PIN is hacked then the hacker can clean out the funds from his account and there’s nothing much the card holder can do except for lodging a police complaint. If this happens with a credit card, the customer can dispute fraudulent transactions without losing any money (because he has yet to pay the credit card bill).

These were the pros and cons of a prepaid debit card. A prepaid debit card works very well in certain situations (students, budgeted spends, monitored spends, etc.). Use it only after assessing your need.

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