How to Rebuild Bad Credit

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How to Rebuild Bad Credit

In order to raise your credit score to a level that is high enough for you to get a loan, you will need to rebuild your bad credit. You will then need to prove that you are able to handle credit responsibly. It can be difficult to get started, but once you do you will build momentum and be on the right track to a good credit score.bad credit

First Get a New Credit Card

If bad credit means that you do not have any credit cards, then you will need to get one. You will need to be able to use a credit card the right way in order to create a positive payment history.

If you have a low credit score then you will find it difficult to get approval from a major bank, but you can opt for:

  • Secured credit card
  • Store card
  • Credit cards for bad credit

You shouldn’t put in too many applications though as this will affect your credit score, which will then make it harder to get a new credit card approved.

If your credit card application is denied then you need to wait and find out why you were denied.

New Credit Habits

In order to build new credit you need to change your spending habits with better ones, otherwise you will just end up in more debt.

In order to improve your credit score you will need to stay well below your credit limit and you must pay your credit card bills on time and in full.

Your bad credit will not improve until you are able to show creditors that you have what it takes to build a good score. You should then only charge what you can afford and pay your bill on time every month.

How to Save Money with Credit Cards

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When you are credit savvy you are able to use your credit card to benefit you so that you can save money even whilst you are charging on credit.

Here is how you are able to save money through credit card use.

save money

Consolidate your Credit Card Debt with Care

A common strategy that consumers use to trim what they owe on cards is to use balance transfer credit cards that have a 0% or low APR on the balance that is moved for a limited time.

You will need to perform a cost benefit analysis before you choose this plan as most cards have a balance transfer fee. You also need to make sure that you are able to pay off your consolidation debt completely before the promotional period ends.

Use Rewards Cards if you Can Pay in Full

Rewards are great, but in order to offset the rewards, the reward credit card will usually have a higher interest rate. In order to make the rewards work for you, you need to be sure that you can pay your balance off in full every month. If you cant then a lower interest card might be a better choice.

Pay More than the Minimum

Having good payment habits is vital with a credit card. By doing this you will be able to avoid high finance charges and penalties. It is always best to pay your credit card balance in full and if you are not able to that then you need to pay more than just the minimum, as this will save you money on interest.

Always Research

Before you sign up for anything you will need to compare credit card offers.

Too Many Cards

You shouldn’t collect rewards cards as having too many could prevent you from optimizing your rewards on any card. Also when you have too many cards you are more likely to spend more then you should or can afford.

Don’t Rely on Credit Cards for Emergencies

If you don’t have any savings then an unexpected expense will end up on your credit cards and having a balance means you will pay extra interest. This means that relying on your credit cards will be great expenses in the long run.

Have a Spare Card

If you are interested in taking advantage of rewards then you can own one, but only use it on items that you know you are able to pay of in full in every month. You can then apply for another card that has a low interest rate as this card you can afford to own with a balance.

Ask your Card Issuer to Lower your Rate

If you have a good history as a card member then you may have some leverage. When you have been a customer for a while, then call your card company and discuss if they are willing to give you a break on the rates.

Credit Card Benefits that might Surprise You

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Credit cards don’t just make it easier to shop, but also have a number of free benefits that many consumers you  are not even aware of.

As long as you use your card responsibly and pay off your balance each month in full and on time.

credit card

You might even consider paying for more of your purchases at a credit card terminal.

When you pay with credit you are able to get help from your credit card company if you do not get what you paid for, find a lower price, change your mind or need some extra cash.

Charge Backs

If the company doesn’t come through on a product or service that you paid for and they won’t refund you, your credit card company might. This process is called a chargeback.

The credit card company will refund the money to you and then charges the cost to the business. You might have to meet some conditions in order to claim a chargeback.

Extended Return Policies

Retailers generally limit their returns to 30 days, but credit cards can extend this policy to 90 days.

Extended Warranties

Your credit card could extend your protection on a one-year warranty to two years.

Price Protection

If the retailer that you bought a product from doesn’t have a price drop policy, then you can recoup the savings that you missed out on directly from your credit card company.

Damage and Theft Protection

Your credit card could cover accidental damage or theft within a certain number of days after purchase.

Batch Credit Card Processing

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Batch credit card processing is the process of a merchant processing all of the credit card transactions that they had in a day after the end of business or at a time that has been determined by the credit card processor. This is the second step taken by the merchant so they are closer to getting paid for its customer’s credit card transactions.batch credit card processing

The merchant will send the authorization codes for every credit card transaction to its payment processor. The processors will then categories the transactions by the bank that issued each customers credit card. The banks will then remit the payments to the merchant, which is called settlement.

The Break Down

In order for the merchant to get paid for a customers credit card purchase the first step is authorization. This happens when the purchase takes place as the credit card information and the amount for the transaction is sent to the credit card issuer. They will then verify the owner of the card, if it has been reported stolen and if the customer has enough credit for the transaction.

After the business has closed the merchant will need to transmit the days credit card transactions to the bank.

The bank will then subtract a fee and ensures that the merchant will get paid for the transactions in that batch. The bank also informs the customers credit card issuer of the transaction so that it can be posted to the cardholder and informs them that the merchant has been paid.

The process to get the funds for the batch can take a couple of days.

Credit card batching can be set up so that it is dine automatically every day at the same time.

Your Kids First Credit Card

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Pretty much every young adult falls into the trap of credit card debt. This is because credit cards allow for the buy now and figure it out later approach.

It is then important for parents to teach children good credit card habits.

kids credit card

There are a few reasons that parents may get their kids a credit card. These are:

Building Credit

The biggest reason that parents will help to get their children a credit a credit is to help them to build credit. Having a credit history is good, but it’s not the most important reason. Credit scores is not that dependent on how long someone has had a credit card. When you look at it in reality most people that have a credit card with the ambition of building credit often end up damaging their credit score as they use the card irresponsibly.

If you want to help your child build credit then you need to help them in building good habits.

Creating Healthy Habits

Whilst your children are still willing to listen and are under your roof, you need to teach them good habits and a healthy mindset with their credit cards.

The majority of people find that they become overwhelmed with debt because of irrational purchases. You will need to teach your child how to distinguish between needs and wants.

Avoiding Impulse Purchases

You will need to examine your children’s monthly purchases and process the rationale behind each of these purchases. You are able to help your kids gain a better insight into impulsive thinking and buying, which can lead to spending more then they can afford.

As a parent you will also need to enforce timely payments of the entire months charges. This way you will teach them about money and you will help them to avoid high balances and late payments, which can be detrimental to their credit, score.

Creating a Safety Net

Good credit habits are something that parents hope their children will learn on their own, but young adults will make mistakes and will learn from it.

The problem is that these mistakes stay on credit reports for seven years.

The last reason that you may want to get your children a credit card whilst they still live with you is that you can provide them with a safety net. You are there to watch them, guide them and help them if needs be.

The Best Type of Credit Cards for Your Kids

The best time to get your child a credit card is in high school, but rather start them with a debit card that takes the money directly from a bank account.

This allows then to get use to the responsibility of a card and not buying more than they can afford. You should get a debit card account that has an overdraft protection to avoid overdraft fees.

You can get them a first gas credit card when they start to drive. A gas credit card will start them on the right path for when they get their first credit card.

A good time to get them a first real credit card is after they have graduated high school. Get them a credit card that has a low limit, a low interest rate and a low annual fee.

In order for your children to qualify for a credit card and to help them build credit, consider opening a joint credit card account with them. It has to be a new account as just adding your child to your existing credit card account will not help them with building credit.

If your child is moving or going to college then get a family emergency card. If there is an emergency then they will have the funds to deal with it. A family card that can only be used for emergencies only will still make them feel that they have their own card.

When you are looking at choosing a credit card for your child, allow them to do the research and discuss it with you. This will teach them the ins and outs of all the cards on offer and they should never just sign.

Get to Know Reward Credit Cards

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There are some credit cards that will give you incentives for the amount of money that you spend on the card. There are all types of credit card rewards. Generally you will earn a certain number or percentage of rewards for every amount that you spend each time your credit card machine

Credit Card Reward Types

There are three main categories that rewards fall into, those being cash, points and miles.

Cash rewards are the easiest. Cash reward cards don’t always mean that you get cash. There are programs that will let you exchange your cash rewards as credit to your account and others will deposit the amount into your bank account. There are some cash rewards that can be redeemed as gift cards for merchant partners of your credit card issuer.

credit card rewards

Point rewards are based on the per dollar amount or your currency. Points can be redeemed for merchandise in the rewards programs online shopping mall or for gift cards, cash or travel.

Miles or travel reward cards will give you miles that you are able to redeem for airline tickets.

Rewards can be used for all sorts of things. You are able to use cash rewards to reduce your balance on your credit card, travel rewards can get you free trips and points can help you get presents or things for yourself.

Tiered Vs. Flat Rewards

With reward credit cards you may earn a number of rewards for every dollar that you spend or you may earn a smaller amount of rewards on the first lot of purchases that you make in year and then a larger amount of rewards once you have hit a certain threshold.

Do You Need an EMV Chip Card Terminal?

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EMV stands for Europay, MasterCard and Visa. They aim to create standardized protocols for integrated circuit cards and also the hardware that is needed in order to accept these cards.

EMV cards have a small circuit or a chip that is built into the card. The data is then read from the chip instead of from the magnetic strip. These chips are then able to protect against fraud in two ways.

The chip is difficult and also expensive to copy and the data which is transmitted changes each time the card is read.

EMV chip cards are being rolled out through the world, which means that you may need to get a credit card terminal that is able to accept these cards.

However, right now the only ones that should think about getting an EMV credit card terminal are those that need a new a terminal. The fact is that the technology behind these will only improve. If you are though already seeing a large number of chip cards then you should probably consider getting the terminal.

Chip cards are able to protect you from fraud, so the price of the new terminal will give you the peace of mind that you may want. It is unlikely that someone will present you with a counterfeit chip card, but is it worth taking that chance and losing a little cash and never having to worry?

You should though defiantly consider getting an EMV chip card terminal in late 2015 though as more and more banks will be rolling out these cards. This means that more people will have them and you will want to be able to accept their business without having to worry about fraud.

The Credit and Debit Card Terminal Options

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The Credit and Debit Card Terminal Options

A business is able to increase their sales by having a credit and debit card machine. This type of a point of sale (POS) terminal has already become a more popular form of payment instead of paying with cash.

In order to have payments processed when customers use a credit or debit card, your business will need a merchant account usually with a financial institution such as a bank, and the equipment needed to process such payments.

What you Need

Before implementing debit and credit card terminals in your business, first talk to your merchant account server to see which account is the best one for you.

After you have settled on the type of account that you will open between your business and server, you will need to consider the type of connection and the varying types of card terminals (fixed, portable or mobile) that is best suited to your business’ needs.

The Connection Types

The connection type that you choose will depend on how you will be using your credit and debit card machine. It will also depend on what you have already available and what you are willing to install into your business.

  1. The first connection type is the shared phone line, which allows the card machine and your phone to run off the same single line. However, this will also mean that you are not able to use the phone and card machine at the same time.
  2. The second connection type involves two separate phone lines, which means that the card machine and phone run off two separate lines so that they are both able to work at the same time. However, keep in mind that if two card machines are running off the same line then they will not be able to work at the same time.
  3. The third connection type is broadband, which is a faster way for the payments to be processed. The card machine will need to be plugged into your router meaning that you will not need a phone line to run the card machine.
  4. The fourth type of connection is the mobile GPRS network where a SIM card is used in the card machine, which then creates a portable card machine so that you can process payments whilst on the go.

Now that you know what the connection types are on offer to you, the next thing to look at is the various card machine options.

The Different Card Machines

  1. Fixed Card Machines

Fixed card machines are usually positioned in a set location such as on the countertop in a business. These countertop card machines need to be connected to a power supply and to either a phone or broadband line. The fixed card machine can exclude a PIN pad, which is where the amount needs to be entered into the machine first before it is given to the customer.  Fixed card machines with a PIN pad allows for the amount to be entered into the main terminal and the customer to enter their PIN on a separate PIN device.

  1. Portable Card Machines

Portable card machines can be carried around within a limited area to process payments. Although it has a limited reach, portable card machines work well for processing payments in businesses like in a café where the machine needs to be taken to the customer. There is a base for the charging of the card machine and the data is transmitted wirelessly usually using Bluetooth.

  1. Mobile Card Machines

For mobile businesses that need to process credit and debit cards, mobile card machines are ideal as they don’t require a phone or broadband line. Instead these mobile card machines use a GPRS SIM card and can be charged allowing for you to carry and use the device wherever you go.

  1. Use your Tablets and Smartphones.

It is now possible to transform your tablets and smartphones into credit and debit card processing systems. This allows for payments to be made wirelessly and is also ideal for mobile businesses. The device that you will use needs to have an IOS or Android operating system, as well as a card reader that is able to plug into your device. Once you have downloaded the correct app, you can start processing payments with your merchant account server and the credit or debit card.

In order to determine which machine is best suited to your needs, first consider the type of connection and power supply that is available during your business operations. You also need to consider how you will use the machine, whether it be at a till point or whilst you are on the move. Once you’ve determined your best options from these selections you can now move to purchase a credit card terminal

Card machines are able to increase the number of sales for a business and also make it more convenient and effective for both the customer and business.

Credit Card Pitfalls

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Credit Card Pitfalls

Credit Cards are a great thing to have as they allow you to buy now and pay for your purchases later. Although it is a way for you to have instant money in your wallet, there are some common pitfalls of credit cards today that we may not all be aware of.


Credit Card Pitfalls

  • Making Late Payments on Your Credit Card

When using a credit card to make purchases, you are expected to pay the amount owed back to your credit card provider each month. If you make late payments, you will notice that it will actually start costing you more. You will accrue late payment fees as well as a higher interest rate.

The late fee will generally be a certain percentage of the amount of the total balance. Also if you miss payments or make late payments, this will reflect in your credit report and your credit score will be affected.

  • Credit Card Charges and Fees

There are numerous charges and fees associated with using credit cards, with many ‘hidden’ fees that you may not even be aware of. Each time you use your credit card there will generally be a fee attached to the transaction. In order to use your credit card responsibly, it is best to ensure that you are aware of all the fees that come with using your credit card and not just the interest rate.

  • Paying the Minimum on Your Credit Card

Paying the minimum amount due on your credit card may seem attractive as it means that you will not have to pay a large amount all at once and are still able to use your card. However, the problem with doing this is that it will take you a lot longer to pay off your debt. Also, the addition of credit card interest will result in you spending a lot more money than you originally owed.

  • Having Too Many Credit Cards

Having many credit cards may seem like a normal thing to do, but in actual fact credit card companies can actually punish you for this. Juggling several credit cards can affect your credit score and may cause your interest rates to increase.

  • Using your Credit Card for Cash Withdrawals

If you take a cash advance or withdraw cash from your credit card, the interest on this will be much higher than a regular purchase. This then allows the interest to accumulate from the start of that transaction. It is best not to withdraw at all from your credit card.

As flexible as your credit card may be, there are also many pitfalls of having one. If you are certain that you need a credit card, you should always read the fine print of all your credit card options so you know what you will be paying in the long run.