Understanding Credit Card Interest Rates

If you are unable to pay your credit card bills on time, then with time interest charges will be levied upon you and sooner or later your repayment amount might reach high figures. In the article we will try to understand the credit card debts and the why it is advisable to get out of it.

What Is Interest?
It is expressed in terms of annual percentage rate, it is the fees for borrowing money with your credit card. A credit card gives you the ability to spend the money you don't have. This interest amount is the fees for having that privilege.

Since, credit cards have become an important part of our life, it is important for users to understand the effect of credit card interest on them.

At times of financial crunch it is always tempting to pay only the minimum payment. if you are doing so, you are making a huge mistake. The interest levied on the balance of your card will not only keep compounding every year but also reach a figure that can be more than twice the amount you borrowed. It will take you several years to repay it back. The tip here is to pay at least twice your minimum payment or more if you can afford. It can drastically cut down the time you will take to pay off the balance, which in turn will incur lower interest charges. However, it is best if you don't carry a balance at all. It is because on an average you have to pay an additional 20% in interest amount. So, if you pay on time, you can save that 20% which can be invested else where to earn money.

Many people prefer to invest the money instead of paying their credit card debt. This is foolhardy and will eventually lead to loss of money. On the other hand, if you pay your credit card debt, you can save on the charges the lender can charge you upon non repayment. Once, you have paid off an high-interest debt, you'll not only save money but also save yourself from a lot of trouble.

The bottom line is carrying a balance on hour credit card is simply going to cost you more money. The best thing to do is to pay it off entirely. If you can't then at least try to pay more than the minimum payment requirement. If you have savings else where, use it to clear your debt.

Best Credit Cards for Bad Credit

If you have a bad credit card history, then chances are you will have a difficulty in obtaining a credit card. But, if you take care of your credit habit then you can work towards a better credit score. A good credit score will eventually help you to regain the confidence of lenders.

When one shops around for a credit card, they want to get the best value for their money. So, one looks for the service providers that charge the lowest interest rate, low fee or no fee and flexible payment terms. But, if you have a bad credit history, your options are limited. Those who have a FICO score lower than 600 have to pay more interest rates and fees to the bank than others. This is because banks perceive them as high risk customers. But, if your credit habit improve than these card companies report the same to the credit bureaus who might in time reevaluate your credit score. In the long run, you might be able to move into less expensive financial offerings.

Options at Your Disposal

Bad Credit Charge Card:         You must have come across the term‘bad credit charge card. A bad credit charge card usually has a high interest rate, high annual fee, etc. But it is the secured card and it is often used to improve one’s credit score. It gives the user a credit line equal to a certain deposited amount in the card holder’s bank account. These deposits are kept in a savings account that gives interest. If the user is regular with repayments then the bank might offer him normal rates and but he is unable to pay then the deposit is forfeited to the bank. The initial cost of such secure cards is high, but it can save you from being sinking into a bottomless debt pit.

Retail Store Credit Card: Often retail store credit cards are used to improve the FICO score by bad credit customers. But, more often than not, it can lead to overspending. If, you opt for this card, make sure you have the ability to repay every month.

What will work best for you?

One should understand that every person’s credit needs are different. It is best to research on the good credit card websites to find out the options available to them. You can check reputed sites like credit karma, credit.com for all financial information. Be aware of shady sites that promise to bring you out of debt without giving concrete information of their offerings.

Always try to form the habit of spending only what you can repay. Sinking yourself in credit debt by overspending can put into problematic situations.

What do Credit Card numbers mean?

Most people use credit card today for it makes payments easier and they are handy to carry around in your wallet. Credit cards have embossed numbers on it and they are unique for every card. Have you ever wondered what these digits stand for? In this article, we will explain the significance of the credit card numbers.

Most credit card companies follow the ANSI Standard X4.13-1983system for numbering the credit cards. Let’s get down to the understanding these numbers.

The first digit signifies the type of the card or the system of the card. For e.g. If the first digit is 3 then it is a travel or entertainment card from the service providers like Diner’s Club, American Express, etc.

Card numbers starting from 4 are for Visa, 5 for MasterCard and 6 for Discover Card.

Now, let’s concentrate on the other numbers. The numbering system of different card is different.

Visa:A Visa card number can be of 13 digits or 16 digits. The second number to the sixth number on a Visa credit card stands for bank number. The digit starting from the 7^th place till the 12^th or 15^th (in case of a sixteen digit number) signifies the account number. The last number is a check digit.

American Express –American Express cards are of 15 digits. Digits three and four signifies the currency, digits starting five till eleven are the account number; digits on the 12^th place till the14^thare the card number within the account. The last digit 15 is a check digit.

MasterCard –Master cards have are of 16 digits. The 2^nd and 3^rd digits or from 2^nd till 4^th digit or 5^th or 6^th arethe bank number (it depends on whether the second digit is a 1, 2, 3 or other). The digits after the bank number up tilldigit 15 are the account number. The last digit is a check digit.

Hope you found this article of credit card numbers interesting and informative.

The Importance Of Your Credit Rating

With the rise in credit card usage, more and more people are becoming highly dependent on credit. In order to maintain your credit worthiness, you should understand the importance of your credit rating. In this article we will explain all the basics about credit rating and why it is important.

Whenever you borrow using your credit card, you promise to pay it back in a stipulated time frame. A credit score is a person's credit worthiness measure. It determines the likelihood that a person will pay back the amount borrowed by him. The credit bureaus have different evaluation methods to calculate a person's credit score. They take into account, the person's credit history, payment history, frequency of credit and payments, credit types, etc.

In U.S there are three major credit bureaus - Equifax, TransUnion and Experian. Since, they give different weight-age to the various parameters, credit score for an individual by these agencies might be different. A FICO score is the term used to refer to a credit score. FICO is the acronym for the Fair Isaacs Corporation, who created the software used to calculate credit scores. The score range is 350 to 850 of which 350 is extremely risky and 850 is low risk.

Apart from the FICO scores, a personal credit number is also used in U.S and Canada. The number ranges from 0-9 and the numbers are preceded by one of two letters. The letter "I" stands for installment credit like home or auto financing and "R" signifies revolving credit such as a credit card. The creditors issues their own credit rating for borrowers. R1is the best credit rating while R9 is the worst. However, these days it is stressed to move towards a single way to rating like FICO to maintain uniformity.

What Makes Up Your Credit Score?
When a person borrows money, the lender sends the information to a credit bureau. The information includes details about how you handled your debt. This information is used by the bureau to determine a credit score based on five major factors:
1) past credit performance
2) present indebtedness
3) period of credit
4) types of credit available
5) pursuit of new credit.

Why Your Credit Rating Is Important ?
Credit ratings and scores are checked when you apply for a credit card, mortgage, etc. If your credit rating is not good stores will not accept your cheques, banks will not issue credit or debit cards. Your credit score helps lender determine your credit worthiness.

For an increased credit risk lenders add at risk premium to the price at which money is borrowed. So, if you have a bad poor credit score, lenders will lend you money at a higher rate than normal.

The Bottom Line is the credit has significant importance today. One cannot afford to overlook it as it will prove detrimental to one's financial health. If is also impertive you have an idea of how your credit score is calculated. By being aware of your credit health only you can take care of your credit ratings and score.

Take Control Of Your Credit Cards

2008 was the year when the economic condition in United States was going through a very difficult economic phase. The credit card delinquency rates in United States were on a high. Some reasons for the same we're mortgage crunch, rising energy cost and decreasing savings rate. In such hard times, people often depend on borrowing and hence rely heavily on credit card to pay their bills. Here are a few things to remember that will help credit card users to make their credit decisions smartly and take control of the finances.

Hard Truth about Credit
People prefer to use credit cards for various reasons. First, it removes the need to carry cash around for shopping. They also offer some lucrative bonus and reward programs enabling users to earn points that can be converted to monetary value and various other perks. It is also very helpful for emergency situations. But, the hard truth is if you can't pay in cash you can't really afford to make the purchase. Far too often people use the credit card and send far beyond their spending limit. And then starts a vicious circle of non payment of bills, high interest rates and accumulating debt.

Know the basics:
If you have a wad of cards, but are going through a low financial state, then you have to take control of the situation. Following are the things that you should pay attention to:

Yearly Fees - Check if the card on your wallet comes with a yearly fees. when you cant afford to pay for your necessities why pay a fees to keep the card at first place. the best thing to do in this situation is to cancel the card.

High Interest Rates - Have you ever thought of negotiating the interest rates charges with your credit card companies. Well, it is well worth a try. Some companies do lower their interest charges if you call.

Late Fees - Be sure to know about the late fees on your credit card if you are using it to make a purchase, you think you might not be able to pay back on time. Paying this fees as a penalty will burn a bigger hole in your pocket.

Over-the-Limit Fees - Make sure you don't cross the spending limit of your credit card as the credit card companies will impose a penalty fee on you if you do so. Check the details about it out before you apply for the card.

Bounced Check Fees - Ensure that the cheques you send to credit card company get clear as they do impose a bounced cheque fees as well. It is always advisable to avoid such charges.

Minimum Payments - Try to clear your credit card bills before interest rtes get levied in it. There is no point in buying something via credit card if you are unable to repay it on time. The addition interest charges are just a burden that keep on increasing.

Credit cards can be a great tool if used wisely. Choose your credit cards wisely and use them wisely for a healthy financial position.

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Nowadays, online money making has become a very common way to earn money. There are many ways available on the internet, which can be used to have a good income. In this article, we are sharing some most commonly used online jobs which you can start from your home, office or any other place.

1.         Google AdSense:     Google AdSense is the most common source of income among all the online jobs. 70% of the people, who are making money online, are making money using Google AdSense. People work for a small part of their daily routine and get paid highly. The monthly income may vary from $100 up to $1000. Many people are making $10,000 and even higher.

If you want to have a Google AdSense account, then all you need to do is make a website or a blog, get some good traffic on it and start earning.

2.         Online Surveys:     Online surveys are also a good source of income. To earn from online surveys, you have to register for surveys on online survey sites, and complete the survey whether it is monthly, weekly or daily. This source of income is best for those people who have some daily free time and want to get something good in it.

3.         Micro jobs on mTurk:     This is a kind of data entry job which is also very popular, especially in India. By mTurk, you can earn approx. 8000 – 10,000 INR per month by working 1-2 hours daily.

4.         Earn from mobile:     You can also use your mobile as a source of income. By sending or receiving some SMS, you will get paid. This is the most easy online job among all, because in this you do not have to sit somewhere before a computer screen and do some work. Instead, you will receive some SMS and for every SMS you will get paid. You can check your SMS anytime, as per your convenience or either you can simply delete them. Although the income in this job is very less but you can make much money from this part time opportunity.

5.         Get paid to click ads:     Many websites provide paid to click jobs. All you need to do is just register yourself on such websites, login and start clicking advertisements. You will be paid for each advertisement you click.

6.         Make money from blogging:     Blogging is the most reliable source of income for every newbie in online money making. Around 70 percent of the people who make money from internet earn from blogging. It is considered to be the best online money making program because it is much vast and gives a newbie to learn a lot. If you are having a blog, and it is getting some good traffic on it, then you can use it for Google AdSense account or any other advertisement program as well. Moreover, you can also use it for affiliate marketing. Most of the webmasters seek blogging as the best source of income. All you need to do is make a blog, learn the ABC of it, learn some SEO and go for some ads.

7.         Work as a freelancer:     Freelancing is the best source of income for every person, who is having some skill like logo designing, programming, designing or something else. There are many freelancing sites available on internet. Some of them are –

Freelancer.com
WorknHire.com
Guru.com

If you are having some skill like designing, programming, development or something like that, then go to one of the above website, register yourself there and make a good profile. After registering, search for the best job, grab it and start earning.

8.         Part time seller on Fiverr or eBay:     Fiverr is website which provides part time jobs at a fixed price of $5. Just go to fiverr.com, register yourself and start earning. You can also check out eBay.

9.         Affiliate marketing:     This is also a good earning opportunity but it is a little bit difficult for a newbie. Affiliate marketing means getting registered on any online advertiser website and promoting their product so that every time a customer buys something from their website via you, then you get paid. Many websites are there on the internet which provides such type of thing. Even many of the shopping websites provide their widgets to use on your blog or website.

10.      Earn from YouTube:     Now, the most famous website YouTube.com is also providing advertisements. To earn from YouTube, you should have a YouTube channel of yours. Just apply for ads on your videos or channel and get paid by YouTube.