Pros And Cons Of Department Store Credit Cards

Credit cards come in several different forms. There are charge cards, credit cards, rewards cards, and etc. One of the most used kinds of credit cards are department store credit cards. They make it easy and convenient to buy things on credit from your favorite clothing, jewelry, hardware stores, and from several other places which things you would otherwise not have been able to buy. Still, are you really getting a good deal by using a department store card, or would you be better off using a regular card? Here are a few advantages and disadvantages of buying things using department store credit cards.

PROS

Savings

Buying things from a department store using the card specifically designed to use at those particular stores can sometimes save you money. Depending on the department store, you may be able to get a certain percentage, or a certain amount of money back for a certain amount that you spend on a purchase. In this aspect, it is much like a rewards card, though it is only limited to purchases and savings within that particular department store.

Other rewards

Some department stores allow you to receive free amenities when you use your card to buy things online or from a magazine. Services such as shipping and handling and/or free gifts sometimes come with your purchases when you buy an item from a store with its credit card. This can be bought on the internet, over the phone, and through magazines, all being delivered by mail to your home.

CONS

High Credit limits

Having several department store cards with limits that you think are not very high can actually add up to be quite a bit. Having even small amounts on your department store credit limits becomes one large limit, which can make it difficult to get a major credit card. Having such a high credit limit because of your combined department store cards ties up your credit line and only allows you a small amount in which you can add another credit card.

High interest rates

Some department store cards have high interest rates that end up costing you more than you bargained for. Sometimes even the rewards do not make up for the money you spend on interest just to get these cards. Making late payments on these will also allow department stores to shoot your rates sky high, so you have to pay on time, or the card will be more of a burden than an advantage.

No rewards

Department store credit cards are more dangerous than they are useful when they do not give you something back for what you buy. Just being able to buy it on credit is not worth it, and can get you into financial trouble that you do not need. Get a card that allows you to save money on the products that you buy, and keep only those cards. Once you pay them off, don’t keep them. Having these cards will tie up your credit line and make other cards difficult to acquire.

Credit Card Offers

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Millions of credit card deals are offered to people everyday through email, letter mail, television, radio, magazines, and even the newspaper. Credit cards have become such a dominant part of our financial life that we often fail to realize both the dangers and benefits of these offers.

Credit card companies know that many people in today’s society are very naïve and accepting of credit card advertisements that seem too good to be true, which they really are. The marketing teams of the credit card companies create credit card ads that are very appealing and attractive to the eyes of people who do not know any better. A few of the following simple pointers should help prevent people from becoming victims to ads that would normally cause many unfortunate problems.

Too Good To Be True

If a credit card ad seems too good to be true, it probably is. Whenever a credit card ad offers big prizes or incentives to people who sign up for the credit card, this should be a big red flag and the person should immediately stay away from the ad. Companies only offer large incentives because they are able to make up for it with excessive credit card fees and charges.

Initial Low Rates

Sometimes credit card companies try to trap people by offering very low initial rates. What people don’t understand is that the rates only last anywhere from a few days to a few weeks. After this initial time period is over, the credit card rates dramatically increase and customers find themselves financially trapped.

Fine Print

People must beware of the fine print of these credit card offers. Obviously, all the incentives, low rates, and attractive aspects of the offer are printed in a large format, whereas the extremely high rates, catches, and real information is printed in a very tiny format in order to hide them from careless customers. A person must remember to read the fine print and acquire the necessary offer details in order to prevent them from becoming trapped by credit cards

Junk Mail

Whenever people receive emails concerning credit card offers, it usually is not a good offer. People call these emails junk mail, and that is exactly what these emails are. Get rid of the junk, and you will ultimately get rid of many potential financial problems.

The smartest way a person can sign up for a credit card is to go directly to the credit card companies for information. Forget the ads and marketing schemes because they are specially designed to entrap and snag unknowing victims. People should obtain as much information about the credit cards as possible by asking the credit card company representatives detailed and compulsive questions.

People should also seek to obtain information about all the many different options that credit card companies offer. Rewards cards can be a great option for potential credit card users if the necessary information is obtained. These types of offers and incentive are real and can provide a very successful financial future for customers who know how to correctly use the credit card.

How Do Charge Cards Differ From Credit Cards?

You have probably often heard of a credit card being called a charge card. Or you may have heard of a charge card being called a credit card. Many people believe that they are the same thing. However, the two are quite different.

1. One difference between a credit card and a charge card is that credit cards allow you to have a balance. Charge cards do not, because they require that you pay in full the amount that you charge on an annual basis. This is how credit cards can be used for long periods of time without ever being paid off, though payments are made monthly that may reduce the balance, but never actually eliminate it. With a charge card, you must pay off the amount you owe periodically, no matter how great the amount is.

2. Another difference is that credit card holders must pay interest fees. This is because the card holders are not required to pay their debt in full periodically. They only have to pay the minimum monthly requirement. Interest is where credit card companies make their money. Though they do not require you to pay your bill completely by a certain deadline, they do charge you interest for the entire time that you do not have it paid off.

3. Credit cards give you the opportunity to pay off your balance whenever you want, but charge cards have more rewards. There is such a thing as a rewards credit card, but many charge cards outweigh these in benefits.
Depending on who the card holder is and what their spending habits are, preferences between charge cards and credit cards differ depending on the person. The different aspects of each can determine which one is the best for you.

Credit cards

Credit cards are beneficial to you if you need to buy on credit and can afford to pay on a balance along with the interest fees. It can be better to have a credit card because they have no annual fees and they allow you to pay off your debt when you like.

Charge cards

If you are the kind of person who would be able to pay off your debt when the card company requires it, charge cards are a good investment. They allow you to buy things that you cannot pay for now, but because of the periodic pay off requirement, it keeps you from getting into debt further than you can escape from.

Whether you are willing to pay on interest rates and be allowed a credit balance or pay annual fees and get great rewards is up to you. Depending on what kind of spending you need to do and how well you will be able to pay it back are big factors to consider when comparing the two types of cards. There are benefits and pitfalls to both sides, but if you manage either or both of them wisely, you will be able to reap the benefits they bring and control the expenses they incur.

Why Are People So Afraid Of Credit Cards?

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Many people believe that having a credit card is too big of a risk to take. They fear several aspects of the credit card that can cause huge debt problems. What many people do not realize is that they control how much debt they take upon themselves, and they control how well they can manage a credit card. Some may fear things that they cannot control though, like theft, how high the interest rates can climb, and other penalties for late payments. Well, there are a few pieces of advice that can be offered for these kind of fears.

Fear: My Credit card may be stolen

It is out of your control when someone steals and misuses your credit card. Still there is comfort in knowing you can cancel your credit card immediately after you realize it has been stolen. This way you can advise the credit card companies not to make any kind of transactions with that particular credit card.

Fear: I will spend too much on credit cards

This risk applies to everyone. No matter how rich you are, you can still spend beyond your means using credit cards. The best solution to this is completely dependant upon the card holder. It is totally up to you to determine and control your spending habits so that you do not get into debt that you cannot escape. This is where many people fall short. The key is to be well disciplined. You will be rewarded for it if you keep your spending consistent enough with your payment abilities so that you can pay your bills on time. The best way to stay out of debt is to keep the amount of money that you spend low enough that you can pay it off frequently, like at the end of the month. If you only pay the minimum amount each month and spend more than you pay, this will rack up your debt to the point where it can be unbearable, consequently leaving you paying bills for several years to come.

Fear: People I know have credit cards with way high interest rates

Sometimes the interest rates on your credit cards can increase due to contract agreement, or as a penalty. It is important to know everything about your credit card agreement when you sign for one. You need to know how much the interest is, if and when it expires, how much the rate will increase after the expiration date, and how high it will be if you pay late on your bills or if you do not pay in full. The best way to prevent a shock when and if your interest rate goes up is to know ahead of time exactly how it’s going to change and whether or not you can afford a possible increase. Knowing the terms on your credit cards will also help you as you shop for the one that is right for you.

Fear: Not all credit cards are accepted at stores anyway

You should get a credit card that will be accpeted in most places, like Visa or Mastercard. These kinds of credit cards are seldom turned down, and it gives you easier access to buying on credit.

Signature Loans Vs. Credit Cards

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Signature loans are generally pretty easy to get. It is easiest when you have a good credit history, but not impossible to get when you have bad credit. These type of loans are founded upon a single signature. You do not have to put up any collateral up to get a signature loan. This is one way in which it differs from most loans, including the usage of credit cards.

Which is better?

There are pros and cons to both signature loans and credit cards. Which one is right for you is dependent upon your financial situation and the kind of spending you want to do on credit.

Credit cards

The good thing about credit cards is that you almost ultimately control how much you get to spend on credit. If you have a good credit history, you can qualify for a very large amount of credit. You can choose, within that amount, what your credit limit will be. With signature loans, often times the maximum amount you can borrow is ten thousand dollars. Of course, in some cases, having a smaller limit on how much you can borrow might not be such a bad idea. It all depends on your spending habits and your ability to pay the money back.

The payments you make on your credit card depend on how much you spend. The larger the balance on your credit card, the more you pay monthly. With signature loans, you pay a set amount every month, or even every two weeks. This depends on how much money you took out on loan, but it does not vary depending on how much of that money you spend or what you use it for.

Signature loans

When you apply for a signature loan, there is no requirement of collateral. The thing that they lenders look for is a good credit rating. This assessment alone will determine whether or not you qualify for a signature loan. Once you qualify, all they need is your signature, and you have the loan. Sometimes it’s easy to forget that it is STILL borrowed money, that you must pay back.

Interest rates on signature loans are based also upon the applicants credit rating. It is not impossible to get a signature loan if you have bad credit, but you will better chances and lower interest rates on your loan if you have good credit. With credit cards, a larger variety of people can qualify for credit cards with low interest rates, even if they don’t have great credit ratings. The problem with credit cards is that, usually, if the person has a bad credit rating, they probably will not be able to pay back the money they would owe on a new credit card. Still, credit cards are offered to many people regardless of their financial abilities.
Whether a signature loan or a credit card is best for you depends on how much you want to spend, how well you can control your spending habits, and how well you can make your set payments.

Top 3 Myths About Paying Off Your Credit Cards

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So you have finally paid off all your credit cards. It took you a long time, and for a while it didn’t look like you were going to get it done, but you are finally at the point where you are debt free. It’s a great feeling, isn’t it? So you sit back in your easy chair, patting yourself on the back…but what happens now? Will this add or take away any points from your credit score?

Would it be better to just close your account so that you won’t be tempted to get into debt again? Since you paid off your debt, will your late payments and other negative records be forgotten on your credit report? Maybe you should know a little bit more about what is fact when it comes to paying off your credit cards, and what is fiction.

Myth: Your Credit Score Will Improve by At Least 50 Points Because You’re out of Debt

Fact: Some would like you to believe that just because you paid off your debt, your credit score is going to improve enormously… fifty points is the most popular belief. But because of the complex formula that is used to calculate your credit score, it is difficult to say just how many points exactly will be added to your score. Even if it isn’t fifty points, your credit score will, in actuality, improve.

Myth: Negative Records Will Be Taken from Your Credit Report Once You Pay Them Off

Fact: Whether or not you pay your credit accounts off on time or even early, your late payments and other negative records could stay on your credit report for up to ten years. Paying off your accounts early will improve your credit score, but it will not take away the mistakes you’ve made that hurt it. Eventually those mistakes will be erased from your credit report. It is just better to not make a late payment in the first place, keeping your credit report clean.

Myth: Your Credit Score Will Get Better If You Close Your Old Credit Card Accounts

Fact: The longer you have an account, the better. Having an old account, whether it is active or not, is good for your credit score because it shows that you have a long credit history. This is beneficial especially if you’ve paid all your bills for that account on time. Closing an old account can lower your score because it can make your credit history look shorter. If any accounts should be closed, it is best if you pay off and close the newer accounts rather than the old ones.
Getting out of debt is a big relief, but knowing how to pay off your credit cards can be beneficial when it comes to keeping a high credit score. The key things to remember are that it’s best to pay them off, but keep the old ones open, and pay the requirements on time so you can avoid negative records on your report.

What Are The Pros And Cons Of High Credit Limits?

Pros and Cons of High Credit Limits

When using a credit card, a limit is set upon how much you can spend before you max it out. This limit varies for each person and each credit card. So how high can your limits be? Or, more appropriately, how high should they be? Many would agree that a high credit limit would allow you freedom to buy as much as you want of whatever you want. Oh sure, you can pay for it later, it’s no big deal. Others would say that in reality, high credit limits bind you with debt that you cannot pay back. So who’s right? Is it really that bad to have high credit card limits?

Advantages of High Credit Card Limits

• Using your credit card more, as long as you pay the bills on time, adds points to your credit score.
• Purchasing expensive items is less of a hassle.
• You have money on hand for emergencies should the need arise.
• You do not have to worry about maxing out your credit cards.

Disadvantages of High Credit Card Limits

• If you cannot pay your monthly bills, the interest rates increase more quickly with a high credit card limit than if you were to have a low limit.
• Someone may steal your credit card, and with so much space within your limit will allow them to spend more money that you would have to pay back.
• With a higher limit, it would be more tempting to buy things with money you don’t have, even if you know that you could not pay it back.
• There may be less of a risk using some other form of credit, like taking out a loan.

Do It the Smart Way, Or Don’t Do It At All

When you put a limit on your credit card, be sure that even if you got to the limit that you could pay the money back without strain. Anything that you want that is more expensive than the amount you have within your limit is probably more safely purchased with a loan. It may even be worth it to save up money to buy it. Otherwise, if you cannot afford to increase your credit limit, you probably cannot afford to buy something that expensive.

Make It Easy To Give Back What You Borrow

It is good to keep in mind that no matter what you buy on credit, whether it is expensive or not, it is not yours until you have paid back the money that you borrowed to get it. The pros and cons of high credit limits do not change the fact that credit is money that you do not have, and so the best type of credit is affordable credit. Keeping your limits low will allow you to more easily pay your monthly bills and pay off your credit cards more often, and overall, you will be less likely to get trapped in debt that you cannot get rid of.

How Many Credit Cards is Too Many?

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Is there such a thing as too many credit cards?

There can be. Honestly, it goes both ways. Most people would agree, though, that they are at a higher risk of getting into debt that they cannot escape if they own way more credit cards than they can control. Having so much credit can be too tempting, and many people have given in to that temptation, spending more than they can pay back and ending up with a bad credit card and debt up to their earlobes.

This is why it is often difficult to keep, or build up to, a good credit score. Creditors look at how many credit cards you have and almost automatically see a potential threat that you will not be able to pay off your debt. This automatically decreases your score, and it also may make it difficult to receive other forms of credit, like a loan, or another credit card.

So how do you escape the automatic assumption that just because you have a lot of credit cards, you cannot pay your debt?

Well, there are some cases in which people do not have a bad credit score, even when they have several credit cards. What did these people have that those with even a few cards did not? A good credit history. That and regular payments helps your credit score either stay in the high numbers, or increase to where you want it to be.

So how do I know how many credit cards I can have?

How many credit cards you can handle is up to you. If you have a large number of credit cards in your wallet and are confused as to why you are having difficulty paying your bills on time, you may want to cut down a bit. Your spending habits and our monthly income are what determine how many credit cards you can have without letting your debt get out of control, and how well you control your debt is what will determine your credit score.

How do I build up a good credit history?

If you are just starting to get familiar with credit, you should probably start out with a low number of credit cards, if not one. Buying too many credit cards at once will make you appear as a potential over-spender, and even worse, someone who will not be able to pay their bills. To start out low and use your credit card wisely, like paying your bills on time and paying your cards off frequently, will eventually prove that you can handle credit cards carefully and result in a very good credit history, allowing for you to build up to an excellent credit score.

How can I show creditors that I’m dependable with my credit cards?

Always pay in full and on time. The thing that will hurt your credit score the most is having frequent occurrences where you make your payments late. Paying your bills on time every time will show that whether you have one or fifty credit cards, you can pay back the money that you borrowed on those cards.

Big Money With Credit Cards Affiliate Programs

Most website owners out there are looking to monetize their site however they can. The explosive growth of blogs has introduced a whole list of new ways for people to make money online.

You don’t want to forget some of the old reliable ways to turn a visitor into a buck. In the reading I’ve been doing on blogs lately  I see a lot of material about google adsense and Pay Per Post, and I almost never see anything about affiliate programs.

This site is about how to apply for credit cards, so of course I’m looking for affiliate offers from some of the major credit card companies. Did you know there are credit card offers that pay $200 for a single sign-up? That’s a huge commission for one sale.

Let’s put this in perspective. I think the average click through rate for google adsense is about 2% for most sites. So if you get a thousand page impressions on your site and 2% of them click ads you’ll get 20 clicks. If you get paid $1 per click (and most ads won’t pay that much) you’d end the day with $20 in revenue.

That same 2% conversion with the $200 credit card affiliate offer would have paid you $4000!

Okay, I know the comparison isn’t sound and the math is ridiculous. I’m just trying to get your attention. But let’s say the conversion is only 1/10 as good with the affiliate offers as it is with adsense clicks. That’s still a $400 day. In fact, to outperform the adsense clicks you would only have to convert 1 visitor every 10 days with the credit card offer. Really makes you think twice doesn’t it?

It’s true that most offers don’t pay $200 per conversion. To bring into more realistic terms, think about a $20 payout. You’d only have to get one per day to match the performance of adsense.

I know you’re not dumb, you can do the math yourself. It’s worth thinking about thought isn’t it? Are you maximizing the profitability of your site?