How To Get A Credit Card No Matter How Bad Your Credit Rating
Your credit is bad. Perhaps you have a string of unpaid bills
haunting your past. Maybe you declared bankruptcy within the
past 10 years, or defaulted on a student loan.
All of the above can block your access to obtaining a major
credit card, such as VISA or Mastercard.
But bad credit is not the only reason you can be denied a major
credit card. Some people simply have never used credit. People
who like to pay cash only, have never financed a car, taken out
a college loan, or a mortgage may have zero experience with
credit. In that case, most card companies will reject your
application, not because you have bad credit -- but because you
have no credit rating.
Many women who marry young and do all their borrowing under
their husband's name often find themselves with no credit rating
after they are widowed or divorced. Thousands of women have been
denied loans and credit cards on that basis.
Still other people carry too much debt to be considered a good
risk. If you have a car loan, a student loan, a mortgage, two or
three -- out cards, you are unlikely to be granted another
credit card.
But in any and all of the above cases, you can still obtain a
credit card. No matter how bad your credit, and even if you have
declared bankruptcy, you can still be granted a VISA or
Mastercard with a limit as high as $5,000, if you know the right
company to call, and how to make your application.
We are going to reveal these card companies and the methods by
which you can obtain a VISA or Mastercard later in this report,
but first, let's talk about some of the other things you really
should know about credit cards, including annual fees, interest
rates, credit reports and more.
================== Your Credit Rating ==================
How do credit card companies decide if you are a good credit
risk or a bad credit risk? Well, it's sort of a Big Brother
thing. There are several large agencies in America which track
the borrowing and buying behavior of just about every single
American who has borrowed money at one time or another.
The four major credit rating agencies are:
CSC Credit Service :: (Phone: 800-392-7816)
TRW Information Sys. :: (Phone: 800-392-1122)
Equifax :: (Phone: 800-685-1111)
Trans Union Corp. :: (Phone: 800-851-2674)
When you send in an application for a credit card, the card
company contacts one of the above agencies, which pulls your
file, if one exists, and let's the company know if you have any
bad debts in your background.
If you have never borrowed money or used credit of any kind,
your name will not appear in the data base of any of the above.
If you have, there will almost certainly be information about
you. If you have ever defaulted on a bill, or walked away from a
debt owed, that information will be available. If you have never
defaulted on a loan, but have made frequent late payments, that
is recorded, too, and goes against your credit rating.
====================== 25 Percent Error Rate
======================
If this sounds a bit like Big Brother, most would agree with
you that it is. It's scary to think that some large anonymous
corporation is keeping a file on you, but it's true.
Furthermore, they will share your file with any lending
institution that wants to know something about you. That's the
price you pay to obtain credit. You've heard the statement,
"there ain't no such thing as a free lunch."
When it comes to the game of credit, the lunch is definitely not
free, neither in the monetary sense, or in the realm of personal
freedom.
To top things off, credit agencies make errors in as many as
one-fourth (25 percent) of all their reports. At this minute,
false information about you may be ruining your credit rating.
To check your credit rating for errors, call the agencies at the
numbers I provided above. They will request that you send them a
written letter asking for a copy of your credit report. They
will send you a copy of the information they have about you.
Now let's look at how card companies make the big bucks --
interest rates.
===============
Interest Rates
===============
A few decades ago there were laws against charging the kinds of
interest rates credit cards get today. Exorbitantly high
interest rates were called "usury," and were forbidden by
federal law. Just 30 years ago loaning money at 20 percent would
have landed any banker in prison. Such rates were the territory
of loan sharks and organized crime.
Today, however, it's standard business. Some cards have rates
approaching 21 percent. Some product manufacturers, such as
Apple Computer, have credit plans that push a whopping 23
percent.
Most credit card companies attract customers with super low
interest rates, sometimes as easy as 5 percent. But what they
only tell you in the fine print, which few people bother to
read, it that the interest rate jumps back up after six months.
Many cards that start you out at 6 percent soon jump to 18
percent, or higher. By that time, most people have chalked up a
balance and are stuck. Most people simply fail to notice when
their rate increases. Credit card companies count on that. They
like who take no interest in details. If you don't watch them,
they'll watch you -- and your wallet -- and dip into it in the
most insidious ways.
====================
No Annual Fee Cards
====================
Some credit card companies charge no annual fee for use of
their card. Annual fees range from $18 to $55. You pay it every
year simply for the privilege of using the card. Other companies
charge no annual fee. You might think, then, that this is a
better deal. Most often they are not. Cards with no annual fee
almost always have a higher interest rate. If you leave a
monthly balance, you'll always pay more than the annual fee in
interest charges. Only if you never leave an unpaid monthly
balance can you benefit form a card with no annual fee.
==================
Perks and Freebies
==================
One of those insidious ways is the offer such perks as frequent
flier miles or annual rebates. Use the card so often, and get X
amount of frequent flier miles. Use your card, and get credit
toward the purchase of an automobile. Is this a good deal?
Hardly ever. As you might have guessed, the offer of rebates and
gifts is simply an inducement for you to pay super high interest
rates. Unless you are a big spender and travel a lot, you'll
rarely benefit from this kind of promotion.
==========
Be Choosy
==========
In short, never sign up for a credit card until you compare
rates. Shop around. Credit card companies are just as
competitive as any other kind of business. That means interest
rates that vary widely. In general, never go for a card that is
five percent higher than the current prime rate.
========================
How To Get A Lower Rate
========================
What if you are already on the hook with a major credit card
with an agonizing rate of interest? Pick up the phone, call your
card company, and get tough. Often, if you ask for a lower
interest rate, you'll get one -- it's as simple as that.
As further incentive, you can threaten to transfer your balance
to another card company with a lower rate. Many card companies
are more than willing to take you on as a customer by paying off
one of their competitors for you. Of course, you are then
beholden to them. That's okay if you score a lower interest rate.
=================================
How Anyone Can Get a Credit Card
=================================
Now what about all of you "hopeless cases" out there. What if
you have deplorable credit, or no credit rating at all. You may
have already been turned down by a half-dozen card companies.
What can you do?
First, you should think long and hard about why you want a
credit card in the first place. If you have a history of bad
credit, a credit card may be the last thing you need. Many
people feel that credit cards and the debt they lead people into
is a modern form of slavery.
Credit cards are almost magically deceptive and alluring. They
get at the deepest psychological lever of the human mind -- a
lever which allows people to have the feeling they are getting
something for free, when in fact, they are paying two, three,
four, even ten times as much for that product because of the
interest they will pay on each purchase.
On the other hand, not having a credit card is becoming less and
less practical in modern America. You can't rent a car without a
credit card. Carrying cash is dangerous. Checks are not accepted
everywhere -- and traveling to another city or country is
extremely difficult without the confidence and identity a credit
card brings.
===============
A Secured Card
===============
If you decide you really need and want a credit card despite
your past problems with credit, you should get what is called a
secured credit card. Even people who have declared bankruptcy
are granted secured cards.
A secured card works this way: you pay a lump sum of cash
upfront either to your bank or the card company itself, usually
from $200 to $2,500. The card company will then grant your
credit for up to 150 percent of the amount of your deposit. If
you pony up $500, you will be granted a $750 credit line. If you
put up $1,000, you will get $1,500 in credit, and so on.
Your deposit money will earn a very nice 4 to 5 percent interest
while it is held as collateral by your bank or the card company.
The deposit money acts like a buffer for the lender. In the
event you default on your card debt, the lender gets to keep
your money. They may still incur a net loss, but the risk is far
less.
Additionally, the interest you gain on your deposit will offset
the interest on your monthly balance if you have one. If you get
a secured card with an 18 percent interest rate, you can feel
good about the fact that your pre-payment is earning 5 percent.
Which card companies offer secured credit card plans?
The following: (At the time of writing, these details are
correct. If they change by any chance, you'll have to look up
the institutions in the Yellow Pages, or simply do a search
online.)
CitiBank -- Minimum deposit is $300, which earns 4%.
Call: 800-933-2484
Federal Savings Bank -- Minimum deposit is $250, which earn
2.5%.
Call 800-285-9090
Orchard Bank -- Minimum deposit is $400, which pays 4%
Call 800-873-7307
Key Federal -- Minimum deposit is $300, which earns from 4% to
5%.
Call 800-228-2230
Signet Bank -- Minimum deposit is $200, which earns 5%.
Call 800-333-7116.
Using a secured credit card can also help repair your credit
rating if you use it responsibly over a number of years.
Even if you do not have bad credit, a secured credit card is
recommended for anyone who wants the safety and convenience of a
credit card. Secured cards are a safe, responsible way to
control your spending, and you actually earn money though
interest on your deposit while you enjoy the use of your card.