Credit Cards Prove Affective For Building Good Credit

A credit card is a system of payment where by the user is able to make purchases without cash. It is named after the small plastic card issued to users of the system. As specified by the ISO 7810 standard, most credit cards are the same shape and size making it easy for universal usage.

A credit card is different from a debit card in that a credit card does not remove money from the user's account after every transaction. The cost of the purchase is applied to a predetermined line of credit and the user is billed monthly, including interest.

It also differs from a charge card, although the term is sometimes used to describe credit cards. Charge cards require that the balance to be paid in full each month, while, as stated, credit cards allow the consumer to revolve their balance, with interest or usury being charged.

Ironically, while credit cards are often the cause of an undisciplined individual's dive into the world of bad credit, credit cards can also play a vital role in rebuilding one's credit as well. Although the author acknowledges that circumstances such as job loss, credit fraud, and identity theft can be the cause of a poor credit score, it is safe to assume that a large number of poor credit cases, worldwide, are the direct result of poor discipline in managing the credit granted to an individual.

Although the individual is ultimately responsible for the decisions they make, the credit card industry does play a role in consumers becoming buried in credit card debt. Anxious to sell their product, they flood a targeted market with pre-approved credit card plans. Enticed by the opportunity to have such funds available to them, many apply to and get the credit. Before they realize it, they find themselves charging one card to pay the other simply because they become over extended.

Those who desire to improve their credit score by making use of credit cards must first make a commitment to follow the basic steps in credit discipline mention in the article, "How To Rebuild Your Credit" which can be found on our site Rebuild-Credit.us. A link is provided in the author's bio.

There are four basic classifications of credit cards designed specifically for those with a poor credit history. They are as follows:

Secured Credit Cards

Secured credit cards are an option to allow a person with a poor credit history or no credit history to have a credit card which might not otherwise be made available to them. They are often offered as a means of rebuilding one's credit. Secured credit cards are available with both Visa® and MasterCard® logos on them.

Fees and service charges for secured credit cards often exceed those charged for ordinary non-secured credit cards. However, for individuals who have charged off on other credit cards or have a long history of delinquency on various forms of debt, secured cards can often be less expensive in total cost than unsecured credit cards, including consideration of the security deposit. For those who are serious about rebuilding their credit, or establishing good credit, a secured credit card is a viable avenue to start with.

Poor Credit Credit Cards

Poor Credit credit cards are designed for individuals with an average or a limited credit history who would prefer a traditional credit card over of a secured or prepaid card. While they allow for some discrepancies in one's credit history, being unsecured this type of card is designed primarily for those with, as stated, average or limited credit.

Those with truly bad credit should reconsider and make use of a Secured Credit Card. Each time a credit application is made, and is not approved, it lowers your overall credit score. To apply for a credit card whose approval is questionable could only serve to dig a deeper hole to climb out of.

Credit-Card-Rates.info provides a pre-qualifying questionnaire that does not ask for specific personal information, nor is any information gathered whatsoever. Once submitted the questionnaire returns all of the possible cards you qualify for. Each one links to a non-bias detailed review of both the pros and cons of the card's benefits and rewards. Convenient online application is just one click away from that point.

When using the questionnaire it is in your best interest to answer the questions accurately as it does provide an accurate result to the cards you qualify for. This will help you to keep from getting negative hits on your credit for applying to cards you don't qualify for yet.

Prepaid Credit Cards

Although a prepaid credit card is classified as a credit card, is not really a credit card at all. No credit is offered by the card issuer. The card holder simply deposits money in an account with the issuer and spends the money which has been deposited. In reality, prepaid credit cards are more act more like a debit card. As more consumers require a suitable solution to rebuilding credit, some credit card companies have begun to offer pre-paid credit cards to help rebuild credit.

Reporting to the bureaus is not a standard procedure with most prepaid cards, but some offer the service at a nominal fee. For the purpose of credit building or rebuilding the card is useless if it is not being reported to the three major credit bureaus.

When it comes to prepaid credit cards the author leans to the Eufora(TM) Elite Credit Builder Prepaid MasterCard® and the The Eufora(TM) Preferred Credit Builder Prepaid MasterCard® issued by BANKFIRST. These two prepaid cards are among the highest rated in our research, they will report to the three major credit bureaus for a nominal fee, and offer a considerable rewards package including cash referral fees ranging from $50 to $90 paid each year, for each referral that results in an established account. This alone is reason to purchase the card and could prove to be quite lucrative for those who truly realize the potential. For more information you can visit Rebuild-Credit.us

Student Credit Cards

Student credit cards are just like any regular credit cards except for the fact that there is a little bit more latitude on approvals. This latitude is accompanied with higher interest rates. The author would like to express a word of caution to students seeking a credit card. The lure of "free money" can be very enticing, especially to a young student. But it is important to realize that credit cards are not free money. In fact, if they are abused, you will wind up paying two to three times the initial amount charged.

In today's society, the credit card companies are targeting students at every corner. They are offered pizza, free T-shirts and numerous other gimmicks to get the student to apply for a credit card. If they are approved, often times they are not completely aware of the adverse affect accruing debt is until they find themselves way over their head. The other side of the coin is if they do not get approved they get a hard inquiry hit on their credit and they wide up with a low credit score which hurts them in the future.

It is the opinion of the author that unless the student has a job, and can be responsible to make their payments on time they should avoid student credit cards altogether and perhaps focus on prepaid or secured credit cards. In fact, they should take a serious look at the Eufora(TM) Elite Credit Builder Prepaid MasterCard® and the The Eufora(TM) Preferred Credit Builder Prepaid MasterCard® issued by BANKFIRST which offer considerable annual residual referral bonuses for recommending their prepaid credit cards. The bonuses of between $50 and a $90 are paid when the referral purchases a prepaid card and continue annually as long as the referred card is active. For more information concerning this unique opportunity visit Rebuild-Credit.us
By: Pete Bolduc

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