Bad Credit Loan vs Good Credit

Financial savvy persons have no difficulty differentiating a bad credit loans or debt to good credit or debt. The clear distinction between the two helps individuals and companies to make wise financial decisions. It is not a clear-cut distinction that one is bad and the other one is good. It takes much more than that to distinguish the one from the other.

In general terms, a good debt is used to purchase an asset that appreciates in value or has some income potential such land or real estate property. Bad debt is used for consumption-based spending such as on cars, travel, electronics and luxury items. Simply put, if you are earning something from your debt, that is good. If you are not benefiting from your debt and are just paying for it, that is bad or not good.

Some examples of good debt are mortgages and student loans. If you acquired mortgage for a real estate property or your home, it is definitely good debt because as everyone knows properties do appreciate in value, despite the boom-bust cycle that the property sector goes through every now and then. A mortgage is also tax-deductible. What is not good is if you continue to pay huge monthly rent payments to your apartment or condominium unit rather than buying your own house.

Student loans of course are like investing in your future. It is better to incur debt in order to continue your education rather than drop out of school. A diploma is always a good security in landing a good job and earning a decent salary. Once employed, you can definitely pay off all your student loans. 

There are a lot of good examples of bad credit or debt, the most popular by far is credit card debts. Many people fall into the trap of unpaid credit card purchases. Some think that buying consumer items such as clothes and electronic gadgets, which are on sale, is a good thing. But these people often use their plastics or credit cards for such unplanned purchases and are not able to pay it off within the billing period. Thus, they end up paying for that little black dress or fancy cellphone for twice their amount! And that is bad by any standards. 

Many people with a great deal of wanderlust splurge on vacations and trips even if they cannot afford such luxuries. Thus they fall into a bad debt trap also. They would borrow money to travel to their dream destination or for a weekend out of town. They may feel rejuvenated after the trip, but they would soon feel stressed out looking for means to pay for their fare money. In the end, it is wiser to travel when you have the money to do so. Then it will truly be a hassle-free vacation.

For women, there is a lot more temptation to incur bad credit loans, mostly for vanity’s sake. There are dime-a-dozen offers from various spa resorts and beauty clinics to pamper or indulge through luxurious spa treatments or makeovers. But most of these so-called packages are really expensive. So they turn to the ever-reliable credit card and opt to deal with the consequences of their beauty regimen when the billing statement arrives.

What Credit Score Is Good

You may have an outstanding loan application that you need to be approved for the furnishings of your new home. You may be worrying over the financing of that spanking good car you just love to get your hands on. Or you may be praying to the heavens that your student loan be approved or else you won’t afford to take your classes next semester.

Whatever credit you are about to incur, you are worried about one thing. Will your credit score allow you to get this loan? It is enough? So how will one know what credit score is good? Where do you draw the line? Do all institutions draw the line at the same score?

Range

The FICO credit score range is about 300 to 850. Some people claim that a person with 850 credit score does not really exist. Scores close to 850 yes. But scores exactly 850, some beg to disagree. Does that mean getting an 850 is impossible? An 850 score means you have to be perfect in your debt repayments and availing only proper credit. The lowest, which is 300 is a credit score number I have yet to encounter from anyone.

Median

The median credit core in the US is 723. It used to be 678 but last February 2, 2007, the people in Fair Isaac who created the FICO credit scoring, announced that it is in fact 723. Having a credit rating of 723 means that half of the country is in front of you, the other half, behind you. Does a 723 credit score answer the question “what credit score is good?” I believe it may answer the question “what credit score is good enough?” and not the earlier question.

Good

So what credit score is good? Does it mean that it’s the credit score that can make you take a loan fit for a 1 year stay in a high class hotel for 2? Or a financing deal whose interest rate is so low, you get so excited about it that you write it in your diary.

Even though the lines are not drawn, it is safe to say that a good credit score is around 750-760. Banks offer great interest deals to those with credit score of 750. It may be best to stick to a score of 770 as lenders generally lump you with those having a good 800 score.

In terms of the question “what credit score is good enough?” then it is between the numbers of 690 and 730. Having such a score will give you relatively fair interest rates on your applied finances.

However, the discussion of what credit score is good really does depend on the person asking the question. If for you good means just basically getting your loan approved, the a credit score of 570-620 will already get you in on high interest loans. But if good for you is getting the lowest interest rate you can possibly get, then try reaching the maximum of 850.  As we all know, the higher our credit score is, the better deals that you get!

Virtual Credit Card Charge to Phone Bill

The evolution of technology brings fascinating results. The plain credit card before is now upgraded to virtual credit card with the purpose to evade credit card frauds. The ordinary mobile phones evolved into FM radio, MP3, camera, recording device and GPS. And now, the latest trend is virtual credit card charge to phone bill.

It means that the mobiles phones can have a dual function which is a virtual credit card. The launching of this facility – virtual credit card charge to phone bill – is largely a phenomenon as this kind of system will eliminate the possibility of stolen cards, credit card frauds and simply the absence of the plastic card.

The virtual credit card char phone bill has been already initiated in other parts of the globe. Like in India, it launched the ‘Reliance mPay Credit Card’. The mobile number of the customer will serve as the credit card number once verified by the bank. After verifies, the customer can proceed with the purchase transactions he wish to do.

While in UK, such technology is not yet rampant though such concept interests to the 30 percent of the population of mobile phone holders. The research statistics has quite varied result. There are people who would like to utilize the virtual credit card charge to telephone bill for micropayments only while others prefer to use it for major transactions such purchasing airline tickets and booking for hotel rooms. It is an indicative idea that UK residents are open with such valuable option of payment method.

The virtual credit card charge to phone bill is exponentially growing in countries like Japan and Korea. It in fact launches the handsets turned into ‘mobile wallets’. This system serves multiple purposes in these countries varying from shopping for goods, electronic key, membership card and payment for services such as spa.

In Australia, the Telstra, NAB and Visa are collaborating to launch similar concept. A device will be inserted in the mobile phones. Payment will be made simply by waving the mobile phone to the merchant’s contactless reader. The same policy with credit card will apply in case of stolen mobiles. It should be reported immediately to avoid unauthorized use. The virtual credit card charge to phone bill concept is still scheduled for launch in Australia.

This innovative technology is indeed very beneficial to people specially the travelers, business men and even for housewives and ordinary working people. Credit card is a necessary matter nowadays from shopping in the malls to purchasing online for some items. With this type of purchase, our credit card details are exposed and easily subjected to fraud cases.

The various means of obtaining one’s credit card details are very easy and accessible hence using the virtual credit card charge to phone bill is a very convenient and safety option. Although not yet very dominant technological feature, improvised systems will be launched for sure in the next few months or years.

The virtual credit card charge to phone bill is one of the most useful technological innovation.

Secured Credit Card High Limit

Secured credit card high limit is the best alternative solution for people who are facing a challenging credit history such as consecutive defaults of loans, no credit or bankruptcy. Paying regular on time through your new secured credit card high limit will establish again your reputable credit records.

This type of credit card is requires collateral in the form of deposit account which will determined your credit limit hence it is called secured credit card. The cardholder must own this deposit account. Hence, if the cardholder deposits an amount of $1000, the credit limit will be likely from $500 - $1000. It depends and varies as the credit card provider policies.

All your purchase transactions will be charged against the collateral deposit. Also, any fees and charges such as for delay payments or defaults will be charged accordingly to your deposit.

To avail secured credit card high limit, the credit provider will ask you of your personal details, bank details, income statement and employment status. The last requirements are important, as they will evaluate your capacity to pay the required regular payments. As it is a secured credit card high limit, there is a big chance of your application to be approved. The high risk factor is minimized because of the security deposit.

If you are keen to consider applying secured credit card high limit, it is beneficial to know how the secured credit card system works and what important things to consider.

The first thing to ask to the credit provider is the interest rate. Note that every institution providing secured credit card service has different policies therefore interest rates will vary. Scouring many credit providers will give you the general idea of the interest rate and other fees incurred during the application process. The usual interest rate is around 19% thus beware of any tremendous interest rate charges.

Apart from the interest rate, you should know all the charges included or to be paid in the secured credit card high limit. There are some scrupulous credit card providers that will exponentially charge you. The usual charge is from $25 to $60 hence charge higher than this must alarm you. Other information you need to know is the grace periods, the penalties for late payments and the applicable fee if bill is not paid fully in the end of the month.

These types of cards are also available both in Masters and Visa. It is expected that the charges are higher than ordinary credit card and the terms and conditions specified are limited and more specific.

The purpose of the secured credit card high limit is to give option to people with a poor credit history or no credit. It is most of the times the last solution offered for people who wanted to recover their tarnished credit history.

Making your payment on time and paying the full balance amount will truly help you rectify your bad credit record. However, it is still important to note that secured credit card high limit is just a tool and not a guarantee for better credit.

Prepaid Credit Card

Shopping with credit card is very tempting as you don’t notice your expenditures until you receive your credit card bill. If the credit card holder doesn’t have the healthy habit to pay regularly, it ends up to spiraling debts due to accrued interests of late payments and from the unpaid balance.

Such unpleasant cases lead to damaging your credit history and once your credit record is tarnished, it is very difficult to redeem your credibility as a borrower.

The best solution for irresistible credit card shopping spree is the prepaid credit card. This type of credit card is a guaranteed card and similar concept with debit card.  A certain amount is needed to be deposited akin to opening an account saving or checking account. After you have deposited the amount in your account, the bank will then issue the prepaid credit card.

The prepaid credit card has the same functionality as ordinary credit card except that your expenditure will be limited only to the amount you deposited in your account. Prepare credit card can be used to guarantee booking of hotel rooms and purchase of airline tickets and other online activities that involved credit card details.

The advantage of the prepaid credit card is its limit being by set as per the available amount deposited the credit card holder’s account. Another great deal about the prepaid credit card is the opportunity it offers to people with bad credit history or people who declared bankruptcy hence their application for any credit card is always rejected.

With the prepaid credit card, it helps the bad creditors to establish again their reputable. Since there will be no regular payment fees and interest rates, there will be no records of defaults payment also.

This type of card is also best to be given as gifts. The recipient can shop and purchase their goods of their likes but ensure that it is within the credit limit. This is wise alternative for students. Parents can simply deposit certain amount to emphasize the ceiling limit of the credit card. This will help them not to misuse the credit card.

Like in any other transactions made in the banks, charges are applicable. A certain fee will apply to open an account for the prepaid credit card. Another expected fee is the charge for every additional deposit made to your account.

Apart from the incurred charges as mentioned above, the prepaid credit card is the best solution that offers minimal risk. The credit cards nowadays are becoming necessary part of our day to day life. It seems most of the items we purchase and need are made through credit card.

In fact there are instance especially in online purchase or subscription that you are unable to process your purchase or subscription unless you provide your credit card details.

Now with the new prepaid credit card, it gives fair chance to people who would like to have a credit card but not eligible to apply. The only requirement you need in prepaid credit card is the deposit.

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