Prepaid Debit Cards vs Secured Credit Cards

We get quite a bit of email asking about the differences between these two categories of credit cards so I decided to write a short article to explain the basics of each category. Each of these cards will require funds to be deposited in advance before using them, so what's the difference? The truth is there are some distinct differences that may work better for people from different walks of life. I have listed these differences below.

Prepaid Debit Cards - Prepaid debit cards are a descendant of the secured credit cards that you are probably familiar with. Prepaid debit cards are just that, debit cards that have the Mastercard or Visa logo on them and are accepted worldwide. Much like your bank debit cards they deplete funds in your account as you use them, they do not require monthly payments and do not charge interest.

The major difference is how you qualify for one and how much it cost to use the card. Prepaid debit cards are not concerned with having card holders qualify for their cards. Most issuers do not verify employment, credit, addresses or even legal residency. This makes these types of cards very popular with immigrant workers in the United States illegally.

Debit cards are also more fee intensive than traditional secured credit cards. They have fees that are usually measured by transaction. Other fees include, loading fees, transfer fees, check deposit fees, annual fees and more. This is the price people have pay for convenience and anonymity. These cards will not report cardholder transactions to the credit bureaus, which is not ideal for those who are trying to establish credit.

In our society it is virtually impossible to live without some type of visa or Mastercard, debit cards fill this void. They offer a "de facto" banking system for those unable to qualify normally. They offer direct deposits for paychecks and many other features to a segment of society that traditional banks have left out in the cold. All in all, prepaid debit cards are pretty cool for some people.

Secured Credit Cards - are credit cards that are specifically designed for people with bad credit. Most people that apply for these types of credit cards do so to build or rebuild their credit. The other advantages are they appear, look and act exactly like a regular credit card. Most prepaid cards are clearly marked as debit cards with outrageous designs and colors.

The price you pay for rebuilding your credit is interest. The worst thing is that you are paying interest on your own money! Unlike prepaid debit cards, secured cards usually carry pretty steep interest rate, usually around 15%. Secured credit cards are not usually "re-loadable". Meaning, once you make your initial deposit this becomes your "credit limit". Your payments will bring down the balance giving you more purchasing power.

Secured credit cards report to the credit bureaus exactly the same way a regular credit card does. Creditors that review your credit for purchases have no idea if your credit card is secured or not. Another thing to watch is that most people will fund their cards with money that they intend to use immediately. Meaning they send in $500 and expect to be able to go out and spend that $500 immediately on receipt of their card. This is not good borrowing practices and will actually bring down your credit score.

Credit cards are viewed as liabilities on your credit bureau once you borrow over half of your credit limit. The credit bureaus see this as a sign of credit dependency and discount your credit score 35%. When this happens you are hurting your credit, paying regular credit card fees, paying interest on your money and carrying around a maxed out credit card.

Our advice to borrowers is to save up enough money so that your initial deposit is large enough to show a decent credit limit on your credit bureau, around $1000. Then leave it alone. It will only cost you the price of the annual fee to keep it in their bank. Most people feel the need to charge something on the card to "prove" they can pay it back. This assumption could not be further than the truth. Credit bureaus do not show monthly payments; they only show the months you have had the account open and any months that you have been delinquent.

When a future creditor sees your $1000 open line of credit, higher credit scores and the financial restraint you have demonstrated you will be much more likely to get the loan. Secured credit cards can significantly help you rebuild your credit and have a positive impact on you overall credit score. Unfortunately most people use them incorrectly and end up hurting their credit more than it was before getting the card.

Aubrey Clark is a syndicated writer for Credit Card Direct who writes frequently on credit cards and financial matters like prepaid debit cards and Where to find low interest rate credit cards.

Debit Cards: Use and Abuse

Did you know that youngsters between the ages of 13 and 19 have huge buying and spending power? On average, this consumer group spends about $5,000 each per year. And much of that funding is provided by Mom and Dad. You may send your daughters to the mall for school shopping, or you may have a child who just can't seem to keep away from the video arcades. You reason that it is money they've earned mowing lawns, baby-sitting or with part time jobs, so it's their money to spend, right? That may be true; yet this age group is at real risk for developing credit and spending habits which will not serve them well in just a few years.

If you've had a child go off to college, I can guarantee that he or she has been offered credit cards. And these are credit cards you may not know anything about at all. Lenders do target college kids for seemingly attractive credit card offers. And many of them do sign up. Unfortunately, they may not have the financial savvy or experience to understand what they are getting into. Today, more than ever, it's important to educate your children about the use (and abuse) of credit. And one way that seems to be gaining popularity is with debit-cards. When I first heard about parents actually encouraging the use of debit cards, I was very concerned. But read on. Parent-controlled use of debit cards might be just what you and your child need to build a foundation of financial literacy.

Debit cards do look like credit cards, but the similarity should end there. With credit cards, your student can charge on up to the credit limit of the card on the very day the card is received. A debit card can be used like a credit card to pay for goods and services but only up the balance on the card at any particular time. So, if you and your student have agreed on a particular allowance from home for various expenses, you can fund that amount monthly and know that your child can't use up next month's rent this month simply because it's not available to him.

Debit cards actually work like a checking account if you think about it. When there is no more balance on the card, the card is rejected. Your student can't write "checks" which will bounce with a debit card. The card simply won't be accepted if the money isn't there. Debit cards can work like ATM cards, too, so access to cash, if there is cash available, can be as convenient as your local ATM machine. Parents don't have to make a mad dash at lunch to put money into a checking account which would take a couple of days to clear. They can set up deposits to a debit card on a regular basis, and those amounts do appear on time on the debit card balance. It's less stress all the way around.

Does this mean your student might not call you at midnight with a "desperate" need for weekend money which won't be deposited till Monday? Nope. He or she still will call. And you can still make the dash to deposit if you want to. But what if you don't? Your student knows that the money will be there, as a balance on the debit card, like clockwork. Are you getting the picture? This is actually a pretty good way to teach your student money management. He can't get into trouble by overcharging or writing bad checks. He will have to learn to pace his spending until the debit card is refreshed at the agreed upon time.

As parents, you may have additional concerns about student spending. Well, there's a monthly statement you receive. If ALL the withdrawals on the debit card are to the local beer emporium, you might need to have a conversation. Also, if all the withdrawals are only at the very beginning of the month, some time/money management discussions might be in order. Many debit card accounts allow parents to limit ATM withdrawals to a certain amount per day to ward off spending sprees. Check with your Credit Union about other safeguards which may be available including how to handle fraudulent use of such a card, and how to handle lost cards. And breathe a sigh of relieve, parents. This really is a good tool for you and your young spenders.

Take advantage of low rate debit cards and all of the benefits that your local Credit Union has to offer. New, "Community" registration status makes joining one simple and open to everyone. Find out how easy it is at http://usacreditunions.com

John Holder is the founder of http://usacreditunions.com. We have a dedicated page of detailed information on every Credit Union in the USA and make it easy for you to find one for you to join.

Article Source: http://EzineArticles.com/?expert=John_Holder

Car Accident and Florida Lawyer- an Inseparable Pair

Accident of car invites enquiries on how to claim insurance coverage amounts and on how to claim good compensation amount if there is total loss of life. However, the laws and practice varies from state to state. It is to be taken into account that in places like Florida, a lawyer needs to be engaged for this purpose.

But the accident auto lawyer Texas is to be selected based on the experience of the lawyer in handling such automobile accident related cases particularly the car accident cases. In this regard, one may even enquire on the reputation of such lawyers.

However, as a person involved in the accident or as a caretaker of the accident victims, one needs to be genuine in their approach for the insurance claims etc. In such genuine cases, the Florida-lawyer may be able to argue in an intellectual manner and thereby provide some good guidelines to the clients like you.

Such arguments with legal statements in the court of law will be of more useful to the victims of car accident in getting the amount due to such accident. However, this depends on the evidences that are put forth by the concerned legal personnel with appropriate claim forms, statements from the concerned persons.

In Florida, lawyers are, many in numbers and many of them are efficient in handling the accident borne injuries or loss of life. The highly reputed lawyers might have handled numerous cases at a point of time.

In all automobile injury cases, the concerned individuals will put up the claim forms in a short time without making much delay, in association with the legal experts.

Accident-car is evidence that is materialistic in nature and the concerned Florida-lawyer may cross-examine the witnesses depending upon the history of the concerned accident car based problem.

Do prefer an experienced Florida lawyer as he pursues Florida Auto Accident Claims very easily. However, one needs to tell everything on what has happened to them when the accident-car encountered problems on road. The special Florida lawyers who handle accident-car cases expect comparatively a higher fee and most of the time the fee may be settled after the case meets up with success.

The concept of 'no cure no pay' may also be offered by a few of these lawyers, which means if you win the case you pay a decent salary if not you pay little or nothing. Pretty fair, somebody will say.

Adverse Credit Remortgage UK – Switch Mortgage for Benefits

You are paying a huge amount per month towards the current mortgage which is a burden on your repaying capacity. The best considered way to reduced monthly payments is to go for remortgage. but your problem is that you have adverse credit and lenders may refuge you a new mortgage. In the UK, you can however rely on adverse credit remortgage that is designed especially for the UK people who could not make timely payments, have payment defaults or arrears and county court judgments.

Adverse Credit Remortgage UK allows the UK people to switch their current mortgage to a new mortgage of competitive rates. The advantage of adverse credit remortgage is that people having adverse credit in their names can release extra equity in their home and thus they can use the amount for home improvements, buying car, and wedding or for educational purpose. Despite adverse credit, you can get adverse credit remortgage at competitive interest rate as it is a secured loan using the same property as security of the remortgage. Also, you have the choice of paying back adverse credit remortgage in larger duration which surely reduces monthly outgo towards its installments.

The UK people can get adverse credit remortage at competitive interest rate as such lenders are plenty on internet. Take their rate quotes first of all and compare lenders for a suitable interest rate as per your conditions. Also note that as you clear installments of adverse credit remortgage your credit score improves which goes a long way in taking easier loans in future.

Search well on internet for a suitable adverse credit remortgage in the UK who has right package for your circumstances. Go through terms-conditions of such lenders carefully. Ensure timely paying the remortgage installments as your home is at stake.

Mobile Phones Wholesalers

Mobile phone wholesalers can be challenging to get nearer in this day and age. In attendance are numerous companies advertising these wholesale mobile phones however the question we need to ask are these companies untrustworthy? This is going to be paramount to your success online.Inevitably, this will effect your outcome.