You may be worried about job loss in the future, or if the state of your health is questionable, you may worry about being unable to work due to illness.
Those worries could cause you to consider opting in to a credit card protection offer from your credit card issuer. But think twice and do your research before you make the decision. If you know your company is about to announce widespread layoffs, it might be a good idea – but only if you’ve read the fine print and know that the coverage will actually be there when you need it.
Some plans require that you’ve been employed for a set length of time, that you’ve had the coverage for a set length of time, and that you’re a full time employee. They may also state that the coverage doesn’t extend to existing medical conditions.
Many programs require you to wait for coverage until you can show that you’re receiving unemployment benefits. And that, as you may know, takes a couple of weeks. If you’re off work due to illness, the coverage may require you to send in a monthly note from your doctor.
Job loss from disability may be non-existent, due to the fine print in some plans. These state that you must be physically unable to perform any work for pay. So, if you make your living climbing tall structures as a steel worker and you suffer from a broken leg, you may be out of luck. Why? Because that broken leg wouldn’t prevent you from taking a job as a bookkeeper, a telemarketer, or anything else you could do while seated.
If you read all the fine print and determine that yes, the coverage is genuine, then you need to consider the cost vs. the risk you face.
Credit protection plans can effectively increase your overall cost of credit by more than 100%. The offer is presented to look inexpensive – only 99 cents per $100 per month.
That doesn’t sound like much, until you apply it to your entire balance and compare it to your interest charges. Say you’re carrying a balance of $2,000 at 9.9% interest. Your interest charge is about $16.50 per month. Now add the fee of 99 cents per $100. That’s 99 cents times 20 – or an additional $19.80. Ninety-nine cents per months translates into 11.88% per year if you were calling it an interest charge.
Some card issuers charge less – perhaps 50 cents per $100 – that’s still an additional $10 per month that you could be using to pay down the debt instead.
BestRateforCreditCards.com your resource for credit cards, business credit cards, student credit cards, secured credit cards, and prepaid credit cards. We also provide a weatlth of information about the importance of having credit cards and how they will benefit you.
If you’ve applied for a new credit card and been told that you don’t qualify because there’s a problem with your credit scores, a collection agency’s dirty tricks may be the source of that problem.
Some collection agencies are now specializing in dirty tricks, and thousands of unsuspecting consumers are falling for them – and paying debts they do NOT owe!
First is the one that will hurt your credit scores. It’s attempt to collect on debts that were either discharged through bankruptcy or are so old that the statute of limitations passed years ago.
Here’s how it works: At one time, those collection agencies “purchased” the debt. They paid pennies on the dollar for the right to pursue collection and, hopefully, make a very large return on their investment.
Now, even though those debts have become legally un-collectable, they’re still there, hanging around in a moldy file. So, a debt collector can pull them out and start causing trouble. We’ve heard reports of debts discharged 20 or more years ago being used to try to extort money from consumers.
They know that calling isn’t going to get them anywhere, so they file a lawsuit. Then, even though it’s illegal, they use what’s called a “gutter” process server to deliver the notice to you. It’s called gutter, because they “toss the paperwork in a gutter” and it never gets to you. So you can’t go into court and show the judge that you don’t owe the money.
Thus, they win by default, and the notice of judgment goes on your credit report. Then the debt collector sits back and waits until you need to use your credit and find out your credit rating has been trashed.
Unless you check your credit report regularly, you won’t know it’s there until then. At that point, many consumers rush to pay the debt and get it cleared from their credit reports.
And so, collection agencies collect money that isn’t owed.
If this happens to you – don’t pay them. Send them a certified letter with proof that you don’t owe the debt. Then contact all the credit bureaus and fill out the appropriate paperwork to have the information cleared from your records.
Getting this straightened out may delay you getting a new credit card, or even a car or a house. But unless the amount is so small that you’d rather pay the bill than spend the hours to have it removed, you shouldn’t let them get away with this.
These people are just common crooks – and they don’t deserve your money.
If overuse of credit cards is one reason why your credit is poor, you may think you should never get another one. But careful use of a new
credit card is actually a good way to rebuild your credit.
By using your credit card each month and paying the balance in full as soon as the statement arrives, you’ll slowly build a reputation for on-time payments, which will raise your credit scores.
You should also be careful never to exceed 30% of your allowable credit limit during any one statement period. And, in the interest of your own finances, you should not allow yourself to carry a balance. The interest rate on poor credit credit cards is high.
The Applied Bank® Secured Visa® Gold Credit Card offers the best terms, with a $50 annual fee and only 9.99% interest, while New Millennium Bank offers a card with a $59 fee and 19.5% interest.
A third choice would be the Total Visa card with a $48 fee and 19.92% interest.
Thus, the only purpose in obtaining such a card should be to build or re-build your credit.
As you continue to make on-time payments in full, and assuming that you have no other ongoing credit issues, your credit scores will gradually build until you become eligible for a card with no annual fee and a smaller interest rate.
If you have some cash on hand, another choice is the secured credit card. These also require an annual fee and high interest, but they also will help to build your credit.
Pre-paid cards, on the other hand, will do nothing to help your credit scores.
When you choose correctly, credit cards and
debit cards can save you money on your overseas travels. Here’s what you need to know and do:
First, the big benefit to using your cards: You’ll get the best exchange rate available.
While taking your traveler’s checks to a currency exchange counter or an overseas bank, you’ll be charged high retail exchange fees, plus additional fees. When you use your cards, you’ll get the wholesale exchange rate reserved for big banks and corporations.
The caution: Watch out for fees from your own bank and card issuers. Visa and Mastercard charge a 1% fee, and most banks will pass that on to you. But some will tack on their own charges as well and that could add up to an additional 2%.
Before you go – or before you choose a new card – learn the policies. Call each of your card issuers and find out their fees, then choose the two with the lowest exchange fees. Always take 2 cards, just in case one is lost, stolen, or damaged.
Since many credit card issuers are now trying to protect card holders, call each of them before you leave and let them know your travel plans. Let them know the travel dates and the countries and cities you’ll be visiting. Then the card issuer will know it’s you and not a thief.
If you fail to do this, the card issuer could put a freeze on your account – leaving you with no funds while you’re traveling. That would put a definite damper on your vacation.
While you’re talking to them, ask for an international contact number. You won’t be able to use their 800 numbers once you’re outside the country, so you need a working number with an actual area code – just in case your credit card is lost or stolen.
Do the same with your bank. Ask about their exchange fees, and their ATM fees. Since fees of $2 to $5 per use can make ATM withdrawals expensive, try to limit the number of times you use them. Make one large withdrawal to last a few days rather than using the machine each day.
Be sure to tell the bank about your travel plans and get their international contact number as well.
Test your ATM card before you leave home and if your PIN number includes letters, get it changed to 4 numbers. Many ATM’s outside North America don’t have letters on the keyboard.
If your plans change and you extend your stay overseas, be sure to use those international contact numbers to let both your credit card issuers and your bank know. Otherwise, when they see charges from Paris when you’re supposed to be back in Houston or L.A., they’re apt to freeze your account.
BestRateforCreditCards.com your resource for credit cards, business credit cards, student credit cards, secured credit cards, and prepaid credit cards. We also provide a weatlth of information about the importance of having credit cards and how they will benefit you.
