Tag Archives: option
Unsecured Credit Card for Poor Credit History
Even hotel reservations and plane tickets are now reserved on-line where a card is necessary in order to make the reservations successful. However, having bad score or lack of credit may give you a hard time obtaining a card. The good news is there are cards that are designed especially for people who are in tight situations such as those described previously. Card issuers have designed this card to have higher rates and some are with additional fees but they are meant to give an opportunity for people to build or improve their score.
One option when applying for a card is to take secured cards. These types of cards are not particular to history. The reason for this is that you are required a security deposit of an amount usually between $100 and $500 before you are allowed to make any purchase with your new line. This security deposit determines your limit. The best thing about this is that if you encounter problems with regards to paying your bill, the deposit will cover your obligation so that your debt is secured.
Having a secured card does not appear like a real line of credit but it does help you establish or rebuild your history because all your activities concerning credit will be reported to the three major bureaus. Some other advantages of having secured cards include: 1. up to 4.5% of the interest may be paid on the deposit; 2. merchants give high regard for cards that have MasterCard or Visa logo on them; 3. some issuers give you double the amount deposited as your limit; and 4. if youve proven your ability to handle your monthly bill, your limit may be increased minus the additional charges.
Your second option is to apply for unsecured cards. This type of card does not require a security deposit and the limit and interest rate are dependent on your history. If you have poor or no history then you will most likely not land an unsecured card. There are cards that are instantly approved through on-line application where no security deposit is required. However, higher interest rates and some additional fees will be asked from you.
Now, if you have bad credit or none at all what you can do is to try the unsecured card first. If your application gets approved, not only will you have avoided shelling out for security deposit but you will also have a “true” line of credit. If you are denied an unsecured card, most issuers will give you the option to apply for a secured line. It is best if you try for an unsecured line before agreeing to take a secured line. That is, you take the latter if there is no other option left to take.
School Loan Deferments and Forbearance
Student loans are designed to be quite easy to pay off, but there are times when students simply can’t make the payments. Because student loans and school loan consolidation can make the balance of your loan add up, there may come a time when you have trouble meeting your required payment. In this case, it is important to take steps to protect your personal credit in order to build a financial future in the long term. It is never good to default on a loan, and it is even worse to default on a federally funded student loan.
When you can’t make your payments and student loan consolidation isn’t an option, you might want to consider a last resort. Gaining a deferment on your student loan is an excellent way to get a break. Many people have trouble paying back loans of all kinds, so lenders have developed this option to help. They are just as eager to get their money back as you are to pay it, so they will work with you in order to find a solution that works for everyone.
And important thing to remember about school loan deferments is that you can not apply for this type of help after you’ve already defaulted. If you feel like the burden of the student loan is going to be too much to bear, talk to your creditors before it gets to that point. Once you go into default, your credit will be ruined and there will be no deferment option to bail you out.
Deferments will allow you to put off the payments until a later time. Obviously, this will not eliminate your debt, but it will give you some room to breathe. There are fees and charges associated with putting off the repayment of a loan, but it is better to pay these fees than to have a large student loan go into default.
Before you get to the point where deferment is necessary, consider calling up a student loan consolidation company. If you have private lenders for the student loan, they can sometimes work with your lenders in order to lower the rates that you pay. In some cases, they can even help to develop a repayment plan to keep you out of default. This is an option that works for lots of folks.
If you aren’t comfortable with school loan consolidation, then forbearance is another option to strongly consider. As with deferment, this isn’t the most pleasant outcome to the problem, but it beats the alternative of defaulting on the loan. Like deferment, forbearance must be applied for specifically. Some cases will be granted and some will not. It all depends upon your lender and your circumstances. During forbearance, you payments are temporarily suspended or reduced for a certain period of time. This is usually more of a short term fix when deferment or student loan consolidation is not an option.
School loan forbearance and deferment is a good way to keep yourself out of financial trouble. Defaulting on a loan can be financial death, so any way around that is a good thing.
Copyright (c) 2008 USUniversityReviews