Secured Credit Cards

LIST OF TOP SECURED CREDIT CARDS

              

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Money Saving Minute #046 - Secured Credit Cards

Kip Warzon     NMLS 289451

Most loans are secured by collateral. Standard credit cards, however, have no security for the lender so a borrower must first show a positive credit history before being issued an unsecured line of credit. This can make it difficult for individuals that are trying to build or rebuild their credit profile.  Secured credit card accounts, however, bridge this gap.

When applying for a secured credit card a borrower will be asked for a security deposit.  Generally this deposit is equal to the line of credit requested. This protects the bank against the risk of default. 

In all other ways, a secured card operates just like a standard credit card. Cardholders receive monthly bills that they must pay on time. In return, banks report payment information to the credit bureaus, allowing cardholder to build their credit history. To note, do not confuse a secured credit card with a prepaid credit card. The security deposit is to secure the line of credit, not to pay for purchases made with the card.

When shopping for a secured credit account, look for a card with a low annual fee and perhaps one that might pay interest on the deposit. Stick with reputable banks and avoid unreasonable fees.  Applicants with outstanding liens or a recent bankruptcy may not qualify for some programs so be sure to ask questions when applying. 

Once you have your new credit card, keep the following rules for building credit in mind: (1) keep your total purchases for the month under 10% of the available limit. (2) Pay off the balance in full every month and (3) your total purchase for the month will be reported on credit. Even if you pay off the balance in full one hour after making the purchase the lender will still report the high balance for the month as your total of purchases.

(1) Stay under 10% of the available limit

(2) Pay off the balance in full every month 

(3) Total purchase for the month will be reported

Advanced Auto Shopping

              

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Money Saving Minute #037 Advanced Auto Shopping 

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After writing this blog we realized that we may be portraying auto dealerships in a negative light.  This was not our intention.  Profit is not a dirty word however how much profit a dealership makes is up to you.

Money Saving Minute #037
Advanced Auto Shopping

Most people are educated in Auto Shopping 101…shop and compare online, email or call and ask for the lowest price, negotiate the trade separately, always negotiate price not payment…basically do your homework.  The advanced shopper, however, knows that the negotiation does not end with the price of the car.

Once you have a price next comes the Finance Manager.  This person’s job is to present you with financing options, warranty options and vehicle protection options.  If you have not done your homework you will not know if they are offering you the best value.  In regard to interest rate, take the time to talk with your bank.  Find out what interest rate that you would qualify for based on your credit score and the vehicle that you are interested in.  If you have little to no down payment then you will be offered GAP insurance.  This insurance covers the difference between what you owe on a vehicle and what the value of that vehicle is should the vehicle be totaled prior to being paid off.  For this you will want to check with your auto insurance agent prior to visiting the dealership so that you have a number to work with.     The F&I manage will present warranty options as well.  Again, do your homework.  Look online for options and email dealerships for quotes.     You will also be offered paint protection or windows etch theft recovery.  Talk to a trusted detailer or body shop about their cost on these items if you are interested so that you have a quote to work with.  Remember, however, that lowest price does not always equate to best value.  Be prudent but most of all be educated.

Credit Cards

              

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Money Saving Minute #036 – credit cards

Having a credit card in your wallet is a lot like adopting a Pit Bull as a pet.  When properly trained they can be your best friend…when left to run wild they can be trouble.

A properly trained credit card will not be used as an extension of one’s earnings.  The mentality of “I can’t afford it today but I can afford the minimum payments” is what will get a borrower into trouble.  Instead one should think of credit cards as a way to help them track their spending as well as earn rewards or cash back.  If you can afford to pay off the balance each month you are using your credit wisely.  If you can’t pay off the balance each month stop and ask yourself if you need the purchase enough to pay 18 to 25 percent more for the item.

If you are currently carrying balances on your credit accounts go to this webpage and download the credit card calculator.  This will help you to set up a target payment to get those balances paid off.

http://tinyurl.com/MSM-CCcalc

For more information about this or anything home loan related please contact Team Warzon.

 

 

Do you know how credit cards affect your FICO score?  Even if you make your payments on time you could still be loosing points each month.  Click Play To Watch or Read Video Text Below.

If You Have Troubles Viewing Video Click Here to Watch on YouTube

Click Here To Download Your Copy of The Credit Card Calculator.

 

Money Saving Minute #007: How Credit Cards Affect Your Credit Scores and How To Pay Them Off (Text from video).

 

Credit cards can be your credit score’s best friend or worst enemy.  When used properly credit cards will give your scores a real boost.  But what is the proper way of using a credit card?  First, Credits cards should be used as a convenience or a way of earning cash back and rewards.  Credit cards should not be used as a crutch or treated as an extension of your buying power.

 

Second guideline of credit cards is pay them off each month.  If you keep a rolling balance you are paying interest and wiping out all of the savings that your reward points would have given you. 

 

Third, if you do keep a rolling balance keep the balance under 30% of the available credit line.  0 to 10% is best, up to 30% is okay but more than 30% may actually start costing you points.  Your utilization ratio or the amount you owe in comparison to the amount of the credit line, is 30% of your credit score. 

 

The fourth guideline, is the obvious one – pay the bill on time.  Even if it means only making the minimum payment, make sure that you make that payment prior to the due date.  Payment history is 35% of your credit score and late payment stick with you. 

 

Finally, don’t close accounts.  Keeping accounts open will give you more breathing room with your utilization ratio.  Also, length of credit history is for 15% of your credit score so if you close an account that you have had for a long history with you may actually hurt your score.

 

Now let’s talk about how to pay off credit cards.  Below this video is a link to download an excel workbook called “Credit Card Calculator”. 

 

With this workbook you can determine how long it will take to pay off a card or you can set a goal of when you would like to have the card paid off by and it will calculate how much you should be paying each month.  If you have several cards that you would like to pay off work on them one at a time.  Splitting up your available funds between all of your accounts will get you nowhere fast however still be sure to make the minimum payments on each account. 

 

Choosing which card to pay off first is a matter of weighing all of the factors.  You may choose to work on the account with the highest interest rate first.  You may look at paying off the card with the highest balance first because you are paying more interest each month or you may look at paying off the card with the lowest balance first.  Paying off the card with the lowest balance is many times the most effective because once it’s paid off you can use what was budgeted as the minimum payment for that account toward paying off the next account in line.

 

This has been money saving minute number zero zero seven.  It’s your cash and watching the The Money Saving Minute each week will help you keep more of it.  Click to the right to subscribe so you don’t miss any money saving tips and click the facebook button below to share this with your friends.