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Types of Credit Cards
--for people with bad credit or no credit--
UNSECURED CREDIT CARDS:
They are for people with less than perfect credit, but good enough to not have to put down any collateral, or to have a saving account to secure their credit cards. They differ from "regular" credit cards mainly in the higher interest rate they charge or in the higher amount they assess your account in various fees. A normal credit card is not advertised as unsecured and you need to have a good credit rating to receive one.
Show me a list of Unsecured Credit Cards
SECURED CREDIT CARDS:
Secured Credit Cards are cards that require you to have some type of collateral or money on your account to cover them and sometimes you can only buy their own products with their cards. When you have bad credit, these companies with unsecured credit cards may be a chance to reestablish a good credit, and they might give you a card that you can use until your credit rating improves.
Show me a list of Secured Credit Cards
STORED VALUE CREDIT CARDS:
A Stored Value Card is a magnetic-stripe plastic card that is issued by a bank. The "open loop" stored value cards are issued with card association branding, like Visa®, MasterCard®, Discover® or American Express®, and can be used anywhere the association brand (i.e., Visa®), is accepted. Examples of open loop stored value cards include gift cards, payroll cards and teen cards. "Closed loop" stored value cards are issued by a specific merchant or merchant group (i.e., a shopping mall) and can only be used at that specific merchant or merchant group. Examples of closed loop stored value cards include store cards, mall cards and gift certificates. Both open loop and closed loop stored value cards utilize existing processing networks. Consumers can spend up to the value loaded on the card, and can reload the card at anytime or dispose of it when the funds are depleted. Sometimes, the Stored Value Card is NOT imprinted with the customer's name, only with the account number. The Stored Value Card utilizes encrypted communications and electronic banking protocols to create a secure solution for the cardholder and the merchants. As with a credit or debit card, holders of Stored Value Cards are able to purchase goods and services from participating on-line merchants as well as all PIN based POS systems. As with traditional credit, debit and ATM cards, holders of Stored Value Cards are able to withdraw cash from all ATM machines. Unlike traditional credit, debit or ATM cards, Stored Value Card holders can obtain a card without regard to their credit history or ability to open a bank account or their balance in an existing bank account. Unlike traditional bank tied credit, debit or ATM cards, Stored Value Card holders can fund their card by using Western Union®, MoneyGram®, ACH, Bank Wire or Credit Card.
Show me a list of Stored Value Credit Cards
CATALOG CREDIT CARDS:
They might be a good deal if you can take advantage of a catalog's or a store's special offers to their credit card holders. Their rates are not as low as most regular (good credit) credit card rates, so try to pay off your balance always in full or keep only a low balance on them if your goal is to build/rebuild your credit. Get these cards only from providers you are interested in buying goods from and/or if you need to (re)establish your credit*. Again, if you pay your dues on time and leave just enough balance to show up on your credit report (let's say $100) then catalog cards can help to improve your credit rating over time.
*If your primary goal is to rebuild your credit, then try to choose from credit cards that report to at least one credit bureau.
Show me a list of Catalog Credit Cards
STUDENT CREDIT CARDS:
Student Credit Cards and Student Loans are ways to establish a credit history. One's credit history is his/her financial reputation. Lenders use information on how a borrower has handled her/his financial obligations in the past when determining whether to approve or deny a credit application. In addition to helping lenders determine if someone is creditworthy, his/her credit report can be reviewed by any company or individual with a legitimate business need. For example, a credit report can be used to determine one's eligibility for an apartment rental, employment or insurance. Student Credit Cards don't only provide financial security but also help establish a good credit history - if used wisely.
Show me a list of Student Credit Cards
CHECK CARDS:
A check card is like a combined Credit Card with your ATM Card. You can use it the same way as you use a Visa® or MasterCard®, but you do not run up a balance, in fact you are running down your checking account balance when using it. It has the conveniences of a Credit Card but without the inconvenience of paying interest if carried over. It is fairly easy to get from your bank - almost regardless of your credit. The one drawback: it will not improve your credit rating, since you are not using credit, only your own money and you can spend only what you have on your account.
DEPARTMENT STORE CREDIT CARDS:
Usually, their rates are higher than most credit cards'. They might be useful if you can take advantage of a store's special offers to their credit card holders and you pay off your balance always in full (what nearly no one ever does). Get these cards only from stores you buy your things from anyway. Again, if you pay your dues on time and leave just enough balance to show up on your credit report (let's say $100) then your credit rating will improve over time.
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