Credit Cards

Why Are People Scared to Have Multiple Credit Cards?

In the recent world, banking business has provided new technological facilities that are making our lives easier than ever. Starting from online banking transactions to payouts through cards, transferring money from world’s one end to other has become a regular exercise. The two basic types of cards, Credit and Debit cards have made the transaction a simple process. However, some people are yet not used to the system and some are afraid of using it for various purposes. Here, we will talk about why people are afraid of using credit and debit cards and how can these issues be solved.

Reasons to be Afraid of Multiple Credit Cards

People usually use multiple credit cards to earn more credit points which can benefit them in getting a loan, reducing insurance rate and even get themselves a job. But not everyone is familiar with these advantages. They mostly fear using multiple credit cards because –

  • They don’t like using banks for money transfer. They fear banks might loot them instead of saving their money. They think using a credit card will increase the chances of a bank trapping them with debt.
  • The idea of taking or borrowing money from a bank makes people feel indebted towards the bank. They don’t prefer to have such a risk which can become a serious issue if there is any problem with transactions.
  • Everyone does not have a fixed monthly salary. While using a credit card, the amount taken from the bank will be charged from your account on a monthly basis. Usually, depending on the salary these allowances are given which is not applicable in some people’s cases.
  • They fear to spend too much through credit cards and end up going to jail for not being to pay the debt back.

How to Get Over the Fear

These above fears are likely to come in mind of a novice in bank dealings. If you are a regular you know there is nothing to worry about. But for that, you must keep a few things in mind –

  • Build credit history by transacting through credit cards for future loans and insurance benefits.
  • Stay alerted about fraudulent websites and try to keep a check on your payments and debt rate. Your payments on the card should never exceed your income.
  • Have an insurance and cash coverage for unexpected situations.
  • Know the law and try to follow it to avoid legal issues.

To Sign Or Not To Sign – Should you Sign the Back of Your Credit Card

A credit card is the most happening thing in the world of financial transaction. Gone are the days when long queues in banks would give jitters to its customers. With credit cards, there is a degree of financial freedom seldom seen in any other mode. It is also a security nightmare. Imagine, a card with your details falling into wrong hands. Apart from the monetary loss, the loss of identity to is a very big threat. As a result of which, every financial institution issuing a credit card has taken precautions to counter it.

That makes us come to a very pertinent question. Is it necessary to sign in the back of the credit card? Now for years, there has been a school of thought who followed the principle of either keeping the strip blank or mention the statement: “See ID”. However, that really does not make any sense. And the reason for this is that the signature at the back of the strip provides the card holder with an extra level of protection against fraud. You may ask how? When the teller or cashier at the counter provides you with the receipt slip you are supposed to sign, he gives a quick check to the signature done on the credit card. He or she does this to verify, whether the signature belongs to the same person.

More relevant that this is the violation you may be accused of for not signing the credit or debit card signature strip. The cardholder agreement very explicitly mentions the terms and conditions under which the card may be used. One of the conditions is signing at the back of the card.

However, the flip side to this is, many transactions do not require you to sign sales slips. And in a majority of credit or debit card transactions, the employees do not check the signatures. So basically the theory of an extra layer of protection falls flat.

The most foolproof method to keep your card safe is to follow a few rules:

  1. Do not, and I mean never, tell your PIN to anyone. It’s a recipe for disaster.
  2. Do not let any else use your card.
  3. Keep a tab on all the expenses on your credit card. This is the ideal way to find out any suspicious activity on your card.

Following these rules is far more important than deciding whether to sign or not to sign.

How Do I Get Credit

For the average job-holding, nine-to-five adult, the biggest question when it comes to credit is “Is mine good or bad?” But for many college students, the more pressing question is “Where do I even start?”

credit cards

The scene: Jason, a fresh-faced recent college graduate gets a new job and decides he probably will need a car to get to work. He finds an affordable, reliable vehicle but has to finance it because he does not have enough money saved to pay for it outright.

The problem: He’s rejected for financing not because he has bad credit, but because he has no credit.

This scenario plays out all too often for college students and many other young people taking their first few wobbly steps to financial independence, but there are several ways to prevent it.

Step 1: Know Where You Stand

Just because Jason had no credit doesn’t mean that every college student is stuck in the same conundrum. Many students may be making credit histories without even knowing it.

Ever had a student loan? The many college graduates drowning in student loan debt might have more credit to their names then the lucky few who graduate debt free. Basically, anything that requires monthly payments could build credit. Think back to loans, gym memberships, rent checks, and the like.

Everyone is granted one free credit report per year. Take advantage of this service by using a reputable credit-reporting bureau, such as Equifax, Experian, or TransUnion.

Step 2: Get a Credit Card

This part can be tricky. The credit conundrum can prevent people like Jason from getting credit cards simply because they have no credit. So how are they ever supposed to build their credit?

Most banks offer secured lines of credit to their customers. This means that account funds are used as collateral should credit holders fail to make payments.

Store credit cards often have more lenient requirements and lower credit limits, so they are also a good first step to establishing credit—as long as they’re handled responsibly!

Step 3: Take No-Interest Offers in Stores

Ever seen the “same as cash for 90 days” in-store offers on big-ticket items? It’s easy for them to sound like scams, but they’re not. Just be sure that you have the right amount of money, and sign up. This is, in essence a loan, and, if you make good, regular payments, it’s a no-extra-cost way to establish some credit.

Many of these offers have time limits set before you will have to start paying interest, so be sure to read the fine print with any of these offers to avoid getting in over your head.

Debit Card or Credit Card

For the average American credit and debit cards are a necessity, both allow an individual to make purchases at a variety of stores and online. There are many similarities between the two types of cards, but also some key differences. For the young fiscally responsible consumer it is important to understand these differences, to ensure that you have the best card for your own preferences and lifestyle.

credit card
Credit card or debit card?

Debit cards directly withdraw money from an your checking account while Credit cards are based on a credit system. An individual who uses their credit card is essentially taking a loan from their credit card company that they will pay back at a later date.

The biggest advantage of a debit card is somewhat obvious, by using a debit card you can never over extend your credit. Since the money used comes directly from your account, you will never be able to use more money than you actually have. Another perk of a debit card is that it can be used to withdraw cash from an ATM. Essentially the debit card acts as a more transportable mode of cash. A debit card can be used as a good tool to teach yourself about budgeting and monitoring your expenses.

The advantages of debit are also its weaknesses. Debit cards are often less protected than credit cards. Because debit cards have direct access to your account a thief has an easy way to quickly remove your money. Many debit cards do have fraud protection policies, which are always important to ask about. However, if your card is stolen and is used fraudulently the money is removed directly from your account. This means that you could be left without money for days or weeks before your bank acts on the problem and reimburses you.

Credit cards offer more protection than debit cards. Because credit cards loan you money instead of directly withdrawing money from your account fraudulent charges will not actually take away your money if you or your credit card company notices the charges in time. However, this system also has problems. Because credit cards loan you money you can easily use more money than you actually have. This may cause you to build up debt. Another aspect of credits cards that adds to the accumulation of debt is how the credit card bill is set up. Credit card bills do not have to be paid in full; it is possible to make a minimum payment on your credit card bills. Essentially this allows an individual to pay enough to keep the card active, but they will still need to pay off the rest of their debt at a later time. While this might be helpful during a time period when you need to stretch your money a little further, it is a dangerous cycle to get involved in, and it often does not end well for the credit card owner.

Debit cards and credit cards are both useful monetary tools. They both offer advantages and disadvantages. Debit cards offer more protection from yourself than credit cards do; however, credit cards more effectively protect you from the ill will of others. Depending on what type of a spender you are, and how much protection you want for your money you can easily decide the type of card that best suits you.


How do I Improve My Credit Score?

When it comes to the importance of improving your credit score, it is almost as important as losing weight!
Credit Score
Whether your credit is bad or relatively okay, you need to know your current position before you try to improve your credit score. Free credit reports can be obtained one every calendar year. If you haven’t gotten yours yet, now is the time to do so. Before proceeding with anything, make certain there are no mistakes on your credit report. If you find something fishy, be sure to report it, have it investigated and maybe even have it removed from your report.

If you want to improve your credit score, like we all do, then here are a few steps that will help you quickly improve your credit score:

1. Pay Down Your Current Cards – While it may not be at the top of your list, it is important to pay down your current credit cards. When you go into a bank for a loan, lenders want to see a significant difference between your available credit and the credit that you’ve used – or are currently using. Balances under 30% of your credit limit are great, but lower than 10% is fantastic! Start with the highest-rate credit card or the credit card that is closest to be being paid off.

2. Get a Credit Card – If you don’t already have a credit card or just have one, apply for a new credit card. You can build your credit by using your credit and then paying off the balance. If your credit happens to be too poor, get a secured credit card. These are similar to that of a pre-paid debit card, as you load money onto the card and that is your credit limit, except that these report to the credit bureaus. Make sure to get a secured card that reports to all three of the major credit bureaus in order to benefit the most.

3. Get an Installment Loan – Revolving, which is considered a credit card, and installment, which is a student loan, a mortgage and a personal loan, are known to be the best types of credit to improve your credit history and your credit score. Get an installment loan if you can – even if it’s a small personal loan.

4. Don’t Max Out Your Cards – There’s no reason to max out every single one of your credit cards. Regardless of whether you pay it back quickly or not, your credit score will not benefit from maxed out credit cards.

Most delinquencies will appear on your credit history for as many as seven years, so you can’t expect to rebuild your credit history and improve your credit score overnight. It is possible to improve your score, though, and it is worth the time and effort to do so. Follow the four steps above and you’ll be well on your way to improving your credit score!

How Does a Credit Score Work?

A credit score is a number that is arrived at after an individual’s credit files or reports have been statistically analyzed based on particular criterion that are used to determine that person’s creditworthiness, or the risk involved in extending that person further credit. Unknown to a lot of people is the fact that this score is not only determined by how faithfully you keep to repayment deadlines or fulfill your debt obligations but also how often you successfully apply for credit services and fulfill their obligations.
credit card

Legally, credit bureaus are mandated to collect this information. Companies then involved in extending credit seek this information from credit bureaus and are furnished with it. It is against this information that the decision to extend an individual credit is made.

Credit scores have several functions as a financial tool within an economy, both at micro and macro-economic levels. They help credit and financial institutions decide the credit worthiness of an individual or a firm, and the risk involved in extending them credit, thereby allowing them to make informed, calculated decisions. They also act as a form of control, helping individuals monitor their own credit performance or worthiness while at the same time letting them know that any indiscreet behavior will be noted. Credit scores can also help at a fiscal policy level in determining whether measures and tools in place to govern the credit provision industry are actually effective, or working, and to actually inform fiscal decision makers what credit levels the economy is operating at.

Typically banks and credit card companies use this information but several other firms, like government departments, utility companies, mobile phone companies, landlords and the hotel and leisure industries all source this information from credit bureaus.

The calculation of credit scores varies from bureau to bureau but some general rules of thumb exist, and a typical simplified format is outlined below:

35 – Payment History
30 – Credit to Debt Ratio
15 – Credit History
10 – New Credit
10 – Credit Types in Use

Thus the credit score or credit rating is calculated as a percentage of 100. The break-down above implies that if you excel in one area and lack in another, only fixing the areas which you lack are going to improve your score.

The advantages of having a good credit score are about as obvious as the ones resulting from having a bad credit score. With a good credit score, it is easier to get credit extended to you, at lower interest rates, and with simpler terms. Bad credit scores often imply that requests for credit are either ignored or end up having credit extended at high interest rates with additional built-in costs like insurance and stringent terms to guard against bad debt.

Different scoring systems are used, but in the United States, the most commonly utilized system was designed by a company called the Fair Isaac Company and runs under the acronym FICO; a resultant score derived when using this system is called a FICO score. FICO controls the greatest percentage of the credit score market in the United States and Canada although there are several other competing firms that collectively share a very small percentage of the market as well. In the US, FICO scores range from 300-850, with 723 being a median score as of 2010. This figure reflects the likelihood that a consumer will go 90 days past due or more in the subsequent 24 months after the score has been calculated. The higher the consumer’s score, the less likely he or she will go 90 days past the due date in those subsequent 24 months.

It is important to note that different services recognize different limits of scores below which they are not willing to operate, depending on the economic situation and their own financial situation. The risk, indeed, varies from credit service (mortgage, credit cards) to companies as well.

How Do I Find the Best Credit Card?

Are you looking for a new credit card or a first time credit card? This can be a task made difficult due to all the offers out there. The best way to choose a credit card is to research the different credit card companies to find the best card to meet your needs. Find a company that offers the best rates for you according to your credit rating. A good credit rating can get you a better deal on a credit card. If this is the first time applying for a credit card, then look for one that is made especially for those who have never established credit.

Credit Cards

The best credit cards are the ones with lower interest rates, no annual fees, and a reliable company you can trust. Other things to look for when shopping for a credit card are the application fees, late fees, over limit fees, and even how the bill can be paid. Some credit card companies have hidden fees, so be sure to read all the facts before signing up for that card. These are facts you need to know about; and you will need to consider how they will affect you in being able to pay back the charges you have made on the credit card.

An introductory rate credit card is an offer to get you to switch credit cards to another credit card company at a lower interest rate. The key word is introductory; which means this rate will change after you have had the card for so long. Other cards are one interest rate for the life of the credit card. Even though the interest rate may be a little higher at the beginning than the introductory rate cards; you will know what interest rate you will pay throughout the years that you use the credit card. Some offer a variable interest rate credit card; where the interest rate is always changing, and this makes knowing what will be paid back in interest charges confusing.

Can you pay online or are mailing the payment the only way? This might be something that would help you decide which one you like. Do they charge a fee just to take out the card with them? Some credit card companies charge a processing fee making you pay before you even get to use your card. This makes you owe before you even get to enjoy spending. Reading the cardholder agreement will help you determine what each card has to offer.

One way to find the best credit card is to make a list of what you want out of your credit card company, and then start looking at credit card sites on the web and comparing what each has to offer. Things to put on the list to check on are such things as finance charges, grace periods, minimum payment, and cash advance fees, to name a few. All of these things are good to find out about and know before choosing a card.

How Do I Improve My Credit Score?

Your credit score is very important. It follows you everywhere. The higher the better. One of the most common groups that look at your credit score are lenders. They want to know if you will be able to pay them back and how much you can afford to pay back each month. Some employers will even check your credit score.

Credit Cards

Your credit score is a calculation that basically lets people know how well you are able to pay your debts. It is made up of several things like payment history, debt level, and length of credit history. Your payment history is probably the most important part of your credit score. Make sure that you send in your payments so they arrive on time. Thus the better your history of paying the better your credit rating. Keeping a low debt level is also very important. Keys to a low debt level are not running your credit cards to there maximum limit and don’t take out to many loans. The longer you have good history with accounts the better it looks for your credit score. This is why it is good to keep some accounts open even if you do not use them very often. This works good with a department store credit card.

So now that you know what your credit score is and how it effects you, it is time to learn how to repair a damaged credit score. Do not get over stressed if you have screwed up your credit rating. In this current economic situation many people have very poor credit. The first thing that you will want to do is get your spending in order by making a budget. You can find out where you are wasting money and help cut that spending out. Try to stop using your credit cards and pay that debt down. I try and use a rule that if I can not pay cash for something then I will not buy it. This helps when trying to stop using your credit card. Most of the time you will not buy something if you see the actual money leave your hand. If it goes on a credit card you have the out of sight, out of mind syndrome. The faster you can lower your credit cards to 30% or less from your maximum level the better for your score. A typical mistake that people will make is asking a credit card company to lower your card limit, if anything ask them to raise it a little. Another thing that you can do is look at your current credit score and see if there may be some mistakes on it or some things that you can get taken off. If you have a really good history with a credit card but were late once or twice it may help to call the company and ask them to remove those late charges from your history.

The Keeper by Santander Bank

Below is a special video preview of a whimsical documentary titled “The Keeper” directed by Chris Bailey and Jake Naish and brought to you by Santander.The Keeper by Santander Bank

This documentary short was filmed about a man who makes a hobby of collecting and scrap booking his debit card statements. This short film won the MOFILM Cannes 2011 film contest. This film contest was sponsored by Sovereign | Santander, and in this film the main character has saved his debit card statements for the past thirty years. Although silly and kind of funny at times, the video brought up some important points.

First of all is the importance of good record keeping, this man had saved his receipts for the past thirty years, he knew all his expenses and he had a connection to them. Most people these days lose touch with what those statements even mean or even what you had purchased at the time. It is also important to look at all your monthly statements to check for credit fraud and make sure no one is charging you maliciously.

Second is just how useful a credit card or a debit card in this case can be. This man was able to buy almost everything he needed in life. He mentions one particular month that he bought “A night at the city hotel,” a ring and some flowers. All of which led up to him proposing to his wife. However in a sad turn he no longer is married but it is important to see that he still uses the same debit card, since it is something you truly can’t live without.

This post is a paid editorial brought to you by Santander