Types Of Cards

There are many credit card companies today just waiting to approve your credit card application. Likewise, there are a huge variety of credit cards which supposedly offering the best schemes. Each individual has unique needs so all programs and schemes would not be satisfactory to all. Investigate about the scheme that best suits you to use that card for a long period of time.

Low Interest Credit Cards

The low interest credit cards are one of the latest additions into the already wide range of credit cards available today. If you are a US resident, you must have heard about these kinds of cards. They come with a low interest rate and allow you to transfer the balance from a higher interest card to low interest one. Moreover, your transferred balance will be held at 0% interest for a prescribed period or if not, then a very low interest rate. This can certainly save you a significant amount. Go for this option if you hope and are sure to pay it off.

Airline-Sponsored Credit Cardsxhich

Credit cards have become such a big business these days that even airlines offer credit cards to their customers. These credit cards offer a fixed amount of flyer miles depending upon the balance and transactions. If you happen to be a frequent flyer, this is a great scheme for you.

Reward Credit Cards

Reward credit cards are also becoming increasingly popular. The competition is high and each company is coming out with attractive incentives and gifts, rewards to lure you to use their card. After your points accumulate to a certain level, you will start receiving gifts. The rewards range from travel insurance to small appliances and many other kind of things. If you are among those who use the card very often, a card with a reward program is really beneficial to you.

Instant Approval Credit Cards

Instant approval cards are another kind of cards that are popular today. You apply for this card and get an immediate approval without much time to wait in between. Once you submit the application, the company does a quick verification of your background and approves your application quickly. Other normal cards usually take about two weeks to process and approve your application. Although you get instant approval, you may not be able to avail immediate credit. You might be given a temporary credit card and allowed to make purchases. However, not all companies will do this because of the risk of credit card fraud.

Investigate thoroughly before choosing a credit card. Make an informed decision with regards to choose a card that is best for you. Never apply for too many cards since that will burden you in the long run.

Fix Bad Credit

Don't you ever feel that's the only thing you can think of? While driving, at work, talking to people, anywhere you go your mind just fixates into "fix bad credit repair bad credit bankruptcy do it". Wouldn't you like that to stop? I know more than a couple of million people who do.

Having bad credit is terrible; it's like having a leash around your neck every time you go to a mall, look at a commercial or read an ad. There are ways to get out of a bad credit situation but they tend to be difficult, so you should be prepared.

Important Facts

Did you know that three out of ten credit reports have erroneous data on them? Yes sir. But then again, with all the amount of information that floods the three credit bureaus - TransUnion, Equifax, and Experian - one, two, or three mistakes isn't that uncommon. Plus they don't get anything for maintaining correct records. They are just being paid to maintain the necessary data, whether it's accurate or not.

Having said that, you are free to call them, review your credit reports, locate your problem, and solve them. Did you know that if you have had credit denied you are entitled for a free credit report? Aren't things starting to look better? The phone numbers are listed in any phone book or you can just ask your bank for them as well.

Act

Having bad credit isn't like having just a bad taste in your mouth; it's the real deal. Banks and any other financial institutions will look at you as a risk, making them think many times before they grant you credit, resulting in denied credit most of the times. For this matter you must begin fixing your bad credit as soon as possible.

Why Have A Credit Card

Ask any financial advisor and they will tell you that credit cards, in general, are not a good idea. But they aren't all completely bad. The problem isn't necessarily the card, it is the way the card is used.

The average American family has approximately $7,000 to $10,000 (or higher, by some reports) of credit card debt. For most people, credit cards are a major obstacle between them and financial security. They are just too tempting. Too easy to use. And it is too hard to get out from under them.

But if you are one of the few people who have the self control to pay off your credit card bill each month -- every month -- then credit cards could have some advantages.

If you pay off your bill each month, you are basically receiving an interest free loan from the time you make your purchase until your credit card bill arrives. But the key is that you have to keep a close eye on how much you are spending, you must have the money to pay it off in full. Or you will pay interest on what you can't pay.

Many credit cards offer protection for your purchases for a certain amount of time after the purchase is made. Airline tickets purchased with credit cards often offer free life and baggage insurance during your vacation. Some provide rental car insurance. A number of cards let you earn points for every $1 you charge. Others offer you cash back on your purchases. Many of these "reward" cards can be found with little to no annual fee.

The most popular of the rewards cards are the airline credit cards. These allow you to earn points toward free tickets or other upgrades with each dollar you spend. Almost all airline cards have annual fees, but these are sometimes waived for top customers. If you have used your card a lot during the year, you can request to have your fees waived.

There are many other card programs out there -- all intended to draw customers in. There are cards that pay towards your home mortgage loan. Some will donate to your favorite charity. You can find a card linked to almost anything nowadays.

The reason that credit cards take the risk that you will take an interest free loan and pay off your bill in full is simple. First of all, anytime you make a purchase with a credit card, the store you do business with must pay the credit card company anywhere between three and seven percent of the amount charged.

The other way they stay in business is by charging credit card holders who don't pay their balance each month high interest rates. These rates are even higher for those who miss a payment.

Credit cards are banking on you not paying your balance in full. The majority of their card holders don't. They encourage you to charge by offering money transfers, convenience checks and other incentives. They want you to be surprised when you receive your bill each month at how much you owe them.

But the fact is that credit cards are only a good deal if you pay off your balance in full each month and you only buy things that you have the money for at the time you buy them.

So that leaves many advisors to ask: why not just use your money and forgo all of the trouble? The benefits to the rewards cards are so minimal, they often aren't worth the risk.

While cards are the downfall of many, if you have self-control and use them wisely, there are advantages. Many people do find that they can save money by using them. Be careful and keep track of your spending, and you should find that they not only improve your credit score, but provide many other benefits as well.

Credit Repair

First Frank and Janet thought it was a simple error. Their mortgage had been recently sold to a new company with a new servicing company. As with the prior lender, they had sent in their mortgage payment by way of a personal check between the first and the fifteenth of the month and the payment had been posted with little event as being received as agreed.

Around the 20th of month, a rather cryptic call was received on the answering machine stating the payment had not been received and a late charge would be applied and charged and that they needed to make a payment immediately. Ok Frank and Janet reasoned that the payment might have been lost in the mail. Things happen, although it was the first time in two years that a payment was late. Frank and Janet has some credit challenges three years ago and found it necessary to entertain a sub prime loan to buy the house that they currently resided. Thus they were dealing with a sub prime lender and all that goes with it. Quickly, Frank and Janet called customer service and were able to make a check debit on line for the payment plus a late fee right out of their checking account. The late fee of 5% amounted to $62.50. Frank told the mortgage-servicing representative that they would put a stop payment on the check and instructed them to flag the account and not deposit that particular check (with #10224 check number dated on the 2nd of that month) as he was going to put a “Stop Payment” on it. After the call they called their bank and put a “stop payment” on that check. This cost them $25. Five days later another call came in from the mortgage servicing company stated that they had deposited the mailed check and it came back resulting in a $50 charge for the transaction since it hadn’t gone through. The conversation went nowhere as there wasn’t a record anywhere.

Frank and Janet looked at each other and collectively rolled their eyes while verbally reviewing what had transpired. Frank asked Janet rhetorically, “Can you believe this”? Next month rolls around and this time Frank and Janet make a special effort to send the mortgage payment in close to the first of the month. Around the 20th of the month, Frank and Janet received another call from the mortgage servicing company indicating again, that the payment had not been received and that there would be another late charge. The discussion became extremely heated with Frank leading the charge. Frank demanded to speak with a supervisor regarding the second time around of the mishandling of the monthly mortgage payment. The supervisor was not of much help claiming the check had not been received. Frank and Janet were determined that they would not put another “Stop Payment” on this check at a cost of $25. Not getting any satisfaction, Frank told the customer service supervisor that he would call back in seven days to see if the check had been received and posted. Seven days later, Frank called and the check had been received and posted but there would be a late charge that would apply. Another $62.50 late charge would apply. Frank and Janet were frosted beyond belief but at the same time relieved that the check had arrived. What could be going on they wondered.

The next month Frank and Janet decided to send in the mortgage payment a week before the 1st giving the mortgage servicing company plenty of time to receive and post the payment well within the time frame. On the 20th of that month a call was received from the mortgage servicing company stating once again the payment had not been received. Frank and Janet were beside themselves. This time Janet demanded to speak with a supervisor. The supervisor explained that the check had not been received. Janet pressed the supervisor further, “Has this been a recurring problem with other borrowers?” There was a long pause of silence from the supervisor followed by, “Uh…no…I don’t think so.” Janet wasn’t satisfied with any of the answers and what was going on with this new mortgage servicing company and was determined to get the bottom of these “phantom late charges”. Adding insult to injury, the following month a thirty-day late was reported to the credit bureau. Frank and Janet engaged in their own spirited credit repair campaign.

Immediately, after getting off the phone with the supervisor Janet and Frank went on line and started researching the company for any information that might shed some light on what was happening. It was found a series of stories and articles about complaints regarding this servicing company. A ton of new service business had been added without the staff to handle it. Check and payments were stacked up and untouched. Problems and complaints mounted. State and Federal agencies were suing with massive fines to be levied. Frank and Janet decided to send bank checks by certified mail return receipt. This was cheaper than $62.50 a crack and could now prove ready receipts of their payments.

Cash Back

First Frank and Janet thought it was a simple error. Their mortgage had been recently sold to a new company with a new servicing company. As with the prior lender, they had sent in their mortgage payment by way of a personal check between the first and the fifteenth of the month and the payment had been posted with little event as being received as agreed.

Around the 20th of month, a rather cryptic call was received on the answering machine stating the payment had not been received and a late charge would be applied and charged and that they needed to make a payment immediately. Ok Frank and Janet reasoned that the payment might have been lost in the mail. Things happen, although it was the first time in two years that a payment was late. Frank and Janet has some credit challenges three years ago and found it necessary to entertain a sub prime loan to buy the house that they currently resided. Thus they were dealing with a sub prime lender and all that goes with it. Quickly, Frank and Janet called customer service and were able to make a check debit on line for the payment plus a late fee right out of their checking account. The late fee of 5% amounted to $62.50. Frank told the mortgage-servicing representative that they would put a stop payment on the check and instructed them to flag the account and not deposit that particular check (with #10224 check number dated on the 2nd of that month) as he was going to put a “Stop Payment” on it. After the call they called their bank and put a “stop payment” on that check. This cost them $25. Five days later another call came in from the mortgage servicing company stated that they had deposited the mailed check and it came back resulting in a $50 charge for the transaction since it hadn’t gone through. The conversation went nowhere as there wasn’t a record anywhere.

Frank and Janet looked at each other and collectively rolled their eyes while verbally reviewing what had transpired. Frank asked Janet rhetorically, “Can you believe this”? Next month rolls around and this time Frank and Janet make a special effort to send the mortgage payment in close to the first of the month. Around the 20th of the month, Frank and Janet received another call from the mortgage servicing company indicating again, that the payment had not been received and that there would be another late charge. The discussion became extremely heated with Frank leading the charge. Frank demanded to speak with a supervisor regarding the second time around of the mishandling of the monthly mortgage payment. The supervisor was not of much help claiming the check had not been received. Frank and Janet were determined that they would not put another “Stop Payment” on this check at a cost of $25. Not getting any satisfaction, Frank told the customer service supervisor that he would call back in seven days to see if the check had been received and posted. Seven days later, Frank called and the check had been received and posted but there would be a late charge that would apply. Another $62.50 late charge would apply. Frank and Janet were frosted beyond belief but at the same time relieved that the check had arrived. What could be going on they wondered.

The next month Frank and Janet decided to send in the mortgage payment a week before the 1st giving the mortgage servicing company plenty of time to receive and post the payment well within the time frame. On the 20th of that month a call was received from the mortgage servicing company stating once again the payment had not been received. Frank and Janet were beside themselves. This time Janet demanded to speak with a supervisor. The supervisor explained that the check had not been received. Janet pressed the supervisor further, “Has this been a recurring problem with other borrowers?” There was a long pause of silence from the supervisor followed by, “Uh…no…I don’t think so.” Janet wasn’t satisfied with any of the answers and what was going on with this new mortgage servicing company and was determined to get the bottom of these “phantom late charges”. Adding insult to injury, the following month a thirty-day late was reported to the credit bureau. Frank and Janet engaged in their own spirited credit repair campaign.

Immediately, after getting off the phone with the supervisor Janet and Frank went on line and started researching the company for any information that might shed some light on what was happening. It was found a series of stories and articles about complaints regarding this servicing company. A ton of new service business had been added without the staff to handle it. Check and payments were stacked up and untouched. Problems and complaints mounted. State and Federal agencies were suing with massive fines to be levied. Frank and Janet decided to send bank checks by certified mail return receipt. This was cheaper than $62.50 a crack and could now prove ready receipts of their payments.

Credit Card Debt

People know the fact that debt accumulated by spending on frivolous items is bad and research has also found that people tend to underestimate the extent of their borrowing. In financial website Bankrate's survey, 58% of respondents claimed to pay off in full their credit cards every month, which is in contrast to studies that show the number is closer to 40%. Surprisingly, only 3% of respondents believed that other people paid off their bills in full.

A study by an American economist on the competition in the credit card market also found that, despite assurances to the contrary, three quarters of consumers pay finance charges on their outstanding credit card balances.

Actually, debt may not just be related to money problems but emotional issues as well. Some depressed people may use credit and shopping as a means of overcompensation. They feel depressed and they don't feel good. They hope that shopping will make them feel good. Thus, in a simplistic way, they're 'fixing' their problem, but the fact is, it leads to even more trouble.

It may also be used to make up for certain traits one may be lacking. For instance, if a person feels that he isn't very capable, he may try to make up for that through credit spending. Society enjoys a higher standard of living today and people are used to getting what they want even though they can't afford it and this kind of habit leads to disaster.

In a study titled "Consumer Response to Changes in Credit Supply", two US researches analyzing several hundred thousand credit card accounts and found that increased liquidity triggers immediate and large jumps in spending and debt. On average, debt rises by about $40 in the month in which a credit line is increased, more than $180 in the two months after an increase and more than $350 in a year. Each extra $1,000 of liquidity is translated into a $130 increase in an individual's debt.

The research also found that many people seem to 'aim' credit card use. Say, if a consumer is originally using 60% of his $5,000 credit limit and when his limit is increased to $6,000, he might increases his spending to raise the utilization rate back to 60%. Thus, it causes more debt and more interest to pay.

Another research program by an American non-profit financial centre Myvesta's survey reveals that a quarter of Americans don't even review their credit card statements each month. It's natural for human beings seeking pleasure and avoiding pain. In a materialistic and hedonistic world, pleasure is often linked to buying something. Thus, as long as they don't face the bills, they can carry on spending and deriving pleasure. For them a credit card is a tool for spending; whether they have money or not to spend is a separate issue.

When you are consuming, you are not thinking about the payments and when you are paying, you do not know what you are paying for!

If you are taking on a long term or large debt that can't possibly be paid off in the near future, it is smart to factor in all the things that could happen in that time period. As we all know, economies can decline which leads to changes in interest rates and value of assets and threaten jobs. People always just see what is happening today and they always ignore the future.

Usually, the person is already in debt but it is still under control until something bad happens. Once the income is gone, the person can't afford to make monthly payments and the excess gets rolled over. Then, due to compounding interest, the debt grows and grows. In conclusion, consumers should be entirely rational about debt and when it comes to spending.

Instant Credit Card

Getting a credit card used to be a time-consuming business. You'd have to ring or go into your bank, fill out a lengthy form and wait for quite a while before you got a reply. Although many people are still using that method, there's now a quicker way, thanks to the Internet.

How Do I Find An Online Credit Card Application?

Most card issuers now offer online application for their credit cards. Finding one is as simple as doing an Internet search or visiting that company's website. In addition, there are several credit card comparison sites that allow users to select cards that match a range of features and then apply. Credit card applicants are required to be UK residents and over 18.

Most online credit card applications now have a summary box which gives details of the rates that apply to purchases, balance transfers and cash advances, the interest free period, fees and charges, how interest is charged and how payments are allocated. There is also a link to the detailed terms and conditions. Once you've read these, it's time to fill in the application form. Here is the information that most credit card applications ask for.

Cardholder's Name And Address

To start with, you will need to give your name. This is usually your full name – no hiding that unwanted moniker from the credit card companies. They will also ask about marital status and your date of birth. Credit card companies also ask for your mother's maiden name for security purposes. Applications are only taken from the principal cardholder. This means you can't apply for a credit card on someone else's behalf. However, you can add an additional cardholder at the time of application or later.

You will also need details of your address and postcode. If you have lived at this address less than three years, you will also need to give your previous address and postcode. In essence, you need to show a three year history of where you have lived. Other contact details required include a phone number and an email address.

Home Ownership And Employment

Most companies want to know whether you own or rent your home and some may ask about the size of your mortgage payment. They will also want to know your occupation and employment status. Ideally credit card applicants should be working more than 16 hours a week.

They will also require annual income and bank details, including how long you've been with the bank. Finally, you'll have to list the types of credit cards you already have (Visa, MasterCard, Amex, store cards and so on).

All of these help credit card companies establish what level of credit risk you are and what credit rating you have.

Other Credit Card Services

Many online applications forms offer you the chance to take up additional services such as payment protection insurance, travel insurance, household insurance and much more.

You will also need to have details of any cards that need to be transferred to your new credit card.

Once you've completed all these details, you simply need to wait a short while for a response. Some card issuers respond within a minute. It's worth knowing that there will be some cases where they will ask for additional information before issuing a credit card.

Cards And Rewards

A lot of credit card companies offer incentives to people with large debts. These include 0% balance transfers, 0% purchase rates and long term low interest rates on balance transfers. But people who clear their balances regularly do not benefit from these rewards. After all, if they pay off their balances each month, they are not paying interest anyway. So how can these people gain something from using their credit cards? The answer lies in credit card reward schemes.

What Are Credit Card Reward Schemes?

Credit card reward schemes are schemes that offer bonuses or incentives to people when they spend on their credit card. These schemes are usually linked to the amount spent, so this is a good option for people who put their monthly spending on their credit cards. There are a number of credit card reward schemes to choose from.

Earning Nectar Points With Your Credit Card

One of the best known reward schemes is the Nectar points scheme. This started as a loyalty card scheme, with Sainsburys, Debenhams and BP as the principal players. There are now a number of retailers who accept and issue Nectar points. There is also a branded Nectar credit card (run by American Express) which allows card holders to earn Nectar points when shopping for a range of goods with the credit card. Card holders who also have a Nectar loyalty card can earn up to 4 points for every pound spent. These points can then be used for shopping, entertainment, travel and more.

Other Credit Card Points Schemes

Many other credit card companies also offer their own proprietary points schemes. Again, these allow card holders to collect a set number of points for every pound spent. These points can then be used to claim discounts on food, wine and travel; travel insurance; clothing; high street discount vouchers; or exchanged for cash. Many credit card companies also give cash back rewards. These consist of a rebate of a certain percentage of the amount spent on a credit card per month or year. There is usually a cap on the amount of the rebate.

Reward Yourself For Travelling

Another common points scheme is the air miles scheme. This allows card holders to earn a set number of miles linked to the amount they spend on the credit card. Card holders can have separate air miles accounts or can gain more benefit by applying for one of the many credit cards that offer air miles as their reward. With air miles credit cards, credit card holders can also benefit from balance transfer rates and other incentives. Many air miles credit cards also offer additional discounts or upgrades on travel products.

Other Credit Card Reward Schemes

In addition to these credit card reward schemes, there are credit cards that offer specific incentives to consumers. These include earning money to help with the purchase of a car. Credit card holders can also consider using their credit cards to give to charity. There are a number of charity credit card schemes backed by major banks.

Card Applications

A bank credit card is an extremely incredible and convenient piece of plastic with which one can purchase goods and services. An average American now holds up to eight bank credit cards. In order to qualify for a bank credit card, the applicant must be eighteen years of age and should have a good credit history.

U.S. banks offer various types of bank credit cards. After choosing the appropriate bank credit card, the consumer needs to submit a duly completed bank credit card application. An application and processing fee must also be paid along with the application. An individual can apply for a bank credit card online or through the phone. U.S. banks usually send bank credit card applications by ordinary mail, since the consumer is required to sign the applications upon receiving them. When bank credit card applications are transmitted online, there are more chances for fraud.

Most bank credit card applications include personal information about the consumer such as name, age, date of birth, marital status, applicant's current and previous addresses (only when the current address is less than two years), e-mail address, driver's license number, and social security number. To enter the employment details of the applicant, fields such as occupation, employer, position, household income, and source of other income are available. Bank account information is also included in the bank credit card applications. Moreover, the applicant needs to specify whether he is a citizen or a permanent resident of the U.S. If necessary, the details of the co-applicant/spouse are also required to be entered in bank credit card applications.

If the applicant is a student, in addition to the basic personal information, bank credit card applications have fields for entering student status, school name, graduation year, major, and campus telephone.

Once the bank credit card applications are completed and submitted, the bank will verify the details by contacting the consumer in person or through the given telephone numbers. The bank issues bank credit cards only when the consumer proves to hold a good credit record.

Get A Bank Card

A bank credit card is a financial tool that can act as a form of revolving credit. A consumer, who uses a bank credit card, must pay back the money after a period of time, along with some interest. Sometimes, the bank waives interest charges when the balance is paid completely each month.

Any U.S. citizen who is above eighteen years of age is eligible to obtain a bank credit card. Despite this, many banks issue bank credit card only after opening a bank account. The consumer needs to maintain a good credit history and his income must meet the bank's criteria.

Most of the U.S. banks verify the details written in the consumer's credit card application form before issuing the bank credit card. This is usually done by contacting the consumer in person or by telephone. Some banks even assign agencies to check the consumer's credit history. It is always advisable to have a copy of the credit report from any of the major national credit bureaus before applying for a bank credit card.

When the application is approved, the bank sends a Personal Identification Number (PIN) that serves as the key to obtain cash from an ATM. A PIN is a highly confidential number known only to the consumer; it is unique to every bank credit card. In most cases, the consumer can obtain a bank credit card within ten business days upon approval of the application.

With the advent of online banking, it is very easy to apply for credit cards online. It is a more secure method, as it protects the consumer's personal financial information. Some U.S. banks provide additional benefits such as insurance, credit card protection, rebates, and discounts along with the credit card.

Even when the consumer has bad or a damaged credit, it is possible to obtain a secured bank credit card; to do so, the consumer is required to open and maintain a savings account to act as collateral for the credit line.

Balance Transfers

A balance transfer is an option offered by many credit card issuers which enables the card holder to use their available credit from one card to pay off the balances due on one or more other cards. Usually the interest rate on the amount borrowed is lower than the rate of the cards that are being paid off by the balance transfer.

Balance transfers are really nothing more than a consumer loan made to a customer who is already pre-qualified by the lender because of the credit card relationship that exists. Since the card issuer is already open to exposure for the maximum amount of the card holder’s credit line anyway, it makes financial sense for the card issuer to entice the cardholder to run their balance up as high as possible.

A balance transfer offer is the perfect way to entice the card holder. Most balance transfer offers will come with an artificially low introductory interest rate, such as 1% or 0%, for a fixed period of time. After that time period the interest rate will rise to whatever was permitted by the terms of the offer.

Some offers will come with a fixed interest rate for the lifetime of the balance transfer payment period, subject to the usual penalty clauses for late payment, etc.

Although some card holders receive fee-free balance transfer offers, depending upon their credit experience with the card issuer, as well as their overall credit score, most balance transfer transaction require the card holder to pay a fee. This fee could be a flat-rate or a percentage of the amount borrowed. Typical offers these days are running 3% of the amount transferred per transaction, or $5, whichever is greater. Some offers cap the transfer fee at $50.

Consumers who pay close attention to the fine print, and who are diligent about paying the balance transfer balance off during the promotional interest rate period, can reduce their monthly expenses by transferring high interest credit card balances to the lower interest card offering the balance transfer option.

Consumers who do opt to take a balance transfer should not run up more debt by using the credit cards that the transfer was used to pay off. This defeats the purpose of paying off the balance to begin with and will quickly place the debtor in a position where they are no longer able to make their payments.

Top Credit Score

Do you often have too much month left at the end of your money? While you strive to pay your monthly bills on time, computers are keeping a close watch on your performance.

Automated programs keep score on your payment punctuality, and other financial information, which have a direct impact on your ability to qualify for a loan, and the interest rate you will be offered. A score of 700 or better can provide the lowest rates, while a score of 620 or less can mean the highest rates, or possibly no loan at all.

3 Primary Factors That Influence Credit Scores:

Late Payments - Not considered late until 30 days past the due date. 60 or 90 day late payments are more negative than a 30 day late. The age of late payments can influence credit scores. Recent late payments are considered worse than older ones. More serious issues include: consumer credit counseling, collections, bankruptcy, and foreclosure.

Outstanding Debt - Having a large number of open accounts can reduce your credit scores. Another issue is the ratio of your credit limit compared to the current balance. Using 75% of your credit limit is a greater risk than using 25%.

Account History – Older credit accounts can have a positive effect on credit scores, as long they are not delinquent. Having recently opened accounts could reduce your scores. Also, multiple inquiries indicate a possible new account, which may cost a few points.

Incorrect information can sometimes appear on a credit report. If you believe there is a potential error on your credit report, you are entitled to dispute the accuracy of the information. The federal Fair Credit Reporting Act gives you the right to challenge inaccurate information by contacting the reporting agencies, and the company who reported the information. Under the FCRA, they are responsible to correct any errors on your credit report free of charge, and within a specific time limit.

The credit bureaus, Experian, Equifax, and Transunion, are required to investigate your dispute within 30 days of reporting the potential error. They will contact the source of the derogatory information and try to confirm the record. Providing documentation to support your claim, if you have any, can also expedite the process. If the credit bureaus are unable to confirm the derogatory information from the source, the item must be removed from your credit report, which can improve your score.

Yearly Fees

The annual fee, or membership fee, is an amount charge card companies levy for the right to use or carry their card. This fee is payable whether you actually use the card during the year or not. Annual fees range from an average low of $25 to as much as $100 or more.

Annual fees were first popularized by prestige charge cards such as American Express and Diner’s Club. These annual charges were called Membership Fees. The charge card companies justified these fees because card holders were required to pay their balances in full every month and the companies earned no interest from the balances due.

The annual fee made the leap from club cards to the ordinary bank card in 1980 after the U.S. Government imposed a temporary moratorium on the solicitation of new customers for bank card companies. This was done in the hopes of cutting runaway inflation. The card issuers saw this as a chance to earn more money from their existing customer base who suddenly found themselves without any options thanks to the hastily passed government initiative.

After the moratorium was lifted, card users left the fee in place with a justification that annual fees kept interest rates low because it provided a way for the banks to offset losses from fraud and the rising number of personal bankruptcy claims. There was little outcry from the public and business went on as usual.

The first sign of trouble on the horizon came in 1990 when long-distance giant AT&T (American Telephone and Telegraph) entered the credit card industry with the hopes of offsetting their declining long distance revenues. Looking to raise the visibility of their new card in an already crowded marketplace, AT&T made a big advertising splash with their “No Annual Fee Credit Card!”

The response from consumers was overwhelming and the panic spread quickly through competing banks that were seeing their long-time credit card customers defect to upstart AT&T. That one incident, which bankers still call “The Big Scare”, marked the beginning of the end of the annual fee for most people.

Today, American Express still charges their membership fees although some of their interest-bearing products come fee-free. Most banks issue fee-free credit cards to their customers with high credit scores and save the fee-based offers for lower scoring customers and customers with scores so low that they can only qualify for secured cards.