U and your Credit Card

We can see that most of the people are using credit card for their regular use of life. In every place where ever we deal with money on that point of time we use our credit card. We like to keep credit card with us as we know that its very comfortable and safe.

Today, we can see many credit card services available in our market with their various proposal and scheme but there are also lot of scam present in the market. If , we want to take any credit card then we should know every details about the credit card service because its matter of money. Everyone want a secure credit card as no one want to include in scam of credit card. I have collected some basic information about how can you get secured credit card, Which I have mentioned in this article.

There are lot of credit card services available in our market but make sure the credit card which you apply is associated with a prime logo which belongs to big companies like Master card, Visa etc. So, the logo is one of the major point for any secure credit card.

There are different kind of scheme are available on credit card and rate of interest is one of the scheme. You should research about the interest rate of credit card and always make sure that you won't take those credit card in which you have to pay every month and others additional rate. Those credit card services are secure, who are charging fees either a one time fee or an annual fee. You will also find some credit card services who waive your fee for first year.

We should search all the review or feedback about the credit card which are present in the market. We should check different opinion of other people and what they think about the card. We can get all the information of different people from the Internet.

Always remember, Those card which are belongs to Public savings, Capital One, Orchard Bank etc. They are very much safe and secured.

So, all these are just basic information about how can you get the secured card from the different credit card services which will be helpful if you are little bit confuse about the credit card.

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Annual Percentage Rate

APR or Annual Percentage Rate should be known to everyone, at least by those who are having loan, mortgage, credit card etc., which deals with interest rate. In order to avoid bugger lenders or different credit card companies and compare the percentage rates on different loans or credit cards.

What is APR?

APR is the Annual Percentage Rate is the interest rate calculated for a whole year, rather than just a monthly fee/rate, as applied on a loan, mortgage, credit card, etc. APR tells you how much you are going to pay annually for the amount borrowed, so it is the cost of loan in terms of percentage. If your loan has a 10% rate, you’ll pay $10 per $100 you borrow annually. All other things being equal, you simply want the loan with the lowest APR.

Why it is necessary to know APR?

The fees included within the APR vary from one lender to another. The fees included within the APR involve charges related to the making of the loan and other fees such as title fee, escrow fee, attorney fee, tax service fee, home inspection fee, recording fee and credit report fee. The fees for the preparation of loans include loan processing fee, underwriting fee, document preparation fee, private mortgage insurance, loan application fee, credit life insurance and appraisal fee. Lenders often mislead borrowers by charging hidden fees. In order to reduce the confusion, US Government made the provision that the lenders have to quote APR to potential borrower, as per the Truth in Lending Act.

For example if the APR is 36%, the percentage is 3% per month, but the interest rate or cost of funds for the entire year may be greater than 36% due to the effects of compounding. By law, a credit card company or other lender must inform the customer of the APR before any agreement is signed. The APR provides the customer with a convenient number against which to compare the cost of funds for other loans or investments.

So you have to do some research work before applying for any loan, mortgage or credit card and find out which is having lowest APR.

How is APR Calculated?

APR is the equivalent interest rate considering all the added costs to a given loan. Naturally, it is a function of the loan amount, the interest rate, the total added cost, and the terms. The APR would equal the interest rate if there is no additional costs to a given loan.



1) For example, consider a $100 loan which must be repaid after one month, at 5% interest, plus a $10 fee. If the fee is neglected, this loan has a (year-long) effective APR of approximately 79% (1.05^12 =~1.7958). If the $10 fee were considered, the interest increases by 10% ($10/$100) for the month, with the effective APR being approximately 435% (1.15^12 =~5.3502, as 535%-100%=435%). Hence there are at least two possible "effective APRs": 79% and 435%.

2) For example, a credit card company might charge 1% a month, but the APR is 1% x 12 months = 12%. This differs from annual percentage yield, which also takes compound interest into account.


What are APR Limitations?

Unfortunately, all other things are not equal. APR can include more than just the interest cost of a loan. On a mortgage, APR might include Private Mortgage Insurance, processing fees, and discount points. There are other fees and charges that may or may not be included in a given APR quote. Therefore, you need to look closely at each and every APR.

You can’t simply rely on an APR quote to evaluate a loan. You need to look at each and every charge and expense related to your prospective loan in order to judge whether or not you’re getting a good deal. In addition, look at the bigger picture – you need to know how long you’ll be using a loan to make the best decision. For example, one-time charges up front may drive up your actual cost on a loan – even though an APR calculation might assume those charges are spread out over a longer lifetime (and therefore the APR would look lower).

APR Calculator:

1) Loan Amount (C):----------- 2) Extra Cost (E):---------- (The Extra Cost (E) is the lump sum of all extra costs involved in the loan, which include points, application fee, closing cost, processing fee, title fee, and so on. In short, it's the money you borrowed that you never saw.)
3) Interest Rate % (R):------- 3) No. of Months (N):-------
4) APR (A):------------------- 6) APR (A):----------------- Calculator

The calculator first calculates the monthly payment using C+E and the original interest rate r = R/1200:

P = (C+E)r(1+r)N/(1+r)N-1

The APR (a = A/1200) is then calculated iteratively by solving the following equation using the Newton-Raphson method:

{a(1+a)N)/(1+a)N-1) – P/C = 0

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Good Debt!

Can a DEBT be GOOD? Yes it is!

For Creditors all secured debts are Good Debts and for Debtors Good Debts are those which builds wealth over the long run.

Question: Can Debts build wealth?

Not all debts are bad. If used precisely Debts can be huge source in wealth building. Good Debts can be considered as a sort of investment, which generates
income at a later stage.

Good Debts is secured with a valuable asset, like a home mortgage or, perhaps, a car loan, and so considered an investment.
Home loans are good because over time a home’s value increases. Student loans are also considered Good Debt because they are also like an investment. Students who graduate with a college degree earn, on average, higher incomes than those that don’t.
Home loans and college loans are good for another reason: they usually have very agreeable terms. Both types of loans come with very low interest rates, and borrowers repay the debt over a long period. The typical home loan, for instance, carries a 30-year term. The interest on college loans is so affordable that the graduate can repay their loans slowly over a long period as they gradually earn more money and build their personal wealth.

"Mortgage debt is Good Debt. You're borrowing money, but you're getting a tax advantage and can write off interest on an asset that's appreciating over time. Plus, you get to live there."

One of the secrets, therefore, to being smart with your money is to differentiate between Good Debt and Bad Debt.

1) Good Debt: Having a mortgage, getting a home equity loan or line of credit to fund a home renovation or remodeling job.
Bad Debt: Borrowing money to trick out your car to impress your friends, or just yourself.

2) Good Debt: Getting student loans to attend college.
Bad Debt: Using your credit cards while at school to buy groceries, throw parties or accumulate stuff. Many students are saddled with insane amounts of debt after they graduate. Average credit card debt after graduating from college: $3,000.


3) Good Debt: Leverage in real estate or using the bank’s money to invest in real estate. You can use leverage by borrowing funds to get into real estate investing with the expectation of turning in a profit.
Bad Debt: Leverage in Wall Street or borrowing money to buy stocks. In my opinion, buying stocks on margin is a bad idea. This is a subjective opinion because I’m sure there are a lot of successful margin players out there. As an average investor, I’d avoid trading on margin like the plague. There’s a difference between using a loan to invest in real estate versus investing in the stock market: if the real estate market drops, you are not forced to pay off a mortgage in short notice. With a drop in stock prices, you’ll be subject to margin calls that will force you to raise more money to hold on to your position or else force you to redeem at poor market prices. Using leverage takes a good amount of risk, the question here is if the risk is reasonable and if you’re fairly comfortable taking it.


4) Good Debt: Applying for a business loan and borrowing for business. Many ventures need cash flow that they don’t have at the moment to run their operations or expand their facilities. Using loans to grow a business is a sensible approach to take.
Bad Debt: Using your credit card to go on vacation, travel or to just have a good time; borrowing for pleasure. Once the vacation is over, you’re left with fun memories and a financial obligation to pay up.

While the differences often seem logical, it is a logic that is apparently missed by many people.

Therefore, Good Debt helps borrowers by increasing their wealth and by building a healthy credit history. Borrowers who repay their debt diligently earn a good credit score and become eligible to borrow more good debt in the future. Good Debt is investment debt that creates value.

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Credit Card Debt

Credit Cards had been one of the greatest boons for mankind of this Century. Through Credit Cards buyer can buy goods or services, without having cash in hand. A Credit Card is only an automatic way of offering credit to a consumer. Today, every Credit Card carries an identifying number that speeds shopping transactions. Imagine what a credit purchase would be like without it, the sales person would have to record your identity, billing address, and terms of repayment.

But, today this boon for mankind has turned into curse. People are using their Credit Cards, just because they can avail the product or service of their choice, without thinking whether they can repay the amount with interest later. U.S. citizens are buying on impulse.

"Credit buying is much like being drunk. The buzz happens immediately, and it gives you a lift. The hangover comes the day after".

The major cause of U.S. population under debt today is Credit Card Debts. People are possessing more than one Credit Cards and using them extensively without making timely payments. This is increasing their interest rates and also their total Debt and people are opting for more and more credit card debt settlement .
Credit Cards were created for people's convenience where they can smoothly carry out their financial transactions, without carrying much cash. Now People are carrying the burden of Debt because of Credit Cards.

Below are some simple Tips & Advices for Credit Card users which can be or rather should be followed to avoid Debt like situations and lead tension free life:

1) Use Credit Cards when in dire necessity.

2) Stop spending on impulse. Check out whether you really need the product or service. Just because your neighbor is having it or it's the current craze you needn't buy it.

3) Do not cross your credit limit unless it’s an emergency. Banks charged a hefty 2% interest for all amounts in excess credit, in addition to the existing financial charges.

4) Every month allocate a portion of your income for Credit Cards. Try to pay more than minimum due amount.

5) Try to maintain not more than 3 Credit Cards.

6) Apply only for Credit Cards, when you are having stable source of income and can afford it. Otherwise you may end up in heavy Debts and even bankruptcy.

7) Cash advances are convenient BUT costly. Banks charged 18% per annum of cash advance amounts AND a 5% interest OR minimum of RM20 on the amount drawn. There is no interest-free grace period and the interest is accrued the moment cash is received.

8) Secure a list of your Credit Card numbers and report lost or stolen cards immediately. All banks have a 24-hour banking service and you’ll not be held liable for any purchases made with the card after reporting.

9) Inform and update your Credit Card issuer of changes in your personal particulars such as new mailing addresses so that billing can be mailed on time to avoid late payment charges.

10) Keep track and list out the things you bought with your Credit Card to cross-refer on the billing items to filter out misuse and credit frauds.

11) Be aware of the interest-free grace periods for settling outstanding bills. If your billing statement arrives ‘fashionably’ late every month, complain to your bank. Late mailing might be a contributing factor in the accumulation outstanding bills over the month.

12) When you want to cancel your Credit Card, it’s better to go straight to the bank to settle it rather than post to them. Call the bank and follow up closely on the cancellation status, as there have been many cases where banks still impose charges to consumers even AFTER they’ve canceled their cards.

13) Go for Credit Card Debt counseling, with professionals immediately, in case your financial situation is not manageable anymore by you.

Control your spending control your Debt.

"Credit Cards are for convenience and not for collection".

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