Payday loans are unsecured, short-term cash advances that are not due until your payday. People typically use these payday loans to make ends meet until their paycheck arrives.
While payday loans are very easy to get, they are also very expensive and a bad choice for making ends meet. The U.S. Federal Trade Commission has a nice page that gives good information regarding payday loans. The FTC points out that payday loans are costly and they give a nice example to illustrate the cost. In their example the cost to the borrower is effectively a 391% APR. That is outrageous even compared to a high interest rate credit card.
The FTC also notes that payday loans can be called several different names, but they are all essentially the same thing. Payday loans can also be called cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans.
Payday loans are not a good option for borrowing and the FTC suggests several other alternatives. You can figure the APR on the payday loan and then see if a cash advance on a credit card is less expensive. You can also ask for more time to pay your bills. Many creditors are willing to work with you on payments. You can also build up a savings so that you have something to borrow from when the need arises.
For more information on payday loans and the companies that provide them, simply run a search for “payday loans” on Google and you will get plenty of addtional information.
Getting approved for a credit card can be difficult without a positive credit history working in your favor. It’s a Catch-22: To obtain a credit card, you need a good credit history. But to have a good credit history, you need to establish good credit!
This no-win cycle can keep people with a non-existent, limited or negative credit history from getting approved for a credit card. But it doesn’t have to if you understand the type of credit cards available and how to build a good credit history.
When it comes to credit cards, the type of card you apply for will depend on your situation. If you’re a student, you’ll, naturally, sign up for a student card. But if you’re a non-student with a non-existent or bad credit history, a card that is secured or obtained with a co-signer may be your best option. With co-signed credit cards, the co-signer guarantees and is responsible for the debt. This means that the co-signing person is responsible for paying the full amount of the debt if the card holder doesn’t pay. In fact, when co-signed debt goes into default, three out of four times co-signers are normally asked to repay what is owed, according to the Federal Trade Commission.
Furthermore, the issuing bank can attempt to settle the debt without first trying to collect from the card holder. The bank can also use the same collection methods against the co-signing individual, including suing and garnishing wages. If the debt is not paid, it can leave a negative mark on the credit history of the co-signer, as well as the card holder.
Despite the risks, a co-signed credit card can be great tool for helping a friend or relative build their credit history so they can one day obtain a card on their own. Secured, co-signed and pre-paid credit cards offer viable options. But you should start building a strong credit history, so you can obtain a regular credit card on your own in the future.
First, you need to understand how credit card issuers determine credit worthiness. The approval criteria varies from among issuing banks, but generally relates to what’s often called the three C’s of credit: capacity, character and collateral. Capacity refers to your ability to pay based on your income and existing debt. Collateral refers to any assets you have that can secure payment, such as bank accounts or home ownership. Character refers to factors like your payment history, length of employment, etc.
To get a good idea about how your application will fare with credit card companies, check your credit history with one of the major credit reporting agencies: Experian (www.experian.com), Equifax (www.equifax.com) and TransUnion (www.tuc.com). These agencies access your payment information directly from the companies you have credit with, as well as from government agencies such as the legal court system.
Credit reporting agencies use the information in your credit history to determine your credit rating or credit score. Credit scores, also known as FICA or Beacon scores depending on the CRA, generally range from 350 to 850. Most banks will approve you for credit if your score is at least 620. If your rating is 720 or higher, banks will offer you their lowest interest rate.
Generally, y our credit score is determined by your payment history for the last two years. T echnically, CRAs calculate your score using a closely-guarded formula. TransUnion, for example, determines credit scores using a variety of factors, including: how you pay your accounts, how much you owe and how often you’ve applied for credit.
http://www.credit-cards-rates.co.cc/