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Plastic Fantastic: How to Prepare for Your First Credit Card

Plastic Fantastic: How to Prepare for Your First Credit Card

Your first credit card is a real responsibility. Here’s how to know you’re ready and the best practices for being a responsible user.

By the end of 2018, United States Americans owed over $800 billion in credit card debt.

And the same source tells us that 48% of those credit card users make only minimum payments on their credit cards. Those customers typically have rollover amounts each month.

To keep up with friends, almost 40% of millennials spend money they don’t have. And 3 in 10 cardholders don’t even use their rewards.

If you aren’t financially aware, credit cards can be a detriment to your future earnings. But if you use them correctly, they can improve your credit significantly and help set you up for success.

Before you get your first credit card, make sure that you’re ready. Keep reading to determine when you’re ready and to learn some essential tips for being a responsible user.

When Are You Ready for Your First Credit Card?

Getting a credit card is an essential step in almost every person’s life. But before you get one, you should understand the way they work.

Plus, it helps if you already have a bank account. Understanding how to deposit, save, spend, and budget money is an integral step in learning about finances.

When you use your debit card that’s attached to your checking account, you’ll get practice for when you use a credit card.

Do you already have self-discipline? Do you prioritize? If the answer is yes to either, you’re one step closer to being ready for your first credit card.

You should know about how much money you have in your checking account at any given time.

Make sure that you don’t overdraw your account and can manage any regular payments before spending money on anything else.

Do You Save up for Things?

Have you ever saved up for anything, big or small?

It’s good to be in the habit of saving up for things, especially when it comes to bigger purchases.

Don’t think of your credit card as a blank check. It’s a great idea to only buy things on your credit card that you could already pay for with funds from your checking account.

Using a credit card is an excellent way to build credit, especially if you pay it down regularly, and don’t max out your available credit.

Where Do You Get a Credit Card?

There are a few different types of financial institutions that offer credit cards.

1. Your Bank

Your bank is a great place to get your first credit card. While it used to be harder for someone with no credit to qualify, there are now quite a few options for those with no credit.

And applying through a bank where you already have an account may significantly increase your odds of being approved.

2. Retail Stores

Sometimes these cards are easier to get, as you can typically only spend money in the store for which you hold the card. However, many of those stores have different card options, some of which DO work in other venues.

If there’s a particular retail store you frequent often, try there, especially if you have no credit. These are easy to get approved for, but they generally have higher interest rates.

3. Other Financial Institutions

Lenders other than banks also offer credit cards. Some only offer to low to high credit, but some lenders who offer cards to those without any credit yet.

What If It’s Difficult to Qualify?

Getting your first credit card isn’t always easy. If you don’t get an offer on your own, you could always try enlisting a co-signer in your application.

Your co-signer’s credit history and income will be used to determine whether or not you are eligible.

A secured credit card is another viable option, and banks offer them a lot of the time.

The way it works is that you’ll put a deposit on the card first, and the lender may match those funds, or approve you for a certain amount.

It makes things less risky for the lender in choosing to trust someone with no credit.

How Should You Manage Your First Credit Card?

There are a few tips and tricks that will make your first credit card adventure a success.

Make Your Payments on Time

First and foremost, make all of your payments on time. Late payments will only lower your credit rating and put you further into the hole. Plus, there’s no sense in starting with bad habits.

Don’t Outspend Your Pockets

If you can help it, don’t ever spend more than what you could pay in full. If you pay your balance in full every month, you’ll avoid significant interest charges and a lower credit rating.

Plus, when you purchase things you technically can’t afford, you’re borrowing from and making decisions for your future self.

Watch Your Credit Utilization Ratio

Try to keep your credit utilization ratio under 30%. If the amount of credit you’ve used is not significantly lower than the credit you currently have available, you won’t be building good credit.

Be Ready Before You Get Your First Credit Card

Before you get your first credit card, it’s in your best interest to open up and use a checking account with a debit card.

You must know how to manage your money and to put bills and essentials ahead of other purchases.

Plus, you must make your payments on time and make more than the minimum payments. And the lower you keep your credit utilization ratio, the better it is for your credit.

If you’re determined to better your credit, here are some life-saving tips that’ll boost your score quickly.

And if you’re ready for your first credit card or have any questions, give us a call.

Click, Click, Apply: How to Find Online Car Financing

Click, Click, Apply: How to Find Online Car Financing

Buying a car doesn’t have to be hours of paperwork in a dealership – sometimes you can get online car financing, learn about it here.

Did you know that you can get online car financing with just a few clicks? Say goodbye to tedious paperwork and a slow approval process with the digital way of getting an auto loan, and drive off in your new set of wheels in no time.

Online financing has made it easy for people to apply for loans. The rates are very competitive, the process is fast, and one of the best thing about such loans is the ability to process bad credit car loans.

In as much as getting a car loan from the comfort of your house sound like a good idea, you need to be careful about who you borrow from. Take your time to find a lender with the best rates, quick approval process, and can accommodate your credit score.

Choosing an Online Auto Finance Company

Just like you took your time to choose the make and model of the car you want, you need to put the same effort when selecting an online auto finance company.

Even though it is possible to apply for an online auto loan with bad credit, you might have to pay a higher interest rate. Make sure you know what you are expected to pay monthly based on your current credit scores, your down payment, loan term, and the much you want to finance.

Here are four tips that you should have in mind:

1. Check for Options

Get quotes from different online lenders. Do not just settle for the first one you come across.

2. Pay Attention to the Fees

Lenders charge many fees that you need to know before settling on one. Be aware of such fees and do not forget to read the fine print so that you do not miss out on anything.

3. How Much Can You Afford?

Stay within your budget. Americans are highly in debt because of auto loans and you do not want to find yourself in this bracket. Therefore, consider all other costs of owning a car such as insurance, maintenance, etc. and factor them in.

Know how much down payment you are required to make and if you can afford it.

4. Your Credit Score

Some lenders do not give bad credit car loans. This means if you have a poor credit score, you need to look for a lender who can be able to accommodate it.

Benefits of Online Car Loans

Getting a car loan from an online lender is a very good option, especially if you have poor credit and need to have a car. There are several benefits of online auto loans:

1. Highly Competitive Interest Rates

Compared to a traditional lender like banks, online auto loans have very competitive rates. This makes it very affordable.

For example, with good credit, the APR on a 60-month car loan can be 2% points higher from a bank than online lenders. It’s a small difference but the interest can add up very fast.

2. Speed and Convenience

The application process for an auto loan is very fast. You can apply for the loan regardless of the time and your location. Some lenders only take 3 minutes to let you know if your application was successful or not.

You can also easily check your auto loan application status online. With this loan, you do not need to go to the dealership to know how much you can afford. You will get to know all that during the application process.

Comparing Online Car Loans

There are so many options to choose from in the market today. However, you want to get a lender who offers not only what you need but also what you can afford.

When comparing online loans, you need to keep in mind that you are going to have a very long relationship with your lender. Therefore, choose to work with a lender that is giving you the best and you are very content with their services.

Here is what you should compare:

Down Payment

Check if the lender can accept a trade-in as part of the down payment. The amount you give as down payment will affect the rates that you will be given and the loan term. Make sure you can afford it.

Application Process

How fast is it? What do they require? A good lender should have a very fast system that can give you an answer in no time.

Documents Needed

Are there any documents that you should send to the lender? Can they be verified online? Remember, online verification saves time, you need a lender who can handle the entire process online.

Total cost

This should be included as the APR. Compare two loans for the same amount given, the fees and interest rates affects the total cost.

Applying for an Online Auto Loan

Even though each lender is different. There are some basic steps that you will need to follow:

  • Find the lender that fits your need
  • Go to their site and select their application page
  • Fill out the application form making sure that you provide all the necessary details
  • Submit your application

Once done, you should be able to get a response within minutes after which. You can check on the loan terms, view the interest rates and any other fees.

You will then sign all the necessary documents and click submit. It is as easy as that. With that, you will be on your way to a dealership, with your financing as your back up and drive off with your new car.

Consider Online Car Financing and Get Your Dream Car Fast

Online car financing is a good option. If you have bad credit, all you need to do is to consider getting a less expensive car. This will make it easy for you to get financing, and manage to pay for the down payment as well as the monthly payments.

We offer online auto loan financing to those who want it irrespective of their credit scores. Check out our website, go to our auto loans page and start the process of applying for your car loan today. We are fast, easy and very professional.

Don’t hesitate to contact us for more information.

How to Get a Cash Advance on a Credit Card: 8 Tips You Should Know

How to Get a Cash Advance on a Credit Card: 8 Tips You Should Know

A credit card can be a great source of cash if you need it. Learn how to get a cash advance on a credit card and how to be smart with it here.

how to get a cash advance on a credit card

You use your credit card at the checkout and online, but did you know you can use it as a source of cash?

A credit card cash advance allows you to withdraw a percentage of your credit limit in cold, hard cash. You can get it from the teller at the bank that manages your credit card or request a PIN to hit the ATM.

However, getting a cash advance differs from swiping your credit card. If misused, it can transform your credit card from a helpful tool into a monthly nightmare.

Here’s what you need to know about how to get a cash advance on a credit card (and how to pay it back).

1. Read Your Agreement

Can you get a credit card cash advance? Your credit card agreement spells out the answer.

If you don’t have the original agreement, log-in to your online banking portal and download it a second time. Can’t find it? Request a new copy from your bank.

Under the credit line section, you’ll see two numbers: your total credit line and your cash advance credit line.

If you have a cash advance credit line available, it will be a fraction of the total credit line.

Your cash advance line is part of your total credit line–not an addition to it. If you have a $500 cash advance line, but only $300 available on your entire credit card line, then you can only take out $300 in cash.

2. Request Your PIN

To access your credit line, you need access to your PIN.

You may do this one of two ways depending on your card provider. Most banks now allow you to do this online. However, other banks may require you to call customer service to request your PIN. Either way, your PIN will arrive in the mail.

3. Pay Attention to the Access Fee

No matter what credit card you have, you need to know that your cash withdrawal differs substantially from a typical swipe transaction.

Credit card cash advances usually come with two fees: an upfront transaction fee and an interest rate.

Let’s start with the transaction fee.

For the privilege of taking out cash, you will either pay a percentage of the transaction or a flat fee. You need to know what this fee is and factor it into your withdrawal. Not only is it one more item to pay back, but it will remove the remaining credit you may count on to do things like pay bills.

Most companies charge around 5 percent of the transaction or a fee of $10. The greater of the two applies based on the size of your withdrawal.

So if you take out $50, then your fee would be $2.50. But if you ask for $500 in cash, your payment is $25.

4. Note the Higher Interest Rate

A credit card cash advance almost always comes with a higher interest rate than your total credit line. And if you are in an introductory period that offers a reduced or zero interest rate, then it likely doesn’t apply to your cash advance.

You might think that paying off the cash advance at the end of the month will save you the hassle of the higher APR. However, your credit card doesn’t work that way.

When you make a payment, you pay off the oldest balance first. To pay off your cash advance, you generally need to pay off your card balance in its entirety.

Plus, credit card companies typically start counting interest the day you take the cash out. If you take out a cash advance on the first day of your billing cycle, you will pay a month’s worth of interest if you don’t pay it off until your due date.

5. Factor in the ATM Fee

The final fee is the ATM fee.

If you use an American card, you already know that using an ATM outside your network comes with a fee between $2 and $10, depending on who owns the ATM.

If you use the ATM to withdraw your cash advance, keep the fee in mind when you calculate your balance and your budget.

6. Borrow Pocket Money–Not Hundreds

The combination of all the fees and the interest means that a cash advance works best when borrowing a quick $40. Borrowing hundreds of dollar quickly adds up and puts you at a disadvantage from the day you borrow.

As a result, the best and safest way to use a cash advance is only to borrow what you can pay back after your next paycheck.

7. Pay It Off Fast

A cash advance isn’t a long-term loan or credit option. You need to pay it off fast–as in days, not weeks or months.

Paying it off quickly is the best way to avoid the combined high-interest rates, which turn your one-time need into a month’s long battle.

If you can, don’t wait until your next due date to pay it off. Do it as soon as feasibly possible to avoid growing your balance.

8. Consider an Alternative to a Credit Card Cash Advance

In some cases, a personal bank loan or collateral loan are better alternatives. Both of these loans offer a higher limit and fairer interest applications, which means it will take less time to pay off and cost you less in the long run.

Keep in mind that both these loans also include fees. However, the fee tends to be lower than that of a cash advance once you reach the higher figures. You can also avoid the ATM fees, which saves you at least a bit of cash.

How to Get a Cash Advance on a Credit Card: The Takeaway

Now you know how to get a cash advance on a credit card, but remember, it’s best suited for those who need to borrow $100–not $1,000. Borrowing large lump sums becomes expensive very quickly because the interest rate is not only high but the bank applies it immediately.

Do you need cash quick? Click here to learn about our financial products for all credit types.

Payday Loans 101: How Do Payday Loans Work?

Payday Loans 101: How Do Payday Loans Work?

How to payday loans work? Learn everything you need to know about the precautions and benefits with our guide to understanding payday loans.

How Do Payday Loans Work?

Payday loans can be a real life-saver. Used wisely they are your knight in shining armor. They’re there to rescue you from financial ruin when all else has failed.

How do payday loans work? Find out how you could get yourself out of an impossible situation with a quick injection of much-needed cash.

Hard Times

Many people have moments in their lives when they’re short of cash. You may well have managed your finances well. But sometimes something unexpected comes up and your budget can be stretched to a breaking point.

Let’s say a heating system breaks down unexpectedly. It could be very cold, and there may be a few more weeks to go until your next paycheck. If you’re already stretched, there could just be no money left to pay for the repairs.

It could be that you don’t have time to apply for a bank overdraft. You may not even be confident that your application will be successful. Your credit cards may also be maxed out.

The Payday Loan Solution

It’s in these kinds of circumstances that a payday loan could be a solution. They’re a quick way to get the funds you need. They’re a stop-gap to enable you to keep your finances on track.

You’ll then repay the loan by the end of the month when you get paid. It’s a potentially life-saving choice for those who have poor credit or no credit history at all.

It’s often possible to get the cash you want on the same day if you can get an online application submitted early in the morning. You’ll need to be sure that you fill in any forms accurately.

How Do Payday Loans Work?

With these kinds of loans, lenders may keep a check from the borrower until their next payday. That would typically be when the loan and any finance charges would need to be paid back.

There are also lenders who offer longer-term installment loans. They’d require authorization to electronically withdraw multiple payments from your bank account. That would typically be on each pay date.

Payday loans are usually for amounts that range from one hundred to one thousand dollars. The maximum will depend on what is permitted in any given state as well as your monthly income. A normal loan term would be around two weeks.

The downside of payday loans is that the interest rates tend to be high. There could also be arrangement fees on top of this. Rates can be even higher in states which do not cap the maximum cost of the loan.

It’s important not to let a payday loan become a ‘debt trap.’ That can happen if you can’t afford the loan and the fees. You might end up repeatedly paying even more fees to delay having to pay back the loan. The debt can then spiral out of control.

Applying for a Payday Loan

Lenders will need your personal details. They will want to know how they can contact you. That usually means that you will need a phone that accepts calls and texts.

Lenders will also want information about your employment status and financial income. They may also want to see bank statements from the past few months. This is so that they can see evidence of the regularity and size of your paycheck.

Before you apply for a payday loan, gather together all this information. If you don’t do this, then you might slow down the whole process.

Lenders often will not carry out a full credit check or ask too many questions when deciding if a borrower can afford to repay a loan. Loans are usually granted based on the lender’s power to collect, rather than on the borrower’s capacity to repay.

Understand Your Credit Score

If you’ve just begun a college course, then you may find that you don’t have a credit history. Some lenders may still allow you to borrow in these circumstances. This will typically mean that the cash must be spent on books or college fees.

If your credit score is poor, you might still be able to get a payday loan. You must not be in a state of bankruptcy and you will require an active bank account. Lenders generally only let you borrow up to a smaller percentage of your income.

Limited Options

You should consider taking out a payday loan only in a time of real need. It shouldn’t be your first or ideal option. To an extent, it needs to be considered as a last resort.

That’s because there are real consequences if you fail to repay the loan. There will be a negative impact on your credit score. This will be a red flag for any future lenders.

Payday loans are not the right way to pay for luxuries you could do without. They’re there for necessities rather than something that you want.

You may want to go on a luxury vacation or buy a new and expensive computer. A payday loan would not be the most appropriate way to make the purchase.

The Costs Involved

It’s very important to read all the small print when taking out a payday loan. Check thoroughly so that you understand what the fees and charges are. You need to be aware of what you are getting into with payday loan.

The best advice is only to borrow the exact amount you’re going to need. It might be tempting to add on a little extra for the treat you think you deserve. This is never a good idea because of the fees you’re likely to have to pay.

Remember that the more you borrow, the more it will cost you to pay the loan back. That’s because you’ll be paying more interest and probably more in fees too.

When There’s an Emergency

How do payday loans work? They can be the lifeline you’re looking for when you have an unexpected expense and need a quick solution. You should always use them responsibly and with care.

Find out more about payday loans here and how online banks keep them safe and secure.

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