Friday, November 21, 2014

Should I get a pre-paid credit card?

Simple answer is "almost never."  They are basically gift cards, nothing more.  It's understandable that some people have trouble obtaining a bank account, but, when/if you can, you should avoid using pre-paid credit cards.

As stated above, pre-paid credit cards are basically gift cards.  In fact, many of us have received these cards AS gifts in our stockings or event cards.  Getting these are fantastic gifts and we all love them, however, there is virtually no upside for consumers to get pre-paid credit cards for personal use, especially when considering the normally high fees that are associated with these cards.  To top it all, pre-paid cards do not report to your credit report.  If you're going to use your own money to obtain your own pre-paid credit card (that you will also use), you may as well put your spending habits to work building your credit!

An alternative to pre-paid credit cards are SECURED credit cards.  MOST secured credit cards report to all 3 credit bureaus; you'll be adding history to your credit report every time you use these cards.  Important NOTE: Your deposit is the collateral for which you are granted the line of credit.  It is NOT meant to be the replacement to making your payments on your secured credit card.  Make your payments like you would any other bill.

For a list of secured credit cards with some great rates, CLICK HERE!

Monday, November 3, 2014

Denied for "Pre-Approval"????? Credit Bureaus selling your information.

That notorious junk mail.  The Credit Card offers.  The PRE-APPROVAL letters. It does have it's place.  We've all seen one that generated genuine interest; ESPECIALLY for those that have been denied the past few times they applied for a credit card or a loan.  A Pre-Approval is NOT an's simply a direct mail advertisement.  Period.

The company that sent you that pre-approved letter may have a "special code" generated for your "approval."  They may have included an application to fill out or a website to visit to more quickly generate your approval status.  No matter how official these may look, these are misleading and confusing.

These companies have massive marketing budgets and departments designed solely to get consumers to apply for credit regardless whether they qualify or not.  The truth is, these companies PURCHASED your information from the credit bureaus along with hundreds, thousands, and possibly millions of others that possibly fit their marketing criteria (credit scores, income levels, demographics, etc). 

The credit bureaus are not on your side.  They LOVE it when these companies purchase this information as it will generate FURTHER revenue for them.  They generate revenue when they sell your information to be marketed to and then sell it again in the form of your credit report when you apply for these offers. Just remember, these are simply advertisements and you're receiving them because you fit the model to be a lead for this ad.

A hard inquiry into your credit report will still be required and can count against your scores when.  Too many of these inquiries WILL hinder your scores.  Be careful and selective; pre-approval letters are simply ads to get you to apply.  It is very common for consumers to receive these letters and still be denied.  It will NEVER hurt your credit to receive these offers.  It CAN hurt your credit if you apply for too many of them.
If you'd like to be removed COMPLETELY from these go to:

Be careful, be educated, be informed!
Your friends at Credit Management Solutions