Many consumers would say that all credit cards do more harm than good, but that is not necessarily the case. While it is true that the credit card industry leaves a lot to be desired, there are consumers who can actually benefit from responsible credit card use. With that in mind, you should know that not all credit cards have the same benefits or pitfalls. Unless you are adopting a cash-only lifestyle, it pays to know which cards to avoid.
Credit cards that do not report to credit reporting agencies.
Whether you are trying to establish credit or maintain a good credit score, you need to have your credit card activity reported to all three credit bureaus. Without this information all of your efforts to properly manage your credit card account are for naught.
Granted, properly managing your account will keep your finances in good order but without the activity being reported to the agencies, no one will be the wiser. You don’t want your hard work and responsible behavior to go unnoticed by future lenders. Avoid this scenario by confirming the card you are applying for will report your credit activity.
Prepaid and secured credit cards can cost you money.
Most often used by people who have bad credit or no credit, credit cards that require a cash deposit for collateral often come with high fees. If you fail to properly research and understand the terms and conditions of these forms of credit you may find up to 50% of your deposit is consumed by various fees. To avoid this look for cards with low interest rates and minimal fees.
Department store credit cards don’t offer real savings.
Have you ever reached the checkout register and when presented with the amount due, the clerk mentions you can save ten, fifteen or twenty percent if you apply for and use their store credit card? Most of us have been in this situation and while it is tempting to go ahead and accept that offer and the savings that come with it, proceed with caution as these cards have a way of costing your more money in the end. Department store credit cards are notorious for having very high interest rates which make it inadvisable to use them for perceived savings unless you are certain you will pay the balance in full. Carrying a balance on this type of card will quickly reverse the savings at the cash register and you could end up paying double or triple the original price.
Rewards programs that cost more than buying the product outright.
For consumers who regularly use credit in a responsible manner a good rewards program can offer many benefits. The key to reaping the maximum reward from these programs is finding one that works with your current spending habits. You should not use your rewards card to incur debt that you cannot afford simply to get the miles, points or cash back benefits. In most cases you could have saved the money for that purchase and paid less than the amount of money you have to charge in order to accumulate the necessary points or miles on your reward program. Again, if you are already using your card for purchases, it makes sense to get the rewards, however you should not use the card just for the rewards.
Conclusion
Due to recent changes in the industry and an overall enlightenment among consumers, the way many people use credit cards is changing. Some people have decided to forgo credit cards altogether. For those of you who are not quite at that point, pay attention to the cards you use to get the maximum benefits possible.
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The best way to avoid the problems with banks, & Credit Cards, is not to have so many. Have only ONE OR TWO credit cards MAX. If you a lot like I did, 17, wiht over $175000 credit limit, a lot can happen. So, KEEP ONLY 2 MAX & PAY IT OFF EACH MONTH. Banks & Credit Card Companies care only about one thing — MONEY & they can care less about YOU. SO, the best thing to do is if you have bad credit, fix it. It takes time, but it can be done. DO NOT GET ANY PREPAID, DEPARTMENT STORE, OR any CC with Annual Fees. They do YOU no good.
Start Thinking about YOURSELF & YOUR FAMILY. Use Cash or your debit card if you have the money. If not, Don’t buy it.
If you don’t — you will have problems someday like I did then get ready for hell. NOW, I fight back & win & hopefully someday will get infront of the Senate Sub-Committee to make some new laws to make the laws for the consumers and heavy fines to the collection companies, banks, & Credit Card Companies which commit FRAUD EVERY DAY.
I recently applied for a secured credit card through US Bank. I filled out my application and sent them a US Bank Money order for $300.00. After ten days I received a letter asking me to provide tax info. I called customer service and was told I was turned down do to the fact that I am collecting unemployment. They claim “under federal law they cannot issue secured credit cards to unemployed applicants.” I was very disappointed. I am trying to build my credit and also starting an on-line business. The bank claims I’ll get my money in 10 business days. How can I build credit in this tough economy? Any suggestions? Thank you.
I’d go with a secured card. Here is our list:
http://www.creditinfocenter.com/cards/secure-credit-cards.shtml
Hi Kristy:
I was sued by Gurstel Ghargo (Mpls, Mn.) for the alleged Plaintiff Capital One Bank (USA) P.A.
Gurstel almost immediately petitioned the court for a hearing on a Summary Judgment.
I am not a legal guru, not even close. I did not have the money to pay an attorney for represent me against these money mongers.
I researched everything I could think of related to bad debt, Capital One Bank (USA), P.A., Gurstel Chargo, and tried to find sample pleadings.
Gurstel served me with S&C. I served my Answer within the 20 days. I did not hear from the attorneys and I regularly called our county civil filing and I was continually told that a case had not been filed yet. After several months, I stopped worrying.
On Feb. 13, 2010, I was served by mail another S&C which was the exact S&C I was served several months ago. Though I was not aware, MN. is one of the few states that allows “pocket lawsuits”.
I was served Interrogatories that I answered very generally and as quickly as possible.
The hearing the Motion for Summary was set for sometime the latter part of August.
I prepared some well researched Interrogatories. However, the attorneys did not need to answer the Interrogatories because the hearing was set for two weeks prior to the hearing.
I asked the judge for an extension of time–2 weeks, and I was advised that I had to call the attorneys. Though my husband suffered 4 heart attacks in the past 6 months, a broken hip, an infected knee scheduled for surgery, the Attorney Michal Johnson from the Gurstel law firm would NOT grant the extension of time. It was obviously to me that he denied my request because if he agreed to the extension of time, he would have to answer the Interrogatories which would prove that Capital One Bank (USA), P.A. was NOT the “real party in interest”. The account was sold and my information and & research supported the fact that Gurstel was the debt buyer of my account, so…the attorneys were representing themselves.
GURSTEL BUYS DEBT AND LISTS THE PLAINTIFF AS CAPITAL ONE. Poor Defendants generally don’t know much about debt collection and they get a default judgment and more money in their pockets.
If anyone is sued by Gurstel and lists Capital One Bank (USA), P.A. as the Plaintiff, be aware that Capital One is NOT the “real party of interest”. File your Answer within the 20 days allowed by law. Prepare and serve your Interrogatories on Gurstel before Gurstel filed the Interrogatories on you. After you serve the Interrogatories petition the Court for a hearing for Summary Judgment. You will have to move quickly. Use the Internet for good information, ask any attorney friends for advice. if you have the dollars, get an attorney or seek the help from an attorney group for low income residents.
BEAT GURSTEL!…and then share with others how you did it.
I don’t have the money, but I thought that I had to at least try, whether I lost or not. I lost but at least I knew I tried.
I did not get all my information for my “Response to the Motion for Summary Judgment” in document form. I showed up at the hearing, I admitted the account was mine (which I would not have had to do if I had filed my Response tothe Motion for Summary Judgemnt in a timely way.
There were a number of responses/statement made by Gurstel that had fraudulent intent but I just could not get the document completed without a two week extension of time. Gurstel knew I could prove my case. Attorney Michael Johnson, Gurstel firm, told me when I asked for a 2 week extension of time that it didn’t sound like I was busy on the day set for the hearing on the Motion for Summary Judgment. He was a jerk but in his defense, I have come to believe that all debt buyers and debt collectors are cold hearted jerks.
I may not be making sense but if anyone can learn anything from my experience, it would make me happy.
I would like to appeal but my husband is dying, has many doctors appointments, I am being threatened with foreclosure, so time is precious and I cannot afford to let myself get trapped in another war with Gurstel…I don’t have the time or resources. I was not able to find a pro-bono legal agency that was willing to help. I am 100% disabled, thus I am on a set income, and on that, I qualified for legal assistance. However, Legal Aid denied my request for help because they included the equity in my house to determine my whole net worth, which, apparently did not not their “low income” requirements.
Julie P.