In our current technologically advanced society it is almost required for you to have a credit card or debit card with a Visa or MasterCard logo.
Without one you are in a vulnerable position because you do not have the same purchasing power.
Their are many transactions that require a Visa or MasterCard such as; car rental, phone purchases, online purchases, hotel accommodations, even buying gas at the pump, and the list goes on.
Just because you have had some trouble with your finances does not sentence you to a life of lesser purchasing power. In truth their are many options that will provide you with the same purchasing power and without outrageous fees.
However use caution and make sure you read the fine print.
There are a variety of card options to choose from …
1. Unsecured – this is a regular credit card. Your limit will be around $300 and you will have monthly payments. This card can be used to help your credit history.
It will carry the most weight because it is a revolving line of unsecured credit. That simply means that you have monthly payments and you have only promised to pay back on the line of credit.
The drawbacks to these cards are there are some very expensive upfront fees. We have seen fees as high as $176.31 on a credit card with a $300 credit limit, and these fees are charged upfront.
Meaning when you get your first statement you will already have a balance that you must pay. Additionally these cards carry high interest rates often around 20%.
2. Secured – These cards act the same way, however you must make a deposit into a bank account which secures the credit line you are given on the card. You will still be required to make monthly payments.
Your deposit securing your line of credit will earn interest, is FDIC insured, and will be refunded assuming you do not default on your secured credit card.
Additionally the amount of your deposit will be equal to the line of credit on your card. The amount you can deposit typically ranges from $500 – $5,000.
3. Prepaid – With these cards you must first deposit money and then you can use your card to make purchases. It works just like a major debit card and will be issued as a Visa or MasterCard.
You can use your card to make purchases online and over the phone, rent a car, pay at the pump for gas, book travel accommodations, …
These prepaid cards typically carry a monthly fee often around $10. They usually offer direct deposit and a way to pay your bills without purchasing money orders. This can help save you hundreds of dollars annually.
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