TRYING TO REBUILD YOUR CREDIT HISTORY?
TRYING TO REBUILD YOUR CREDIT HISTORY?
Be On The Lookout For These Shameful Scams
Copyright 2005 Money and Credit Information
Trying to rebuild your credit history is an uphill battle as it is. Regaining that financial freedom that might have seemed as an impossibility can be done, and you’re willing to try everything that you could to achieve this. You should be applauded, dear friend. Such is a really courageous stand. Sadly, there are many scrupulous entities who wish to take advantage of you during this difficult period of yours. Knowing how to determine these devious schemes could help you a lot in your trek to financial liberation.
Let’s take a look at the more famous, or infamous, of these pitiable scams.
Catalog Clubs Disguised As ‘Credit Cards’ For People With Bad Credit.
There are some “alleged” credit cards that promote themselves to alleviate your financial burdens if you’d only purchase from their catalogs. But the products in the catalogs are often overpriced, and you can’t use the ‘credit card’ anywhere else. While they will make reports to credit card companies with your balance and payment history which will help to repair bad credit, it can be a very expensive way to acquire goods and clear up your credit history.
Prepaid ‘Credit Cards’ To Help People Repair Bad Credit.
This is the mother of all misnomers. Technically, prepaid credit cards are not credit cards, though they may bear a Visa or MasterCard logo. They’re more like debit cards, without a bank account. The purchaser ‘loads’ the card with a deposit, usually with a minimum of $20 and a maximum of $500 to $5000. When you use the credit card to make a purchase, the amount of the purchase is deducted from your balance. When the balance reaches $0, you can’t use the card until it is reloaded.
Though you can reload the card at any time, there is usually an upper limit to the amount of cash that the card can carry at any one time. So basically, there can be no “credit” in these alleged credit cards because the amount has been paid beforehand.
Secured Credit Card - The Best Option For People With Bad Credit.
A secured credit card is one of the best options for people who’ve failed to get the approval for a standard credit card. Your approval for credit is contingent upon a deposit in the credit card company’s bank. Your initial credit limit is usually the amount of your deposit. As you make payments on time, the credit card company may increase your credit limit to 150% or 200% of your security deposit.
Unlike a prepaid card, where you are actually spending your own money when you make a purchase, with a secured credit card you are buying on credit and reestablishing your credit history. The security deposit is only touched if you default on payments. Be sure to check around for the best interest rates, as they can vary widely.
There are more of these misleading scams that would prey on you during your period of rebuilding your credit history. But you have the power to disallow them from taking advantage of you! Do your due diligence with every option that comes your way. You’d then be able to distinguish the rotten apples from the real gems.
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