In this post, let’s discuss pointers that you should consider before signing up for your first credit card:
Go with a low rate card. Interest rates on credit cards for students range from 15% to 35%. It’s best to find a low APR card for times when you need to carry over a balance. Watch out for cards with incredibly low variable rate as these are subject to change depending on the Prime Rate.
Is there an annual fee? Annual fees can cost you anywhere from $30 to $50 or more each year, depending on the card. Your best choice is a student credit card with a reasonable APR and no annual fee.
Start with a low limit. It is a good idea to start with a low credit line to help you exercise control over your spending. Since you do not have permanent employment yet, you can greatly reduce the risk of bad credit by watching your credit card usage.
Credit reporting. Make sure that your chosen college credit card comes with credit reporting. Take note that some Issuers may not report payments to the three major credit bureaus. This is a crucial provision that you should look for when applying for a credit card.
Fraud liability protection. Choose a credit card that comes with a $0 fraud liability guarantee. This guarantee will protect you in case of unauthorized charges in your account. With this in mind, carefully your monthly billing statements before submitting payment to make sure that you’re not paying charges that are not yours.
What about rewards? A student reward credit card can be a great option if the type of reward matches with your lifestyle. However, student credit cards with rewards usually require good credit so you need to have established credit history in order to get one.
Furthermore, you may find that the interest rate and the fees are higher than a non-rewards credit card. If you decide to apply for a rewards student credit card, do your best to avoid the interest rate and late penalty costs by submitting full payment on time at all times.
Read the fine print. Before submitting your application, carefully read the fine print to make sure that there are no hidden fees or unfair terms associated with your student credit card.
Thursday, February 25, 2010
Easy Steps When Applying For A Student Credit Card
If you are planning to apply for a student credit card, this is the best time to do so. Students have a few months left to get credit cards before the New Laws take effect on February 22, 2010. Although a student can still apply for a credit card, it would be more difficult for them especially if they are just 18 to 21 years old. The New Credit Card Law prohibits credit card companies to market on campuses or 1000 feet within any campus or school sponsored.
The following are 3 easy steps on how to apply for a student credit card:
Shop and Compare. There are some credit card companies setting up tables and booths at college fairs. This is a great opportunity for you to shop for possible options. You can also search the web. Most credit card companies offer online applications. This makes the application process easier and faster. . Look for a student credit card with lower interest rates and fees.
Choose the Best. Never grab the first offer that you encounter. It is best to seek your parents’ opinion regarding which is best for you. Not every credit card is the same. Some will offer lower interest rates, others will have better terms.
Check which one offers low interest rates and longer grace period (this is the amount of time you have to submit your payment before incurring the interest rate fee . It is also important to choose a credit card with no annual fee and lower fees (i.e. late payment fees etc.)
Apply. This part is simple. Once you are decided, just fill out the application- it can either be on paper or online. Most companies will ask for the following information:
Full name of the Applicant
Applicant’s Permanent Address and Phone Number
Your Birth Date
Applicant’s School, School’s Address
Your Enrollment Status
Your Year of Graduation
Maiden Name of the Applicant’s Mother
The reason why your mother’s maiden name is asked is because this detail is used by the company to verify your identity.
There are also instances wherein you will be asked about information regarding your bank accounts and employment (if applicable). If you are currently employed or you have existing savings accounts in the bank, there is a possibility that you will be given a higher line of credit. This is also possible for students with summer jobs.
Keep in mind that a student credit card is one way to show how responsible you are in managing your finances and spending. Always submit your payments on time. Student credit cards are great tools to build your credit history, as long as you can keep up with your payments.
The following are 3 easy steps on how to apply for a student credit card:
Shop and Compare. There are some credit card companies setting up tables and booths at college fairs. This is a great opportunity for you to shop for possible options. You can also search the web. Most credit card companies offer online applications. This makes the application process easier and faster. . Look for a student credit card with lower interest rates and fees.
Choose the Best. Never grab the first offer that you encounter. It is best to seek your parents’ opinion regarding which is best for you. Not every credit card is the same. Some will offer lower interest rates, others will have better terms.
Check which one offers low interest rates and longer grace period (this is the amount of time you have to submit your payment before incurring the interest rate fee . It is also important to choose a credit card with no annual fee and lower fees (i.e. late payment fees etc.)
Apply. This part is simple. Once you are decided, just fill out the application- it can either be on paper or online. Most companies will ask for the following information:
Full name of the Applicant
Applicant’s Permanent Address and Phone Number
Your Birth Date
Applicant’s School, School’s Address
Your Enrollment Status
Your Year of Graduation
Maiden Name of the Applicant’s Mother
The reason why your mother’s maiden name is asked is because this detail is used by the company to verify your identity.
There are also instances wherein you will be asked about information regarding your bank accounts and employment (if applicable). If you are currently employed or you have existing savings accounts in the bank, there is a possibility that you will be given a higher line of credit. This is also possible for students with summer jobs.
Keep in mind that a student credit card is one way to show how responsible you are in managing your finances and spending. Always submit your payments on time. Student credit cards are great tools to build your credit history, as long as you can keep up with your payments.
Friday, February 19, 2010
credit card Profits and losses
In recent times, credit card portfolios have been very profitable for banks, largely due to the booming economy of the late nineties. However, in the case of credit cards, such high returns go hand in hand with risk, since the business is essentially one of making unsecured (uncollateralized) loans, and thus dependent on borrowers not to default in large numbers.
Credit history
The way credit card owners pay off their balances has a tremendous effect on their credit history. Two of the most important factors reported to a credit bureau are the timeliness of the debt payments and the amount of debt to credit limit. Lenders want to see payments made as agreed, usually on a monthly basis, and a credit balance of around one-third the credit limit. The credit information stays on the credit report generally for 7 years. However, there are a few jurisdictions and situations where the timeframe might differ.
Credit card security problems and solutions
Credit card security relies on the physical security of the plastic card as well as the privacy of the credit card number. Therefore, whenever a person other than the card owner has access to the card or its number, security is potentially compromised. Once, merchants would often accept credit card numbers without additional verification for mail order purchases. It's now common practice to only ship to confirmed addresses as a security measure to minimise fraudulent purchases. Some merchants will accept a credit card number for in-store purchases, whereupon access to the number allows easy fraud, but many require the card itself to be present, and require a signature. A lost or stolen card can be cancelled, and if this is done quickly, will greatly limit the fraud that can take place in this way. For internet purchases, there is sometimes the same level of security as for mail order (number only) hence requiring only that the fraudster take care about collecting the goods, but often there are additional measures. European banks can require a cardholder's security PIN be entered for in-person purchases with the cardThe PCI DSS is the security standard issued by The PCI SSC (Payment Card Industry Security Standards Council). This data security standard is used by acquiring banks to impose cardholder data security measures upon their merchants.
Most internet fraud is friendly fraud. The rest is done through the use of stolen credit card information which is obtained in many ways, the simplest being copying information from retailers, either online or offline. Despite efforts to improve security for remote purchases using credit cards, systems with security holes are usually the result of poor implementations of card acquisition by merchants. For example, a website that uses SSL to encrypt card numbers from a client may simply email the number from the webserver to someone who manually processes the card details at a card terminal. Naturally, anywhere card details become human-readable before being processed at the acquiring bank, a security risk is created. However, many banks offer systems where encrypted card details captured on a merchant's web server can be sent directly to the payment processor.
controlled payment number which are used by various banks such as Citibank (Virtual Account Numbers), Discover (Secure Online Account Numbers, Bank of America (Shop Safe), 5 banks using eCarte Bleue and CMB's Virtualis in France, and Swedbank of Sweden's eKort product are another option for protecting one's credit card number. These are generally one-time use numbers that front one's actual account (debit/credit) number, and are generated as one shops on-line. They can be valid for a relatively short time, for the actual amount of the purchase, or for a price limit set by the user. Their use can be limited to one merchant if one chooses. The effect of this is the users real account details are not exposed to the merchant and its employees. If the number the merchant has on their database is compromised, it would be useless to a thief after the first transaction and will be rejected if an attempt is made to use it again.
The same system of controls can be used on standard real plastic as well. For example if a consumer has a chip and pin (EMV) enabled card they can limit that card so that it be used only at point of sale locations (i.e restricted from being used on-line) and only in a given territory (i.e only for use in Canada). This technology provides the option for banks to support many other controls too that can be turned on and off and varied by the credit card owner in real time as circumstances change (i.e, they can change temporal, numerical, geographical and many other parameters on their primary and subsidiary cards). Apart from the obvious benefits of such controls: from a security perspective this means that a customer can have a chip and pin card secured for the real world, and limited for use in the home country assuming it is totally chip and pin. In this eventuality a thief stealing the details will be prevented from using these overseas in non chip and pin (EMV) countries. Similarly the real card can be restricted from use on-line so that stolen details will be declined if this tried. Then when card users shop online they can use virtual account numbers. In both circumstances an alert system can be built in notifying a user that a fraudulent attempt has been made which breaches their parameters, and can provide data on this in real time. This is the optimal method of security for credit cards, as it provides very high levels of security, control and awareness in the real and virtual world. Furthermore it requires no changes for merchants at all and is attractive to users, merchants and banks, as it not only detects fraud but prevents it.
The Federal Bureau of Investigation and U.S. Postal Inspection Service are responsible for prosecuting criminals who engage in credit card fraud in the United States, but they do not have the resources to pursue all criminals. In general, federal officials only prosecute cases exceeding US $5,000 in value. Three improvements to card security have been introduced to the more common credit card networks but none has proven to help reduce credit card fraud so far. First, the on-line verification system used by merchants is being enhanced to require a 4 digit Personal Identification Number (PIN) known only to the card holder. Second, the cards themselves are being replaced with similar-looking tamper-resistant smart cards which are intended to make forgery more difficult. The majority of smart card (IC card) based credit cards comply with the EMV (Europay MasterCard Visa) standard. Third, an additional 3 or 4 digit Card Security Code (CSC) is now present on the back of most cards, for use in "card not present" transactions. See CVV2 for more information. Stakeholders at all levels in electronic payment have recognized the need to develop consistent global standards for security that account for and integrate both current and emerging security technologies. They have begun to address these needs through organizations such as PCI DSS and the Secure POS Vendor Alliance.
Most internet fraud is friendly fraud. The rest is done through the use of stolen credit card information which is obtained in many ways, the simplest being copying information from retailers, either online or offline. Despite efforts to improve security for remote purchases using credit cards, systems with security holes are usually the result of poor implementations of card acquisition by merchants. For example, a website that uses SSL to encrypt card numbers from a client may simply email the number from the webserver to someone who manually processes the card details at a card terminal. Naturally, anywhere card details become human-readable before being processed at the acquiring bank, a security risk is created. However, many banks offer systems where encrypted card details captured on a merchant's web server can be sent directly to the payment processor.
controlled payment number which are used by various banks such as Citibank (Virtual Account Numbers), Discover (Secure Online Account Numbers, Bank of America (Shop Safe), 5 banks using eCarte Bleue and CMB's Virtualis in France, and Swedbank of Sweden's eKort product are another option for protecting one's credit card number. These are generally one-time use numbers that front one's actual account (debit/credit) number, and are generated as one shops on-line. They can be valid for a relatively short time, for the actual amount of the purchase, or for a price limit set by the user. Their use can be limited to one merchant if one chooses. The effect of this is the users real account details are not exposed to the merchant and its employees. If the number the merchant has on their database is compromised, it would be useless to a thief after the first transaction and will be rejected if an attempt is made to use it again.
The same system of controls can be used on standard real plastic as well. For example if a consumer has a chip and pin (EMV) enabled card they can limit that card so that it be used only at point of sale locations (i.e restricted from being used on-line) and only in a given territory (i.e only for use in Canada). This technology provides the option for banks to support many other controls too that can be turned on and off and varied by the credit card owner in real time as circumstances change (i.e, they can change temporal, numerical, geographical and many other parameters on their primary and subsidiary cards). Apart from the obvious benefits of such controls: from a security perspective this means that a customer can have a chip and pin card secured for the real world, and limited for use in the home country assuming it is totally chip and pin. In this eventuality a thief stealing the details will be prevented from using these overseas in non chip and pin (EMV) countries. Similarly the real card can be restricted from use on-line so that stolen details will be declined if this tried. Then when card users shop online they can use virtual account numbers. In both circumstances an alert system can be built in notifying a user that a fraudulent attempt has been made which breaches their parameters, and can provide data on this in real time. This is the optimal method of security for credit cards, as it provides very high levels of security, control and awareness in the real and virtual world. Furthermore it requires no changes for merchants at all and is attractive to users, merchants and banks, as it not only detects fraud but prevents it.
The Federal Bureau of Investigation and U.S. Postal Inspection Service are responsible for prosecuting criminals who engage in credit card fraud in the United States, but they do not have the resources to pursue all criminals. In general, federal officials only prosecute cases exceeding US $5,000 in value. Three improvements to card security have been introduced to the more common credit card networks but none has proven to help reduce credit card fraud so far. First, the on-line verification system used by merchants is being enhanced to require a 4 digit Personal Identification Number (PIN) known only to the card holder. Second, the cards themselves are being replaced with similar-looking tamper-resistant smart cards which are intended to make forgery more difficult. The majority of smart card (IC card) based credit cards comply with the EMV (Europay MasterCard Visa) standard. Third, an additional 3 or 4 digit Card Security Code (CSC) is now present on the back of most cards, for use in "card not present" transactions. See CVV2 for more information. Stakeholders at all levels in electronic payment have recognized the need to develop consistent global standards for security that account for and integrate both current and emerging security technologies. They have begun to address these needs through organizations such as PCI DSS and the Secure POS Vendor Alliance.
credit card features
As well as convenient, accessible credit, credit cards offer consumers an easy way to track expenses, which is necessary for both monitoring personal expenditures and the tracking of work-related expenses for taxation and reimbursement purposes. Credit cards are accepted worldwide, and are available with a large variety of credit limits, repayment arrangement, and other perks (such as rewards schemes in which points earned by purchasing goods with the card can be redeemed for further goods and services or credit card cashback).
Some countries, such as the United States, the United Kingdom, and France, limit the amount for which a consumer can be held liable due to fraudulent transactions as a result of a consumer's credit card being lost or stolen.
Some countries, such as the United States, the United Kingdom, and France, limit the amount for which a consumer can be held liable due to fraudulent transactions as a result of a consumer's credit card being lost or stolen.
Prepaid "credit" cards
A prepaid credit card is not a credit card, since no credit is offered by the card issuer: the card-holder spends money which has been "stored" via a prior deposit by the card-holder or someone else, such as a parent or employer. However, it carries a credit-card brand (Visa, MasterCard, American Express or Discover) and can be used in similar ways just as though it were a regular credit card.
After purchasing the card, the cardholder loads the account with any amount of money, up to the predetermined card limit and then uses the card to make purchases the same way as a typical credit card. Prepaid cards can be issued to minors (above 13) since there is no credit line involved. The main advantage over secured credit cards (see above section) is that you are not required to come up with $500 or more to open an account. With prepaid credit cards you are not charged any interest but you are often charged a purchasing fee plus monthly fees after an arbitrary time period. Many other fees also usually apply to a prepaid card
Prepaid credit cards are sometimes marketed to teenagers for shopping online without having their parents complete the transaction.
Because of the many fees that apply to obtaining and using credit-card-branded prepaid cards, the Financial Consumer Agency of Canada describes them as "an expensive way to spend your own money". The agency publishes a booklet, "Pre-paid cards", which explains the advantages and disadvantages of this type of prepaid card.
After purchasing the card, the cardholder loads the account with any amount of money, up to the predetermined card limit and then uses the card to make purchases the same way as a typical credit card. Prepaid cards can be issued to minors (above 13) since there is no credit line involved. The main advantage over secured credit cards (see above section) is that you are not required to come up with $500 or more to open an account. With prepaid credit cards you are not charged any interest but you are often charged a purchasing fee plus monthly fees after an arbitrary time period. Many other fees also usually apply to a prepaid card
Prepaid credit cards are sometimes marketed to teenagers for shopping online without having their parents complete the transaction.
Because of the many fees that apply to obtaining and using credit-card-branded prepaid cards, the Financial Consumer Agency of Canada describes them as "an expensive way to spend your own money". The agency publishes a booklet, "Pre-paid cards", which explains the advantages and disadvantages of this type of prepaid card.
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