credit report - 5 Things to Know Before You Apply for a Prepaid Credit Card

The benefits from owning and using credit cards are obvious. The shopping experience is enhanced as cash is no longer required to pay for our purchases. Internet shopping is an ease as we shop at home, just with our credit cards by our side. However, the challenge is when you don't have a credit record, or if your credit report looks bad. Credit card companies are sticky when it comes to evaluating an individual's credit risk to them. In this sense, getting a prepaid credit card would be a better option for you to enjoy the convenience of credit cards regardless of your credit status. Nevertheless, before you submit your credit card application, there are a few aspects of prepaid credit cards that you should learn about. How do prepaid credit cards work? Although labeled as a credit card, prepaid credit cards function more like debit cards. You will need to place a deposit into your credit card account before you can start charging your expenses to it. In this sense, your deposit amount is also your credit, so it is unlikely that you will spend more than what you can afford. The fact that they are backed by major credit card names such as MasterCard and Visa provides them with the security and benefits of any standard credit card. Loading limitations One of the disadvantages of prepaid credit cards is that limitations may be imposed by the credit card companies on the maximum amount of deposits that can be loaded into your credit card account. Thus, this becomes a limitation on the amount that you can actually charge to your card, even though you can truly afford it. No interest charges and escalating debt Interest charges are not applicable for prepaid credit card due to the simple fact that you don't actually owe the credit card company anything. All charges to your card are money that you already have, as the credit card company is not extending a credit line to you. Therefore, you won't be charged interests on your purchases and also will not be caught in a web of escalating debt. Service and set up charges With no interests chargeable to you, credit card companies compromise by imposing other types of charges which are not applicable for standard credit cards. These would include charges for loading your card, monthly membership fees, set up fees or even purchase fees. All of these charges may become quite substantial which increases your cost of using prepaid credit cards. Enhancing your credit record As certain credit card companies report your usage and payment history to the credit bureau, having a prepaid credit card can actually help you rebuild a good credit record. With this, you can then revert to a standard credit card after a period of good standing. Alan Bernstein recommends Find Credit Cards to apply for a prepaid credit card today. Article Source:http://EzineArticles.com/?expert=Alan_Bernstein credit report - Avoid False Promises of Credit Repair Companies If it sounds unlikely to be true, it probably is. This rule holds true even when it comes to credit repair. More often than not, the promises of certain credit repair companies to help clean up your credit history are completely false. Here are some of the things they will ask you to do in order to 'repair' your credit: Get a new identity Some companies will try to get you to create another identity - one with no bad history - as a means to clear all your bad credit history. Not only is this impossible, it is also against the law to have another social security number to your name. Submit incorrect information Rather than work on your bad history, these companies insist that you submit incorrect information pertaining to your purchases. This is so that you can dispute the information or get the company to 'correct' certain bad histories to make your credit report look better. Technically, it is a good idea but in reality, you are committing fraud. Pay them to get you your credit report Under certain circumstances, you are able get a free credit report without having to pay a credit repair company for it. If you are denied the application for a credit card, you can ask for your credit report within 60 days for free. In the event that you spot a mistake within the report, you have the rights to contact both the reporting company as well as the information provider for a dispute. An investigation will ensue and within a month, the problem will be rectified - all without a fee. Payment first, service comes later In reality, no individual or agency can legally rid your credit report of any bad history. Some companies will ask for payment from you to help clear up incorrect information, which can be done by yourself for free. Others will ask you to send them checks so they can handle the 'payments' for you, then vanish into thin air months later. Regardless of the reasons they give you, if you do not receive your 'goods' upon payment, they have committed an offence, punishable by law.