Nowadays a plastic credit card is a widespread payment method all over the world. A profitable option allows you to use funds, which you, in fact, don’t obtain in reality. Still, before applying for a credit card figure out what kind of a card fits your credit history. According to the state of the credit history, financial experts identified two different types of the card – secured and unsecured.
A secured credit card got its name from security, which the lenders require. Secured credit cards are, basically, created for people with a bad credit history. Therefore, lenders need proof that a borrower will manage to pay off a debt. If you have a bad credit history and apply for a secured credit card, you will have to provide a lender with collateral.
Collateral acts like a deposit, which you also supply to your lender. Then a lender provides you with financial support equal to your deposit. Some financial bureaus will provide you with an amount of money, which is less than a deposit. Nevertheless, your regular payments can encourage a lender to increase a credit limit without increasing a deposit. You will get your deposit when you close your account.
Who Will Settle the Credit Card Debt for Me?
There exist certain debt settlement companies that can provide a credit card debt settlement. There are local and online companies and you can choose among both of them. Some people are cautious about online debt settlement companies. But believe, such companies will provide trustworthy services and help to deal with debt.
Still, you must remember that all companies will charge you a percentage of the enrolled debt (so-called percentage of the savings negotiated). Most of the fees such as Account maintenance fees are now forbidden. The amount of money, which the company charges, depends on your credit (the lower it is, the more you will give and the less you will receive).
So, there are different companies that deal with providing credit card debt settlement. You can apply to online or local specialists but pay attention to their professionalism. It’s better to check out reviews on their companies and ask someone, who has already applied to them.
How Many Credit Cards Should I Have?
There is no specific number of credit cards you should obtain. An average citizen has from 5 up to 10 credit accounts open. The number depends on the bank and on you. Some people tend to open up to 50 bank accounts while others are cautious about having multiple credit cards.
The number, especially, depends on your ability to manage your credit cards. If there is your first time applying for a loan, then one card will be enough. A person, who decided to establish a credit history, should also manage one credit card to avoid the risk.
Closing your credit accounts right after you pay off the debt can also be harmful to your credit history as when you apply for a loan you must provide proof of your creditworthiness. The valid accounts with a good payment history are supposed to increase your chances of getting a loan approved.
Multiple credit cards obtain different interest rates. If the difference between interest rates is large, you can transfer the funds to the credit card with a lower interest. Having multiple credit cards can affect your credit score up to 30%.