4 Secured Credit Cards That Offer Rewards

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Consumers with poor or nonexistent credit should consider secured credit cards for their spending and credit-building needs. Secured cards have looser credit restrictions and require a security deposit up front to open, but otherwise they operate like traditional credit cards.

With secured cards, your poor or limited credit history won’t necessarily keep you from earning rewards. While most secured credit cards are no-frills affairs, some do offer spending incentives.

Here are four secured credit cards with real rewards.

1. SKYPASS Visa Secured Card

Rewards: One mile for every dollar spent on eligible purchases.

Sign-Up Bonus: 5,000 SKYPASS bonus miles upon your first purchase.

Annual Fee: $50

APR:Variable 17.24% on purchases and balance transfers.

Why We Picked It: Cardholders can earn miles with select airlines.

Benefits: Every purchase earns one SKYPASS mile per dollar. You’ll get 5,000 bonus miles right out of the gate and 1,000 bonus miles every year upon renewal. Points can be redeemed for flights and upgrades with SkyTeam partners—including Delta, Korean Air, and Air France—or for other travel expenses.

Drawbacks: There’s a $50 annual fee, and miles are limited to twenty participating airlines.

2. Best Western Rewards Secured Mastercard

Rewards: Thirteen points for every dollar spent on Best Western stays; two points for every dollar spent on other purchases.

Sign-Up Bonus: 5,000 bonus points upon your first purchase.

Annual Fee: $29

APR:Variable 21.99% on purchases and balance transfers.

Why We Picked It: Frequent Best Western guests can earn points for future reservations and more.

Benefits: Cardholders earn thirteen points per dollar on Best Western stays, with ten points through the Best Western Rewards program and three points for using your card. All other purchases earn double points. Points can be redeemed for Best Western stays, gift cards, merchandise, and more.

Drawbacks: If you aren’t a loyal Best Western guest, this card isn’t for you. 

3. Navy Federal nRewards Secured Credit Card

Rewards: One point per dollar spent on all purchases.

Sign-Up Bonus: None

Annual Fee: $0

APR:Variable 9.99% to 18% on purchases and balance transfers.

Why We Picked It: Navy Federal members can earn points for goodies.

Benefits: All purchases earn one point. Points can be redeemed for gift cards or merchandise.

Drawbacks: You must be a Navy Federal member to access this card. Points expire after four years.

4. AeroMexico Visa Secured Card

Rewards: Two miles for every dollar spent on gas and groceries; one mile for every dollar spent on everything else.

Sign-Up Bonus: 5,000 bonus miles and a companion flight certificate with your first purchase.

Annual Fee: $0 the first year, then $25.

APR: Variable 23.99% on purchases and balance transfers.

Why We Picked It: Frequent AeroMexico flyers can enjoy the miles earned with this card.

Benefits: Gas and grocery purchases earn double miles, and all other purchase earn single miles. Your first purchase earns 5,000 bonus miles and a companion certificate. Plus, you’ll get an additional $99 companion certificate each year you renew.

Drawbacks: If you don’t fly AeroMexico, you won’t see much value in this card.

Choosing a Secured Credit Card with Rewards

Because secured credit cards are primarily intended for consumers with poor or nonexistent credit, building credit should be your primary goal. Rewards should be a secondary concern.

Pay close attention to the fees and APR associated with any cards you’re considering. Annual fees and interest can eat into the overall value of earned rewards.

You’ll also want to evaluate security deposit policies. Many secured credit cards can be opened with as little as $200, and the credit limit will equal your deposit. Some cards may increase your credit limit without requiring an additional deposit after a period of timely payments and responsible card use.

When it comes to rewards, choose a card that rewards your specific spending habits and provides redemption options you’ll actually use.

What Credit Is Required to Get a Secured Credit Card?

Secured credit cards are generally available to consumers with poor or nonexistent credit history, but that doesn’t mean approval is guaranteed. To increase your chances of approval, you should check your credit score before you apply to make sure you meet the requirements. You can check your credit report for free at Credit.com.

Image: istock

At publishing time, the Discover it Secured Credit Card is offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Source: credit.com

Part 4 – Credit Scores Broken Down – Proper Mix of Credit – Credit Absolute, How Credit Scores Work

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In the 4th video of the YouTube series which discusses how credit scores are broken down, Derick Vogel explains the “mix of credit” component that makes up a portion of your total credit score.

Having a proper mix of credit makes up just 10% of your total credit score, which is worth 55 points, but is still important when trying to achieve an 800+ score. As mentioned in previous videos, when looking at individuals with scores above 800, it’s important to look at every aspect of your credit score, even if it doesn’t seem like it would make much of an impact. Having the proper mix of credit, for instance, is one of those items you don’t want to ignore simply because it has a smaller impact than other areas.

What Makes a Proper Mix of Credit

Now, when it comes to having a proper mix of credit, which looks at different types of credit, you don’t just want to go out and get loans and credit cards just for the sake of mixing it up. A lot of this will happen naturally over time. Having a proper mix of credit would include having a car loan, a mortgage, credit cards, and charge cards, for instance. Keeping these different types of accounts open will help maintain a proper mix of credit which will help to increase your credit score.

Credit cards, for example, are one of the easiest ways to maintain a good mix. If you can keep 2 or 3 credit cards open at all times and also open a charge card – a card that must be paid off each statement – in addition to having an installment loan open, such a car loan, you will have a good mix of credit. Now, you don’t have to excessively use any of those cards. Simply keeping small balances on each and paying them down each month is enough to keep them active on your credit report and help provide positive credit history.

Installment Loans

Many people have the idea that paying off an installment loan, such as a car loan, quicker will help improve their credit score but it doesn’t. Making extra payments or paying more than the minimum to pay it off sooner won’t help your credit score. While you have the loan open and you’re making payments on time each month, you’re building positive credit history. Once you pay off that loan, that loan stops contributing to your credit history and mix of credit. So, there’s no benefit to paying it off early, when it comes to your credit score.

One thing to be aware of in regard to installment loans is that, when first opened, they may initially hurt your credit score. This is because, with an installment loan, you’re receiving a large amount of credit upfront which you then slowly pay off. This adds a lot of debt to your credit report which will have a negative impact initially. That being said, once you begin making on-time payments you’ll start building positive credit history which evens it out. So, just know that you may see a dip in your credit score when you first take out an installment loan before it begins to climb.

Credit Cards

As previously mentioned, credit cards are an important part of a proper mix of credit because they are usually easier to maintain without the large financial burden that an installment loan may bring. Ideally, you’ll want to have at least 2 or 3 credit cards open at times. You should maintain a balance under 10% of the limit on each.

Most importantly, never close a credit card, even if you don’t need it anymore. Once you close a card it stops building credit history and your total credit limit goes down. For instance, if you have a card with a $2,000 limit and you close it, your credit limit overall goes down by $2,000 which hurts your utilization (your balance to limit ratio). So, if you prefer not to use a card, just keep it open and simply use it every few months on small purchases which you can then pay off immediately.

Finally, if you have any questions about maintaining a proper mix of credit or have other questions about your credit score, please give us a call today. 

Source: creditabsolute.com

Petal 1 Credit Card Review – Earn Rewards With No Annual Fee

Advertiser Disclosure: This post includes references to offers from our partners. We receive compensation when you click on links to those products. However, the opinions expressed here are ours alone and at no time has the editorial content been provided, reviewed, or approved by any issuer.

The Petal® 1 “No Annual Fee” Visa® Credit Card is an unsecured credit card designed to help new-to-credit consumers build credit. It’s also appropriate for applicants in the midst of rebuilding credit.

Petal 1’s nonexistent annual fee is just the beginning. As one of the best secured credit card alternatives on the market, Petal 1 has a seamless application process and a host of additional features, perks, and capabilities worth mentioning.

If you’re looking for a new entry-level credit card that doesn’t require a security deposit and won’t penalize you for a complicated credit history[1], you owe it to yourself to take a closer look.

Key Features

These are the most important features of the Petal 1 card, a rewards credit card from one of the most innovative credit card issuers around.

Earning Rewards

Earn between 2% and 10% cash back on eligible purchases from select merchants. Once earned, cash back doesn’t expire as long as your account remains open and in good standing.

Redeeming Rewards

Redeem in any amount for a statement credit or for a paper check once your cash-back rewards balance hits $20 (the minimum check amount is $20).

Credit Limit

Depending on your income, creditworthiness (possibly based on your FICO credit scores from the three major credit bureaus), and other factors, your initial credit limit could be as low as $500 or as high as $5,000.

If you’re still building credit and have a complicated credit history, you can still apply for Petal 1.

Important Fees

Petal 1 does not charge an annual fee or fee for international transactions (foreign transaction fees). Possible fees include late fees up to $29 for the first late payment and $40 for any subsequent late payments, and a returned payment fee of $29.

Regular APR

The regular APR for purchases is 19.99% to 29.49%, depending on your creditworthiness, prevailing interest rates, and other factors.

Credit Bureau Reporting

Petal reports Petal 1 account information, including payment history, to all three major consumer credit reporting bureaus. This means responsible use of the card will be added to your credit history and may help to boost your credit score.

Additional Capabilities and Benefits

Additional Petal 1 capabilities and benefits include:

  • A mobile app that makes it easy to manage your funds, track spending, and automate payments on the go
  • Cash flow technology (cash score) that can help earn approval for new-to-credit applicants with bank accounts and adequate banking history
  • Get preapproval within minutes without impacting your credit score

Credit Required

The Petal 1 card is designed for cardholders with average credit (fair credit) as well as new-to-credit consumers with no credit histories and those in the process of rebuilding credit. It’s a suitable student credit card too.


Advantages

These are the Petal 1 card’s top advantages for cardholders.

  1. No Annual Fee. Petal 1 doesn’t charge an annual fee. That’s good news for frugal cardholders and a welcome contrast with some entry-level cards.
  2. No Security Deposit Required. Petal 1 doesn’t require a security deposit as a condition of account opening. This is a key distinction from secured cards, which appeal to the same audience as this one.
  3. Open to New-to-Credit Applicants. Thanks to an innovative underwriting process that considers cash flow and other noncredit factors, Petal 1 is appropriate for applicants without credit histories or with limited credit history.
  4. Ideal for Consumers Rebuilding Credit. Petal 1 may also be appropriate for consumers in the midst of rebuilding credit.
  5. Cash Back on Some Transactions. The Petal 1 card earns between 2% and 10% cash back on purchases with select merchants.
  6. No International Transaction Fee. Petal 1 doesn’t charge a fee for international transactions, so frequent international travelers can use it without fear of surcharges.
  7. Potential for Relatively High Credit Limits. Petal 1 offers credit limits between $500 and $5,000. That’s on the high side for an entry-level credit card.
  8. Regular Credit Bureau Reporting. Petal regularly reports account information to the three major consumer credit reporting bureaus. With timely repayments and responsible credit utilization, your Petal 1 card could help increase your credit score over time.

Disadvantages

Consider these drawbacks before applying for a Petal 1 card.

  1. Potential for High Regular APR. Petal 1’s maximum APR is on the high side. That’s a drawback for cardholders who plan to carry balances from month to month.
  2. No Cash Back on Most Transactions. Despite its attractive cash-back rate on certain partner purchases, Petal 1 doesn’t earn cash back on most transactions. That’s a problem for consumers looking for an everyday credit card that earns rewards.
  3. Credit Limits Capped at $5,000. Petal 1’s maximum credit limit could be problematic for higher-income cardholders.

Final Word

The Petal® 1 “No Annual Fee” Visa® Credit Card is a rarity in the world of entry-level credit cards: a no-annual-fee product that doesn’t require a security deposit and earns cash-back rewards on some transactions.

Although it does have some drawbacks, including the potential for a high APR, it’s a great option for millions of would-be cardholders in the process of rebuilding their credit — and millions more who’ve never had a credit card at all.

Source: moneycrashers.com

How to Get a Lower Interest Rate on Your Next Car

Whether you want to refinance your current loan for a newer car or get a good deal on your first car, getting approved for low APR financing saves you money. The world of Auto Financing is tricky and a good deal goes beyond bargaining on the sticker price.

Luckily, there are some approaches that can help you save thousands over the course of your car loan. To help you achieve this here is how to get a lower interest rate on your next car.

Getting a Low Car Loan Interest RateGetting a Low Car Loan Interest Rate

Start by Building Your Credit

Credit scores and loans go hand in hand. High scores attract low APRs while low scores get you high rates, and depending on how low yours are, you may end up not qualifying for the financing. To know where you stand, start by reviewing your credit report. This you can get from the major bureaus, at no cost once every year.

If the report gives your score at being below the “good” range, below 670 in the FICO model, then you need to hold your loan application and build up the score first. There is however no quick fixes when it comes to building credit. Here are some pointers:

Shop Around

Almost every bank and credit union offers auto financing. There also independent and direct renders such as CarsDirect and RoadLoans, who offer instant financing. The industry is however not standardized hence rates differ from a few to as much as ten percentage points.

Get the best deals by starting your shopping online. Compare rates and terms, and feel free to call and haggle for better rates.

Pro tip: To outdo a dealer or financier during negotiations is not an easy task. Start by approaching a lender for loan prequalification that is within your means. Use that document to get other lenders to lower their APR.    

Consider Refinancing

Refinancing involves having a new lender to offset your current loan for a new loan. This gives you the chance to haggle for lower rates and a shorter term. If done right, refinancing can see you save thousands of dollars, buy a new car from the surplus, pay off the loan quicker and settle for affordable monthly payments.

Pro tip: To get a sense of the advantages of refinancing or what to expect, check the facility through online calculators.

Go for Shorter Loan Terms

Low monthly payments are some of the inducements that lenders use to make you borrow more. Such payments are made possible by having the loan stretched over a long repayment period.

Long terms, however, translate to high interest on an aging car. When on the negotiating table ask for a short loan term and calculate the total interest due; don’t be blinded by low monthly payments.

Read before Signing

“The devil is in the details.” This is a saying that no lender will use in front of you. Reason being, it holds true on most financial and contractual agreements. Taking a loan is a huge commitment to your income and lifestyle. You should, therefore, be careful of what you sign.

It’s in the fine print that huge penalties and hidden charges can be hidden. It’s also possible for some good aspects of an oral agreement, such as low interest, to be voided in the legal jargon. With this mind, read the agreement and if possible have a lawyer friend assist you in understanding important points.

Do not Finance Add-ons

One crafty way dealers use to increase interest rates is by including add-ons on the car loan. These could come in terms of new rims, leather interiors, audio upgrades and so on.

When the dealer is explaining, add-ons will sound like “must-haves” with only a key detail missing- they will cost you far much more than they would if done in independent garages, after the sale.

The Takeaway

Getting low interest on a car loan requires due diligence on your part. It’s on you to ensure that your credit scores are above average. Learn about online platforms where you can compare, shop and negotiate loan particulars. Lastly, be ready to shop around and to bargain for better terms by arming yourself with everything you need to know; as outlined above.

Source: creditabsolute.com