Secured cards are different than unsecured credit cards in that the card holder must provide a cash deposit into the card to be used as the credit limits. For instance, a secured credit card may require a $300 initial deposit. This $300 amount becomes the spending limit. Consumers spend against the credit limit and must replenish the account monthly in order to re-increase the credit limit.
Secured cards do not work the same. If you are interested in applying for a secured credit card, you have to do some research to ensure the card you choose is right for your financial situation VCC buy. The most important step to finding the right secured card is to ensure the credit card provider will report your activity to the credit bureaus. Not all providers will and if you use an unsecured credit card that does not help to improve your credit, your efforts have been wasted.
You also need to pay close attention to the fees and costs of the secured credit card. You may find that you may pay a higher fee for a secured card than for a traditional non-secured card. These higher rates may be something you cannot afford. Many providers institute these fees because without a credit history you are a risky proposition to their bottom line.
Interest rates should be considered. You may be depositing $300 into the card account but will be charged interest for your purchases and card use. Your initial deposit may not stretch as far as you would like.
When you apply for a credit card, it is common knowledge that issuers will utilize your credit score to determine your application approval and the subsequent interest rate you will pay on the card. It is smart to check your credit score before applying for a card to ensure you will get the best rates available. However, even with the best credit you may not be entitled to the best of everything else.
Financial experts are now advising consumers to pay more attention to the credit card providers who may be setting terms based on their own needs rather than as a reflection of your credit profile. Terms such as late fees, interest rates, and default consequences may not be what you has hoped despite good credit.
Since the regulations involving banks and credit providers have changed, companies need to make up for lost profits which are the result of these changes in regulation. The company you deal with may actually be the one dictating how much you pay no matter what your credit profile says about you
Fees associated with credit cards will depend on the type of provider issuing the account. Typically, major banks and credit companies will charge the highest interest rates, late fees, and have stiffer default consequences. There may be lower fees associated with credit cards offered by credit unions but it is up to the consumer to do some research before committing to a card. Be sure to understand the terms and conditions for late payments and other associated fees before agreeing to open an account.
In general, credit companies that are most likely to charge the higher fees are the same companies that continually send out their promotional deals in the mail. If you notice that one or two companies have a tendency to mail you once a week with their latest offerings, there is a good chance they will also be the company to impose the stiffest fees and be very aggressive about collecting late payments.
American express introduced the “Black Card” back in 1999. This seems like a relatively short time on the market, given how ubiquitous the Centurion now is, and it’s probably due to that fact that rumors of this card date back to the 1980s. This card is arguably the most internationally recognized signs of luxury, prestige, and exclusivity. The success of the Centurion is due, not just to its distinctive black appearance, but to its construction as well. American Express began the practice of minting exclusive credit cards out of something other than plastic, and it started with the Centurion (which is made from titanium). The card seems relatively “cool” already, but if you want the chance to tote your own “Black Card” you may have to wait awhile: they’re offered through invitation only (to current American Express cardholders who spend at least $250,000 annually). This is a charge card, so the balance must be paid in full, and no interest is assessed. However, the annual fee is $2,500 (plus an initial set-up fee of $5,000). And what perks do you earn? Pretty impressive ones like a personal 24-hour concierge, amazing travel benefits, like rewards, travel discounts, airfare and upgrades and companion tickets, entrance to airport lounges, a personal shopper, and the opportunity to be included in selective programs, etc. Although this card is expensive to own, the perks are impressive and nothing says luxury credit card like Centurion.
Upon first glance at these different tier credit cards, you might not be able to tell exactly what sets them apart, and this is understandable. Take the Westpac Earth card, for example. The standard card, the gold card and the platinum card all feature the same 19.99% p.a. purchase rate, the same 21.49% p.a. cash advance rate and an identical balance transfer offer. So, if you were to look no further, you would just think it was a matter of pretty colors.
However, a closer glance will reveal that there are differences and they are quite significant. First of all, the credit limit differs quite a bit. Of course, just because you want to get a higher credit limit, that doesn’t mean you can as the higher up you go, the stricter the conditions for approval are. Generally, you will find that as you go up in tiers, each of these credit cards requires you to have a higher level of annual income and a gold card or a platinum card usually demand a spotless credit history.
Prior to American Express Centurion, one of the most exclusive credit cards on the market was the Platinum Card. This prestigious card has a more reasonable fee ($450) than Centurion, but tends to be comparable compared to the other options on this list. And while people in the know will immediately recognize the prestige inherent in owning this card, it doesn’t scream “luxury”, and is made from plastic like most credit cards. One of the best kept secrets is that the benefits are nearly identical to those offered by the Centurion card. With the Platinum Card you’ll receive 24-hour personal concierge service, be enrolled in the American Express rewards program (plus an extra 25,000 points the first year), travel rewards, companion airfare, airport lounges, a $200 airline credit, and Global Entry (this lets you skip U.S. Customs lines). You can see how this credit card pays for itself if you use it for all your purchases. Ultimately, this card is not the most exclusive luxury credit card on the block, but you get a lot of rewards for a reasonable price.