Credit Universe

Sadly, Visa is now accepted in more places than cash. Millions of credit cards are being used daily for purchases. Visa, MasterCard, %26 AMEX, are in just about every household worldwide and the trend is not going to die anytime soon.

There are people though who do not have the means to obtain a regular credit card, be it a lack of credit in general or too much bad credit combating the application process. Here, a secured credit card can come into play as an asset to building your credit rating and history.

A secured card works just like a regular credit card with the exception of having to deposit your own funds initially to open the account and utilize as available credit. Some banks require a minimum amount be deposited to obtain a secured credit card while other banks simply do not offer the option. The average deposit requirement ranges between $200 – $500. Whatever amount you decide to deposit will be the available spending amount for the secured credit card.

Just like a regular credit card, a payment is due each billing cycle and interest fees are applied to purchases and cash advances as applicable. Yes, this means you will be paying interest to spend your own money. While this may seem asinine, for some consumers it is the best way to build a good credit score or help combat a bad credit rating.

It is a good idea to know who you are getting into bed with before making any commitment. You could say the same about establishing credit with big banks. There are some things you want to consider when shopping banks for a secured credit card. Terms and conditions are just as applicable and enforced as they are with regular credit so it is important to see what you will be facing after the honeymoon phase.

Fee Fi Fo F… What are the fees for the secured credit card?! Is there an activation fee? Is there an annual fee? Is there a fee for speaking to a customer service rep? Will you be charged for inactivity if you do not use the card one month? Payment processing fee? Make sure your initial deposit is not eaten alive by enrolment fees, etc. Secured card fees can add up quickly so watch OUT!

Get interested in interest: Check the interest rate before signing any tri-folds and make sure the rate is not going to detonate after a certain promotional time frame or period. Obviously, look for a low interest rate and compare rates. AND…make sure it is in writing.

Read between the lines and the lines between those. Those 3 font tri-folds were not developed on accident. Most banks make it difficult and irritating to read all the terms and conditions, usually in an attempt to sway you away from reading the terms definitively.

Apply accordingly. Try not to apply for too many secured credit cards. One or two will suffice. Going overboard could cause your credit rating to decrease instead of increase over time. To spell it out, applying for too many secured cards is contradictive to the mission of building better credit.

Checka checka check it out. Ok. So you have your fancy secured credit card. You are done cursing about the fees and using your own money to establish credit and have come to terms with your position in the credit game. Now we need to make sure someone is keeping score.

Be sure to check your credit report a couple months after establishing the secured account. The account should be reporting to the credit bureau and positing with all 3 credit reports. If not, contact the lender and find out WTF the problem is and how they can fix it – ASAP. If possible, it is a good idea to find this out before establishing the account. Honestly, if the activity is not reported to the credit bureau on a consistent basis the effort is then a waste.

There are many ways to build a better credit score. A secured credit card is just 1 of a few ways a consumer can begin to establish credit or rebuild a bad rating over time. Consolidating unsecured credit cards can also help combat bad scores and help improve credit over time. Unsecured accounts consolidated with a non-profit receive a lower fixed interest rate and usually a lower monthly payment. This enables a consumer to pay off their credit debts at an affordable cost and a decent rate, lowering the debt amounts faster and establishing a positive consistent payment history. Utilizing both can accelerate your efforts to build a better credit score and help you be debt free from unsecured debts. Contact a certified credit counselor at 800.905.1563 or visit our website for more information about debt consolidation and building a better credit score.

Credit counselors work with consumers to assess their financial situation and determine what their best option may be.

Will Obama lead America into a “mild” depression?

Downturn sinking into depression?
Economy » With alarming economic contraction, defining current slump is tricky.
Combined News Services

Updated: 03/03/2009 06:40:01 PM MST

Click photo to enlargeIn his prime-time address to Congress last week,… (Ron Edmonds / The Associated Press)«123»Washington » There’s a reason it’s called the Great Depression. The epic hard times of the 1930s became the best-known depression in American history, but it doesn’t necessarily take that kind of nightmarish suffering to trigger the D-word today.

In fact, some economists worry that the economy could be sinking into a milder depression, the kind spelled with a lowercase “d.”

This isn’t the 1930s of bread lines, rampant unemployment, a wipeout in the stock market. But, unlike recessions, which are easy to define, there are no firm rules for what makes a depression. Everyone at least seems to agree there hasn’t been one since the dark days of Hoover and FDR.

That said, with each new hard-times headline, most recently an alarming economic contraction of 6.2 percent in the fourth quarter, it seems that something more drastic than a recession could be on its way.

“It’s not going to be acknowledged until years go by. Because you have to see it behind you,” said Peter Morici, a business professor at the University of Maryland.

No one disputes that today’s economic downturn qualifies as a recession. Recessions have two handy definitions, both in effect now — two straight quarters of economic contraction, or when the National Bureau of Economic Research makes the call.

Declaring a depression is much trickier. By one definition, it’s a downturn of three years or more with a 10 percent drop in economic output and unemployment above 10 percent. The current recession doesn’t qualify — 15 months old and 7.6 percent unemployment.

Another definition says a depression is a sustained recession during which the populace has to dispose of tangible assets to pay for everyday living. For some families, that’s happening now.

Morici defines a depression is a recession that “does not self-correct” because of fundamental structural problems in the economy, such as broken banks or a huge trade deficit.

The Great Depression retains the heavyweight crown. Unemployment peaked at more than 25 percent. From 1929 to 1933, the economy shrank 27 percent. The stock market lost 90 percent of its value from boom to bust.

And although the 2008 stock market was the worst since 1931, the Dow Jones industrials would have to fall about 5,000 more points to approach what happened in the Great Depression.

Few economists expect this downturn will be the sequel, but nobody can say when or whether the downturn may deepen from a recession. In his prime-time address to Congress last week, President Barack Obama acknowledged “difficult and trying times” but sought to rally the nation with an upbeat vow that “we will rebuild, we will recover.”

Despite the tempered optimism, consumer confidence has fallen off the table, stocks are at 12-year lows, layoffs come by the tens of thousands and credit remains tight.

Policymakers and economists note there are safeguards in place that weren’t there in the 1930s — deposit insurance, unemployment insurance and an ability by the government to hurl trillions of dollars at the problem, even if it means printing money.

Most postwar U.S. recessions have come after the Fed has increased interest rates to cool rapid growth and inflation. Later, the Fed lowers rates and helps restart the economy, with the housing and auto sectors leading the way. This time, as Senate Banking Committee Chairman Chris Dodd, D-Conn., said, “Our housing and auto sectors are leading us into it.”

What’s more, the central bank has already lowered the short-term rates it controls to zero, eliminating that leverage, and there are no guarantees the massive economic stimulus package and series of bank bailouts will stave off a nightmare recession, or worse.

Answer
We can only hope it will me ‘mild’