Prepaid Debit Cards Vs. Secured Credit Cards

I have listed these differences below. The truth is there are some distinct differences that may work better for people from different walks of life. Each of these cards will require funds to be deposited in advance before using them, so what?s the difference?

We get quite a bit of email asking about the differences between these two categories of credit cards so I decided to write a short article to explain the basics of each category.

Much like your bank debit cards they deplete funds in your account as you use them, they do not require monthly payments and do not charge interest. Prepaid Debit Cards - Prepaid debit cards are just that, debit cards that have the Mastercard or Visa logo on them and are accepted worldwide.

The major difference is how you qualify for one and how much it cost to use the card. Prepaid debit cards are not concerned with having card holders qualify for their cards. Most issuers do not verify employment, credit, addresses or even legal residency. This makes these types of cards very popular with immigrant workers in the United States illegally.

Debit cards are also more fee intensive than traditional secured credit cards. They have fees that are usually measured by transaction. Other fees include, loading fees, transfer fees, check deposit fees, annual fees and more. This is the price people have pay for convenience and anonymity. These cards will not report cardholder transactions to the credit bureaus, which is not ideal for those who are trying to establish credit.

In our society it is virtually impossible to live without some type of visa or Mastercard, debit cards fill this void. They offer a "de facto" banking system for those unable to qualify normally. They offer direct deposits for paychecks and many other features to a segment of society that traditional banks have left out in the cold. All in all, prepaid debit cards are pretty cool for some people.

Secured Credit Cards ? are credit cards that are specifically designed for people with bad credit. Most people that apply for these types of credit cards do so to build or rebuild their credit. The other advantages are they appear, look and act exactly like a regular credit card. Most prepaid cards are clearly marked as debit cards with outrageous designs and colors.

The price you pay for rebuilding your credit is interest. The worst thing is that you are paying interest on your own money! Unlike prepaid debit cards, secured cards usually carry pretty steep interest rate, usually around 15%. Secured credit cards are not usually ?re-loadable?. Meaning, once you make your initial deposit this becomes your ?credit limit?. Your payments will bring down the balance giving you more purchasing power.

Secured credit cards report to the credit bureaus exactly the same way a regular credit card does. Creditors that review your credit for purchases have no idea if your credit card is secured or not. Another thing to watch is that most people will fund their cards with money that they intend to use immediately. Meaning they send in $500 and expect to be able to go out and spend that $500 immediately on receipt of their card. This is not good borrowing practices and will actually bring down your credit score.

Credit cards are viewed as liabilities on your credit bureau once you borrow over half of your credit limit. The credit bureaus see this as a sign of credit dependency and discount your credit score 35%. When this happens you are hurting your credit, paying regular credit card fees, paying interest on your money and carrying around a maxed out credit card.

Credit bureaus do not show monthly payments; they only show the months you have had the account open and any months that you have been delinquent. This assumption could not be further than the truth. they can pay it back. Most people feel the need to charge something on the card to ?prove?

It will only cost you the price of the annual fee to keep it in their bank. Then leave it alone. Our advice to borrowers is to save up enough money so that your initial deposit is large enough to show a decent credit limit on your credit bureau, around $1000.

Unfortunately most people use them incorrectly and end up hurting their credit more than it was before getting the card. Secured credit cards can significantly help you rebuild your credit and have a positive impact on you overall credit score. When a future creditor sees your $1000 open line of credit, higher credit scores and the financial restraint you have demonstrated you will be much more likely to get the loan.

Stop Losses - My Biggest Downfall

One of the common email questions I get through my website relates to difficulties in sticking with stop losses.

Of course, when price gets to that level there?s no shortage of reasons why they should hang in there just a little further it?s sure to move back into profits. Some traders don?t place one in the market at all, promising that they?ll get out when price hits a certain level.

Other traders have no problem placing their stop. But for some reason, they decide to remove that order from the market before its hit.

Well, I got another email this morning ? ??Sticking to stop losses is my biggest downfall, any suggestions??

This particular question came from someone who says they?re fairly new to trading, so I think it?s great they?ve recognized this problem so early. Well done. But it?s such an important question and such a common question, that I felt I should share my answer.

Firstly, difficulty in sticking to your stops is certainly a common problem - so don't feel too bad about it. This means it?s not just you ? others have been through the same issues, and overcome them. So there?s no reason why you can?t do this as well.

The difficulty is getting rid of this bad habit. Traders say that they understand the need for the stops - they see the danger in letting the trade run - but for some reason even if they had full intention of exiting at the stop loss, they still let it run, either by not placing the stops at all or by removing the stop once it 's in the market.

Where does this problem come from? Well, I could write a whole book on this, but let?s try to summarize it here.

Basically I believe the problem is fear. Not just the fear of a small loss of money occurring with this trade, but a much deeper fear at the very heart of your trading endeavor and your life. What does total failure to become a trader mean to you? What does losing all your money mean to you? What does that mean in terms of your opinion of yourself? What will your family think of you? What will your friends think of you?

This is what you're risking every trade, because every small loss takes you potentially one step closer to ultimate failure.

So, even if a person rationally understands the need for stops, and places a stop in the market with full intention of following their plan, they succumb to the greater fear as the trade approaches their stop loss and remove it from the market. After all, the nature of the market is 'uncertainty', so it can surely come back from here and get into profit again. And you can ALWAYS find further technical analysis to support your decision to remove the stop, and hold for just a little longer. And there will ALWAYS be other analyst or news opinions to support the decision to remove your stop.

Sorry if this sounds all rather dramatic, but its reality and it will continue to happen until a person learns to manage their trading decisions despite their emotions. (Note that I didn't say 'control' their emotions. Too many people say that you need to control your emotions, or trade without emotions. Rubbish! You're human and the emotions will happen no matter how much you want to control them. You cannot overcome them by willpower on a consistent basis. You rather need to find strategies to manage your trading decisions despite these emotions).

So, the way forward:

1. Establish total confidence in your system - ensure thorough back testing and forward testing so that you KNOW it provides you with an edge, despite small losses. This will reinforce the fact that small losses are part of the system, and can't hurt you over the long term.

2. Compare results had you let stops run - go over your historical trades, and compare results had you not got out at your stop. Initially you might find that many of them did come back. However work out how much money you can afford to draw down before you either lose everything, or the pain would become unbearable. Then all you have to do is find one or two that don't come back before getting to this point. This will reinforce the danger of letting your stops run.

3. Ensure stops are always placed in the market. If your broker doesn't allow for an exit order attached to an entry order, get a new broker. Despite the fact that some traders still remove the order once it?s in place, it is still harder to do that than not placing one in the first place. So make sure you always place an exit order at the same time as your entry order.

4. Ensure you have a documented trading plan, and procedural steps (eg. checklist) for trade entry, management and exit. Ensure that there are no circumstances within your plan that allow for removal of your stop loss. Then as you trade these steps, act as if you were two people (stick with me here, I know it 's getting weird) - firstly you're the trader, and secondly you're the boss of your trading firm who is a real fan of risk management and following rules. For every action that you as a trader make in entering or removing an order from the market, pause and assume the identity of the boss of the business - would you be happy with the decision that your employee is making, or would you overrule it? Would you sack the trader if he makes the decision he 's about to make? Often this is sufficient to overcome the problem. Assuming the identity of the 'boss' or 'risk management guru' allows our rational side to come through and reinforce the need for taking our small losses.

5. Use an accountability partner. Explain your problem with someone independent from your trading, perhaps your wife, husband or a friend, and ask if they are happy to assist with your trading through ensuring compliance you?re your plan. Then, after each trade (or trading session or week), show them each of your trades. Show them evidence of the stop placed at entry, and held till exit. Enforce some form of punishment if you break your rules - make it something you will really hate. Often we find that it 's easier to hold the stops if someone else is depending on us to do so - the fear of embarrassing ourselves through showing poor discipline can often be enough to counter the fear of loss, and keep your stop order in the market.

It?s a difficult problem to overcome. But through building confidence in your trading strategy through thorough testing, and through disciplined application of your plan with the assistance of your ?alter-ego? boss and your accountability partner, you can overcome this. Never give up.

Lance Beggs

All Rights Reserved. Lance Beggs. Copyright.2008.

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Credit Monitoring Services

Monitoring services notify you via email and/or wireless telephone instantly of any changes made to your credit report, which can help you identify fraudulent activity faster, and therefore minimize the negative impact it would have on your credit. Monitoring services notify you via email and/or wireless telephone instantly of any changes made to your credit report, while protecting your credit and identity information. Online credit monitoring services provide consumers with a suite of tools that help you to take proactive action in monitoring your credit report, while protecting your credit and identity information.

Notifications by Credit Monitoring Services

What types of activity will generate a notification or alert from the credit monitoring services? As a member of such a service, you?ll receive notification whenever your address has been changed, a new account has been opened, or when an existing account has been changed. This is extremely valuable information as you will know immediately if someone is attempting to use your good name to obtain financing. Time is of the essence when dealing with credit and identity fraud, and without credit monitoring services, it could be several months before you are aware of fraudulent activities.

Tips for Improving Credit

Most credit monitoring services also provide a host of tools that allow you to see what your credit score is at the current time, as well as steps you can take to improve it. Since credit scores are used to determine whether or not to extend individuals credit and at what interest rate; it?s important that your score be as high as possible.

Citi?s Credit Monitoring Service provides a very useful credit analyser function that allows members to determine the effects of several types of activities on their credit score. For example, if you?re considering applying for a car loan, you can use the analyser to determine how much of an impact applying will have on your score, as well as what would happen if you obtained the loan or applied and were denied the loan.

You can also use the analyser to view how missing a payment or two might effect your score overall, or determine which activities will raise your score the most and how long it will take. Extremely useful for individuals who are working diligently to improve their credit score, the Citi Credit Monitoring Service with credit analyser takes the guesswork out of improving your credit.

Identity Theft Insurance

Many credit monitoring services offer identity theft insurance programs that will reimburse members of the credit monitoring service up to a certain dollar amount if there are instances of fraud. (This service is not available to individuals living in the state of New York.) Typical expenses that are covered by identity theft insurance include:

Lost wages for several weeks of work missed if you take time off to deal with the fraud
Repayment of notary or certified mail costs for the delivery of affidavits.
Long distance phone costs in conjunction with the fraud
Attorney fees incurred for dealing with the fraud

Companies Offering Credit Monitoring Services

There are numerous companies that offer credit monitoring services. Most of the services offered are the same or similar, but a few companies having notable differences may make their services more beneficial to individuals.

If you?re looking to improve your credit, you want to be sure a credit monitoring service offers an analyser, like Citi Credit Monitoring Service, TrueCredit, or Identity Guard.

If you want to see results from all credit bureaus, then it?s important that you select a company that provides access to all 3 of the major credit reports.

Are No Credit Check Loans Good For People With Bad Credit?

The loan without credit check process is quick and easy and designed to help (well, not really) those who have bad credit and need to borrow. No credit check loans are something to be avoided if your credit is good.

Quite often, no credit check loans are a payday type loan, which means you get the money by writing the lender a post dated check for the date of your next pay period, at which point they cash the check. Generally, however, they are exorbitantly costly and could lose you the title to your vehicle or possession of other property you put up as collateral.

That seems easy and fair enough, doesnt it? The catch, of course, is that you pay back that lender much more than you get by taking out a loan without credit check.

Of course, there are situations that are unpredictable and many of us can find ourselves in a financial pinch that, for credit reasons, leaves us without any other option than a loan without a credit check.

Loans without a credit check are a rather novel and comparatively new industry, and some of them ??? such as payday loans and title loans prey on the low income and the unfortunate.

There are legitimate lenders, however, that do offer no credit check loans. Banks and other financial institutions do so. What is important is that you comparison shop and read all the fine print. Ask for as many free quotes as you can.

Most of these are going to be available online, although some will say they can give you an online quote and what they are doing is getting your personal contact information so a financial sales rep can call and hound you into using their loan without credit check services.

If you want the information and this happens you might consider submitting an alternative phone number. The result will be that you will get an email saying they were unable to reach you by phone, at which time you can tell them to send the quote by email. Some will, but some will not. If they will not then they were probably one of the higher-end of the lenders. Cross them off your list.

Comparison shopping is not just about who offers the lowest rate, however. Make sure you know all their policies such as prepayment penalties and terms of repayment.

A much lower rate paid back for an additional three years could end up costing considerably more than its shorter term loan without credit check counterpart who offered a higher rate of interest. Make sure you do the math.

This refers to the total cost of your loan for a year, and it is expressed as a percentage of the amount of the loan. The term is APR, annual percentage rate. One term you will want to fully understand when comparing the various no credit check loans.

It is made up of the total of the interest you will be paying over the course of the loan and the other loan without credit check fees such as discount points.