Where to find low interest rate credit cards!

How often have you seen the advertisement online or in your mailbox telling you how you should apply for their credit card to repair your credit? The advertisements are right to some extent; credit cards can help you when you are trying to repair your credit, if used correctly. The problem is that most people try to repair their credit with horrible credit cards while using the same spending habits that caused their bad credit to begin with.

A large majority of the people who set out to repair their credit, with the aid of a credit card, do so with the wrong credit cards. There is a right way, and a wrong way to repair your credit and using a credit card is only one small part of the process. At Direct Banc, we monitor the applications and approvals of credit cards across the web that are designed and marketed for those seeking to repair their credit. The overwhelming majority of the cards that people are applying for are going to hurt their credit, not help it.

The correct way to use a credit card to repair your credit is not to use it. People that are recovering from bankruptcy or other credit problems need to face the fact that they aren’t going to get a good credit card right out of the gate. Conceding this fact, we must now begin to pick the best of the worst credit cards in which we can use to re-establish our credit.  The main thing to be aware of is that you are getting a credit card to help to restore your credit, not necessarily to use it. This leaves us with two options: secured credit cards and unsecured credit cards.

Most people opt for the unsecured variety, which in my opinion is a mistake. Most unsecured credit cards for bad credit are going to hit you with a lot of front loaded fees in lieu of making you put down a deposit. You can expect to pay anywhere from 50$ to $75 up front for your annual fee for starters. Then, some cards have other up-front fees like a monthly maintenance fee, account processing fees and some even charge an application fee.  All in all, up front fees could be around $150 on a card that only gives you a $300 limit.

If you know you are going to have high fees and a low credit limit you should give serious thought to getting a secured credit card with lower rates and fees. Think about it, if you have to pony-up $300 for a deposit, at least all of the money would be yours and you would still have the $300 limit. Also, using a secured credit card gives you the ability to raise your own credit limit, which strengthens your credit. Used correctly, a secured credit card will cost you less, save you on fees and act as a savings account for you.

As you may know, secured credit cards allow you to raise your credit limit by making additional deposits. If you get your secured card, never use it, and make a $100 a month payment to that card for one year you will have a credit card with a $1500 credit limit. This looks a lot better to someone who looks at your credit than a $300 limit. Loan officers and underwriters have no way of knowing whether a credit card on your credit report is secured or not, unless it has a $300 balance.

What you definitely do not want to do is use your credit card. Most people are unaware that it makes no difference in your credit score whether you use the credit card or not. In fact, if you do use your credit card and exceed 35% of your credit limit, your credit score will begin to deteriorate. The best credit reference on a credit bureau is the one that never has to be touched, it shows restraint. Think about it, having a secured card allows you to pay fewer fees, dictate your own credit limit, build a savings account and helps you to rebuild your credit. This is definitely the best, and least expensive, way to go in my opinion.

Aubrey Clark is an Author and editor for Direct Banc, a directory of Low Interest Rate Credit Cards, specializing in credit cards for fair credit. Aubrey is a native of Destin, Florida but now lives in Atlanta Georgia since 1999 with his wife and four children. This article may be reprinted without permission as long as the author credits and links remain in place.

	Prepaid/Debit Cards - Benefits of a credit card without credit restrictions.
	Secured Cards - For those wanting to establish or rebuild their credit with a deposits as low as $300.
	Unsecured Cards - For those unable to qualify for main-stream credit cards and DO NOT want to pay a deposit.
	Credit Cards for Fair Credit - For those who pay their bills on time but may have lower credit scores.

In today’s market banks and mortgage lenders are being extremely cautious about which loans they approve. Real estate values are dropping and foreclosure rates are rising, and many banks are dropping out of the mortgage business all together. Gone are the days when banks could sell their loans on Wall Street, reload, and do it again. Banks are now faced with the reality of having to actually hold on to their loans like they did in good ole days. This means that they want to make sure that the loans they make at this time are good loans that will pay them back on time.

Nowadays, it seems like all we ever hear about, in reference to mortgage brokers, are the bad brokers; the ones that make headline news and are carted away on TV in handcuffs. What these stories fail to report, is that the bad mortgage brokers make up less than 1% of all the brokers that are licensed in America. In fact, it has always has been the mortgage brokers that have advocated for tougher licensing guidelines, not the banks. They have always argued that by tightening licensing guideline they can eliminate the ‘bad brokers” that give legitimate brokers a bad reputation.

What columnist and reporters fail to mention in their stories is the indispensible service brokers perform in the marketplace. For instance, each bank tends to have their own, distinct, personality when it comes to approving loans. Knowing these “personalities” is where brokers really begin to benefit their clients. Brokers have working relationships with almost every kind of lender imaginable and know each lender’s uniqueness, rates and approval thresholds. This way, they are able to place your loan with the best investor the first time, saving their clients time and money.

Most brokers also have working relationships with the underwriters that work for these lenders as well. This doesn’t mean that they can get bad loans through the system; but it does mean that they can help underwriters see the glass half-full as opposed to half-empty while they are underwriting your loan. In today’s market, almost all mortgages are considered “marginal” and scrutinized by underwriters, having someone on your side is an invaluable asset.

Issued by Citibank Category Reward Finance Annual Fee $0 Purch. APR 9.99% Intro Rate 0% balance transfers submitted during the first twelve months Good/Average Credit

Citi® Home Rebate Platinum Select® MasterCard Receive 6% rebate on Utilities, Cable/Satellite TV, Internet Connection and Telecommunication for 12 months Receive 1% on all other purchases Rebate automatically applied to your mortgage principal NO CAP or limits on the amount of rebates you can accumulate in a year No annual fee

One of the biggest selling points using a broker is personalized service. “So what, all I need is a good rate” is the response I have had from some customers in the past, but consider this. As opposed to brokers, when you submit your loan application to one of the large banks, your loan becomes a number and is pushed through the system as if it was on an assembly line. The monolith lenders usually have a person at the bank accept your application who will never see the loan package again. Those of you that have used the large banks know what I mean, those of you who haven’t, I suggest you try this exercise before committing to a larger lender.

Pretend you have just submitted a loan application a week ago with one of the large lenders. Let’s assume that you have forgotten to give the loan officer a key piece of information that can really help with your approval. Call their 800 number and try to find the right person to give this to so that the underwriter can consider it when approving your loan. This should answer the question, “Why do I need good service.” Another misconception many people have is, that you actually have to pay more when using a broker because they are the infamous “middle man.”

Nothing could be farther from the truth, in fact, most brokers can offer lower pricing than larger banks nine out of ten times. This is because, much like manufactures, money has a retail cost and a wholesale cost, and brokers get the wholesale pricing. Banks have to charge retail for their money because of the added expense it takes to close mortgages. They have to pay loan officers, processors, underwriters and many more expenditures that are involved with closing a loan. Simply put, their overhead is higher than most of the brokers, which results in lower pricing for you. Keep these facts in mind the next time you read an article about “crooked brokers” and remember, honest brokers don’t sell newspapers but they can save you time and money.

Aubrey Clark is an Author and editor for Direct Banc, a directory of Low Interest Cards, specializing in credit cards for fair credit. Aubrey is a native of Destin, Florida but now lives in Atlanta Georgia since 1999 with his wife and four children. This article may be reprinted without permission as long as the author credits and links remain in place.

The Credit Cardholder’s Bill of Rights Act recently cleared the House Financial Services Committee last week and is garnering support from both sides of the aisle. This bill is designed to protect consumers from “unfair and deceptive” practices that the credit card issuers are engaging in like, universal default, two cycle billing and raising rates on existing balances, even for who pay on-time. The usual quid pro quo for the banking industry is to take heed of the saber rattling from Washington and “self regulate” before congress or the Fed has to step in.

The Fed addressed this issue in May basically agreeing that some credit card practices were unfair and need to be addressed. In that time, the card issuers have done very little to correct this situation other than making their warning labels more prominent. Some theorize that this is because credit card issuers are reeling from mortgage right-downs and are unable, or unwilling, to take the one-two punch. There is little doubt that by making these changes the credit card issuers will lose money; the latest independent study estimates 10 billion industry-wide.

As a result of these changes, most credit card issuers will raise their interest rates across the board and lower credit limits. Opponents argue that by lowering credit limits and raising interest rates they will collectively lower credit scores for the majority of card holders. Having higher balance to limit ratios and lower credit scores will ultimately limit the consumer’s access to other traditional credit sources like home equity loans and mortgages.

Many in congress realize that this is a bitter pill for consumers to swallow, but a necessary one. At the root of this bill, consumer benefits aside, is the consensus among legislators that the spiraling credit card debt and climbing default rates must be addressed before we find ourselves in another economic melt-down.  A bill that forces credit card companies to “play nice” offers dual benefit that can easily cross party lines. This bill, or a watered down version of it, is expected to be passed, but not this year.

Even though legislators are eager to throw in their two cents on this juicy issue, they are basically tabling the issue and using it as campaign fodder. The debate on this issue should resume once the elections are over. The reason being, this issue simply isn’t a deciding factor for most voters. Candidates are focusing on Issues that center on the war and rising energy prices. However, throwing in a couple of statements about the greedy mortgage companies and the evil credit card issuers makes for a great stump speech.

Meanwhile, back in Washington, banking lobbyists are licking their lips at the prospect of the fresh-meat that always follow an election. You can expect a fierce battle on Capitol Hill; the banking industry will not go gentle into that good night. At Direct Banc, we predict that if the bill passes, it will closely mirror the Fed’s lead and fall into obscurity soon after.

Just remember, credit cards, by their own definition, have variable rates and obnoxious fees; responsible credit card use is your only defense against them.  If you carry a low balance, or pay your balance off each month, credit card “gotchas” really can’t harm you. If credit card issuers are forced into a corner with over-reaching regulations, they will simply raise their rates. This will force all card holders to pay higher rates in order to absorb everyone else’s late fees.

Aubrey Clark is an Author and editor for Direct Banc, a directory of Low Interest Rate Cards, specializing in credit cards for fair credit. Aubrey is a native of Destin, Florida but now lives in Atlanta Georgia since 1999 with his wife and four children.