If you have ever been asked by your wife, husband, child or friend to have someone else as an authorized signatory to you, i.e. a supplemental signatory, on your credit card account you no doubt gave this some serious thought. If you agreed to the request, the following are some reason why you should have a credit card in your own name and they have a credit card in their own name.
Possibly the main reason why you should have a credit card in your own name is the effect it has on your credit history.
In short, you have had to manage your financial affairs very astutely in order to gain a sufficient credit worthiness to apply for, and be approved, a credit card. Conversely, any supplemental signatory to you on your credit card doesn’t have to do anything – as the card is relying on your credit history to determine the risk of the third person. This may sound a little harsh, but if you think about it you are the one who is responsible for repaying the card, so why shouldn’t they rely on your ability to repay rather than some third person who has no obligation to repay them if there is an outstanding debt?
Now, you may well be thinking: “That’s not a problem, I’ll control their spending.” And, you may even be able to manage that feat. But, here’s another reason why you should have a credit card in your name and they should have a credit card in their name. Throughout the time that they are supplemental signatories to you on your credit card account, they are not enhancing their own credit worthiness – nor are they affecting their credit rating. So, even if they are good supplemental signatories and never spend money on your card without first seeking and getting your approval, it has no positive affect on their credit history. On the other hand, if they were to have a credit card in their own name, and were good and managed their account well, all of this would add lots of brownie points to their credit history!
Lose - Lose Situation
The reason why having a supplemental signatory on your credit card account is a lose-lose situation is not only because you take on the financial risk that they will behave themselves, but also they have no upside if they behave well. Also, keep in mind that if your supplemental cardholder runs amok and spends, spends, spends, it is your credit history that is being affected, not theirs!
What Does This Mean?
It means that you could work years building up the perfect credit history and rating only to have it all torn down overnight by someone else. So, if you don’t want that to happen, make sure have these good reasons why you should have a credit card in your own name only the next time someone asks you if they can become a supplemental signatory on your credit card account.
If you have never been in debt before or you are young, then getting a credit card can be hard. Strangely, lenders trust people who have been in debt and paid it back more than people who have never had any debt. Although it may seem hard to get a card if you have not gotten one before, there are some ways to get a credit card. If you are unsure about how to go about getting your first credit card, then this article might be able to help you.
Check your credit report
The first thing you need to do is to check a copy of your credit report. This will tell you if you have any problems with credit, and if there are any errors you can clear them up. If your credit rating is good then you should have no problem getting a card.
Apply to your bank
Once you have established that your credit rating is good, then you should apply for your card. The first place you should start is with your bank. If you have a full-time job and have had no credit problems, then you bank is likely to give you a card with a low limit of probably a few hundred pounds. Now that you have a card you can use it and if you pay your bills on time then slowly your credit limit will get better.
If your bank will not give you a credit card, you can improve your credit by getting a store card. Although these cards have very high rates, if you spend a little on them and pay it back then you credit will quickly improve.
Don’t over apply
One thing that you should avoid is applying for lots of cards at once. If you do this then the credit process will be started for each and your credit rating will be further weakened. Applying for lots of cards makes you look financially unstable and will harm your chances of getting one good card.
Beware of ‘unbeatable’ offers
If you are applying for a card you might feel the best option is to take one of the ‘amazing’ deals you get in the post every day. These deals offer you really low interest rates and tell you that you have been pre-approved already. All they mean by this is that you are pre-approved to apply, but you can still be turned down and even if you aren’t you are unlikely to get the rates they quote. If you are going to pay your balance each month then the interest rates at first do not matter. Apply to a company you know and trust and that will be fair when you want to renegotiate terms.
One of the best ways to get your first card is to get a secured credit card. This involves you paying a money deposit that is frozen whilst you have the card. This reduces the risk for the lender, and if you show that you can pay your bills then you can get upgraded to an unsecured card quickly.
Never pay fees
One thing you should avoid when getting your first card is to actually pay for it. Although secured cards require a deposit, there are other companies that charge myriad fees before you get hold of the card. If this is the case you may find just the fees eat half of your balance up, which almost defeats the point of getting the card. Even if you are getting a card for the first time you should not have to pay for the privilege.
Credit card bills can be expensive. Sometimes they can be simply too expensive. Depending on how you use your credit cards, and how much you spend, and how disciplined and controlled you are over your own spending, you may or may not have trouble paying your credit card bills when it comes to the end of the month and the bill arrives in the mail. No matter what your situation is however, there is always one thing you will not, under any circumstances, want to see on your monthly credit card bill, and that is a credit card fee.
There are different types of credit card fee and different reasons for incurring them, but the good news is that many of them can be avoided by simply following a few simple rules and keeping on top of your finances and bills. The most important way to minimize the fees you receive from your credit card company is to pay your bill on time and in full each month. Generally if you do this, you will be charged no interest of finance charges at all, and will be receiving all the benefits of a credit card and over a month of credit absolutely free. If you are one of the lucky customers who can manage to maintain your account in this way, you will be very lucky.
However, many people cannot pay their account in full each month, therefore, they incur the most common of all credit card fees, and this is finance charges. Credit card companies actually charge very high interest rates to their customers so if you have the option of borrowing in other ways that may be cheaper it is recommended that you use these methods if you are planning on needing the money for more than a couple of months. It is far cheaper to pay back a short-term loan than to maintain a large credit card balance.
Another credit card fee is a late fee for when you are late in making your monthly payment. Many people who have more than enough money to make their repayments simply through a lack of organization miss payments and incur large fees. If you are late in making your repayment because you don’t have enough money to make it you may need some debt counselling or other advice to help you manage your way out of this situation.
There are many other fees that your credit card company can impose upon you depending on the company, but being aware of how they are calculated and what sets them off is probably all you need to know to be able to avoid incurring them in the future.
Michael, 25 years old and working in United States for past one year was on the verge of going bald from trying to figure out the best credit card among the tons of emails that he received almost daily about the "pre approved credit cards". Chances are that you too maybe going through the same dilemma of choosing the right credit card. As choosing the right credit card is not such an easy task as it looks at the first go, it becomes essential that you know some of the important points before you eventually purchase the best credit card for yourself.
Most of the credit cards, which call themselves as the best credit cards, come with almost the same features, offering more or less the same rate of interest. In such a case, getting the best credit card becomes even more of an ordeal for the buyer. However when the rate of interest is more or less the same, one should look for incentives offered by the various card companies in order to get the best credit card. Incentives and rewards can be of various kinds; depending on them you can opt for the best credit card. For instance you get reward points for every purchase that you make from the credit card and these points are redeemable from certain stores and outlets.
There are three main categories of cards: secured, regular and reward or rebate. Where you fall on the scale depends upon your credit history. If you’re in the process of trying to rebuild your credit, a secured card can help you achieve that. The other categories are differentiated by the types of services they afford. While reward cards generally have great perks, the higher interest rates that they normally charge can be costly if you do not pay your balance in full every month.
Then there are cash back incentives. This definitely is a strong criterion for the best credit card. According to this scheme, you get a percentage of cash back at every purchase that you make. You can also convert your redeemable points into discount for various airline flights. Most of the buyers make the mistake of thinking that the reward schemes are mostly similar whereas the difference in schemes offered by different card companies is extensive. So first of all do your research about different reward schemes and then choose the best credit card.
Nowadays banks have started offering balance transfer credit cards, which are becoming increasingly popular for people deciding on the best credit card for them. Balance transfer cards allow you to consolidate you debt onto one card, thus helping you save on interest payment, hence recommended by experts as the best credit card for debtors.
Getting the best credit card wouldn’t be a difficult task when loaded with the right information. So research about the incentives and other schemes and then only go for choosing the right credit card. It might take a little time but at least you can be sure that it’s the best credit card.