A secured credit card could be a good option for rebuilding your credit after debt settlement. You’ll probably want at least one account on your credit report (maybe more) that doesn’t have a negative history. Traditional credit cards will probably deny your application because of your recent settlements; they don’t want to take a risk that you’ll settle on their accounts, too. So, a secured card may be your only option in the first few months after you finish settling your debts.

Know the security deposit.

Some secured credit cards have a minimum security deposit that you must make. This minimum could be as low as $100 or as high as $1,000. Make sure you know how much of a deposit you must make since this is the amount of money you have to come up with to get a secured credit card. If a particular secured card has a minimum deposit that’s too high for you, keep looking for one that’s more affordable.

Look for minimal fees.

Credit cards aimed at consumers with bad credit often have ridiculous fees. Fortunately, there are many secured credit cards that don’t price gauge vulnerable credit card applicants. An annual fee and application fee less than $100 are relatively reasonable. Anything above that is probably too much.

Interest rates shouldn’t be extremely high.

While interest rates on secured credit cards are higher than rates for people with great credit, rates should be reasonable. (more…)

Prepaid debit cards can be a great alternative for people who can’t get a credit card or a debit card associated with a checking account. During and after debt settlement, a prepaid debit card may be the only way you can have access to a Visa- or MasterCard-branded card. Check out some of the pros and cons of prepaid debit cards.

Pros of a Prepaid Debt Card

You don’t need good credit to qualify. When you’re right out of debt settlement, your credit score typically won’t be in a state that you can qualify for a credit card. But, you probably still need access to a credit-like card since transactions are increasingly becoming electronic. Prepaid debit cards don’t usually require a credit check, so you can qualify even with bad credit.

Get one even if you’re in ChexSystems. If you’ve had trouble with a checking account, like outstanding overdrafts, you may have a record in ChexSystems that keeps you from getting a checking account and check card. Prepaid cards don’t usually run a check through ChexSystems so a bad checking account history would not affect you.

You can’t overdraft your account. With a prepaid card, you can only spend as much money as you have in your account. That keeps you from dealing with (more…)

Cash is less common these days. In fact, you can’t make certain types of transactions if you don’t have some type of plastic card – a debit card, credit card, or prepaid card. If you’re looking for a way to keep your transactions electronic after debt settlement, weigh these options carefully. Not all plastic cards are created the same.

How to Access your Money

Debit cards are linked to a bank account that you can also write checks against. You can swipe your debit card to make a purchase, use it to make purchases online by entering your debit card number, or withdraw cash from the ATM.

A credit card is used to access a credit limit that your credit card issuer has extended to you. When you use a credit card, you’re not spending your money. Instead, you spend the credit card issuer’s money. You have a certain amount of time to pay back the money you’ve borrowed to avoid paying interest.

Prepaid cards are similar to debit cards in that these cards are typically used to access cash in an account, but it’s not customary to have checks with a prepaid account.

Typical Fees

Some debit cards have a fee for making PIN-based transactions. You may be able to avoid this fee if you use your debit card as a credit card, in other words you (more…)

A prepaid debit card could come in handy when you’re going through debt settlement. Most of your credit cards are probably involved in the settlement process and you may have even lost access to a checking account. Life still must go on and you still probably have to make purchases. To eliminate the inconvenience of paying cash for everything or ordering a money order to pay bills, one can use a prepaid debit card.

A prepaid debit card is much like the debit card you had associated with your checking account. You make a deposit onto the card and each purchase you make takes away from your account balance. One of the main differences is that there’s no checking account associated with the card, though some prepaid debit cards do have check writing privileges. There are many prepaid debit cards on the market, so choose carefully.

Consider the Fees

Nearly all prepaid debit cards come with fees, some have more fees and higher fees than others. The goal is to probably choose a prepaid card with the fewest and lowest fees. That way less of your money goes toward fees and more of it is available for spending. Typical fees include monthly account fees, loading fees, and ATM fees. There may be a fee for speaking with a customer service representative, receiving an account statement, or if your monthly deposit is below a certain amount.

Monthly account fees probably don’t seem like much when you look at what you’re paying per month, but multiply the fee by 12 and you’ll see just how much you’re spending each year. Look for a prepaid card with a monthly fee below (more…)

The world of commerce is becoming more automated to the point where it’s hard to make certain transactions without having a credit card or debit card. It’s almost impossible to rent a car or book an airline ticket without having some type of plastic. But, when you’re going through debt settlement, you may not have access to a credit card. Many people in debt settlement have also lost access to checking accounts and therefore debit cards. So what’s the solution?

Fortunately, there’s an alternative credit card-like product for people who don’t have a credit card and can’t get a checking account. That product is a prepaid card. Prepaid cards work much like debit cards. Some prepaid cards even give you the ability to write checks against your balance.

How Prepaid Cards Work

You load a certain amount of money onto the prepaid card. Depending on your card, you can do this online, at a kiosk, or at certain stores. Once you make the deposit, you can (more…)