Through a Glass Ceiling of Debt (FORBES)   Leave a comment

WASHINGTON - APRIL 23:    U.S. President Barac...Image by Getty Images via @daylife

While Democrats and Republicans fritter away the time politically posturing and holding tight to their party lines, the U.S. comes closer to losing its coveted Triple-A credit rating. The majorratings agencies plan to reduce the county’s rating unless Congress and President Obama can produce a credible plan to address the country’s growing debt burden. Standard & Poor’s, Moody’s, and Fitch all plan to downgrade the nations credit rating if failure to raise the nation’s debt ceiling leaves the U.S. with no cash in the treasury to pay its outstanding debts.

Should the U.S. suffer a decrease in its rating, Americans could see a raise in borrowing costs for generations to come; call it trickle-down reduced credit. Rates could increase on mortgages, loans of every type, and may even affect the APR rate on your credit cards. Especially in the downturn of the economy, where many mortgages have morphed into foreclosures and loans are becoming less common, Americans are dependent on credit cards in order to spend, budget, and survive on a day-to-day basis. It is becoming increasingly important to compare credit cards,see what offers are out there, and, yes, read the fine print. There are a plethora of options out there; offers abound for those with poor to excellent credit.

The standard credit card is usually an unsecured credit card; these cards are typically granted based on the applicant’s credit score, financial history, and earnings potential. While an applicant with good credit is more likely to be approved for this standard card, there are some places that will offer unsecured credit cards for bad credit risks. The APR, as well as the cost of certain fees, will usually be increased for those considered a poor risk. Should you have difficulty in procuring an unsecured credit card, there are options such as secured credit cards, no credit-credit cards, and prepaid credit cards.

Similar in structure, no credit-credit cards mainly differ in the amount the lender is actually extending you. No credit-credit cards are rare indeed; the downside to these cards is that they usually carry very high interest rates. These are best suited for those with no, or bad, credit histories who are trying to rebuild their credit ratings.They can work, but at a price. Prepaid cards are a great convenience, but generally extend no credit. Paid in full, up front, they are more a convenience so that one does not have to carry cash and/or can budget. Secured credit cards work much in the same way as prepaid, but you can keep using the same card by paying the bill down monthly. There is a security deposit upfront that the lender can hold should you miss payments.

So while the government struggles to cap its spending, you can come away with a credit card that helps control spending while building your rating.

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Posted July 31, 2011 by ilanamelissagreene in Uncategorized

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