Prepaid Credit Cards For Teenagers - A Good Thing?
Nov 17, 2008 Credit
Credit cards for teenagers…hmmmm. That sounds dangerous. Adults get in trouble with debt due to credit cards. Now you want me to give one to my teenagers? Let’s think about that for a minute. At first glance, this does sound like a dangerous proposition but how one that the parent has complete control over? A card that the parent can check at any time to see what money was spent, where, and when? Sound a little better? Visa PAYjr may be just what you’re looking for.
You have two choices - PAYjr Chore and Allowance card for 12 year olds and under or the Visa Buxx card for 13 years old and up. The PAYjr Chore & Allowance System (the card for 12 and under) is an online chore and allowance system. The parent goes online, checks off the chores that have to be completed by the child. The child also goes online and gets their chore list. As they complete their chores, they check them off online. The parent can check at any time to see which chores have been completed and which ones have not. When the chores are done, the parent loads the child’s PAYjr Chore and Allowance card and the child can use it just like a credit card - at the movies, at stores, fast food restaurants etc.
This is the fast, convenient, and easy way to manage chores. You don’t have to sit down and decide what chores need to be done. Just review the online list, choose the ones you want done and print it off. There are online calendars that help you keep track. An ongoing "Balance Owed" is tracked by the PAYjr system and you can have the system email you and the child when a chore needs to be completed (so you don’t have to nag) and when you need to load their allowance onto the card (so they don’t nag you). Either way - very convenient!
The #1 teenage prepaid credit card is PAYjr Visa Buxx and is the only card that your teenager can design themselves which, of course, makes it really cool. Your teenager can use a picture they took themselves or get a picture that they like online, upload it to the PAYjr site and get back the card they designed themselves. This card is a reloadable prepaid card designed just for teens. It gives teens flexibility and spending independence while also providing parents with a peace of mind, complete parental supervision and the convenience of paying allowances electronically.
Your Credit Score Affects Your Reputation
Nov 17, 2008 Credit
When you think of your reputation you think of things like honesty, sense of humor, generosity, punctuality, your love life, and the way you treat other people.
They’re all personal habits, and so is the way you handle money.
The difference is, while all the rest of those attributes are tossed around between your friends and acquaintances, your money management reputation is also made public record for any potential creditor, landlord, employer, or insurer to access.
Unlike some other things that might have gone on in your life, you can’t move to a new community and escape your financial reputation. Your credit report and your credit scores tell all - at least for 7 years.
The worst of it is - that financial reputation affects things that you might think have nothing to do with your bill-paying or borrowing habits. Things like qualifying for a new job.
That’s why it’s worth your effort to protect it, and to keep it accurate.
If your credit right now isn’t so hot, it’s time to take steps to rebuild it. I know, 7 years seems like a long time to completely erase blots on your reputation. But if you wait, that 7 years will just keep moving further into the future.
So, get started. Here’s what to do first:
1. Start paying down your bills! Even if it means finding a small side job to boost your income, or cutting back on something you enjoy, just do it.
2. Pay off any collections on your record. Many of these collection agencies will negotiate with you, so see how low you can get the balances, and then take care of them. Be sure you get the payoff agreement in writing, so if they don’t remove them from your record you can contact the credit bureaus and take care of it yourself.
What Are Seasoned Credit Trade Lines?
Nov 17, 2008 Credit
WHAT IS A TRADE LINE: The answer is simple: Any account reported to your credit file is considered a trade line. They can include Mortgages, Your credit cards, Auto Loans, Furniture stores, Jewelry Stores, Gym memberships, and any other account that you have been granted credit for that reports to the bureaus.
WHAT IS SEASONING: Seasoned trade lines are again simply, accounts that have been posted for a period of time.
THREE POINTS MAKE UP A GOOD SEASONED TRADE LINE
Accounts with a history or seasoning. Top FICO scores are given to accounts with 2 to 6 years of history. Anything less or more barely effects your score.
Accounts with a perfect payment record. If your account has any 30-day or more late payments recorded, it will adversely effect your FICO scores. One late 30-day late will effect your score between 25 and 50 points.
Keep the Balance Low. To get a good credit utilization score on your FICO report, you need to keep your balances below 9% of your credit limit. Having no balance can also adversely effect your score. Try keeping a small balance on your accounts to keep your credit card companies from lowering your Credit Limit for non-use.
TWO KINDS OF TRADE LINES
The AUTHORIZED USER or cosigner type trade lines are the most common. Your Father, friend, boss or who ever, with a good payment record can add you to their credit file. This is normally done with credit cards. The Primary user, will call their credit card company, and ask for an additional card who then becomes an authorized user. The AU (Authorized User) will have the payment and history record of the Primary user added to his or her credit file. Remember, if the primary user has 30-day late payment, so will you. The new FICO 08 scoring has largely reduced the credit score for the Authorized user.
Investors have been "piggybacking" for years to help raise their scores and get approved, and up until recently the technique has been considered a "best kept secret". With the influx of companies promoting these accounts, many creditors have decided to no longer report authorized users.
