Bad credit? These cards can help

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Business Week | By Peter Andrew, IndexCreditCards.com

If your credit scores are circling the drain, one of these credit cards could help you get back on track.

You might be surprised by how many Americans get by with few or no mainstream financial services.

The Federal Deposit Insurance Corporation reported in 2012 that 28.3 percent of U.S. households were either "unbanked" (didn't have so much as a checking or savings account), or "underbanked" (had at least one such account, but had still, in the previous 12 months, used alternative financial services, such as check-cashing companies or payday lenders).

It wasn't so long ago that not having a credit card was likely to seriously cramp your style. Without one, you couldn't make online transactions, book flights, rent cars, reserve hotel rooms and so on. But things have changed. Prepaid and debit cards now make it much easier to do most of those things.

So is there any point in having credit cards anymore? You bet!

This website is always talking about the unique consumer benefits and protections credit cards bring, but they also have an additional role for those whose credit reports have been damaged. Neither debit cards nor prepaid ones routinely report your financial activity to credit bureaus, which means they have zero impact on your credit score. Credit cards, however, do make such reports, and that means they can be one of the fastest and surest ways of boosting that score.

The problem is, if your score is low, you're likely to struggle to get approved for mainstream plastic. Luckily, there are two types of credit card designed for people in precisely that position:

Secured credit cards: These require you to lodge an upfront deposit, and you generally spend and replenish that. So it's hard to get further in debt, good behavior should boost your credit score, and you stand to get an ordinary, unsecured credit card once you've proved your finances are back on track.Unsecured credit cards for bad credit: These don't require an upfront deposit, but the issuers tend to cover the additional risk you pose with higher credit card rates, and, usually, annual fees.

You need to take care in committing to any financial product, and these are no exception. In fact, given that you're currently in a vulnerable situation, you should take even more care when applying for one of these cards. In particular:

Reporting to credit bureaus cuts both ways. It's a great opportunity to prove you have the resources and skills to manage your money well, and can quickly increase your score. But it can just as quickly make things worse if you mess up. Be certain you're going to have the cash and self discipline to act perfectly. A good way is to draw up a household budget in advance. Be prepared for rejection. If your financial history is messy enough, you may not qualify even for one of these products. If your application's declined, you could consider applying for a store card, some of which have low approval thresholds. But be aware of the dangers of these. Wherever people are desperate, there are sharks waiting to prey on them. Some card issuers offering these products are notoriously predatory, and charge outrageous fees (including especially dangerous "application fees") and usurious rates. Be sure you read and understand the terms and conditions in full before you commit to anything.
One of the best issuers of secured credit cards is First Progress, and it's worth exploring further three of its products in particular:

First Progress Platinum Select MasterCard® Secured Credit CardFirst Progress Platinum Elite MasterCard® Secured Credit CardFirst Progress Platinum Prestige Secured MasterCard®
Read the terms and conditions of all three for yourself to find the one that suits you best, but let's take a closer look at the main features of the last one, just as an example:

You have to maintain a minimum security deposit of $300, although you can decide to deposit up to $2,000.You won't get interest on that sum, but you will be charged interest at 11.99 percent APR variable on purchases (more on other transactions), which is very reasonable by comparison with average credit card rates. However, you don't get an interest-free grace period, and should begin to pay from the day a transaction is posted on your account.There's an annual fee of $44.These cards are not yet available to residents of Arkansas, Iowa, New York or Wisconsin. First Progress reports on accounts to all three credit bureaus each month.

With unsecured credit cards, you don't have to pay a security deposit, but the cards can be costly. Again, the advantage is that your accounts should be reported each month to credit bureaus, so giving you the chance to rebuild your score quickly.

Barclaycard Rewards MasterCard - average credit: This isn't for those with really bad credit, but it's a great deal for anyone who's just below the threshold for mainstream cards. There's no annual fee, but the rate is a high 24.99 percent APR. This is, of course, irrelevant, providing you completely pay your balance each month. You can get double rewards points on gas and groceries purchases and utilities payments.Credit One Bank Credit Card with Gas Rewards - poor credit: You're more likely to get approved for this than the Barclaycard product, but it comes with a $75 annual fee in the first year, and $99 annual fees each year thereafter. The rate charged is a steep 23.90 percent APR, but you can get basic rewards on gas purchases. One advantage is a pre-qualification process that lets you apply without affecting your credit score.

You wouldn't go anywhere near any of this plastic -- except, maybe, the Barclaycard product -- in normal circumstances, but these are difficult times. The sooner you can get your score back up, the sooner you can apply for mainstream cards and lose all the problems bad credit brings.

These products are good for that. However, if you do apply for one, just make sure you really are going to be able to make payments on time, and, if at all possible, pay down your balance in full each month. If you can't be certain of that, it may be best to wait until you are.

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A logo tattoo for a raise? These workers did

8:30 AM raise, tattoo, These, workers No Comments

"We call it brand ambassadorship," said Anthony Lolli, owner and CEO of Rapid Realty, a New York based real estate firm that encourages employees to get a tattoo of the company's logo. In exchange for the tattoo, employees receive a 15 percent commission increase for life. NBC's Joelle Garguilo reports.

By Amy Langfield, TODAY contributor
How far would you go for a raise?

Inking a deal with Rapid Realty has a more permanent feel now that the New York City-based brokerage is giving a 15 percent raise to its workers who get a tattoo of the company’s logo.

So far, 40 agents are inked and more are lining up, Anthony Lolli, the CEO of Rapid Realty told NBC News.

One new agent got the tattoo after only a week working for Rapid Realty.

But isn’t that crazy?

“I don’t think so,” Lolli said. “Some people fall in love with the opportunity. They fall in love with the brand.”

It’s actually pretty conservative compared to other people who have tattooed company logos on their person, such as the man who tattooed the web address of a porn site on his face or the woman who auctioned the space on her forehead for $10,000.

Rapid Realty

Agents of Rapid Realty in New York City are eligible for a 15 percent increase in commission if they get a tattoo of the company logo.

But at Rapid Realty, there are no regrets yet and all 40 inked employees are still with the company, Lolli said. Some early adopters are even making plans to touch up their colors.

The tattoos can be any size anywhere on the agent’s body to qualify for the bonus. They’re getting the tattoos anywhere they like: on their thighs, biceps, ankles, wrist, behind the ear and elsewhere, Lolli said. Some have only the RR logo, while others have also spelled out Rapid Realty. “They’re allowed to customize it,” he said.

Since all of Rapid Realty’s 1,100 agents work on commission, the 15 percent boost kicks in each time they complete a deal. Most agents start at a 25 percent commission so a company tattoo will bump them to the 40 percent bracket. Some agents were already maxed out at the 40 percent rate, but still got tattoos even though there was no extra pay in the deal, Lolli said.

About two years ago, Rapid Realty agent Adam Altman was the first to make the commitment after he closed a deal for a tattoo parlor in Bushwick, Brooklyn. A video on the company website documents the event, as the bespeckled, bearded agent adds the stylized RR logo to his existing tattoo collection. He already had tattoos on his arms, legs, back and mouth.

“The company’s been good to me. I don’t see myself going anywhere. If I have it on, it’s gonna force me to keep going and working harder, cuz you know I have that logo on, you know you’re not going to give up. It’s there for life,” Altman says in the video .“Rapid for life.Yo.”

So far, Lolli himself isn’t inked, but is grateful for his agents’ devotion. “It’s very humbling. I have an attitude of gratitude,” he said.

He’s considering getting a tattoo when his company hits a big benchmark of 100 offices. Currently Rapid Realty has franchises in New York City, Boston, Philadelphia, Long Island and New Jersey. But with 62 locations, he has some time to consider where he wants his tattoo for the 100th.

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Don't fall for these 7 credit myths

11:00 AM Credit, myths, These No Comments

| By Liz Weston, MSN Money

Offers to repair your credit problems can be a rip-off. Here are some tips on what is and isn't possible when it comes to your score.

Thanks to the recession and its aftermath, millions of people suffered foreclosures, bankruptcies and job losses that tanked their credit. Given how much bad credit can cost -- in higher interest rates, more expensive insurance premiums and bigger deposits for utilities -- many want to rehabilitate their credit as quickly as possible.

But real credit repair doesn't happen overnight, and it can take even longer if you fall for any of these myths:

No. 1: Credit bureaus have to investigate disputes within 30 days.

Federal law typically requires credit bureaus to investigate consumer complaints of errors on their credit reports and report the results of that investigation to the consumer within 30 days.

But there's a pretty big exception. Under the Fair Credit Reporting Act, bureaus don't have to investigate disputes they consider "frivolous or irrelevant."

"The bureaus can look at it (the dispute) and refuse to investigate. They can even do it based on the format of the dispute letter," said Barry Paperno, community director at Credit.com and a former operations manager at Experian, one of the three major credit bureaus.

Credit firms often reject the techniques used by many credit repair firms, such as using cookie-cutter forms, disputing the same information over and over again or disputing a bunch of items. You can reduce the chances of your dispute being discarded out of hand, Paperno said, by using your own words when writing disputes and including copies of relevant documents that support your position.

Liz Weston

No. 2: Disputing information will remove it from my credit reports.

If the credit bureaus do investigate your disputes, they won't remove the negative information in question while they do so. The bureaus wait to hear back from the company that supplied the information about whether it's accurate.

Sometimes these companies don't respond to disputes in time. In that case, the credit bureau may delete the disputed information.

Credit repair firms often claim victory when these deletions happen, but if the creditor doesn't remove this data from its own records, it could pop back up on your reports, said Gerri Detweiler, another Credit.com blogger and author of "Reduce Debt, Reduce Stress: Real Life Solutions for Solving Your Credit Crisis."

"They last long enough for (the credit repair firm) to cash your check," she said.

Temporary deletions are a problem even when you get a legitimate error removed, Paperno said. That's why it's important to check your credit reports frequently and keep paperwork that proves you're in the right.

No. 3: Credit repair firms know secret ways to fix things.

Credit repair outfits love to tout their special industry knowledge and insights, Detweiler said, and people often assume the firms can do things that individuals can't.

"They're led to believe there are loopholes in the law and that if you take advantage of these loopholes, you can get things off your credit report," Detweiler said.

But what credit repair firms know is secret only in the sense that their customers don't realize they can get the same information for free at their local library or from reputable Web sites.

"People think the only way to get better credit is to pay someone to do it for them," Detweiler said. "They don't really understand how much they can do on their own."

One place to start is the FTC's page on credit repair. You can get your free annual credit reports at AnnualCreditReport.com and a free "credit report card," based on your Experian credit report, with personalized advice how to improve your standing at Credit.com.

No. 4: Paying off an old debt will help my credit scores.

Some people think that paying off a debt somehow removes it from their credit reports. That's not true. But even people who understand that may assume that reducing the balance of a past-due debt to zero will help their credit scores.

That's often not the case, said Paperno, who also worked for FICO, the leading credit score creator, for 12 years. If the debt shows up as a collection account, the balance owed is usually irrelevant for FICO credit scoring purposes, so paying it off won't help unless you convince the collection agency to stop reporting the debt -- something that's typically hard to do, Detweiler said.

Balances matter more when the debt is still held by the original creditor. Even then, though, the credit scoring formula starts to ignore the balance information after a certain length of time. FICO doesn't disclose how long that time might be.

"Paying off an old charge-off isn't going to help you like (paying off) a new one," Paperno said.

If you're trying to improve your credit scores, consider paying off your most recent defaults first and see how much that moves your numbers. (If your accounts are all current, pay down your credit card debts to improve your scores.)

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These are the states hemorrhaging red ink

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AP

Nevada is among the states most stung by the downturn. Between 2006 and 2010, home values plummeted a staggering 44.5 percent.

By Michael B. Sauter, Charles B. Stockdale and Ashley C. Allen, 24/7 Wall St.

Balancing the budget is not just a federal problem, but a state one as well. The Great Recession resulted in some of the worst state revenues and budget shortages of all time. According to a report on state budgets by the Center for Budget Policy Priorities, dozens of states faced shortfalls of hundreds of millions — or even billions — of dollars.

24/7 Wall St. examined the 10 states that had budget shortfalls of 27 percent or more of their general funds for fiscal year 2011 — the states that were short the most money before they balanced their budgets. For the most part, the states with the worst budget gaps also had among the most anemic economies. Because of their budget shortfalls, all of them have been forced to make dramatic cuts to government services.

Every state but Vermont is required by its own law to balance the budget. In order to do so, state governments have to take extreme measures, instituting deep cuts that often hurt a diversity of residents. In the 2011 fiscal year, 29 states made cuts to services benefiting the disabled and elderly, 34 reduced funds for K-12 and early education, and all but six states reduced positions, benefits or wages of government employees.

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The housing crisis was one of the primary causes for many of the largest budget deficits. The housing markets in states such as Nevada, Illinois and Arizona — all of which are on the list — have been hit particularly hard. Home values in Nevada declined the largest amount in the country between 2006 and 2010. Home values in Arizona decreased the fifth-largest amount over that same period. Sick housing markets weaken the economy and lower tax bases, which hurts state revenues and in turn helps create a budget gap.

Overall, weak state economies contributed to lower revenues and rising budget shortfalls. Not surprisingly, states with slower-growing economies tended to have a larger budget gaps. And although the GDP of every state in the nation grew between 2006 and 2010, seven of the 10 states on this list fell within the 15 states with the smallest increases.

While economic slowdowns and housing problems hit most of the states with the worst budget gaps, there were some exceptions. In four of the 10 states, home values actually rose between 2006 and 2010, the worst period of the recession. Similarly, other states with budget shortfalls weathered the recession relatively well and managed to maintain fairly healthy economies. In Washington state, for example, the median income rose 5.8 percent, the 16th-most in the country, while GDP increased 13.4 percent, the 12th most.

These are the states that cannot pay their bills.

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1. Nevada

 2011 budget shortfall as a percentage of general fund: 54.5 2011 budget shortfall: $1.8 billion 2012 projected budget shortfall: 37.4 percent (the largest) GDP change (2006 - 2010): +1.2 percent (smallest increase) Median home value change (2006 - 2010): -44.5 percent (the largest decline)

No state has suffered during the recession more than Nevada. Between 2006 and 2010, home values plummeted a staggering 44.5 percent, the poverty rate increased 26 percent, median income dropped 3.8 percent and GDP increased only 1.2 percent. Each was the worst in the country for that category. Last year, Nevada’s budget gap was $1.8 billion, the equivalent of 54.5 percent of available funds. This was the third year in a row the state has had one of the worst shortfalls in the country, and that trend appears ready to continue through at least 2013. In order to balance its budget last year, Nevada was forced to raise taxes significantly, cut dental and vision services from Medicaid coverage for adults, reduce financial aid funding, and cut state employee salaries.

2. Illinois

 2011 budget shortfall as a percentage of general fund: 40.2 2011 budget shortfall: $13.5 billion 2012 projected budget shortfall: 16.0 percent (11th largest) GDP change (2006 - 2010): +8.2 percent (13th smallest increase) Median home value change (2006 - 2010): -4.2 percent (11th largest decline)

Illinois has consistently had among the largest budget shortfalls in the country since 2009. It also was hit extremely hard by the recession. Between 2006 and 2010, home values decreased by 4.2 percent. GDP grew a relatively small 8.2 percent. Median household income increased less than 2 percent. The state made cuts in its budget for community mental health services for both children and adults, and it cut its school education funding by 4 percent, or $311 million. Governor Pat Quinn has announced also that he will lay off thousands of state employees.

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3. Arizona

 2011 budget shortfall as a percentage of general fund: 39.0 2011 budget shortfall: $3.3 billion 2012 projected budget shortfall: 17.0 percent (10th largest) GDP change (2006 - 2010): +2.7 percent (4th smallest increase) Median home value change (2006 - 2010): -28.6 percent (4th largest decline)

Like its neighbor Nevada, Arizona was hit particularly hard by the subprime mortgage crisis. Between 2006 and 2010, median home values plunged 28.6 percent in the state, the fourth worst price drop in the country. GDP, poverty and income levels have either stagnated or become significantly worse during this period. Since 2009, the state has had among the worst budget gaps in the country, a combined total of $12.1 billion for the three years. To balance its budget, Arizona has made dramatic budget cuts, including revoking Medicaid eligibility of more than 1 million low-income residents and cutting preschool for more than 4,000 children.

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