What’s the difference? Prepaid Credit Cards versus Secured Credit Cards

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There are so many choices when it comes to credit cards – different banks, logos, perks, fees, etc. How do you know which card is right for you?

When most people think about credit cards, they think of a “traditional” credit card. These cards, typically issued by banks, credit unions and retailers allow a buyer (you) to take possession of something now and pay for it later (either in full or over a period of time). You are sent a monthly bill for all the charges incurred during the billing cycle. If you are unable to pay your balance in full, you are charged interest or a fee on the amount you did not pay back. When buying something “on credit”, creditors (organizations you owe money to), report your history of making payments (on-time or late) to three credit reporting agencies, Equifax, Experian and TransUnion.

If you are unable to obtain a traditional credit card (i.e. you have been denied) or simply choose not to get a traditional card, there are other “credit” options available to you – a prepaid credit card or a secured credit card. But what is the difference between the two?

Prepaid credit cards require you to deposit a dollar amount (in any amount you choose) on the card. The funds are then drawn down as you make purchases (similar to a gift card). Many prepaid credit cards are “reloadable,” which means you can add funds to replenish your credit line at any time for continued use. Prepaid credit cards are typically issued by major creditors (Visa, Mastercard, Amex, etc.) and can be used anywhere their card is accepted.

Comparatively, a secured credit card, also issued by major creditors, requires you to provide the creditor with collateral (typically money). In turn, you receive a credit card with a credit limit valued at the amount of the collateral (or another agreed upon amount). A secured credit card is used just like a traditional credit card where you make purchases throughout the month (up to your credit limit). When you make purchases, funds are NOT withdrawn from your collateral. Instead, at the end of the billing cycle you receive a bill for the purchases made. You elect to pay your balance in full (which is recommended) or a lesser agreed upon amount, referred to as the minimum payment, in order to keep the account in good standing. If you do keep your account in good standing, when you close the credit card or after a period of on-time payments, the collateral will be returned to you. If you do not keep your account in good standing, the creditor will use the collateral as payment.

Now that you know more about how each credit card works, what are the advantages and disadvantages of each card?

Prepaid Credit Card
Advantages:
– Helps you control your spending because you can only spend up to the amount deposited on your prepaid credit card
– Allows you to purchase items that cannot be bought with cash (i.e. online transactions) or at companies that require a credit card to utilize their services (i.e. car rental).

Disadvantages:
– Fees are typically charged on activities such as card activation, monthly maintenance, cash withdrawals, balance inquiries, paper statements, account inactivity, and much more. Fees may appear nominal, but they add up quickly. Shop around for the card that is right for you
– Account activity is not reported to the credit reporting agencies. Therefore, a prepaid credit card does not help you establish or re-establish your credit history

Secured Credit Card

Advantages:
– Most secured credit cards report your account activity to the credit reporting agencies. If the card is used responsibly (i.e. on-time payments), it will help you establish or re-establish a positive credit history
– If your credit report shows you have used your secured credit card responsibly, when you apply for a loan or a traditional credit card, you are more likely to be approved with favorable terms (low interest rate)

Disadvantages:
– Fees typically include an annual fee, monthly fee and interest is charged on any balance you do not pay at the end of the billing cycle. Interest rates vary, so shop around for the best rate
– Just like traditional credit cards, late payments are reported to the credit reporting agencies, adversely affecting your credit history

All credit cards have their pros and cons. Before you decide if a prepaid or secured credit card is right for you, consider all of the advantages and disadvantages each card has to offer and how the card will help you reach your financial goals. If you have any additional questions about the difference between prepaid credit cards and secured credit cards or need help deciding which card is right for you, contact one of our Certified Personal Finance Counselors at 888.354.6332. We can help you on your way to …a brighter tomorrow.

DON'T FREEZE YOUR LOOK. . . (YOU MIGHT BE LEFT OUT IN THE COLD!)

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I am often told when I am doing make-up, “well, I always use. . . “

Well, if you’ve always used the same lipstick, eyeshadow, blush, foundation, etc., etc. for the last 25 years. . . you might just be dating yourself (and that’s lonely!). I’m not suggesting that you should throw out the whole look, but if you look like someone out of the 1970’s and you’re in your 50s, we gotta talk!

Our skin changes. Color, texture, elasticity. The eyes change. Brow shapes and styles change. I can tell when a woman first started to use makeup sometimes by what’s in her handbag.

Look at current celebs. We’ll use Lady Ga Ga — she’s good for an example. I love her, but she’s a bit extreme. Look at a celeb with your coloring, age range and someone whose look you like. I can help you achieve “that look”. Just ask Michael (see above link to ask me a question!).

Let’s see what eyes and lips (the most tramatic differences) can do to change your look, even a little, to update your colors.

So, ask me.

I can create a look we will both like. Make-up is like cooking. I have my recipes and you are gonna add your own spece to make that look your own, which is the way it should be. And, working together, I can create a formula which can work with you (as you are) and your work, your lifestyle and your individual point of view.

So, don’t be left out in the cold. Be the best possible, beautiful you!

Why look good when you can look great! ™

Until next week! I’m Michael – ask me!

How Forced Change healed my life.

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Have you been forced out of a job? Are you facing a health issue? A victim of a crime? Accident? Have you lost a loved one unexpectedly? Then you know that forced change embraces your life in an instant. 

And that is where my message starts. I experienced “forced change” when my 17-year old son, Michael, died in an auto accident. But, years later, I now see that losing Michael wasn’t the only reason my life hit rock bottom. I wound up down there because the forced change took hold of me and began to drag me down. Naturally, any forced change is a challenge to face. But I continued to get dragged deeper and deeper because I felt like I had nothing to grab onto. It felt like no one or no thing would ever matter again. I felt truly empty of everything including life itself.

And now I know why. And this is the heart of my message to you.

You have an entire lifetime worth of ideas, beliefs and values. Everyone does; and I certainly had quite a full Garage myself. I knew that many of these thoughts were in desperate need of change; and in some cases, I knew that I needed to change them. But working against these well-intentioned plans to change were equally powerful negative and fearful thoughts. So I was feeling stuck between wanting help and the fear of letting go and heading into the unknown. 

So many people spend too much time in this state of mind. Not quite happy, not quite sad. Grouchy at everything and nothing all at the same time. In short, they are just moving along. The danger is that when something unexpected enters the picture, it can drag life right to the bottom before you know it because the life they are leading just can’t hold up to the heavy weight of forced change. 

This is why I now say that my son, Michael, taught me more about living life than I had ever imagined. I was so completely stripped of everything that the only thing left to do was to start completely over. As I began to recover, I learned how to make new choices. Choices that were based upon what I wanted in my life. I am here today because I used all my energy to rebuild every part of my life. 

But as I look back now, I can see that my journey could have been less traumatic if I was living life differently before it all happened. And that is what my message is all about. Going from living life to loving the life you life… before it’s too late. You can avoid hitting rock bottom when forced change knocks on the door by choosing to change your thoughts one moment at a time long before tragedy strikes. 

What can you do right now to be ready to fight through a life-changing situation? Take just one small issue in your life and take one small step to fix it. Imagine making that overdue phone call. Choose to throw out one cigarette instead of inhaling it. Make your cup of coffee at home and put the money you save in the vacation fund. And when you are done with that one small thing, then do another. Choosing to make a change one moment at a time will add up to great change in a short time. 

Forced change often arrives with no warning. And when it does, it will take every bit of your own personal power to get through it. So make time today to bank some of that personal power for when you need it. Where do you get that from? You get it by making the choice to stop wasting energy avoiding the change, and choosing to enjoy the success that comes from accomplishing that which you feared the most.

REAL FACE TIME

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“Other things aren’t there to create or bring you happiness. They are simply there to add to your life.” — The Zing; pg. 70

What ever happened to stick ball? How about hide-and-seek with your house as home base? What about playing outside in the neighborhood until the street lights came on?

Think back to your youth — you played in groups. You found things to do when you had nothing like a cell phone or gaming device in your hands. You were in a group of kids, whether you liked all of them or not, and enjoyed your free time by doing things together. You found a way to make something great with nothing more

than your imagination.

Now, we still have those groups today. But they are all linked together by social media. Our kids find ways to entertain themselves with things that either plug into the wall or runs by battery. And many of these devices have the great ability to link game players from all over the globe.

Don’t get me wrong. Being connected is a great way to broaden your life experiencesBut it is not the exclusive way to be out in the world. There are a great many lessons to learn from playing outside in “the neighborhood” which has gotten lost in today’s electronic driven world.

Bored with a house full of things? Start today by choosing to connect with people without a device. Want to start reaching out to the younger generation in a new-old way? Throw a frisbee, play catch, take a walk. When your kids have a play date, help them choose to interact without some type of gadget in their hands.

Let’s start going back to the REAL social media of yesterday. Re-discover the real time world, face-to-face — and leave the texting and posting for another time. I guarantee you and your family will enjoy it more than you think.

Have Christmas in July!

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Consider buying gifts all year long. Not only will you avoid the January money hit, but you also avoid the crowd and get the size and style you want. Spend the holidays enjoying time spent rather than spending family time at the mall.

When you change the way you see the gift giving season, you can change the outcome in January. All you need to do is consider doing something different this year and you will reward yourself with less holiday and financial stress in the end.

“When you choose to change your thoughts, you begin to change your life.” Ron Villano, M.S., LMHC, ASAC is a licensed psychotherapist, certified clinical hypnotherapist, life & bereavement coach, author and national speaker. He has appeared before sold-out audiences across the country, is the host of two internet radio shows, and is currently featured on the Verizon FiOS1 network. Please check www.RonVillano.com for event and contact information.

It's never too early.

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Now that you have a better financial handle for this year, pay it forward and plan in January for the next shopping season. This means taking a look at what you spent this year and start putting money away. It Set up a separate checking account and make regular deposits. Even as much as $10 per week will add up nicely. And this way, you won’t feel the financial pressure during the holidays and you will have NO bill in January. Imagine that as you pull that credit card out this year.

Internet to the rescue.

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Know what you want? eBay, Craig’s list, and other discount sites may be able to give you a better deal. And there’s no crowds. And the store doesn’t close. Even if you have to pay shipping charges, you will gain back family time and will avoid those impulse buys.

Stick to it.

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The easiest way to overspend during the holidays is when impulse buying takes over. Plan the list, plan your budget, then stick to it. Make a deal with yourself that after you have bought a gift for everyone on the list, you can to go back and buy yourself something for sticking to the list. Buying only what you planned will keep your mind aware of your money and save yourself the shock of a devastating January bill.

Take a financial inventory.

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You may have a budget in mind but the only way to stick to it is to pay cash. Whether you’ve got $100 or $1000 make sure you spend just that amount by avoiding the temptation to pay for it later. Got the urge to charge? Be bold and leave every credit card at home. Try it just one time. You’ll find it is easier than you think.

Make a list. Check it twice… and three times… and more.

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Ask yourself this question. If I didn’t buy a gift… would it really matter? Once you do that, then go back through the list and decide who can get a “budget” gift (something less expensive or, better yet, handmade). And there’s nothing wrong with gift cards. It pre-sets your spending. This way you can make the most out of your money rather than regret what you spent in January.