Recent legislation from Texas to California focuses on banning payday lending. This ban inherently assumes that the 12 million people who take out ~$7.4 billion in payday loans every year are incapable of making intelligent decisions and must be protected by removing this choice.

There is no question that many payday loan users are making poor decision. In fact, The Consumer Finance Protection Bureau (CFPB) finds that over 66% or 8 million people use payday loans incorrectly as longer-term loans instead of as a short-term credit tool. This is unacceptable, but is it a result of bad decision making skills or, as the CFPB states, a question of “whether consumers understand the costs, benefits, and risk of using these products?”

The correct answer is probably a bit of both, but 66% of a population making irrational decisions suggests to us a lack of understanding is a big driver. Our data supports this conclusion.

The attached chart shows the higher ranked a lender is, the more visitors the lender gets from our site. The same is true with price – the lower the price, the more visitors. The only exception occurs between the top ranked lender classes. Here, users appear to be willing to pay more to use a state licensed lender rather than an unlicensed lender. This supports the conclusion that payday borrowers are not only capable of making rational decisions but of making fairly sophisticated trade-offs when provided tools and information.

What is odd to us is why any borrower goes to lower ranked, higher cost lenders. One hypothesis is this occurs because in states where payday lending is banned, licensed lenders are not an option forcing borrowers to go to higher-priced, riskier lenders. We will examine this hypothesis in more depth in a future post.

The Payday Hound’s preliminary results show payday borrowers do make rational decisions when provided with tools and information. This makes sense; after all, can one imagine trying to select a mortgage in an environment where there is no truth-in-lending regulation, anyone with capital can make mortgage loans, and there is no consequences for lying? We imagine if this was the case, 66% of prime borrowers would also make poor decisions.

The Payday Hound suggests that legislators consider focusing more on creating consistent, cohesive, enforceable regulation in the short-term lending market, much like prime borrowers enjoy in the credit card and mortgage markets, rather than reducing choice by banning a product. Just like banning unregulated mortgages in the example above does not address the need for mortgages, banning payday loans does not solve the need for short-term credit. We believe regulation that focuses on creating a short-term, loan market that is fair, transparent, and competitive is more helpful to borrowers than reducing choice.

The post Are Payday Loan Users Stupid? appeared first on The Payday Hound.

We aim to provide informed, fact-based reviews and services to consumers. We believe more reviews and comparison tools help consumers make educated decisions while encouraging a wider array of product choice. Ultimately, we believe consumers, when armed with information and trade-offs, will educate themselves, avoid inferior or deceptive products, and use financial products to their advantage.

Opponents of payday lending believe the best way to protect consumers from high fees and deceptive practices is to ban the product completely. We do not think banning the product is the best solution for consumers. We believe high pricing and deceptive practices are two different problems requiring two different tools. Pricing is best left to market forces. If payday loans are too expensive compared to other options, the industry will disappear on its own. Transparency highlights price differences but, today, it is very difficult to comparison shop in the payday lending space as information is limited or even censored. Deceptive practices are best addressed through regulation. Clear rules and regulations and the active removal of deceptive and illegal lenders creates a level playing field letting consumers trust the system. Bringing more transparency to regulation not only warns consumers of unscrupulous lenders, but also helps legitimate businesses plan and reduce costs. We believe banning a product is a blunt tool that leaves consumers with less choice. Instead, specific tools should be used to address the problems they are designed to fix: market forces for managing pricing and regulations for leveling playing fields.

Payday loans and other short-term loans are expensive credit products but millions turn to them every year. We support building infrastructure and programs, both public and private, that reduce the need for these expensive products but banning products is unhelpful. For individuals who turn to payday loans because they have exhausted all their options, we should be doing everything we can to provide more options not less. The Payday Hound believes that regulation, enforcement, and transparency will do far more to providing immediate options to consumers than blunt tools such as banning or censorship.

For more information on our views see our article More Transparency in Payday Lending in the American Banker.

Thanks and feel free to send us your thoughts and suggestions!

The post Payday Loans Too Taboo to Touch? appeared first on The Payday Hound.

The basic steps for making a payday loan are,

1. Marketing the Loan. Finding people that want and can qualify a loan.
2. Getting an Application. Getting the applicants information.
3. Underwriting. Deciding yes or no to making a payday loan.
4. Funding. Having the money to lend to the borrower.
5. Account Management and Collections. Getting your cash into your checking account, managing your account, calculating fees, call centers and collecting payment.

Direct Payday Loan Lenders generally manage all the steps listed above. Sometimes they do the entire process themselves and other times they partner with companies to help them. CashNetUSA, Check City, and ACE Cash Express are examples of direct payday loan lenders. They manage all steps of the above process. You can apply directly for a loan from any of them. These two companies also work with other partners to help them with the different steps. For example, some direct payday loan lenders work with networks that help to market and/or gather applications for them. These networks act as a matching service. A network may work with multiple direct payday loan lenders directing borrowers to their website’s or even taking applications and then forwarding qualified applications on to direct payday loan lenders. For example, The Payday Hound works with T3 Leads and RoundSky. When you apply for a payday loan from our site your application will be matched different direct payday loan lenders via direct relationships we have with lenders and by going through these two networks.

Underwriting is generally done by the direct payday loan lenders themselves. This involves setting loan pricing and acceptance criteria. Usually this step involves statistical analysis to understand what attributes in a loan application identify people that will pay them back. The fourth step is funding the loan. In order to give you money the payday loan lender must have money to give. Sometimes payday loan lenders take out bank loans to have money to lend to you. For example, Wells Fargo makes loans to some payday loan companies. The payday loan company then lends the money to you but if you don’t pay the loan back then the payday loan company must use their own money to pay back the bank. The final step is operations and collections. This involves the actual mechanics of transferring money into you checking account as well as making sure your pay the loan back. Sometimes direct payday loan companies will outsource this step to companies that have the software and staff designed to do this.

The advantage of working with a direct payday loan lender is you know exactly to whom you are applying. In addition, they generally provide you a list of rates and terms before you even apply for a loan. The disadvantage of applying to direct payday loan lenders is that you need to apply directly to each one individually. So if you are rejected by one lender you must fill out another application each time you apply to another lender. When you apply through a network you only need one application. The disadvantage is that you do not get to see your rate or terms until after you have been approved. But remember you never have to accept a loan and never should accept a loan, even if approved, until you have reviewed, understood, and agreed to the loan terms.

The post What are Direct Payday Loan Lenders appeared first on The Payday Hound.

We get a lot of searches for Jupiter Funding Group so we decided to update our review of this payday lender. We initiated our rating earlier this year of Jupiter at two stars and our recent review maintains this ranking.

Unlicensed Lender?

It appears Jupiter Funding Group is an unlicensed lender incorporated in Delaware. If you are sure you are able to pay off on time then, like most all other payday lenders, everything should go fine but if you decide to rollover your loan or have troubles paying back your loan Jupiter appears to operate unregulated. We suggest using a four or five star rated company and one that is licensed in your state. You can use our loan finder to the left to find a company that operates in your state.

Limited Information, Unreturned Phone Calls

There is very little information available on Jupiter Funding Group. We checked the records of State of Delaware and they are listed as an LLC but that doesn’t really tell you very much. Their domain registration appears to have been in place since January 2010 and they have no record with the Better Business Bureau.

We tried to call Jupiter and speak to someone to learn more about their group but were given what appears to be incorrect and then evasive answers. The first person we spoke to offered to help us with a loan. When we asked if they were a licensed lender we were told they make loans in every state but Delaware. When we asked if that meant they were licensed in every state we were told yes. When we pressed further (knowing that many states do not allow payday lenders and thus it’s impossible to be licensed in every state) the representative said they don’t know what licensed means but knows that they provide payday loans in every state but Delaware. As we tried to get more information we were asked why we wanted to know this information. We told them we were a review site looking to learn more. At this point the representative became very evasive and said we needed to speak with a manager. So we asked to be transferred to a manger. Another person came on the line and asked who we were and why we were asking questions. We told them we were a review site and wanted to better understand Jupiter Funding Group for our readers. We tried to ask again whether they were licensed but were told we must speak to a manager and one would call us back. We gave the person our phone number and email and have not heard back. This was three weeks ago.

Based on this interaction and lack of information on Jupiter’s website we are guessing they are an unlicensed lender offering payday loans. They are incorporated in Delaware but do not offer payday loans in Delaware maybe so they don’t violate Delaware laws. This is not clear but Delaware does allow payday lenders and is relatively lenient relative to other states, some of which outlaw them outright, so that doesn’t quite add up either.

Additional Information?

We would like to better understand Jupiter Funding Group’s approach to lending, legal status, and size. We also would like to know if they are operating as a licensed lender, offshore lender, tribal lender or state lender. Additional information on how they handle collections would also be useful. If anyone has direct experience with Jupiter Funding Group or if we’ve misrepresented anything here please email us or leave a comment below.

The Payday Hound believes in improving transparency in the payday lending space. We believe regulations can help but are a fairly blunt tool and when done to an extreme can even increase the costs of the lending until it is detrimental to consumers. We believe clear market transparency combined with regulations can improve the payday lending space for consumers and businesses alike.

The post Who is Jupiter Funding Group appeared first on The Payday Hound.

Prepaid cards have many different fees and the best card varies based on how you use it. The prepaid card calculator takes your inputs on how you plan to use the card, automatically calculates the different fees, and ranks the cards based on cost. The resulting table also provides detailed reviews and a fee breakdown under “More Info.”

Prepaid card fees have come down for the most competitive cards. The main variations for the top cards have to do with ATM withdrawals, card reload and customer service. There are two ATM withdrawal fees: one charged by the owner of the machine and one charged by the card issuer. The cheapest cards do not charge fees for either. The next area of differentiation is card reload. To put cash on your card you generally need to use a third party service like a MoneyPak. These services charge the same fee for all cards but some cards allow you to reload your card at their stores for a lower fee or no fee. Note that these fees only relate to cash reloads. Direct deposit reloads are free. The final area of differentiation is customer service. Many cards charge a fee for calling customer service, others provide a couple free calls a month and some have free customer service. It can be difficult to compare cards across these different fees. The prepaid card calculator will calculate these fees automatically.

Here is a more detailed explanation of usage fields:
Direct Deposit: Will you reload your card with direct deposit or not. All cards provide direct deposit reloads for free so don’t be sold by “Free Direct Deposit” as this is free with every card. The reason we include it here is that some cards will actually waive fees if you do direct deposit.

Purchases: How many purchases will you make a week? This attribute is not as important anymore. In the past some cards would charge you every time you made a purchase. Today, he top cards will not charge you to make a purchase.

ATM Withdrawals: How many ATM cash withdrawals will you make? There are two fees here: one charged by the card issuer and one charged by the ATM machine owner. Some card issuers waive both fees on ATM machines they own. The prepaid calculator separates out between in-network and out-of-network machines to differentiate whether you make withdrawals from the owner’s machine or not. To find the location of each card’s machines click on “More Info” under each card to find a link to their network of machines.

Loading Your Card: How much you will deposit in total each month and how many cash loads will you make. How much you will deposit is your total deposit. It includes direct deposit AND cash loads. Many cards reduce and even waive fees depending on how much money you deposit on your card. This is because the cards earn a small fee from merchants when you use the card. So the more you use the card the more money they will make. The number of times you do cash loads lets the calculator estimate you fees for cash loads. The calculator assumes you will use the cheapest method to load your card.

Account Maintenance: How many times will you check your balance at the ATM? And how often will you call customer service? Most cards will charge you if you check your balance on an ATM. We suggest you check balances online where it is free instead of going to an ATM. The cost of customer service calls vary greatly among cards. Some charge up to $3 a call while others are free. .

Time: How long do you plan to hold this card? Some cards charge activation or one-time fees. Knowing how long you will hold the card lets the calculator figure out the effective weekly cost of these one-time fees.

Once you set your usage click “Find Card” and the calculator will show a list of card ranked by cost. Click on “More Info” to see a detailed review, cost break down, and fee schedule for each card. The cost breakdown will vary based on your usage. For example, customer service calls may be free if you do direct deposit but have a fee if you don’t have direct deposit. So expect to see this to change as you change your usage behavior. You can adjust the usage to see how cards re-rank.

Prepaid cards do not build credit. If you have bad credit and are looking to build your credit we recommend secured credit cards. They are available to individuals with no or bad credit and they do build credit by reporting to the three major bureaus. To learn more visit What is a Secured Card and The Best Secured Cards.

The post Prepaid Card Calculator appeared first on The Payday Hound.

To better understand this relationship between payday loans and your credit score we’ll look at what is a credit score and how it’s calculated. Your credit score is basically a score modeled to predict your likelihood of paying back what you borrow.

There are three major credit bureaus that model credit scores: Equifax, TransUnion, and Experian. They model your credit scores using data submitted to them by lenders and creditors with whom you have accounts such as banks and credit card companies. Each credit bureau has their own modeling technique but in general they look at 24 months of your credit behavior to determine a score. They then furnish this score to entities with whom you’ve given permission when you are applying for credit such as credit card companies, banks, landlords, and insurance companies.

The reason payday loans cannot improve your credit score is that payday lenders do not report to the three major credit bureaus. According to Maxine Sweet, Vice President of Public Education at Experian, “Experian does not currently receive payday loans from lenders. Payday loans are not typically included in credit reports…” This means that when you payoff a payday loan on time no one knows about it so it cannot positively affect your credit file.

The reason payday loans can negatively affect credit scores is because if you do not pay your loan off on time a payday loan company may sell your loan to a collection agency. And according to Ms. Sweet, “most collection agencies do report their accounts to all three of the credit reporting companies.” This means that your failure to pay off a loan does get reported and can hurt your credit file. To be clear the only way a payday loan can affect credit scores, as of the writing of this article, is if you do not pay it off on time. Just the act of taking out a payday loan will not affect credit scores as this behavior is not reported.

Payday loans are a last choice option for emergency cash. They are not a tool for rebuilding credit. More importantly, if not repaid, payday loans may hurt your credit. If you have bad credit and are looking to build your credit we recommend secured credit cards. They are available to individuals with no or bad credit and they do build credit by reporting to the three major bureaus. To learn more visit What is a Secured Card and The Best Secured Cards.

The post Do Payday Loans Affect Credit Score? appeared first on The Payday Hound.

What is a secured credit card?

A secured credit card is just like a regular credit card in the way that it is used.  The main difference is that in order to obtain a secured credit card, you must deposit money up front with the bank that issues the card.  This refundable deposit is held by the bank in an FDIC insured account as collateral to cover any credit card balance you may owe the bank when you make charges on the credit card.  The amount of the money you are required to deposit varies but is typically equal to the amount of your desired credit limit.

For example, if you want a secured credit card with a $500 credit limit, the bank that issues the card will require a $500 deposit.  You may make this deposit in a variety of ways – by writing a check and mailing it to the bank, by ACH transfer, or in some cases walking into a branch. Once the bank receives your deposit, the bank issues the secured credit card.

How does a secured credit card work?

A secured credit card works very much like a regular credit card.  In fact, it is identical when it comes to paying for things you buy at a store or buy online, paying bills and most other charges. Merchants, stores, restaurants, online retailers and anyone accepting your card cannot tell the difference between secured cards and regular cards. Secured cards look and behave just like regular credit cards.

The main difference between a secured credit card and a regular credit card is that you must deposit money with the bank that issues the card.  This deposit is held by the bank as collateral for the charges that you make on the card.  As long as you pay the amounts that you owe your deposit will be refunded when you close your account.  If, however, you do not pay the amounts that you owe, the bank will deduct any amounts you owe from the deposit before refunding the remaining amount to you.

Where is my security deposit held?

Your security deposit will be held in an account at the bank. These accounts are almost always FDIC insured and in some instances even earn interest. You will not have access to your deposit until you close you cancel you secured credit card account and pay off any remaining card balances.

What happens to my security deposit when I close my account?

Your security deposit will be refunded to you when you close your account.  The bank will deduct any amounts that you owe the bank at the time you close your account.  If you owe the bank an amount that is greater than or equal to your security deposit, the bank will keep your entire security deposit.

Can I get a secured credit card with bad credit, poor credit, or no credit history?

Yes, secured credit cards are designed for people with bad credit.  Banks are primarily concerned with getting repaid for the amounts that the cardholder owes to the bank.  With a regular credit card, the bank takes a risk that you will not pay them.  With a secured credit card, the bank has much less risk because there is a cash deposit they can draw on in the event you don’t pay.  For this reason, banks are willing to issue secured credit cards to people who would not qualify for a regular credit card.

What are the advantages and disadvantages of a secured credit card compared to a regular credit card?

The advantages of a secured credit card vs. a regular credit card are:

• Easier for people with bad credit or no credit history to obtain
• In some cases, may have a lower interest rate on amounts owed

The disadvantages of a secured credit card vs. a regular credit card are:

• Must make an up-front cash deposit
• In some cases, may have higher application, annual and/or monthly fees
• In some cases, there is no grace period and interest starts incurring immediately after making a purchase

What are the advantages and disadvantages of a secured credit card compared to a prepaid card?

The advantages of a secured credit card vs. a prepaid card are:

• Ability to build or rebuild credit by reporting credit card activity to credit reporting agencies
• In some cases may have lower fees

The disadvantages of a secured credit card vs. a prepaid card are:

• A secured credit card will, with some exceptions, charge interest on outstanding balances

Does a secured credit card improve my credit history?

Yes, if used responsibly. Your secured credit card activity is reported to the three major credit reporting agencies – Experian, Equifax, and TranUnion — just like a regular credit card;  however, just like a regular credit card, if you fail to pay amounts owed on time, it may damage rather than help your credit rating.

Is a secured credit card a good option for me?

A secured credit card is a great product for you to consider if you,

1. have been unable to obtain a regular credit card,
2. desire to build or rebuild your credit rating, and
3. have the funds to make the initial deposit.

If I get a secured credit card, will I be able to obtain a regular credit card in the future?

Yes, if you get a secured card and use the card responsibly so that your credit score increases through use of the card, you may be offered the ability to move to an unsecured credit card or you may be able to apply for and obtain an unsecured credit card in the future.

To compare secured cards visit see our Secured Card Calculator.

The post What is a Secured Credit Card appeared first on The Payday Hound.

First a couple tips, in general, if you take a payday loan and pay it off on time, most payday direct lenders behave the same. If you run into unexpected difficulties and are unable to pay the loan on time, this is when a state licensed payday direct lender could make a difference, as they are more tightly regulated than off shore lenders. Direct payday lenders are regulated by states, so if you want a licensed payday direct lenders, you need to find one that offers loans in your state. Below we list which states our top picks operate in, but if your state is not listed, use the Loan Finder to the left or our application to find a payday loan in your state. Visit Payday Loan Laws to learn more about licensed and unlicensed lenders. And now for our top picks based on different needs.

The Safer Path: State Licensed Payday Loan Lenders

Going with a state licensed lender means your state regulator monitors and evaluates this lender for compliance. There a national payday lending companies that are licensed in every state in which they operation. We likeCheck City, ACE Cash Express, or CashNetUSA. Each of these payday direct lenders is licensed in each and must comply with each state’s laws. The fees for payday direct lenders vary from state to state and can be lower or even better than the offshore entities who generally underprice these state licensed lender, so it’s a good idea to check the pricing and availability of these guys before going with an offshore lender. We use the pricing for Idaho residences for comparisons below.

Check City charges $67.50 for a $300 payday loan in Idaho. As we mentioned above these fees vary by state and can sometimes be lower than offshore payday direct lenders so check the pricing for your state. For example, in Washington, Check City customers are charged $45 for a $300 loan, which is cheaper than the offshore lenders. The maximum loan amount for Idaho is $1,000 and you may renew the loan three times. Check City has an A+ score from the Better Business Bureau. Check City also has a referral program where you receive $30 for every friend you refer who takes out a loan and your friend will get 20% off their first loan. Check City offers payday loans in Alabama, California, Delaware, Hawaii, Idaho, Illinois, Kansas, Missouri, Nevada, New Mexico, North Dakorta, South Dakota, Utah, Washington, Wisconsin and Wyoming. Check City opened its first store in 1986. Click here to apply to Check City.

ACE Cash Express charges $75.00 for a $300 payday loan in Idaho. Again, fees vary by state, so check pricing in your state. For example, ACE Cash Express charges $51.00 for a $300 payday loan in Nevada. The maximum loan amount for Idaho is $1,000 and loans can be renewed up to three times. ACE Cash Express has an A+ rating from the Better Business Bureau. ACE Cash Express offers payday loans in Alabama, California, Delaware, Hawaii, Idaho, Kansas, Louisiana, Maine, Minnesota, Mississippi, Missouri, Nevada, Ohio, South Dakota, Tennessee and Texas. ACE Cash Express is one of the largest payday direct lenders in the country and has been in business since 1968. It has over 500 employees and has served over 38 million customers. It was a publicly traded company until 2006 when its current management took it private. Click here to apply to ACE Cash Express.

CashNetUSA charges $75.00 for a $300 payday loan in Idaho. Again, fees vary by state so check pricing in your state. CashNetUSA can also have lower fees than offshore entities depending on the state. The maximum loan amount is $1,000 and can be renewed three times for the state of Idaho. CashNetUSA also has a loan referral program. You earn $20 for every friend that opens a loan and your friend receives 20% off of loan fees. CashNetUSA has an A rating from the Better Business Bureau. CashNetUSA offer payday loans in Alabama, Alaska, California, Delaware, Florida, Hawaii, Idaho, Illinois, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Nevada, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Texas, Utah, Washington, and Wyoming. It currently has over 1 million customers. It started in 2004 and in 2006 was acquired by Cash America International, a publicly traded company with over 5,000 employees. Click here to apply to CashNetUSA.

Save Money, Pay On-Time: Off-Shore Payday Direct Lenders

Many of our users apply to off-shore payday lenders. These lenders import their country’s law into your state so are not regulated by your state but their pricing can sometimes be cheaper. If you choose to use one of these lenders make sure you understand the terms and stay on top of your loan. If you do not want to renew make sure you can control the automatic renewal process. The most popular of these off-shore lender amoungst our users is Payday Max or Discount Advances, both lending from Anguilla, BWI. They generally have the lowest fees of the direct payday lenders we reviewed and appear more established than other off shore payday direct lenders.

Payday Max’s payday loans cost $55.86 for a $300 loan and have 25% off for first-time borrowers for a fee of $41.88 for a $300 loan. They allow you to roll over the loan over three pay periods paying only fees and interest, but after three renewals you must pay $50 in principal for payday loans under $600.01 and $100 in principal for payday loans over $600.00 plus fees and interest until the loan is paid in full. If you are only paid once a month, you are required to pay principal on the second extension of $100 for loans under $600.01 and $200 for loans over $600.00. The payday loan amounts vary from $250 up to $2500. They offer loans in all states. Click here too apply to Payday Max.

Discount Advance charges $52.50 for a $300 loan with a 25% discount for first-time borrows, which is $39.38 for a $300 loan. Their renewal features are the same as Payday Max and they offer payday loans in all states. In fact, we think these direct payday lenders are operated by the same entity as they are both based in Anguilla and their websites are very similar. Given this, we suggest going with Discount Advances, as they are slightly cheaper. Click her to apply to Discount Advance.

One Application Many Lenders: Payday Loan Network

The above options require an application for each lender to whom you apply. So if you are rejected by one lender you must re-fill out an new application to apply to another lender. Applying through a payday loan network lets you use one application that gets sent to multiple lenders until one accepts your or there are no more lenders.

The Payday Hound has a payday loan network where you can apply for a payday loan. Your application will be sent to direct lenders through our own network and general payday loan networks. Our general lender networks include T3 Leads> and RoundSky. Our direct payday lenders matching service is 100% free to our users and you are under no obligation to take the loan even if you are approved. If you are approved you will be sent to the lender’s website. We do not have control over these lender’s websites or terms so make sure you read the loan terms carefully before accepting a loan. This service is private, safe and discreet. The sevice is completely online, faxless, and approvals are instant. To use this service, you fill out a single and simple form and we take care of the rest, including determining which payday direct lenders serve your state. Once you click apply, we send your application to our network of direct payday lenders and you can have up to $1000 cash within 24 hours. Click here to apply to multiple lenders at once.

Final Thoughts

We hope our research has made it easier to find a payday direct lender. Remember to review your loan documents before you accept the payday loan to understand when your loan is due, how much you owe, and when funds will be withdrawn from your checking account. Payday loans are designed for emergency short-term loans. Visit our Quick Fast Loans article to see a comparison of other options.

The post The Best Payday Loans and Lenders appeared first on The Payday Hound.

If you have bad or poor credit, a secured card is one of the best credit card options available. Unlike pre-paid cards, they can improve your credit score and unlike unsecured cards, they are generally pretty straight forward without numerous fees (although some issuers have removed the grace period, meaning unlike traditional a credit card, you are charged interest even if you pay your balance off in full every month; we’ve highlighted these issuers below and in our rankings). A secured card does require a deposit unlike unsecured credit cards but, if it’s possible, saving up your deposit can be worth it, as unsecured cards often charge fees almost equivalent to your refundable deposit. Once you have a deposit, finding the best secured card largely depends on whether you will carry a balance and for how long. In general, the best approach is to avoid running balances by paying off your card each month. If you can do this, the best bad-credit card is the one with the lowest fees. If paying your card off in full every month is not possible, then the best secured card varies. We’ve summarized the best secured cards for typical users below.

Revolving Balance Users: Low Interest Rate Secured Card

Applied Bank® Secured Visa® Gold Credit Card is a good low-purchase APR or interest rate bad-credit card if you do not pay off your balances in full every month (if you anticipate carrying a balance of over $701 over the year, please see the Best High Revolving Balance Secured Card section below instead). The interest rate is a low 9.9%, but the card has no grace period. This means it charges interests immediately when you make a purchase. If you carry over a balance, then a grace period is not that relevant to you and a low interest rate benefits you, but if you are someone who pays off your balances, then this bad-credit credit card is not a good option for you, as you are charged interest on your purchase even if you pay your full balance off immediately.

What about those of you who carry over a balance some of the time but not all the time? A top secured card for those of you in this scenario is the The First Progress Platinum Horizon MasterCard® Secured Credit Card. The First Progress secured card charges a relatively low interest rate of 14.99% and a $39 annual fee. It also includes a grace period of 25 days for you to have some time to pay off your balance without incurring any interest rate. So, if you carry a balance over only for one month, your interest rate will be low and if you want to pay off you entire balance, you have 25 days to do so.

High Revolving Balance Users: 0% APR High Fee Secured Bad Credit Card

For those that revolve a balance of over $701 a year, the Platinum Zero® Secured Visa® Credit Card from Applied Bank® is a great option for you. The card has 0% Purchase APR, hence its card name, and includes a $9.95 monthly fee, which is $119 a year. This monthly fee clearly adds up and the card does require a higher deposit of $500, which is around $200-$300 more than what is required for other cards, but if you carry balances of over $700 a year, the interest savings on this card compared to other cards make this a better bad-credit card choice. If you do not keep an average balance of over $701 a year, this card is not recommended because the costs for the monthly fee will be more than what it would cost you to use another card. In this case, see the Best Interest Rate/Best Revolving Balance Card or the Best Low Fee/No Revolving Balance Card sections.

Pay In Full Every Month: Best Low Fee Bad Credit Credit Card

If you know you are not going to carry a balance over or only occasionally carry a low balance, the Wells Fargo® Secured Card is a great option for you because it has one of the lowest annual fees at just $25. This secured card also has one of the highest maximum secured credit card limits at $10,000. If you want to make big purchases and can pay off your bills each month, this is one of the best securd cards to help you build your credit. It does require a minimum deposit of $300, which is slightly higher than the majority of other cards, but not much higher at just $50-$100. In addition, this secured card lets you customize your card with a personalized design, which we think is a pretty neat feature.

Military Service Member & Veteran Card: Low Fee, Low Interest Card

For those that are severing or have served in the military, the USAA Secured Card® is a great option. You must first be a USAA member. Once you are a USAA member, its secured card is one of the top secured card options for its low fees and interest rates, high maximum and low minimum deposit, and other great features. Both the Purchase and Cash APR are exceptionally low at 9.9%. Out of the 11 cards we reviewed, the average Purchase APR is around 17% and the average Cash APR is around 19%. The annual fee is also one of the lowest at $35 while the average is around $40. Both the maximum and minimum deposit is at one of the best amounts with $5,000 as the maximum and $250 at the minimum.

Some other great features of the USAA Secured Card® include the ability to earn an interest of 0.95% on your security deposit, the option to choose between a MasterCard and an American Express card, allowing you to take advantage of the benefits of either network, and access to CreditCheck Monitoring, an online credit review and management service, for free.

If you are always going to pay off your balance within the 25-day grace period, then the Purchase APR, or interest rate, is not going to be too relevant for you. In this case, it’s better to choose a card that has a lower annual fee; a good option is the Wells Fargo® Secured Card, as it has a lower annual fee of $25 and a higher maximum credit limit of $10,000 should you want to make larger purchases that you can pay off before the due date.

Forgetful Users: Best Late Payment Card

We do not recommend paying your bills late, as it may hurt your credit score and the fees are expensive. Nonetheless, if you are someone that occasionally forgets to pay your bills on time, the Capital One® Secured Master Card® maybe a better option for you. Like all other providers, Capital One will charge you a late fee, but the maximum late fee is lower at $19 compared to the $35 fee that the majority of providers charge. In addition, the annual fee of $29 is only slightly higher than the Wells Fargo card, so if you forget your payment once this card may save you money.

Best Credit Score Monitoring Card

For the majority of you, you want to use a secured card to help build your credit worthiness. Two providers, US Bank and Capital One, understand this and so have included with their secured cards features to help you monitor your credit score. The US Bank® Secured Visa Card offers a free credit score from Experian, one of the three credit reporting bureaus in the U.S. The Capital One® Secured Master Card® includes free enrollment in their credit score tracking service, CreditInform®, allowing you to monitor changes in your credit score. Along with this feature, Capital One offers the opportunity for users to lower their deposit while keeping a credit limit above the deposit amount if the users show a history of credit worthiness over time when using the card.

The Payday Hound Secured Card Calculator

To find out more about each card discussed above as well as other cards we have reviewed and to approximate and compare the exact costs for you for multiple secured credit cards, visit our secured credit card page and try our secured card cost calculator.

If you have other questions, please leave a comment and we will address them as soon as possible.

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What Do Payday Lenders Look At to Determine If An Applicant Qualifies for A Loan?

The five key areas that payday direct lenders will typically look at to determine if a consumer qualifies for a payday loan include proof of identification, state residency, employment, and existence of a checking account, sometimes with direct deposit, under the consumer’s name. Typically, in-store payday lenders are able to verify this information by looking at a consumer’s government issued state ID/license, a bank statement, and a pay stub. For some online lenders, consumers are required to scan or fax copies of these documents.

How Do No Faxing Payday Lenders Verify Applicant’s Information?

Faxless payday loan lenders use a number of other methods to verify your information. Some, rather than have you fax any documents, will require you to put a request with your bank to provide a bank statement to the lender. Some will call your employer to determine if you are indeed employed by the employer you listed on your application. Some payday lenders use independent verification services like Accurint, CL Verify, or Corelogic/Teletrack. These services may provide identity verification, bank account validation, employment history, and information on your open and paid payday loan performance history, open and paid charge-offs, bankruptcy filings, and more. With these verification services, online payday direct lenders are able to bypass the entire faxing of documents by consumers completely.

Can No Faxing Payday Lenders Still Ask For Verification Documents?

A careful look at the fine prints of online payday lenders will show that depending on state laws and qualification criteria, lenders may still require consumers to provide verification documents. Always ensure that the information you put down on an application is accurate to avoid as much as possible the hassle of providing verification documents.

In addition to our payday loan application which is a faxless system, some of our most popular direct payday lenders also offer no faxing payday loans including CashNetUSA, Ace Cash Advance, and Check City.

The post How No Faxing Payday Loans Work appeared first on The Payday Hound.