5 Reasons Why a Secured Visa Credit Card is Better Than Prepaid

Many people assume that a prepaid Visa card is the same
thing as a secured Visa credit card. This actually couldn't
be further from the truth. A prepaid Visa credit card is
significantly different from a secured Visa credit card.
Here are five reasons why.

1. The Credit Factor

If you're trying to decide between a prepaid credit card or
a secured Visa credit card, chances are that your credit
isn't exactly spotless. If you want to improve your credit
rating, understanding the differences between prepaid cards
and secured cards is critical.

If you opt for a prepaid credit card, you're not doing
anything to improve your credit rating. This is because
prepaid credit cards typically aren't reported to the
credit bureaus. On the other hand, when you are issued a
secured Visa credit card, your account activity is reported
to the credit bureaus, improving your credit.

By managing your secured Visa credit card properly, you
aren't just gaining access to a credit card and the
benefits that go along with carrying one, but you're also
increasing your credit score and rebuilding your credit
history.

2. The Money Factor

There is one thing that prepaid credit cards and secured
credit cards have in common. Whether you open a secured
credit card or a prepaid credit card, you're going to have
to send in money. That, however, is where the similarity
ends.

When you give money to a prepaid credit card company, they
credit the amount to your prepaid card and then you can
spend the money you've put on it. That's it -- end of
story. When all the money is spent, you either add more or
throw the card away.

When you send in money to open your secured Visa credit
card account, the money is put into a savings account and
you earn interest on that account. Then the credit card
company extends you a revolving line of credit equal to the
amount of that account.

3. Monthly Statements

When it comes to a prepaid credit card, there aren't
monthly statements to pay. With a secured Visa credit card,
however, you receive a monthly statement that must be paid
on time (or it will affect your credit). You will have the
choice of paying the minimum amount due, the balance in
full or anything in between. This activity is then reported
to the credit bureaus.

4. Hotels and Cars

Nowadays when you check into a hotel they ask you whether
or not you are using a prepaid credit card and many hotels
and car rental companies won't even accept prepaid credit
cards as a form of payment. However, there is nothing
differentiating an unsecured credit card from a secured
Visa credit card, which means you can use your secured card
to book hotels and car rentals without any hassle.

5. Moving Forward

If you carry a prepaid credit card, there will never be a
chance of it evolving to an unsecured credit card. However,
it is not uncommon for a secured Visa credit card to evolve
into an unsecured credit card once you have established a
payment history and have proven that you can be trusted
with the card.

So while a prepaid credit card may look a bit like a
secured Visa credit card, the fact remains that they are
very different in many ways. If you want to rebuild your
credit, then a secured Visa credit card is really the only
way to go.

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For more tips on secured credit cards, saving money and
avoiding getting taken, check out CreditCardTipsEtc.com, a
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http://www.creditcardtipsetc.com/secured_credit_cards/

Options Trading and the "Up" Scenario

In the "up" scenario, the maximum gain that can be attained
is the stock finishing at $10.00 or higher.

At $10.00, you would profit from the full value of the
extrinsic value of the option which is $.50 and you would
also have $.50 of capital appreciation from the stock for a
total of $1.00. This represents a 10.52% one-month return
or an annualized return of 126.32%.

It is not realistic to expect this type of return every
month but remember, recent studies show that premium
selling works approximately 80% of the time, which is still
very good.

We stated earlier that the maximum return of this buy-write
will be actualized when the stock reaches $10.00 or above
and the maximum return will be $1.00, and no more than
$1.00. As the stock goes higher, the option will earn less
in direct proportion with the increase in capital
appreciation.

For example, if the stock closes at $10.30 you would
receive only $.20 from the option. The option would now be
worth $.30 because with the stock at $10.30, the 10 strike
call would have $.30 of intrinsic value.

Since you sold the option at $.50, you would see a $.20
profit ($.50 - $.30 = $.20). Since you bought the stock at
$9.50 and it is now $10.30 you have $.80 of capital
appreciation. Combine the two and you have a $1.00 profit.

Let's look at what happens when the stock trades up to
$12.00 and see if you again have a $1.00 return on the
position. At $12.00, the option will have $2.00 of
intrinsic value (stock price – strike price) because it is
in the money.

You sold the option at $.50 so you have a $1.50 loss.
However, you bought the stock for $9.50 therefore you have
a $2.50 capital gain. Combined, you have a $1.00 profit.

In a third example, if the stock trades up as little at
$.10 you still have a $.60 gain. You will receive $.50 from
the sale of the call which would expire out of the money
thus worthless plus $.10 of capital appreciation. $.60
represents a 6.3% one month return.

Please refer to the chart below for examples of total
dollar profits per number of contracts, remembering that
each contract controls 100 shares of stock.

Observe that if the stock closes over $10.00, then your
stock will be called away because your short calls will be
exercised. This is correct but we will talk about position
management later. For now, let's get back to our three
scenarios.

In the "up" scenario, you would profit with the buy-write
when the stock is up as little as a penny, but you are also
limited on our maximum profit.

You are limited on your maximum profit as defined by the
formula below:

Maximum Profit = Strike Price + Option Price – Stock Price.

This method of calculation will work every time. As you
see, the buy-write has a positive but limited upside
potential.

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This Article Provided By The Options University: Options
Trading Strategies For Safer Investing and Consistent
Profits. Discover how to protect your investments with the
leveraged power of options. Step-by-step video tutorials,
articles, free and premium trading content can be found at:
http://www.TheOptionsUniversity.com

Pros and Cons of Mental Stop and Hard Physical Stops

When a trader starts his new venture into trading or
investing, he finds out many things that need to be
learned, understood and used as part of his tools to become
successful. One of the useful tools in many trading
software is the use of stop loss orders. Although this a
standard tool, not many use them. Some use them in
different ways to try to achieve one goal: profitability.
However, some use mental stop, a method in which a trader
determines a stop loss (either in dollar amount, percentage
or point system) in his mind but not physically place it in
the trading platform. Whereas the physical stop order is
placed in the platform on the broker's server or directly
on the exchange. What is the difference between the two and
what are the advantages and disadvantages of using either?

Advantages and disadvantages of using physical stops:

1. Placing physical stops remove the stress that normally
accompanies the trade. Once it's placed, there is usually a
sense of relief that the risk is known and cannot be
changed. This advantage is due to the removal from having
to think and guess what to do next during the trade.

2. Mental stops give the trader greater flexibility that
may fit his trading style where adjustments can be made
according to changing market conditions. This requires
thorough understanding of price action to be able to use
this flexibility.

3. Mental stops are difficult to implement for those who
lack discipline and concentration. Discipline is the
biggest obstacle for a trader to execute his planned mental
stops during the trade. Many cannot cope with the fast
action of the market, handling a losing situation, or
cannot even stay focused with the trading plan before the
trade. This cause the wish-washy decision-making that
inhibit the trader from sticking to his original mental
stop. Many times, the final stop loss ends up very far off
the original stop planned, thus a larger loss than planned
or expected.

4. Physical stops can be a disadvantage in markets that are
prone to stop-hunting, a method used by floor traders,
market makers, or highly capitalized traders to move market
to prices where high concentration of stop loss orders are
placed. Be they in stocks, futures or commodities and forex
markets, all markets are vulnerable to them, especially
where liquidity is low. This is especially true in stocks
during lunch hour where volume is thin or stocks that have
low daily average volume.

5. Physical stops protect traders from unexpected disasters
and mishaps they routinely suffer. When the stop loss order
is placed, it is parked at the broker's server or at the
exchange, depending on the instrument and the exchange in
which the trade is made. Having this order placed away from
the trader's computer, this will protect from outages,
internet connectivity problems, trading software problems,
or even the trader must attend to other priorities away
from the trading desk.

6. Using mental stops can keep the trader's focus in the
trade and not be distracted with anything else. Physical
stops are in place will cause the trader to be less
attentive to the trade and market at hand, causing him to
tend to other things besides trading. Concentration and
focus may suffer. If the trader must stay focused for the
subsequent trades, concentration is a must; else he may
miss important information that goes between trades.

It is always recommended that the novice traders use
physical stops entirely and unconditionally until he can
control his emotions and discipline. In additional, he
needs better understand the market before he can make rapid
and objective decisions in real time in order to be
flexible in using mental stops. The trader may not like the
idea of being stopped out just before the market goes his
way, leaving him out of the market. Each type of stops has
advantages and disadvantages, but stops must be seen as
insurance to keep his capital from major harm. It's a
difficult decision to make and only through trial and error
and assessing personal qualities or weakness will the
trader can determine which is best for him.

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Larry Swing is the President of the popular day and swing
trading site http://www.mrswing.com a place where you can
find free daily articles and videos covering education,
market analysis and picks from Larry and other well known
traders in the industry.

Fixing Your Credit Score May be Easier Than You Think!

We all know that a credit score is an important barometer
of our financial health. A low credit score can block you
from getting credit cards, mortgages, and car notes. A
mediocre credit score may mean that you're only eligible
for high-interest loans, not the good deals that your
friends may be able to land. If you've got a bad credit
score, don't despair. It can be fixed.

In the U.S., consumers have both a credit report and a
credit score. Your credit report is actually a fairly
complex file of financial transactions that provides
information on your various loans (credit cards,
mortgages), how you've handled credit, along with
information on where you work, what you earn, and any court
cases you're involved in. A credit score is a number,
typically between 300 and 850, that gives an overall
"snapshot" of how you manage your finances.

In the U.S., Fair Issac & Company came up with a system to
translate the bulk of data in the credit report into the
snapshot credit score. Today, those scores are called FICO
scores (for the name of the company that invented them).
Three major credit bureaus maintain credit records:
TransUnion, Experian, and Equifax. All of them use a
version of the FICO score.

The good thing about credit reports is that they move
forward with the time. The good thing about credit scores
is that they balance what you do right against what you do
wrong. This means that if you do more things right than
wrong, even starting today, you can eventually clean up
your credit.

Fixing your credit report is slow, steady work. You can't
do it overnight. But you can do it. The opposite is also
true. Good credit today will not last if you don't keep
doing the right things.

So what should you be doing to have a good credit report
and good credit score?

The FICO score balances a lot of different activities. If
you understand how the credit bureaus think, you'll know
how to improve your scores (and you'll be wiser in how you
deal with money).

First, pay bills on time and keep paying them on time. If
you're already in arrears, work out a plan to get back on
track and keep up with payments. Late payments can really
hurt your score. One late payment can offset many on-time
payments!

If you have credit cards, try to keep no or a low balance.
A maxed-out card is bad for the report, but a card with a
reasonable balance is fine. Reasonable is not a dollar
amount! What's reasonable for one is not reasonable for
another. There should always be a big difference between
the amount of credit at your disposal and the amount of
credit you're actually using at any one time.

If you have a lot of credit card debt, it is better to
consolidate it into one large debt than keep getting new
cards and moving the debt around. In fact, the website
http://myfico.com says that if you have a certain amount of
debt, it will be better for your credit score if it's a
larger amount on one card than the same amount on several
cards.

On the other hand, don't get a bunch of credit cards you
don't plan on using. Having a bunch of available credit
that is never used can hurt your score; it looks like
you're preparing a way to go head-over-heels into debt.

If you do apply for new cards or loans, do not go crazy. A
sudden increase in credit card applications can lower your
score. The best strategy is to apply for new credit and
loans only as needed.

If you had a financial disaster, whether a bill went to
collections, a house went into foreclosure, you defaulted
on a note, or you went bankrupt, be aware that the
information about that problem can stay on your report for
years, even if you have paid off the debt or otherwise
managed the problem. A collection account can stay on your
report for seven years.

Seven years may seem like a long time, but you can
eventually "outlive" a bad financial mistake. If you had a
bankruptcy 20 years ago, that information will no longer be
on your credit report. In fact, you could have sterling
credit 20 years later despite that financial misstep.

Furthermore, do not think that lenders are in any way
obligated to use your credit report or your credit score.
Lenders are free to lend to anyone they choose. Most
lenders do, in fact, pull a credit report (that's called an
"inquiry") but they will likely consider other factors,
including your income, the type of loan, and whether or not
they have had previous dealings with you. (That latter
information can be bad news if you've ever not paid them on
time-another good reason to keep your bills paid on time!)

Credit scores change constantly. Every single month,
information is updated. Do enough things right, and the
good reports will outweigh the bad. That gets encapsulated
into the score, which is really just a snapshot of your
overall credit health on that day.

You can obtain a copy of your credit report at no charge
once a year or if you are turned down for a mortgage; you
can also get your credit report at any time for a nominal
fee. The best resource for getting credit report
information is http://www.annualcreditreport.com. They work
with all three credit agencies and can help you get your
yearly free report and provide some general information on
credit reporting.

Lenders are in the business of lending money. They don't
want to do that foolishly, but they don't want to keep
credit-worthy borrowers away, either. The credit report is
designed to be accurate and reliable to help borrowers get
the credit they need (and can manage responsibly) and
advise lenders as to which consumers are the most likely to
repay a debt.

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Did you know that debt consolidation is one of the few
programs to manage overwhelming debt that can actually help
rather than hurt your credit score? Debt consolidation is
not for everyone in debt and, some people may not qualify
for it. To learn more about what debt consolidation is and
how it can help, check out
http://www.debt-consolidation-diva.com . Mandy Karlik wrote
this article and she contributes regularly to
Debt-Consolidation-Diva.com.