According to Wikipedia, "a credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's promise to the card issuer to pay them for the amounts plus the other agreed charges. The card issuer (usually a bank) creates a revolving account and grants a line of credit to the cardholder, from which the cardholder can borrow money for payment to a merchant or as a cash advance."
The first credit card was launched by the Diners' Club, Inc., in 1950. Credit cards have a long history of being used to pay for the creation of small businesses, movies and other entrepreneurial projects. They are not the ideal financing tool for these purposes, however.
The field is very complicated and competitive now, with credit card companies offering sign-up bonuses and rewards. For frequently travelers, cards that offer travel or miles might be a good choice. There are cards that offer rewards for everyday purchases. A cash back credit card may be a better choice for those who enjoy being rewarded for making those purchases.
Even with these benefits, women and minorities have a difficult time gaining access to this marketplace. But, that is not their fault. The responsibility rests on the shoulders of the financial institutions in this marketplace. They are making more than adequate returns. Let's start with interest rates, In a market environment where the US Government charges 3% to borrow money, the average credit card rate is 20% as of June, 2019. What this means is that the card issuer (a bank or other large financial institution) can borrow at 5% and charge you 20%, which means they make a spread of 15%.
Instant Purchasing Power: Cards allow holders to make purchases they might not otherwise be able to make or afford.
To get a credit card, you need to be at least 21 years old or 18 with either a parent’s permission or a verifiable source of income.
Racial and gender discrimination lowers your credit score. It's an insidious feature of the modern economy. Discrimination makes it harder for people to get jobs, which makes it harder for people to have money, which makes it harder for people to build credit, and so on and so on. Very few actually acknowledge these facts. What this meas is that women and minorities are more likely, statistically speaking, to have bad credit, since the credit system is set up to benefit a small group of people. While there are a number of credit cards for people with "bad credit", the cost of using these cards is higher, as are penalties for misusing these cards, so they can put you right back where you started Still, in the modern economy there is no getting around having at least one credit card. We want to help you get the right one.
Credit Score: At least 600. See the tab on credit scores.
Have a source of income: higher the better, of course.
Applicant should have a Social Security number.
The following documents are required along with your credit card application:
The listing below contains data on fees and interest rates charged on credit cards. Note that these fees vary wildly.
*Taxes and other Government levies etc. applicable will be charged over and above the Fees and Charges listed above.
Help You Apply For A LoanSeveral banks owned by minorities (banks owned by African-Americans, Asian, Hispanics) issue credit cards. Should you look at one of these institutions? Of course.
No. Credit scores and standards, designed to benefit a small part of the population, remain the same. Minority banks operate within an economic, political and regulatory environment they do not control, so they are limited in their ability to develop and implement friendlier, special, more relevant standards. As we noted in our talk to the Congressional Black Caucus on Black wealth, the average wealth (savings, retirement, equity) for an African American family ($95,261), is one-seventh that of a white family ($678,737). Credit standards are written for the white family, not the Black one, so these standards are likely to be less realistic for a group of people with one-seventh of the wealth. Still, some of the Black banks do what they can to help, so it's worth looking at them.
Look at all of your options. Examine banks, credit unions, for the best terms and conditions.
Also note that "Credit union credit cards often have lower interest rates, lower fees, and are more consumer-friendly than credit cards from major credit card issuers. Interest rates on credit union loans are currently capped at 18%."
The banks below are minority banks offering credit cards. As one website noted, "Black-owned banks offer credit card account with interest rates as low as 7.75%. Why pay Bank of America or Wells Fargo 18% when you could be paying 8% or 10%? Many offer low or no fees and rewards points programs."
A credit score is a number calculated based on an analysis of a person's history of using borrowed funds, supposedly representing an objective representation of an individual's (or businesses) creditworthiness. A credit score is primarily based on data obtained from third party sources known as credit bureaus. For women and minorities, there are a number of problems with this system. As noted, scores do not account for racism and discrimination in the general society. These factors impact an individual's ability to obtain and utilize money, something credit bureaus are completely unwilling and unable to account for.
Studies have shown that "Caucasians earning less than $25,000 per year were likely to have better credit scores than African-Americans earning between $65,000 and $75,000 per year." This is not due to an objective review of the individual's ability to repay debt, but is influenced by the general level of discrimination in the economy, something that definitely influences the likelihood of repayment. As we noted, credit reporting institutions are entirely unable to examine the actual reasons for these disparities: "While the study uncovered a correlation between ethnicity and bad credit, no conclusion has been reached as for the actual cause." Right.
Even with the clear bigotry that is part of the credit scoring system, scores still "influence the credit that's available and the terms (interest rate, etc.) that lenders may offer. " They are regarded as a "vital part of credit health." Why?
According to credit bureaus, "When a consumer applies for credit - whether for a credit card, an auto loan, or a mortgage - lenders want to know what risk they'd take by loaning money. When lenders order a credit report, they can also buy a credit score that's based on the information in the report. A credit score helps lenders evaluate a credit report because it is a number that summarizes credit risk, based on a snapshot of a credit report at a particular point in time." As we noted, these scores do not consider information that may have impacted an individuals ability to repay debt, like sexism, racism or other forms of discrimination, but rather seek to have borrowers conform to a general level of wealth and income that may be unreachable for certain segments of the population.
To deal with these issues, we suggest careful monitoring of credit health. Get reports from all credit bureaus. These are free. Be proactive. Write to the bureaus to dispute any information you feel is unfair or inaccurate. Links to the bureaus can be found below.
We have included some forms and templates you might find helpful in your search for capital.
These sample funding documents are educational in nature. You will still need to review all documents with your team and with a lawyer.
Prepare carefully. Fulfill your dreams to lead the life you want, the way you want with a business or personal loan! Download loan forms and information now!
Get quote easily: just fill the below form and our one agent will contact you in 24 hours.
