A "Bad" Credit Card: What it Is, and Why You Need It

Have you been overspending again? Could not resist yet another sale? Has your credit card been swiped so many times that your account number emblazoned on the card been worn smooth?

If so, you may need the help of a "bad credit card". Now one may be put off by its less-than-tasteful sounding name, but if you prefer, you may call it a debit card. However, it is still the same thing. This bad credit card helps shopaholics to learn some self control and while learning, to provide a means to control spending. With some training, a persona can easily curb his or he spending and then upgrade to a credit card.

Sometimes a debit card is also known as a secured credit card because the money is secured-its yours. You can only spend what you have and not spend money that is "on loan" from banks. You need to have an existing account with a bank and then deposit some money -the amount that you can afford to spend-into the account. This money acts as a trust between you and the credit card company. It is a gesture that shows you are genuine in trying to change your free spending ways and companies can then start trusting that you would pay your bills on time again.

Moreover, you will even earn some interest with the money you deposit in your debit bank account. For example, DBS bank of Singapore offers a rate of 0.25% per annum on whatever funds you have in your account. You may search around and look for banks which offer higher returns for your money. Some good banks to try besides DBS would be Standard Chartered, Maybank and United Overseas Bank.

Whichever bank you consider, be sure to take note of four things listed below:

One, you need to take note of the amount of money needed to keep the account open. This is the bare necessity. For DBS Bank, the minimum amount is a mere 2 dollars, but it varies with other banks. You don't want to find out that you need to keep a minimum of say, $5000 in your bank account. Some banks won't tell you, you need to find it out yourself.

Two, you need to find out what charges you need to pay for when you open the account. Generally it is free, for companies are happy to invest with your cash, but sometimes there may still be an annual fee.

Three, you may also need to know how much you can spend per day. Usually, it is all of the money in your account (save for the bare minimum pre-requisite), but as above mentioned, it varies from bank to bank.

Four, you may also want to choose a bank which offers you freebies or extra interest rate on your bank account. This may take some hunting time, but will be worth I in the long run.

Debit cards are really a godsend for those who go on shopping sprees. It allows you to spend as you would with a credit card-only within controlled limits.