Apply card credit
Credit card now has become a part and parcel of our lives. Business without credit cards is almost unimaginable these days, especially in developed countries. So much so that if you do not have a credit card then you are in for trouble even while renting a car or booking a hotel room. Credit card means a card that is used to obtain cash, goods or services up to a stipulated credit limit. The credit card company later pays the supplier on behalf of the card holder. The amount is in due course reimbursed by the card holder who will be charged interest at the end of the credit period if the amount still remains unpaid. .
Identify your requirements
Before applying for a credit card, the first thing you should ask yourself is for what purpose you need a card at all. If you can arrive at an appropriate answer, it can help you choose a suitable type of card that best suits your needs.
If you want a credit card for business use, it is best to look for one that offers a cash-back for business purchases or membership to a discount buying club. Usually many credit card companies lure customers with an attractive introductory offer at a low rate for a specified time period. In that case, you must keep yourself alert about the deadline; or else, it might increase rather suddenly for you when the designated time expires. It may be wiser for you to look for a long-term, more moderate interest rate than keep changing cards at frequent intervals in order to pay as little interest as possible.
If you want a credit card for personal use, be sure about the purpose you are going to use it for. If you hate transactions through cash and checks throughout the month and prefer to use a card instead and pay it off each month, make a note of what the card's grace period is and what penalty you face in case you miss the deadline. Try to look for a card that offers reward points even if you don't carry a monthly balance. If you are keen to pay your monthly bill in full and keen at all on other features such as frequent flyer miles, a card that has no annual fee and offers a longer grace period is likely to be your best choice. If you feel that it may not always be possible for you to pay your monthly bill in full, it is better to choose a card that carries a lower interest rate.
If you are interested in using your card to get cash advances, you should settle for a card that carries a lower annual percentage rate (APR) and lower fees on cash advances. Some cards charge a higher APR for cash advances than for purchases. By APR is meant the interest rate you have to cough up if you carry over a balance, take out a cash advance, or transfer a balance from another card. The APR states the interest rate on a yearly basis.
Incentives
A number of credit card companies offer incentives to use the card and other special features such as rebates on the purchases you make, frequent flier miles or phone-call minutes, additional warranty coverage for the items you buy, car rental insurance, travel accident insurance or travel-related discounts, credit card registration, assistance in case your wallet or purse is lost or stolen and you need to report that all your credit cards are missing. But to benefit from these incentives, you need to use your card a great deal which might well become a sort of debt trap for you. It naturally makes sense to think carefully about whether these incentives will be useful for you. You should never pay for something you do not want to use.
Fees
Many credit card companies charge fees for various things. Before you apply for a card, you should better know what these fees are and how to avoid them.
Some companies will charge you an annual fee just for using their card. But as the competition is more intense these days, you are often in a position to reduce this fee by talking to a customer service representative of the company.
The cash advance fees charged by credit card companies can vary from one another but, they are quite hefty almost everywhere. In addition to a one-time fee, the interest rate for such advance will come at a considerably higher rate. And while in the case of a regular purchase, interest begins accruing after the lapse of some grace period, cash advances accrue interest charges from the first day itself.
Fierce competition has forced many companies to offer an introductory cash advance and balance transfer rates for a fixed amount of time. This lower rate applies to any balances you may wish to transfer from another card. However, some companies will charge a transfer fee for the transaction. You must know what the fee is before you decide to transfer any balances.
There are also fees like late-payment fees, over-the-credit-limit fees, set-up fees, and return-item fees - all having the potential of leaving you poorer once you get whacked for any of them.
You should keep in mind that credit companies will examine your credit history for checking if you are responsible with your credit and have paid your bills in a timely manner. A healthy credit card history will increase your bargaining power and will be of immense help in reducing the amount of interest that the card company will charge you.
Even if it is true that credit cards come in extremely handy in an emergency situation, they can also easily get out of hand. So you must use them judiciously to get the maximum benefit without burning your hands. Every credit card offers a wide variety of apparently attractive features. You must have a good understanding of these features to decide just which card is most suitable for your needs.
Other Articles
