The ins and outs of using credit cards and examining credit card offers!
Credit cards are not toys and they certainly don't provide the free money that many individuals believe they do! Most people get into financial hardships and difficulties because they neglect to pay attention to the fine print and they just don't pay attention to the details on their online credit card application! When you apply online for a credit card you need to be aware of the differences that set a good credit card apart from a bad credit card. No fee credit cards and low APR credit cards are good things, annual fees and hidden surcharges are bad things! Here are some tips to getting and using credit cards wisely!
Only own the cards that you use! Too many people see good credit card deals and jump all over them, time and time again. Stick to one or two good credit cards and keep it for a while. The best way to build credit fast is to have a credit card for a long period of time.
Read the fine print carefully! As stated above, this is where most people make the biggest mistake in terms of falling behind financially- they just don't read the fine print! Many people fall into the trap of seeing guaranteed approval credit card offers and stop reading there! Credit card applications online usually have fine print through the roof that you need to be aware of! Consider the terms and be wary of deals that seem too good to be true because they probably are! Look at things such as annual fees, balance transfer fees, surcharges, grace periods and late fees. Many times these fees will add up to pretty large sums! Also keep in mind that rewards credit cards (such as airline cards, gas cards and cash back rebate cards) typically come with higher APR's and more fees. Read the entire credit card solicitation!
Don't settle for low introductory rates! Low introductory rates are used by credit card companies to slowly bring customers into using their particular card. Why? People love seeing 0% APRs for up to 15 months and see it as a great way to save a lot of money. However, these ‘teaser rates', as they are often referred to, will cost you a lot of money through balance transfers and late fees! If you do get a card like this, make sure you know for sure when you're introductory period is up!
Just because you get an application doesn't mean you have to fill it out! Many people love getting credit card applications in the mail because it makes them feel special and singled out. In fact, many credit card companies use solicitations as a way to bring customers to their doorstep in mass quantities so don't feel too special! A credit card company will usually send you a solicitation because of how much you make on an annual basis. The more income you have, the better the solicitation you will get! Usually solicitations have nothing to do with your particular credit history or score.
How much grace do you need?! Most credit cards come with a grace period, which is the time between the date of your monthly bill and the time that you have to pay it off without any additional fees. The typical credit card search will show that most cards offer between 15 and 30 day grace periods- obviously the longer the better! Knowing when your grace period is will give you a better chance of paying your bill on time and at least before any more fees take place!
Variable rates can make anyone's head spin! Most credit card companies operate on the normal percentage based, fixed interest rate system. These fixed rates are very easy to understand and calculate which makes them consumer friendly. However, there are still some credit card companies that stick by the variable rate system. If you are applying for credit cards online you should look exclusively for fixed rate cards and not variable- especially if you wish to keep it simple!
Pay more than the minimum! Most people who handle credit cards spend much in terms of purchases and services on their card, thinking that all they have to do is pay off their minimum balance each month. Whether it is a case of laziness, financial hardship or convenience, people pay off their minimum balances (which can be as low as $10 per month) thinking that they can pay the rest off later. This is one of the quickest and surefire ways to fall behind financially. If you want to keep your credit score in good standing and keep creditors off your back then you will look into paying off at least 2/3 of your balance each month!
Late payment charges can bring quite a bit of penalties! There are many good credit cards out there and they will turn ugly in a second if you miss just one payment! Most of the 0% APR credit cards (introductory rate cards) will jack their rates up if a consumer pays late! You need to be aware of what your late payment is and how it affects the terms and conditions of your card.
Canceling isn't always a bad thing! You probably aren't going to keep the same credit card for the rest of your life. Sure, it is great for your credit score and credit history if you show consistency and regularity in the cards that you have and your payment history but sometimes a credit card offer will come up that is truly just too good to pass up! Your current credit card may not be able to compete with a competitor's card and if this is the case you may want to switch.
Living within your means has never felt so good! Learn how to apply for credit cards that help you stay within your certain lifestyle and you will learn a valuable life lesson. Credit cards bring an obvious financial freedom to the common person and it is this freedom that gets most consumers in deep trouble. The best way to stay out of it is to simply live within your means. Living within your means comes down to living a life that you can afford!
Know your rights! If you ever find yourself in a dispute of any sort with your lender or credit card Company, it is especially important that you are up to date on your rights as a card holder. There are many protections that will keep your credit score in good standing so it is important that you know your rights in a dispute. As a credit card holder you are only liable for $50 in the case of identity theft and purchases, which mean you can't get charged thousands just because your card was! Know your rights and keep yourself protected!
