In this era it is becoming more and more difficult to get by in our society without a credit card – or at least, a debit card bearing a credit card logo. Credit cards are essential for travel arrangements, restaurant reservations, online business transactions and placing orders by telephone. But all this doesn’t mean that you should get a card without having a proper knowledge of things that you need to look for before that you apply for a credit card.
Here in this article I have mentioned few things that you must consider before signing your name to a new credit card application:
1. Don’t Have Too Many Cards:
There is no reason for having multiple credit cards. Typically, you only require one or two credit cards to fulfill your needs. So you have to decide those cards that will suits you the most. If you have too much credit available then this can lead you towards bad financial decisions, and then it will ultimately results into unmanageable debts.
2. Take a Hard Look at Your Spending Habits
If you have four credit card offers in your mailbox every day then that does not mean that you are able to afford more credit cards.
In fact, the credit card companies are always looking for those individuals who are most likely to rack up big balances. So they would be able to make the most interest off you.
3. Don’t get attracted by Teaser or Promotional Rates
Most of the companies try to attract new customers through teaser or promotional rates. Typically such offers are lower than average interest rates on new purchases or balance transfers that apply for a limited time, but here one has to keep in mind that once that time is up, the interest rate shoots up. So rather than looking for a card that offers temporary lower interest rates you should find a card with permanent interest rate.
4. Examine More Than the Interest Rate
Although it is important to check the interest rate on a credit card but that is not the only thing that matters. The fact is that the interest rate only matters for those people who carry a balance from one month to the next, it is due to the reason that if you pay your balance off in full within the stated grace period (typically 20 days), no interest would be charged from you.
Also, if you select a card only on the basis of interest rates, you might be very disappointed when the interest rate changes a few months after you have got your card. Even the “fixed interest rate” cards can adjust their interest rates.
5. You should ask that how does the Credit Card Billing Cycle work
It is important to know the cards billing method. You have to find out that will the interest be applied to your purchases from the day you have started using the card, or is there any grace period? How many days are there in between billing cycles to pay off your balance before interest is applied? If there is a grace period then how long does it last for?
You have to get the answers to all these question due to the reason that your lender is likely to mail the bill out late in the billing period, and due to this you would have just a couple of days in which you can get your payment out before that it falls outside that grace period.
6. You have to Understand Late Payment Charges and Penalties
For understanding that how late payment charges and penalties are charged to your account if you make a payment late check the credit card terms carefully. You have to see that if a late payment will also result in an increase in the interest rate.
In most of the credit cards the late payments and penalties are applied to the card balance, and therefore if you don’t pay the balance of your card off in full before the end of the billing cycle, you have to pay interest on these as well.
You might also like
|
|
|
|
|
{ 0 comments… add one now }