Credit Card Basics - Understing What You Need!
There are different credit cards to suit each individual. One
needs to assess his or her needs before applying for a credit
card online.
Many people feel that they have been through hell because of
credit cards and would not like to repeat their mistake. Another
common misconception about credit card is that having a bad
history will stop credit card offers coming there way again. The
truth however is something else. Some credit card companies
offers great schemes to those with bad credit card. They also
make cards specifically for frequent flyers, Wall Mart Shoppers,
or frequent moviegoers. There are many offers based on
incentives on shopping.
Let us see what things you should keep in mind before shopping
for credit card.
The first thing that should be kept in mind is Annual Percentage
Rate. An Annual Percentage Rate is the amount of interest you
pay every year on your borrowings. The higher APR will make you
pay more finance charges. The minimum amount that you are
required to pay would be basically your past balance, try paying
a little more than the minimum repayment. In short your APR
should be as low as possible.
The next step to keep in mind would be introductory rates. Most
credit cards offer a low or 0% rate of interest for an
introductory period. You should strictly keep in mind that this
interest free period is applicable on purchases and balance
transfers as well. This will reduce your bill considerably.
You may seriously consider gold or a platinum card if you are a
good earner and love to splurge on luxurious things. These cards
have very less rate of interest and unlimited credit limit. They
also come with exciting offers.
Another point to be considered is Grace period. During this
period, a credit card holder doesn't have to pay any interest on
repaying the amount.
Cash back and rewards also offer a great relief to the customer.
But such offers are mostly entitled for air miles, cash back or
discounts. You should consider them seriously as they are of no
use to you if you don't fly.
Balance transfer rates are the most wanted among the customer
who are having a huge outstanding amount. Many cards offers
lower rate of interest. Thus, if you transfer your balance from
one card to another with lower interest, it can help you with
your debt problems and save a lot of money.
One should also avoid late payments as the interest in this
case, keeps piling. A time also comes when the interest amount
exceeds the principal amount. This can be avoided if you keep
tabs upon the charges levied on the late payments.