First of all, credit cards are not created equally. Before you choose one, think carefully about your spending habits and how you plan to utilize the card.
If you must charge your purchases, try to make a smart decision by using a card that will do something for you-- and not to you.
Annual fee: with so many credit cards on the market, it generally doesn't make good sense to pay an annual fee for the privilege of carrying a piece of plastic in your pocket. However, there are cards that can make a rate guarantee, such as prime interest rate for life. This might be a smart decision in the event that you regularly carry balances on a card.
Membership perks: some cards offer really cool "benefits" in exchange for carrying their card. Some of these extra benefits can be seen as value added services, such as travel insurance or extended warranty protection. Be careful though, because the devil's in the details. Carefully read your card membership agreement because a lot of these cards have a list of exclusions longer than your right arm.
Credit monitoring: as a consumer you're very well aware of the importance in having up-to-date information about what is on your credit rating. Because your credit score is based upon your financial performance, it makes sense that you would want to know immediately if someone posts negative information about you on your credit file.
Default rates and penalties: before you sign on the dotted line and accept a credit card, be certain of the terms and conditions surrounding the use of your account.
Credit card companies almost universally charge default credit card rates if you make two consecutive late payments, but there are also card issuers out there that will increase your APR if you're late in making payment to any creditor.
Default rates can sometimes be as high as 30% -- or more - so be careful and know ahead of time what you're getting into.
Customer service and online payment: nobody plans on having a problem with their credit card, but if you do, you want to know that excellent customer service is only a phone call away.
A growing number of credit card companies are outsourcing their customer service to foreign countries, where communications could be a challenge. In addition, some companies are even utilizing prison inmates as customer service representatives.
Balance transfer checks: find out what your prospective credit card company's balance transfer rules are, because some companies will mail you "free" balance transfer checks.
If they do, be careful how you utilize them, because there are credit card companies that will permit you to draft a check in excess of the amount of available credit to which you are entitled, which can result in excessive fees and charges being assess to your account for going over your credit limit.
There is no such thing as a free lunch, and this is especially true for your credit card and the company standing behind it.
If you decide you must have a credit card, make sure it's one that will do something for you, rather than being just another way of hurting your credit rating or increasing your debt loan obligations with sky-high credit card rates and fees.
Rule #1: Always look for a credit card with a low interest rate, or a 0% balance transfer option. This is extremely beneficial to the borrower, so that he or she, may have the ability to transfer their higher interest rate credit cards to the 0% or low interest credit cards.
Rule #2: Always look for a credit card that has a grace period on payments that are late. Many credit card companies hike up interest rates, whenever a card holder is late on a payment within a certain period of time. This certain period of time is usually between six months and a year. Some credit card companies will boost the interest rates anywhere from 5 to 10 percentage points, after just one late payment. Some credit card companies reverse the 0% balance transfers, which in turn forces the card holder to make interest payments on the balances. So that low interest credit card, now turns into an out of control debt monster that will devour all of the borrower's income.
Rule #3: Try to find a credit card with no annual fee. If the borrower has good to excellent credit, say with a credit score of 550-800, then it is extremely easy to search online to find a little or no annual fee credit card. Unfortunately, if the borrower has bad credit, then paying an annual fee is almost imperative. A credit card applicant with good to excellent credit shouldn't have to pay any annual fees at all. There are exceptions to this, such as business and corporate credit cards, with no credit limits.
Rule # 4: Only apply for a credit card with a company that has a proven track record with a solid reputation in the financial industry. Many credit card companies have a reputation of honesty, fairness, and excellent customer service. However, there are many credit card companies who have reputations of changing terms frequently, raising interest rates often, having bad customer service, and receiving a large amount of complaints from consumers. It will save the borrower a lot of time, headaches, and money to find a credit card company that is reputable.
Rule #5: Never apply for a credit card with a company that stipulates that they can accelerate your payment of the debt. Many cardholders don't know that numerous credit card companies can, and do, sometimes raise the minimum monthly payments due by the borrowers to extremely high amounts. Some credit card companies even raise the minimum monthly payments to more than double the regular payments. So beware of the cardholder terms of agreement. Read the legal terms and conditions of the credit card very carefully.
If you follow these “5 Simple Rules”, then you too, will be able to steer away from pitfalls that befall millions of the credit card holders, and you will be able to say confidently, that “Yes, I have a good quality credit card.”
Both Darrin Roseborsky & Bryan Pringle, Ph.d. are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Darrin Roseborsky has sinced written about articles on various topics from Finances, Credit Counseling and Credit Cards. Darrin Roseborsky is a Refinance Specialist with OMAC Mortgages, seminar speaker and president of the Roseborsky Group and . Darrin shows people. Darrin Roseborsky's top article generates over 27100 views. to your Favourites.
Bryan Pringle, Ph.d. has sinced written about articles on various topics from Credit Cards, Business Credit Cards and Credit Cards. To learn more about credit cards and then click. Bryan Pringle, Ph.d.'s top article generates over 4400 views. to your Favourites.