Not all credit cards are born equal. Different cards have different offers, features, and charges, and choosing a card is not as simple as going for the one with the lowest advertised rate. Various types of card are suitable for different types of use, and choosing the right card for you depends on how you plan to use it as well as how low the rate is, or how attractive the introductory offer. If you intend to use the card mainly as a convenient way of spending and usually clear your balance every month, then the headline interest rate doesn't really matter to you, as you shouldn't be paying any interest at all. Instead, make sure the card you're planning to apply for has a long 'grace period' on interest charges, giving you chance to pay your statement before any interest is applied. Interest free periods should be at least 30 days and are more usually in the 50-60 day range. This kind of card user can also benefit from a cashback or rewards scheme if the card is regularly used for purchases, and so long as you avoid carrying a balance over you can actually turn a profit from your credit card account. If, however, you use the card as a kind of short term borrowing, regularly paying off larger purchases over a few months, then a low interest rate is attractive. A cashback feature might seem attractive if you're making larger purchases, but it's rare that a card's cashback rate will be anything like high enough to compensate for a higher interest rate. If you want to finance a single large purchase and repay it over a year or so, then look for a card with an introductory 0% deal on purchases that lasts long enough to clear your balance before interest kicks in. Introductory deals of up to 12 months are now common. Many people use a credit card's balance transfer feature to fund longer term borrowing. If this applies to you, then you have a choice between a 0% introductory deal or a long-term low rate. If you can see yourself paying off your transfer in the near future, then a 0% deal with a long introductory period is probably the best way to go. If, however, you'll be repaying your balance over a longer period, then a low balance transfer rate that is fixed for the life of the balance can be a good deal. Many such cards feature a rate much lower than other forms of unsecured finance such as personal loans, and you don't have to worry about finding a new 0% card when the introductory deal ends. Most people use their card in a mixture of ways, and this is where choosing a card is more complicated. A low balance transfer rate might mean having to pay a high rate on purchases, or a card with a low standard rate might charge higher rates for cash withdrawals. Fortunately, there's a new kind of card that is becoming more widely available, which charges a simple flat rate for all use, whether balance transfers, purchases, or even cash withdrawals. These cards often feature an attractively low rate, as there are no fancy introductory offers or reward schemes to pay for, and so they can make a very good option for the average card user.
Many card providers calculate APR based on several tables. The APR is part of the package when receiving a credit card that you must understand to avoid debt. Nowadays, nearly any company that offers consumers the ability to pay their debts via phone will charge a fee. The fee sometimes starts at $1.50 and reaches to $3.50. As you can see, to save money you want to avoid the telephone. Some companies are even charging customers for reviewing their statements, asking general questions, and so forth. Therefore, the telephone is making more money than you are if you continue to press those buttons. Therefore, if you are applying for a credit card, make sure your read the Terms & Conditions carefully to avoid overcharge. It is bad enough you have to pay your own phone bill without paying someone else's. You might want to look at the Internet also. Some cards providers offer FREE ONLINE account access, but once you go online you find out that the FREE has a FEE.
Annual FEES should be weighed out carefully also, since some providers claim to offer NO ANNUAL FEES, and when you get your first bill, and the succeeding bills, you will learn that the FREE again has a FREE.
Cash Advances are often provided with credit card acceptance. This is good in some instances, but if the APR rates are high, it's not worth your time. Some card providers offer a fee of $3 on cash advances, but again you want to read the Terms & Conditions carefully to avoid debt.
Balance Transferring is the process where the card provider will allow the cardholder to use one method to pay another fee. In other words, some card providers will send the client a ?check? and once the check is utilized to pay the balance, fees will apply. Therefore, learn more about balance transfers to avoid debt.
Late fees are often charged to cardholders, plus APR rate increase. This means that the cardholder will pay: bill + APR +Late FEE +APR, if the bill succeeds the grace period. As you can see, late fees can take your money and toss it down the river. The one most frustrating thing in the world is to work your buns off, all to find out that you have nothing left once your bills are paid.
Credit cards have limits on credit spent. In other words, some credit cards offer credit up to $30,000, while others offer less. If the cardholder succeeds the limit, then the card providers will often charge high APR+ Payment.
This is one of the most selfish acts of any card provider, but few card providers will literally CHARGE their clients additional fees, simply for requesting a higher credit limit on the card. How cruel and vicious, but it is a reality.
Overdrafts charges will also be charged if you pay for an item with a ?check? and the ?check? is returned, without sufficient funds. You would think that the providers would be happy to get a new customer, but instead you see where their goal is, since some credit card lenders actual charge customers for opening a new account with them.
Anyone applying for a major credit card should be wise to compare and contrast the different cards, the cards attributes, costs, APR, fees, and other details carefully before sitting them self up for a ride. Credit cards are plastic coated cards that have put millions of people all over the world in court filing bankruptcy.
Bankruptcy if you haven't heard yet, the law is making it virtually impossible, especially for anyone holding a credit card to get out of the debt. At one time, it was easy to go into bankruptcy, but now, the greed has extended to the point it is pushing people over the edge. Finally, word of caution, if you feel you can survive without a credit card, and then do so, otherwise, make sure you read, learn, and control your spending if you are accepted for a major credit card.
Both Nicholas Hunt & Bueford Copeland 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.
Nicholas Hunt has sinced written about articles on various topics from Mortgage Insurance, Finances and Banking. Nicholas Hunt is a contributing writer on financial issues for where you can. Nicholas Hunt's top article generates over 550000 views. to your Favourites.
Bueford Copeland has sinced written about articles on various topics from Home loans, Mortgage and Credit Cards. Please visit For more information and resources regarding credit cards and other finance topics.. Bueford Copeland's top article generates over 14800 views. to your Favourites.