How To Choose A Credit Card
|
Your credit score may just be a little number, but it packs a big punch. A poor credit score can keep you from getting a mortgage or a car loan. In addition, your credit score may haunt you for a long time if it suddenly drops. Of course, if you have a good credit score it opens a lot of doors for you. This is just one reason why it is important to think about which credit card you apply for before you do.
Every time you apply for a credit card, the company has to check your credit score. This is a bad thing. Numerous inquiries from credit card companies look bad on your credit report because it looks as though you are scrambling to open lines of credit, which can be a sign that you are struggling financially. Of course, this may not be the case. However, credit scoring companies all look at it the same way.
You can avoid scarring your credit score with credit card applications by choosing your card wisely. Choose a card that matches your lifestyle and works for you instead of against you. If you plan to pay off your balance each month, you might want a charge card instead of a credit card. American Express offers a number of charge cards with flexible spending programs that are perfect for people who plan to pay off their balance each month. They also offer some flexibility so that if you have an emergency you can use the card and pay off large charges over time. In addition most of their cards offer you reward points for using the card. On the downside, American Express charges an annual membership fee for having the card.
If you do not plan to use the card often, but plan to make large purchases on the card, which you will pay off over time you should get a revolving credit card, which allows you to carry a large balance over time. Of course there cards require you to pay interest on everything you buy. Interest expenses can get very high.
Other kinds of cards include:
1) A check guarantee card, issued by your bank, that you can use to ensure that your cheque will be honoured up to a certain limit.
2) A debit card, issued by your bank, where whatever you spend is immediately deducted from your bank account
Do you need a credit card?
a) A credit card means you don't need to carry huge amounts of cash around and risk losing it.
b) A credit card means you can buy items over the internet.
c) A credit card means you can make purchases abroad without having to worry about local currency.
d) A credit card gives the opportunity to spread the cost of a large payment over several months.
e) A credit card is useful in an emergency. For example, an unexpected repair to your house or car.
What You Need To Consider:
1) APR (Annual Percentage Rate)
This is the rate of interest that you will pay on any outstanding balance.
2) Special Introductory Rates
You may be offered a low or 0% rate of interest for a limited time (Up to 6 months) when you sign up for a new card. A higher rate of interest may be charged for cash withdrawals.
3) Balance Transfer Rate
Card issuers may offer you a lower rate of interest if your swap your balance from another credit card to theirs.
4) Interest Free period
Remember to check when interest payments will begin. Will you pay interest from the day of the purchase? Or will you have a number of days interest free before you begin to pay? There is usually no interest free period for cash withdrawals.
5) Cashback and Rewards
Some cards over points or rewards for every pound spent on the credit card. Make sure that these are appropriate for you. For example, there&'s no use collecting airmiles if you never fly.
6) Minimum Repayment
Remember to check what the minimum monthly repayment will be. If you borrow £1000 on your credit card the monthly minimum repayment will probably be in the region of £25. But if you only pay this amount each month it will take a long time to pay off the balance and cost a lot in total when you include the interest payments.
7) Annual Fees
This is the fee that the issuer will charge you every year for using their credit card. Not all credit cards have an annual fee, so remember to consider this when you are choosing which one is right for you.
8) Late Payments
There will be an extra charge, as well as the interest owed, if your payment is late. This charge may even be more than the amount you owe so be very careful to check what the charge is, and to ensure that all your payments are made on time. A good way of doing this is to set up a direct debit from your current account.
9) Exceeding Your Limit
You may also be charged a fee if you exceed your credit limit.
Choosing the right credit card is a complex decision, but it can be made easier by using the free online credit card finders at http://www.creditcardbuzz.com.
Stephen Kelly is a financial advisor and the founder of Credit Card Buzz (http://www.creditcardbuzz.com). A free site with credit card reviews, ratings, analysis and online applications.
|
|
|
Top 7 Factors To Consider While Reviewing Credit Card Offers
Credit cards have migrated from being hip or convenience product into a must have entity for everybody. Shopping Online you need a credit card. Wanna book a weekend rental you need a valid card to pick one. In order to register as a valid seller in many online sites you need a card. Like this the credit cards have evolved from being just convenience items into something you got to have or you will be denied many services. There is a lot of money being made by the credit card industry. Everything you buy has a credit card fee attached to it. If you p...(related: Credit)
How To Survive In A Plastic World, Qualifying For Credit Card
Let's face it, having credit is no longer a choice. "Don't leave home without it" is more like "can't buy a home without it." Your credit now determines the neighborhood you live in, the kind of car you drive and, sometimes, even whether or not you get a particular job....(related: Credit)
Are You Paying Higher Interest On Your Credit Cards Than You Think?
Many credit card holders sign up for a credit account with an 8.9% interest rate and then later realize that their interest rate has been bumped to 27.4%. Why?You know that your credit score affects the credit card rates that you qualify for. But, did you know that a little clause in the fine print of the credit card terms and agreements, called the "Universal Default Penalty Clause" may mean that you're already paying a higher interest than whe...(related: Credit)
Negotiating Rates With Your Credit Card Company
Ok, let's face it, everybody hates high credit card rates, and they drain hard earned money out of your wallet. As a valued consumer, it is apparent that you learn how to negotiate to get the absolute best rate that you possibly can. The good news however is that it doesn't have to be a difficult or time-consuming process. In fact, it can be very easy indeed if you know what you're doing. In this article we will discuss the ins and outs of credit card negotiating to ensure that you get the best possible rate with the least amount of effort.
Why Does Facta Matter To Me?
FACTA stands for Fair and Accurate Credit Transaction Act. FACTA is the law which allows any American access to their credit report once per year. The law went into effect Jan. 1, 2005. So what does that mean for you as an employer?On June 1, 2005, a new provision of FACTA goes into effect. It says that any employer (even if you only employ one person, and you have their personal information so that you can pay social security taxes,) whose action or inaction results in the loss of employee information, can be fined by federal and state government, and sued in civil court.A USA Today article on FACTA from Jan. 14. 2005, stated "Bet you didn't know that." But you need to know, and need to know wha...(related: Credit)
Free Credit Report Offer - Careful, It Might Carry Hidden Charges
FREE credit checks or free credit reports. What are they all about? Why every second company on the Net is offering you a free credit report? Are they all suddenly moved into a charity business?Don't worry about their finances. Start worrying about yours. They are offering you a FREE Credit report as a bonus. Their main offer is something else -...(related: Credit)
What Is The Check 21 Act?
Check 21 is the common name for the Check Clearing for the 21st Century Act. It's new legislation that was recently passed by congress and made a law when signed by the President of the United States (remember "I'm just a bill" from Saturday morning cartoons). Check 21 basically streamlines the traditional check processing system by incorporating new electronic technology. This new system replaces an outdated check clearing system that banks and other financial institutions have used for many years. The advantage is the ability to cut the time it takes for a check to clear from days to hours.The process to do this involves a pseudo or substitute check. Check 21 now allows banks to use this in place of original checks. The technique to make this a reality involves converting the information on the check into an electron...(related: Credit)
What Happens When Your Credit Is Damaged? Do You Have Recourse?
The good thing about bad credit is that you can fix it. If you start now, over time, your bad credit can turn into good credit, and you could qualify for the loans you want at the rates you want. The most important aspect of rebuilding your credit after it has been damaged is showing lenders and cre...(related: Credit)
Beware The Shopping Mall Monster
Like me, you've probably been offered a fair old number of these by now.....and, if you're like most people, chances are you maybe own at least one or two.They always seem to put in an appearance at just the right (or wrong) moment...It might be Saturday and you've just seen the clothing item of your dreams.That can be a pain, though, if this month's paycheck isn't due fo...(related: Credit)
Negotiating Rates With Your Credit Card Company
Ok, let's face it, everybody hates high credit card rates, and they drain hard earned money out of your wallet. As a valued consumer, it is apparent that you learn how to negotiate to get the absolute best rate that you possibly can. The good news however is that it doesn't have to be a difficult or time-consuming process. In fact, it can be very easy indeed if you know what you're doing. In this article we will discuss the ins and outs of credit card negotiating to ensure that you get the best possible rate with the least amount of effort.
Automobile Credit Report
When applying for a loan to purchase a car, the lender will want to take a look at a person's auto credit report. Credit reports tell lenders all they need to know about granting a loan to all applicants. When a person applies for a car, an auto credit report shows the lender what kind of credit or risk sc...(related: Credit)
site-map - Copyright © 2007 | Contact Webmaster | All Rights Reserved | Free Articles and Information | Credit