It seems everything requires a credit card. You can’t rent a car without one. You can’t reserve a hotel without one. In some banks, you can’t even cash a check without one, as it’s treated as a form of ID. If you want a rock-solid credit history, a major credit card is absolutely essential.
Make no mistake; some of the best deals on credit can be had from direct mail solicitations. How do you sort through the junk and find the best card offers?
First, don’t judge a card by its cover. Pretty cards don’t usually mean good deals. For example, you might have seen the transparent American Express Blue card. Very chic, indeed. Getting one of these requires perfect credit. There are many copycat cards that look like the Amex Blue card. These copycats are not American Express, and don’t offer the same membership benefits. Some might actually be good cards, but some companies hope that you won’t look past the appearance.
Second, examine the credit limit. Before accepting a card offer, you need to take a good, hard look at your finances. You should consider the worst-case scenario, which is maxing out a credit card. Could you afford to pay the monthly payments? Can you afford to pay more than the minimum payment? If you max a credit card and can only pay the minimum, you’re in trouble. Make sure the credit limit is something your wallet can handle. Also, evaluate your spending habits. If you have a tendency to shop impulsively, you need to curb that behavior. If necessary, ask the card company to lower your limit. Maximizing your credit limit could damage your finances and your credit score.
Third, check the Annual Percentage Rate, or APR. This is the interest you’re charged on your credit spending. Obviously, the lower the rate, the better. However, if you pay your credit cards off every month, APR is not a big issue because you probably won’t get charged interest. Beware, however. Pay special attention to the fine print. Find out when interest starts accruing on your account. For example, most cards will give you a 25 day grace period after you make a purchase before you’re charged interest. However, some cards do not have a grace period, and interest accrues from the time the purchase is made. Even if you pay your cards off every month, you’ll be charged interest if the card has no grace period. Also, find out if the rate is fixed or variable, and under what circumstances your rate can rise. Some cards might give you a 9.99% APR, but will change that to 19.99% if you are one day late on your payment. Beware of limited-time rate promotions. If they advertise 0% interest for 6 months, make sure that you don’t have a balance on that card when 6 months is up.
Fourth, find out if there’s an annual fee. Regardless of whether you carry a balance or not, you don’t need an annual fee to tack on to your existing charges. If your credit history is such that you can’t qualify for a card without an annual fee, find out when your annual fee is charged. You can make a phone call to the card company and ask them to waive the fee. Most will without any hesitation.
Fifth, see if the card company offers any kind of online account management and payment option. With online account management, you needn’t wait until your next statement to see your charges. You can avoid that surprise every month. Additionally, if an online payment option is available, check to see if there’s a fee associated with that service. It’s always good to have the option of paying online. Even the most diligent card users forget that their card payment is due. You can pay instantly without incurring late fees, or worse, affecting your credit history.
Credit cards are a wonderful tool when used properly. However, the best credit cards are only available to those with the best credit. Make sure your credit scores are as high as possible so you can be a part of this elite group of cardholders.
- Post Time: 01-16-16 - By: http://www.rfidang.com