Credit And Credit Cards

Everyday, people spend for different purchases either on goods or services. Money is required when you go to a store, a gasoline station, a restaurant, and many more. In all these different situations, running out of cash is probably the last thing that you have in mind. But even so, there are unavoidable circumstances when you do run out of cash; and the situation can be quite embarrassing, especially if you don’t have any credit card.

A credit card allows you to make purchases on credit, as long as the store accepts credit cards. With the card in hand, running out of cash is not much of a problem anymore. That is why many people are finding credit cards quite handy, and there are even those who can’t live without it.

But wait, applying for any credit card that comes your way is a big no-no. Credit card companies often have enticing offers, but don’t be easily fooled. You should be careful in choosing the card company that will definitely suit your needs.

Here are terms that you should be familiar with before filling out any application form.

Annual percentage rate or the interest rate - cards are being charged with an annual interest rate based on your purchases, cash advances, and/or balance transfers. You must know that there are cards which have variable interest rates, while other has fixed rates. Some companies offer low introductory interests to attract customers, after some time, the rate will increase as soon as the introductory period is over.

The grace period is the allotted time given to cardholders in order for them to settle their account in full. After that certain period, finance charges will be credited to the cardholder’s account.

Annual fee - having a credit card is a privilege, and because of this annual fees are charged. If you shop around, you can actually find credit cards which have very low annual fees, and if you’re quite lucky, you might find one which does not charge any annual fee.

Cash advances - compared to regular purchases, interests on cash advances are much higher; you can get cash advances through ATM machines.

Fees on over-limit - credit card holders are provided with credit limits; in case you exceed this limit, a certain amount of fee is charged called over-limit fees. However, this is not a very ideal situation especially if you need to use your card during emergencies.

Balance transfer - if you are not satisfied with your present card, you can take advantage of balance transfers; this allows you to transfer your balance to a new credit card. Many people are attracted to this scheme because of very low interests. Be aware that low interests are offered for several months only, the most is at six months. After that, a much higher rate will be charged. You should first ask the card company about this matter.

Disclosure - you must be aware that there is a federal law which requires credit card companies to disclose all information about the credit card. Be wary of companies who fail to disclose important information about the card because they may be a fraud. This information includes APR; finance charges computations, grace periods, late/annual fees, and many more. As a responsible consumer, you should read all disclosure information to protect yourself from any deceit.

Tags: credit cards, credit repair, consolidation, credit reports, finance

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