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

Popularity: 4%

Credit cards are widely used by many people because of the great number of conveniences it offers, this is most especially with the working professionals. But unlike before, you can now apply for a credit card online. With the help of the Internet, making an application online is very much possible.

Credit card is a card given to a specified holder who is entitled with a credit line. With a credit card, its holder can withdraw cash or make purchases on credit. After a specified period, the amount charged will be paid by the holder. An interest charges are also applied where applicable, and some banks make annual fee charges.

The use of a credit card gives a lot of people convenience most especially if they don’t have cash on hand. Just in case they need to make emergency purchases, or withdrawals; the credit card is always handy.

Many people, however, are reluctant to make any application online. And this is true especially when it comes to credit card applications. Most people think that it is quite unsafe to make such private application online.

This is the most common misconception because applying for a credit card online is very much safe as making an application in a bank. Why? because your application form (for a credit card) is secure, and you are directly applying with the bank.

Different issuing banks have their very own websites, and they provide secure application forms. There are ‘middlemen’ on the net, but their job is simply to refer prospective clients to the issuing bank’s website.

So you just have to make sure that you’re filling out a secured application form. Most of today’s browsers are SSL equipped, so that all-important information is sent ‘encrypted’ to the issuing bank.

The fact remains that there are also a lot of scammers on the net; just to be sure, never send any number, especially that of a credit card or SSN, through email because it is unsafe. Any information sent through ‘unencrypted’ forms is unsafe. As an applicant, you have to be alert, and very careful.

How do you make an online application? First, you have to choose among many credit card issuers. And in doing such transaction, you must be of legal age, which is 18 years old and above.

Most applications are easily processed if the applicant has an email address, driver’s license, employer details, and other things which pertain to your salary/wages and employment or source of income.

Employer details include the name of the employer, address and telephone number. If you have existing loans, you should also provide information about it, it can be a personal debt or a personal loan. Most credit card issuing banks will require you to provide them with details about your present credit card, current balances, and credit limits.

There are also banks which would require you to provide information about your current assets which includes your house, investment properties, bank accounts, vehicles, and shares. Others also ask for the national identification number or NIN.

Upon submission of the application form, you can wait for a few seconds or minutes to have your application confirmed. If you have a good credit rating, you’re application will be approved soon. Usually, it would take about three to five days before you get your credit card.

Having a credit card entails responsibility. You must have a good credit reputation; otherwise, you will find it hard to secure a credit card the next time you apply for it.

Tags: personal finance, improve credit score, loans, money, consolidation

Popularity: 4%

Eighty one percent of regular American households own at least a single credit card, making credit card ownership extremely popular nowadays. This high percentage rate is attributed to the convenience and benefits of using credit cards for purchases instead of using cold hard cash. There are also other additional features of credit cards (such as reward system and applicable discounts) that helps an individual generate savings out of what he/she spends using that card.

However, many financial experts stressed out that these facts are not just within the positive aspects alone. In fact, most of the credit card holders who belong in that 81 percent possess more than $8,000 worth of credit card debts. The accumulation of such huge credit card debts is attributed to several factors such as the consumer’s lavish lifestyle and unnecessary spending.

But one of the most common “suspects” in accumulating huge credit card debts is the interest rate.

According to a certain consumer credit website, a single credit card has an average interest rate of 18.9 percent, or relatively close to 20 percent worth of interest rate payments. With this high interest rate (this is just only the average) it will really lead the credit card owner to huge debts, especially if he/she has a lavish lifestyle.

Let us get deeper into the nature of interest rates. These rates are typically charged by the credit card company once the owner had accrued several balances on his/her due payments. In most cases, individuals tend to pay the required minimum credit card balance only, as shown by the 48 percent of the total 81 percent of credit card owners.

If you are only paying the minimum balance of your credit card, the tendency is the remaining balance (or the accumulated excess of the minimum balance) will just be carried over the next monthly billing period, which will worsen the situation. The remaining balance will pile itself, resulting to higher accrued debt, which is commonly hard to pay since the same interest rate will be applied on that higher accrued debt.

At this point, you need to apply for a low interest credit card. You will be provided with low introductory APR (annual percentage rate) which will lower your monthly interest rate payments. However, most financial experts argued that low interest credit card just motivates individuals to make more purchases. Since the interest payments are now easy to handle, you will think that it is okay to make many purchases.

Hence, before you apply for low interest credit card, you need to consider several things that you can use to evaluate and interpret several facts about low interest rates applied on these credit cards.

1. Most of low interest credit cards are offered as an introductory promo, making it an effective strategy in attracting more clients. Most individuals are accumulating larger credit card debts because they fail to understand that this introductory promo is limited within a certain period of time.

2. The effect of neglecting the fine print of credit cards is the worse thing that you can experience. In fact, almost 75 percent of credit card owners who accrued huge debts were not able to understand the things written on the fine print of their credit cards. Most of them confessed that they have just signed up immediately without reading the fine print.

Before you apply for any low interest credit card, make sure that you analyze it first or else, you will be counted among the majority of the 81 percent of credit card owners who have more than $8,000 worth of credit card debts.

Tags: credit, credit reports, money, consolidation, credit repair tips

Popularity: 4%