6 Questions and Answers on Credit Card Application
by Susan Rumbo
Nowadays the range of credit cards is so vast, that sometimes choosing the one can be quite confusing. In one particular case, why one credit card deal can be so different from hundreds of others? We are glad to suggest you six questions and answers. They will possibly help you to choose a plastic which does for you best.
1. Are you a student? Being a student, you are free to apply for a student credit card. It would be much better, of course. It is quite possible, that your application will be accepted without problems, no matter what your credit is. However, before an application, it would be better to contact to the bank where you are going to obtain a credit card.
2. Are you going to transfer your balance from a credit card to another one? In this case it would be much better to look for a plastic with low APR on balance transfers. APR is an abbreviation for Annual Percentage Rate, and it implies the total cost of your loan expressed as interest rate. Plastics with low APR on balance transfers may be very convenient; however, you still should be careful with these, as they represent a nice base for swindlers.
3. Are you going to make large purchases? In this case, pay special attention to the plastics with low APR on purchases. If you are really intended to make large purchases, you can also take advantage of bonus points which you can earn with every purchase. Moreover, pay attention to special grace period, which is different for various plastics. Grace period is a special period during which you may pay off your debt without any extra charges, or you do not have to pay at all, if you cannot. Usually this period lasts for 10-28 days.
4. Do you pay off your debt in full every time you get it? If a customer has enough money or your credit card is only for an emergency, he or she can pay off a bill in full every time he or she gets it. In this case, chose the deals with introductory APR of 0% or grace period. You will be able to pay off a balance not worrying about rates.
5. Are you ready to pay fees? In many cases the issuers charge various fees. And sometimes these can be really high. There are quite enough of them: annual fees, cash advance fees, balance transfer fees, foreign exchange fees, setup fees, penalty fees... Of course, not all of them are charged, but some (for instance, cash advance fee) are charges ALWAYS. Moreover, some issuers can charge a fee irrespective of the fact, that you do not use your plastic.
6. Do you need a good Customer Service? Sometimes this can be a quite important issue. In some cases, for instance, in case of loss of your plastic or if there is any charge you would like to contest, etc. you may need such a service. Moreover, you need a friendly and competent service. So choose the right bank with great reputation and with really nice customer service.
Showing posts with label Best Credit Card. Show all posts
Showing posts with label Best Credit Card. Show all posts
Tuesday, March 3, 2009
Saturday, February 28, 2009
Choosing the Best Credit Card for the Purpose
Choosing the Best Credit Card for the Purpose
by Ajeet Khurana
Few things in the world can give a person the same sense of independence as that which is provided by a credit card.
The truth is you need to be extremely cautious when applying for a credit card, as it is a complex web of fees, charges, and interest rates (not to mention hidden clauses and terms which are not only illegal but also financially dangerous) which can sink you deep in debt.
If you are financially responsible, you should make an effort to avail of a credit card and start using it wisely. But first, you will need a layman's crash course on credit card interest rates before you secure and swipe your card at the first opportunity.
Two different loan seekers could get different interest rates. But usually the means for assigning interest rates on an applicant is based on his credit history. Given that your credit ratings are good, the loan that you are approved for could be a very affordable one. If your credit rating is poor, you would have to try to rebuild it before you can get approved for good loan deals.
This may be done the hard way, by taking the brunt of the compromised interest rate which the bank will assign to you, or to choose a plan with a lower credit limit so that the interest rate follows accordingly. You could also think about getting a prepaid credit card. But this method of rebuilding credit is hard to secure and it charges even higher interest costs.
Sure enough, there are low interest credit cards or even zero percent interest plans which are available, but as expected, there is a catch: most credit card providers make sure that this low interest is charged for only an introductory period. Thereafter, a much higher rate of interest is charged on the card. For a monthly or annual fee, service alerts are offered, informing the borrower as to when his low interest period is due to expire.
However, most of these plans have no lasting appeal. This is because they address only short term requirements.
Some credit cards can also be used in an ATM to take out funds within the credit limit, but the interest is usually charged from the date of withdrawal, and not from the monthly billing date. This means that the issuer gets a higher payback in interest rate from the transaction than usual.
Ideally, you should be very clear about the deal that you are being offered. You must bear in mind that different providers will make different offers. Some may lure you with teaser offers of low rates for a certain period, whereas the regular rates can get as high as 40 percent.
Since there are no fixed regulations concerning interest rates and penalties on late payments, some issuers forfeit the teaser rates if the borrower does not make the payment on time, and replaces it with a penalty interest rate. Some can even be so unscrupulous as to charge interest even if the balance is fully paid on the due date.
One should make an effort to find a card that will be charging low rates of interest. But low interest rates are not enough. At the end of the day, the borrower must not end up feeling cheated.
by Ajeet Khurana
Few things in the world can give a person the same sense of independence as that which is provided by a credit card.
The truth is you need to be extremely cautious when applying for a credit card, as it is a complex web of fees, charges, and interest rates (not to mention hidden clauses and terms which are not only illegal but also financially dangerous) which can sink you deep in debt.
If you are financially responsible, you should make an effort to avail of a credit card and start using it wisely. But first, you will need a layman's crash course on credit card interest rates before you secure and swipe your card at the first opportunity.
Two different loan seekers could get different interest rates. But usually the means for assigning interest rates on an applicant is based on his credit history. Given that your credit ratings are good, the loan that you are approved for could be a very affordable one. If your credit rating is poor, you would have to try to rebuild it before you can get approved for good loan deals.
This may be done the hard way, by taking the brunt of the compromised interest rate which the bank will assign to you, or to choose a plan with a lower credit limit so that the interest rate follows accordingly. You could also think about getting a prepaid credit card. But this method of rebuilding credit is hard to secure and it charges even higher interest costs.
Sure enough, there are low interest credit cards or even zero percent interest plans which are available, but as expected, there is a catch: most credit card providers make sure that this low interest is charged for only an introductory period. Thereafter, a much higher rate of interest is charged on the card. For a monthly or annual fee, service alerts are offered, informing the borrower as to when his low interest period is due to expire.
However, most of these plans have no lasting appeal. This is because they address only short term requirements.
Some credit cards can also be used in an ATM to take out funds within the credit limit, but the interest is usually charged from the date of withdrawal, and not from the monthly billing date. This means that the issuer gets a higher payback in interest rate from the transaction than usual.
Ideally, you should be very clear about the deal that you are being offered. You must bear in mind that different providers will make different offers. Some may lure you with teaser offers of low rates for a certain period, whereas the regular rates can get as high as 40 percent.
Since there are no fixed regulations concerning interest rates and penalties on late payments, some issuers forfeit the teaser rates if the borrower does not make the payment on time, and replaces it with a penalty interest rate. Some can even be so unscrupulous as to charge interest even if the balance is fully paid on the due date.
One should make an effort to find a card that will be charging low rates of interest. But low interest rates are not enough. At the end of the day, the borrower must not end up feeling cheated.
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