Applying for credit card is so easy with the offers looking quite appealing. But, it is important to note whether a particular card is the right choice as per your needs. There are certain parameters for choosing a credit card. Before deciding on a particular card, you must see that your important queries are responded to. You can go through the disclosure associated with the card to get replies to most of your questions.
The type of the card:
Regular credit card, student credit card and rewards credit cards are some of the card types and it is necessary to know about each of these cards in detail before submitting the application.
The usage of the credit card:
You should first decide whether you are going to pay the card debts in full each month. If that is your plan, you can opt for a charge card. Excellent credit report is the eligibility criteria for this card. If you plan to use the card for balance transfers, you need to choose the card that comes with low rate of interest on balance transfers. You need to look for a credit card with a low APR if the plan is to carry the balance to the next month. The APR, that is, the annual percentage rate is the rate which is applied to the balance amount that is carried beyond the specified grace period. The APR purchases, cash advances and balance transfers differ from one credit card to the other. It is essential to know the details regarding this, while selecting a particular card.
About the grace period:
The grace period is the time one has to pay to settle the entire balance without the necessity to add finance charge. If you opt for the cards that come with longer grace periods, you can have more time to settle the bill without the need to spend for the convenience in the usage of credit. The grace periods are not for the additional purchases if there is already a balance in the credit card.
The fee structure:
The amount charged as fees and the types of charges are important details about which you should have some good knowledge. The ‘annual fee’, the ‘over the limit fee’, and the ‘late fee’ are some of the common types of fees charged for the usage of credit cards. Some of the credit card companies charge you for the payment on the due date over the phone, for the returned check, and also for additional copies of the account statement.
About the finance charge:
The amount of finance charge is based on the method that the company adopts in calculation of finance charge. While some of the credit card companies take in to account only the balance of the current month, there are some other companies that consider the earlier month balance along with the current month balance for calculation.
The credit limit:
This has much influence over the purchasing power of a credit card. It is advisable to make a start with a very low credit limit to get familiar with the habits to become a smart user of credit cards without incurring debts.
Some of the credit cards attract you with the offer of rewards for using the card. The reward structure varies for each of these cards and it is important to understand the reward structure of your card so that you enjoy the benefits to the maximum.
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