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2/19/09

Tips and Techniques for Applying for Credit Cards

The biggest factors you need to consider when applying for a credit card are (1) interest rate; (2) fees; and (3) terms. In addition to these important considerations, you need to gauge whether you need more credit or whether your current credit score will allow you to obtain a particular credit card. If you have never had a credit card before, you may not be able to get the best credit card available. The same is true if you have bad credit and/or a low credit score. However, this does not mean that you have to settle for a bad credit card.

If you currently own a credit card and want another card so that you can increase your purchasing power, increase your credit to debt ratio, and/or get a new card with better terms, a better interest rate, and/or a better fee schedule, you possess the power to find a great card with great terms, interest rates, and fees.

The first thing you need to look at is the interest rate of your prospective credit card. A low, fixed rate should be your priority. However, you may not be able to find a fixed rate credit card. If such is the case, look for a low, adjustable rate but make sure that the interest rate on the credit card, although adjustable, cannot exceed 9.99%. If the adjustable rate that you are looking at can possibly go over 9.99%, do not get the card. The lower the interest rate on your prospective credit card, the better. However, do not pay an annual fee or other fees in order to get that lower interest rate.

An annual fee is the worst thing you can have on your credit card. The fee simply does not make sense. Basically, you are paying a credit card company solely because you own the credit card regardless of whether or not you actually use the card. You should never pay for something unless you use it. As such, why should you pay for carrying a piece of plastic in your wallet or purse? The point is, avoid annual fees. It is important to remember, however, that some fees (such as late fees, over the limit fees, etc.) are unavoidable because every credit card on earth will have such fees. However, this does not mean that all of the fees are the same. As such, obtain a credit card with no annual fee and the lowest "unavoidable" fees.

You credit card terms are also very important. Credit card terms include the grace period between payments, rewards programs, and customer service. The longer the grace period between payments, the better. Some credit cards have 20 day grace periods while others have 30. Obviously, having an additional 10 days to pay your credit card bill can help. Rewards programs can also be good because you can accumulate points from purchases for travel or products, get cash back on the total amount of your charges, and/or get tickets to concerts and events.

Search for a low, fixed rate credit card. If, however, you cannot find a fixed rate credit card, look for an adjustable rate card that cannot go over 9.99%. Never get a card with an annual fee and try to get the lowest "unavoidable" fees that you can find. Last, look for good terms such as long grace periods and a good rewards program. Following these tips will help you get a great credit card

2/9/09

Who is Better, Visa vs Mastercard?

The four major credit card companies (Visa, MasterCard, American Express, and Discover) are all constantly trying to set themselves apart from the others. Whether by credit card services offered, credit cards offered, credit card terms offered, or rewards programs offered, to name a few, each company is constantly trying to convince the public that their company is the best when it comes to credit cards. However, with all of the conflicting advertising and consumer reports that you may have heard, read, or seen, how do you discover which card offers the best service?

With respect to Visa and MasterCard, the question of service can be broken down into two parts (1) acceptance around the world; and (2) customer service. The category "acceptance around the world" refers to the number of places that each card is accepted. Because of the vast amount of marketing and money that both of these companies have, the difference between the amount of locations in which each card is accepted is minimal. As such, it is very hard to distinguish between Visa and MasterCard on this subject. Because of this fact, neither credit card company gains an advantage over the other in regard to credit card service.

In regard to customer service, my personal experiences have led me to favor MasterCard over Visa. As far as telephone customer service, I found both services to be friendly and willing to help. However, as far as actual help is concerned, MasterCard actually delivers on its promises. My opinion on this situation is derived from the following experience.

My father and I have the same name. However, because I am named after my father, my name has the suffix "II" following my name. Despite this fact, from time to time I find my father's credit card activity being reported on my credit report. On one such occasion, both a MasterCard and a Visa belonging to my father were being reported on my credit report. After contacting both of the credit granting institutions and receiving instructions on how to remove my father's credit information from my credit report, the MasterCard account has since correctly been removed from my credit report while the Visa account belonging to my father still remains on my credit report.

Based upon this experience, I feel that MasterCard better protects its cardholders by correcting problems when they arise. On the other hand, it feels that Visa is more interested in protecting its own interests. Granted, your own experiences will dictate your opinion of each company. However, based upon my experiences, MasterCard has better credit card service.

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