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

Credit Card 101: Facts About Credit Cards

There are many things that you should know about credit cards before applying for one. For example, not all credit cards are the same. Some credit cards are secured and some are not secured. In addition to this difference, there are usually "hidden" provisions in a credit card agreement that most people neglect to read. Such provisions include the differences between the interest rate for a purchase and a cash advance, and whether or not the credit card company from which you obtained a credit card engages in the practice of universal default.

A secured credit card is a credit card that is that is tied to a monetary fund of some kind (whether it is a deposit, bank account, or some other account). The monetary fund can be accessed and used by the credit card company in the event that the credit card holder defaults on a payment. These kinds of credit cards usually have an obscenely high interest rate and an inordinate amount of fees. Basically, they are terrible credit cards that target people with bad credit.

As an alternative to getting a secured credit card, you should look at non-major credit cards. These types of credit cards include credit cards from various retail stores, department stores, and even gasoline cards. These cards usually have a high interest rate, however, the usually have no fees attached to them as secured credit cards do. Additionally, these "non-major" credit cards are unsecured, therefore, you do not have to put up a big deposit or tie the credit card to a bank account. It is easy to qualify for non-major credit cards, and thus, they provide an attractive alternative to secured credit cards should your credit be bad.

In regard to the different interest rates for purchase and cash advances, if you look at your credit card statement, you will see a section that shows you your interest rate. There are usually two interest rates shown: (1) your purchases interest rate; and (2) your cash advance interest rate. I can almost guarantee that the cash advance interest rate will be several points higher than your purchases interest rate. For example, you regular purchases interest rate may be 12.95% while you cash advance interest rate may be 19.95%. Why the big difference? This difference exists because your monthly payments will not count towards your cash advance balance until you fully pay off your regular purchases balance. Therefore, the credit card company will be able to charge you a higher interest rate while you are paying off your primary debt.

Universal default is a credit practice where you will be in default on one card because you are in default on another unrelated credit account. For example, let us pretend you have two completely unrelated credit cards; Credit Card A and Credit Card B. Further, let us pretend that Credit Card B has a universal default provision in the credit card agreement. Now, pretend that you are late or default on a payment to Credit Card A. The credit card company that gave you Credit Card B can now put Credit Card B into default even if you have never missed nor been late on a payment to Credit Card B.

The effect of this is that it is possible for you to be charged a credit default fee for Credit Card B (even though you have never missed nor been late on a payment to Credit Card B) and that another negative impact will occur on your credit report.

These are just a couple of credit card facts of which you need to be aware before you obtain a credit card.