Useful Tips When Choosing
Credit Cards
by
John Mussi
Chances are you
have received your share of "pre-approved"
credit card offers in the mail, some with low
introductory rates and other perks. Many of these
solicitations urge you to accept "before the
offer expires." Before you accept, shop around
to get the best deal.
Credit
Card Terms:
A credit card
is a form of borrowing that often involves charges.
Credit terms and conditions affect your overall cost.
So it's wise to compare terms and fees before you
agree to open a credit or charge card account. The
following are some important terms to consider that
generally must be disclosed in credit card
applications or in solicitations that require no
application.
Annual
Percentage Rate:
The APR is a
measure of the cost of credit, expressed as a yearly
rate. It also must be disclosed before you become
obligated on the account and on your account
statements. Some credit card plans allow the issuer
to change your APR when interest rates or other
economic indicators - called indexes - change.
Because the rate change is linked to the index's
performance, these plans are called "variable
rate" programs.
Free
Period:
Also called a
"grace period," a free period lets you
avoid finance charges by paying your balance in full
before the due date. Knowing whether a card gives you
a free period is especially important if you plan to
pay your account in full each month. Without a free
period, the card issuer may impose a finance charge
from the date you use your card or from the date each
transaction is posted to your account. If your card
includes a free period, the issuer must mail your
bill at least 14 days before the due date so you'll
have enough time to pay.
Annual
Fees:
Most issuers
charge annual membership or participation fees.
Transaction
Fees and Other Charges:
A card may
include other costs. Some issuers charge a fee if you
use the card to get a cash advance, make a late
payment, or exceed your credit limit. Some charge a
monthly fee whether or not you use the card.
Other
Costs and Features:
Credit terms
vary among issuers. When shopping for a card, think
about how you plan to use it. If you expect to pay
your bills in full each month, the annual fee and
other charges may be more important than the periodic
rate and the APR, if there is a grace period for
purchases. However, if you use the cash advance
feature, many cards do not permit a grace period for
the amounts due - even if they have a grace period
for purchases. So, it may still be wise to consider
the APR and balance computation method. Also, if you
plan to pay for purchases over time, the APR and the
balance computation method are definitely major
considerations.
You'll probably
also want to consider if the credit limit is high
enough, how widely the card is accepted, and the
plan's services and features.
Useful
Tips:
Keep these
tips in mind when looking for or using a credit or
charge card.
Shop around
for the plan that best fits your needs.
Make sure
you understand a plan's terms before you accept the
card.
Hold on to
receipts to reconcile charges when your bill arrives.
Protect
your cards and account numbers to prevent
unauthorized use.
Draw a line
through blank spaces on charge slips so the amount
can't be changed.
Keep a
record - in a safe place separate from your cards -
of your account numbers, expiration dates and the
phone numbers of each issuer to report a loss
quickly.
Carry only
the cards you think you'll use.
______________________________________
About
the Author:
John Mussi is
the founder of Direct Online Loans who help UK
homeowners find the best available online secured
loan via the http://www.directonlineloans.co.uk website. To find a loan
that best suits your needs visit http://www.directonlineloans.co.uk
Add
to Favorites