How to Choose Wisely a Credit Card

So, you've made the decision to apply for a credit card. It's an important step for any consumer. Whether this is your first application in an effort to establish your credit, an addition to your existing credit card portfolio, or a plan to re-establish unsatisfactory credit, it is critical to research and fully understand the plans associated with various types of credit cards.

Before beginning the research process, consider and decide how you will use your new credit card. Will you be using the card for everyday purchases, or will you be taking an exotic vacation? Do you plan to pay the balance in full each month, or do you prefer to make monthly payments? Since APRs (annual percentage rates) vary for each card and respective payment plan, it's important to make these types of decisions before the credit card selection and application process.

Obtaining credit is not free, but can be economical and less costly if you understand the finance charges (the cost you pay for using a credit card). Grace periods may help reduce certain finance charges, depending on the individual credit card company offer. A grace period is the number of days you are given to pay your credit card balance in full before you are charged a finance charge. In most cases, finance charges are applied to new purchases only. (Cash advance finance charges are usually imposed immediately following the advance.)

Familiarize yourself with the annual percentage rate. An annual percentage rate represents the interest rate associated with using your credit card for purchases and cash advances. The APR is often a determining factor for many consumers when selecting and applying for a credit card. Credit card companies may vary their APRs, offering a different rate for purchases, cash advances, introductory periods and penalties. Traditionally, purchases carry the lowest APR. An exception may be an introductory APR for new purchases or balance transfers that may be offered at 0% for qualified applicants.

Many credit card companies competing for your business may offer a lower introductory APR of 0% for a specified period, for example, six months. At the end of this specified period, the APR will change to a pre-determined APR. (This information will be included in the credit card offer.) Therefore, it's very important to understand the APR following the introductory rate period, particularly if you will be using the card for large purchases and / or balance transfers. Also look for companies offering 0% interest on balance transfers with no time limit. Cash advances usually carry a slightly higher APR than purchases, but will vary for each credit card company.

An annual fee is another cost associated with using a credit card. Many think of annual fees in this way, the greater the APR, the lesser the annual fee. While this may be true in some cases, these fees are typically charged annually and usually will be subject to finance charges. Some special credit card offers, such as unsecured or unlimited credit card types and lines, may impose a higher annual fee.

In addition to a possible annual fee, many credit card companies impose charges through other fees such as late payment penalties, over limit fees and cash advance fees.

With the growing competition amongst credit card providers, new plans such as rewards and points programs are offered as incentives. These programs may offer earned 'points' or privileges for consumer items, travel (vacations and frequent flier miles) and other premium services, but oftentimes impose an enrollment participation fee in addition to any annual credit card fee. If you are a frequent traveler, these special programs and incentives may appeal to your taste.

When reviewing each credit card offer, look for the specific information outlined here to best determine the most appropriate card type and plan for your needs. You may elect to use a comparison chart of your own when considering credit card programs to more carefully select the best offer. Using the categories listed above (APR, finance charge, grace period, annual fee, etc.) create a left-hand column containing specific information about each category. Then, create a column for each credit card offer you are considering. This method will afford you a side-by-side, line item comparison to assist you in making a final decision.

Do you want a new credit card but can't choose? Don't panic! abc-of-credit-cards.com gives you all the basic information you need to know before applying for a credit card. For more info visit this credit cards website.

Single Mother and Learning how to Save

Saving may seem easier if you were saving for a... Read More

Creating A Household Budget

Creating a budget can be a very difficult task. Although... Read More

Understanding Your Finances Can Give You Power And Choice

What is finance and what do you need to know?... Read More

Saving Money - The Magic 20 Percent

Saving money is not easy and is made more difficult... Read More

The Good and the Bad of Money Management

Good money management needn't be difficult. In fact, there a... Read More

Budgets And Eating - Can They Co-Exist?

Whatever your reason for having a tight budget, the truth... Read More

What?s New in Checking ? From Designs to Photos

Just about everyone has a checking account. Checks present easy... Read More

When do You Need a Financial Management Company on Your Side?

We live in a crazy world. Someone ought to sell... Read More

Money Saving Tips. Maximize Savings on Everyday Items!

Frugal living is more than a lifestyle. It's a passion.... Read More

Accessing Funds You Never Knew You Had- Household Utilities and Mortgage Expense Reduction Plan

For most of us the process of getting out of... Read More

10 Steps to Take if You Are a Victim of Identity Theft

There have been an estimated 9.9 million victims on America... Read More

Chex Systems ? Why Every American Needs To Guard His Checking Account With His Life

Most Americans have been brought up to be concerned about... Read More

Car Donations and Used Car Donations

Car donations and used car donations are the way many... Read More

10 Steps To Improve Your Financial Situation

Here are ten steps you can follow to help improve... Read More

Budgeting -- The Critical Flaw That Causes Most Budgets to Fail

Budgeting. It's a word we're all familiar with. Everyone knows... Read More

Do You Know What Tomorrow Will Bring?

I've been sharing the following idea with people for a... Read More

If I Had a Structured Settlement, I Would Use It to Pay for Gas

Has anyone been to the gas pumps lately? Soon $3... Read More

The World is Not Enough - Calling for a More Ethical Approach to Personal Finance

At a time when the entire world's attention is focused... Read More

Developing a budget? Watch out for Those Budget-Bursting Gremlins

If you've developed a household budget to get your spending... Read More

5 Steps to Healthy Spending Habits

Next to our physical health most of us are primarily... Read More

What Happens if You Die Without Making a Will

If you die without making a Will in the UK,... Read More

Organizing Your Finances - Thinking Outside the (Shoe) Box

If you're like most people, your personal financial records are... Read More

Top 10+ Ways to Jumpstart your New Year?s Finances!

Of course, these don't have to be done in any... Read More

UK Parents Inactivity Harming Their Children?s Future University and Mortgage Savings

The British government at the beginning of this year officially... Read More

Safely Save for Your Childs University Studies Using An Education IRA!

This investment retirement account (IRA) is useful to you as... Read More