Understand How You Will Use Your Credit Card

Friday, August 26, 2011, 2:00 AM | Leave Comment

Before finding the right credit card, you will need to determine how you will use it and what factors are important to you. Don’t just apply for a credit card when you receive an application in the mail. Read the fine print. Consider the following how you will use your credit card:

  • Carry over balance

    If you generally carry over a balance, you will need a credit card with a lower interest rate, more specifically, lower Annual Percentage Rate (APR).

  • Pay full by due date

    If you pay off your bill every month in full by the due date, you might get a card that offers a slightly longer grace period so you have more time to pay your bills.

  • Heavy use

    If you use your card always and for everything, apply for a card that will give you rewards such as air miles or other points for spending. A better card for that purpose is American Express Card.

  • Occasional use

    If you use your card occasionally – not very often – you will certainly want one that does not charge an annual fee.

  • Pay bills late

    If you constantly pay your bills late, you will want to find a card that has the lowest late fees.

  • Big purchases

    If you are planning to make a big purchase – tuition fee, or down payment on a car, you will need a card with a generous credit limit.

  • Transfer balances

    If you are looking to transfer balances, you will want a card that provides a low APR and low associated fees.

  • Cash advance

    This is too expensive. You will not find a credit card that would charge a lower APR. Don’t go for it.

Understand types of fees credit cards can charge.

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