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:
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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).
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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.
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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.
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Occasional use
If you use your card occasionally – not very often – you will certainly want one that does not charge an annual fee.
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Pay bills late
If you constantly pay your bills late, you will want to find a card that has the lowest late fees.
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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.
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Transfer balances
If you are looking to transfer balances, you will want a card that provides a low APR and low associated fees.
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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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