Find a Credit Card
If you are just starting out and need a new card, or need a card with a
lower rate and better terms or need a card for balance transfers then we
have listed some points on how to select a credit card and use a credit
New laws have been passed to help protect you from outrageous credit
card fees and tricks. But you still have to be diligent in your use of
1) How To Find Which Credit Card is
Best for You
*When choosing a credit card, first determine how you plan to use the card, or what you
need the card for.
Will it be used for emergencies, to make monthly automated payments, travel expenses, balance
transfers to get a lower rate, or just to help build or repair your credit score?
Do you need a business credit card or
will this be for personal expenses? Is this your first credit card?
What kind of monthly payments fit into your budget?
If your goal is to rebuild credit then you may need to get a
secured credit card. Secured cards
require a security deposit. The larger the deposit, the higher your credit limit will be.
Other suggestion from federalreserve.gov:
- If you are not interested in extra features like frequent flyer miles but you plan to
pay your bill in full each month, then you may want to consider a card with no
annual fee and a longer grace period
- If you sometimes carry a balance from month to month then
select a credit card with a lower APR (annual percentage rate or interest rate)
- If you plan on using cash advance features then
get a card with a low APR and lower rate on cash advances
2) Read the Fine Print when selecting a card.
Choosing wisely can save you aggravation later on. Read the
fine print, check the billing cycle, look at annual fees, some compound
interest rate daily and some monthly:
APR (annual percentage rate) – the interest you’ll be charge
for carrying a balance, expressed in annual terms although most card issuers
calculate compounded interest daily of monthly. One card can carry different interest rates. For example the rate for
cash advances may be different than the stated APR, some issuers also have an “introductory”
offer which will change after a certain amount of time.
Fixed vs. Variable rate
With fixed rates your APR seldom changes, or changes infrequently (unless
you become a credit risk by not paying your bill on time). The credit card
company must tell you ahead of time if they want to change the fixed rate. With variable rates, your rate can change
from 1 month to the next. Variable rates
are usually based on the prime rate or Treasury bill (T-bill) rate.
Grace Period. Grace period is the time you have to pay your bill after the statement
day before you get charged extra fees. It’s usually a certain number of days.
It usually only applies to new purchases. Look on the credit card application for information about the “method of
computing the balance for purchases” to see if new purchases are included or
Finance Charges How are finance charges determined? Card issuers use different methods to
calculated the finance charges.
Minimum Finance Charge Some credit card companies have a minimum charge so
you'll get charge a monthly fee even if you don't purchase anything or have a zero balance.
Credit limit Find the maximum amount you can charge with the card.
Other Fees Other fees may include:
Annual fees - If there is an annual fee it may
be billed monthly.
Cash advance fees.
Balance transfer fees.
Over the limit fees may be charged when you exceed your credit limit.
Credit limit increase fees.
3) Control credit
card debt & keep or build a health credit score
There are times in life
were "things" happen. An emergency or unexpected large expense for
example. But for normal
every day life use the card wisely by following a few simple steps:
Pay off the balance every month, use cash
advances sparingly, if at all.
Make payments on time.
Don't spend more than you can afford to pay at month end
Avoid using too many credit cards.
Don’t max out the card available balance. This
will negatively affect your credit score
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