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Credit Cards Facts

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Learn the facts about credit cards and know how to choose the correct one for you.

Learn the facts about credit cards and know how to choose the correct one for you.

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Credit Cards Facts Credit Cards Facts Document Transcript

  • Credit Cards FactsThe Facts You Need To KnowCredit Cards Factsby Hector JayatBrought to you by Finance Tipspage 1 / 22
  • Credit Cards FactsThe Facts You Need To KnowChoosing Your Credit CardAs you probably already know, there are many credit cards out there. The oneyou choose however, should reflect your lifestyle and your ideal spendingamounts. If you are looking for the best possible deal and the best company foryour credit card, you’ll obviously need to look around at what you have tochoose from and what works best for you.The first thing you’ll need to decide when choosing your credit card, is whyyou need one in the first place. Some people choose to get a credit card forcash flow purposes. With a credit card, you can make purchases and buythings, leaving your paycheck or other source of income in your bank accountto draw interest. This way, your money will continue to grow while youcontinue to buy the things you need. Then at the end of the month, simply payyour bill.Others will choose to get a credit card and use it for instant cash purposes. Thisway, they can use their credit card at an ATM and get instant cash, which isgreat for travel or going on a long and extended vacation. If this is why youwant a credit card, you should look for one that has the lowest rate possible forinstant cash transactions.With a credit card, you’ll also need to think about the payments. You’ll need todecide if you want to pay the balance in full each month, or only the requiredamount. When you select your credit card, you should look at the introductoryrates, balance transfer rates, and other offers that may apply to new credit cardsand new holders. Some will offer you truly amazing deals, especially if youhave good credit.Another important area to look at when choosing your credit card is theincentives. There are several cards out there that will give you incentives, suchas reward points and even cash back with purchases that you can use towardspaying back what you owe. There are several incentives out there with creditcards, all you have to do is look around and compare.page 2 / 22
  • Credit Cards FactsThe Facts You Need To KnowThe key area you’ll need to look at and compare is the APR (AnnualPercentage Rate). The APR is what you will pay on what you purchase whenthe incentive period runs out. APR rates will vary among credit cards, so it isalways in your best interest to compare and shop around. The lower APR rateyou get, the better off you’ll be.Another concern with choosing your credit card is the minimum paymentamount. Most minimum payment balances will start around 3%, although somecan be lower while others tend to be quite a bit higher. The interest free periodis a concern as well, as you will obviously want to choose the longest periodthat you can keep the payments down.When you make that final decision and choose your credit card, you shouldalways make sure that you know exactly what you are getting. Credit cards aregreat to have, although they can lead to a downfall if you don’t choose themcarefully. If you put some time and research into choosing your credit card,you’ll find the best one for you. As long as you take care of your credit cardand pay the bill on time, you’ll help raise your credit and eventually be able topurchase even bigger things - such as a car or even a house.page 3 / 22
  • Credit Cards FactsThe Facts You Need To KnowComparing Credit CardsAll across the United States, there are hundreds and hundreds of banks andcredit card companies looking for your business. This day and age, banks andcredit card companies are in competition with each other, trying all they can toget your business. To try and get your business, they offer different credit cardswith various incentives, rebates, and other perks.Before you make your decision and choose a credit card, you should alwayscompare what each company or bank has to offer you. If you get an offer in themail for a credit card, you should go on the Internet and look into it more. Youshould also make sure that you read the fine print as well, to see if there are anytype of hidden fees or other costs associated with that card. Many times, withoffers in the mail, credit card companies or banks will try to sneak hidden feesand costs in there.When you start to compare offers, you should make sure that you look at theAPR and the fees. The APR is very important, as this will tell you your interestrate. You want to get the lowest APR possible with your credit card. If youlook at a credit card that has an unusually high APR, you should immediatelyrule it out. Credit cards that come with high APR rates can easily lead you on aroller coaster towards credit card debt. No matter how good your credit maybe, high APR rates can leave you with charges that are really difficult to pay.Among the many options available to you, you’ll have three primary choicesfor your credit card - Visa, MasterCard, and American Express. These threegiants are the leaders in credit cards. Visa and MasterCard don’t issue the cardsthemselves, they have banks and other companies issue on their behalf.American Express, or AMEX, is the only one that does everything themselves.AMEX issues their credit cards, maintains their own networks, and doesn’t useany type of third party.If you like to travel, you will probably want to choose either Visa orMasterCard, as they are accepted all over the world. American Express is thepage 4 / 22
  • Credit Cards FactsThe Facts You Need To Knowleast accepted of the three, although the company is upgrading their networksevery chance they get. Before too long, AMEX will be accepted virtuallyeverywhere. Right now though, AMEX isn’t accepted in all areas of the world.Discover is another type of credit card, although it isn’t near as popular as thethree above. Discover does have some great benefits to offer you, although itisn’t accepted in other parts of the world. Most people who have Discovercredit cards stay local and use their cards in the event of an emergency. If youdon’t have a credit card and have been thinking about getting a Discover card,you should really think about that decision and choose either Visa orMasterCard instead.All in all, there are a lot of credit cards to choose from. That final decisionthough, is entirely up to you. There are a lot of great companies and banks outthere, although it’s up to you to find the best credit card for your needs. Youcan choose to go with a company or bank that’s local to you, or get online andlook for your credit card. The Internet can be a great resource for credit cards,as long as you know what you want. If you know what you want before you goonline - you’ll save yourself a lot of time and money.page 5 / 22
  • Credit Cards FactsThe Facts You Need To KnowConsolidate Your Credit Card DebtConsolidating your credit card debt is actually one of the smartest decision youcould ever make. Credit card consolidation is ideal for anyone who is lookingto have better credit now, and in the future. Consolidation is very commonthese days, and it is actually a sure way to combine your debt and make surethat you never get yourself too far in credit card debt.Even though there are many reasons why to consolidate your debt, one of thebetter reasons is to get a better rate. If there is a way to get lower rates on acurrent consolidation, then you’ll have no reason to consolidate your debt.Anytime you are able to consolidate your debt and save yourself a bit of money- you should never hesitate to do so.Consolidating your credit card debt will also save you a lot of money as well. Ifyou have managed to get yourself in debt, chances are that you owe a lot ofmoney on your credit card, or possibly several different credit cards.Consolidation will put everything into one bill, making it easier for you to pay.Paying just one bill can help you save a lot of time, as well as prevent stress.Although consolidation will put your credit card payments into one bill, youshould never do it for that reason alone. The last thing you want, is to pay moremoney to avoid getting more than one bill a month. Credit card debtconsolidation is a wise investment though, as it may give you lower monthlypayments over an extended period of time. It will also close out other accountsas well, which could help you to improve your credit.If you are looking to consolidate your credit card debt, you shouldn’t hesitate tolet the professionals help you. There are a lot of companies and banks thatspecialize in consolidation, and would be more than willing to help you. Beforeyou make your decision though, you should always research your optionsavailable and find the best one for your needs. You should also make sure thatthere are no hidden fees or other problems as well. If you take the time toresearch, you’ll save a lot of money in the future.page 6 / 22
  • Credit Cards FactsThe Facts You Need To KnowA lot of people who turn to credit card debt consolidation, let their credit cardsget the best of them. A credit card can be great to have, although it can be easyto abuse as well. If you aren’t careful in your spending, you can rack up debtbefore you know it. Once you get yourself in credit card debt, it can be reallyhard and very stressful to get out of it. Normally, it will take you months andpossibly even years to get out of debt.If you’ve made the decision to turn to credit card debt consolidation, the firstthing to do is to look at your debt, and see exactly how much you owe. If youknow what you owe and who all you owe it to, it will be much easier to contactthe professionals and get them to help you. When you contact them to helpyou, you shouldn’t be afraid to ask them any questions, as you should alwaysbe looking for the best deal possible. Although credit card debt consolidation isa great thing, you should always do yourself a favor and wait until you find thebest deal possible.page 7 / 22
  • Credit Cards FactsThe Facts You Need To KnowCredit Card DebtIn the world of credit cards, credit debt is all too common. Debt from creditcards can be very stressful, and lead to a very crippling situation. No one isimmune to credit card debt, as even students can experience debt with theircredit cards as well. With people using their credit cards more these days, moreand more people continue to take the plunge into debt. Debt is never good, as itleads to bankruptcy and the destruction of your credit report.Even though getting in credit card debt is simple to do, getting out of it issomething that takes a lot of work. Even if you go to an agency or companythat specializes in helping people out of debt, it won’t happen overnight. To getout of debt, it will take you quite a bit of time and effort as you get the debtunder control and begin the long process of rebuilding your credit.To properly defend yourself from credit card debt, you’ll need to know quite abit about credit, managing your money, and finances in general. Normally, youcan stay out of debt by creating an ideal budget and saving money wheneveryou can. If you stick to this plan and avoid steering away from it, you’llnormally have no problems staying out of debt.If you have other credit cards that you don’t use, such as store credit cards thatare known for high interest rates, you should dispose of them. If you have a lotof open accounts, you should look into debt consolidation, which will combineall of your debts into one payment so you can get them out of the way quicker.By using debt consolidation services, you will only have one bill to pay.When you receive your credit card bill, you should always strive to pay morethan just the minimum. If you only pay the minimum amount, you could verywell end up being in debt the rest of your life - as you could be paying nothingbut the interest. Every month, you should strive to pay the minimum amountand then some. Paying more than the minimum amount will also help to payoffer your credit card bill faster as well.page 8 / 22
  • Credit Cards FactsThe Facts You Need To KnowNo matter how much credit card debt you are in, you can always find debtmanagement services and agencies that will help you fight back. Credit carddebt is very common these days, something many of us have experienced.Although there are ways out of credit card debt, the best way to get out of it isto avoid it all together. If you pay your bills on time and never miss a payment- you’ll always live a debt free lifestyle.page 9 / 22
  • Credit Cards FactsThe Facts You Need To KnowCredit Card FraudThis day and age, credit card fraud is very common. Victims of credit cardfraud often experience a lot of hassle and stress. If you have a credit card, youshould always be aware of the security features that is included with the card.If you are looking to get a credit card, you should always make sure that itoffers plenty of security.With credit card companies all over the United States, credit card fraud isbecoming more and more common. Consumers are becoming more and moreaware of the situation, and always look for ways to protect themselves. Manycompanies that offer credit cards are looking into other methods of security, toprevent credit card fraud from happening.The best way to protect yourself against fraud is to check the monthly creditcard statements you receive. By looking at your statements, you’ll easily beable to tell if your account has suffered any type of fraud. If you notice anytype of fraudulent charges, you should instantly contact your credit cardcompany and inform them. This way, they look into it and try to retrieve themoney that was illegally stolen from you.Another way that you protect yourself from fraud is to never reply to emailsthat may appear to be sent by your bank or credit card company. There are a lotof fake emails going around, that will steal your information should you enter itin. You should always use caution with emails, and reply only if you know thatthe email was indeed sent from your bank or credit card provider.You can also protect yourself from fraud by keeping your credit card aroundyou at all times. When you hand it to someone to make a payment, ensure thatit is given back to you promptly. You should also keep it safe from others sothey can’t view your information. When you carry your credit card with you,you should always keep it in a safe place, such as your wallet. This way, youdon’t have to worry about it falling out.page 10 / 22
  • Credit Cards FactsThe Facts You Need To KnowThere are always steps that you can take, to avoid falling into the trap ofthieves and criminals. Criminals are always out there, looking for ways thatthey can steal your credit card information. Therefore, it’s up to you to protectyourself. Credit card fraud happens quite frequently these days, normally as aresult of credit card holders not being aware of how to protect themselves.Anytime you suspect credit card fraud, you should contact your bank orcompany. This way, you can let them know what happened - and take thenecessary steps in stopping fraud before it goes on any farther.page 11 / 22
  • Credit Cards FactsThe Facts You Need To KnowCredit Card Reward CardsNo matter where you look, there is always a credit card company that isoffering reward programs with their credit cards. New ones pop up all the time,making it sound too good to turn down. Even though they may sound great,you may wonder if the rewards are truly worth it. In some cases they are,although in others they may not be quite as good as you would like.Although having more than one reward card is something many peopleinstantly think about, you should always keep in mind that not all of them areworth having. Even though using your credit card is always good, you cansometimes end up paying quite a bit if you don’t pay attention to what you arebuying. When it comes down to credit card reward cards, you should usecaution - with a dash of common sense.Any reward cards that come with high interest rates should always be avoided.With most reward cards, you’ll find that they include higher rates of interestthan standard cards. This higher interest rate can quickly and easily offset anytype of reward. To be on the safe side, you should always look at the interestrates and determine if the reward is indeed worth it. If you pay off your entirebalance at the end of every month - then this won’t be a concern at all for you.You should also keep your eyes peeled for reward cards that offer a highannual fee. These cards can be very tough to keep a grasp of, and they can alsointerfere with any type of reward you may think your getting. If you look at thefine print before you get choose your reward credit card, you can help toeliminate problems.Cash back is a type of reward card that is becoming very popular. A lot of thetop credit card companies and banks offer cash back programs that arenormally around 1% for every purchase that you make. Before you rush outand get a reward card, you should always make sure that you read the fine printand see if there is a maximum limit on the card.page 12 / 22
  • Credit Cards FactsThe Facts You Need To KnowAnother type of popular reward credit card is the type that give you points forevery purchase you make using that card. Once you have accumulated enoughpoints, you can redeem them for items and other cool things. Some cards willhave limits as to how many points you can receive, which again makes it yourbest interest to shop around.There are also credit cards with frequent flyer miles, which have been aroundthe longest. Some cards will base their rewards on points, while some chooseto use actual miles. For every dollar you spend using your frequent flyer creditcard, you’ll receive either a point or a mile. Once you get enough accumulated,you can redeem them. Most frequent flyer rewards take about 25,000 points ormiles in order to redeem them, which can make it nearly impossible for someto reap the benefits of using the card.No matter where you look, finding the right credit card reward card can takesome time and effort. You may have no problems finding the card to fit yourneeds, and if you do, you should consider yourself lucky. Before you chooseyour card however - you should always take the necessary time to read the fineprint and compare what each unique company has to offer you.page 13 / 22
  • Credit Cards FactsThe Facts You Need To KnowCredit Cards With Cash RebateCredit cards with cash rebate incentives give you cash rewards each and everytime you make a purchase with your credit card. Although there are many typesof reward credit cards out there, more and more companies are leaning towardscash back incentives, as most people prefer to receive cash back over any othertype of reward.For many, getting cash back is far preferred over air miles, items, or any otherreward. If you like to use your credit card often, then you’ll find that cashrebate credit cards will give you a lot of money in return.Normally, these types of credit cards entail higher fees and APR. You don’twant to carry a high balance on these cards at any time, as it normally ends upvery costly. If you can off your balance at the end of the month, then your APRwon’t affect you. Paying off your bill will also allow you to take full advantageof the cash rebate reward.The percentage of cash back will vary, although most normally have 1%, with5% being applied with certain purchases. For every purchase you make usingyour cash rebate credit card, you’ll get a small amount of cash back. Usingyour credit card on a frequent basis will give you a lot of cash back at the endof the year.If you make big purchases, you can get a lot of cash back by using your creditcard, although some may have a limit on just how much of a rebate you getback. If you plan to purchase large items such as furniture, you should checkinto your cash rebate credit card and find out what the rebate is on these typesof purchases. The better rebate cards will normally send a lot of rebate cashyour way just for purchasing some of the larger items.Before you get a cash rebate credit card, you should always find out how muchof a reward you will be getting with each purchase, and what the limit may be.Once you have reached the limit, some banks will either send you a check,page 14 / 22
  • Credit Cards FactsThe Facts You Need To Knowdeposit the reward into your bank account, or simply add the reward to yourcredit card. All three are wise options, although most prefer to have the moneyadded to their bank account - so it can help draw some interest.If you research the rebate card and find out what other features are included,you’ll normally come out a winner. Make sure you inquire about the creditlimit, fees, and other things that you feel you should find out. Once you haveresearched and found out what you need to know - you can get a cash rebatecredit card and begin living life knowing you will be getting cash back for justabout anything you purchase.page 15 / 22
  • Credit Cards FactsThe Facts You Need To KnowThe Cost Of Credit CardsAlthough some choose to rush into getting a credit card, they normally do sowithout being aware of the costs. A lot of credit cards out there come withhidden costs and charges, and you should always be aware of this before youapply. In most cases, these fees and charges won’t get noticed by the user untilit is too late.Credit card holders who aren’t aware of any hidden costs could easily end uppaying possibly thousands of dollars at the end of the year - and not evenrealize it. If you have a reward credit card, your rewards could easily bedestroyed by these hidden costs. Although some credit card users may realizeit, there are many out there who aren’t aware of these costs at all.The first factor for hidden costs is found in the grace period. The grace periodis the extra time you have to pay your bill without having extra fees added toyour bill. Even though this can be great for paying your bill, it can quickly leadto a pitfall if you let it. To avoid any type of costs or hidden fees, you shouldpay your bill as soon as it arrives. This way, you won’t have to worry aboutyour grace period or the interest that can accrue from letting your bill get laterand later.The late fee is another factor with credit cards that is often overlooked by creditcard users. Late fees are common with credit cards, although their potential forcosts is often overlooked. Some people choose to pay it and be done with it,unaware of the fact that these costs can indeed add up in no time at all. To beon the safe side, you should always know what the late charges are and howfast they can add up.The easiest way to avoid any type of hidden fees or costs is to pay your bill ontime - as soon as you receive your bill. You should also pay more than theminimum, as this helps to pay your bill off faster and ensure that you pay thebill and not just the interest. Paying your bill late is never a good thing, as itcan easily destroy your credit report. If you continue to make late payments,page 16 / 22
  • Credit Cards FactsThe Facts You Need To Knowyour company or bank can increase your interest rates.No matter what you do, you should always pay your credit card bill on time.Hidden fees and costs are out there - it’s up to you to avoid them. Credit cardcompanies and banks won’t tell you what the hidden fees are, unless you askthem. To protect yourself and your credit - you should always be aware of thecosts - and how to prevent them from happening to you.page 17 / 22
  • Credit Cards FactsThe Facts You Need To KnowOptions For Good Credit CardsThose of you who are looking to get the best options with your credit card,should first look into the terms associated with that card. There are a lot ofdifferent features that you can get with credit cards these days, including lowAPR, rewards, no annual fees, and several other perks designed to keep youusing your credit card.There are several credit cards that you can choose from as well, giving you aslew of different options. There are credit cards with instant approval, creditcards with low interest rates, cash back credit cards, reward credit cards, andeven prepaid credit cards. If you have good credit, you won’t have a problemgetting any type of credit card you desire.Most people think of the best options with credit cards being the rewards.Reward credit cards are great to have, as they give you extra incentives for themoney you spend. Whether it’s cash back or points to redeem towardshundreds of items, cash back cards make it worth your time and interest to useyour credit card. These cards are becoming very popular, as they offer youfeatures that other types of credit cards generally don’t offer.Another great option for credit cards is low APR rates. Your APR, or annualpercentage rate, is the amount of money that you pay at the end of the year foryour credit card. If you can get a credit card with low APR and low fees, youshould hang on to that card. Credit card companies and banks are alwayscompeting for your business, and you can normally find credit cards these dayswith some truly impressive features.To get the best possible options for your credit card, you should always shoparound and compare what each company or bank has to offer. Most optionsfound on credit cards will vary from company to company and bank to bank. Ifyou have access to the Internet, you should use it to find yourself the bestpossible credit card. There are literally hundreds of credit card offers found onthe Internet, many of which offer you some truly great options with their creditpage 18 / 22
  • Credit Cards FactsThe Facts You Need To Knowcards.Before deciding on your credit card, you need to determine which options arethe best for you. This way, you’ll know exactly what to look for. The bettercredit cards will include several different options, such as low APR, low fees,and certain rewards as well. These types of credit cards are easily the bestinvestment, as they give you a lot of bang for your buck. If you play your cardsright and look for the right credit card - you’ll get the options you desire with acredit card that you’ll be proud to use.page 19 / 22
  • Credit Cards FactsThe Facts You Need To KnowIdeal Offers For Credit CardsWith many people, looking for the best credit is a very tough task. Even thoughthere really is no “best” credit card, there are credit cards out there that are thebest for you. There are many different types of credit cards available, some thatmay be for you and some that won’t. With so many to choose from, it can betough finding your ideal credit card.No matter type of lifestyle you have, how much money you are looking tospend, or how you plan to use your credit card, the one thing you shouldalways pay very close attention to when choosing your card is the APR. Mostpeople, choose the credit cards with the lowest APR, which gives you betterinterest rates. The lower the number of APR you can get, the less you’ll have topay. Many times, the best credit card offers are those with the lowest interestrates.No matter what type of credit card you choose, you should always pick the onethat best fits your needs and interests. If you look at several of the companiesand compare their rates, you’ll find the best possible deals. You should alwayscompare companies and what they offer before you make a decision, so thatyou can find which company fits as your best credit card offer.If you have never applied for a credit card before, you may find it quitedifficult to get a low interest rate. If this is the case, you’ll find other offers thatwill give you what you need. Those of you who have bad credit or no credit,will obviously need to look into credit cards that will give you credit at the bestpossible deal. Once you have had your credit card for period of time and beginto establish credit, you’ll be able to go back and apply for credit cards that offera much lower APR, or interest rate.Although you may get an offer from a company that sounds amazing, youshould read the fine print before you sign the dotted line, then look around atother companies. With the credit card industry being so competitive, there arehundreds and hundreds of companies out there willing to compete for yourpage 20 / 22
  • Credit Cards FactsThe Facts You Need To Knowbusiness. Before you rush into an agreement, you should always find out whatother companies will off you.No matter how you go about getting your credit card, you should always lookaround for your ideal credit card offer. Even though your choice may bequestioned by others, it will be the credit card that you feel most comfortablewith. If you put some time and research into looking and compare other offers -you’ll find the best credit card for you and your money.page 21 / 22
  • Credit Cards FactsThe Facts You Need To KnowThanks for reading this book. Find more articles at Finance TipsPowered by TCPDF (www.tcpdf.org)page 22 / 22