By learning the basics before applying to an account. Understanding the basics, from knowing which types of credit cards are available to legalities of use, will help you charge wisely from the moment you pick up this powerful piece of plastic.

See related cards: first card dilemma: student card and safe card

1st. There are different types of cards to choose from.
There are several types of credit cards: general purpose cards can be used everywhere, while private-label retail cards can usually be used only at the issuing store or service station.

Most general purpose cards are precarious , meaning the publisher extends a credit limit based mainly on your credit history .

Conversely, secure Cards are supported by funds you put into a deposit account that the creditor can claim if you default. Qualification is relatively easy, as creditors take little risk with secured cards, so it’s ideal for those with damaged or unspecified loans.

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Robert Manning, a professor of consumer finance and director of the Consumer Financial Services Center at the Rochester Institute of Technology, recommends asking the guarantor if there will be an unsecured card once you build up your credit history.
” Make sure they report to credit bureaus as well, ” he says. If they don’t, you’re not going to build any history at all.

2nd ed. There aren’t the perfect number of credit cards you should have.
FICO is the consumer division of the company that invented the credit risk score myfı according to the, the average consumer has nine credit cards.

The person does not have the perfect number of credit cards to have. A few general purpose cards suit most consumers ‘ needs.

If you want a retail card, make sure it’s for a store that you use frequently, and retail cards offer an incentive to use it because they typically impose higher interest rates than general purpose cards.

See related information: how many cards should you have?

  1. You should understand the interest rates on your card.
    Credit card interest rates can vary significantly-from 0 per cent to 30 per cent on limited-term balance transfer offers.

Creditors use factors such as your credit score , income, assets, current debt load, credit queries , payment history and economic circumstances to determine your annual percentage rate (APR).

Who gets the best (lowest) rates? Consumers whose credit history is positive and proven.

  1. It’s very important to compare cards.
    Banks, credit unions, retailers and credit card companies issue credit cards. (Visa and Mastercard are the companies that help process payments; they don’t issue cards.)

The best way to apply for an account, says Lita Epstein, author of “full idiot’s Guide to Boosting Your Credit Score,” is to “find the card with the best prices and terms by researching online options.”

This targeted search approach can protect your credit score against too many unnecessary investigations.

See related information: comparing various types of credit cards

  1. The contract is binding.
    Read the agreement carefully, because after you sign it, you will create a legal agreement and agree to the terms set by the publisher. These:

Credit limit
The total amount you can charge, including interest and fees.
Annual percentage rate (APR).
Interest on carried balances. It often predicts a higher rate for late payment, payment beyond your limit, balance transfers and cash advances.
Method of calculating interest.
Most calculate the interest rate by taking the average of the Daily account balance and then calculate that figure at the periodic rate (divided by Apr’s number of days in a year).
Fixed or variable APR .
Fixed-rate APRs have consistent interest rates. Variable APRs are linked to an index (usually the main loan interest rate set by the Federal Reserve) and therefore fluctuate.
Additional airtime .
The additional period is the number of days (usually between 20 and 30) you have to pay in full before interest is added.
Fees .
The usual fees include those for cash advances, balance transfers, late payment, exceeding your credit limit and sometimes an annual fee. t 800 number, online account management, and account termination.
Note that most lenders reserve the right to change any of these terms, so check your mail carefully for regulation notices.

  1. You can make the full payment … or not.
    You borrow money every time you charge it.

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However, because credit cards offer a rotating balance option, you don’t have to pay the entire loan – at least as long as you make the minimum payment requested, you can move the remainder to the following month. Interest will be added to the balance.
But avoid making the minimum payment . ” Your creditor may think you’re high risk and increase your interest rate accordingly, ” warns Manning

7. You have rights.
You have the right to legal treatment as a cardholder. The Lending Act requires issuers to explain in detail all the terms of the contract in language that an average adult can understand.

Are you having trouble with your bill? The Fair Credit Billing Act gives you the right to dispute and correct errors and protects your credit rating during the transaction.

After all, there is no secret to using credit cards wisely. If you get a low-paid account, you always pay on time, and if you don’t lend month-to-month, the remuneration is free.

Even better, if your card has a good rewards program, you can even stand out by using them.


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