What To Consider Before Signing Up For A Credit Card
There are a lot of banks and credit card lenders that will offer instant approval credit cards, even unsecured credit cards for those without excellent credit. Typically the approval process consists of filling out a few questions about yourself, and your credit history, and the website does a scan of your credit and lets you know in a minute or two whether or not you've been approved. This is a great service for those in need of a credit card, but what should you be looking for when applying for an unsecured credit card?
First, the percentage of interest that a credit card charges you is very important to know. For every dollar you spend on your new card, the bank is going to charge you an annualized percentage rate of interest, so finding the lowest rate you can is vital. If you have good credit you should easily qualify for today's top rates, but if not you can still find a good card, just at a higher rate. Understanding the terms of your rate, such as any increases after an introductory period or after a late or missed payment is very important so you don't find yourself with a rate of 20 percent or more.
The next thing you need to consider are the fees. Most credit cards will not charge you an annual fee, but other cards, such as American Express, charge a fee for the "privilege" of being a member of their service. Be sure to understand all of the fees you are required to pay as a member before signing up for the card. Once you start using the card many credit card companies won't refund your fee and you will be stuck paying it. Worse, they could charge you interest on the fee if not paid right away.
Now that we've looked at rates and fees, one of the good things you should look for in a credit card are the rewards that it pays. Many companies will give you incentives to use their card including travel miles, gas bonuses and even cash back. If you are a responsible consumer and pay your bills on time, these can be a great incentive for you to sign up for one of these cards. Everyone likes free things right? Don't get lured in for the incentives alone though, if you don't pay more than the minimum payment, or miss payments many companies will not give you the full benefits.
Once again, before you sign up for anything make sure you read and more importantly understand the rates and terms for that card. Not understanding them and getting sideswiped with fees and high interest rates can really cost you hundreds or thousands of dollars in the long run. If you aren't sure don't be afraid to give the card's customer representatives a call to be sure you understand.
First, the percentage of interest that a credit card charges you is very important to know. For every dollar you spend on your new card, the bank is going to charge you an annualized percentage rate of interest, so finding the lowest rate you can is vital. If you have good credit you should easily qualify for today's top rates, but if not you can still find a good card, just at a higher rate. Understanding the terms of your rate, such as any increases after an introductory period or after a late or missed payment is very important so you don't find yourself with a rate of 20 percent or more.
The next thing you need to consider are the fees. Most credit cards will not charge you an annual fee, but other cards, such as American Express, charge a fee for the "privilege" of being a member of their service. Be sure to understand all of the fees you are required to pay as a member before signing up for the card. Once you start using the card many credit card companies won't refund your fee and you will be stuck paying it. Worse, they could charge you interest on the fee if not paid right away.
Now that we've looked at rates and fees, one of the good things you should look for in a credit card are the rewards that it pays. Many companies will give you incentives to use their card including travel miles, gas bonuses and even cash back. If you are a responsible consumer and pay your bills on time, these can be a great incentive for you to sign up for one of these cards. Everyone likes free things right? Don't get lured in for the incentives alone though, if you don't pay more than the minimum payment, or miss payments many companies will not give you the full benefits.
Once again, before you sign up for anything make sure you read and more importantly understand the rates and terms for that card. Not understanding them and getting sideswiped with fees and high interest rates can really cost you hundreds or thousands of dollars in the long run. If you aren't sure don't be afraid to give the card's customer representatives a call to be sure you understand.
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