Factors To Consider When Applying For Credit Cards
Credit cards have become a lot more accessible to the public over the last decade or so - something that is due in no small part to the evolution of the Internet. No longer do applicants have to take time out of their busy schedules to visit their local bank branch to obtain information. Applicants instead can just switch on their PC and surf the Web when it's convenient for them.
Information on credit cards is found very easily online. There are even application forms hosted on the Internet, some of which offer instant decisions to s applicants. Within 5 minutes, applicants could have applied online and have received approval. It can really be as quick as that!
But, with so much information available online (and in the offline world), how can applicants make the right decision on the types of credit cards to apply for? A lot of course will depend upon the personal preferences and needs of the applicants. There are however several factors to consider when attempting to decide on which to apply for.
APR
The APR on credit cards is the annual rate of interest that you'll be charged on your outstanding credit cards debt, a percentage of which is applied to the balance present on a monthly basis. If you intend to use your credit cards to carry forward a debt and pay it off over several months, the APR should be an important factor in your consideration. Basically, the lower the APR, then the lower the amount of interest you'll be charged on your debt.
Balance Transfers
Do you want to transfer debt from other credit cards or store cards onto the new offers that you are considering applying for? If you do then you'll need to check out the balance transfer facilities on your potential cards. Many card companies now offer zero-percent interest for an introductory period on balances transferred from other cards. If you intend to use this facility, do check out the rules governing balance transfers as you may find that certain provisos apply!
Interest Free Period
All credit cards provide an interest free period on purchases for a defined amount of time before interest begins to accrue. However, not all offer the same maximum amount of interest free days. At the lower end of the scale, some may offer only 45 days interest free. At the other end of the spectrum you may find some offering as many as 59 days or 60 days interest free. It has to be said that the most popular types of credit cards are offering the longest maximum interest free period on purchases.
Charges
Credit cards companies make a fair amount of money on the charges that they levy against their customers. Annual fees, balance transfer fees, cheque-processing fees, late payment charges and cash advance charges may all apply. If you intend to use them abroad, look out too for credit cards that charge a fee for foreign currency transactions.
- Get To Know Your Credit Card Penalties
One of the most unsavory entries you can see on your month-end credit card statement is a credit card penalty fee. Why? Because, along with being charged a high rate of interest on the penalty, the fee is totally unnecessary if you manage your debt repayment properly.
Payment allocation
Not all credit cards companies allocate payments received from their customers in the same way. Some will allocate credit card payments to cover off promotional rates and discounts first before placing the payments against the standard balance; others will not. Companies who allocate a percentage of the repayments against both promotions/discounts and your standard balance will save you money in the long run.
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