Tips For How to Apply For a Credit Card
There are many people young and old that are in great need of a credit card.
This can be for many reasons. Some people need help with bills that they don’t have the cash for. Others want a credit card so they don’t have to carry cash.
Some people need one to go on vacation. Whatever the reason is, most people feel they need a credit card. Unfortunately, credit cards are not handed out like candy.
Most people have to apply for a credit card before they can get one. If you are looking into getting a credit card, please read on to get some tips on how to apply for a credit card.
There are several ways to apply for a credit card. You can go online, call the credit card company, or fill out the application by mail. Keep in mind that when you apply for a credit card, you will have to give out your personal information.
All credit card companies will need your social security number as they will use it to run a credit check on you. This is why it is best to have the best credit you can have when you apply for a credit card.
Before you apply for a credit card, you should do some research on which credit card company has the best APR rate and bonus programs. Many credit card companies have a low introductory APR rate for new credit card holders.
Some credit card companies even offer no APR for 12 months! But remember, to get this kind of a deal, you probably need to have good credit.
The bonus programs credit card companies’ offer can vary. Some offer cash back bonus awards. Some have free airline mileage. Others give you points towards merchandise.
The last things you should look into when you apply for a credit card is if there is an annual fee to have the card and what your credit limit is.
Some cards have an annual fee you must pay just for having their credit card so you may not want this type of credit card.
When deciding on a credit limit, most credit card companies will base it on your income and credit score. Never get a credit limit that is too high for you to handle.
These were all of the most important tips on how to apply for a credit card. Be sure to do your research before you apply for a credit card.
There are dozens of companies to choose from. Take you time and pick the best credit card that will suit your needs before you apply. This way you won’t waste you time or your money!
The Basic Credit Card Types
It may seem incredible, but credit card issuers clog the mails with over 2.5 billion offers inviting people to apply for a credit card.
Even those who would not qualify for a conventional credit card due to serious credit problems are now able to get one; some credit card issuers even specialize in this particular type of market.
And according to financial gurus, there are at least a billion credit cards in active circulation throughout the United States alone.
Credit has been an economic cornerstone for some time now. Surveys show that the average American household is estimated to have at least twelve credit cards, including charge cards.
While you may tend to think that one credit card is pretty much the same as the next, there are in actual fact distinct characteristics for each different credit card type.
It is good to know these difference between the three different types of cards in the market: a bank credit card, a travel credit card,
an entertainment credit card (although nowadays the combined travel and entertainment card has become more common) and a retail credit card or house card.
Bank Credit Cards
You have probably noticed that most credit cards bear either the logo of Visa or MasterCard together with the name of the bank.
It would appear that the credit card has been issued by either Visa or MasterCard. That is not quite an accurate assumption: these two companies do not issue credit cards directly to the consumers.
Most of the credit cards on the market today are offered by thousands of banks around the globe. Each bank is linked to the credit card association, because are not allowed to issue any kind of card unless they are association members.
Visa is a privately held membership association, although it is preparing to go public. It started as an association of banks in California and the West Coast.
There are over 20,000 financial institutions in the membership rolls, and virtually all of them offer Visa Card. MasterCard is also a membership association, similar to Visa, and originally consisted of member banks in the East.
A bank credit card is in reality a revolving credit line. When you receive your statement, you can pay all or part of your balance each month, run up the balance again and so on.
Being a credit line, the account comes with a pre-determined credit limit that depends on key factors like disposable income, credit history, etc. The credit limit can be as low as a $100 or as high as many thousands of dollars.
It is possible for card holders to get themselves into trouble when they do not properly manage the revolving credit line.
When you carry a balance instead of paying it off, the credit card issuer starts charging interest on that balance — in some cases, this interest could be pretty steep.
The interest rate varies widely, depending on who issued the card, but you could expect the average credit card interest rate to be at about 18 percent.
For instance, if you carry forward a $1,000 balance for 12 months, you pay $180 in interest per year or $15 every month. If you maintain a $1,000 savings account, you will earn about $40 in interest per year.
Those who get into trouble will have to reduce debt, and one of the more common ways to go about this, is to arrange for credit card debt consolidation, which helps lighten the interest burden.
Travel and Entertainment Card
Travel and entertainment cards are similar to bank credit cards in the sense that holders can charge purchases at various stores and locations.
However, they are also different from bank credit cards because they are offered directly by the credit card companies, namely, American Express and Diners Club.
This credit card type was once accepted primarily at travel- and entertainment-related businesses such as airlines, hotels, restaurants and car rentals.
Nowadays, all other establishments, such as upscale department stores, gas stations and drugstores, accept them.
Like any bank card, the typical travel and entertainment card of today offers the menu of features that most credit card holders have come to expect, such as frequent flyer miles, luggage insurance and collision insurance coverage on rented cars.
A further difference between travel and entertainment cards, and bank cards, is that travel entertainment cards do not carry an extended line of credit.
This means that you will are required to pay your outstanding balances in full, either within one or two billing periods, in order to for the account to stay current.
Both travel and entertainment credit card providers, such as American Express and Diners Club, also deliver categorized summaries of expenses charged to the credit cards at the end of each year. This certainly is a convenience at tax time.
Unlike a bank credit card, and a travel and entertainment card, which you can use in many purchase locations, a house card is accepted only at a particular store or stores within the same chain.
House cards (also referred to as retail charge cards) are the second largest category of credit cards; major house issuers include department stores, oil and gasoline companies, and telephone companies.
Discover Card, once owned by Sears, was probably the biggest house card until it was purchased by a financial institution to become a distinct credit card company.
Merchants are very much in favor of house cards as these cards are valuable in helping them to both develop customer loyalty and enhance sales; you may appreciate the shopping convenience they give you.
Just like bank credit cards, house cards give you a line of credit, with a limit that varies depending on your creditworthiness. For this reason, you may choose not to pay your credit card bill in full each month.
Note, however, that the majority of house cards charge fixed interest rates of between 18 and 22 percent annually; thus a house card is more expensive in terms of interest cost than a bank credit card.
All types of credit cards involve costs when you use them. After knowing the different credit card types, you may choose the credit card that best fits your personality and needs.
If you have a number of credit cards on your wallet, you may also consider discarding some.
If you are the type who does not carry a monthly balance, you can have a credit card with no annual fee but make sure that there is a grace period on purchases.
However, if you do carry a balance, it is wise to do away with a credit card that has the worst of the following:
· High interest rates
· Unfavorable interest calculations. A credit card may calculate interest charges based on average daily balance, not on the balance due.
· No grace period. Some credit cards might charge interest from the date of purchase until payment date, even if you pay off your balance.
· Nuisance fees. Try to do away with credit cards that have late-payment fees, over-limit fees, fees for not carrying a balance or only a balance below a certain level, or a percentage fee on your credit limit.
The modern bank credit card was first introduced in the 1960s by the Bank of America; the travel and entertainment credit cards were both introduced in the 1950s.
Much may changed since then in terms of features and benefits, but the basic characteristics of each type of credit card have remained the same.
To Avoid Possible Problems With Card Companies, Learn And Understand Credit Card Offers
For many years, the use of credit cards has increased due to the offers that credit card companies include while profiting through the consumers use of the credit cards.
Statistics reports American households use credit cards for a variety of purposes in making purchases and payments for transactions that are easy and convenient for them.
About 81% of Americans have at least one credit card they use for transactions to assist in their lifestyle.
If you are considering applying for a credit card you need to learn about the offers made by many credit card companies to decide on offers in your preference.
Surely you have seen many people use their credit cards for making purchases and payments in stores and other billing organizations that accepts credit cards.
But have you ever taken the time to really understand the credit card offers that individual companies include in their credit cards.
Before applying you should learn about the different companies that offer credit card to understand its terms and benefits.
There are some credit card offers that others prefer while at some point may not work for you. Personal preferences of your own personal needs should be considered in choosing the best offers because some offers as mentioned may not entirely work for you while .
other offers may be useful to others, so keep in mind that when choosing credit cards always consider your personal preference that will suit your personal needs.
Also, try to analyze and learn more about credit card offers from different companies and compare the best deals to identify which is best for you.
Most mistakes that every consumer make when applying for a credit card is the neglect of reading the fine print.
Some consumers have finalized their decisions thinking it is the best offers. By neglecting to read the fine prints, the best offers can also be the worst.
Consumers are often misled with great credit card offers but by reading the fine prints you will be able to avoid possible mistakes and will be able to determine if the credit card offers are really worth it.
Giving time and effort to research can get you the best offers. Conducting research on credit card companies will allow you to learn more of the offers that credit card companies tend to ignore discussing to those applying for credit cards.
Understanding offers like low introductory rates are necessary for consumers to have knowledge. Low introductory rates are tempting, especially to consumers new to the world of credit cards but without the understanding of how low introductory rates work.
However, a person more experienced in credit cards knows that the offer expires in a period of time. After the expiry period the benefits for the credit card is terminated.
In general, paying for the credit card should also be considered. As credit card companies offer you a chance to enjoy the benefits that credit cards allows,
you should also know your capacity in paying your credit cards, whereas companies that offer credit cards does not know every consumers capacity to pay credit henceforth, consumers should evaluate their ability to pay their credit without default in payment.
Most credit card company offers great benefits that are helpful, however keep in mind that these offers by credit card companies are often misleading to individuals interested in getting a credit card.
The most important matter for every individual applying for a credit card should be learning to understand the credit card companies benefits and offers in order to avoid possible credit problems.
Good For Worst: Credit Cards For People With Bad Credit
A credit card can offer advantages that ready cash will usually not. With robbery rife, a credit card can keep you from carrying large and dangerous amounts of cash.
You also do not have to worry about looking for an ATM if you suddenly run out of money, provided that the merchant you want to purchase products and services from has a credit card machine.
A credit card is certainly convenient, and, despite the fact that some establishments are choosing not to adopt credit cards as payment yet, plastic is growing to be ever more popular.
There may come a time when credit cards will replace cash – but can such a day, and its conveniences, come for someone in bad credit standing?
If you are in debt, or if you have a record of unpaid bills in the past, then you may be denied a credit card when you make an application.
Credit card companies are now growing ever more wary of identity thieves and piling bills, so their concern is not without its merit. You need not worry, however, as there are ways to obtain a credit card even if you are in bad credit standing.
The secured credit card offers the advantages of both credit and debit cards. A secured credit card, by virtue of its name, is secured because of a deposit made by the cardholder.
This deposit determines the amount of credit that the secured card will have. Generally, cardholders should deposit the amount of credit they want, or twice it.
For instance, if a cardholder deposits ten thousand dollars, he or she will obtain credit in the range of five thousand to ten thousand dollars.
This money acts as security for the credit card company, as it can take the money in if the cardholder spends too much and does not pay credit card bills.
In this way, people who are in bad credit standing, or people who have no credit history, can carry a credit card. A secured credit card is often marketed as a way to rebuild an otherwise unattractive credit standing.
If you are interested in procuring a secured credit card, you may want to take note of the following tips before making your application.
• Due to the considerable leeway secured credit cards give to sometimes inveterate spenders, credit card companies will often charge high service charges or fees than they would for other credit cards.
• A secured credit card is not the way out of debt. As the cardholder, you are still required to pay your secured credit card bills regularly.
If you decide to pay less than the bill you are required to pay – that is, if you default on your payment – the credit card company has an option, by law, to deduct the remaining money you owe out of your initial security deposit.
• There are different secured credit card packages available, with some of them granting clemency for late or unpaid bills.
In cases of delinquency exceeding five to six months, however, the account may be closed, and the security deposit will be taken by the credit card company in its entirety.
The cardholder, moreover, may be in debt, and may have to pay the unpaid portion of the bills, plus interest.
As with all your other conventional credit cards, a secured credit card will require you to manage and discipline your spending habits.
As long as you spend wisely, control your buying habits, and monitor your budget to fit your lifestyle, then you will be able to rebuild your credit standing. A secured credit card can assist you in this goal.
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