Choosing The Best Credit Cards Is An Important Process…
Choosing a credit card is a process that should not be taken lightly. All credit cards are not created equal. The best credit card is entirely dependent on what it will be used for. However, there are three basic principles that all credit seekers should abide by; never open a credit card that limits your buying power, choose from a well known company, and always read the fine print before signing on the dotted line.
Is A Store Credit Card A Great Way To Establish Credit?
Store credit is limited to that specific retailer, and possibly their sister stores if you’re lucky. This kind of limitation does nothing to boost your credit score. Also, store credit cards usually have an interest rate greater than 20 percent, and no grace period on purchases. This means that you start accruing interest the second an item is bought. Most major credit cards have a 30 day standard grace period before any interest is applied on purchases.Before looking anywhere else; research opening a credit card through your own bank. Having a credit card through your bank is the ultimate in convenience. Many banks let you connect your credit card to your debit card as a safety net, should your account ever be overdrawn. The overdrawn amount will simply be added to your credit card balance which could save you from non-sufficient fund fees.
If opening a credit card through your bank is not an option then keep in mind that the best credit card offers come from reputable banks and credit unions. A good rule of thumb is, if you don’t recognize the name of the bank; don’t open a credit card with them. Lesser known companies typically charge annual fees on top of a high interest rate. An annual fee is charged every 12 months by a credit institution for the convenience of the card. But if the card doesn’t offer special benefits such as airline miles, or a percentage of cash back on purchases, then an annual fee is not worth the mere use of the card.Reading the fine print is a long and laborious task, but with credit cards it is essential.
Many credit cards have enticing offers, such as zero interest for the first three months. Zero interest for the first three months is great, but what is the interest on purchases after the first three months? What are the fees if you go over your limit, or make a late payment? What might cause your interest rate to go up? It is important that you know the answers to these questions before opening any credit card. Changes to your interest rate, or exorbitant penalty fees can greatly increase the time it takes to pay off your credit purchases.Without the proper knowledge; credit cards can go from a wonderful convenience to a stressful burden. Following these simple guidelines will help increase your credit score, and prevent you from accumulating unnecessary debt.
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