Thursday, November 30, 2006

Pros and Cons of Credit Cards

Credit cards are very convenient. There’s no need to carry any cash; you can just take a credit card with you to the store and charge for your shopping.

When you store on the Internet or over the phone, it’s the lone good manner to do purchases online. This is more than convenient than posting a check for payment. Like anything convenient, though, having credit cards have got its cons.

Not Keeping Path of Your Shopping Charges May Land You in Trouble.

When you walk into that store and manus over the card, you don’t wage cash rightaway. This tin mean value that as you make not see less money in your bag or wallet, you may lose path of how much you’ve spent.

Everyone have a inclination to underestimation what they spend, and smaller amounts can add up quickly on a credit card without you even noticing. It’s like taking the manner phone measures work and applying it to everything you purchase – and that can’t be a good idea.

Also, conceive of the scenario if you have got more than than one credit card. You will have got to consolidate your charges on all of them as well as those on your debit entry cards to derive your sum disbursement for the month.

You May Pay More Interest than Earn Interest.

The minute you run an outstanding balance, you’re paying the credit card company interest. You’re also paying your credit card measure as soon as you get your wages, so you may not have got the opportunity to earn any interest from your bank balances.

You Charge More to Your Credit Cards to Earn More Reward Points.

The more than than debt you demo you can pay back, the more credit card companies will offer to you in terms of bounds and cash advances. The offers are so attractive that sometimes, it’s alluring to apply for more than than one credit card. Credit card companies also seek to do you charge more than to credit card by awarding you reward points. The consequence is that you stop up disbursement more as you get enticed by lucky draws, price reductions for shopping, etc.

But Credit Cards If Used Wisely Can Be Useful.

When you need money in an emergency and you just don’t have got any, there’s no uncertainty that credit cards can be useful. They are also a very utile manner of proving to credit evaluation agencies that you can manage debt, and this may be taken into consideration when you apply for car loans or a mortgage.

Just retrieve that whenever you manage credit cards, you’ve got to learn how to manage your finances. Keep your loans to a minimum, and you will be in greater financial health.

Tuesday, November 28, 2006

Less Interest Credit Cards - Paying Less Is What Matters!

Consider yourself lucky if you can lay your Lands on one of those less interest credit cards. They offer great rates so it is easier, to pay off your balance in a timely manner.

These cards are useful for persons who make large purchases on their credit cards, or even those that use their card for everyday purchases. So, if you are serious by making a research on less interest credit cards, consider these factors during your search.

(i) Credit Score: - To qualify for a less interest credit cards, you must have a great credit card. There are several scores that fall in the “excellent credit” and in the “good credit” groups in terms of the credit bureaus. If your score falls into one of these categories then the cardholders are those with flawless Credit Score.

(ii) Common Rates: - The common interest rates are 9% and 15%. These are considered as lowest rate of interest. Those who make large purchases they can avail these credit cards with such rates of interest.

(iii) Introductory offers: - If you avail a less interest rate credit card, you can enjoy some of the best introductory offers. These credit cards offer an entire year with no APR.

(iv) Fees: - A less rate interest credit card never charges any annual or enrollment fees. Even if they do it would be one of the rare cases. This quality makes the credit card a valuable asset for the people who own it. That is why most companies do not charge unnecessary fees to deter cardholders from applying.

So, if you come across with some credit card, which charge some interest rates, you need to look elsewhere for your card. Those with great credit should never pay these fees; for they are never pay those fees, for they are intended for high risk card holders with bad credit.

Less interest credit cards can be extremely helpful when it comes to your credit card finances. The amount of interest you have to pay, the better off your finances are in the long run. But you should do a proper research on your less interest credit card choices before applying. These some3 cards, which offer less interest rate for the first few months and then they may raise it dramatically.

Your decision can be wise only if you are well informed about the terms and conditions of the credit card. So do not get carried away with the less interest rate offers, which may have some hidden charges in it. Research properly and apply for it.

Monday, November 27, 2006

Using Your Credit Cards Wisely

"I believe money was stolen from my card" or "I might have got blocked my card in the ATM" - these are frequent problems that bank customer-support officers usually hear from agitated clients. Incorrect usage of credit cards or incorrect readings of their mathematical functions are frequent even after 10s of old age of credit-card extended use. Actually, there are 4 most frequent causes for problems; one is related to overspending, the second is about missing money; this is usually connected to the 3rd problem - unauthorised usage and finally there is the issue of forgotten information. All these problems are interconnected and can lead to serious financial problems. However, there are a few simple things that you can make in order to avoid hassle.

First and foremost, retrieve that your credit card have a limit. When you open up a credit line you will be given a certain credit bounds that tin change from twice your monthly income to 3 or maybe 4 modern times that income, depending on past credit history. However, make not pass more than than you can pay back. At the end of each calendar month you will have got to pay-back the borrowed money and there will be no exclusions from the rule. So lesson number 1 is “spend within limits”.

The second thing you need to make is maintain a record of your expenditures. Keep bank statements, gross and carbons in a safe topographic point and at the end of each calendar month do a computation of your sedimentations and withdrawals. If there is any disagreement between the two, do certain to reach your issuer bank immediately and work out the situation. Most people happen out that they have got forgotten about a certain payment that was made with the card, yet you may happen out more than of import information than this.

This conveys us to the adjacent issue - the unauthorised usage of credit cards. This is a broad problem mainly owed to theft. It is safe to maintain your credit cards in a wallet, separately from any other document so that you do not lose cards; it is also recommended that you make certain there is no 1 observation over your shoulder when you type you personal designation number and off course of study there is the regulation of never giving out the pin to anybody. Unauthorized usage is not only related to theft. Young children should never be given the number and/or the pin of a credit card. If they are still not aware of the value and importance of money you may happen yourself paying for useless points or services. So regulation no.2 is Never Give out Your PIN.

There are many things we need to retrieve and maintain path of. One of these things is credit card information such as as name of issuer, twelvemonth and calendar month of expiration, credit card number and pin and the help-line phone number. If you experience there is too much information to memorise it is best to have got everything written down and kept in a safe topographic point like a sedimentation box or your telephone - there are telephones that offer a particular notebook characteristic which can only be accessed by introducing a codification and where you can hive away information safely. Therefore, another thing you need to make is Keep Records of Important Information.

Managing credit cards is not child's play. You will need to maintain good path of your money if you make not desire to overspend or lose path of expenditures. You also need to learn that your money is your business and thus attention needs to be paid when giving out credit card designation information. Last, but just as important, you need to maintain in convenient support-centre contact information in lawsuit you need to report abnormalities or you have got inquiries to ask. Attention and common sense is actually all you need in order to utilize a credit card wisely.

Friday, November 24, 2006

10 Simple Steps to Manage Your Credit

By far the greatest invention the banks have ever come up with came out in the 20th century. Also the new field of Credit Management was born with the invention of the credit card. It is the most available out of any financial product out there. In fact more than 80% of the U.S. households have at least one credit card. If you want to consider yourself as the "Average" American then you have about 8 credit cards burning a hole in your wallet right now. To make sure that you don't get yourself in any trouble (again) try and follow these 10 Simple Steps for Credit Management.

1. Ignore the bank's/lender's rule on what is an "acceptable" level of debt. Your debt-to-income ratio, as they like to call it, is how much debt you can carry to the amount of money you bring make. Depending on how well you have managed your credit in the past it can fluctuate quite a bit. The average is about 25%. The ideal number is of course ZERO but for starters work on getting it down to 10-15%.

2. Remember what a credit card is...A Credit Card. Just because they have waved their magic wand and sent you your "Pre-Approved" Card doesn't mean go out and use it. The bank does not know your situation or your lifestyle all they look at is the number that you should be able to pay off using most of your "extra" money. They will keep you paying them for the rest of your life if you let them.
Which brings me to the next point...

3. Don't pay just the minimum balances, unless of course you like paying 400% or more in interest. A typical Credit Card debt of $4,500 would take you about 44 YEARS to pay off! And you would end up paying about $17,000 total by the time you are done. When you stop and think about it, does that sound like a good deal to you?

4. Play the Game- Remember that you are the customer and "the customer" is always right. When it come to annual fees and higher interest rates ask for a lower rate. And if you slipped up and got a late fee ask to get it waived (make sure you promise never to do it again...well at least for six month) Remember that it is a lot more cost effective for them to keep a customer happy than it is for them to go get another one. Your $29-$35 late fee does not come close to the money they will have to spend to get a new one of you.

5. While you are playing the game don't get blindsided by the fees. The banks have come up with some very creative ways to make money at your expense. They have the ones that everyone knows like over the limit fee, late fee, and extra card fee. However, they also have the less obvious fees like account transfer fee, and a fee for talking to a live person instead of a recording. Make sure you look at your statement and check out all the charges. Some of them may surprise you.

6. Know how you stack up- BILLIONS AND BILLIONS of dollars are charged annually to consumer on mark ups in interest rates. That's a lot of money when you look at your share. Your credit information is something you should look at and make sure it is accurate. About 25% of all credit reports have erroneous information contained in them. Make sure your information is accurate and keep an eye on it regularly.

7. Know you limits- When you know you will have a hard time paying even the minimum balance STOP charging. It may sound simple but for millions of Americans it is very hard to do. Of course the easy way Hind sight 20/20 don't get in the situation.

8. If you are one of those people that are disciplined enough to pay off your balance at the end of the month then make sure you are getting some bonus for being such a great user. Get the free stuff that you can use. Some extra Flying miles, free gifts, Cash back reward (my favorite). If you are going to use it might as well get something for your efforts.

9. Only have what you need- You Should have 2 cards, one for what you use regularly and pay off every month and the other for emergencies or business. When you start trying to take advantage of all the deals out there the only one who gets taken advantage of are you. Overkill on your credit cards are not necessary, but being really good at managing a couple of cards is.

10. The statistics are in and they are mind boggling. Bankruptcies are at record numbers and the consumer debt for the U.S. is over 1.7 Trillion dollars! Teach your kids now to not make the mistakes that you did. Financial Literacy is a must for the next generation as we are heading into a cashless society. It's harder to manage what you cannot see. Make sure they understand that the credit card is what pays for food on the table and gas in the car as well as the play station games they love.

Tuesday, November 21, 2006

Credit Card Refunds - When and How to Ask for Your Money Back

I’m certain most people have got dealt at least once with unsatisfactory service. Quality complaints, merchandises not up to criteria or not what you would’ve expected. And, in the good American fashion, what did you do? You disputed the charges with the credit card company/bank, being almost certain that you won’t be charged anything… right? Well, it might not have got been the best decision. And here’s why:

The “money dorsum guarantee” condition only uses if you are indeed eligible to get the money back. If you just had a change of bosom and decided you don’t desire the merchandise you just bought, opportunities are you won’t see a penny if the company that you bought it from and from where you bespeak the money back now make up one's minds to difference the case. In this case, it’ll be almost as if you’re going to tribunal with that company: your bank and the company will show their statements before a chargeback commission which will make up one's mind on whose side the truth lies. And if they govern in favour of the company, not only you will not get the money back, but you’ll also pay a chargeback fee… Sol the full thing might stop up costing you more than than expected. So here’s my advice:

Don’t just travel and difference just about any charges you don’t like anymore… Some people make this thought they can get the money back AND maintain whatever merchandise they have got purchased. You might be in a batch more problem then you’d anticipate and it’s just not deserving it. First off, when you purchase something, especially over the internet, read carefully the Terms & Conditions of the website. I know, it sounds deadening and it’s A batch of legal material you don’t really desire to know, but it could turn out of import should you not be satisfied with your purchase.

If, for whatever reason, you don’t desire the product/service anymore, contact the company you got it from. Get in touching via email, phone, regular mail or other means, but talking with them and hear what they have got to say. You might get a better deal than just your money back. If the company have a “no refund” policy written in their T&C, this doesn’t mean value it’s written in stone. Exceptions can be made if there is no other way.

Of course, if all else fails, travel talking with your bank. They can counsel you regarding the adjacent stairway you can take to work out the problem. But if you follow the instruction manual above, you shouldn’t get there. Or if you do, you have got great opportunities of getting your money back.

Teaching Responsible Credit Card Use

It's an unfortunate fact that most students never get formal lessons in managing their credit and debt. For many immature people, their first brushwood with being responsible credit card users won't come up till they are in college - away from home and the counsel of ma and dad. The minute they step on campus, new college students will be wooed by major credit card companies, all of them eager to set up themselves as 'the first card in your wallet'.

If your kid will be going off to college in the fall, one of the best things you can make for him or her is to get them started on the right ft to handling credit responsibly. Needless to say, illustration is the best manner to teach. The more than than responsibly you manage your ain credit card use, the more likely it is that they'll absorb your attitudes toward the usage of credit cards.

Beyond that, though, one of the easiest ways to learn responsible credit card usage is to cosign an application for one of the credit cards that is especially designed for student usage - and make it before they're off on their own. Each major credit card line characteristics at least one credit card that have low credit bounds ($500 to $1000), no annual fee and a moderate APR.

Make a large deal about applying for the credit card. Explain to them that each credit card application they fill up out volition be noted on their credit report - high school students especially understand the conception of a 'permanent record' - and that the more than credit cards they apply for, the worse their 'permanent record' volition become. That way, when they hit campus, they'll be forewarned against the countless credit card companies telling them 'it's no large deal'.

Show them how to compare credit cards and figure out what credit will actually cost them. If you're not certain of it yourself, see our articles about Annual Percentage Rate and how to calculate out the cost of a credit card. Brand certain that they understand what a 'late payment' is, and how it will impact the charges on their credit card. When they understand that making a payment late volition add $29 to their measure this month, AND addition their APR so that every measure from now on volition be higher, they're far more than likely to appreciate the significance of making payments on time.

Finally, before turning them loose with a credit card, take the clip to sit down down with them and work out a loose budget they can follow. Then do a monthly day of the month to sit down down and travel over the credit card measure and credit card gross together. You'll be able to supervise disbursement and assist them work out ways to remain within budget while still paying off their credit card properly.

It's a common apothegm that it takes only 7 years to set up a new habit. Take a few calendar months before your student caputs off to college to assist them set up good, responsible credit card habits. It's a lesson that volition last them the remainder of their lives.

Sunday, November 19, 2006

Correct Credit Card Use

Having a credit card have go the norm in today’s society. If you have got a light-minded attitude and don’t usage your credit card in the right mode then you could unwittingly go deep in debt without realizing it or the implications. Looking at ways in which you can get the best usage out of your credit card and keeping your disbursement under control may be cardinal factors in reducing your opportunities of having unmanageable debt.

Paying On Time

Probably the most of import thing is that you pay your measure on time, if you don’t you will incur a late payment charge and have got the added interest on top of your original payment. Paying the full amount of your balance every month, if you can, will forestall the cost of interest, meaning you only pay what you have got spent. If you can’t do the payment in full then at least paying the minimum payment is advisable but will cost you on interest the following month. If you repeatedly only pay the minimum payment every calendar month and are still disbursement on your credit card you will soon happen out that you look to be getting nowhere in reducing your balance. Some credit card lenders include a minimum payment warning on their credit card statements. Bash not disregard your bills. Ignoring your measures will only do your state of affairs worse. If you are struggling to pay off your debt contacting your credit card supplier to come up to an understanding on paying the outstanding balance will assist you get back on track.

Only Spend The Absolute Minimum

Keep you’re disbursement to a minimum and only utilize your credit card for things that you need. This volition aid maintain your debt down. Only pass what you can afford to pay back as having a credit card makes not intend you have got extra money it only intends you can obtain and pay for things a small sooner than you would if you had to salvage up the money.

Avoid Cash Advances

It may be a bad thought to utilize your credit card to obtain money word form a cash machine as this volition undoubtedly intend you will be charged a higher interest rate increasing your debt further. It is too easy to believe that using your card in this manner is likened to having money sitting in your bank account. The world is that it is not and you are obtaining money that you don’t have. Never be tempted to utilize your credit card for urge purchases as you generally believe about the deductions after the purchase have been made.

What is Your Budget?

Have a budget and seek only to pass what you can afford to pay back every month. Take duty for what you pass and you can have got fuss free disbursement using your credit card without the unmanageable debt.

Thursday, November 16, 2006

Top 7 Factors to Consider While Reviewing Credit Card Offers

Credit cards have got got migrated from being hip or convenience merchandise into a must have physical thing for everybody. Shopping Online you need a credit card. Wanna book a weekend rental you need a valid card to pick one. In order to register as a valid marketer in many online land sites you need a card. Like this the credit cards have got got evolved from being just convenience points into something you got to have or you will be denied many services. There is a batch of money being made by the credit card industry. Everything you purchase have a credit card fee attached to it. If you pay by cash you still paying those fees since the merchants don’t offer a price reduction for cash or check payments. They are willing to pay the 2-3% charge to the credit card companies than give it back to you. If you are not using a credit card as your chief payment method and enjoying the convenience it offers you are paying for nothing.

The cards come up up now-a-days not just loaded with a assortment of characteristics but they also come in many forms and colors. Rich Person you seen the new discover cards? Well let’s take a expression at the of import characteristics you should measure the credit cards against.

1. The credit limit: This is the amount you are allowed to pass using the card. Be careful while choosing the right amount. This is of import in two angles; the first is how much buying powerfulness you are willing to vouch to pay back. The other is what your disbursement style is. Many folks don’t cognize that reaching stopping point to your credit bounds is not good for your credit history. Are you a responsible individual and wanted to maintain the bounds low but you utilize up 90% and constantly pay every month? You may desire to increase your bounds so that your credit score is not affected by this usage pattern.

2. APR: This is the interest rate you have got to pay for the amount you owe in the credit card. Obviously look for the best rate you can get. Regularly reach the client service to convey down the APR. These companies addition it regularly; you should reach to maintain it at the same rate.

3. Annual fees: This should be zero.

4. Online payment option and activity checking: You should take the bank that offers a good and comprehensive online tool to check and measure your use. They should give you have like auto payment options. This is a batch utile as you will have got a manner to check the account usage. If you are planning on a shared card it is a must have got to monitor.

5. Late Fee and further charges: Although being late is bad, you will stop up atleast once a twelvemonth being late to pay the dues. You may desire to do certain they don’t add it to your credit history even for one late payment. And the fees! yeah check out the agreement.

6. Rewards and further benefits: The current tendency is offering cash back on purchases or points for buying with preferable vendors. This is free money as well it is a better manner to salvage on the purchases you are anyway going to make. The further benefits include insurance coverage, miles and more. Measure these carefully as they may be worthwhile.

7. Read about the reviews: Although you can measure the card by yourself, you may desire to read about what others have got to state about the card. It is these reappraisal land sites that cast some visible light on the crappy client service or the concealed charges. You should and must use the many reappraisal websites to take the best card that tantrums your need and lifestyle.

Don’t forget those fraud protection capablenesses that come up with the card. You don’t desire to be stranded because person misused your card and you are stuck in nowhere land without any money.

Monday, November 13, 2006

Credit Cards Make Your Life Easier! Find Out How!

Credit cards make more than than supply you with extra buying power. Actually, credit cards can do quite a spot to make your life easier. Credit cards add convenience to your life by helping you set up credit and simplify your measure payments. In fact, credit cards can even protect you in the event that you are a victim of theft! Finally, credit cards are first-class to have got when you run into one of life's many emergency situations!

If you are getting credit cards for the first clip ever, one of the obvious benefits of owning such as cards is that you will be able to set up a credit rating. Further, by establishing a good credit evaluation over time, you will later be able to do larger purchases with your well-earned credit, like automobiles and homes. Finally, a well-established credit evaluation can assist you lease cars and apartments, and sometimes assist you get employment that may necessitate a credit check.

Alternatively, paying measures or even making purchases on the Internet necessitate the usage of a credit card. Unlike bank debit entry cards where you must have got money in your checking account to pay your bills, credit cards allow you to pay your measures with your predetermined credit limit. Therefore, if you are a small short on cash during the month, you can still successfully do online charge transactions with the usage of your credit cards.

Did you cognize that credit cards can assist you afford the larger purchases that you might not necessarily expect? Perhaps you are a college student and you need to purchase your books for your approaching semester. Imagine going to the book shop and determination out that your book measure is far more than than you had planned for. Nevertheless, you necessitate the textual matters for the approaching social classes you are enrolled in. With a credit card, you can successfully pay for your books all at once and pay off the balance later in the calendar month or in respective monthly increments.

Did you cognize that having a credit card can actually salvage you money? For example, if you were supplied with a credit card with a $500.00 bounds and you made $500.00 worth of purchases, as long as you paid off the full measure before interest is applied, you have got basically afforded yourself an interest free loan! Conversely, if you borrow money from a bank, interest is applied immediately and you are required to pay the interest first, then the principle.

Another benefit derived from having credit cards is that you can carry less cash with you. Thus, if you are ever the victim of theft, you will not lose as much cash as an individual that makes not carry credit cards. What's more, if your credit cards are stolen, unlike cash, you can immediately put a phone call to the issuing company of your cards and have got them issue new ones.

Finally, credit cards can maintain you prepared for life's small emergencies. Imagine that you are on your manner home from vacationing out-of-state. While drive home your car interruptions down and you have got got to name a towage motortruck to have it brought to the nighest garage and repaired. Now conceive of not having adequate cash to have got a towage motortruck come up and recover your car; what would you do? By having one or more than credit cards handy, you can do your life easier because you will be prepared for anything, including the towage motortruck fees!

In short, the many benefits derived from owning credit cards only do your life easier. Credit cards can give you the extra purchasing powerfulness that you necessitate and can assist you set up a credit evaluation that volition addition your purchasing powerfulness in the future. Further, credit cards can assist you take a proactive function in protecting your money by allowing you to have got less cash-on-hand. Finally, credit cards can assist you afford unexpected outgoes with relative easiness and thereby give you peace of mind!

Friday, November 10, 2006

Store Card Versus Credit Card - Which Should You Choose?

Store cards and credit cards have got their advantages and disadvantages, but which is best for you. In this article we point out some rudiments to assist you take control of your spending.

Store Cards

Do you have got a shop card? How many make you have? Bash you cognize how much you are disbursement on each?

Store cards are a great thought if you utilize them properly, but they can cause huge amounts of personal financial damage if you don’t take control.

When you are offered a shop card here a few things to bear in mind:

1. Get very clear on what the offer is exactly. Most supplies will offer a card with a promotional deal – say 10% off any purchases that twenty-four hours and for the adjacent week. So what exactly is the offer and how long makes it last?

2. Sometimes hive away cards are heavily pushed during a sale. Again, what’s the offer – for example, make you get 10% off sale points too?

3. What are the privileges you get as a shop card holder? Bash you get a price reduction every clip you shop? Bash you get reward points of some kind? Bash you get particular prevue events for new ranges? And what are the inside information – how many points, how many prevues a year?

4. How much credit are they offering you? And can you manage it – Oregon will it do you experience like a child in a candy store?

5. What are the repayment terms exactly? What’s the minimum repayment? What’s the APR – during the offer time time period and after the offer period?

6. Are you bothered? It’s easy to take up what looks like a great offer with no attempt on your part. But retrieve you would probably have got bought the things you are buying even if there was no shop card being waved in your face. Bash you really desire another piece of plastic, another debt?

7. Can you get the things you desire cheaper elsewhere anyway? Most things you usually can do.

8. Can you pay for the things you desire using your credit card? Credit cards usually have got got a much lower APR than shop cards – so unless you can afford to make repayments in full, you could well lose in interest payments what you addition in particular offers.

Credit Cards

The same sort of inquiries can be asked about credit cards:

How many do you have?
Bash you cognize what you’re spending?
Are you in control?
What are the particular offers – low interest, 0% balance transfers, etc?
What’s the credit bounds and can you manage it?
What are the repayment terms, including APR?

The major differences from a shop card are that you can utilize a credit card almost anywhere, and that the APR is usually a batch lower. It’s also a batch easier to command your disbursement if it’s all on one card.

So when you’ve weighed up both sorts of card, what should you do? Here’s A couple of ideas:

1. For general use, have got just one credit card. Keep the credit bounds low and in control.

2. If you are offered a shop card and there’s Associate in Nursing unbeatable gap offer on your purchase, take it. Then, if you can’t wage off the debt in one go, usage your credit card to pay it off so that you at least get lower interest charges. Next, when your glistening new plastic card arrives, cut it up! Seriously. If you don’t destruct it you (or person in your family) will pass on it and the debt spiral will continue.

Wednesday, November 08, 2006

Student Credit Cards: Benefits and Dangers

Every year, college fresher are bombared with offers for student credit cards. Parents need to speak about in talking about the duties that spell with having a credit card, before their boy or girl travels off to college.

I'm not suggesting that it's a bad thought for college students to have got their ain credit card. Actually, it have many benefits, but it is indispensable that they get the right card and usage it carefully and prudently.

The benefits of a student credit card are clear. Parents won't need to be continually sending money and students will be able to do normal purchases more easily. They will also be prepared for unforseen "emergencies." Moreover, since most credit cards have got a predetermined disbursement limit, parents can be certain that disbursement will stay within a pretermined amount. Parents should retrieve to bespeak a relatively low disbursement limit, since credit card companies are often too broad in the disbursement bounds they delegate to student credit cards.

Parents may wish to have got the student credit card used only for emergencies. In that case, this must be made quite clear to the student.

Some credit card companies offer very low "teaser" rates in the beginning for a limited clip period of time and then jack up up the interest rate to an exhorbitant degree afterward. Always check out the interest rate that volition apply after the introductory period.

Another pitfall to avoid is paying only the minimum payment each month. Often, the minimum payment only covers the interest for that month, and small or no money travels toward paying the principal. In that case, it may take decennaries to pay off the balance. In fact, if no money travels toward the principal, the balance will never be paid off!

Many credit card companies offer the ability to manage the account online. This is a very convenient feature. Students can check their balance or do payments from their checking account 24/7.

This characteristic also allows parents to supervise the account, even from thousands of miles away. This degree of accountability adds an extra border of safety and reduces the opportunities that the student will get into problem by over-using the credit card.

Tuesday, November 07, 2006

Credit Basics: Choosing and Using Credit Cards

One of the most powerful financial tools that the modern technology has ever-produced is the credit card. And there is definitely no denying that a credit card is an extremely and overwhelmingly useful and powerful financial tool only if it used properly.

This small and thin 'plastic' is now responsible for the seemingly endless possibilities of getting things done in just one swipe. Aside from the fact that most people-especially in the US-find these plastic cards more convenient and safe to carry around compared to cold, hard cash, many of them also appreciates the consumer protection provided by the Federal Law.

But, with so companies coming out with many kinds of credit cards, it is no wonder that many people get confused and overwhelmed by the "convenience" each and every one of them offers. Since people have very diverse and different credit needs, they must be very careful in choosing the right credit card for them so that they could avoid the portent of credit traps.

While it is true that there is no single credit card that will fit everyone's need, it doesn't mean that consumers should just take in what these creditors offer. Before your credit card lead you to a path wherein you owe more than you can afford repay, or before it damages your credit and would create trouble by careless usage, here are some vital information that can guide you to choose the right credit card for your need.


The most basic tip in choosing and using any credit card is to identify first your credit need. You must ask yourself why do you need it and when do you need to use it. If education, health, home improvement, and business are some of your reasons, then you should start looking for a credit card. But if it is for purely convenience in purchasing the things you need, think twice and hard first. Before getting one, you must have a specific target where you can use your credit card wisely.

After defining your credit need, you must conduct a credit card research so you can review and compare the credit cards available in the market. This may seem very general and vague but this is the most basic thing one should do if you plan to apply for a credit card. You may research first what are the available credit cards out there. As you may know, there are actually hundreds of banks and other finance agencies that are offering credit cards and each of them has a lot to say about their product.

By doing research through online and offline resources, you can learn more about credit card offers and ratings. After doing an extensive research on all of the cards, you may now review what they offer and start the "elimination process." By reviewing all these credit cars, you can create some sort of chart for you to see side by side and compare what important features each credit card offers.

You must choose a credit card that can easily establish and strengthen contact with credit unions. Once you apply for a credit card, you become a creditor. It will be beneficial for you if you belong to a credit union since these are non-profitable organizations. They also offer a lower overhead that can offer you numerous advantages like lower interest charges.

Try looking for a credit card with a low Annual Percentage Rate (APR) or the measure of the cost of credit expressed as a yearly interest rate. In choosing the right credit card, it is a must that you check out the APR because this is the amount charged to you on monthly outstanding balances. Bear in mind that the higher the rate, the higher the chances you will pay relatively high interest charges.

Also consider interest rates and find out what if a fixed-rate or adjustable rate credit card would suit you best. Many people-especially those who pay off their balance monthly or those who only use cards for small purchases-opt to use cared that has a fixed rate. Even if the rate is a point or two higher than the usual, it ensures that they can pay off their loan quickly without even noticing the difference.

Fees can be considered one of the bloodlines of most credit card companies. In addition to your research, you should never forget to do an extensive research on credit card fees, transaction fees, and other charges. Since numerous companies are infamous for charging their clients fees that add up quickly, you should make sure to check the fees section of the credit card disclosure section before fully indulging into it. This is also one way of knowing the recognized fees collected like annual fees and cash advance fees.

Also consider length of Grace Period or the amount of time between the date of a purchase and the date interest starts being charged on that purchase. So you would know how much time you can buy before you make your payment.

You must also consider taking credit cards that offer other benefits and make sure to understand all necessary and additional terminologies in the contract in your credit card application and acquisition. Lastly, take into consideration your credit limit for your ultimate credit experience.

To apply online for a major credit card, visit Credit Card Info Guide