Opting For A Credit Card? Check Out Certain Terms

You've just received a "pre-approved" credit card offer in your mail. Without wasting a minute you're ready to accept it, especially if it's the "before-the-offer-expires" one. Wait! Don't be in a hurry. Shop around a little and then make your decision about that credit card.

Do you know that these "pre-approved" offers that pop up almost every time you open your mail are just gimmicks? Actually, the approval of your credit card depends on your formal application. If it fails to meet the criteria, you may be either denied the credit card or offered a higher interest rate on it. Moreover, don't be in the illusion that just because your credit card is pre-approved, it'll be compatible to your spending habits. Credit card basically means that you're borrowing money by paying some charges. So, it's essential to understand the terms and conditions of the credit card before accepting it.

Every credit card applier should be aware of certain terms before opting for that valuable plastic asset. Are you aware of them? If not, then read on?

Annual Percentage Rate (APR): It's the measure of the credit cost that is charged annually. Before opening your credit card account, you should be familiar with the APR. In addition, some credit card issuers may change your APR with the change in interest rates or other economic indicators. Programs allowing such change are called "variable rate" programs.

Free Period or Grace Period: Always find out whether your credit card gives you a free period lest you may be deprived of the benefit of avoiding finance charges on full payment before the due date. If your credit card offers a grace period, you should receive your bill 14 days prior to the due date, so that you get sufficient time to make the payments.

Annual Fees, Transaction Fees and other charges: It's vital to have knowledge about the annual and transaction fees charged by the credit card issuer. Besides this, you may also be charged in case of a cash advance, a late payment, or exceeding your credit limit. Sometimes, you've to pay a monthly fee even if you don't use your credit card.

The Bonus Program: If you're opting for a credit card that offers attractions like airline miles, merchandise, or cash back, check out whether there are any participation charges linked with them. If you think you won't get a chance to use these bonuses due to your lifestyle, then it's better to avoid such credit cards.

Zero percent financing: If you hold several credit cards, then a credit card with an initial 0 percent balance transfer rate would save you hundreds of dollars in the first year. However, such transfers may come with some charges. Check them out.

Credit card terms differ with the issuers. You should know how you'd use your credit card. For instance, if you are going to pay your full balance each month, then you should concentrate on annual fee and other charges rather than the periodic rate and the APR.

Moreover, you should know your credit card limit too. Also, find out how popular the credit card is and what are the features and programs of the credit card you've opted for.

Once you are well versed with the terms of the credit card, just apply for it!

James Marriott is a finance writer with more than 15 years of experience in writing financial content, including those related to credit cards, mortgages, stocks, investments, and funds. He has been with RNCOS, a premier financial writing services company, for 2 years as head of financial writing. He is also a regular financial columnist with renowned business journals. For your comments on the article and further financial assistance, please contact our staff writer at info@rncos.com.

---

Good Credit Is Not A Good Reason To Borrow More Money After Youve Achieved Financial Freedom

The most important thing for you to remember is that... Read More

The Hitchhiker?s Guide To Insanity

A new sickness is plaguing the UK called Denial. Denial... Read More

Collection Agencies: What Do They Do?

Collection agencies are businesses that collect past-due bills and accounts... Read More

Myths and Truth about Credit Scoring

Credit score is the key factor determining approval of almost... Read More

The FICO Score Misconceptions

There are many misconceptions about credit scores out there. There... Read More

The Best Strategy To Erase Credit Card Debt

Credit card debt is a growing sickness in the United... Read More

Credit Card Incentives

Credit card companies want your business. After all, lending money... Read More

Credit Counseling: Is it Really Necessary?

Not everyone has a positive experience with credit counseling. Potential... Read More

Restore Your Credit Rating And Reduce Your Debts

Your credit rating affects many areas of your life. Opening... Read More

Understanding Credit Report Score

Understanding credit report scores is important when you see your... Read More

Credit Counseling: Could it Work for Me?

In the face of financial hardship, many seeking a responsible... Read More

Dealing With and Repairing Bad Credit

Bad credit can be a burden for otherwise good credit.... Read More

How To Start A Second SEPERATE Credit File!

Your personal credit file is separated from those with the... Read More

Credit Report ? Look Out for Your Debit Report, Too

Most consumers are aware that there are companies that keep... Read More

Two Things You Need To Know About Prepaid Debit Cards

According to the September 2004 issue of the Nilson Report,... Read More

Home Loans ? Repair Your Credit Before You Buy

Before you take out a home loan or make any... Read More

Bankruptcy Myths Busted

The average American knows very little about bankruptcy. Most people... Read More

Choosing The Best Credit Card To Apply For

Always shop around to get the best deal when choosing... Read More

New Credit Advice: Dont Pay off Those Credit Cards!

Credit needed for real estate mortgage financing differs from credit... Read More

Avoiding ID Theft and Credit Fraud

Article excerpted from the new book, "How to Do Space... Read More

Five Debt Negotiation Facts

These five debt negotiation facts along with a few debt... Read More

Why Does Your Credit Card Rate Keep Going Up?

Have your read your credit card contract through completely? Do... Read More

SuperCharged Secret 4, Credit Card Utopia

YOU SCRATCH MY BACK, AND I'LL BUY SOME MORE BEER!Let's... Read More

Top 5 Reasons To Check Your Credit Report Regularly

#1 Make sure mistakes aren't hurting your credit.Reviewing your credit... Read More

Have You Ever Opened a Checking Account?

Maybe some of you are saving it in your trusty... Read More

Your Credit Score

Credit scores: all lenders use credit scores to determine interest... Read More

Credit Score ? for Scoring the Right Loan

Somebody once said, "There is always a way of knowing... Read More

What Is A Credit Report?

Even if you have heard of a credit report, you... Read More

Finding What is on Your Credit Report

A credit report is basically a file about you kept... Read More

SuperCharged Secret 1 of 5 - Credit Card Utopia

I AM THE CONSUMER. AND I HAVE LOW-RATE SUPER-POWERS!Note: The... Read More

Beginners Guide to Credit

I remember back when I was 18 and completely oblivious... Read More

10 Ways To Boost Your Credit Score

1. Deleting Errors in 48 HoursThis is the absolute fastest... Read More

Useful Tips on Borrowing Money

Here are some useful tips on borrowing money. Borrowing money... Read More