People these days often tend to acquire many things that they don’t really need, and this puts them at a great disadvantage. New inventions of the modern world have led to an influx of numerous gadgets and services targeting a vast majority of consumers, and this seems to have somehow made the people oblivious to their actual needs.
Most people are concerned about their personal finances and how to better manage them, and rightfully so. Over the last few years, several options have emergeed in the market to address these very needs, and the most prominent one among these is the Credit Card.
A Credit Card, if you are unaware, is a form of borrowing that involves charges, limits, interest-free periods, and terms and conditions for repayment – all of which may affect your overall borrowing cost. Often referred to as “Plastic Money”, this litte wonder indeed holds great promise.
While a lot of people acknowledge that a credit card can be great tool when it comes to ease of use, it is not to be considered as something that is suitable to everybody. To be able to use a credit card well, you need to have the resolve to never extend your spendings beyond your income, and to clear the bill every month if full, well before the due date.
People usually apply for a credit card for a reason – be it to just manage their finances in the short term, or in order to meet a big expenditure like a wedding or a vacation. Irrespective of why someone chooses to get a credit card, it is an already established fact that credit cards bring convenience. You might have already obtained and seen pre-approved offers from various credit card companies in your physical and electronic mail. Credit card companies often try increase their market-share and undercut their competition by offering various incentives or perks to their new customers. These can be in the form of low APR, zero annual fees or extended interest-free credit periods.
While there definitely are pros and cons about having a credit card, we present here a few helpful tips that can guide you in acquiring a credit card that matches your current needs just right.
Follow these three easy steps once you have made your decision to apply for a credit card:
Browse the internet and perform some research on the credit cards available in the market, their types and terms.
Make a list of the credit cards you think would be most appropriate to fulfill your current need and compare them.
Select a card that is most suitable and apply for it online or by contacting a bank representative.
It is utterly important that you understand all the terms of the credit card before you apply for one. Pay special attention to the annual percantage rate (or APR as it is commonly known as), daily periodic rate, and if the APR is fixed or variable. The APR determines the yearly or annual rate of interest for the borrowed amount if you fail to clear the bill before the due date. Some credit card companies also happen to levy the interest on a daily basis. This is often referred to as “periodic daily rate”, and generally implies that interest gets compounded on a daily-basis. Click here to learn more.
You would also need to be aware of the interest-free period (or “grace period”), annual fees, transaction fees and any other fees and charges that may apply in connection with the usage of the card, as well as the method of computation for the interest, such as average daily balance, adjusted balance, previous balance, or two-cycle balances. Although all of these details do (and must) appear on your monthly billing statements, it is advisable to know these before-hand when you apply for a new credit-card, so as to avoid any undue surprises.