Getting Down To Basics with Finances

Getting Down To Basics with Finances

How to Choose your Credit Card Issuer

Credit cards are like chainsaw’s, it is a tool that’s very handy, but it can cause a lot of damage when you will use it improperly. For this reason, you should choose a credit card in a wise way. In this article, you will be able to learn some things that needs to considered on the selection of a credit card.

Interest Rates

In a credit card offer, you will find the interest rates as APR or an Annual Percentage Rate. This can be a fixed rate or can be a variable rate which is being tied to another financial indicator, which is known commonly as prime rate. With a fixed rate card, you are going to know what is going to be the interest rates for each month and cards with variable rates tends to fluctuate. It is very important to take note though that even cards that comes with fixed interest rates, it could change because of certain triggers like the card payment, going over its limit or cards that are late. This could also be because the issuer of the credit card will decide on changing it.

Credit Limits

This actually is the amount of money to which the credit card issuer is going to be willing to let you borrow. This is based mostly on your credit history. You will not want to end up in a situation where you are close on maxing out the limit of your credit. This in fact can do some damage to the credit limits of customers towards an amount that’s lower than its current balance. There’s also going to be penalty if this will ever happen.

Its Penalties and Fees

There are various ways as to how a credit card issuer can make money off you. These common charges will include fees on the transactions like balance transfers and cash advance or in asking to increase your credit limit or by making payments through phone. There’s actually various penalty charges when paying your bill late or when going over your credit limit.

It’s important to look for credit cards which comes with reasonable fees. On balance transfers, it’s best that you search for offers that comes with no transaction fees and one that comes with zero interest for its 12 months. Avoid also paying extra on their reward programs.

Incentives

Many card issuers tend to offer reward programs which offers a reward program to their customers for them to use their card. You should try looking for programs that comes with flexibility like rewards and cash or travel which you can use and one which could be redeemed and earned easily.

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