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Learn How To Apply For A Credit Card

by dmaxwell on May 29, 2010

One of the disadvantages of modern times is that people tend to acquire a bunch of things that are really not necessary. Numerous gadgets and services are being produced all the time to make people buy.

And to facilitate this modern and convenient lifestyle, various financial products and services were created. And out of the hundreds of financial services that were developed in this century, the credit card has influenced our everyday life the most.

Even though many men and women are delighted with how convenient it is to apply for a credit card, it doesn’t follow that you should get one, or everybody for that matter should just get one. When people apply for a credit card, there is always a reason. It can be for extra money because of a recent big expenditure they had (like a trip, or tuition payment); for emergencies; for being able to buy necessities when cash is short; or for better managing their bills.

But no matter what the reason is, it all boils down to ‘the ultimate convenience that credit cards bring’. People already consider the convenience of credit cards as part of living in a modern world. Most if not all people, when they reach the legal age, are already thinking of applying for a credit card. And to get people started, credit card companies offer attractively low introductory APRs, with no annual fee, and other numerous bonuses. These “value deals” are able to persuade many people to apply for a credit card. And not many can resist all the ‘pre-approved’ credit card offers they get in their mail box at home or in their e-mail.

Like with all decisions that can significantly affect your life, there are both advantages and disadvantages to owning credit cards. But if you really have carefully made-up your mind to get a credit card application, we have some helpful tips that can guide you on your credit card shopping.

Actually, there are three simple steps you should follow if you have made-up your mind to apply for a credit card. First, surf the web and do some research on credit cards. Before you check the rewards programs being offered by the credit card companies for new credit card holders, first pay attention to learning what some credit card terms mean. For example, do you have an idea of what an APR is? What about the methods to computing your finance charges? Also get to know the various kinds of credit cards and what they are great for, like retailer cards, bank cards, and etc. so you would know what cards to prioritize having. Keep in mind, its prudent not to have plenty of credit cards. The second step is to short list the credit cards you are interested in and compare them with each other based on their APR, finance charges, and etc. And the last step is to use the internet to fill-in a credit card application from the company or card issuer of your choice or to go to their place of business to fill-in an application.

Hence, to find the right credit card make sure you have mastered the credit card terms. You need to fully understand that paying for things using your credit card means you are taking on debt loans which would also involve paying for interest rate charges, and interest on interest charges if you only pay the minimum fee or you don’t pay your full credit card balance.

And when you apply for a credit card, you must know how the APR affects your credit card balance. An APR is the amount of interest you need to pay each year if you don’t pay your entire balance. By law, the APR to be charged to you is required to be disclosed before you get a card and it needs to appear in your credit card statements. Aside from APR, the periodic rate (used to compute your monthly payments) must be disclosed to you, the card holder before you are given a credit card so you would have an idea of how much you will have to pay for each billing period. So it’s best to compare terms and fees before you apply for any credit cards and agree to open an account.

Just to recap, here is a list of key credit terms to know before you apply for a credit card: APR or annual percentage rate, periodic charges, annual fees, grace period, method used to compute credit card balance (adjusted balance, average daily balance, 2-cycle balances, previous balance), transaction fees, other applicable charges. So if you are not that type of person who has the patience to research and study all these terms on your own, at the very least, ask the credit card issuer’s representative to explain to you how the balance is computed and how it will be presented on your monthly billing statements.


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