Credit cards have benefits but they should also come with warnings because misuse or overuse of them can put you in the red. Getting into financial trouble is very easy. Applying for credit cards is the easy part, it is learning to manage your money wisely when you borrow that can be problematic.
What then is the number one rule that must be observed when it comes to using credit cards? The answer is to pay the balance of the card off every single month. When you carry a balance from month to month you are charged interest. This also can affect your credit score. It takes effort and discipline to pay your bill off every month but think of it this way- when you carry no balance then you will always have credit to use in the event of an emergency.
When applying for credit cards realize that plastic money as it is sometimes referred to comes with a hefty price tag and hefty consequences if you are not careful. In order to protect both your good name as well as your credit score always pay your credit card bill on or before the date it is due. Late fees can run as high as $20 to $30 (or more). This is not what you want to have to contend with. Missing a payment all together is not a wise practice to get into either. Late payments are also a no-no. If you pay your bill late many times over then the company may decide to increase the interest rate. It is their way of attempting to smarten you up!
Both late payments as well as missed payments can cause havoc with your credit score by lowering it. Many people are not aware of this but this can cause a spike in the interest rates of other credit cards you have and can affect the interest you will pay on loans you apply for in the future.
When it comes to applying for credit cards, do not go crazy and apply for every one you can get your hands on. As well, the more cards you possess the more tempted you will be to use all of them. Financial experts recommend that an individual have no more than two to six credit cards. Keep your annual income in mind when it comes to applying for credit cards, regardless of whether they are bank cards or department store cards.
Credit cards have become a big part and of the modern life in a last decade and more accessible to the masses. For many, applying for a credit card means gaining financial flexibility.
With a variety of credit card to chose from, making the right choice is very difficult. Generally, consumers apply for a credit card without going through the finer details and end up paying interest and charges they weren't expectin. Therefore it is very important for a credit card customer to research and find out more about the ins and outs of the credit cards available in the market:
Sometimes, call-center executives call prospective customers and give brief details for credit cards offered by the credit card company - and often, the cards offered come with great low interest deals, no annual fee promotions and other credit card rewards. Just be sure to ask as many questions as you can regarding late fees, processing charges and other hidden costs.
If you wish to apply for a credit card are you aware of what you need? First of all typically you need to be 18 years of age or older to apply for and be approved for a credit card. There may be special circumstances where a retail store geared towards teenagers will approve a card with a low credit limit for a person under 18 to use. It is also possible that a person under the age of 18 could be granted permission to use their parents’ credit card or could be included as a joint user on a card. However most major bank credit cards such as MasterCard or Visa will not extend credits to individuals younger than 18.
To apply for a credit this is what you need- a source of income. Better yet it must be a source of income that can be verified. You will need to provide a telephone number to the credit card company you are applying to in order for them to check that the information you have given is correct. They need to know where you work, how long you have worked there, whether you are full time, part time or casual and how much money you earn. This is a standard procedure. Rest assured that you are not being singled out in any way in this regard.
You will also be required to provide your address and how long you have resided at the address. Keep in mind that where money matters are concerned things that to you might not seem relevant to the application process might seem very important to the company. It is their money that you will be borrowing after all.
To apply for a credit card through an application form, you'll need the following details to accompany your application:
The application form also contains details of the schemes offered by the card issuing company such as:
A consumer can apply for a credit card at any time, however before applying for a credit card a customer should be cautious about the consequences of continuous non-payment of outstanding payments where the interest rates increase in a cumulative manner.
The credit card applicant must be familiar with the payment structure of the principal and interest rate to avoid non-payment of outstanding balances that can led to bankruptcy in some cases.
Regardless, credit cards provide great financial flexibility to consumers - and the meticulous payment of the principal amount(in part or full) within the grace period and interest payment thereafter helps a consumer to be financially stable. So pay your credit card balance in a timely manner to avoid hefty fees.