Using Your Card: What Is Its Purpose?

There is a wonderful feeling to having a credit card when you need one, but that blanket term "credit card" can be misleading at times. Not all Credit Cards are the same, and this goes beyond the APR that most people are aware of. Before choosing a credit card, consider what it is that you plan to use it for. This can make a big difference in how you use it and what you will pay in charges and fees for using it.

There are some consumers who will pay off their bill each and every month, and rarely, if ever, carry the balance over into the next billing cycle. If you intend to follow this routine, then APR will not matter as much to you. Keep in mind that finance charges do not kick in unless you carry over a balance. If you pay in full, you do not incur finances charges which are based on the company APR.

For those who will be paying the full balance each month, consider a credit card that has a longer grace period and has no annual fees. This allows you to use the credit for little, if any, charge. Do keep in mind, however, that if you happen to lapse and carry a balance, you will have to pay the finance charges and then APR will matter to you.

Most people, however, do carry over a balance and for those individuals it is important to find the credit card that offers the lowest annual percentage rate (APR). The APR is the number that the credit card company will use to calculate your monthly finance charge so the lower this number the less money you will pay.

If you think that you may use your credit card to get cash advances, you will certainly want to look at the fees and charges for that service. It is important to remember that many, if not most, of the credit card companies charge a higher rate for cash advances than they do for purchases. Some companies will charge a substantial amount more and you would do well to avoid using these cards for cash advance purposes.

Many people are lured into poor credit card choices by the promotions that many companies offer. These might include such things as frequent flyer miles, phone minutes, rebates and other things. There is nothing wrong with opting into these programs if they are benefits that you are going to actually use. The old adage that nothing is free applies here as well. Many of the companies that offer these promotions will have a slightly higher APR to help offset the cost of the programs. Make sure you look for that before you sign up, as it may not be in your best interest to pay higher rates for benefits that you will not use.

In order to find out what the APR and other fees are for any particular company, you can visit their website or you can look at the information that comes to you through the mail. Federal law requires that all solicitations and applications for Credit Cards include key information on the rates and fees that they charge consumers. This information must be clearly printed and if you have to hunt for it, then you may want to avoid dealing with that company.

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How To Consolidate Credit Card Debt

It is so easy to get heavily into debt on Credit Cards that you within a few months or even weeks you could find yourself not being able to keep up with the repayments. If this is the case, then you should think about consolidating your credit card debt. Consolidating your debt can make it easier to manage your money problems as well as helping you to save money. Here are some useful hints about consolidating credit card debt.

What is consolidation?

Consolidation is where you take all of your debts and combine them into one debt. For example, if you have 2 or 3 Credit Cards with a balance on them, you could get one credit card to cover all of the debts and transfer each balance onto this card. This way all of your debts are covered in one place and you only have one bill to pay.

How to consolidate?

There are different ways you can consolidate your credit card debt. One way is to get out a loan in order to cover your credit card debts and then pay off your Credit Cards using this loan. Then you can pay back the loan over a longer period of time. Although this is good because the interest rate will be lower than the Credit Cards, it will most likely take you longer to pay off. Another way is to get a credit card that has a limit that can cover the debts you have, or at least most of them. This way you can put all your debts in one place and pay them off.

Cards for consolidation

In order to consolidate your credit card debt onto one credit card, you need to make sure that you get the right card in order to make it worthwhile. Getting a card with a higher or equal interest rate than you currently have will not make any difference. Instead, look for a card with a lower interest rate that will help you to save money and pay off debts quicker.

0% cards

The best cards to get for consolidation are cards that offer 0% interest on balance transfers. Some of these cards offer 0% for up to one year, which will mean that you will pay no interest on the balance you transfer to the card for a year. This can save you a lot of money as well putting all your debt into one convenient place. For example, if you have a balance of around ?3,000 to transfer from 15% cards, with 0% for a year you could save around ?200. These cards are especially good if you can pay off the debt within the promotional period.

Cancel your cards

Remember, when you consolidate your credit card debt, it is important to cancel all or some of the cards that you have transferred from. Although cancelling too many cards can hurt your Credit rating, it is better to cancel them, as this will stop you from being tempted to use them again and thereby further increasing your debt. If you have 2 or 3 cards with no balance, then get rid of all but one of them so that you have less chance of increasing your debt. If you consolidate your credit card debts correctly then you will make paying your bills easier and save yourself money on interest payments.

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Securing A Credit Card When You Have Bad Credit

Having bad credit can make getting a credit card difficult, but the situation is not impossible. If you need or want a credit card but are worried that your poor credit history will stop you, then you perhaps you need some advice about how to get a credit card even with poor credit. If you follow these steps then you will have a much better chance of getting a credit card:

Retail store cards

If you have poor credit then the best place to start applying for Credit Cards is at small retail stores. These companies are more likely to give you a chance, although their rates are usually much higher and your credit limit will be low. If your application is approved, then buy something small each month and then pay off the bill. This will show other credit card companies that you are able to handle credit and pay your bills.

Go to your bank

After you have had a store card for some time, you can apply for a card at your bank. If you have been with your bank a long time and you have performed well with them, then they might be able to help you out.

Secured cards

If you are unable to get a bank or store card, then try and get a secured card. This involves putting down a deposit that is held by the lender whilst you use the card. This collateral takes away some of the risk for the lender and you are much more likely to be approved for this type of card. If you pay your bills then eventually you can upgrade to a regular unsecured card.

Co-signing

If you are still having problems, then get a friend or family member with good credit to co-sign for the card with you, as their credit will count towards the application. Remember that if you cannot pay the bill they will have to, so be sure you can pay back anything you spend or you will not only damage your credit but someone else's as well.

Avoid annual fees

Even if you are desperate for a card, avoid getting a credit card with an annual fee. There are plenty of cards that do not charge fees, and even if the interest rate is higher you will be better off. Also, stick to well known card types like Visa and MasterCard as they are widely accepted. This will help you to make the most of the credit you have.

Using your card

Once you have a card, remember that you can use it to your advantage rather than putting yourself into debt. Only spend what you can pay back easily, and if possible pay back the whole balance each month so that you avoid paying interest. If you pay off your bills well then your Credit rating will improve quickly and you can get better terms and a higher credit limit.

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