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Your Best Credit Card Application
There are so many different credit cards out
there. What do you need to know to choose the
best one for you? First off learn about the differences
in card types, consider your spending habits,
then go comparison shopping. Remember the right
card for you will save you money and help your
credit.
How Do You Choose The Best Credit Card
for You?
Three very important things to think about when
credit card shopping
- Your payment style.
- Your credit rating
- The card’s terms and conditions
Your Payment Style
Simply speaking the card you want is one that
costs you the least and helps you the most. First
thing to consider is your payment style.
Will you pay off your balance in full
every month?
Interest rates really don’t mater IF you
pay your card in full, every month before the
due date. What you need to watch for is Annual
fees, or transaction fees. Another benefit from
paying off monthly is to look for card with rewards.
These cards can match your spent dollar with credits
for all sorts of items depending on your personal
preferences. These credits can go for air miles,
free stuff, or even cash back bonuses. Your best
options in this category are cards with no annual
fees and rewards that you will use.
Will you carry a balance?
Interest rates matter in this category, so make
sure to find the best interest rates along with
little or no annual fee. Check the rates page
to determine the best one for you...
Credit Card Plans
- There are a large number of banks and companies
that issue credit cards. Carefully shop them.
Make sure you know what the plans they have
are all about. Read in this website about annual
percentage rates, annual fees, interest rates,
penalty fees and transaction fees. These items
can be completely different from card to card.
Make sure you fully understand the credit agreement
and terms for the card you choose. Pay attention
to the following when checking out cards
- Annual Percentage Rate (APR)
This is how much the money you borrow will cost
you. If you pay the balance off monthly it isn’t
a big worry. The APR and the periodic rate as
well as fees will be in the “terms and
conditions’ information about the card.
- Grace Period
A grace period saves you money on interest charges.
It is generally 20-25 days from the date of
purchase. This is especially useful if you pay
your balance off every month. Then you do not
pay for the money you borrow.
- Fees and Other Charges
Many card companies charge annual fees, cash
advance fees, late payment fees, and over the
credit limit fees. These all can effect your
payments...
What's more important when choosing a
credit card
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Credit
Terms |
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APR |
Grace Period |
Very Important |
| Payment |
Pay off each month |
Doesn't Matter |
Very Important |
Very Important |
| Style |
Carry a balance |
Very Important |
Doesn't Matter |
Important |
To learn more about credit card interest rates,
see How APRs make a difference page.
Your Credit Rating
Your credit card rating is what runs all this.
Do you know what it is? Is it good, bad, mediocre,
or non existent. If you have never purchased anything
on credit you may have basically no credit rating.
If you were to try and go buy a house it would
be extremely difficult with no credit rating.
Credit card companies use your credit rating to
decide if they are going to give you a credit
card and often what terms you qualify for.
If you don’t know what your FICO credit
score is it would be a good thing to find out
before card shopping It only takes a few seconds
for a credit company to find out. If you check
your score first there are a ways to repair your
credit by reporting errors to the credit reporting
company
Although each card issuer has different standards,
the following is a general guideline based on
your FICO score.
| FICO Score |
Credit Rating |
| Above 730 |
Excellent Credit |
| 700 - 729 |
Good Credit |
| 670 - 699 |
Borderline Credit -
Lender will take a closer look at your credit
file
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| 585 - 669 |
Bad Credit - Higher risk
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| Below 585 |
Bad Credit - Limited credit availability
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You can check your credit by obtaining a copy
of your FICO credit score and credit report.
Select from the following credit cards according
to your credit rating:
- If you have good credit:
- Low Interest Credit Cards
- Low Introductory Rate Credit Cards
- Reward Credit Cards
- If have borderline credit, i.e., your credit
is not good but not bad, select from the following
cards:
- Unsecured Credit Cards
- Secured Credit Cards
- If you have bad credit:
- Secured Credit Cards
- Gas Cards
- Retail Cards
- Prepaid Visa/MasterCard’s
- If you have no credit, i.e., haven't established
your credit:
- Secured Credit Cards
- Unsecured Credit Cards
- Gas Cards
- Retail Cards
- Prepaid Visa/MasterCard’s
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