Useful Tips When Choosing Credit Cards
Chances are you have received your share of "pre-approved" credit card offers in the mail, some with low introductory rates and other perks. Many of these solicitations urge you to accept "before the offer expires." Before you accept, shop around to get the best deal.
Credit Card Terms:
A credit card is a form of borrowing that often involves charges. Credit terms and conditions affect your overall cost. So it's wise to compare terms and fees before you agree to open a credit or charge card account. The following are some important terms to consider that generally must be disclosed in credit card applications or in solicitations that require no application.
Annual Percentage Rate: The APR is a measure of the cost of credit, expressed as a yearly rate. It also must be disclosed before you become obligated on the account and on your account statements. Some credit card plans allow the issuer to change your APR when interest rates or other economic indicators - called indexes - change. Because the rate change is linked to the index's performance, these plans are called "variable rate" programs.
Other Costs and Features:
Credit terms vary among issuers. When shopping for a card, think about how you plan to use it. If you expect to pay your bills in full each month, the annual fee and other charges may be more important than the periodic rate and the APR, if there is a grace period for purchases. However, if you use the cash advance feature, many cards do not permit a grace period for the amounts due - even if they have a grace period for purchases. So, it may still be wise to consider the APR and balance computation method. Also, if you plan to pay for purchases over time, the APR and the balance computation method are definitely major considerations.
You'll probably also want to consider if the credit limit is high enough, how widely the card is accepted, and the plan's services and features.
Keep these tips in mind when looking for or using a credit or charge card.
? Shop around for the plan that best fits your needs.
? Make sure you understand a plan's terms before you accept the card.
? Hold on to receipts to reconcile charges when your bill arrives.
? Protect your cards and account numbers to prevent unauthorized use.
? Draw a line through blank spaces on charge slips so the amount can't be changed.
? Keep a record - in a safe place separate from your cards - of your account numbers, expiration dates and the phone numbers of each issuer to report a loss quickly.
? Carry only the cards you think you'll use.
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