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Useful Tips When Choosing Credit Cards
by John Mussi
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.
Free Period: Also called a "grace period," a free period lets you avoid
finance charges by paying your balance in full before the due date. Knowing
whether a card gives you a free period is especially important if you plan to
pay your account in full each month. Without a free period, the card issuer may
impose a finance charge from the date you use your card or from the date each
transaction is posted to your account. If your card includes a free period, the
issuer must mail your bill at least 14 days before the due date so you'll have
enough time to pay.
Annual Fees: Most issuers charge annual membership or participation fees.
Transaction Fees and Other Charges: A card may include other costs. Some
issuers charge a fee if you use the card to get a cash advance, make a late
payment, or exceed your credit limit. Some charge a monthly fee whether or not
you use the card.
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.
Useful Tips: 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. You
may freely reprint this information on your website provided the following
caption remains intact.
"This information courtesy of
http://www.directonlineloans.co.uk Click here
to see full range of loans."
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About the author:
John Mussi is the founder of Direct Online Loans who help UK homeowners find the
best available online secured loan via the
http://www.directonlineloans.co.uk
website. To find a loan that best suits your needs visit
http://www.directonlineloans.co.uk
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