Applying for a Credit Card

One of the features of a consumer society such as is prevalent in the West, is the huge number of purchases that people are persuaded to make by advertisers and the debt that we are persuaded to get into in order to be able to pay for them.

One of the most crucial financial tools ever developed was the credit card because it made instant credit easy, which allowed people to get into debt easily and purchase more goods with money that they did not have. The invention of the credit card was a stroke of brilliance for the financial and commercial world.

Most people realize the value of having a credit card and do not abuse the credit facilities offered by them. However, it can be very handy to be able to get your hands on a few thousand at a moment's notice and it is a great deal safer than carrying cash.

Most people think of applying for a credit card when they comprehend the convenience of having one.

Applications for credit cards are usually made soon after they reach the age of majority (18 or 21 years of age), which is an indication of the value people place on owning a credit card.

Many people are lured into applying for a credit card by low APR (annual percentage rates) of interest and air miles. There is no annual fee on moist cards any longer.

If you are thinking of applying for a credit card, especially if this is your first credit card, I hope that you will find some of the following tips practical. It is vital to gain a feel for the latest credit card deals and the best way of doing this is online.

Write the pros and cons of a dozen credit card offers on a piece of paper and put the different points under headings like: APR interest, Annual Fees, Penalties, Free Days etc, so that you can evaluate them without difficulty.

Do some research into whether a Visa or a Mastercard is best for you or apply for one of each. Check whether they allow a balance transfer from your old card and what the interest rate on that is.

Be certain that you are entirely aware of the terms and conditions of using the credit card that most suits you. Above all, read about the penalties for late payment and think of whether you can realistically comply with them.

Check the APR of interest before applying for a credit card. Is it unusually high? What is the average for credit cards? How does your intended card compare?

The APR does not matter in fact, if you anticipate paying the full amount on your billing statement every month. Some of the firms charging high APR's permit longer free credit periods, so straight comparisons are not always easy. It occasionally appears that credit card businesses look for methods to complicate the conditions of use of their cards, so be wary.

These periods of free credit are frequently called 'periods of grace' and are very important depending on how you intend paying off your monthly debt. Look out for transaction charges as well and any other covert charges.

Do not be fooled by statements like 'instant approval', because it does not exist. They will check your credit history no matter what they say. Keep foremost in your mind the purpose of the card (CREDIT), do not get sidetracked by 'rewards'. Rewards can be very expensive unless you pay your bill in full every month.

Consider getting at least two credit cards, one with a long period of grace so that your money continues to earn interest in the bank, and one with a short period of grace but a very low APR in case you need to borrow money in an crisis.