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Best Credit Card Application for You

How in the world do you decide on the best card for you? "Shop around. In general everyone wants the card that costs the least and saves the most.

If you have bad credit or no credit, no problem, click here.

On the other hand, if you have a very good credit rating and would like a higher limit, check into applying for a Gold or Platinum card at the same or lower interest rates.

How Do You Choose The Best Credit Card Application?


Your Payment Style

Your credit habits will be a strong factor in choosing the right card for you.

  1. Will you pay off your balance in full every month?
    If you pay your bills in full every month the interest and finance charges don’t matter much. You should look towards finding cards with little or no annual fee., You should look for cards that offer rewards or incentives. Also make sure your card carries a grace period before charging interest on purchases
  2. Will you carry a balance?
    If you carry a balance, you will want to cards with low interest rates. The APR and the method of computing your balance are key factors. Look for a card with a low interest rate and the right mix of rebates or rewards to justify any fees.


Credit Card Plans

What to compare among credit cards:

  • Annual Percentage Rate (APR)
    APR is the interest rate reflecting the total yearly cost of the interest, expressed as a percentage rate. The lower the APR, the less you will need to pay in interest if you do not pay your balance of at the end of each month. The card issuer must also disclose the periodic rate, that is, the rate the card issuer applies to your outstanding account balance each billing period.
  • Grace Period
    The length of time between purchase and finance charges. Gives you 20-25 days free money after which finance charges will take effect. Make sure you card has one.
  • Fees and Other Charges
    Most issuers charge an annual fee, cash advance fees, late payment fees, and over your credit limit fees.


What's more important when choosing a credit card

    Credit Terms
    APR Grace Period Fees
Payment Pay off each month Doesn't Matter Very Important Very Important
Style Carry a balance Very Important Doesn't Matter Important


How APRs make a difference

The following is an example of the annual savings you could achieve by switching to a credit card plan with a lower interest rate and no annual fee.

Assumption: In this example, the average monthly balance carried forward equals $2,500, which is about the national average for consumers with credit card debt.

Terms Plan A Plan B
Average monthly balance $2,500 $2,500
APR 18% 14%
Amount paid in finance charges annually $450 $350
Annual Fee $ 20 $ 0
Total Cost $470 $350


Read the Fine Print

Read the fine print. Know the details. They make all the difference in the actual cost of your credit card.

Credit card issuers use a complex system for calculating the interest rate. Some banks charge a fixed APR (annual percentage rate) that doesn't change, while others charge a variable APR which is tied to an index, such as the prime rate.

Most of them charge interest on the average daily balance, which is calculated by adding the daily balance up for a month and dividing that number by the number of days in the month.

  • Introductory rates.
    Teaser rates, are rates used by the credit card companies to get you to take their cards. They generally last 3 to 6 months then the interest rates climb again. These are good for saving money if you have the discipline to pay attention and move your pay off your bill or move your money before the low rates expire.
    Again read the fine print. Sometimes the teaser rates apply only to balance transfers or only to new purchases or expire if you make even 1 late payment.
  • Balance transfers.
    Balance transfers to low rate card can be a profitable idea, however, remember to read the fine print make sure what the fees are, what the interest rate is and how long that rate applies.
  • Credit limit
    This is the most the card company will let you borrow. Go over the limit and they will charge you extra fee until you pay it down.

For more information on important credit terms in your application, see the Fine Print page


Important Tips

  • Avoid accepting too many credit card offers.
    Carry only a few cards, having too many .even if you don’t use them, can reflect poorly on your credit score.
  • Beware of temporary "teaser" rates.
    Remember these expire quickly leaving you with sky high interest. Be sure to pay off or transfer balances before the low rate expires.
  • If your rate is variable, understand the basis on which it may change.
    Variable rates can cost you a lot of money, avoid them if possible, if not know the terms.
  • Investigate terms related to late payment charges and penalty rates of interest.
    Fees, fees and more fees. Late fees, over limit fees, cash advance fees, annual fees, and more if they can think of them. Know the contract, read the fine print and stay on top of your credit card bills.
  • Learn your credit card's billing method.
    Know your grace period.
  • Always read both the disclosures and the credit contract.
    Read the fine print then read it again. If you don’t understand something call them and ask.

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