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Choosing and Using Credit Cards

Chances are you have received offers in the mail asking if you would like to open credit card accounts. Frequently, these offers say that you have been “pre-approved” for the card, with a line of credit already set aside for your use. Typically, these offers urge you to accept quickly, “before the offer expires.” However, before accepting a credit card offer, understand the card’s credit terms and compare costs of similar cards to get the features and terms you want.

Credit card offers may seem attractive, but remember a credit card is a form of borrowing that usually involves a “finance charge” — a charge for the convenience of borrowing — and often other charges as well.

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A Few points to consider when applying for low interest credit cards online

When applying for credit cards online, there are a few very important things to be aware of., learning what these terms mean will help you make the right choice on which cards to apply for.

Introductory APR: Do you have outstanding credit card debts on other higher interest rate credit cards? Do you want to enjoy an extremely low, lower or zero percent interest rate for a period of time? Companies these days are offering great introductory rates to convince you to swap to their low or lower interest credit cards. Be sure to check if their introductory APR applies to balance transfers as well as purchases before assuming you’ll save compared to your present credit cards.

Ongoing APR: When your introductory rate (if offered) runs out, this will become very important. Some of the very lowest interest rate credit cards do not offer introductory rates because their ongoing is very low. Before deciding on a card, choose whether you want up front savings, or ongoing savings.

Grace Period: How much time passes before you are charged interest for purchases and cash advances made on the card? Depending on your spending habits, a longer grace period may just be what you’re after.

Annual Fee: If the card has an annual fee, you need to take this into consideration. If you do not use your credit cards that much, all savings from other features may be forfeited through the cost of your annual fee.

Credit Line: They may start you off with a minimal credit line, but over time you may have the need for more. Check each card to find out just what size credit limit you can build yourself up to. If you’re a big spender, starting off with a card offering a substantial credit line may be the right move for you.

Issuer: You always want to make sure you are applying for a credit card from a recognized issuer / bank. If you are looking to rebuild or improved your credit rating, make sure you apply with an issuer that reports transaction history to one or all of the three main credit bureaus.

Warning When credit cards are offered with low interest, low interest may be for an initial period. If you make a late payment you may have an interest rate that is higher than the initial low interest rate. Zero 0% credit cards may work the same. You should make your payments on time or you may pay higher interest and receive bad credit listings on your credit report.