One of the major revelations in the financial industry has been that of credit card. Ever since their conception, they have come up as a major financial tool. As it is, they have caught the imagination of the average guy on the streets in a big way and today a large number of people are making use of these cards. As a matter of fact, according to a recent study, it was revealed that the average Australian carries as many as four to four cards in his wallet.
A credit card is a thin sheet of plastic, which allows a user to make purchases on credit. With the use of credit card a user can buy products as well as services and uses of a credit card to make payment. The merchant then submits the sales slips to the finance company or bank and receives his/her payment. The company in turn receives the payment from the user on a later date.
So, what is it that makes them so popular? The answer perhaps lies in the number of advantages, that these thin sheets of plastic bestow their user with. The following are a few notable advantages of using a credit card:
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You probably don’t need me to tell you credit cards are easy to get a hold of; at least, that is so in the US and UK. How many weeks pass without a glossy brochure promoting a credit card popping through your letter box? And that’s just your mail; the tv advertising budgets for credit card promotion are enormous, with some famous faces often adorning your screen, smiling beautifully as they tempt you. How does anyone resist that promotional onslaught, coupled with the peer pressure, and the “have now, pay later” culture in which we live? Well, the fact is, few people do resist. If you are credit worthy and have no credit card, you are something of a rarity.
Credit cards are almost as easy to get as your fruit and vegetables from the local supermarket. The thing is, you can have a bad credit history, and still get deluged with offers of easy credit. Even if you have just filed for bankruptcy, you may still get more offers of credit cards than you know what to do with!
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Before applying for a credit card there are several things you need to know and do. A lot of banks will offer you credit cards but the APR which is the amount of money one has to pay in interest charges per year; can be very high especially for the first credit card you get. Choosing the best credit card for you, apply for it and getting it can be a difficult process, but it is important to make your best selection and get a credit card with a good APR. After you got a credit card other issues like how to use your credit card wisely or how not to get in over your head, arise. As easy as it is to spend and use the money you have in your account plus the ones that you do not have but the bank lets you use, turns out to be as difficult to put them back and to repay the debt. Most of the credit cards have a maximum amount that you can spend when you do not have any money in your account. The sum can be 500, 1000, 2000 or up depending on your credit history. Spending more than you can afford usually happens when you get your first credit card, but this is not a must for all the credit card holders.
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Credit card offers aren’t exactly a rare occurence. In fact, many people are bombarded by multiple credit card offers each and every day. The question is, how do you know which credit card offers are the good ones and which ones should be thrown in the trash (after being shredded of course)? Follow these seven bits of advice.
1. What Does “Pre-Qualified” Really Mean?
First things first — when you get those credit card offers in the mail that say you’re “pre-qualified,” it does not mean that you’ve been approved for the credit card that is being offered. You still have to apply for the card (and have your credit history run) before you’ll actually be approved.
Many people have gotten frustrated because they respond to a “pre-qualified” offer only to find out they’re not really approved.
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Applying for a credit card nowadays is speedy and convenient. Probably because there are already a lot of credit card companies which are fighting to get your business. Credit cards are considered a necessity in these times. There are a lot of financial benefits that you won’t be able to avail if you don’t own a credit card.
Everybody can make use of a credit card. Credit cards are great ways to pay bills even if you currently don’t have the cash for it. If you’re going on a vacation, using a credit card will help shoulder your expenses. Also, all online stores need to get your credit card information if you want to purchase something from them.
Truly, credit cards have given people more purchasing power. With credit cards, you can conveniently transact business anywhere without ever carrying cash. But these credit cards have also caused the financial downfall of several people. If you’re not careful enough with how you use your card, you could be paying too much just for interest rates.
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Credit cards are simple rectangular plastic cards that are becoming one of the basic necessities to people nowadays. That is because the wonderful card is making it possible for people to purchase items and services even without outright cash at hand.
Thus, people would never worry of being robbed while on the way to the department store. They would not incur headaches from counting coins and money during and after purchase transactions.
If people do not have enough cash to buy an item, they could rely on the credit card. Thus, they could opt to repay the amount in full or in installment, so the purchase would not hurt the budget that much. So who would not want to own a credit card nowadays?
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Credit cards are now considered as a necessity in today’s world. With a credit card, you will be able to purchase items and services without needing to carry cash. With this feature, it is certainly very attractive to own a credit card. Besides, with a credit card, you can purchase the things you need in case of emergency. You can also save yourself the trouble of carrying cash.
However, when applying for a credit card, you have to consider quite a few things first before submitting that application form. Firstly, you have to determine your needs when you apply for a credit card. You need to know how you will be using the credit card. You also need to determine your credit history and determine whether you have a good credit rating. If you have a good credit rating, the chances of getting a credit card will improve.
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It’s a new year, so don’t fall victim to the same old habits that lead to tarnished credit and mounting credit card debt. Instead, change your ways of doing business with creditors. Here are some helpful tips to decrease your credit woes in 2008.
First, keep only the credit cards you really need. If you already have credit cards or plan to apply for new ones, be sure to read the fine print on the agreement. Credit card companies will slip details into the agreement that aren’t easily noticed. Read every word, and call customer service if something seems too vague.
Once you start using your cards, keep an eye on your interest rates. You might be paying a punitive rate if you’ve made late payments, or an inflated interest rate if you have cash advances from your credit card. Be clear about which types of charges incur interest rates above your base rate. And if you see that your interest rate has gone up without explanation, call your card company to ask why. They are usually very helpful in explaining charges, and will negotiate better terms with you if you stick to your guns (and possibly threaten to take your business to one of their competitors). You can also ask the card company if they will let you opt out of the higher interest rate, but this means that you can only pay off the balance of your card at the previous rate, not make new charges.
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It can be so easy to think of the funds available to you through your credit card as free money, especially when it’s your first card. You never actually see any cash—you just hand the cashier this piece of plastic that some nice company sent you in the mail, and the cashier gives you your purchases. You don’t see the cash until it starts disappearing from your savings, after you’ve maxed your credit card out and are buried up to your neck in late fees and penalties, and your credit score starts going down the tubes.
That’s why it’s so important that you establish disciplined credit card practices from the first day you get your card. Responsible credit card use can build you a great credit history and help you toward a great future, but reckless credit card use can throw your finances off-course for years. Start on the right foot with your credit card, and side-step the worries. The most valuable piece of advice you can when it comes to responsible credit card use is so simple that many people overlook it: never carry a balance. Especially when you’ve only just started using your credit card, you should never make purchases with it that you don’t already have the money to pay off. This might seem counterintuitive. If you already had the money, why would you be using a credit card? Learning to use your credit card intelligently when you first start out requires a little re-thinking of what your credit card can provide you. You should think of it as a means to build good credit, possibly get rewards points, and a source of funds for extreme emergencies—and that’s all.
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It’s only October, but there is actually less than 82 shopping days remaining until Christmas. Many people are still paying their holiday debt from last year, let alone feel ready to start the holiday gift buying season all over again. Didn’t you make a promise to start your holiday shopping earlier this year, so you wouldn’t be as tempted to rely on credit cards at the last minute? Now would be a very good time to start planning for your holiday shopping. If you can work it into your budget for the next two and a half months, you may be able to avoid the dreaded after-holiday-credit-card-debt issue that the majority of American’s experience at the start of every new year.
If you’ve looked over your cash flow and bills however, only to find the disappointment of knowing you aren’t going to have a lot of additional cash to make your purchases with, at the very least- spend some time finding credit cards that are going to benefit you the most during your holiday shopping- and hurt you the least over the long term.
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