Archive for February, 2014

5 points to remember before taking a credit card

Saturday, February 8th, 2014

credit cardThe concept of credit card can be a boon for many but can also be a curse for many. There are several considerations before taking a credit card. Here are some of those given below:

• First of you need to ensure the purpose of the credit card and for what you will be using it. If it is to pay monthly bills then you must choose the bank that has got no annual fees and also has the facility for longer grace period. If you want to keep a minimum balance then the bank with lowest possible interest rate should be selected. That bank will also have a low introductory rate. If you use it on a daily basis then the best card would be the one that has got a generous credit limit. It should also contain a solid reward program. If it is for emergency purposes then the bank with no frill should be selected. They also have low fees and low rate of interest.
• Second point is the interest rate. The interest rate of credit cards is denoted by APR which is annual percentage rate. The rate can either be fixed or variable although in most cases the prime rate prevails. It is better to choose a credit card that has got a fixed rate of interest. This will help you to calculate the accurate amount of interest at the end of the month.
• Credit limit is another thing that you need to consider. This is nothing but the amount which the bank would let you borrow. This can be selected according to your choice because you would be the best person to decide how much you can spend in one month depending on the purpose for which you are using the credit card.
• Before selecting a credit card you must analyze the credit score you got. This would help you to know which type of credit card you would be eligible for. Those who have a poor credit record are not eligible for credit cards which have a good credit limit.
• The fine print of the credit should always be checked before you finally decide to take one. It would tell you the fees which will be charged annually. There are times when you want to transfer some balance from one card to another. You must ensure that the charges are really for these things.