Saturday, November 10, 2007

SOME BASIC ENQUIRIES ON CREDIT CARD

Credit card, also known as plastic money is a medium of transaction. It facilitates you with immediate financial support at the time you do not have sufficient money. In the credit card system of transaction it is the issuer who lends you the required amount at the required time. Unlike the charge card the credit card system of payment allows you to revolve your outstanding credit card bills even for more than a month against an interest. It is also a source of great help to keep your day to day transaction secured. Regular use of credit card reduces your need of carrying heavy amount of cash in your wallet all the time. Thereby it is extensively used by people despite all its disadvantages. Moreover its easy availability attracts customers all the more. Anybody is eligible to acquire a credit card.

Am I qualified to apply for a credit card?

Credit card in today’s world has become an indispensable part of life. To acquire a credit card, the process is very short and simple.

  • You have to be 18 years of age.
  • You need to have a regular income
  • You need to have a clean credit report that would reflect your eligibility to handle the credit card.

Before opting for it what should I look for in the credit card?

Generally the credit card issuers’ answers to all possible inquiries you would make after you apply for it. The different offers of the credit card companies’ varies from each other but in general the basic things you need to focus on are the fees that they might charge from time to time. At the first instance you should research on the interest rate, annual fee, the grace period, other supplementary fees charged by the credit card company you intend to deal with.

  1. Interest rate: There are two different types of interest. Usually the fixed interest rate in the credit card is not as constant as the interest rate in the banks. The floating interest charged is usually less than the fixed interest. The floating interest fluctuates on the basis of the T-bill sale and some other variable factors. Thus before applying for a credit card it is wise to make an approximate estimation whether you would be able to bear the interest that might be charged on you
  2. Annual Fee: The Annual fee is the amount of money the issuer bills to your account on a yearly basis. Most of the card issuers consider the bill charge for the first year to attract customers. If you comprehend the charge of the credit card bill, the issuer charges annually then it would definitely become easier for you to predict whether you would be able to fetch the amount.
  3. Grace period: Grace period is the span of time after billing date till the day that is fixed for you to pay back the due amount. Normally in case of cash advances there is hardly any grace period. Bank cards provide 25 days of grace period .T and E card companies are some what lenient on this ground. Thereby considering this factor as well you should gage that if it would be convenient for you before you finalize the deal.
  4. Other supplementary fees: At times you might make purchases beyond your credit limit. Under such conditions the credit card companies charge over limit fees which might range from $20 to $29.Some other cards might charge a late payment fee supplemented with that amount. You should always enquire all minute details of all possible fees that come along with the credit card you are intending to opt for.

Application fee is another type of fee that is charged with the credit card. Normally it is associated with the secured cards and very rare with unsecured cards. This type of fee is legal. However despite all things you should always make all things clear before you pay an application fee.
Credit card in today’s world means a lot. It is of great help for the people who know to deal with it in a planned manner. But one who would handle it carelessly would face the consequences awfully. Thereby you should always research on all the terms and conditions before you finally decide to opt for a credit card. Generally the credit card companies mislead you by providing alluring offers keeping major details hidden. Thus you should first get yourself cleared about all the terms and conditions of the credit card company and contemplate on your capability to handle it before you finally apply for a credit card.

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