Credit Card Applications - A Guide For First Timers

The surfeit of adverts for credit cards is mind boggling. However for a first timer it is also very confusing when looking into credit card applications.

Things you should know

Places to look for a credit card

Credit cards are available from banks, financial companies, department stores. If you are a first timer, then the best place to approach would be your local bank as you would already be having some kind of checking account there and this should provide you the necessary goodwill and credit standing to be able to get a card without collateral and with good interest rates. The banking official will be helpful and guide you about the different types of cards available and will also help you fill out your credit card application.

What details will be required from you when filling a credit card application
The card company will need to know details of income, address and other financial commitments. Once approved, you will need to sign to confirm the contract in return for the card.

Online or not
Applications can be made online or through post. You can also personally visit the bank or institution and fill out the forms there. Online offers allow you to compare and choose what you find suitable for your needs. Postal applications carry the risk of identity theft as the envelope may be tampered en route. Online applications now use encryption technology so that is probably safer. The absolute safest way would be to make a trip to the bank and fill the forms there. You could research and determine your choice beforehand online.

Time for approval
Online applications can be approved within seconds. Personal applications will not take too long either. Postal applications take time due to the time for the paperwork to go back and forth.

APR
This stands for annual percentage rate. This is the rate of interest that you will be charged if you fail to clear your balance in full within the grace period. For cash advances, there are no grace periods and interest starts accumulating immediately. To entice customers companies offer low interest rates, some companies have 0% APR rates however these all are teaser rates and once the introductory period is over the interest rates shoot up to the standard rates as mentioned in the offer document. Before filling out a credit card application make sure you have researched your cards well and know which card carries the lowest interest rates for the long term.

Credit Score
This is numerical representation of your ability to pay back any credit that may be extended to you. Companies use your credit score to evaluate if you are credit worthy and whether to extend credit to you. Depending on the status of your score, the interest rates applicable to you will differ. The most common score for individuals is the FICO score. It is based on your credit card report. You can access your free yearly report on www.annualcreditreport.com
Even if you have never borrowed money before, there will be a credit report about you which will contain data obtained from accounts with department stores, utility companies, mobile phone accounts, etc.

Annual Fees
Not all cards carry fees. Generally, annual fees range from 15$ to 450$. When selecting a card see if you could pick a card with no annual fee. Of course compare the cards and see that the interest rates are comparable.

Rewards
Companies offer different types of rewards. Rewards are of the following types:

• Cash back on purchases
• Air-miles
• Travel rewards
• Reward points redeemable for gifts.

Reward cards often carry higher interest rates, or annual fees. If you decide to go in for a reward card decide which reward is most suitable for you, and choose one that you will optimally take advantage of.

Age
If you are below 21 years of age, you will need someone above 21 years of age to co-sign the credit card application if you do not have a steady source of income.

Click here to find out how to save money on credit cards

Compare and save on credit cards, cell phone, long distance, Internet access, mortgages, insurance, and more at www.dontspendmore.com

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