Applying For A Credit Card

The following are important terms to consider that generally should be disclosed

in applications or in solicitations for credit that require no application. Ask about these terms when you're looking for a card such as the Annual Percentage Rate. The APR is a measure of the cost of credit, expressed as a yearly rate. It also needs to be disclosed before becoming obligated on the account and on account statements. The card issuer also must disclose the "periodic rate" the rate applied to your outstanding balance to figure the charge for each billing period. Some cards allow the issuer to change the APR when interest rates or other indicators called indexes change. Because the rate change is linked to the index's performance, these plans are called "variable rate" programs.

Rate changes raise or lower the finance charge on the account. If you're considering a variable rate pre-approved card the issuer needs to provide various information disclosers: that the rate may change; and how the rate is determined - which index is used and what additional amount, the "margin," is added to determine the new rate. At the latest, you also must receive information, before you become obligated on the account, about any limitations on how much and how often the rate may change. Free Period. Also called a "grace period," a free period lets you avoid credit card finance charges by paying your balance in full before the due date.

Most companies charge annual membership or participation fees. They often range from $25 to $50, sometimes up to $100; "gold" or "platinum" cards often charge up to $75 and sometimes up to several hundred dollars. Choice Credit gives many options. Some may include other costs. Some issuers charge a fee if the card is used to get a cash advance, make a late payment, or exceed a credit limit. Some charge a monthly fee whether or not you use the card. Choice Credit gives all the info needed to make a wise choice.

If there is not a free period, it's important to know what method is used to calculate the finance charge. This can make a big difference in how much of finance charge will be placed - even if the APR and the buying patterns remain relatively constant.

Even with the new credit card laws that took effect in February 2010, you still have to be aware of many sneaky tricks and traps that credit companies will set for their customers. Although the new laws have ended many practices that both banks and credit card companies to confuse their customers have subsided, they are on the war path in making their financial gain. There are many loop holes in the new laws, and rest assured that these financial institutions will milk it for all its worth.

Just a friendly reminder that if you are planning to apply for a credit card - especially if this will be your first, please makes sure that you know what you are getting yourself into. Credit cards are a privilege and nit a right. There are many hidden things that credit card companies try to do to entice new customers. Read the fine print, and carefully look over the contract. It may be a bit of a pain, but it is worth it. No one wants to have headaches that they could avoid in the first place.

by: Teeny solomon

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