At some point, you are going to need credit for life’s major purchases or you may feel the need to have a credit card or two to make things more convenient. This means you are going to need to know how to apply for credit.
There are many things to consider when applying for credit, and specifically when applying for a credit card. With so many offers out there and available, your head can be swimming with interest rates, reward programs and different fees.
The key is to simplify everything down to what you are looking for in your credit line. If you are new to applying for credit, you just need to know the basics and go with the no frills approach to picking the right credit card.
General Guidelines To Follow When Applying For Credit
When it comes time for you to apply for credit, it doesn’t matter what type of credit or how much credit you need, there are a few general rules that you should be aware of. If you follow these guidelines and use a little common sense, you should make good personal financial decisions.
- Check Your Credit Report: Experts say that roughly 70 percent of all personal credit reports contain some sort of error. If you are applying for a large loan, check your credit report a few months in advance to make sure all is right. It could save you a bundle on interest payments in the future.
- Answer All Personal Questions Correctly: This is not as easy as it appears. Make sure dates are correct, names are spelled correctly, income is reported accurately and any other questions are correct as you know them to be. With the red tape involved in getting credit, a tiny mistake can turn into a major headache.
- Don’t Ask For More Credit Than You Need: Just because you may be approved for a large line of credit does not mean you should accept a large line of credit. If you have decided that you can afford a $150,000 dollar house and it appears that you can be approved for a $200,000 house, don’t change your plans. Credit is not free and you will have to pay the interest on the extra amount that you have already decided that you don’t need.
- Always! Always! Make Sure Of The Interest Rate: The interest rate determines the amount that you will eventually have to pay back. Nothing is as important as knowing the interest rate and how will operate over time. Be careful of variable interest rates, because no one can predict the future.
- Shop Around: Don’t just go with the first lender you see or the first lender that looks pretty good. That one lender that looks pretty good, can soon begin to look pretty bad once you start comparing them to other lenders. It doesn’t take long to check out and talk to different lenders, especially when there is a large amount of money at stake.
How To Apply For A Credit Card
Applying for a credit has never been easier and more convenient. You can either answer one of the hundreds of credit cards offers you get in your mailbox every year, or you can simply go online and quickly fill out an application.
It is not the simple filling out of the application that you need to concern yourself with; it is what you need to do prior to the application that is important when applying for a credit card. There are things to look out for and there is a small amount of research to be done. Not to worry, it is not difficult and not that time consuming, it basically means reading some of the fine print to make sure you are not getting into something you don’t want.
- Accrued Interest: Interest that would be paid during an interest free period may accrue and then come due once the introductory period is over. Introductory rates and no interest, no payments for 6 months sounds like a good deal. In fact, it is only a good deal if you pay off the balance before the period is up. If not, all of that interest, on the entire initial balance, will show up on your card.
- Hidden Fees: These can be anything from an annual fee, to balance transfer fees, to a monthly or yearly maintenance fee. There are plenty of good deals on credit cards out there, so you don’t have to pay these fees just to get a quality credit card with a low interest rate.
- Interest Rates: If you normally carry a balance on your credit cards, then you will want to pay particular attention to the interest rate on all prospective credit cards. Pay special attention to when introductory rates expire, to balance transfer interest rates and to interest rates for cash advances.
- Rewards Programs: As competition between credit card companies gets more intense, the rewards programs offered get better and better for you. Points for airline miles, gas, office supplies and groceries get you the most points in general, though plenty of cards offer points to be redeemed on all purchases made. Cash back is another popular way to reward you for using you credit card. Some cards are now offering as much as 6 percent cash back on specific purchases.
Find The Right Credit Card Today!
Applying for credit should be something done not on a whim, but after careful consideration. Getting a loan or a credit card can be helpful with your personal finances, but only if you use restraint, discipline and good sense.
Use our free credit card “chaser” to find the best credit card offer for you!
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