A Savvy Credit Card User

by : Ted Goodman

So everyone's carrying around a plastic card for credit use. Aside from the convenience of buying items in any place it also gives financial magic in getting what you want without any cash available. It is like borrowing money quickly, and getting what you want even without funds available in your wallet. That is the beauty of credit cards. It gives to anyone the convenience of instant procurement, without the hassle of paper works to borrow money.

It is so appealing that almost everyone owns a credit card today. But importantly, knowing how credit card works will help prevent you from the brink of too much debt and credit mismanagement. As a consumer, it is your right to know everything about the card company's policies. After all, you are borrowing money from them therefore you should know how you will be billed so that you can manage your credit account properly.

Before you sign a contract with a credit card company, it is wise to shop for a good credit card offer. Learn to compare their charges, policies and terms of conditions. Keep in mind how you plan to use your credit card. Consider whether you plan to pay in full before your credit is due or pay on an installment basis.

Keep in mind that you are charged with an interest with any unpaid balance which is carried over your next bill. The annual fee and other charges maybe more important consideration if you plan to pay your bill in full. However, if you think that you cannot handle paying your bills in full before your due date, it would be wise to consider the annual percentage rate as well as the balance computation that applies to your card.

Since every credit card companies vary with their promos and offers, it is important to be smart in comparing these offers. Some may offer a lower rate for balance computation but may only be good for a brief period of time. Their regular rate will take effect which will turn out to be much higher than the other credit card companies. Know all the terms and conditions that apply with your card. Make it a habit of reading and understanding the contract before signing it.

Educate yourself with the different terms used commonly found in the credit applications. The annual percentage rate (APR) is the yearly rate that applies to your card. The lower the APR, the lower the interest will be. It is also good to know that some companies may offer fixed rate or it may vary which is dependent on varying interest rates or indexes.

A variable rate subjects your finance charges to change from time to time. Your credit card issuer must disclose which rate applies to your card. The grace period allows you to pay for your account in full which is free of interest before your due date. Finance charges usually apply when you choose to keep an outstanding balance after your due date. Many credit card companies impose other transaction fees and other charges which you have to understand in order to maintain your good credit standing. As a credit card user, know all charges that apply with your card. After all, you will be the one to pay for all these charges.