Three Simple Things About Credit Cards

by : Sharon

It is a well known fact the more you know, the more difficult it is to trick you. If you are able to use your knowledge sagely, it will be a power.
Let's say, you turn to a bank for a new plastic. As a rule you wish to know all the specificities and understand them in full to avoid pitfalls that are used very often in the industry of credit cards. It doesn't matter whether it is your first credit card or just one more card for special purposes. I believe the following tips will help you be more competent on a credit card management and avoid being a victim to a lender.
Are you ready to make your plastic a beneficial deal? There are three things to understand and learn by heart. As soon as you do it, the terms of credit card deals will be like a piece of cake for you.
&bullThe APR - the Annual Percentage Rate that assesses the overall cost of a credit deal. Applying for a card it is better to get the one with the lowest rates. Who wishes to pay more? As credit companies work in a strong competition, they try to attract customers and offer them the most alluring rates.
&bullAvailable credit. Spending with a credit card, you have a definite credit limit. And it is better not to exceed it. The exceeding of the limit leads not only to a penalty fee, but can also damage your credit history.
The better your credit history and score is, the higher your credit limit can be. Your credit company or bank can also increase your initial limit on a basis of your payment history.
Those cardholders who are inexperienced or illiterate may think that this fine increase is like an encouragement to spend more. But it's not exactly so. Most probably your lender plans to earn in increased fees and rates in case if you spend more.
In reality, the increase of credit limit can play your game. In what way? Just think that your limit was increased but you spent the same amounts as usual. In this case your debt to limit ratio will become higher and it may improve your score. Let's sum up, when a bank or credit company make your limit higher, it is a good chance to keep yourself from overspending in order to improve your credit score.
&bullAvailable cash. Carrying a credit card in your purse can usually be enough when you suddenly need cash. You can withdraw some cash from your credit account at the nearest ATM or at the bank. But you should know you can't withdraw more than the half of your total limit. Moreover, you will be charged a cash advance fee and rather high interest rate. So, before you apply for cash advance, weigh the cost of the option. Is it really worth it?
Now as an informed cardholder, you know these three simple things about credit deals. Turn them to your advantage to manage your credit card matters sagely!