It's amazing how cashless payments have made credit cards a must have for the shoppers of today. Did you know that in the United States, the total credit card debts have already reached more than $900 billion in the year 2007. This only means that Americans really find the need to apply for credit cards. What makes credit cards such a hot item? Credit cards offer more than just the convenience of payments if you are short on cash, but you also get useful rewards such as points for gas and other items.
So you finally decided to apply for a credit card, but what are the things that you need to remember? Note than in everything you apply for, there are terms and conditions regarding making transactions with the said company. For one thing, it will be smart for you to be familiar with the guidelines and the other conditions involved when you become a cardholder of their company.
Here are some important terms you need to know before you close in on a deal and get yourself a credit card. Note that these conditions can vary from company to company. These were taken from the United States Federal Reserve Bank website.
APR - This stands for annual percentage rate. Simply put, the APR is the interest you pay when you have an outstanding balance on your card, or if you make cash advances, or when you make balance transfers. It is a yearly rate that you pay, but it may be divided over 12 months. There are two types of APR's, which have fixed rates or variable rates. The rates depend on current Treasury bill rates.
Grace period - It will be preferable if you apply for your card and your card company gives you a grace period. This is the amount of time that you are given until you can pay off your monthly minimum dues. Sometimes, card companies will charge fees if you fail to pay within the grace period. There are instances when cards allow you to pay within 25 days of statement date.
Fees - Cardholders may also be charged fees depending on what kind of transactions they make. For example, there may be a fee for making cash advances, or for making balance transfers. If you also go above your credit limit, expect to have fees to pay. Also, fees for late payments may be imposed. It pays for you to be aware of these conditions.
Perks and Rewards - For every credit card transaction you make, you can also earn points to help you gain rewards. These points may come in the form of gas discounts or discounts from department stores, groceries, and the like.
Have these terms and conditions in mind, and you will surely be able to choose for the perfect card to suit your needs. Always keep an eye open for hidden charges and additional fees. There are tons of resources online that help you check out all the features of the top credit card offers in the market.
