Applying for credit is a significant financial decision. Whether it is your first credit card or your fourth, you should be fully aware of what you are getting yourself into before you sign the terms of agreement. Misinformed individuals are those most likely to be caught off-guard by fees that ultimately put them in debt. Be sure to carefully inspect these seven areas before choosing a credit card.
Annual Percentage Rate (APR)
The APR is the selling point for many credit card companies and represents how much you can expect to pay if you do not pay off the entire balance monthly. Compare the APRs of various credit cards to find the most appropriate option for you. You should also take into consideration annual fees and charges when deciding which credit card is more affordable.
If you do not pay off the balance monthly, there is a minimum payment you must make to avoid delinquency. The minimum payment is typically a small percentage of the total balance, but being able to make the minimum payments should not be your goal. Doing so can allow interest to accrue and create debt issues.
Many credit cards charge an annual fee for owning and using the card. The fee is added to the total amount due and can build interest as if it were a part of regular spending. The only way to avoid interest on annual fees is to pay the balance in full monthly.
Credit card companies typically charge individuals for late payments, exceeding the credit limit, and using the credit card abroad. Be sure to check the details of the agreement to clarify what you can get charged for and how much the charges are per infraction.
Introductory Interest Rates
Introductory interest rates are those that start off low or at zero and increase after a particular date or a certain amount of months. Look into how long the introductory interest rate lasts and what it turns into at the end of the promotional period.
Loyalty Points and Rewards
Some credit cards offer loyalty points and rewards for using the card to purchase goods. Particular credit cards specify where you can earn points while others give you the ability to earn points on every purchase. Being aware of possible rewards can make it easier to make your decision.
Cash back is another offered incentive. It is when the credit card company refunds money to your card for spending a certain amount or paying your balance off regularly. This is something to consider but should not outweigh the importance of a low-interest rate.
Being aware of all specifics can help you choose the right credit card. If debt issues are getting in the way of you obtaining credit, speak with an Illinois credit card debt attorney at Benveniste Law Offices. Heather Benveniste is an experienced credit card debt attorney with years of experience representing Illinois debtors and can help free you from the grips or consumer debt. Contact us today for a free case evaluation.