It is very common today for people to own a credit card or two. Plastic has become part of the modern lifestyle, something that most people cannot do without. If you are ready to own your very own credit card, there are 7 important tips that you should know before you get your own.
1. All credit cardholders should receive fair treatment.
When you get your credit card statement, and you see that something is incorrect, disputing those charges is a right that you have. The Fair Credit Reporting Act stipulates this right, and therefore you should go through your monthly credit card statements to verify that all of the charges were made by you.
2. Some secured credit cards do not offer credit reporting.
Although there are three major credit bureaus, some secured credit cards do not actually report your payments to them. Therefore, if you want to improve your credit score, or repair bad credit that you currently have, make sure that the secured credit card provider sends this important information to the agencies, an important service that you need to have.
3. Other costs above and beyond the interest rate.
Choosing a credit card with a reasonable rate of interest is very important to do. However, because there are other fees associated with most credit cards today, the interest rate should not be your sole consideration for getting the one that you choose.
4. Credit cards can vary.
There are many different types of credit cards out there, including rewards cards that offer gas rebates, travel rewards or even cash back. You can also get secured credit cards, business credit cards, or credit cards that are only issued to people that have bad credit. Whatever card you choose, make sure that it fits your personal needs and lifestyle because choosing the wrong one may actually make your life more difficult managing a card that does not work for you.
5. Multi-rate credit cards.
It is common for some credit cards to charge you interest based upon the type of transaction that you make. An example of this would be making a balance transfer, where the rate is substantially higher than simply making a purchase, or substantially lower than a cash advance. Understanding which rate applies to each transaction is something that you need to know before choosing a card.
6. Your credit score will not improve by owning multiple credit cards.
Although some people actually believe that your credit score can be improved by owning multiple credit cards, this is actually not the case. The key to having exceptional credit, even if you only own one or two cards, is to make your payments in a timely manner, and stay within your credit limit when making purchases.
7. Variable rates and the Index Rate.
Any credit card that has a variable rate of interest is bound to the Index Rate via the APR. Choosing a credit card with a fixed rate is always your best option, although it is tempting to get a variable rate because the rates are so much lower than when you initially received them.
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