so many opportunities to apply for credit cards once you become
an adult, it's important to understand what you're getting yourself
into. Credit cards are not all the same. When shopping for a credit
card, here are some important things to know. Look for cards with
a low APR (Annual Percentage Rate). This is the percentage of the
principal of a loan to be paid as interest in a year. Be aware that
many cards offer a low introductory rate, but when that offer expires,
your rates will increase, sometimes drastically. Also some cards
say that you are pre-approved for a card at one rate, but in reality
when you apply you're approved at another rate.
things to look for when shopping for a credit card include the annual
fee, grace period, and billing cycle. Some cards charge an annual
fee to use the card, and others don't. The cards with no annual
fee usually have higher interest rates, but if you're planning to
pay off your card monthly, this is the way to go. If you have a
balance, calculate whether it's cheaper to transfer the balance
to a card with an annual fee for a lower interest rate. Be careful
with this though because there is often a fee for transferring balances.
Grace periods and billing cycles are important if you plan on paying
off your balance monthly. Look for cards with grace periods of 28
days and be sure to avoid double billing cycles.That way you won't
be charged interest from the day of purchase.
whenever possible, avoid cash advances. Some companies charge up
to 4% along with other fees for these advances. Always read the
fine print and all of the information in the disclosure. Be aware
that credit card companies have the right to change rates and fees
with as little as 15 days notice. For that reason. be sure to read
the information that accompanies your statement. Don't be fooled
by the perks and freebies that credit card companies offer you.
These companies often charge higher annual fees or interest rates.
And by all means, if you are unsure or don't understand something,
don't hesitate to ask. Also, don't be afraid to ask your credit
card company to lower your rates, sometimes companies will be willing
to do this rather than risk losing your business.
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