Credit Cards Online

The task of choosing a credit card online can be a daunting one.  There are so many things to consider:  annual fees, A.P.R., incentives, etc. 

The first step in applying for a credit card online is to decide what you intend to do with the card.  For example, will this be a card that you will use to carry a balance or will you be paying it off every month?  If you plan to pay it off every month, it might be useful to pick a card with a good incentive program like a frequent flyer program.  The frequent flyer program allows you to accumulate points or miles based on the amount of purchases made that can later be cashed in for an airline ticket.  If you plan to carry a balance on the card, it would be in your best interest to find a card with the lowest A.P.R. possible. 

Once you’ve taken into consideration how you intend to use your card, it’s time to read the fine print.  Many credit cards promise low A.P.R.’s but upon closer inspection of the fine print, a person may find that the bank has many exceptions.  For example, a card may offer a low introductory or “teaser” interest rate to draw you in only to have the rate sky rocket after the introductory period is over.  

It is also very important to make payments on time.  Find out if your credit card company offers you a grace period.  Many zero percent interest rate credit cards do not offer a grace period.  In fact, they are waiting for you to make your monthly payment just one day late just so that they can raise your A.P.R. as a penalty.

It’s possible for a credit card to charge different interest rates for different transactions.  For example, they may charge 0% for balance transfers, 8% for purchases and 25% for cash advances.  If you carry a balance on a credit card like this, it’s important to know that the payment sent in will go towards paying off the items with the lowest interest rate first, leaving the balances with the higher interest rates to continue to accumulate interest.   

Find out if the credit card that you are applying for online has any annual fees, or other administrative fees attached to it.  Such fees could include cash advance fees, balance transfer fees, over the limit fees, set-up fees, et al.  After all, it would not make sense to balance transfer $200 to a zero percent interest credit card if the transfer fee is $40 and the set-up fee is $35.   

Lastly, use credit wisely.  Credit can either be a consumer’s best friend or worst enemy.  The credit card companies make it so easy to apply for credit online or by mail, it may be tempting to apply for as much as possible and go on a shopping spree.  This would not be a good idea because credit cards accumulate compound interest and this would lead the consumer to financial trouble in no time!   

This book is just as witty as it is true.  Good credit is Sexy!  It also gives a lot of advice about how to apply for credit cards online!