If you are taking the time to read this, chances are, you have very little experience with credit cards and/or are considering obtaining a credit card. These financial products will provide cardholders with a multitude of benefits. Examples include the ability to build up your credit history, the potential to earn various types of rewards, and a convenient means of making purchases.
In order to make the absolute most of the credit card that you obtain, it is essential that you understand all of the terms associated with the product. In short, these cards offer you a type of loan that you are responsible for paying back. In this guide, we will outline everything that you need to know about credit cards.
How Do You Avoid Fees and Interest Charges with Credit cards?
When you make a purchase on your credit card, you will have a due date. If you do not pay by that date, you will be paid a late fee. Not only that but the late payment will then be reported to the reporting agencies, which can impact your credit score/history.
Many people only pay the minimum payment required each month, unfortunately, though, the costs associated with this may be immense on a long-term basis.
From the time that you make the purchase, the credit card company will start charging you interest fees. The faster you pay something off, the less you will pay in interest charges, and making your payment before or by the due date will help you avoid late fees, which may be hefty and add up over time.
How Can You Get Good Credit Card Offers?
Companies that issue credit cards use the credit report that you have in order to determine if they are going to offer you a credit card. The information contained in the report will help the company figure out how much they are going to give you and what interest rate they are going to charge you.
You should check your credit report at least once a year.
This will allow you to keep tabs on your score and whether or not someone has stolen your identity. You may get 1 free report each year from TransUnion, Equifax, and Experian. If you want to order your credit report easily, you may visit the website, AnnualCreditReport.com.
How Do You Get the Best Credit Card Terms?
In order to get the best terms on a credit card, you should compare different cards from various companies. When shopping for a credit card, consider the following in order to get the best terms:
- Annual Percentage Rate (APR) – This outlines the annual cost of the credit that is provided to you by the credit card company. Generally speaking, there are three different types of APRs that you will find are directly applicable to your credit card. These include the ones when you make a purchase, the balance transfers that you make from another credit card, and cash-based advances provided on the card. When evaluating APRs on the card, pay close attention to determine if there are introductory rates because, if so, these will end after a certain amount of time or after what is called the “promotional period” comes to an end.
- Fees – There are many fees that may be associated with a credit card. These include annual fees, cash advance fees, fees associated with balance transfers, and interest fees. Additionally, many cards include transaction fees for foreign purchases, and some require you to pay an annual fee. Play close attention to the fees that you will be charged.
- Reward Incentives – When you obtain a credit card, you will likely find that it includes reward incentives. You should gain an understanding of what you will be required to do – as a cardholder – to obtain the rewards associated with the card. In most instances, you will be required to spend a certain amount to accumulate points, miles, or other incentives. You should also check to see if your reward points, miles, or other incentives will expire. If you find that you do not have a solid understanding of this process, contact the credit card issuer directly to inquire.
Should You Sign up for Add-On Products or Promotional Offers?
When you sign up for a credit card, you may find that it offers add-on products and promotional offers that are enticing. You must understand, though, that these may end up – eventually – costing you money.
You may find that you get no interest charged on your account if you make a purchase within the first 6 or 12 months. If you fail to pay off the balance by this time, you may find that you are charged for all of the interest of the specified time period.
If you do take advantage of a promotional offer, be certain to pay the balance off – completely – before the promotional period comes to an end. Even better – try to find a credit card that has a very low APR associated with it that never expires.
You may also discover that some credit cards offer credit protection services. These protect you in the event that you experience pre-determined hardships as outlined by their Terms of Service.
Additionally, you may be offered identity theft protection services. Prior to signing up, be certain that you know how these services will work and how much you will be paying for the services. This will help you determine if you are experiencing any true value from signing up for these services.
Credit Card Statements Are Critical for Your Protection
When you sign up for a credit card, you should make sure that you sign up for paperless statements. Once you do this and start receiving your statements, you should ensure that no billing errors have occurred.
If you happen to find an error, contact the credit card company as quickly as possible to get the issue resolved.
If your card is lost or is stolen, you have a set period of time to report that so that your liability for any charges that have not been authorized are limited.
What about Adding an Authorized User?
If you would like to jointly manage finances or you are trying to help someone under the age of 21 years of age or another person build their credit history up, you may add another person to your credit card as an authorized user. Being the account owner, though, you should outline your expectations with the person that you want to add as an authorized user.
You may also contact the company where the credit card was issued and request that a spending limit be placed on the card that is assigned to the other user.
Be sure to monitor the account closely and if need be, take any action that you deem appropriate. You may have the authorized user taken off of the account anytime that you like.
Convenience Checks
Many credit card companies offer their customers what is called “convenience checks”. These allow you to actually make payments with the check that will show up as a “charge” on the card.
If you keep the check, we recommend placing them in a safe or another safe location. If you decide not to use the checks, you should shred them and discard of them. Never throw them away before shredding because there are people that steal trash and go through it in an attempt to discover valuables.
If you have any questions about convenience checks, you may contact the issuer of your credit card to learn more.
Our Services
We here at Somerville Bank offer many financial services that you may benefit from. For consumers, we offer consumer accounts, credit cards, auto loans, and we also offer residential lending. We also offer identity theft protection, online banking, mobile banking, Zelle, checks, and more. If you are concerned about your finances and want to work with an institution that will protect your finances, we can help.
We have many Somerville Bank locations that you may choose from. We are a hometown bank with many services and features for both consumers and businesses. Our credit card services include both consumer credit cards and business credit cards. Regardless of your needs, we are capable of assisting you. If you have an interest in choosing a banker that will work directly with you to determine the best financial services and products for your needs, we encourage you to contact one of our local financial experts today.
In addition to our long list of locations we have had for years, we are now opened in West Chester. We have a lobby and a drive through at this location. While established in the year of 1910, year after year, we continue to offer the latest and greatest in bank services, features, and products. A hometown bank with all the perks of a big city institute, we continue setting trends and look forward to working with you! Find a location near you and visit us today: https://somervillebank.net/locations/
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