Information Center – News and Articles about Credit Cards
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You Do Not Need A Doctorate To Understand Credit Card Applications
Credit Cards are fast becoming the popular form of credit use today. Despite their popularity there is often confusion about the credit terms and conditions that affect the overall cost of purchases. Before you begin the credit card application process, it is wise to gain an understanding of the credit card terms and fees that various cards offer. The following article will explain the many important terms that are disclosed in applications for credit cards and how they impact you.
Grace Period
Sometimes known as a "free period" it allows you to avoid finance charges by paying the balance on a credit card in full before finance charges are applied. Look for "Grace Period" or "Free Period" wording on a credit card application if you plan on paying your credit card balance in full each month. If the terms of the credit card do not contain a grace period, the card issuers may begin imposing finance charges from the date of each transaction that is posted to your account. Credit cards with no annual fees usually impose fees for not paying off the balance within this grace period.
What is an APR?
The Annual Percentage Rate is the calculation that a lending institution uses to measure the cost of your credit. The APR rate is required on credit applications and typically is a yearly rate. A credit card with a low APR has a lower annual cost then one with a higher APR. The lender also must reveal the "periodic rate" - the rate applied to borrower’s outstanding balance to calculate the finance charge for all of the billing periods.
Several credit card programs allow the card-issuing institution to change your APR when some of the economic indicators (the interest rate, etc) – known as indexes - change. Because those rate changes are tied with the index's performance, the plans are also known as "variable rate" programs.
Rate changes lower or raise the finance charge on the borrower’s account. If you're considering a variable rate card, the issuer must also provide you with different information such as: the possibility of rate change; and how it is calculated - what "margin" (additional amount) is added to compute the new rate and which index is applied. At the latest, you also should receive information, before you become obligated on the account, about any limitations on how often and how much the rate might change.
One common offer that many take advantage of is 0% APR balance transfer credit card applications. This allows borrowers to take high interest credit cards and transfer the balance to a credit card with a 0% APR.
Monthly and Annual Fees
While it is certainly possible to obtain a credit card with no annual fee it is not uncommon for card-issuing companies to charge annual membership or participation fees. Usually the fees run from $25 to $50 depending on the status of the card member. High interest credit cards will sometimes apply fees from $75 to over $100.
Miscellaneous Credit Card Charges
Depending on what features a card may have there could be any number of additional charges applied. For example, sometimes issuers bill you more for getting a cash advance, making a late payment, or exceeding the credit limit. In rare cases, card issuers charge a monthly fee regardless of card use. If you are shopping for a credit card then look for a no fee credit card application online.
Credit Card Balances
The most common balance computation method is the called the Average Daily Balance. Your account is credited from the time that a payment is received. The issuer then adds up the beginning balance for each day in the billing period and subtracts any credits to the borrower’s account during that time period. The total is the divided by the number of days in your billing cycle. This is a standard computation is most likely to appear on bad and good credit credit cards.
Another popular computation method is the adjusted balance method. It is actually one of the few computation methods that are in the best interest of the cardholder. Your credit card issuer will subtract any payments or credits received during the billing period and compare it to the balance at the end of the previous billing cycle. Usually purchased made during the cycle are not added. This means that you will actually have a longer grace period meaning more time to pay all or a portion of the balance on your low interest credit card before interest charges are applied.
The previous balance is the amount you owe at the end of a billing cycle. Any activity during this time is not included.
Finance Charges and the Balance Computation Method
If you have a card that does not have a free period or if you are expecting to take several months to pay for a purchase, you need to understand finance charges. Understanding how your credit card company calculates your finance charge will save you money.
Even when dealing with the best credit card companies you will end up costing yourself money if you don't have a firm grasp of balance computation methods. A mistake that many people make is in thinking that if they have a credit card with low APR that they aren't going to pay much in finance charges. You need to make sure you understand how your balance will affect you.
Two-cycle and Other Credit Card Features
Some credit card issuers actually use various methods in calculating your balance. Two cycle methods make use of your last two months of account activity. Reading your applications for credit cards, especially for instant online credit card approval, will help you to spot these kinds of credit offers.
Credit card features and terms will vary from one company to another. This is why it is important to shop for the best credit card before completing your credit card application. Your goal is of course to end up with the lowest interest credit card possible. In addition to that, you want to make sure that you are aware of all of the features that your card offers. How fees and other features will affect you depends primarily on how you plan on using your card. A person that plans on paying the balance in full each month has different factors to consider then a person that may allow a balance to carry over. If you will not be retaining balances past the grace period then obviously APRs will not have a bearing on you. In addition to the types of fees on a card, you will also want to know what kind of credit cards rewards are built into the contract. From cash rewards credit cards to airline miles credit cards, there is a reward system out there that will appeal to most everyone.
These days it is not uncommon to find hotel reward credit cards or no balance transfer fee credit cards.
See Past the Glitz and Glamour
It is easy to be blinded by the promise of rewards or the ease of filling out online credit card applications, but it is important that you realize your credit rights.
- Never accept a credit card you didn't apply for. Federal laws state that an issuer cannot send you a credit card that you didn't apply for.
- Issuers ought to credit your account the day your payment is received by them. If the payment does not meet requirements of the creditor or if there is no penalty for a delay this requirement is waived. To ensure that your payments are credited immediately, make sure you are sending payments to the correct payment address.
- You have the right to obtain information about the card issuers delinquency rates. This information must first of all be on the applications for credit cards.
- Tssuers must issue a refund of any credit balance on your account no matter how small the amount may be. The refund needs to be issued within 7 working days if it has been requested. If you have not requested a refund, the issuer must issue a refund within six months and is considered a "good faith" effort.
- Any errors that appear on your bill must be promptly corrected. The best credit card companies provide this information to you right on your statement. If not then most likely this information will be sent to you within the first year of your opening an account. This information should outline the correct way to file a billing dispute. For the quickest resolutions make sure you follow the instructions that have been outlined.
- Charges incurred on your card without your permission must be reported as a loss. You may be help liable for charges equal to an under $50. Once you report a card stolen you are not help responsible for any charges made after the date you reported the theft.
- If you pay for goods or services with your credit card and later find them unsatisfactory you have the right to file a dispute. You must first attempt to make an effort to resolve the issue directly with the seller. If this is unsuccessful and the charges are over $50 you may file a dispute with the credit card issuer.
- Determine your credit needs and shop around for a card that best meets your plan. This could be a low interest rate credit card or a gasoline card if you are looking at establishing credit with a no credit history credit card. Make sure that you understand the terms and conditions of your card prior to using it.
- Always hold onto your receipts to make sure that you are aware of all of the charges made on your card.
- Keep records but keep statements and receipts in a different spot then your cards.
- To minimize overspending or over extending yourself, only carry credit cards with you when you absolutely plan on using them.
Why use Credit Cards?
With all of the rules and requirements involved in using a credit, many may question why so many people use them. If you have ever applied for a home, auto or personal loan you realize just how long and drawn out that process is. Would you want to go through that the next time you decided that you wanted to buy a new TV or living room furniture? Of course not.
Credit cards allow you to make purchases without having to carry around a lot of cash or commit to the long terms found in home and personal loans. Multiple purchases made within a month are all shown on the same statement for your convenience. Ordering goods online or by phone is much quicker then if you were dealing with money orders or checks. You are also given more consumer protection by giving you the power to withhold payment for unsatisfactory goods or services.
Obtaining a credit card is as simple as filling out a simple application for credit cards. Online credit card applications are easily found and in some cases offer instant credit card approval. It isn't difficult to locate applications for even the major card issuers. Filing out a discover credit card application or a visa credit card application will only take a few minutes and they will usually get back with you in just a few days.
Using credit cards is a serious responsibility. Either they can be a tool to help you; or they can be a hindrance to your financial goals. Gaining an understanding right from the very beginning will help you to avoid any surprises.
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The XXI century is the century of high-speed and nanotechnologies. It seems people strive to speed up all processes to make this already hectic and sometimes chaotic rhythm of life even crazier. They are ready to shrink everything they can lay hands on to make nanotechnologies work. In fact people just want to make their life more convenient.
Contactless credit cards are another product designed to upgrade our life quality through saving customers' time during the checkout process. These new-age credit products are gaining more and more popularity with customers. The so-called wave card makes the checkout process easier and faster. The recent opinion poll proves that contactless plastics won many hearts. According to the survey's result, over 90% of wave cards owners find them to be very convenient and user-friendly. Plus such plastics are accepted nearly everywhere regular credit products are accepted.
The financial economy crisis in the US has been admitted the largest financial shock for America since Great Depression. US banks incur billion-dollar losses. The number of delinquencies keeps rising. Associated Press has announced the results of data processing on 17 trusts dealing with securitization of credit cards.
The results leave much to be desired, to put it mildly. The volume of credit card debt with a delay of 30 or more days has gone up by 26% as compared to October, 2007. Now it makes up $17 billion. It stands for over 4% of credit card debts. The information on card holders debts for Associated Press was provided by the leading US companies.
We are used to see credit cards the way they look today, and it is hard to imagine that they looked different and served for another purpose than paying for goods and services. We call them plastics. In fact, a century ago credit cards had a different shape, size and were not made of plastic.
The appearance of credit cards dates back to the beginning of the XX century. Who were they created for? The target audience was wealthy people. The cards could be used as business certificates and licenses for the so-called "loyalty programs" at some restaurants, gas stations and merchants. Those cards, you can be surprised, were made of cardboard.
Rapidly growing credit card crime rate causes more and more concern of credit consumers and credit providers as well. Credit card fraud is a number one card holders complaint to Federal Trade Commission. According to the statistics, over 85% of credit card owners that fell victims to credit scam discover the fraud only after they get turned down by credit issuers, having applied for a new credit card or loan.
Credit bureaus cannot stay indifferent to the problem of credit fraud and identity theft, in particular. Equifax, one of the three US major credit bureaus has introduced a new ID theft protection service. "ID Patrol" is a multifunctional tool that allows protecting customers from identity theft.
