Applying For a Credit Card: What You Need to Know
Before you rush into a credit card application online it’s a good idea to consider a few things first.
1: Find the best credit card
There are lots of credit cards out there and they all probably claim to be the best. The trick is to find the best credit card for you. The right card depends on how you will use the card.The perfect card really does depend on your situation; for example, if it’s a backup card then a no annual fee card could be good, those with credit card debts may seek a card with a good balance transfer offer andd low ongoing APR, high flyers might want a Gold or Platinum card with extra touches while those who always pay bills in full each month may choose a rewards credit card. As you can see, the best credit card for you depends on your situation.
2: Understand the credit card offer
Once you have figured out the type of credit card may be best suited to then you need to compare credit cards from the same category. Look for the following main features:
Purchase APR: This is the annual interest rate that you will pay on purchases made on the card. When you don’t pay your bills each month and get charged interest the lower the credit card apr the lower your interest costs will be.
Balance Transfer APR: This the credit card APR charged for balances transferred from other credit cards or store cards. Intro rates are often as low as zero percent for a fixed period. However, look out for transfer fees and consider what interest rates might apply if you don’t pay off the balance during the introductory period.
Annual Fee: Some credit cards charge an annual fee or have a fee that is waived in the initial year or two but will kick in down the track. This adds to the cost of the card. Premium cards may offer privilages and rewards but are often coupled with high annual fees; do the math and make sure the benefits will be greater than any costs.
Interest Free / Grace Days: Most cards offer a certain number of days between a purchase being made and interest kicking in. Because of this you won’t pay a cent in interest charges if you pay your bills in full every month. If there is no grwce period on your card then your going to paying interest on all purchases from the day they are made. When you open your credit card statement you may find that items you purchased have up to a months interest already owing. Stay clear of credit cards with no grace period as this could cost you hundreds in interest even if you pay your card off each month.
Rewards: Rewards come in different shapes and sizes. Do the math and attempt to do a rough calculation of the value of rewards you will receive for each dollar spent. If your a big spender then check the small print for the rewards program to see if they impose a points or cash-back limit each month.
3: Have the right information ready
Applying for a credit card online is probably the quickest and easiest way to apply. It also leads to faster approval times which may be instant if the information provided is sufficient for approval and your credit score meets the criteria.
Before you apply online then make sure you have the required information to hand such as:
Personal details: You’ll need to provide personal details such as contact details including your residential address for past few years. You may need addresses for the past three to five years so if you’ve moved about then have those details ready.
Employment details: You will need to provide details of your employment status, wage and contact details for your employer. Your Human Resources department is normally the best section to provide details for employment and income verification.
Identification: You may need details such as your driver’s license or social security number to hand a verification method
Balance Transfer Details: If you are doing a balance transfer then you will need details including the card number, issuer and balance of any credit cards or store cards you wish to have the balances transferred for.
Finance and Loan details: Depending on the lender they make ask for details of the other credit cards and personal loans you hold. They typical ask for issuer, balance and card limit.
Every credit card issuer asks slightly different questions but covering these basics should ensure your credit card application goes as smoothly as possible. For more information on credit card features such as credit card rewards details online.
Article on credit card application is by Richard Greenwood of finance comparison website creditcardapr.com.sg
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