Pennywise
Credit Card Plans
There are various companies and credit card plans available in the market and choosing wisely among them is the most important aspect for keeping a good credit standing. Most of the credit card companies offer revolving credit with a balance on which you pay interest if it is not paid off in time. However, credit cards can be further divided into other categories according to the perks and benefits offered for using them.
Some of the most common credit card plans are cashback credit cards, cards that redeem points to give you air miles or cards that provide various types of insurances. However every card is unique and some have an annual fee and some dont. The best type of card is one which does not have an annual fee and any additional paid services such as accident insurance.
Many credit card companies deliberately keep such features in fine print and charge the customer for services that they do not use. One of the common services is balance protection program where the consumers minimum payments are insured in case of disability or unemployment. Make sure by calling the credit card company to discontinue such services that charge a premium without your noticing it.
The most important thing to consider when you opt for a plan is the annual income and the ability to pay back. Your credit history will also determine whether or not you are qualified for a credit card. If you do not have any credit history or have a poor credit record then it would become impossible to get a credit card in many of the developed countries in the world.
Another important factor to consider is your lifestyle since most of the credit cards provide benefits such as cashbacks, air miles, or points that can be redeemed for purchasing vehicles. A frequent shopper will benefit more from cashback type of card and a frequent traveler would benefit from a card that offers air miles. However these are long term schemes and the benefits may take years to materialize.
When opting for a personal credit card, customers ought to do their research with utmost care. If a card has a low initial rate, a customer should make sure to notice how long the rate will last, and what the rate will be after the introductory period. Moreover, customers might want to reflect on the effect that starting a revolving line of credit will have on their credit score and credit report.
The crucial part of any credit card plan is the interest rate. It determines how much you will shell out if you make minimum payments or late payments. Usually the interest rate can range from as low as 9% to as high as 23%. It completely depends on the credit card and the company. However the common factor between all the credit cards is that some interest has to be paid if you make cash advances or make late or even minimum payments.
Choosing a low interest credit card is easy but there is always a catch in such plans and these may charge you a very high interest rate if a single payment is missed. Always read the fine print and call the credit card company for any doubts that you have. It is always possible to switch from one credit card to another and to transfer the balance of one companys credit card to another at a lower interest rate.
Credit card plans are best kept simple and opting for a card that has a lower credit limit is advisable compared to a higher one since the ratio of the balance to the credit limit is considered and not the amount itself. Choosing a lower limit credit card with no annual fee and no other paid services attached will improve your finances. An increase in the credit limit is always possible even with a simpler plan in the future if you do not have a high initial limit.
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