Choosing the Right Credit Card

Don’t sign up with the first offer that you get in the mail. Shop around. Read the contract carefully to make sure you understand the terms. Note and compare the important features of each card, including the:

  • Annual percentage rate (APR): This is the interest that you are charged on any balance that you carry over, or do not pay off, each month. If you pay off your balance in full every month, the APR is not important, but it doesn’t hurt to look for a card with a low or fixed-rate card just in case. If the card comes with a teaser rate – a low or no interest rate for a temporary period of time – don’t forget to check what the interest rate will be once the teaser rate expires.

Apple Federal Credit Union offers the eXtras Student Platinum Visa® credit card that has a low, fixed APR, $1,500 credit limit, no annual or balance transfer fees, and 24/7 fraud monitoring.

  • Credit limit: The credit limit is the maximum amount you can borrow at any given point in time. Having a higher credit limit is better for your credit score, but if you are worried you will overspend, it may be a good idea to look for a card with a lower limit.
  • Fees: It is standard for creditors to charge a fee for paying late or going over the credit limit. Some cards also charge an annual fee.
  • Rewards: Some credit cards offer perks, such as cash back or gift certificates, that come with using the card.

Keep it Simple

One card is all that you need to start building a good credit history. Plus, it’s easier to monitor your spending and pay one bill each month. If you happen to find that you get into trouble with your card by accumulating an outstanding balance, seek help from a family member or consumer counseling agency. A little help can eliminate a huge debt later down the line.

There you have it. The basics to credit card ownership. If are serious about using a credit card wisely and paying on time then you’re ready to find a card that best fits your lifestyle.

 

Stay tuned for our next posting How to Choose the Right Credit Card Limit next week!

 

 

Are You Ready for a Credit Card?

What many first time credit card users don’t realize is how beneficial proper credit card management can be. A credit card can be a great first-step to building a positive credit report.

What many first time credit card users don’t realize is how beneficial proper credit card management can be. A credit card can be a great first-step to building a positive credit report.

Having an excellent credit report and score makes you more likely to be approved for credit in the future and receive a lower rate (which will come in handy in if you want to buy a house someday), but it may also be easier for you to rent an apartment, get good rates on your insurance, and perhaps even get a job (yes, some employers check your credit).

It’s no accident that many of us WANT a credit card. After all, large companies and financial institutions pay a lot of money for flashy advertising.

It’s up to you to take a moment and think about if you really NEED to pump your wallet full of plastic. Ask yourself:

  • Can I currently pay for anything that I need with cash or a debit card?
    If so, you may not need a credit card.
  • Do I pay my existing bills on time?
    If you do, commit to always paying your credit card balance at the end of the month to minimize interest charges. This helps build your good credit history that will help you on later in life when getting loans or applying for a mortgage. Remember, your payment history is one of the largest factors in determining your credit score and this is a score that will follow you for the rest of your life.
  • What will you use the credit card for?
    Avoid using your credit card to finance your education, pay for living expenses or for purchasing things that you really do not need. A good way to decide if you should use the card is to ask yourself if you would pay for item(s) if you did not have the credit card. Deciphering what you want and need will eliminate a bunch of superfluous costs that can accumulate quickly when you are not paying attention. In the end, you will have to pay for whatever you charge and if you cannot do it when the bill comes in, you will spend more money than intended on those purchases with accumulating interest charges.

Stay Tuned for our next posting Choosing the Right Credit Card next week!

Source:
Use Credit Cards Wisely in College/Jeremy Vohwinkle http://financialplan.about.com/od/students/a/studentcards.htm

Credit Card Secrets You Can’t Live Without

You want to know the secret to successfully managing a credit card? I’m happy to tell you, it’s really not a secret. It basically boils down to simple common sense

You want to know the secret to successfully managing a credit card? I’m happy to tell you, it’s really not a secret. It basically boils down to simple common sense.

  • Stay out of debt.
    It doesn’t take long for a few purchases to add up to hundreds, even thousands, of dollars. Don’t charge more than you can afford to repay the balance when the bill arrives.
  • Pay it off.
    If you do get into debt, commit yourself to getting debt free as soon as possible. Pay more than the minimum, and don’t charge more on the cards until your balance is at zero.
  • Pay on time.
    If you miss a payment, your credit score can take a quick and hard hit. Furthermore, you may be charged a late payment fee and the late pay may stay on your credit report for years.
  •  Limit the number of cards you have.
    (2-4 is usually a good number.) The more open credit lines you have, the more you may be tempted to spend beyond your means. Also, applying for credit too often can hurt your credit score.

Stay tuned for our next posting Are You Ready for a Credit Card next week!

Source:
“The Road to Financial Independence: A Guide for 20-Somethings” BALANCE™ Financial Fitness Program. <https://www.balancepro.net/roadtoindependence/index.html>. 08 February 2013.