The Facts about Applying for Credit Cards
Before you rush off and start applying for credit cards online there’s some facts you are going to need to know. The first thing you need to know is your personal information is secure, most people think there’s too much risk when you apply for a credit card online but the fact is by completing a secure application online your personal information is actually safer than handing it to a representative in person because your personal financial information is handled with several layers of security.
The next thing you need to think about when you are applying for credit cards is your credit score is lowered slightly each and every time you submit an application. Credit card companies will look at your credit history to determine the APR available to you and also determine is they will issue you credit based on your credit score. So it’s important to choose the credit card offer that’s right for you.
So let’s take a look at the various credit card offer categories and who should or should not apply for a particular card to help your choice of credit card easier.
Credit Cards for Good to Excellent Credit
If your credit score is good to excellent then you’ve got many more choices of credit card offers to apply for compared to people with bad credit but don’t worry if your credit score sucks because you can still get a credit card and in some cases use your credit card that’s been designed for people with bad credit to start rebuilding your credit score so you can take advantage of the card offers that give you perks like travel or cash back rewards.
Balance Transfer Credit Cards
Credit card companies have created offers to entice you into doing business with their company by offering 0% balance transfer credit cards which means you’ll be able to transfer your current credit card balance and save on costly interest payments for a limited period of time.
Balance transfer credit card offers are best for people that have an outstanding balance owing on an existing credit card because you can save yourself a lot of money by eliminating the accruing interest.
Be forewarned though that once the introductory 0% balance transfer period expires you will once again be charged interest. We recommend that if you apply for a 0% balance transfer credit card that you make payments greater than your minimum balance owing every month to help you eliminate credit card debt.
Cash Back Rewards
There are credit cards that offer cash back rewards based on your spending. Credit cards with cash back rewards are best suited for people that are disciplined credit card spenders, people that pay their balance in full each and every month.
If you’ve got control over your personal finances and want to earn some extra cash then a cash back rewards card is right for you.
Low Interest Credit Cards
We’ve already talked about 0% balance transfer credit cards but what you need to watch out for on balance transfer offers is the ongoing APR, you might be surprised to see the ongoing interest rate could skyrocket beyond belief.
If you’ve got good to excellent credit and tend to carry a small balance on your credit card each month then you should consider applying for no frills low interest credit cards.
These are credit cards that don’t offer incredible perks or a 0% APR initial offering and simply have a low APR from the day you get your card.
No Annual Fee Cards
If you’ve read the fine print on a lot of credit cards with rewards you’ve probably noticed several of those cards give you rewards with a price attached via an annual fee. Quite often the annual fee you are charged on your credit card statement outweighs the rewards and perks you earn.
Annual fees are applied directly to your statement on a set date each and every year and can come as an unwelcome surprise. If you hate paying fees to be a customer of a financial institution then you should get a credit card with no annual fees.
Small Business Credit Cards
Small business credit cards typically offer extra perks and services for small business owners and entrepreneurs. If you are a small business owner it’s important to get a business credit card to avoid intermingling funds with your personal credit cards.
By applying for a small business credit card you’ll likely save any annual fees on accounting because once you start to intermingle funds your accountant is going to need to do more work to get your books done right.
Student Credit Cards
Financial institutions realize that students are hard at work studying to earn lots of money upon graduation and the banks want to have you as a customer from the day you launch your career to the day you retire.
Student credit cards are typically low limit credit cards with decent interest rates and on occasion you can earn rewards.
Credit Cards for People with Bad Credit
If you have bad credit you can still get a credit card but your options are limited but before you apply for a credit card for people with bad credit we recommend that you order a free credit report and scour your credit score report with a fine tooth comb to ensure all the items are accurate. Quite often people have lower credit scores than they should have because of inaccurate credit reporting or because they’ve been a victim of identity theft.
Prepaid Credit Cards
Prepaid credit cards are perfect for both people with bad credit and folks that want the conveniences of having a credit card but want to avoid getting enticed into credit card debt.
Prepaid credit card offers are essentially the same thing as a debit card only they have a Visa or MasterCard logo and are used exactly the same as a regular credit card.
Please take the time to submit your questions and comments and let us know what you think about a credit card you have in your wallet right now and submit a review.