Credit Card Applications, the Good the Bad and the Ugly

When the economy was booming, one could find stacks of credit card applications in the mailbox, almost on a daily basis. There seemed to be one good deal after another available for people with practically any credit score. However, during the recession there were many people who were forced to default on credit card loans, so banks and other financial institutions became wary of making such offers to just anyone. In addition, new rules that apply to credit card companies caused them to make changes as well. As the economy improves, people are beginning to see a few more offers for credit cards popping up in the mail. There are many different types of credit cards available.

Low Interest Rate

When looking at the credit card application that you received in the mail or accessed online or in-store, it is important to determine what type of card you are applying for. A low interest card will offer a fixed rate APR that is lower than the going rate. This can be an advantage to someone who is looking for a way build credit without paying high interest rates. The disadvantage is that these cards often come with high yearly fees, so shop around for the card with the lowest annual fee charge.

Low Introductory Interest Rate

This type of credit card is similar to the low interest rate card, but the rate is only good for a specified or introductory period of time. After that time period has passed, the full interest rate applies. This rate is often in the form of a 0 percent APR and may be offered for new purchases or for balance transfers. Often the rate is only good for a period of six to eighteen months. The advantage is that this could be a great way to finance a large-ticket item that you plan to pay off within the introductory time period. The disadvantage is that if you don't finish paying it off during the low interest period, you will end up with a much higher rate for the duration of the card.

Balance Transfers

A card that allows a balance transfer at a low interest rate can be very advantageous if the current card's interest is too high. If your credit score is within the good range, you may be able to find a card that allows balance transfers for a low introductory rate. Just remember that if you carry a balance past the introductory date you will again have a high rate on the balance.

Student Credit Cards

Many companies offer students credit cards as a way to get them to be loyal to their brand early on. They feel that college students are on their way up the ladder to making a good salary and want to get in on the ground floor. It is important for students to remember to carefully read through the terms on the card so that they can maintain good credit. Early credit blunders are deleterious to one's credit standing.

Business Credit Cards

When a business has an excellent credit record, it is not too hard to find credit card offers for business cards. Small businesses or those that are just getting started may find it more difficult to locate a credit card that works for them.

Bonuses attached to Credit Card Offers

· Airline Miles - many companies offer a point system where you earn points based on how much you spend when you make purchases with their card. When the points have accumulated and reached a given level, awards such as airline miles are available to the consumer.

·Gas Rebates - these cards offer discounts or rebates when you use them to pay for gasoline. People who do a lot of driving, whether for work or for pleasure can benefit from these rewards

· Other bonuses - many card companies offer gifts when the customer reaches a specified point level, whether they are gift vouchers, pre paid debit cards, or other specified goods.

When filling out a credit card application it is important to read the terms. If one does not follow the terms, interest rates could go up without your knowing it and additional fees could apply. It can also be easy to fall into a credit card trap and spend more than one actually has because one has available credit. This can destroy your credit for the future. However if you act responsibly, you can use credit cards to build up your credit score.

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