Finding The Right Credit Card For You Can Be A Difficult Choice That Throws Up Many Question

Category: Finance, Credit.

Finding the right credit card for you can be a difficult choice that throws up many question. What is a credit card?

We ve captured those below all in one place. A credit card is a small plastic card with a magnetic strip that is issued by a bank or other financial institution. What kinds of credit cards are available? It authorises card holders to purchase services and goods on credit. There are many kinds of credit cards available, but they break down into two different main kinds. What s the best kind of credit card? Charge cards allow you to charge items to your account but expect that you will pay off your full balance each month, Credit cards also allow you to charge items to your account, but let you pay for your purchases over time and charge you interest on the outstanding balance.

There s no single answer to that question, because it depends entirely on your circumstances. In general, most people prefer a credit card that offers a low APR- but that may not be the best choice for someone who pays their balance in full each month. Only you can decide whether you re better off with a low interest card, one that offers cashback or rewards, or some combination of those. What is an APR? Credit card companies make their money in many different ways. APR stands for annual percentage rate.

One of those ways is by charging you interest on the money that you borrow to buy things. If your APR is 12% , for instance, you ll pay 12% interest per year on �10 How do I get a lower APR? The annual percentage rate is the percentage of your outstanding balance that you ll be charged in interest charges. The APR that you re offered is completely dependent on your credit score, the higher your credit score, the lower rate of interest you ll be offered. If you pay you bills on time and keep your accounts up to date, you ll qualify for a lower APR in time. If you have a record of paying your bills on time, you ll be offered a credit card with a low APR. What s a secured credit card?

You simply deposit a sum of money into a bank account with the bank that issues your card. If you can t qualify for a regular credit card because of low or no credit, a secured credit card may be the solution that you need. Your spending limit will be a portion of that deposit. If you make regular payments when they re due, the issuing company will eventually approve a regular credit card for you. That money will remain in the account as security in case you don t pay your account. How do I compare credit cards to decide which one is best for me? You can compare credit cards against each another at comparison websites where you ll find all the information you need to compare credit offers from dozens of UK companies.

There are many different standards of comparison when you re choosing a credit card- interest rates, finance charges, annual fees, penalties and late fees- even how your interest charge is determined. How do I apply for a credit card? From the comparison websites you can just click on the offer that you ve chosen to fill out a short application. Applying for a credit card online is easy, too. In many cases, you can have an answer within minutes.

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