Credit Card Lowdown: Credit card considerations

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Credit card considerations

Different credit cards offer different terms so you need to consider how you plan on using your card. If you intend to pay in full each month, annual fee and other charges are key considerations if there is a grace period for purchases. For cash advances, grace periods are mostly not valid even if they are for purchases. For taking your time to pay for purchases, the APR and balance computation method are major factors.

The credit limit could also be a consideration as may wide acceptance of the card and the services and features offered by the plan. There are affinity cards which are all-purpose and sponsored by professional organizations, college alumni associations and travel companies. Usually a portion of the annual fees or charges is donated to the sponsor or you may be entitled to free travel and other bonuses.

Find out if there are special delinquency rates. Cards with low rates for timely payments may charge a huge APR for a number of delays in a specific period. The rates could be almost 20 percent.

According to federal law issuers cannot send you cards you never asked for. But renewal or substitutes cards may be sent without request. They may also send you applications and solicitations or ask you over the phone.

The day your payment reaches the issuer, it must be credited to your account. This doesn’t apply only if it has not been done according to the prescribed procedure or if the delay in crediting will not incur a charge.

On making any return or paying more than the balance, you can keep the credit on your account or request a refund. Refunds have to be issued within seven days of receiving your request. A credit remaining in your account for over six months should be refunded by the issuer. Credit card info.com reports:

Credit terms vary among issuers. When shopping for a card, think about how you plan to use it. If you expect to pay your bills in full each month, the annual fee and other charges may be more important than the periodic rate and the APR, if there is a grace period for purchases. However, if you use the cash advance feature, many cards do not permit a grace period for the amounts due - even if they have a grace period for purchases. So, it may still be wise to consider the APR and balance computation method. Also, if you plan to pay for purchases over time, the APR and the balance computation method are definitely major considerations.

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January 15, 2006 in Tips & Advice | Permalink