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Credit Cards - What You Need To Know

   Choosing the Right Credit Card

   How to Open your First Credit Card

   Common Credit Card Mistakes

   Choosing the Right Credit Card

It is easy to be overwhelmed when shopping for a new credit card. There are literally thousands of cards to choose from. But finding the right credit card for you doesn't have to be difficult. Knowing what to look for can make the process a cinch:

1. Types of cards – Are you looking for a student credit card, a business credit card, a rewards credit card? The first step is to decide what type of credit card you need. If you are working on improving or building your credit, try a secured credit card. If you have good credit already, find a rewards card that can earn you prizes for using it responsibly.

2. Annual fees – Look closely at the terms and fees disclosure for each credit card offer. All types of credit cards can sometimes include a hidden annual fee. Avoid cards that charge this fee unless you are sure the benefits would outweigh the costs.

3. Interest rates – You should also investigate what APR's are offered on the credit card you want. See if there is a 0% introductory period and what the APR will be after that period passes. Most credit cards have rates in 15% range, but some are as high as 30%. You should also take a look at the balance transfer rates if you are considering moving your debts to the card.

These three criteria can help you narrow down your credit card search considerably. Remember, it helps you credit scores to keep these accounts open for a long time. Be sure to pick a credit card that you will want to keep open for at least a few years.

   How to Open your First Credit Card

Opening your first credit card account can be exciting. But for many people it is also a scary and sometimes frustrating process. Establishing your credit doesn't have to be hard. Here are three tips to make opening your first credit card easier:

Tip 1: Choose the right type of card – Opening your first credit card is a snap if you choose an account designed for new borrowers. If you have no previous credit history, a secured credit card may be the best choice. This card requires a deposit as "collateral" for the credit limit but works much like a basic credit card in every other way. College and university students will be easily accepted for a student credit card even with no previous credit history.

Tip 2: Read the fine print – Now that you have narrowed down your search to a certain type of card, you should investigate each offer more closely. Read the "terms and conditions" section of the offer to see if there are any annual fees, strange charges or high interest rates that may make the card expensive to use. You should also make sure that this first card will report your account information to all three credit bureaus (Equifax, Experian and TransUnion).

Tip 3: Apply for one card at a time – Be patient when applying for a new credit card. Submit one application at a time and wait up to three weeks to hear back from the company. If you apply for multiple accounts all at once you could end up with more cards than you wanted. If you are turned down for a credit card, the creditor will send you a letter explaining why you were rejected and will give you instructions for ordering a free credit report.

You're on your way to establishing good credit! Just remember to use your new credit card responsibly. Keep those balances low and pay your bill on time each month!


   Common Credit Card Mistakes

How you manage and use credit cards has a major impact on your credit scores. The following common credit card mistakes can damage your credit standing if you are not careful. Learn how to avoid these credit blunders:

1. Maxing out a credit card – Having a high amount of credit card debt in relation to your credit limits can bring down your credit scores.
2. Avoiding credit – It's best to have 2-6 open and active credit card accounts on your credit reports. If you don't have any credit cards, your credit scores can drop.
3. Making late payments – Regularly missing credit card payments can harm your credit scores for up to seven years.
4. Closing old credit cards – Closing credit card accounts can damage your credit scores. Especially, if you are closing the oldest accounts on your credit report.
5. Accepting store credit cards – These types of credit cards are usually not worth the 10% discount. Remember, each card you open will appear on your credit history for at least seven years.

Don't make these credit mistakes! Instead use your credit cards responsibly and you'll see your credit scores improve over time!


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