If you're like me, your mailbox is usually stuffed with
things like bills...postcards selling some turbo-charged
Internet service...maybe a few magazines...and, of course,
credit card offers.
It's the credit card offers that get you. They're pretty
tempting, aren't they? Whether it's being pre-approved for
$10,000, or the promise of earning free airline tickets,
there's always something that lures us in.
While you might get a few good offers every now and then,
most should be sent right to the shredder. The trick is,
knowing which ones should stay—and which ones should
go.
Be choosy
Keep one thing in mind: if you have a couple of credit
cards you're happy with, try not to apply for more cards.
Each time you apply, it shows up on your credit report. And
that can make you look credit hungry. It may also lower
your credit score.
When you do decide you need a new credit card—or you
are applying for your first one—ask yourself: what
kind of card do you want? You can get one with reward
points. Or miles. Or even a card that helps you save. With
so many cards out there, you don't have to jump at the
first offer you get in the mail. Shop around.
Learn the lingo
You've probably noticed that credit card offers come with
what looks like a lot of legal mumbo jumbo. But these are
the terms and conditions of the credit card, and they
explain what fees and finance charges you could pay when
you use the card. Every card has different terms and
conditions. To shop for the best deal, you need to know
what the main terms mean. Here are some to look out for:
Annual Percentage Rate (APR)—This is the yearly
percentage rate charged when a balance is held on a credit
card. This rate is applied each month that you carry a
balance (the lower APR, the better).
Annual Fee—Yearly fee associated with having the
credit card. Unless you are getting rewards or miles, or
something extra, you may want to look for a card without an
annual fee.
Grace Period—A period of time during which you are
allowed to pay your credit card bill without being charged
a finance and/or late fee. This period is usually 10-28
days.
Introductory Rate (or Intro APR)—A temporary, lower
annual percentage rate that is raised later. Make sure you
know what the rate will go up to after the intro period is
over.
Other fees—Also check for the amount of the late
payment and cash advance fees.
Why wait? Activate
Once you receive your new card in the mail, activate it
right away. Then put it in your wallet or in a safe place.
Otherwise, you may set the card down, forget about it, and
it could end up in the wrong hands.
As you use your card, keep an eye on your bill and the
charges listed. Also, you should get your credit report on
a regular basis to make sure no one else is using your
account. That way, you stay in charge of your credit card.
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TransUnion's TrueCredit empowers consumers to manage their
credit health, providing information on credit-related
issues that range from the significance of a credit report
to identity theft protection. TrueCredit's offerings
include free monthly newsletters & online products,
including credit reports, credit and insurance scores,
credit monitoring, debt management tools and identity theft
insurance services. http://www.truecredit.com/
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