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What are the various aspects to consider before signing up for a credit card?

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With the economy showing signs of recovery, a number of banks and credit unions are willing to loosen their norms in regards to issuing credit cards for new customers. A couple of years ago the number of credit cards offers being sent to customers reduced to a trickle. But, now these deals are back and are flooding the inbox and mailboxes like never before. Customers now have a lot of options that they can choose from. But not all deals are as rosy as they are made out to be. It is imperative to exert some care and caution which applying for credit cards so you do not end up losing money hand over fist.

First of all, you have to consider the type of credit card you are applying for. It is a rewards cards, travel rewards card, student cards, etc. While some cards such as student cards are worth applying for if you are a student, it is important to be careful about signing up for air miles cards and other travel rewards cards since they may have complex terms and conditions. You have to choose the card based on how you intend to use it. If you choose a travel rewards card if you do not travel often, it will not be a wise choice.

The annual percentage rate offered by the banks is another aspect to look into. Do not be carried away by the promotional offers. It is imperative to remember that they last only for a short span of time. Therefore, take a look at the offer details and the interest rate once the offer expires. Also, if the bank if offering an interest free period for a few months, find out if the promotional offer is only for balance transfers or purchases or both.

You should also be aware of the fees and the grace period offered by the credit card you intend to sign up for. Though the CARD Act has made the fee structure more transparent than before, you should be aware of what you are paying for. Grace period is the time offered by the bank to repay the money without incurring any interest rate. This is applicable only till the time you do not carry over the outstanding balance to the next billing cycle. Knowing this period will help you pay off the balances in full each month without any interest.

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