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Research: Understanding credit cards before applying for them - Credit-Land.com

Credit card application process has become very easy these days. All you need to do is look for the right credit card and then apply online. Your credit history will be checked almost instantaneously and you would be informed whether you qualify for the credit card or not, although the actual process of receiving the credit card will take slightly longer. Although a lot of people are tempted to apply and possess multiple credit cards, it doesn't augur well for them in the long run. It is important to understand the credit cards before one chooses to apply for them. Here are some things worth noting about a credit card.

Credit card expenses are debts

A lot of people tend to find it easier to spend on a credit card compared to paying with cash. After a period of time they forget that the expenses on a credit card have to be paid off as well. Every time you swipe a credit card, you are incurring a debt. Although, you have some time to pay it off, you must remember that you will have to pay an added interest on this debt, once you cross the due date. Hence, before swiping your credit card, you have to consider whether or not you can repay the debt before the due date. If you doubt it, you must abstain from incurring those expenses.

Credit card rewards are sometimes marketing strategies

Not all credit cards are rewarding. Some rewards are marketing strategies which are aimed at making the cardholder spend more. Rewards, such as loyalty points that can be redeemed only after a certain limit, milestone discounts that can be benefited from only after reaching certain minimum shopping limit and opening bonuses that can be cashed in only after reaching milestone limits on the card are all marketing strategies. Cardholders have to be particularly careful about such credit cards. Therefore when you look for credit cards you need to select the card where the reward actually helps you save money instead of making you spend more.

There are many different types of fees associated with a credit card

Card holders have to be aware of all the different types of fees associated with the credit card and read the fine print. Knowing about penalties like late fees, over the limit fees for exceeding credit limit, cash advance fees for withdrawing from ATMs, application fee for initial activation, annual fees, etc. should help understand the pros and cons of the card better.

Disclaimer: This editorial content is not provided or commissioned by the banks or credit card issuer(s). Opinions expressed here are the author's alone, not those of the banks or credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the banks or credit card issuer(s). Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult with the issuing bank of the card or account for terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are accurate as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.