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Understanding Credit Cards before Applying Online

Aug 17, 2007
It is important that you understand all the details of credit cards, including the laws, to help you find the best rates. You will also need to compare companies, since few companies offer more for your money. Notice I said money? Yes, when you own a credit card you will be paying interest rates, cash advance rates, default rates, late fees, and other charges against the balance owed on the card.

Nowadays, millions of people are going into debt by reason of overspending their limits on credit cards. Millions of people everyday makes purchase on credit cards, failing to consider the grace period when the bill amount is due. The grace period on some cards is as low as 20 days, meaning that the cardholder must pay the full balance in 20 days, or else.

If the cardholder neglects to pay the full balance due on the grace period, then the amount rolls over to the following month, making the cardholder pay the APR for the first month, and then the second month. If there are late charges, defaults, or other pending strikes on the cards, then additional fees are often attached to the following bill. If you miss too many payments, you are at risk of loosing your credit card.

As you can see, it is important to understand credit cards, since failure to understand can send you down the river. If you do not have paddles, balance, a boat, and some skill, that river may get rocky tossing you onto the banks of forbidden tolerance. Therefore, when you understand credit cards you are on your way to the next step. If you are applying for your first credit card, and understand that no credit will hinder you, then you may want to apply only for cards that offers you the most potential of getting the cards.

No credit is like having bad credit to some degree. When you do not have credit, lenders will often toss you in the high-risk category. Therefore, understanding that you have the right to be treated as a person with no credit is important. Creditors do not have the right to treat you as though you owe them money. Still, you are different from most; therefore, you must find a credit card that meets your criteria.

One of the biggest mistakes debtors do is apply for a credit card to get out of debt. This is ludicrous, since the person is in debt in the first place, and if they apply for a credit card, they are going way over the edge. The high-risk cards will often charge high interest rates, high initial fees, annual charges, and sometimes-upfront deposits. Some cards will extend the initial fees over to the following month and if the cardholder does not pay fee, then the cardholder is at risk of loosing the card. Furthermore, if the cardholder applies for high-risk cards and is accepted, the cardholder will only get around $250 credit line until the holder proves he can pay his debts. The $250 will not apply until the initial fee is paid in full. This means the cardholder must pay around $200 the first month of card ownership to receive $250 credit, and then if he needs to use the card to survive until the next month, he will repay more for high rates of interest and balance than what he had in the first place. Therefore, credit cards are no way out of debt.

Persons with no credit believe they must establish credit to survive in this selfish world. This is not true. Sure, more and more companies are demanding credit cards, but CASH has always been, and still is the top of the prime for paying for items, rent, etc. furthermore, f you have no credit and apply for a credit card and land in debt, then you are going to wish you had no credit again. As you can see, credit cards are a setup, but they can come in handy if you have self-control. You must also learn responsibility to its max to hold a credit card.
About the Author
Hans Hasselfors is the founder of http://www.SubmitYourNewArticle.com. You may find varied credit card articles in our article directory.
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