What Your Credit Card Company Isn't Telling You

What's the thing that is most prominent on any credit
card ad? Well, it's the credit card rate (or the APR, as
we know it). The credit card rate is the most publicized
thing in the world of credit cards.

A lot of people just compare the credit card rate of
various credit cards and just go for the one that is
offering the lowest credit card rate (or APR). Credit card
rates are, in fact, one of the most important factors in
the selection of a credit card (though not the only
factor). Therefore, a proper understanding of Credit card
rates is even more necessary.

So, what is a credit card rate or APR? Very simply,
credit card rate is the rate of interest that the credit
card supplier will charge you with on the amount you owe
them. The credit card supplier will charge you an interest
only if you don't make full payments in time.

When you receive your credit card bill, it specifies the
full amount you owe the credit card supplier. It also
specifies the minimum payment that you must make (by a
particular date), in order to avoid incurring a late fee
and other inconvenience. You have the option of making
either a full payment or just the minimum payment. If you
make a full payment (by the due date), you are not charged
any interest.

However, if you decide to go with the minimum payment or
some amount that is lesser than the full amount, the
credit card supplier will charge interest based on the
credit card rate and the balance amount. This credit card
rate is the interest rate that you agreed with them at the
time of applying for the credit card. The credit card rate
or the annual percentage rate, as is obvious, is an annual
interest rate. The credit card suppliers use this annual
credit card rate to calculate the monthly credit card rate
and then they calculate the interest on the balance amount
that you owe them.

The balance amount here is simply = Full amount -
(payment made by you). This interest is added to your
balance for the next month (at the time of next billing
cycle). If you again make a partial payment, the new
balance is calculated again and the credit card rate
(monthly one) applied to it for calculation of new
interest; and it keeps going on and on until you make the
full payment.

That's how credit card rate acts in this vicious circle.
Hence, credit card rate is termed as the most important
consideration in choosing a credit card.

Are you pondering on whether you should apply for a
credit card? Well, the answer quite simply is - 'Yes' -
you should apply for a credit card (this is true for most
people). The credit cards seem to have transformed our
lives. In fact, one can term credit cards as a revolution.
Today, you find ads in TV/newspapers/website/shops and
almost anywhere and everywhere; all asking you to apply
for a credit card. When you look around, you see that most
people have credit cards. In fact, most people have
multiple credit cards.

Everyone seems to apply for a credit card. So, why should
you apply for a credit card?

There are a lot of benefits associated with credit cards;
however, the most important benefit is the convenience
that they offer. For most people, this is the prime and
the sole reason that instigates them to apply for a credit
card. This wouldn't have been the case a few years ago,
when not many merchants accepted credit cards. However,
today, most merchants do accept credit cards.

So, instead of carrying a lot of cash on you (which is
both inconvenient and unsafe), you can just carry a small
piece of plastic with you. Moreover, you get interest free
credit i.e. you don't have to pay the bills till the next
monthly billing cycle. So, you can buy now and pay later
(when your salary arrives) - a great reason to apply for a
credit card. To add to that, there are certain merchants
that offer interest-free instalment payment plan i.e. you
can make a big purchase today and pay for it in
instalments on your credit card.

So credit cards works as instant long term loan too (not
just a monthly loan). Yet another reason to apply for a
credit card is the discounts on shopping. This is made
possible by the tie-ups between credit card companies and
the merchants. So credit cards offer many benefits.

There are various ways in which you can apply for a
credit card - you can apply for a credit card in person,
you can apply for a credit card on the internet and you
can apply for a credit card on phone too (by asking the
representative to meet you).

You will as such be approached by a lot of sales
representatives, all asking you to apply for a credit card
with their company.

To apply for a credit card, you will need to fill-in a
credit card application form (which is easy to fill and
the representatives of the credit card company will assist
you in that).

When you apply for a credit card, you basically enter
into an agreement with the credit card supplier (the form
that you fill when you apply for a credit card is actually
an agreement).

After you have submitted your application, the credit
card company conducts certain checks to determine your
credibility; and if everything is fine, you receive the
credit card.

So, applying for a credit card is easy and to apply for a
credit card or not to apply for a credit card is a matter
of personal choice. However, for most people who don't
have any credit card, the recommendation is "Apply for a
credit card".

Tell those debt collectors - "NO!" Go to
Credit Consolidation Services