Applying for a credit card is pretty easy, but before you do that, there are few things you should know before submitting your application.
Once viewed with suspicion and caution, credit cards have given us the freedom to buy what we want when we want it – and pay for it later.
Pick up a magazine or newspaper, turn on the TV or log onto the internet and you will see multiple ads by credit card companies urging you to “apply now”.
It’s common for people today to have a group of credit cards in their wallet from different lending companies and there is no doubt that the convenience offered by having that little of plastic makes our lives easier. This is the most cited reason for the stellar rise in the use of consumer credit.
Grace Period
Some credit cards give you a grace period to pay. You might charge something you need that you found on sale and for the next 30 days there would be no interest on that purchase. If you paid it off on payday, it was a great deal.
However, this grace period is becoming harder to find and many companies now charge interest from the date of the purchase. Even so, the sale price may be worth a few dollars of interest if you are able to pay for the purchase within a few weeks.
Merchants With Their Own Credit Cards
One of the best deals around is merchants who offer their own credit cards. Getting the benefit on the deal takes some attention on your part.
Big box hardware stores and major department stores offer their own credit cards that you can use to purchase from that retailer either online or offline. The benefit that makes this type of credit card valuable is the “same as cash” offers you may receive in the mail.
An offer of “90 days same as cash” is not a new concept for retailers. Local appliance shops and furniture stores offered this bonus many years ago. At that time, the merchant often knew the customer personally and would check with the customer’s bank and make sure he had a job.
The same as cash sale was profit for the business owner and allowed a buyer to spread the cost of an item over time without taking out a loan or paying interest.
Some large home improvements have used the same as cash method very profitably. Purchases must be charged to the credit card issued by that store chain and the same as cash may be for as long as one year.
It is a credit purchase, however, and if you do not pay the amount in full before the end of the interest free period you will have to pay full interest on the purchase from the day you bought it.
As these stores commonly have high interest rates of 21%, this can be a significant amount of money for an expensive purchase.
Applying Options
So, how to apply for your first card? Wel, you can apply by filling out a paper application and mailing it in. You can also by picking an online provider and fill out the appliaction without leaving your computer.
You may also choose to apply by phone with a representative leading your through the process. No matter how you apply for a card you should take the time to read the terms you are agreeing to.
When you get your new card you want to use it and enjoy having it – not have unpleasant surprises when the bill arrives.
Now, when you know that applying for a card is pretty easy, you are probably asking yourself whether you should fill out that application and send it away?
If you qualify for one then the obvious answer should be YES! However, if you feel that a credit card would just give you more problems, then I recommend you stay away from any type of credit card until your economy is stable.
