The one advantage of credit cards is that you can make your purchases, among other things, without the need to have cash in your pocket. You can either apply for a credit card through a bank or through a number of financial institutions. It is very convenient to have one, especially in emergency situations. Using your credit card judiciously enables you to improve your credit rating, which further helps when you wish to make more expensive purchases.
However, before you apply for one, you need to know the types of credit cards there are, and the one which will be suitable for you.
Credit Card Types:
The common credit cards are of three types:
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Secured Credit Cards
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Unsecured Credit Cards
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Pre-paid Cards
When you apply for a credit card you need to decide which type you are applying for.
Applying For A Card:
You need to apply for a secured credit card if your credit rating is low, say 620 and less. In fact, the credit card issuers may insist you apply for this card. You need to have a deposit in the account and your credit limit depends on the deposit you have. In this case you are spending your own money. You will need to pay the balance in full if you do not intend to pay a finance charge.
The credit cards you see people use, traditionally, are the unsecured credit cards. The credit limit on your card is decided by the card issuer. It could be any amount – $500, $3000, or even $10,000. You are in effect using the money belonging to the card issuer and it is as if the issuer has loaned you the money. The pre-paid card is just like the secured credit card. The credit limit you enjoy depends on the credit in your savings account. In this case, though you are using money belonging to the card issuer you are securing it with the cash in your savings account. Once you have decided on the type of credit card you wish to apply for, this is what you do:
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You can either approach the bank or the issuer personally, or through online sources
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Applying online is the easiest way, and is also the fastest
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Find out the different features offered by various credit card issuers
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Check out the fixed, as well as the fluctuating rates of interest
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Check out what credit limits they are offering, what is the APR, what grace periods are on offer, what penalties – if any, whether there are any hidden or implied charges
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Once you decide on the issuer that suits you, you can now apply online
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You may be required to furnish personal details, such as your social security number, the number of your driver’s license, proofs of your date of birth and residential and/or official address
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Double check the information you have furnished and then click the required button
You can apply for more credit cards if your financial position is reliable.