All Credit Cards Are Not Created Equal

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					All Credit Cards Are Not Created Equal

The best credit card is entirely dependent on what it will be used for.
However, there are three basic principles that all card seekers should
abide by; never open a credit application that limits your buying power,
choose from a well-known company, and always read the fine print before
signing on the dotted line.

A sales person may tell you that a store credit card is a great way to
establish credit, but this is a fallacy. Store credit is limited to that
specific retailer, and possibly their sister stores if you're lucky. This
kind of limitation does nothing to boost your credit score. Also, store
credit cards usually have an interest rate greater than 20 percent, and
no grace period on purchases. This means that you start accruing interest
the second an item is bought. Most major credit cards have a 30 day
standard grace period before any interest is applied on purchases.

Before looking anywhere else; research opening a line of credit through
your own bank. Having a card through your bank is the ultimate in
convenience. Many banks let you connect your card to your debit card as a
safety net, should your account ever be overdrawn. The overdrawn amount
will simply be added to your credit card balance which could save you
from non-sufficient fund fees.

If opening a card application through your bank is not an option, keep in
mind that the best credit card offers come from reputable banks, and
credit unions. A good rule of thumb is, if you don't recognize the name
of the bank; don't open a line of credit with them. Lesser known
companies typically charge annual fees on top of a high interest rate. An
annual fee is charged every 12 months by a credit institution for the
convenience of the card. But if the card doesn't offer special benefits
such as airline miles, or a percentage of cash back on purchases, then an
annual fee is not worth the mere use of the card.

Reading the fine print is a long and laborious task, but with credit
cards it is essential. Many credit companies have enticing offers, such
as zero interest for the first three months. Zero interest for the first
three months is great, but what is the interest on purchases after the
first three months? What are the fees if you go over your limit, or make
a late payment? What might cause your interest rate to go up? It is
important that you know the answers to these questions before opening any
credit application. Changes to your interest rate, or exorbitant penalty
fees can greatly increase the time it takes to pay off your credit

Without the proper knowledge; credit cards can go from a wonderful
convenience to a stressful burden. Following these simple guidelines will
help increase your credit score, and prevent you from accumulating
unnecessary debt.

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