Credit Card Guide

The first step in selecting a credit card is to understand and know your spending habits, anticipated use of the card, and how good your credit is.

Will you pay off your balance in full every month?
If you pay monthly bills in full each month, the interest rate a card charges may be of less concern to you. Instead, reducing the amount of the annual fee or other fees will be more important. In addition, you should consider the cards that offer more benefits and rewards such as rebates, extra warranty protection or airline mileage bonus. Also make sure you card offers a grace period for paying your bill without paying a finance charge. Your best bet is a card with no annual fee and the kinds of rebates or rewards you expect to use the most.

If you don’t pay the balance off every month, that means you will carry a balance...
If you carry a balance, you will want to consider cards with low interest rates. The Annual Percentage Rate (APR) and the method of computing your balance are key factors. Look for a card with a low interest rate and the right mix of rebates or rewards to justify any fees.

Your credit rating...
Do you know how good your credit rating is? Credit card issuers determine whether your credit card application will be accepted and what kind of credit card terms you'll receive depending on your credit rating. You'd better check your FICO credit score before applying for a card, since the credit card company will do it as well. Your FICO credit score is in your credit report. You can raise your credit score if you find any reporting errors and get them corrected before you apply for your card. Although each card issuer has different standards, the following is a general guideline based on your FICO score.

FICO Score Credit Rating Above 730 Excellent Credit 700 - 729 Very Good Credit 670 - 699 Good credit 600 - 669 Fair credit 550 - 599 High risk 515 - 549 Limited credit availability Below 515 Pay cash (Bad credit)

Based on your credit score check which card might be best for you:

If you have good credit:
Low Interest Credit Cards
Low Introductory Rate Credit Cards
Reward Credit Cards

If have fair to high risk credit, i.e., your credit is not as good but not as bad, select from the following cards:
Unsecured Credit Cards
Secured Cards

If you have high risk credit:
Secured Credit Cards
Prepaid Credit Cards
Gas Cards
Retail Cards

If you have no credit, i.e., haven't established your credit:
Secured Credit Cards
Prepaid Credit Cards
Gas Cards
Retail Cards                                           NEXT PAGE                                           Top...