Are too many credit card offerings coming through your mailbox and inbox? Choosing the right type of credit card doesn’t have to be intimidating, but it’s your responsibility to know the commitment you’re making. There are specific features that should be clearly stated by the company offering the credit card that you, as the consumer, should be aware of.
Here are five tips for consideration before submitting an application for your first or next credit card:
Your Spending Habits: Are you going to be able to pay the card off every month? Do you plan on carrying a balance on the card? Is this going to be only used for emergencies? When considering a credit card, remember that your spending habits will have an impact on the fees from interest and other penalties that you agree to when committing to a credit card offer.
The Annual Percentage Rate (APR): These rates can vary and creditors can regulate them based on factors such as your credit score, income, assets, current debt load and credit history. Make sure you know what the APR is throughout the lifetime of your card and if it may change due to incentive features like a balance transfer.
The Credit Limit: You don’t want to be in a situation when you are maxing out your credit card, it can hurt your credit score. Make sure the limit is something you are comfortable paying off in full in case of an emergency.
Fees and Penalties: Read the agreement or application very carefully, at times there are fees that aren’t clearly stated upfront that could result in you having to pay more on your bill each month. Common fees may include balance transfers, cash advances, late payments and exceeding your credit limit.
Your Rights: Remember, you have the right to dispute any mistreatment as a cardholder. For more information on filing complaints or submitting a dispute, contact the Consumer Financial Protection Bureau (CFPB) at www.consumerfinance.gov or 855-411-CFPB (2372).