Not yet registered? Create a OverBlog!

Create my blog

A guide to applying for credit cards

Credit cards are shiny platinum cards issued by a bank or building society and are forms of borrowing. The majority of us have seen one of these cards in our purses. However, they are not always good news. The following article is a guide to help you understand credit cards in more detail and what you need to consider when thinking of applying for one.

The credit card idea

Credit cards are often used for purchasing items, for cash withdrawals and balance transfers. However, although they give that initial buzz of financial independence and financial freedom to buy whatever you want, they do come with a catch. Interest rate All credit cards have an interest rate and this is an important element to consider when you want to apply for a credit card or for a visa card. Credit cards APR varies from bank to bank and it is mandatory for the lender to display this information before any transaction is made. This article discusses the advantages and disadvantages in applying for credit cards so that you fully understand both sides.

Positive points

Advantages On the positive side, many banks and building societies will offer interest free charges or 0 interest cards for a fixed period of time and on certain transactions. Such cards would include 0% balance transfer credit cards which offers free balance transfer from credit card to credit card for a fixed period of time. Additionally, you have the option of 0% purchase credit cards that have no interest charged on the purchases you make. The amount of interest you will be required to pay for having your credit card will be displayed as APR or annual percentage rate and usually ranges from 6.9% typical APR to 39.9% APR. This will vary according to the amount you borrow. The main advantage with credit cards is the increase in spending power they offer. They can help with emergencies and can help younger people develop stronger codes of ethics when faced with credit cards. When there is low APR credit and when credit cards are used appropriately, they can be a short-term solution to a long-term problem.

Negative points

Disadvantages There is the tendency to buy excessively without paying attention whether they will be able or not to pay the debt accumulated when purchasing with credit cards. In turn, this leads a lot of people into debt and finally to be unable to repay, causing problems with the economic balance and with personal credit too. The real problem with credit cards is that the owed amounts must be paid back and the more you spend, the more you need to pay back. Therefore, one needs to control ones credit card spending.

Same category articles Banking

Nationwide online banking: The facts

Nationwide online banking: The facts

Nationwide is the UK's largest building society. They offer new and existing customers a wide range of financial products, including Nationwide mortgages, investments, insurance products, credit cards, savings and current accounts. Better still, you can manage most of your arrangements with online banking. Find out the pros and cons of managing your accounts online.
All about: First time mortgages

All about: First time mortgages

First-time mortgage home loan buyers face an uphill. They are about to get indebted in an uncertain economy, and are unsure of how different mortgage lenders will treat their application.
Where to find competitive boat loan rates

Where to find competitive boat loan rates

As most people do not have ten thousands of dollars stashed away, the majority of person will need to think about boat loans before they buy a boat. As marine loans can be expensive, it is important for buyers to look around for competitive boat finance interest rates.
What is a merchant cash advance?

What is a merchant cash advance?

This short and informative article gives you information on how you can borrow and repay a merchant cash advance. However, before you commit, learn the advantages and disadvantages of such a 'loan', explained in detail below.