Tips before applying for a credit card

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Credit cards are tempting. They allow you to make purchases today and pay for them later. And like loans, using a credit card helps you build your credit history. Applying for a credit card is somewhat like applying for a loan; The process requires some thought to be put into making sure you get the best deal that meets your needs before you even begin. Remember to consider the following before applying: It affects your credit score.

Whenever you apply for a credit card, an inquiry appears on your credit report. Too many inquiries in a short period of time can lower your score by 10 to 20 points, depending on your particular credit history. This may cost you dearly. If you apply for a credit card without doing your homework, it could end up costing you a lot of money. For example, let’s say you apply for a credit card with a processing fee of $99 and an annual fee of $50. Just by applying for and being accepted for that card, you’re paying almost $150 without making any purchases!

What will you be using the credit card for? Be sure you know how you’ll be using your credit card and what you’ll be buying with it before applying. Keep in mind that every time you use the card, you get into debt which you have to pay back with interest. You need to shop around. Before applying for a card, ask what interest rate and credit limit you qualify for and shop around for the best possible deal. You want to research the best options before you commit yourself to any card.

Make sure you understand the terms. Before applying for and accepting the card, make sure you understand the terms and conditions of the scheme. read the fine print. Ask yourself if you can afford the card. What are the rules for the card and are you free for breaking these rules. Pre-approved credit cards can be complicated. Pre-approved offers tell you that the credit card company has looked at your credit report and determined that you Strength Be eligible for the interest rates and credit limits offered. However, whether you’ll actually get the best rates depends on your income, employment and credit history. Therefore it is important that you read the credit agreement carefully Earlier You sign on the dotted line – there may be limits or conditions that are not clear in the ad.

tip: Get a copy of your credit report before you apply for credit http://www.annualcreditreport.com, Watch them carefully. Mistakes on credit reports are common, and just one mistake can lead to a credit card or loan decline. If you find any error, take necessary steps to remove it. For more information on how to dispute errors, visit www.yourmoney.accion.org [http://www.yourmoney.accion.org/],

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