What You Should Know About Your Credit Card
Executive Summary By Manisha Thakor

Credit cards can be your friends or your foes, depending on how you use them. If used for pure convenience-to keep from having to lug around wads of cash or to keep track of what you spend where-they are your friends. Use them without an understanding of their true potential to create financial shock and awe, and they are a foe like no other. To help you keep your relationship with your plastic a healthy one, here’s a quick check-list of things you should know about your credit card.

1. Having too many credit cards can cause you to become financially obese

The ideal number of credit cards is two-one for primary use and one for a back up. If you have work-related expenses that you get reimbursed for, a third one to help keep the book-keeping straightforward is also ok. More than this, however, is not only unnecessary but also potentially dangerous to your financial health.

2. Your interest rate is not set in stone

Skip the supermarket tabloids and head straight for the fine print on your credit card statements. Huge numbers of credit card companies currently utilize what is called a “universal default clause” (note, Congress is investigating this practice). In plain English what this means is that if you are late on ANY of your bills (not just for that credit card) the company reserves the right to jack up your interest rate to sky-high levels.

When you use your credit card to get cash from an ATM, or use those “free checks” that come in the mail, more often than not you are charged a higher interest rate with no grace period-the interest rate clock starts ticking the minute that money touches your hands.

3. You may have fallen victim to the new card “bait and switch”

This happens when you think you’re getting a brand new card with a low rate, but the card that actually arrives in the mail has a much higher rate. So even after getting your new card, check the interest rate.

4. If you make just the minimum payment, you have effectively DOUBLED your purchase price.

Suppose you have an “average” credit card with an 18% interest rate and a 3% minimum required monthly payment. You charge a $50 pair of jeans to the card, and each month when the bill comes you pay just the minimum. You are feeling virtuous because you are paying your bills on time. Alas, credit cards are not free money.

In today’s credit strapped world, the old advice to call your credit card company and make the case that you are a valued customer and should have your interest rate lowered (or your credit limit raised) is quickly going the way of bell bottoms. A much better solution is to only charge items to your credit card that you can afford to pay off in full at the end of each month.

If you are struggling with credit card debt and are contemplating bankruptcy, you can contact a CREDIBLE credit-counseling agency to better understand your options.

5. Yes, you can complain.

The good news is that if you feel you have been treated unfairly by your credit card company-without cause-you can complain. You have a right under the Fair Credit Billing Act to lodge a formal complaint. Refer to this nifty listing from the Federal Reserve on credit card complaints to see where to go and what to do in this case.
When it comes to knowing your credit cards, the most important thing to remember is that credit cards exist for one and only one reason-to make profits for the credit card companies.

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Credit Card Application

Understanding the Difference Between Credit Card Bad Credit and General Bad Credit
Executive Summary By Max Anderson

If you think all bad credit is created equal then you don’t understand the differences between credit card bad credit and the other types of bad credit out there. Some bad credit isn’t too bad at all, while credit card bad credit can prevent you from getting a car or a home. If you want to understand why credit card bad credit is worse than the other forms of bad credit, here are some things to keep in mind.

1. Understand Your Credit Report
The first step in understanding the differences between credit card bad credit and other types of bad credit is in understanding your credit report and the information it contains.

Your credit report consists of a multitude of facts pertaining to your payment history.

2. Realize That Bad Things Happen to Good People

Let’s say you work for ABC Bank. It is your job to approve or deny mortgage applications. You have three applications in front of you. Let’s see who you would approve.

Bad Credit Card

Applicant A has a credit rating of 595. This person has paid their credit cards on time except for a period of one month when two of her cards were 30 days late. There are also quite a few unpaid hospital bills from this period, but you have a note saying there is a dispute with the insurance company and that is why the medical bills have not been paid. Other than that, her credit looks clean. This is general bad credit.

Applicant B, he’s also got a credit rating of 595, but he doesn’t have unpaid hospital bills. Just a bunch of late credit card payments and a missed car payment or two. This is credit card bad credit.

Applicant C, this person also has a credit rating of 595, but she’s maxed out all of her credit cards and has been only making minimum monthly payments. She’s made a few late payments recently. Again, it’s a case of credit card bad credit.

Who would you approve? Starting to see the picture?

3. Keep In Mind It’s Not Bad Forever

So are you doomed if you have credit card bad credit? No. However, you will be if you don’t change your ways. You’re going to have to make your payments on time each and every time for at least 6 months before your credit takes an upward climb.

Related article you may interest it: credit card application