How To Select The Best Credit Cards:
there are thousands of different credit card products out there. Its important to be able to understand the differences.The most important thing is understanding the APR rate. Even though the government forced the card companies to be more honest they are still very tricky. Look at the APR rate then also find out the rate it will switch to if you are late on a payment. Also make sure that you can qualify for the rate they are advertising.
Sometimes you apply for a 9.99% rate and because of your score they actually give you a 12 or 15 % rate which most of the time people don’t even realize. In general gas and store cards are easier to get but carry higher APR or fees. I would recommend getting one from your bank since its easier to pay because you already do business there. Two cards is probably all you need and they should only be used for emergencies. Don’t fall into the trap of reward points or anything else that makes you carry a big balance. Thats how the card companies make so much profit. They are called credit card but they should be called debt cards because when you are using them you are actually borrowing money. Its funny how people will buy things because they are on sale at 10% off with their credit cards. If they take a while to pay off the card they will have ultimately payed 20% more for the item. If the sale sign said 10% more for that item instead of 10% off people wouldn’t even buy it.
If you are new to using credit cards it is important to understand that no matter what the interest is on the card, you do not have to pay it if you do one very simple thing….pay off what you owe every single month. Do not use your credit cards like 70% of the American public does and use them because you do not have the money to afford it. Use them for the purpose of increasing your credit score and establishing and keeping your credit record in tact.
Also, there is no real formula to how many you should or shouldn’t have, but once you open one up, keep it open. Do not ever close that account as it WILL lower your credit score. I would keep it around 3 to 4 credit cards with credit limits reaching in the $20,000.00. This is available credit….not credit to use. Again, use them wisely.
Having too many cards increases the possibility of identity theft and stolen credit cards, and most likely you will lose check of them. You don’t really need specific credit cards for specific stores/purposes if you don’t spend that much on them, because the benefit difference is not that much.
