Credit Card Quick

Why it Pays to Consider all of your Options when Shopping for a New Credit Card

Introduction

We all remember those days when credit flowed freely. Our mailboxes were crammed full of credit card offers and we essentially had our pick of credit cards.

Shopping for a credit card in today’s economy, however, is decidedly different. We are no longer inundated with credit card offers, and we may not even be eligible for some of the credit cards that, just a few years ago, we could have easily obtained.

Order your Credit Report

Before you begin the process of shopping for a new credit card you must understand where you stand as a customer. To do this, you should order a copy of your credit report from the three, major credit reporting agencies.

If you want further information about your credit score, you can go to myfico.com to get your FICO score. This website also gives you access to financial tools which allow you to see how some of your financial decisions can affect your FICO score, either for the better or the worse.

It is important to understand that most banks will consider you a good credit risk if your credit score is 750 and above, so understanding where you stand is a great, first step when shopping for a credit card.

Consider your Future Plans

Before you apply for a new credit card, consider whether you will make any large purchases in the upcoming months, as a new credit card can reduce your FICO score, which may make it harder to snag a home loan or a car loan (or get a better rate).

You may want to pay off and cut up your old credit card once you have received a new credit card, but reconsider closing the account, especially if you plan to make any large purchases in the upcoming months, as closed accounts lower your available credit, which in turn lowers your FICO score.

Decide on a Card that’s Right for you

If you carry a balance, your first priority should be to find a credit card with a low interest rate. If you travel often, consider a travel rewards credit card, and so on. Make sure your credit card meets your needs and that the terms and conditions of the card make sense for the type of spender you are.

A Practical Guide to Shopping for a New Credit Card

Choosing Credit Card

We all remember the days of free-flowing credit. Our mailboxes were jammed with credit card offers, many of which were willing to offer us outrageously high credit limits and easy terms and conditions.

We all knew this fairy tale couldn’t last, and it sure didn’t.

Things are different now when it comes to credit cards, and that’s an understatement.

If you are interested in securing a new credit card, the road may be a bit more difficult than it was just a year or two ago. For starters, your mailbox is most certainly not full of credit card offers, let alone good credit card offers.

To put the credit crisis into perspective: consumers are expected to witness 60 percent fewer credit card offers this year, following a huge decline of 71 percent in 2008.

Now, that’s not to say that you can’t get a great credit card with a competitive interest rate, it just may be a bit more difficult. There are a few things you can do to ensure that you are approved for the best credit card with the most competitive terms and conditions:

1. Order a copy of your credit report – In order to qualify for the best credit card with the best rate and features, you will need to have a pristine credit report. It is therefore a good idea to check out your credit report to make sure that it is free of any errors or discrepancies. Don’t forget that you are entitled to a free copy of your credit report from all three credit reporting agencies every year.
2. Consider your current level of debt – Creditors, now more than ever, are considering an individual’s income-to-debt ratio when it comes to credit approval, interest rate and credit limit, so if you have a considerable amount of debt, now is the time to pay it down, not take out another credit card. In addition, don’t take on additional credit card debt if you plan on making a large purchase in the near future, such as a car or a home.
3. Consider your wants and needs – You should consider all of your wants and needs before applying for a credit card. Do you need a card with a low interest rate? Are rewards important to you? Is a large credit limit what you need? Take all of these factors into consideration before applying for a credit card that might not be right for you.

Tips for Finding the Right Credit Card

Choosing Credit Card

If you have managed to keep a sparkling clean credit history and have earned the bragging rights of a great credit score then you are one of the lucky few to have your choice of credit cards. Individuals with great credit can expect a barrage of credit card offers, mainly through direct mailings.

So, how do you find the credit card that is best for you?

1. Decide what you need – Do you need a credit card for personal use, or will you be using it for business, as well? Do you need a high credit limit, or is flexibility and a low interest rate more important to you? It may be a smart idea to make your list of credit card must-haves before you begin your credit card search.
2. Compare current interest rates, fees, terms and rewards online – A quick search of the Internet will yield many websites offering current information regarding credit cards. You may want to begin your search for current interest rates on some of the most popular credit cards, and determine which companies are offering the best deals. You may also want to check current special offers, such as 0% balance transfers or promotional interest rates to see which ones work best for your situation.

You will also want to check some of the most popular rewards programs, as well, as you may find a rewards-type credit card that best fits your needs and wants. For example, if you are a frequent traveler, then you may want to check credit cards that feature airline reward points.

1. Sort through credit card offers – After you have done your research and compiled your list of must-haves, you can begin sorting through the credit card offers you have received in the mail. Shred all offers that you don’t accept, and make a pile of credit card offers that you want to research further. You may also want to check online offers for credit cards, as well.

Once you have narrowed your choice down to one or two credit cards, carefully read the terms and conditions of the credit card and, most importantly, make sure that you understand all of the card’s small print before entering into a contract with the company.

Taking Responsibility – How the Credit Crisis has Changed the Way we Use Credit Cards

Introduction

It seems like it was just yesterday when the economy was strong, the housing market was booming and credit was flowing like water. Credit was not only easy to come by, but downright effortless at times.

Even those individuals with poor, little or no credit were being inundated with credit card offers. Fast forward to just a few years later and we find that the economy is weak, the housing market is flat and credit isn’t all that easy to come by anymore.

The recession has affected us all in one way or another. Even if we are fortunate enough to have our jobs and our home, we are all discovering that obtaining credit isn’t for just anyone anymore.

Credit card companies, having been burned in the past by easy credit and delinquent credit card holders, are now recognizing that they must become more choosy with whom they will extend credit.

How the Credit Industry has Changed:

• Don’t expect to obtain personal loans and auto loans without providing documentation regarding your income and your credit worthiness.
• Don’t expect to receive credit of any kind without a strong credit score. If your credit score is weak (anything below 700, according to many industry standards), order a copy of your credit report from all three of the credit reporting agencies and make it a point to begin repairing your credit.
• Don’t expect to miss your credit card payments without being penalized. Credit card companies have adopted much stricter rules and regulations regarding delinquent credit card holders in an attempt to encourage individuals to pay their credit cards on time every month. In fact, many credit card companies now raise a card holder’s interest rate if he or she misses just one payment.
• Don’t expect to obtain loads of credit if you have too much debt. Now more than ever, credit card companies are especially aware of an individual’s debt-to-income ratio. In fact, they are using this number as a guide when extending credit.

Calculate your debt-to-income ratio (take your current income and consider how much of that goes toward paying debt each month) and, if it’s above 30 percent, consider ways in which you can pay down your debt before applying for a credit card or personal loan.