Applying for a new credit card can be a good thing, and it can also be a very bad thing for your debt. The most dangerous debt situations happen when credit card applicants don’t fully understand the terms and conditions of the card they are applying for. As such, whenever you receive a credit card offer, you should look closely at the following information before sending in your application:
Look at the “APR”This is the annual percentage rate. Essentially, you will be charged this percentage amount on any outstanding balances that you hold for the year. If you don’t pay your balance every month, you’ll be paying interest on these balances. Essentially, you’ll want your APR to be as low as possible.
Check for annual feesSome credit cards charge hundreds of dollars in annual fees. Others are free. Make sure you know what kind of fees you’ll be paying in order to have your card.
Review the credit card limitThe limit on your credit card purchases is vital to understand. If you exceed these limits, you could face harsh penalties.
What’s the minimum payment on your credit card balance?
You’ll need to pay this amount in full each month or face late fees and increased interest rates. Understand the minimum balance before moving forward.
Other fees Your credit card could be packed with various unexpected fees. What are the late payment fees? What are the fees for going over the limit? Understand these so you don’t get into trouble with your new card.
Once you fully understand your credit card and all its characteristics, you can make an informed decision about applying for the card. You can also avoid getting into debt trouble while using the card. If you do get into debt trouble, however, remember that debt solutions may be available to help you get out of trouble fast.