Learn to Use Credit Cards

By [http://ezinearticles.com/?expert=John_Allen]John Allen 

Credit cards are accepted at almost every retailer and are very easy to use, which has made them popular payment choice by consumers. Most cards have also eliminated the annual fee and include a free rewards program. A good card allows you to earn cash back or points towards merchandise with every purchase that you make. Not all offers include the same benefits and it is still vital to compare credit cards to find the best value.

Compare credit cards

Proper research is needed in order to find a good card to use for your expenses. Besides considering annual fees and the reward programs, there are several other important factors to evaluate before applying for a credit card. You might be convinced that you will always pay your balance in full, but there is always the possibility to end up in a situation where you can't pay off the entire amount. Always consider the annual percentage rate (APR) on the credit cards you want to apply for. Reward credit cards may have a higher interest rate than regular cards and could end up costing you more than the reward is worth.

Spending limits

The credit card company is going to evaluate your creditworthiness and make a determination of how much credit you will be given. This is an indication of the risk that the lender is willing to take, based on the information in your credit report and personal information. If you exceed this credit line you will be charged an over-the-credit-limit fee. The limit can change over time as the lender makes ongoing evaluations of your creditworthiness.

Pay on time

At the end of the month the credit card issuer is expecting the minimum payment due of the balance, which is borrowed money. You could be charged a late payment fee that is typically $39 if you forget to pay the bill by the due date. This is a costly mistake, but the worst part is that your score may also be negatively affected. Keep in mind that you can avoid this fee by paying the bill on time. There is usually a grace period of around 20 days from the statement date until it has to be paid. 

Cash back

Many people that never imagined they would apply for a credit card can get lured into submitting an application because of the advertised reward program. This is just what the credit card providers want you to do, because if you get a credit card solely based on rewards you may end up paying finance charges, transaction fees and annual fees. If a card is not used in a responsible manner then your rewards end up costing more than what they are worth. Even if you have found credit cards offering 5% cash back for gas and groceries you would lose the benefit of this reward by only paying the minimum balance each month.

Credit history

This is one of the most important reasons to use a credit card. There is no reward program or low interest rate that can compare with the benefit you get from building a solid history. The credit card issuer will report you payment history every month to major credit bureaus and by paying at least the minimum balance on time you will soon be able to qualify for the best offers and the lowest mortgage rates.

Cardadvantages is a way to [http://www.cardadvantages.com/]compare credit cards and find the best offers online. Learn how to use the [http://www.cardadvantages.com/articles/credit-card-balance-transfer-option.html]balance transfer option to maximize the credit card offers.

Article Source: [http://EzineArticles.com/?Learn-to-Use-Credit-Cards&id=2095570] Learn to Use Credit Cards