What you should consider before choosing a credit card

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Stock Trading and finance go hand in hand. Knowing how to manage your credit and credit cards is a must before you start trading online.

When you think about going for a quality credit card, it may seem like you have finally gotten the genius idea to get your life back on track and help you make steps towards achieving your dreams. When you put much more thought into it you realize that it is one of the few things in life that you could acquire that could completely change your life for the better or for the worst. Before you go out looking for quality credit cards and researching about the companies that offer. Choose the best companies that have the reputation of having the best credit cards with good rates. Below are some of the things that you need to know about credit cards.

1. Your spending habits

The first question you should ask yourself before you go and look for credit cards is how you will be using the money. You should also know yourself. Are you the type of person who is capable of paying what you own every month and clearing all of it or are you the type that carry forward the balance from month to month? Will you be using your card frequently, to buy stuff online or just for emergencies? Once you have known how you are likely to spend your money, then you will understand which options to choose. Be careful though, the credit card is one of the easiest ways of opening the doors to a small hell on earth called debt.

2. The interest rate

On your credit card, the interest rate appears as the annual percentage rate (APR). The rate of interest you pay each year will vary depending on which company you choose. Some companies make their rates fixed while others vary their depending on the financial indicators. Having a fixed interest rate will make it easy for you to know how much you will be paying each month. Even then the amount could change depending on some variables such as going over your limit, having a balance or even late payment. Sometimes, because they can, the issuer may decide to just change the limit without warning.

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3. The credit limit

The credit limit will be the maximum amount you will be allowed to borrow. The better your credit score, the higher your chances of getting more money. When getting a credit card you should know how much your limit is. There are a lot of penalties that will increase how much money you pay to your issuer if you max out your credit. This also has a big effect on your credit score. The last thing you want is to have bad credit. Therefore always use less than your actual balance because sometimes your actual limit is lower than your balance.

4. Rewards

Because you are paying some interest on the money your issuer lends you, it is important that you find an issuer who has some real benefits. An issuer who offers to give you travel rewards or extra cash on shopping is much beet than one who just increases your credit limit. Find an issuer who offers rewards that are easy to earn and redeem and know whether the rewards are expiring or how many points you need to earn to get them. if you do not read the terms and conditions, be sure to start because some rewards may have restrictions that could put you at a disadvantage.

5. Balance calculations.

You need to know how the balance carried forward is going to be calculated. The most common method of calculating your balance is the average daily balance method. In this method, the daily balances are all added together and divided by the number of days you are given before you have to pay the money you owe your issuer, also known as the billing cycle. Do not get credit cards from a company that calculates using two billing cycles. Such companies end up charging you more.

6. Penalties

Your credit issuer can use many ways to get money off you. There are fees for transactions, checking balances, asking to increase your limit and even paying your bill late. When looking for a credit card issuer, look for one that will cost you the least for at least the first 12 months or the issuer with the least amount of fees and smaller amounts asked from penalties to be paid. When it comes to your finances, always read and understand all the terms and conditions.

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