Credit Cards FAQ

Common Credit Cards Frequently Asked Questions

/Credit Cards FAQ
Credit Cards FAQ2019-10-25T05:53:38+00:00

Credit Cards FAQ Table of Content

The Credit Cards FAQ contains important information and its always advisable to read them before actually start searching for best credit cards.

Whether it’s your first time taking out a credit card, or you’ve done it dozens of times before, the whole process tends to get confusing. There are many different cards that you can choose from, and each of them has special features that are designed for different purposes.

You need to take a lot of things into consideration when choosing a card that suits your needs. It all depends on so many factors, such as your credit score, what you intend to use your card on, or your debt-to-income ratio. Market Pro Secure® is here to keep you informed and help you make this vital decision.

We offer detailed overviews and comparisons of credit cards, banking and insurance services, and more. You can gather the most basic information about card offers through our extensive Credit Cards FAQ section here, and feel free to contact us should you have any further questions.

101 Credit Cards FAQ

Having credit cards basics understanding and what they can entail allows you to make the best financial decisions for you and your family. It will also make this whole process a lot smoother. When you know what to expect, which documents you need to prepare for your application, or how much a credit card can cost you, there will be no unpleasant surprises down the line for you. So, take a look at some of the Credit Cards FAQ (frequently asked questions) about various card features and fees to learn more.

What documentation do I need to gather?2019-07-02T04:45:45+00:00

In order to apply for a credit card, you’ll need to gather the following documentation:

  • Identity proof
  • Address proof
  • Income proof
  • Age proof
What are credit cards?2019-09-16T11:34:56+00:00

Credit cards are plastic, electronic payment cards that allow you to buy product and services, get cash advances, and pay off debt on other credit cards by borrowing money from a card issuer under one condition – you need to pay back the issuer at the end of each month.

Why do people get Credit Cards?2019-09-16T14:55:07+00:00

Paying with credit cards is extremely convenient because it’s similar to getting a short-term loan. In addition to being fast and secure, credit cards also come with special perks and benefits such as discounts and cashback. They are especially useful for online shopping.

What’s the procedure for getting a credit card?2019-09-16T16:47:55+00:00

After you’ve checked your credit score, determined what type of card you need, and chosen a credit card issuer, you need to submit an application for a new credit card. You can do this in a branch, via phone, or online. The issuer will accept or deny your application based on your credit report.

Can a credit card limit be changed?2019-07-16T23:56:37+00:00

Yes, a credit card limit can be changed. If you are a responsible cardholder, most credit card issuers will increase your limit every 6 to 12 months. In case you can’t wait for that long, you can submit a request in a branch, via phone, or online.

How old do I need to be to be eligible for one?2019-07-02T04:46:32+00:00

Persons interested in applying for a credit card must be at least 18 years old. Anyone younger than that can get co-signed to an adult’s credit card, thereby becoming an authorized user.

What is my credit card limit?2019-10-22T23:47:11+00:00

Different types of credit cards come with different pre-set limits. This amount is determined by your credit card issuer based on different factors such as your income, your debt-to-income ratio, your credit history, and the pre-set limit on your other credit cards (if you have any).

How much does having a credit card cost?2019-09-16T14:57:22+00:00

Being a cardholder doesn’t have to cost you anything at all, but it can also cost you hundreds of dollars on a monthly basis. This depends on the type of credit card and the issuer you choose, but also on how many penalties and additional fees your credit card behavior triggers.

Who can get a credit card?2019-09-16T16:45:36+00:00

In order to get your own credit card, you need to meet certain criteria. Persons under 18 can only get co-signed to an adult’s credit card; they cannot owe one by themselves. More importantly, you need to have at least some credit score to be eligible for a credit card.

Can a credit card improve my credit score?2019-09-16T16:49:32+00:00

Having a credit card should be able to improve your credit score, under the condition that you are a responsible cardholder. This means that you need to pay your credit card bills in full and on time, as well to keep your monthly spendings well under your pre-set credit card limit.

Is there a way to avoid interest on credit cards?2019-09-16T15:05:00+00:00

Yes, you can avoid paying interest charges on your credit card for as long as you pay off purchases in full by the time your monthly statement is due and stay away from cash advances. To avoid interest on balance transfers, you should pay off your debt within the introductory 0% APR period.

Credit Cards FAQ

Few Featured Credit Cards

Secured Credit Cards FAQ

If you want to build good credit, the simplest way to do it is to get yourself a credit card. The problem here is that you usually need to have a good credit score to get a card. If you’re feeling confused, you’re not the only one.

Secured credit cards are your answer if you have a particularly short credit history, or have bad credit. If you’re not familiar with them, you’ll find that some of the Secured Credit Cards FAQ are answered below. If you need more read our extensive guide – Secured Credit Cards Explained.

How Much Money Would I Need to Deposit?2019-07-02T20:49:43+00:00

It depends on your secured credit card issuer. Each has different minimum requirements for the deposit, but the lowest amount is $49. Since the deposit determines your credit limit, choose the amount that will allow you enough flexibility, but be sure you can afford it.

Are There Alternatives to Secured Credit Cards?2019-09-16T16:42:27+00:00

Great alternatives to secured credit cards include credit builder loans, merchandise accounts, and student credit cards (only for students, obviously).

What Are the Common Reasons to Secured Credit Card?2019-07-02T20:44:46+00:00

You can get a secured credit card if you have a bad credit score (to improve it), or no credit history at all (to establish good credit from scratch).

Can I Get a Return on My Security Deposit?2019-09-16T15:18:48+00:00

Your security deposit is refundable, but you’ll get it back in full only if you always provide full on-time payments. You can get your refund once you choose to graduate to an unsecured credit card and close your secured card, provided that you’ve paid off your balance in full.

How Does a Secured Credit Card Improve My Credit Score?2019-09-16T11:40:17+00:00

By making all your payments on time and in full, you show that you’re a responsible, creditworthy borrower. Your good payment history is reported regularly to the major credit bureaus, which put your good behavior in your credit report, thus raising your credit score.

How Much Will It Cost Me to Get One?2019-09-16T11:45:19+00:00

It depends on how big of a deposit you want to make. Different issuers have different minimum and maximum deposit requirements. It also depends on the annual fees (ranging from $29-49), but there are plenty of cards with no annual fees.

What Are the Limitations of Secured Credit Cards?2019-09-16T15:24:32+00:00

You get a low credit limit (set by your security deposit), and you accrue higher interest rates if you don’t make full, on-time payments every month. You can increase your credit limit by making additional deposits, or your issuer may choose to increase it after a particular period of your good payment behavior.

What Are Secured Credit Cards?2019-09-16T11:38:09+00:00

Secured credit cards are cards designed for building or rebuilding credit. They differ from regular cards in that you must make a deposit (refundable) to open your account, and there’s usually no credit check.

Is There a Cap on the Deposit Size?2019-07-02T20:50:27+00:00

The lowest deposit you can make is $49, while the highest is $10000. Most of the issuers allow you to make a deposit of up to $5000.

Is There an Annual Fee?2019-09-16T15:37:56+00:00

There are usually no annual fees associated with secured credit cards, but some cards do charge them. However, they’re very reasonable, ranging from $29-49.

4 Best Secured Credit Card Offers

Balance Transfers Credit Cards FAQ

Balance transfers can help you save a lot of money. You can move your balance from a high-interest credit card to one with a lower interest rate. You can avoid having to deal with the bad terms from your current issuer, or help a family member who’s in debt. However beneficial they may be for you, it’s still good to get as informed about balance transfers as possible. So, check out this Balance Transfer Credit Cards FAQ section that should answer all your questions.

What are balance transfers commonly used for?2019-07-02T21:44:17+00:00

A balance transfer has several uses:

  • Move a balance from a card with a high-interest rate – a balance transfer gives consumers the precious opportunity to get rid of the credit card with a high-interest rate. By transferring the balance to a new card with a significantly lower interest rate, consumers can save a lot of money.
  • Consolidate debts to make managing finances a straightforward process – making regular payments every month is a daunting task. Especially if a consumer has several credit cards. A balance transfer will help these consumers consolidate debts and pay off just one debt.
  • Help a family member in need – a balance transfer is not reserved only for the card user. Consumers can apply for a balance transfer to help family members pay off their debt.
  • Avoid bad terms – some credit cards have very restrictive terms. To change the issuer, a consumer has to pay off the entire debt. A balance transfer can speed things up, and help consumer switch to an issuer that offers beneficial terms.
  • Transfer loans balance to a new card – balance transfer also works for loans. This is why consumers often use it to pay off loans and just focus on paying off a single debt on a single card.
Are multiple balance transfers an option?2019-08-05T00:26:56+00:00

People usually wonder if they can save more by moving a balance from a card where the interest-free period is about to expire to a new card. Paying out debt in the interest-free fashion appears as an attractive idea. The best part is that it is also possible.

To make the most out of it, do your best to pay off as much as you can and then apply for a new card and balance transfer.

The only downside of this is that the new issuers will have insight into your last balance transfer request, and might offer you a significantly shorter interest-free period.

What paperwork will I need to go through?2019-08-05T00:26:15+00:00

The balance transfer process is very simple. Most of the paperwork today is done online via forms on the website or email. First, you will have to submit information when opening a new credit card. Secondly, you will have to submit a “Balance Transfer Request Form“.

Additionally, you should consider going through the terms of the card issuer to make sure that they are not restrictive, identify the potential penalties, and if there are any additional fees (Late payment fee, returned payment check fee, annual fee, and so on).

How do I calculate the money I will be saving?2019-09-16T16:55:56+00:00

Not every balance transfer is bound to save money. Before deciding which credit card company to choose and whether to do a transfer at all, you will have to do calculations on your own.

Start with assessing how much you will have to pay off if nothing changes (don’t forget to include the interest rate on your current card).

Once you have the total amount of your debt, start looking at offers. Assess how much money you can pay monthly. Take the balance fee, 0% APR period, and interest rate that kicks in after it into account.

See how much debt remains after the intro period is over, and calculate the interest rate on the remaining sum to see how much money a balance transfer will help you save.

When are balance transfers commonly declined?2019-09-16T05:13:37+00:00

People often get their balance transfer request declined due to the following reasons:

  • Poor credit report and credit score – once you apply for a balance transfer, the issuer will look into your credit report and credit score to assess your creditworthiness. If you were late with payments in the past or have collection accounts, the issuer will most likely deny you the balance transfer.
  • The balance transfer will exceed your credit line – during the approval process, the issuer will also assess how the balance transfer will affect your credit line. If the balance transfer exceeds your credit line, you will most probably get declined. If your credit line is too small to begin with, you will most likely be declined.
  • You have made too many balance transfer requests recently – credit card companies have to trust you to allow you a credit balance. If you go on a balance transfer application spree, you will appear as someone who has no control over their purchasing behavior or is desperate for another credit.
  • Your balance cannot be transferred – even though it is advertised as a financial lifeline to help you transfer the balance from virtually any card or loan, in reality, there are some restrictions. If you applied for a balance transfer with a company that doesn’t support transfers from the type of card you own, you will be declined.
How much time does it take for a balance transfer to be completed?2019-07-02T21:45:12+00:00

There are several factors that can affect the time required for a balance to be completed. Generally speaking, it can take between 7 and 10 days for the entire procedure to be completed.

The chances are that the credit card companies handling all things electronically will be able to deliver the service much faster than those that still do things over mail.

Where is the major holdup? Once a consumer applies for a balance transfer, the issuer has to do a background check and customize the offer according to a consumer’s current financial situation.

This phase can last a couple of days. The information submission and signing papers fall right behind the previous phase.

Is it mandatory for me to close my accounts after a transfer?2019-07-02T21:50:56+00:00

Once the balance transfer is complete, your old accounts will be free of any debt. You might be wondering if it is mandatory to close them once everything has settled. The simple answer is no. There is no credit card company that will ask you to do so after the transfer is complete.

Keeping them open is beneficial, as it will help you improve your credit score. If you intend on using the old accounts, be mindful of the limit and continue to make regular monthly payments on time.

What is a balance transfer and how does it work?2019-07-02T21:42:30+00:00

A balance transfer is a financial tool consumers can use to move their balance from one credit card to another. A balance transfer doesn’t come with restrictions in the number of cards and loans a consumer can move the balance from.

The primary purpose of the balance transfer is to simplify the management of finances while saving money for the consumers in the process.

The mechanism behind a balance transfer is very simple. A consumer moves a balance from a high-interest credit card to a new credit card.

This new credit card comes with a 0% APR intro period, and a lower interest rate, thus allowing consumers to pay off their debt faster and save money that would be otherwise wasted on paying high-interest rates.

Are there any fees related to balance transfers?2019-09-16T16:59:27+00:00

The balance transfer comes at a price. Most commonly, you will have to pay a balance transfer fee. This fee will be 3 to 5% of the total amount you want to transfer, and it is paid only once.

There are some credit card companies, though, that also includes an annual fee. Make sure to go through their terms to find out if there are any additional fees that you will have to pay.

Can I request a balance transfer for a card that was lost/stolen?2019-09-16T15:14:37+00:00

Once you report a credit card as lost or stolen, a credit card company will most likely open a new account in your name. But this is not a brand new account, as the company will transfer all your data when opening it, including the transaction history and account open date.

Until this process is over, you won’t be able to request a balance transfer. But once it is completed and you get a new credit card, you will be able to apply for a balance transfer.

More Credit Cards FAQ

Do all cards report to all the credit bureaus?2019-10-10T16:00:57+00:00

Unfortunately, not all credit cards report your activity to all the credit bureaus. For example, if you have a prepaid credit card, your credit activity is most likely not reported. Some issuers do report to credit bureaus, but they don’t report to all of them, and you should avoid such issuers.

If you want to truly build up your credit score, you need to check whether an issuer reports to all three of the major credit bureaus, Equifax, Experian, and Transunion. If they report to just one or two of them, your credit history will be limited, and you won’t benefit from your card as much as you could.

Check Credit Reporting Credit Cards.

Why do I suddenly have to pay annual fees on my credit card?2019-10-09T03:37:25+00:00

If you weren’t required to pay the annual fee in the first 12 months of using your credit card, your issuer most likely had a promotion that offered the card without the annual fee for the first year. These promotions last for a limited period of time, and the annual fee will be charged when the promotion period is over.

If the issuer has made changes to their fees and rates, they are required by law to notify you of any changes at least 45 days before they can take effect. If the issuer has decided to impose annual fees on your current no annual fee credit card, you have the option to decline it. If you decline the new fees, you will need to close your current account, so consider this decision carefully.

Contact your credit card issuer if you have any questions about your credit card fees, as every issuer imposes different fees.

How can I avoid paying the annual fees?2019-10-09T03:45:00+00:00

If your credit card has annual fees, you have no choice but to pay them. Not paying this fee will result in additional charges for late payment, will increase your interest rates, and will damage your credit score.

Certain issuers might allow you to bypass the annual fees by charging a certain amount on the credit card itself once a year. If this seems like a better option, contact your issuer to whether they have this offer.

If you don’t want to pay any annual fees whatsoever, you can apply for a no annual fee credit card. These credit cards don’t have annual surcharges and can be much more beneficial for you. They do come with fewer rewards and bonuses but don’t cost anything to hold.

When are annual fees typically charged?2019-10-09T03:44:49+00:00

If you have to pay your annual fees, you will most commonly be charged 12 months after you’ve been approved for your credit card. Certain issuers will charge you immediately upon opening your account, but this is less frequent.

Although the charge is most commonly applied once a year, you might encounter issuers that allow you to pay the fee in monthly installments. You’ll still be paying the full amount of your annual fee, but the cost will be divided into smaller monthly payments.

Not paying the annual fee on time will result in late payment fees, and will affect your credit score, so be sure to always pay your credit card fees and debts on time.

Should I get pre-approved for a bad credit credit card?2019-10-10T23:06:43+00:00

There is usually no need to be pre-approved for a credit card, as this is only useful if your pre-approval is denied. In the case that your pre-approval is denied, you can know for sure that you are not eligible for a credit card, and you will not get it if you apply for it. Having your pre-approval denied won’t have an effect on your credit score.

On the other hand, if you are pre-approved for a credit card, this isn’t a guarantee that you will get the card. Issuers pre-approve you based on a soft credit check, and once you actually apply for the card and they do a full credit check, you might still get denied.

Can I make multiple applications for bad credit cards?2019-10-10T23:08:24+00:00

You can make multiple applications for a bad credit credit card, but you shouldn’t. If possible, you should always avoid making multiple credit card applications in a short period of time. When you apply for a credit card, the issuer will perform a full credit check which will leave a trace on your credit report and damage your credit score. Too many applications in a short period of time will make it seem like you’re in a bad financial situation and are in a hurry to get some cash. Many issuers won’t like this.

The full credit check will temporarily lower your credit score, but its effect will fade over time. Within a year, your score will return to normal, and the credit check will be visible on your report for about 24 months. You should wait at least 3 to 6 months before applying for new lines of credit.

Do bad credit credit cards have rewards?2019-10-10T23:05:13+00:00

Unfortunately, you’ll rarely encounter a bad credit credit card with many valuable rewards and bonuses, especially if you’re applying for a guaranteed approval card offers. Bad credit credit cards are primarily designed to help you improve your credit score, and rewards and bonuses are few and far between.

Secured credit cards do come with nice rewards, and you can easily get cash back credit cards, collect points, and earn shopping rewards.

If you’re looking to save money, you might want to apply for a shopping credit card. These cards are often available to those with poor credit, and they can offer you special deals and discounts, their only drawback being that you can usually only use them in a select few stores.

What are the best cards for bad credit?2019-10-10T15:49:23+00:00

The best credit card for bad credit is generally considered to be a secured credit card. Secured credit cards come with more favorable rates and fees, and they often have some nice rewards as well. The only issue with these cards is that you will need to make a cash deposit to activate it. In most situations, the amount that you deposit will be your credit card limit, but there are some exceptions.

Once you’ve improved your score, you can easily get your deposit back, as long as you’ve been paying off all of your credit card debts on time.

Since secured credit cards have lower card limits, it’s important to be careful with your money. The recommended credit utilization ratio is 30% of your limit, and if you use more than that, you could damage your credit score.

Other options are: 100% Approval Cards, Credit Reporting Cards and/ or Shopping Credit Cards.

Can I downgrade to a no annual fee credit card?2019-10-09T03:41:18+00:00

If you currently have a credit card with annual fees, you might be able to downgrade to a no annual fee credit card offer, but this depends entirely on your credit card issuer. If you have this option, it’s much better to downgrade than to close your current account and open a new one.

When you downgrade, this will not have a negative effect on your credit report as your issuer doesn’t have to do a full credit check. Your account age won’t be affected either, as you’ll likely be able to keep your current account.

The only drawback of downgrading to a no annual fee credit card is that all the rewards and benefits of your previous card won’t be transferred to your new card.

Can I apply for a bad credit credit card online?2019-10-10T23:10:24+00:00

You can apply for a bad credit credit card online, it’s simple, fast, and convenient. Online applications are very similar to in-person applications, and you will need to provide the same personal information for both. In most cases, you will need to provide a personal ID, your verifiable address, social security number, employment status, income information, and more.

Online applications are fast and secure but don’t make them while you’re connected to unsecured public networks (such as public Wi-Fi at your favorite coffee shop). To stay on the safe side, you should only make your online applications through your secured home Wi-Fi, and through your own computer.

How much do credit card annual fees cost?2019-10-09T03:33:46+00:00

The cost of your annual fees will depend on your credit card issuer. These are the most common fees that can encounter, and they’re the most variable.

You can expect to pay anywhere between $30 and $600. Such high fees typically come with valuable rewards and bonuses, but it’s important to calculate whether they will be worth it to you.

If you opt for a no annual fee credit card, you won’t have to pay a dime for your annual fees. These credit cards don’t charge for account maintenance, but you’ll still be charged for other fees that are specified in your contract. Those can include foreign transaction fees, balance transfer fees, interest rates, etc.

How can I improve my credit score?2019-10-10T15:51:43+00:00

There are a few ways to improve your credit score, and unfortunately, there are no shortcuts. Improving your score takes time and effort. To improve your credit score, you will first need to pay all of your credit card bills on time. Being late with your credit card payments won’t only affect your credit score, but you will also have to cover the hefty late payment fees that can easily add up.

You should also ensure that you have a credit utilization ratio of less than 30% of your credit limit. A low credit utilization ratio shows that you can manage your money well and are a responsible cardholder. If you want to improve your credit score, you should avoid frequently opening and closing your credit accounts. Closing your accounts increases your credit utilization ratio and lowers your account age. Opening many new accounts will create many hard inquiries on your credit report and damage your score temporarily.

What rates and fees can I expect from a card for Bad Credit?2019-10-10T16:03:36+00:00

Bad Credit credit cards normally have higher rates and fees than typical credit cards that are designed for those with a good or excellent credit score.

However, the rates and fees shouldn’t be extremely high, and if you encounter a credit card for bad or limited credit that has an interest rate higher than 30%, for example, you should avoid applying for this card.

Some of the common fees that you can encounter with such cards include annual fees, cash advance fees, up to 30% interest rates, and more. However, even though these credit cards have an abundance of fees, you should avoid those cards that charge processing fees to open the card and those with monthly or sliding annual fees.

Do I get rewards with a no annual fee credit card?2019-10-09T04:02:58+00:00

Most no annual fee cards do offer some nice rewards to cardholders. However, the rewards might not be as great as those that come with a credit card with annual fees. You can still enjoy all the perks of having a credit card, you can collect points, get cashback credit cards, etc., without paying for the high annual fees.

When choosing your credit card, it’s important to check how beneficial it can be for you. If you’re paying your annual fee, and its cost is higher than the rewards you’re getting on an annual basis, this card isn’t worth it, and you should opt for a no annual fee credit card.

If your total annual rewards are higher than your annual fees, then your card should be beneficial to you, and you might want to consider paying the annual fee for the higher rewards.

PRO News & Advice from our Editors

Careful, New Scams Promise Lower Rates

Fraud, TRENDS|

In this technology-driven world we live in, there's never any shortage of scams designed to separate us from everything from our cash to our identities. Attempting to keep up with the latest efforts of criminals is a full-time job. Still, the more we know as consumers, the more alert we can be, especially when the efforts to take what's ours comes in the form of a phone call. Here's the latest scam going around and while it's not especially original, it does serve as proof that some things never change.

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Market Pro Secure® is an independent payment card comparison service supported by advertisers, a complete list of which can be seen in our Editorial Guidelines. Even though some of these advertisers are financial product providers and credit card issuers, our paid partnerships don't affect card ratings or the Best Card Picks on our website. We don't post any content that is provided or commissioned by any of our partners. However, our paid partnerships may affect how and where products appear on our site, including the order in which they are presented within listing categories. This order may also be affected by our website rules, as well as the likelihood of the applicant’s credit approval. We can't offer any warranty for the accuracy of the credit card information we share on our website, even though we do our best to keep the Terms and Conditions, rates, and other credit card details up-to-date. For more accurate information, click "APPLY NOW" to get transferred to the credit card issuer's official website. Market Pro Secure® doesn't include all available payment cards in the marketplace.

ADVERTISER DISCLOSURE. Market Pro Secure® is an independent payment card comparison service supported by advertisers, a complete list of which can be seen in our Editorial Guidelines. Even though some of these advertisers are financial product providers and credit card issuers, our paid partnerships don’t affect card ratings or the Best Card Picks on our website. We don't post any content that is provided or commissioned by any of our partners. However, our paid partnerships may affect how and where products appear on our site, including the order in which they are presented within listing categories. This order may also be affected by our website rules, as well as the likelihood of the applicant’s credit approval. We can't offer any warranty for the accuracy of the credit card information we share on our website, even though we do our best to keep the Terms and Conditions, rates, and other credit card details up-to-date. For more accurate information, click "APPLY NOW" to get transferred to the credit card issuer's official website. Market Pro Secure® doesn't include all available payment cards in the marketplace.

EDITORIAL DISCLOSURE. Market Pro Secure® doesn't post any content that is provided or commissioned by our advertisers, the majority of which are financial product providers and credit card issuers whose offers we feature on our website. The entirety of our editorial content – including any opinions, analyses, reviews, and evaluations – belongs to the author alone, and has not been reviewed, approved, or otherwise endorsed by our advertisers.