Credit Cards FAQ

Common Credit Cards Frequently Asked Questions

/Credit Cards FAQ
Credit Cards FAQ2019-08-31T21:26:19+00:00

FAQ Table of Content

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 credit cards through our extensive FAQs section here, and feel free to contact us should you have any further questions.

Credit Cards 101

Having a basic understanding of credit cards 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 frequently asked questions about credit cards to learn more.

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.

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.

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 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.

What is my credit card limit?2019-07-02T04:54:12+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 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.

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.

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.

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.

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

Secured Credit Cards

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 frequently asked questions about them are answered below.

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.

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.

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.

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 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.

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.

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).

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.

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.

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).

Balance Transfers

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 FAQ section that should answer all your questions.

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.

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.

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.

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.

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.

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 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.

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.
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).

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.