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.
In order to apply for a credit card, you’ll need to gather the following documentation:
- Identity proof
- Address proof
- Income proof
- Age proof
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
Few Featured Credit Cards
Fingerhut Credit Shopping Credit CardThe Fingerhut credit shopping card is designed to serve Americans wishing to buy name brand merchandise without paying the name brand price all at once. The merchandise, through the credit card, is able to be paid for in payments. Card members are charged what may be considered a higher interest rate on purchases. This is comparable to any store card, as their interest rates are almost always above 19%. Those using their cards can obtain free rewards items for purchasing certain items, reaching a certain dollar amount, or simply making a purchase from a specific catalog. There is no annual or monthly fee. Cardholders are able to control spending by controlling the items that are purchased. The monthly payment is based on the monthly payment per item rather than on the total balance on the card.6784(678)
Unique PlatinumThe Unique Platinum card is as unique as it sounds. It is a merchandise credit line card that allows individuals to buy merchandise with their card without having to pay interest and with no hidden fees. The fees on the card include an annual membership fee that is paid separately from the card's available credit. There is also a monthly services fee that is subtracted from the available credit on the card each month and those are the only fees that are paid aside from a late payment fee if the payment is made late or a returned check fee if the payment method comes back returned. What this card does is give the cardholder the ability to obtain quality merchandise easily. It is a purchase now and make payments scenario and cardholders receive special benefits just for having an account. The special benefits include being able to receive discounts in thousands of cities all around the world, full-service roadside assistance, and legal assistance with a number of different legal matters. The legal assistance involves will preparation, the review of legal documents, assistance when needing representation in small claims court, and much more. These are benefits that line of credit cards typically do not give. Overall, this card presents a way to purchase merchandise without having to do credit checks, pay interest, and pay fees for every move you make with the card. As you continue on with your account, you may be entitled to credit line increases that will enable you to have even more flexibility with your account. Because the card is easy to use, it is considered a very unique way to use credit.5533.5(553)
DeLuxe Signature Shopping Credit CardThe Luxe Signature Shopping Card us a revolving line of credit that is used exclusively in the Hutton Chase online store where items can be purchased at a discount. These items range from iPads to high-end watches and computers. The store updates fairly often to ensure members have the freshest choices. When purchasing one of these choices, the process is rather straightforward in that you pay a down payment on the item, a payment for the first month, and a shipping charge. The remainder of the balance is divided over a five month period. Once you have made your payments, you will find that even with shipping you have saved on a percentage of the purchase. As for fees, there are a few fees. The one that automatically occurs is the account maintenance fee that is charged monthly on the anniversary date. This fee must also be paid when the account is opened. The second is the NSF fee if a payment is returned, the third is the late fee that varies by state if a payment is late, and the third is a restocking fee if a return is made and the condition of the return is misrepresented or customer tampering caused a malfunction. Cardholders have control over the fees that are paid. Overall, however, the savings on the merchandise can offset most or all of the monthly account maintenance fee and the card gives the cardholder the ability for a person to purchase top-of-the-line merchandise that they may not be able to purchase otherwise.4903.4(490)
H&R Block Emerald Prepaid Mastercard®The H&R Block Emerald Prepaid MasterCard is an alternative to the traditional tax refund check that offers the cardholder a variety of benefits. Not only does the holder not have to worry about pricy check cashing fees but they also have the security that comes with a card bearing the MasterCard logo. Need to do some shopping online? Feel secure in the knowledge that you can use your Prepaid MasterCard online while being protected by the US MasterCard Zero Liability policy. Take the card with you wherever you need and not worry over whether or not you have cash available. With the H&R Block Emerald Prepaid MasterCard, not only can you make purchases at a variety of locations but you can also get cash back like you can with a traditional debit card.2454(245)
Next Millennium Shopping CardThe Next Millennium card is designed to gives its cardholders more than just a membership that allows for unique buying opportunities. Nonetheless, the buying aspect of it allows members to buy products from the My Unique Outlet that they may not be able to buy otherwise. For instance, iPods and iPads are just some of the items available. There are name brand products from Samsung, Cuisinart, and more. All of these purchases are free of interest and there are no transaction fees. The only fee that is associated with the purchases is the monthly membership fee, which comes after the initial enrollment fee. The monthly membership fee will ensure that the exclusive buying opportunities are available, as well as the many other benefits the card has to offer. The other benefits include the roadside assistance, which consists of towing, lock-out assistance, jump starts, winching, fluid delivery, and tire changes. This service is available 24/7 so you can have peace of mind when you are on the road. The second benefit is the legal assistance, which can save you hundreds or thousands of dollars. If you need legal documents reviewed, a face-to-face or telephone consultation for a new legal matter, assistance with a small claims court situation, a Simple Will, Living Will documents, or legal assistance with a government program that you are having issues with, plan attorneys are available. Lastly, there are daily deal discounts in over 6,000 cities around the world. A smartphone application can be downloaded to your phone that identifies what these savings are so that you can customize them to your needs and interests and locate them wherever you are.2313.3(231)
FamZoo Prepaid Mastercard® Debit Card for TeensFamZoo Prepaid Mastercard® Debit Card for Teens464(46)
UNITY® Visa - The Comeback Card™The UNITY Visa Comeback Secured Card is the financial product that American consumers have been looking for. This impressive secured credit card offer comes with a host of other benefits, including Purchase Rewards. Few secured card offers include any kind of rewards program; this offer has really raised the bar. More than that, it's a card offer that reports to the three credit bureaus, which is ideal for those wishing to strengthen their buying power. Imagine the option of withdrawing cash without being hit with invasive surcharges. How about an online banking interface that allows you to budget your finances as a whole - including your taxes? Low fees? Customer service that's right here in the U.S? These are a few of the benefits you'll receive when you apply for this Visa secured card. As a member, you can also begin to think long term financial goals, including investing in CDs, money market accounts and savings accounts. Your security deposit is protected in a FDIC savings account and because your payments are reported to the three credit bureaus, you're strengthening your financial standing. This can lead to lower interest rates and financial choices. Finally, the fixed rate with this offer makes it easier than ever to budget your finances. Members are also afforded a website that offers a plethora of financial savvy articles and blog posts, all designed to provide insight to the importance of credit in our modern society. Applying is easy and once you've made your security deposit, you too will begin reaping the many benefits, courtesy of the Unity Visa.613.4(61)
Surge Mastercard® Credit CardIf you've ever set out to find a better financial solution, odds are, you found a lot of unnecessary verbiage and perhaps not enough answers. These days, finding offers that are fee heavy, with too many terms and conditions and unrealistic fees is the norm. Maybe that's why so many are discovering the Surge credit card offer. With the safety of the Mastercard logo, complete with all the perks and benefits of being a Mastercard customer, you'll discover just how easy it was always supposed to be, without the fuss and unnecessary hype. You'll enjoy at least a 25 day grace period, a comparable APR and an affordable annual fee. Adding additional cards is no problem either. The offer is not designed for co-applicants, but an authorized user is easily added. Other standard fees include a cash advance fee, late payment fees and a monthly maintenance fee. The benefits you receive in return are impressive. This is a fine offer and any credit situation is invited to apply. You have more bargaining power than you realize. Once approved, you'll enjoy a credit limit of at least $500 and you can easily add the optional credit protection program. This helps ensures your account payments are made if you are ever injured or disabled. It's just one of the many reasons why this credit card offer is turning heads. To learn more or to apply today, visit Surge Mastercard® credit card website and as always, we encourage you to carefully review the terms and conditions of any offer you're considering. Have questions? Our customer service team stands ready to help when you need it.1134(113)
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.