How to Choose A Credit Card
If you want to apply for a credit card these days, it’s actually easier than ever. After all, there are so many different types of companies offering a personal credit card, a business credit card, and a credit card for college students.
Today, you can apply online for credit cards from airlines, amusement parks, credit unions, alumni groups, restaurants, retail stories, technology companies, as well as banks, savings and loans, and many more.
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Below is a list of Frequently Asked Questions –– and our Frequently Provided Answers about applying for a credit card, how to apply online for credit cards and applying for a business credit card.
Q. What are late fees?
A. Late fees are what credit card companies charge you for not getting your monthly payment there by the due date. Sometimes, your payment can be delayed by snail mail or even by your electronic bill paying system through your bank, so remember to make your payment early.
Late fees can range from $10 to $15 on balances up to $100; $29 on balances from $100 to $250; and $39 on balances of $250 and up. However, making a minimum payment on your statement usually helps you avoid paying late fees.
Even though the Fair Credit Billing Act requires that issuers credit your payments the day they receive them, each issuer can set specific payment guidelines, which may take as long as five days to credit the payment. The result? More late fees.
Q. What are terms of agreement?
A. The terms of agreement include the Annual Percentage Rate, Credit Line, Periodic Finance Charges based on APRs, Transaction Fees for Balance Transfers, Purchases, Cash Advances, and other late fees, as outlined in the contract when you apply for a credit card or apply online for a credit card, and the card agreement you receive with your credit card.
Q. What other fees may be charged on my credit card?
A. Besides late fees, when you apply for a credit card by mail or apply online for credit card through the Internet, you pay other fees, depending on your usage. These may include:
- Minimum finance charge –– Usually $.50 if the periodic finance charge for the billing period would otherwise be less;
- Balance transfer fees –– Usually 3% of each optional balance transfer with a $5 minimum and a $50 maximum;
- A fee for purchases made in a foreign currency –– Usually 3% of each purchase after its conversion to U.S. dollars;
- Cash advance fees –– Usually 3% of each cash advance, with a minimum $5 fee;
- Finance charges on your balance –– Your balance, subject to a finance charge, multiplied by your pro-rated periodic interest rate;
- Over-the-credit-line fee –– Usually $35;
- Annual membership fee –– Varies per card, from free to $75 or more;
- Returned payment fee –– Usually $29;
- Returned balance transfer check or convenience check fee –– Usually $29;
- Stop payment fee –– On balance transfer check or convenience check, usually $29.
Q. What are interest rate changes?
A. Interest rate charges are also called Annual Percentage Rate (APR) charges, which are based on the Prime Rate, but may vary each billing period. For example, your APR may be 18.24%, but your balance subject to a finance charge is a late fee that’s pro-rated as a percentage of it.
Q. How do I cancel my credit card?
A. If you want to cancel your credit card that you've received when you apply for a credit card, it’s recommended that you call the credit card company at the number listed on the back of your card or on the monthly statement, tell them the reasons you no longer want to use that particular credit card, then destroy the card by cutting it into many small pieces.