Monday, January 26, 2009

Finding the Right Credit Card During a Tough Economy

With the current state of our economy, a growing number of people have been turning to credit cards to help them get through their financial troubles. While a credit card can certainly be beneficial when caught in a financial pinch, it is important for you to understand the pros and the cons of a particular card before you fill out an application. After all, you want to get a credit card that offers the greatest benefits and will cost you the least amount of money to use. Therefore, it is important for you to better understand some common credit card terms so you can be certain to get the best credit card for your individual needs.

Annual Fees

When sorting through your credit card options, you may find some cards that charge an annual fee. An annual fee is a charge you have to pay every year in order to maintain you credit card membership. Unless you have extremely poor credit and can only qualify for a card that charges an annual fee, you should probably steer clear of this type of credit card. While there are some high-end rewards credit cards that also charge annual fees, this is not the type of credit card that you would use to help you get through rough financial times.

Finance Charges

The finance charges you pay are related to the annual percentage rate, or APR, of the card. The APR may be variable or fixed. With a variable rate, your APR is based on the prime rate and will change as the prime rate changes. A fixed rate APR, on the other hand, will stay the same regardless of changes in the prime rate. Finding a credit card with a low fixed APR is generally the best route to take because you can more effectively budget your payments and calculate the finance charges you will be paying from month to month.

Grace Period

The grace period is an important consideration, as the grace period refers to the number of days you have before you are charged finance charges. Most cards offer a grace period of about 25 days. Be certain to select a card with a grace period rather than one that starts charging as soon as your purchase is made, as this will help reduce the finance charges you have to pay.

Introductory Offers

It is important to note that many credit cards offer introductory rates or other introductory specials. Remember that these rates and specials are only temporary. Therefore, even if a credit card has a great introductory APR, be certain to find out what the APR will become after the introductory period is over. If you know you will be carrying a balance for a period of time, a credit card with a less attractive introductory APR but a better long-term APR may be the better card for you.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for . For more info and to order your credit report with FREE credit score please visit

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