THINGS TO DO WHEN YOU GET A NEW CREDIT CARD

THINGS TO DO WHEN YOU GET A NEW CREDIT CARD

UNDERSTANDING CREDIT CARD TERMS

Choosing the right credit card means understanding the terms that will apply. The companies bill you every month for any charges that you make on your credit card.

If you do not make payments and carry a balance on your credit card from one month to another, you will incur an amount of principal interest, i.e., the annual percentage interest. The lower yearly percentage interest, the less will be the interest that you have to pay on any balance that you carry on your credit card.

Certain credit cards include an annual fee which may vary from Nil to 25,000 per year. The more benefits that you get from a credit card means the higher amount of annual fee.

CHOOSING THE RIGHT CREDIT CARD FOR YOU

Credit card companies have eligibility requirements that one has to meet to get their credit card application approved. The eligibility requirements are related to your income, credit score, debt level, etc.

One should ensure that they meet the eligibility criteria before applying for any credit card. Firstly, because if you meet the criteria, it is likely that your application will be approved quickly and secondly, more than one denied application means many hard credit inquiries which will negatively affect your credit score. It will also make it difficult to get a credit card.

Some credit cards are good for new credit card holders or people who have never taken a credit card before. So, one must choose wisely.

THINGS DO WHEN YOU GET A NEW CREDIT CARD?

Once your application for the credit card is approved, it takes approximately 7 to 10 business days for the credit card to arrive through the mail. Once you receive the credit card there are things that you need to perform before you can use it, which are as follows:

    • Read the Terms

        • Read the terms and conditions thoroughly.
        • These terms provide you the information of pricing features of your credit card.
      • This information is made available at a single piece of paper along with your credit card as per the requirements established by the law.
    • Activate your Credit Card

        • Once you thoroughly understand the terms, conditions and pricing features, one should activate their credit card to make it ready to use.
        • It is a simple task.
        • Step One – there is a sticker on the front of your credit card that provides you with a number to call or a website to visit.
        • Step Two – follow these on-screen directions or automated prompts to activate your credit card.
      • It takes hardly a few minutes.
  • Register your Account Online

      • It is not the same as creating an online account.
      • Registering your account online means by creating and registering your account you are allowed to access it through the internet.
      • Also tracks down your account activity.
      • You can make payments from a website.
      • Major issuers have made available registering your account online.
    • It also makes your life much easier.

MAKING PAYMENTS TO YOUR ACCOUNT

Once you have read the terms, activated your card and registered your account online, you should start using your credit card to make purchases. You will receive a bill from your issuer once a month.

The bill contains the following important information:

    1. The total balance of your credit card
    1. Due minimum payment

        1. It is the smallest amount one can pay without penalty.
        1. If the credit card holder makes less than this amount, the interest rate on your credit card will go up.
        1. Each credit card issuer has a different method for calculating the minimum payment amount.
        1. It is generally 1% of your credit card’s balance amount plus the interest charges.
      1. The exact formula applied is written on your bill.
  1. The payment due date

If you make the payment after the due date, then a penalty of the late fee is incurred and included on your next bill. If you are sending your payment through mail be sure that it reaches the issuer before the payment due date to avoid the implication of late fee charges. Online payments apply automatically.

It is advisable to make payment of your credit card bill every month to save yourselves from paying the interest rate. Also, the following things happen if you only make the payment of the minimum amount on your credit card balance:

    1. You will pay more interest
    1. It takes time to pay off this balance
  1. Carrying a balance affects your credit score negatively

But if you are not able to pay off the entire bill make sure that you make the minimum balance on your credit card.

SEE ALSO: DIFFERENT CREDIT CARDS FOR DIFFERENT WOMEN