If you’re getting ready to apply for a new loan or a credit card, chances are that you have some questions about what exactly you need to know about helping you choose credit wisely. If so, take heart, because this article will provide you with all the answers you need to get started.
First of all, when it comes to the first step in determining your new financial circumstances, it’s essential that you first identify your current credit situation. If you don’t know how to do this, you’re going to have to take the initiative and figure it out yourself, which can be a time-consuming and expensive exercise.
How to determine your current credit standing?
It’s important that you take out a free copy of your credit report from one of the three major credit bureaus: Equifax, Transunion, or Experian. You’ll find that these three agencies keep regular reports on your credit history and finances. It’s important to make sure that you read these reports carefully, because not only do they give you an overall account of your credit history, but you’ll also find out the specific details of each report, including any negative information that’s contained therein.
Once you’ve taken a look at your current credit reports, you’ll want to decide whether or not you’d like to apply for a credit card or a loan from your bank. This may seem like an obvious decision, but you may find that you have some qualms about whether or not you actually need to apply for one of these loans. After all, credit cards generally carry a higher interest rate than loans, and there are usually fees that go along with them as well.
Advantages of credit cards
On the other hand, the advantages of credit cards include a very low rate of interest, as well as the convenience of simply spending whatever you want and paying off the balance quickly at the end of each month. In addition to this, credit cards typically come with the added convenience of allowing you to shop at any establishment that accepts credit cards, making it possible for you to spend money at all of the places you might otherwise have trouble doing so.
The downside of these cards is that they tend to be extremely expensive compared to other credit card companies, and are generally available only to people who are already members of a particular card company. Another option for you would be to apply for a secured credit card, which means that you’re going to pay a lower interest rate than the typical credit card. and limit yourself to certain purchases with no access to other cards. If you’re worried about using your card in an unexpected manner, this type of card could be a good choice for you, particularly if you’re planning to make purchases for a limited amount of money each month.
Credit card security
Finally, remember that it’s important that you look into what sort of protection you have available to you with credit cards. Most credit cards offer you some sort of protection in the form of a credit limit, which means that if you have a bad payment, the lender can repossess the card, but usually only if the card has been used for a specific purpose.
In addition to this, most credit cards have “bounced check” protection, meaning that if your payment on the credit card isn’t reported by the company to their credit bureau, the check will bounce back to the issuer instead. And finally, if you’ve applied for a secured credit card and the company finds that you have a history of late payments or bankruptcy, the company won’t have the right to charge any fees or penalties.