Credit cards seem simple enough to understand. Basically, it is an alternative way of paying for your goods instead of cash. For the financially illiterate, it may mean an unlimited amount of money the bank provides for you to pay for what you need and want, even if you cannot afford it. Needless to say, this belief is not simply wrong but overwhelmingly problematic. This could cause a lot of irrevocable financial repercussions if taken lightly.
If you think answering the question of whether it is wise to get a credit card is just a matter of yes or no, you need to know a little more about them and their technicalities. To give you a general idea, here’s a link, kredittkortinfo.no/hva-er-kredittkort/, that can help you
When you are prepared to dig a little deeper, have prior credit card experience, or are already using one, there are more specific questions to guide your research. A quick Google search would probably get you the answers you need – but you would be surprised at how many of the general rules a credit card issuer would be willing to bend for you if you ask them directly. There might be some secret information they let slip during the conversation just to get you to sign up for their program.
Here are ten questions that have been proven to get you the best terms and premium rewards:
Is Getting A Rewards Credit Card An Excellent Choice & Worth It For Me?
For first-time cardholders, it may be worth asking if a rewards credit card can do you more harm than good. Some issuers recommend their basic credit cards just to get you used to the concept and help you avoid overspending. However, depending on your lifestyle, income, and spending habits, there may be some reward cards that will work to your benefit.
Ask your issuer which types of cards would work best for you and give them full details of how you plan to spend most of your credit limits. Some cards offer high cashback rates for certain purchases, and some provide you with better deals with your preferred retailers.
What Is The Difference Between APR & Interest Rate?
One of the first important questions to ask and should know about is the interest rates that come with any credit card. The most common are the APR (Annual Percentage Rate) and interest rate.
Although they are related, they are not nearly the same. For credit cards, the interest rate, which can also be called the “nominal interest rate,” is the cost of borrowing money if you do not fully pay your monthly statement due. Meaning it is the rate placed on top of your outstanding balance from month to month, typically referred to as the monthly rate.
APR, on the other hand, is more than just the nominal interest rates but also includes the annual fees, balance transfer fees, cash advance fees, and all other finance charges associated with the card. In other words, it is the actual cost of borrowing money, as it includes the interest rates and all the incurring fees.
Does Your Card Offer Additional Benefits Or Perks?
If your income and credit score give you more chances to get the more premium types of credit card, it usually comes with significant perks. These benefits often include an elite status with an airline, enrollment in a hotel chain’s loyalty program, free check-in bags, access to exclusive lounges, or even extended warranties. Calculate your projected savings and see if the perks outweigh a possible higher annual fee.
What Kind Of Fraud Protection Can I Expect?
There are several federal regulations in place that limit your liability to unauthorized charges on your credit card to only $50. Should the transaction be beyond $50, it should be covered by your credit card issuer. This protects you from significant financial losses in case of fraud. Some credit cards offer even less than $50, and some are even zero. Ask the issuer for some comprehensive information about what security measures they have in place to protect you from any consequences of theft or fraudulent activities.
Do I Have An Option To Get A Lower APR?
If you are already an existing credit card user with superb credit scores and an almost perfect record of paying on time, then you definitely have a chance for a reduction in your interest rates. You can always ask your credit card issuer; the worst they can say is, “nei (no).”
Are There Any Promotional APR (Annual Percentage Rate) Offers Available?
Credit card issuers are typically flexible with their existing clients. If you prove to be knowledgeable about terms like APR or Annual Percentage rate, then they may have the impression that you are not new to the game. They might be more open about their ongoing promotions of temporary lower interest rates or special rebates on balance transfers.
Can My Overdue Payment Fee Be Waived?
If you have been religious with your payments in the past but missed your due date this time for some valid reason, check if your issuer may have some policies about forgiving your first missed payment with no fees at all. Some issuers typically enroll their clients in payment-due alerts to ensure they do commit past-due payments. Although the overdue payment fee can be waived, your overdue payment may actually make it to the credit bureaus, affecting your credit score. So, be sure to pay on time for your next statements and ensure you do not make a habit out of it.
Can I Change The Statement Due To My Preferred Date?
Although not common, some issuers do give flexible terms on due dates, letting their clients choose which date to commit to for payment. Should you have that option, make sure to set your date at the time of the month when money is not tight. That way, you are able to maximize this privilege and gain some financial benefits.
Are There Any New Rewards Or Benefits That I Can Qualify For As A Long-Time Customer?
Some card issuers may have some loyalty perks or bonuses for their customers who have been with them for an extended period. If you have a good credit standing with these banks, they may even offer great rewards that ensure substantial savings. These perks may be time-limited, so be sure to keep yourself updated with ongoing promotions for your cards or repeatedly call your issuer if they have any bonuses up for grabs that they are not announcing.
Can You Recommend A Better Card Option For My Current Financial Situation?
For first-time cardholders, this would be an ideal question for first-time cardholders to ask your issuer before signing any contract. However, for existing credit card users who made quite a turn in their financial situation, credit card issuers may allow you to switch up credit cards to help you mitigate your losses. If this is your first time, issuers have a policy to help you adjust to your situation while keeping your credit standing intact. However, your next credit card will come with lower purchase limits and higher interest rates.
Accumulating debt on your credit card balances due to more than a month’s worth of nonpayment is another story. Some cards may have programs that give you a chance to get caught up with your outstanding credits; others do not, especially when they have sent your balance to collections. The only step you can take when all else has been exhausted is to – regretfully, cancel your credit card.
Cancelling Your Credit Card
It is easy to cancel your credit cards, contrary to the famous and dramatic way of cutting your rectangular plastic card in half. The proper process is more subtle and simply involves calling customer service. They will most probably offer you some kinds of incentives like a lower interest rate or renewal of the introductory rate within a certain period.
If you have a rational argument that these rates are viable options for you, you can take them to continue using your card. On the other hand, continuing to use the card causes more harm than damage, so it is better to stick to your decision and let them cut it, albeit virtually.
Unless you have made some arrangements with your issuer on the payment plans, you will continue to pay the balance, charging the same interest rate until it is fully paid off.