Credit Cards have always been known to help us when it comes to our financial status and comes with so many benefits. In this guide, you will get to know everything that pertains to “credit cards” and the basic credit card requirements you need first before applying for a credit card of your choice and getting approved for it.
Before you can go into something or go for a particular thing, you should be able to know what “it is and how it functions” and since credit cards are the main purpose here, you should know what they are.
Credit cards are simply payment cards issued to the user who is usually called “the cardholder” to pay for goods and services the user owes. It is in a rectangular plastic or metal form and it is issued by financial institutions like banks.
These financial institutions also grant cardholders which are the users a separate cash line of credit to enable them to borrow money in the shape of cash advances that are usually accessed through ATM cards, bank tellers, or even credit card convenience checks.
These “cash advances” have apparently different terms compared to the transactions that can access the main credit line especially when it comes to the time period and higher interest rates. This is very important and helpful for people with a poor credit history or past stories who seek secured credit cards that will require cash to be deposited.
Advantages Of Using Credit Cards
There are many advantages you will enjoy and benefit from when using credit cards. Some of these advantages include;
- Enjoying incentives like gift certificates, airline miles, hotel room reservations, and car rentals.
- Special discounts or special sales, which are the perks offered to the users.
- Help you build a positive credit history.
- Make online purchases and terminating the need to carry cash everywhere you go to buy something.
- Also, help you build strong credit card scores and extend your lines of credit tremendously.
These are just a few advantages of having and using credit cards mentioned above. You stand to gain more benefits from using it as time goes on.
The Terms And Conditions Of Using Credit Cards
Before making applications for credit cards anywhere, you must, first of all, know their “Terms and Conditions”.
They are the official statements or documents that state the rules and guidelines governing the relationship shared between the card issuers (financial institutions) and the cardholders which are the users or applicants. The most common terms and conditions of credit cards usually include the following:
- Annual percentage rate,
- Interest rate,
- Interest charges
- Cost information, and
- Pricing and its terms.
These terms and conditions also help to explain the things you should have to qualify for some rewards or incentives and promotions and they will also be mailed to you with your credit card after you must have applied for it.
Types Of Credit Cards
When going for any of the available credit cards in your location, you should know which one will serve you best among all and know more about what it offers and covers. Below is a list of the different types of credit cards you can apply for depending on your choice and purpose:
1) Store Credit Cards
These credit cards are offered to users through retail stores to enable the consumers to know their purchases and pay them off as time goes on depending on the time period limit.
2) Business Credit Cards
These ones help the cardholders to keep their business expenses aside and still earn rewards from their everyday spending which makes the business move easier.
3) Cashback Credit Cards
They help you earn the cashback and statements of your spending and its rewards vary from card to card.
4) Travel Credit Cards
These are one of the most interesting and enjoyable types of credit cards. It deals mainly on rewards you earn pertaining to “travel” especially when looking forward to luxury travel and it comes with its own perks.
5) Rewards Credit Cards
These credit cards come in different categories. It keeps you updated on the percentage of your spending and also offers “bonus points”. It is a great one to go for when it comes to everyday expenses.
6) Balance Transfer Credit Cards
If you have a lot of debt on your hands, you can go for balance transfer credit cards as they help you manage and pay off the debt gradually. They help you focus more on paying your debts rather than interest charges.
7) Student Credit Cards
These credit cards are for starters with a limited credit history and it mostly points towards young people. They can help youngsters to build their credit lines and also create good financial habits.
8) Secured Credit Cards
These are the easiest credit cards to apply for and get approved for and are best needed for people who want to start afresh or scratch to repair their credit if they experience some financial setbacks.
9) Cobranded Credit Cards
They are brand credit cards issued by some traditional card issuers. The rewards offered through these cards are sometimes limited but very solid and some of them work with retail stores.
Actually, there are so many credit cards out there that you can apply for but the ones mentioned here are the most common and popular ones that have tons of users all over the world with their own Terms and Conditions.
How Do You Know The Right Credit Card To Choose?
It is very simple, all you have to do is follow these five steps here:
- Know your credit history.
- Put down your plans, goals, and objectives.
- Go through your debts if you have any to make amendments.
- Make a comparison of different reward programs.
- Watch out for fees and other carrying costs.
It is as simple as that, once you follow these steps, you are bound to make the right choice in selecting the best credit card to apply for and use.
The Basic Credit Card Requirements
To apply for any of the credit cards mentioned in this guide, there are some stages you must get to or reach to qualify for any of them and the most important requirements are;
- You must be at least 21 years old or 18years old with the permission of a parent or guardian.
- Must have a positive credit history.
- You should have a reasonable and solid “source of income”.
- Also, it is mandatory that you have a social security number.
Once you have all these necessary requirements, then you can go ahead and apply for the credit card you want without having any doubts or fear of being eligible.
Ways To Apply For A Credit Card
There are many ways to apply for a credit card, and whichever way you choose, you’ll still get your credit card.
- By post: Using this method, you fill in a paper form, which you can usually get at the bank offering the card.
- Online: You will be required to fill in a form on the web.
- In-branch: Someone in your bank can help you with the application.
- Directly from a comparison site that shows you a number of deals and allows you to apply directly
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