When anyone is trying to establish credit, it can seem like a nightmare. Each time you submit an application your credit score dips, and there are so many factors involved with determining your score. Luckily, there are some ways you can control what influences your credit score, and control access to it. This article will show you what to look out for when you receive offers for credit cards, and show you some simple steps you can take to ensure you get a fair deal.
Why do Companies Offer Trade credit
The very first thing you should do when you get an offer is look at the fine print. Look at the details and see how much credit the company is offering to you, and decide if it fits your needs. Obviously if you need a card with a $300 limit, and they only offer you $100, you can tear it up and move on.
If you find that the credit limit suits your needs, you should then look at the interest rate. Keep your attention on the fine print. Notice if there is an introduction rate. Often times, they will offer you an incredibly low rate for 6 months and then hike it up high. Another tactic you need to watch out for is if they offer you a low rate unless you miss a single payment. Generally one missed payment will send the interest rate skyrocketing. This can make it incredibly difficult to repay the balance, and you will end up with a mountain of debt.
Some cards carry benefits for using their credit services. Whether it is frequent flyer miles, or a point system you can redeem, you need to find a card that has benefits you will actually use. One of the best benefits to find is when they offer to waive fees after you accumulate so many points.
Pay Bills on Time to Build Good Credit
Look through the contract to see how often payments should be made. While it is typical for most companies to provide you with a full 30 days to repay or make a partial payment, some companies want a payment within 24 days. Knowing the exact time you must repay will save you a lot of trouble in the future. In addition, you will build great credit when paid on time.
Check the contract to see what the penalties are when you miss a payment. Some companies will offer you a first time discount, or waive any fees for the first missed payment. However, other terms can be incredibly devastating. This is why it is vital to check through the terms and see what you can do if you run into an emergency.
Lastly, you need to make sure you can have an exit strategy in case you do not like the company after using their services. Find out if there are any early termination fees, or if you can get your deposit back if they require one.
Reading through the fine print will save you a lot of trouble. Just be sure to take your time and cover all the information to ensure you are getting a fair deal. There are plenty of other companies out there that will gladly issue you credit without bad deals.
