Credit Cards

Pack Your Wallet With More Buying Power

With a higher credit limit, you’ll have more flexibility for purchases, vacations, and cash advances… and you may be able to consolidate other credit card balances and save on interest as well. And since you pay nothing for credit you don’t use, it makes sense to apply for the highest credit card line possible.

Take Our One-Minute Credit Card Potential Test

Even if you scored less than 15 points, speak to a loan officer at a bank listed in our BankSITE Directory about your particular situation. you’ll find that these institutions always look for ways to approve loan requests, not for reasons why they can’t.

About Credit Cards

We use credit cards in our society so much, we take them for granted. But there are many different types of cards. . . and ways to get the most out of them.

In this section, we’ll show you the ins and outs of shopping for a card, reducing your credit card costs, and protecting your credit. So click on a topic and start to explore… over a longer period, as well as for short-term expenses. Keep in mind however, that many revolving credit cards also allow you to take cash advances. But when you take a cash advance instead of goods or services, the repayment and interest terms may differ.

Types Of Cards

Not all credit cards that let you charge purchases are the same. Basically, there are three different types of charge cards. Here’s How They Work:

Revolving Credit Card
An unsecured loan that provides you with a line of credit against which you may borrow. All you have to do is present your credit card to the merchant when purchasing an item and sign the sales slip (be sure to get your card back and a copy of the sales slip).

You may make more than one purchase, up to your credit limit which is the maximum amount of credit available to you. Interest is charged only on the amount of credit you use and it’s added to your balance on a monthly basis. You repay a portion of the total balance each month.
MasterCard, Visa, Discover Card, and many store credit cards fall into this category. This type of card is excellent for purchases that you want to repay over an extended period of time.

Non-Revolving Credit Card
This card works on the same principals as a revolving-type credit card, but the total balance must be repaid every month. Examples of this kind of card include American Express, Diners Club and most Oil Company Credit Cards. You should use this type of card for expenses or purchases you want to repay within 30 days.

Debit Card
This card is not a credit card at all, although many of the ones issued by banks bear the words “Visa” on them. It’s linked directly to your checking account and the cost of purchases made with it are immediately withdrawn from your checking account.

A debit card is useful when a merchant will not accept a check, but you want to pay for a purchase out of your checking account. Often this type of card may be used as a check guarantee card with merchants.

Choosing A Card

There are several things to consider when deciding which credit card to use. If you’re the kind of person who pays off your credit card balance every month, the only variable that will matter is the annual membership fee. If however, you carry a balance on your card, careful shopping for a card will make a big difference in the total cost of your charges. Here are some variables you may want to consider:

Annual or Membership Fee
This is the amount institutions charge you every year for the privilege of carrying their card. Look for the lowest annual or membership fee. Some institutions charge no fee at all.

Interest
The Annual Percentage Rate (APR) on credit cards can range from only a few percent to much more. It’s always a good idea to compare interest rates.

Cost of Cash Advances
The credit card issuer determines how cash advances are handled. Some banks charge more interest for a cash advance than a purchase. Others begin computing interest from the day you take the cash advance. Others may add a flat “cash advance” fee to the transaction. When you’re considering a particular card, you should know what the bank charges for a cash advance.

Minimum Payment 
This is the smallest amount you pay each month. Some cards peg it to a dollar amount. Others insist on a percentage of the balance. A small minimum payment can make a high balance easier to fit into your budget, but it will take longer for you to pay off your balance and you’ll be paying more interest until you do.

Grace Period
The amount of time you have before the company issuing the card begins charging interest on a purchase or cash advance is the grace period. The grace period on purchases compared to cash advances is often different. For example, a typical card charges no interest on your purchase if you pay off the balance that month, but it will charge interest on a cash advance from the day you take it.

Cost Calculation Method 
Credit card issuers use different methods to calculate the interest they charge. The least costly to you is the Average Daily Balance Excluding New Purchases. Next in line is the Average Daily Balance Including New Purchases.

Tips To Cut Your Credit Card Costs

Tip 1: Try to pay off your balance every month. That way you’ll escape interest charges.

Tip 2: When you make a large purchase you expect to pay in installments, select a card with a low interest rate and high minimum payments. This will minimize your costs.

Tip 3: Be cautious taking cash advances. Save them for emergencies. They’re the most costly use of a credit card.

Tip 4: Look for the lowest interest rate and annual fee.

Tip 5: Don’t get trapped in making minimum payments. Pay larger amounts to pay the balance off faster.

Tip 6: If you have several cards and you plan to pay them off by paying more than the minimum purchase every month, begin with the one with the greatest interest rate and pay that off first, even if it has the largest balance. you’ll save more in the end.

Tip 7: Be wary of “payment holidays” where the lender offers to let you skip a payment because of a holiday or good payment record. During that month, you’re still accruing interest, so you’ll pay more overall in the end.

Tip 8: Select the card with the least expensive cost calculation method.