Your Checklist before Applying for Credit Card

There are various charges that the company may charge on issue of card. Some of the charges that you may be charged include:

Fees
It is very important for credit card companies to charge fees on the cards, as it's the key way they make revenue. Credit card companies may charge fees for late payment of amount due, annual fees, closure fees and over-the limit fees. The fees charged depend on the company which has issued the credit card.

Annual Fee
An annual fee is the fees charged annually for membership of the card. This fee will vary depending on the card and can be as high as 800 dollars, namely on the American Express Platinum Card. Many cards will offer $0 annual fees, but the drawback with these is they don't offer the typical 55 day interest free period that 95% of regular cards do.

Closure Fee
Some credit card companies may charge closure fees when the credit card is closed. This fee typically ranges between 25 to 50 dollars.

Over-the-Limit Fee
It is always better that you do not exceed you credit card limit because if you do then the credit card company may charge you fee which could be as high as 50 dollars.

Late Fee
A late fee is imposed when you do not make a payment before the due date. Some companies charge full interest even if the payment is delayed by one day.

Annual Percentage Rate
Apart from fees credit card companies also charge interest on the outstanding. The rate of interest charges on the amount outstanding is known as the Annual Percentage Rate or the APR. The APR is the annual interest rate charges and is one of the most important factors that you should consider before getting a credit card. Some companies like Chase has come out with 0% rate of interest on their credit card. Therefore you should analyze the offers available in the market before getting a credit card for yourself.

Credit Limit
Before applying for credit card find out what is the credit limit offered on the card. If your credit card expenses are high, then obviously you'll a card which has a high credit limit.

Secured or Unsecured Credit Card
It is important that you find out whether the credit card issued to you is unsecured or secured against certain deposit. The secured credit card is usually opted for if you are a student or a person with a low credit score. In both cases is very difficult to get a unsecured credit card.

Grace Period
Grace period is the number of days of interest free credit given by the credit card company. Ideally a grace period of 25 days is given on the cards. This grace period is not applicable to cash withdrawals and balance transfers.

Rewards & Perks
Credit card companies offer reward points when their credit card is used. These points can be later converted to gifts. Also some companies may offer discounts on purchases made at select stores. These perks and rewards do not have much meaning if you are not a big spender.

Whatever you do always remember to read the terms and conditions of credit card offer before applying for one with a fine tooth-comb.

Once you've passed the checklist, you're read to apply credit card knowledge and not get caught in the numerous pitfalls banks impose on their credit cards.