Most of you get credit card offers that say something like "re-establish credit with pre-approved credit cards, no matter what your credit history is." Some of these cards have low introductory rates and other benefits.
Here are some important terms to think about that should usually be included in credit applications or requests for credit that don't need an application. When you're looking for a card, ask about these terms. Rate based on a year. The APR is a yearly rate that shows how much it costs to borrow money. It also has to be made clear before the account becomes obligated and on account statements. The card issuer must also tell you the "periodic rate." This is the rate that is used to figure out the charge for each billing period based on your outstanding balance. When interest rates or other things called "indexes" change, the issuer of some cards can change the APR. These plans are called "variable rate" programmes because the rates change based on how well the index does. When the rate changes, the finance charge on the account goes up or down. If you're thinking about getting a pre-approved card with a variable rate, the issuer needs to tell you that the rate could change and how the rate is calculated, including what index is used and how much is added, called the "margin." Before you sign up for the account, you should also get information about any limits on how much and how often the rate can change. Free, full stop. A "free period" is also called a "grace period." If you pay off your credit card balance in full before the due date, you don't have to pay finance charges.
Most companies charge membership or participation fees that are paid once a year. Most of the time, they cost between $25 and $50, and sometimes up to $100. "Gold" or "platinum" cards, on the other hand, usually cost between $75 and several hundred dollars. Choice Credit gives people a lot of choices. Some may have extra fees. Some card issuers will charge you a fee if you get a cash advance, pay late, or go over your credit limit. Some charge a fee every month, whether you use the card or not. Choice Credit gives you all the information you need to choose well.
If there isn't a free trial period, it's important to know how the finance charge is calculated. This can make a big difference in how much a finance charge will be, even if the annual percentage rate (APR) and buying habits stay mostly the same.
