7 Important Facts That Everyone Should Know About Credit Cards

How many credit cards should a person have? Why do you need to understand a cards interest rate? How best do you go about comparing different credit cards? All this, and a fair bit more are discussed in the top credit card tips & facts:

1. Is There A Certain Number Of Credit Cards That You Should Hold?
   This is a very personal thing, and every consumer is wildly different. However, myFICO.com reports that the average adult holds a whopping nine credit cards. This does not mean that it is recommended that everyone hold 9 cards – in fact, in this era of debt control and austerity, the fewer cards that you can hold the better. Typically, two or three credit cards should be enough to satisfy the credit needs of most people.

2. Understanding Your Cards Interest Rate
   Credit card rates vary dramatically from company to company, and card to card. It is clearly essential to understand the rate that your credit card is charging, as the rates can vary from 0% on balance transfer offers up to over 50% APR on some (usually subprime) cards. If you are the type of person who most probably will be unable to pay the balance within the grace period, understanding the rate becomes even more critical.

3. Visa & Mastercards Are NOT Card Companies
   Some people mistakenly believe Visa and Mastercard are credit card issuers. This is not true, these companies simply are the worlds largest payment processors and do not issue cards.

4. Compare Your Cards Before You Jump In
   With such a massive range of options, and with so many bodies from banks and building societies to credit unions issuing cards, there are a wide range of cards that you can potentially take out. Not only will the APR vary wildly between different cards, but so will the potential rewards, grace periods and fee structures. Active and regular card users can save hundreds a year by choosing the right card upfront by doing a little bit of research.

5. Your Credit Card Agreement Is A Binding Contract
   You should be sure about taking out your credit card because when you sign up, the agreement is a binding contract. You’re agreeing to a number of terms including the amount of credit, the annual percentage rate, the way interest is calculated and charged, the grace period, and any fees. The other thing to keep in mind is that the credit card company usually can change these terms at any time.

6. Understand That You Have Rights As A Card Holder
   You have certain rights as a card holder. In particular there are two laws that protect credit card consumers – the Fair Credit Billing Act which allows you to dispute any bill discrepancies and The Truth In Lending Act, which requires all card issuers to explain the contract in clear and unambiguous language.

7. Hopping Around Can Save You Money
   The best results from credit cards are achieved by those who are extremely organized and who often look out for the best deals on an ongoing basis to keep their costs at a minimum. This means actively looking out for 0% cards, and hopping to new 0% cards once the free interest period expires.

DISCLAIMER this article is for educational and entertainment purposes only and is not intended to be financial advice