All About Credit Cards (Part 2)

We have discussed some of the basic functions of the credit card. “But Colby what do these rates and acronyms mean? And this contract needs a magnifying glass to read the fine print.” Obviously we still have some material to cover concerning credit cards. The material discussed may seem eclectic but that is because when it comes to credit cards there are a bunch of seemingly unrelated pieces that add together in that tiny piece of plastic.

Key Points

  • There are different types of credit cards available.

    -Image courtesy of urban tastebuds
    Image courtesy of urban tastebuds
  • One of the most important features of a credit card is the card’s annual percentage return (APR) or the interest rate charged on the card.
  • The annual charge and the grace period are two other features to pay attention to.
  • If you have more than one credit cards in use, pay the balance on the card with the higher APR first.

Continue reading All About Credit Cards (Part 2)

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All About Credit Cards (Part 1)

Ah the credit card.  When you think about it ideas of platinum and gold cards and the high life may come to mind. This is part of the story. The other part of the story is that using a credit card irresponsibly can burden a person with an enormous amount of debt and keep him up late at night. So what is a credit card and how does it function?

Continue reading All About Credit Cards (Part 1)

Credit Scores, Credit Reports, And Why They Matter

You have probably seen commercials about “improving your credit score” or companies that will “give you your credit score” now you may be thinking “What the hell is a credit score?” Put simply a credit score is a three digit number that indicates how reliable you are as a borrower. Why does that matter? When you apply for a loan at a bank the bank has to evaluate whether to loan you the money and what interest rate to charge you.  If only there were a way for a bank to see how you have paid other loans and whether you default (don’t pay) on a lot of loans. Surprise! There is a way and it is called credit-scoring systems.  So before we delve deeper remember that the better your credit history and thus your credit score, the easier it is to obtain a loan and the lower the interest rate you will be charged.  Also remember that debit card payments and cash payments are not relevant here. Only credit financing (credit cards, loans, etc.) affects your credit score and credit report.

Continue reading Credit Scores, Credit Reports, And Why They Matter