More than 200 million Americans use credit cards, creating trillions of dollars of debt, but not everyone knows the seemingly simple things about them. Credit card questions remain relevant for many years, even among those who already use them. However, they are most topical for those who are only going to have a first credit card.
Here we have collected the most common credit card questions that Americans often ask. Read on to get answers and use a credit card as efficiently as possible and with minimal loss for you.
- How to apply for a credit card?
If you are just going to register your first credit card, then you need to contact its issuer. Now it can be done more than ever by going to the website of the lender of your chosen credit card. If you have not selected a credit card, use the credit card comparison website, which describes various offers from lenders.
Also, if you are already cooperating with any bank, you can contact your bank, perhaps they will be able to offer you a suitable option of credit card for you. However, even in this case, still consider the different proposals in order to choose the most advantageous.
To apply for a credit card, you will need personal data, documents proving your identity and social security number, as well as information about your income and expenses.
- Can I get a credit card if I have no credit history?
This is one of the frequently asked credit card questions that excites new users, especially young people who are just starting adulthood and do not yet have a credit history.
Of course there are such options, otherwise it would be impossible to start a credit history, but you will have to look for a suitable option. Not all lenders work with borrowers without a credit history, and many of those who do it offer high interest rates and more stringent conditions.
But, there are quite acceptable options, just make an effort to find them. You can also make a security deposit, which will act as a safety net for the lender.
- How are credit and debit cards different?
Debit cards, unlike credit cards, do not lend you funds; you can only use your own funds that you deposit on a debit card. Credit cards provide you with a credit line, thus lending you money.
This means that when using funds on a credit card, you will have to pay APR to lender, that is, annual interest rate for using credit money, while no interest will be charged on using a debit card.
Each of the two types of cards has its pros and cons, but if you want to build your credit, you will need a credit card.
- How old should I be to get a credit card?
Lenders require that a standalone credit card user be an adult, who reach the age of 18 years. At the same time, it is possible to become an authorized user of another person’s credit card if you are fewer than 18, such as your parents ’credit card or other adult family members. To do this, you must have a good relationship with this family member and mutual trust and responsibility.
- How many credit cards do I need to build my credit?
Credit cards are the creators of one of the largest US debts, so you should carefully approach this issue. While you are not sure that you will have enough money to pay off your debts, try to use one credit card at the beginning.
Some people use two, three or even more credit cards, but this is a dangerous game, especially if you are not very good at controlling your spending. It is necessary to keep track of your expenses to avoid late payments; otherwise you will have to pay not only interest, but additional fees for late payments.
Often, this leads to a rapid increase in credit card debt and it becomes unmanageable. Your credit rating also suffers, because for each late payment, a credit score decreases. This is very important one of credit card questions, because a fairly high variable interest rate on credit cards will quickly increase your debt.
Keep in mind that for building your loan it is desirable to use different types of loans, but not just credit cards. This will enhance your chances of building a prosperous future and reduce your risks of getting into big debts.
- How long does it take to approve a credit card application?
Often, the approval period will depend on your credit rating. If you have a great credit, it can happen instantly, but if you do not have a credit or it is damaged, then you will probably have to wait a while. It is individual.
- What is “pre- approval” of credit card?
Credit companies are constantly looking for new customers, so they can make offers for people with a positive credit history, sending them previous approval of a credit card. They conduct a credit check and inform you that you can get their credit card.
- What is a credit card balance transfer?
This is one of the credit card questions, the answer to which can help solve some problems. Balance transfer occurs between credit cards of different lenders, when you decide to transfer your debt on credit card to another that has better conditions.
With the help of balance transfer, you can save money on the interest rate, since many credit companies offer attractive interest rates for new users for a certain period. Often, the APR can be as low as 0% during the first year when the balance is transferred.
- What is cashback and can I get it on a credit card?
Many credit cards issuers offer various rewards programs for their clients when certain conditions are met. This is done to attract customers in a highly competitive market. Cashback is a certain percentage of the money you spent with a credit card, which is returned in a certain form as a reward.
In fact, users are concerned about many credit card questions. Here we gave examples of some of the most common ones that people most often ask. If you are going to open yourself a credit card, then you should learn as much as possible about credit cards.
You can find useful information on this topic in our financial blog, and you can also get answers from our experts by simply writing to us.