Before you apply, take into consideration that the introductory offer you get still depends on your credit score. For most credit cards you will need a very good credit score to qualify for a better deal. You may apply for a credit card with 0% balance transfer APR but instead only qualify for a 6% intro APR.

Here are things to pay attention to when signing up for a new credit card which offers 0% apr.

• What is the balance transfer transaction fee? Most credit cards will charge you a percentage of the amount up to a certain cap.
• What is the regular interest rate after the introductory period?
• How long does the introductory rate last?
• Does the intro rate apply to balance transfers, purchases, or both?
• What is the annual fee?
• What are the late fees and overlimit fees?
• When you receive your new credit card in the mail, read the credit card terms carefully and make sure you got the deal you applied for. Keep in mind that one late payment could increase your 0% interest rate to a penalty rate of over 20%.

When you transfer a credit card balance, keep your old credit card until you receive a statement showing that your balance is $0. If your goal is to reduce your credit card debt and you no longer need your old credit card, cancel your old credit card to avoid using it.

Most credit cards will let you change your due date to a more convenient date. Call your credit card company’s customer service line and ask to speak with a representative. When all your credit cards are due on the same day, it will also be easier to keep track of your monthly expenses.

• Credit card lines play a crucial role in the American economy because credit card debt is revolving – that is, consumers pay off their credit cards and use their credit lines repeatedly over time.
• The decline in home prices has been a better determinant of consumer behavior than FICO scores. In the past, credit card lenders were too reliant on FICO scores and the bulk of credit lines were extended when unemployment averaged below 6%. Hence credit card companies are reducing their credit lines significantly in the current economic environment. As lenders reduce credit lines based on where a borrower lives, trustworthy customers are put in a more vulnerable position along with bad customers.
• When one credit lender cuts a credit line, the credit card owner is perceived to be riskier by other lenders. Consequently, the other lenders also become more likely to cut the available credit lines.
• Upcoming changes in the Unfair and Deceptive Acts or Practices regulations will restrict the ability of credit card companies to reprise risk (in other words, increase interest rates as they see fit) and, as a result, may cause a further decrease of credit available to consumers.

Ms. Whitney acknowledges that credit was overextended in the past 15 years but she is concerned that taking away credit from trustworthy borrowers will weaken consumer spending, and consequently, the economy significantly.

• American Express – 2%
• Bank of America – 3%
• Capital One – 0%
• Citibank – 3%
• Discover – N/A (generally, not accepted globally)
• HSBC – 3%
• JP Morgan Chase – 3%
• US Bank – 3%
• Wells Fargo – 3%

In any case, monitor your credit card charges closely when you travel abroad. You will find that credit card companies use different methods to calculate your exchange rate. Before you leave on your trip, you should call your credit card company to inquire about their charges and fees abroad.

The amount of cash back you receive will depend on the specific terms and conditions of your credit card. The typical cash back rate is approximately 1% of the total amount you spend. While some cash back credit cards offer a fixed percentage across all types of purchases, other cards offer different percentages based on the type of purchase you make. For example, a credit card may offer 5% cash back on grocery purchases and 0.5% on other purchases.

When you compare cash back credit cards, pay close attention to all of the terms of each card. As is the case for many other types of reward credit cards, cash back credit cards may have annual fees or higher interest rates than a credit card that doesn’t offer a reward program. Analyze your past spending to estimate how much cash back you can earn and whether a cash back credit card is really worth it for you. If you do not pay off you credit card balance in full every month, the higher APR will probably exceed the cash back that you have earned. Some credit cards may even limit the amount of cash back you can earn per year. And, consider choosing a credit card that will automatically send you your earned cash back at the end of the year.

If you pay off your credit card balance in full every month, it may be worth it for you to have a credit card with no annual fees and a longer grace period. By paying your credit card in full, you will not incur interest on new purchases. Keep in mind that grace periods usually do not apply to paying cash advances and balance transfers.

If you carry a credit card balance from one month to another, low interest credit cards are the right choice for you. Credit card companies often offer 0% introductory APR on balance transfers and purchases for 6 or 12 months. In this case, your APR will change after the end of the introductory period. If you plan to transfer a balance, chose a card with a low APR and lower balance transfer fees.

But remember that credit card companies can and do change their interest rates from time to time. Many credit card interest rates are tied with the Prime Rate, the Treasury bill rate or another interest rate benchmark. When the corresponding rate changes, your regular APR will chage as well. If your credit card has a fixed rate APR, your credit card company will notify you before increasing your APR rate.

Consumer credit can cost you

This is especially true with credit cards. Credit cards are an unsecured form of credit that can often carry interest rates of over 10%. Whenever you use a credit card, you are borrowing money and you are obliged to repay back the amount you spent. Credit card issuers will require you to pay back the original amount you borrowed plus any interest, charges, and fees.

Before you borrow money, it is important to understand the cost of borrowing. Do the math! For example, if you charge $5,000 and your APR is 15%, you will be have to pay approximately $750 in interest a year. The longer it takes you to repay the loan, the higher the amount you end up paying back. In addition, if your monthly payments do not exceed your monthly purchases plus the interest charge, the amount you owe will grow over time. Try using an online calculator to calculate the cost of carrying a balance over time.

Run a balanced budget

The best way to build a solid financial foundation is to stay focused, organized, and make decisions based on your financial objectives. First, keep track of your monthly expenses. Keep all your pay stubs, bank statements, credit card statements, utility bills and purchase receipts. Second, define your goals. At the end of the month, add up all your monthly expenses and compare the total amount to your income. If your expenses exceeded your income, you may need to make some adjustments. Look for ways to increase your income or reduce your expenses. Finally, establish a savings account and determine a fixed amount of your paycheck that you can allocate to saving every month. If you carry a credit card balance, make a plan to pay it off over time!

Analyze your bank statements

Do not throw away your purchase receipts. You can create an excel spreadsheet on which to record all your receipts, to help keep them organized. At the end of the month, double-check all check, bank, and credit card charges. If you find errors or discrepancies, notify your bank immediately. Read all notices sent by your credit card company. Credit card companies have to notify you of any changes in your credit card terms. If this happens, contact your credit card company and ask for an explanation. If your APR is increased and you carry a balance, consider switching to a new credit card with a lower APR.

Do not use your credit card for cash advances

Cash advances are not a good deal for you. They tend to carry a much higher APR than your APR on purchases.

Schedule your monthly payment online

Avoid late payments. Paying your credit card late will hurt your credit score. Schedule a recurring payment online every month that will cover your minimum payment. This way, if you forget to pay your bill ontime, your credit card company will withdraw the money automatically from your bank account. If you use multiple credit cards and they have different payment due dates, you can call each company and ask them to move your billing cycle to end at the end of the month so you only have to remember one payment date.

Monitor your credit score periodically

Everyone is entitled to a free annual credit report. Use this to check your credit history for errors and discrepancies. Even if you do not plan to apply for a new loan, you want to make sure that your record is accurate and you are not a victim of identity theft. Checking your credit report will NOT result in a lower score.

Do not let others to use your credit

Be a responsible adult by not letting others abuse your credit history. Do not sign up as a cosigner on a loan unless you are prepared to face the possibility that the person my default on their loan.

Watch out for department store credit card promotions

Many of the credit cards offered in department stores carry a higher APR. If you opt to open an account with a department store to take advantage of a discount, do not use the credit card to carry a balance. And, of course, even moreso than with a regular card (with a lower APR), do not charge more than you can afford to pay off.

Pay attention when you receive a credit card offer

Understand all interest rates, fees and charges before signing up for a new credit card. The less annual fee, the better. Often, you will not know what your APR will be until after you are approved for the new credit card. If you do not like the APR you get, cancel the credit card before you use it.

Use only one credit card for purchases

If you have multiple credit cards, use only one credit card for purchases. Avoid accumulating a balance on more than one credit card. If you transfer a balance to a lower APR credit card, use only the new credit card and remove the old one from your wallet and online accounts.

Secured credit cards were designed for people who need to repair their credit history or establish a credit history. Once you are approved, the secure credit card issuer requests a deposit which then becomes your credit limit – that is, you can only spend up to the total amount of your initial deposit, much like a bank account. When selecting a secured credit card, make sure that the card issuer reports to the major credit bureaus. Paying off your credit card balance on time will help you to improve your credit history.

Alternately, you could apply for a prepaid card. Prepaid credit cards can be used just as any other credit card and approval is guaranteed. Prepaid cards also require you to pre-deposit a balance. The disadvantage of prepaid credit cards is that they generally do not report your activity to credit bureaus, and thus you will not be able to improve (or diminish) your credit score.