Credit cards - 5 Key things that you should know about them

There are a large number of people who face problems while handling credit cards. As a result, they incur huge credit card debts which makes their life quite stressful. However, if you know some of the important things about credit cards, it will be easier for you to handle them and you won't incur huge debt.

Key things to know about credit cards

Here are some of the key things that you should know about credit cards. Let's take a look:

• You can choose from different card types: You will be able to find different types of credit cards available in the market. Rather than going for a wrong option, you should choose a card which will suit your purpose. You will get the option of secured credit cards which is backed by funds that you deposit in your account. If you have funds in the account, you will be able to use the card, otherwise not. Apart from this, store cards, personal cards, etc. are also available.
  

• Understand the rate of interest on credit cards: This is very important if you wish to avoid falling into credit card debts. The credit card interest rates may vary to great extent. Normally, the cards have very high interest rates but you will also be able to find some cards which have 0% interest rate. The 0% interest rate cards are mainly used for balance transfers. Getting a low interest card will depend upon your credit scores, overall credit history, income, employment, etc.

• Read and understand the contract: If you wish to manage your credit cards well, you will have to understand that the contract is binding. Thus, in order to avoid any sudden surprises, you should read and understand the contract before you sign on it. You should check out the credit limit, APR, rate of interest, type of interest rate charged, grace period for payments, fees and charges, etc.

• Payment affordability: Before you take out a credit card, you should check out whether or not you will be able to pay off the cards in full. This will help you decide your affordability. You should also note that if you make minimum payments, then there are high chances that the creditor will increase your interest rate accordingly by considering you a high risk borrower.

• Know your rights: Cardholders have certain rights and you should be aware of it. As per the Truth in Lending Act, the card issuers will have to explain each and every term of the card to you in details. The language should be such that any average adult can understand it. If you find any problems with your credit card bills, you will be able to take help of the Fair Credit Billing Act. This Act will give you the right to dispute and correct errors. This will also help you in protecting your credit during the process.

Hope the above mentioned facts will help you manage your credit cards better!