Be Credit-Smart This Holiday Season


What You Should Look For

Once you receive an offer for a new credit card, there are three immediate numbers to look for: the annual interest rate (or APR), the annual fee, and the grace period.

You should be able to clearly identify these three factors quickly and easily. If the card company has made it impossible for you to quickly find these three items, throw the offer away.

Online credit card companies should be just as upfront with you. Many online cards are now beginning to customize terms for every individual. For instance, NextCard presents every new applicant with upgrades to their standard VISA card.

Each upgrade option clearly spells out terms of the enhancements like introductory pricing and annual fees. It's a trend we'll likely see continue, as technology allows credit card companies to personalize conditions of a credit card instantly.

Once your card terms have been identified, it's important that you also take a step back and determine what type of consumer you are. If you carry a balance every month, a lower annual interest rate will be of greater importance to you.

On the other hand, if you use your card strictly for convenience and pay it off every month, opt for a card with low annual fees (or no annual fees whatsoever). And if you find yourself missing the payment due date by a day or two, look for a card that has a grace period of 26 days or more.

Rebuilding Your Credit

If your credit has been less-than-stellar, there are still ways that you can be credit smart and save money at the same time.

First off, know where you stand credit-wise. Obtain a copy of your current credit report, especially if you haven't done so in a couple of years. You'll be able to catch any mistakes in your credit file, and have them corrected before a creditor sees them and incorrectly passes judgment.

Errors on your report can be a real nightmare, especially in cases of an emergency. There are three main credit reporting agencies that maintain your credit record: Equifax, Experian, and Trans-Union. Each agency has procedures in place to clean up your record of any errors. However, you must be proactive.It's important that you fix any mistakes before applying for new credit.

In some states, you can request a free report be mailed to you from each of the three agencies. Such requests must usually be done by phone or in writing, and each agency will only provide a free copy once every 12 months.

To get a faster snapshot of your credit picture, you may want to pull a copy of your credit history online. Companies, such as icreditreport, can pull up your entire credit history and then download it to you for a small fee (usually $8.00).

When requesting a copy of your report from any agency, keep this in mind: limit your requests to once a year. Your credit report reflects every time you've asked for a copy, and too many requests may be interpreted by some creditors as a credit-risk.

Once you know where you stand in your credit history, be very selective in the credit cards you do apply for. Don't apply to every card offer that you see. Creditors get very nervous if they see you've filled out several card applications in a short amount of time. Applying to too many cards can actually hurt your credit history, regardless of whether you are accepted or declined credit.

Better Call Security