There are things you have to take into consideration before getting a credit card or a loan with a company, and these things tend to be in the small print. There is always a set amount of interest and in some cases no interest but only for a limited amount of time. Some of the things you want to check over before agreeing to either a loan or credit card are;
- Check the APR (Annual Percentage Rate) – Normally the lower the APR the better for you, however, if a company are offering an exceptionally low rate then it would be thought best to check if that is a promotional percentage lasting only a short while, because although it may state that amount as the APR that may not be for the entirety of your repayments.
- The grace period – You want to check this as it is the amount of time between when you charge something to your card and when the credit company start to charge you interest. This is good to know because if you need to make a fairly large purchase but don’t have the money for that time then you can make the purchase and put the money back in before they charge interest meaning you don’t pay interest on that purchase.
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Annual fee – There are some credit companies that will charge you an annual fee for them lending you credit. If you check the small print there is usually a set amount for a certain amount of credit they have allowed you.
- Transaction fees and other charges – Many creditors charge you a fee if you fail to make a payment by the due date. Other charges include a charge for if your spending exceeds the limit on your card. There are some companies that charge you a flat fee each month even if you don’t use your card at all.
As well as the things you should check you should be aware of the types of things the credit and loan companies will look for when you apply. Here are some of the main things the companies will check for;
- Your bill paying history, this will include information such as how many late payments you have made or if the case be how many have been on time.
- How many accounts you have active, what kind of account they are and how long you have had each for.
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Whether you have any outstanding debt and how much it is if you have any.
- If you have any collection actions against any of your accounts.
After they have checked all this information they will make a decision as to whether you will make a reliable person for them to lend to. For you to check your credit history you can get a copy of your credit rating/score from several companies, it is thought wise to check this as if the company has some information that may portray you badly but isn’t accurate then it could affect things like you getting a loan or even a house in some cases.