Credit Cards Are Easy?

"Getting credit isn't hard, I get tons of offers in the mail each week." If this sounds familiar you may in trouble already. Yes, in some cases just after graduation form either high school or college the credit card offers arrive in the mail. BEWARE Not all credit offers are equal and chosing the wrong one can lead to real trouble.

All credit card offers have one thing in common - Fine Print.

Before the Fine Print:
When you get an unsolicited credit card offer they come in four basic types.

• Everyone Accepted - No One Turned Down: This means they are going to give you a Credit Card - as long as you jump through some hoops and probably set up a special Savings Account (Savings Balance driectly sets the credit limit) or simply pre-pay the credit line (sort of a reverse debit card). One major limit with these "Credit Cards" is that some merchants check to see if the "credit card" is really that and will not trully accept this type of card. A good example is car rental agencies or airlines.



• Pre-Approved: Different banks (issurers) have different meanings for that phrase. But all have a clause that reads "Based on Pre-selection criteria" That means they are going to check again to see if things have changed. In some cases the credit amount of the "Pre-Approved" card is adjusted up or down based on your "current" credit report.



• Pre-Selected: Generally means "We bought your name from another credit source and based on them giving you credit we may give you credit." They will take the information you provide and check your credit score and record to decide if you get a card, a what percentage rate and up to what limit of funding.



• Open Offers: These may arrive in the mail or you may find them as counter cards at your bank or other merchants. You fill out the application, send it in (can be done online as well) and the card issurer will check your credit score and record to decide if you get a card, a what percentage rate and up to what limit of funding.

• The SDS contains the APR (Annual Percentage Rate) which may vary by state and may have a time limit.
• There may also be a statement that based on performance the APR will decrease or increase (making payments on time or missing a payment).
• The card may also have a variable rate of interest. This is usually tied to a specific index. This means you have no limit to the APR.
• The length of the grace period (if any). Different charge types may have different grace periods. No grace period means the interest starts the moment the charge is made.
• Method used to compute the APR or Grace Period
• Annual or monthly card fee.
• Cash Advance Fee
• Credit Limit Increase Fee
• Over Limit Fee
• Late Payment Fee
• Returned Check Fee
• Reasonable and Customary Attorney's Fees
• Applicable Law - Both Federal and State Law (State Where Card Company and user reside affect this portion)
• Time limit and method to correct errors and mistaken charges