All About Credit Cards
Avoiding late fees and other credit card tricks, types of credit cards, where to find online applications. If you have a credit card or are considering getting one, you must read this section.  We will give you some helpful hints and advice that can save you some money.

Types of Credit Cards: 
There are two main types of Credit Cards- Secured and Unsecured.

UNSECURED CREDIT CARDS
Unsecured credit cards are the ones that most people are familiar with.  You do not have to put down any collateral.  The cards that advertise themselves as "unsecured cards", are really aimed at people with less than prefacer credit.  Because of this, there may be an annual fee or a higher interest rate than regular credit cards.  This is how the banks cover some of the risk associated with offering cards to people with imperfect credit.  A normal credit card is usually not advertised as non secured, but you usually have to have a good credit rating to get them.

BE VERY WARY OF SECURED CREDIT CARDS
To obtain secure cards you must have some type of collateral.  Many are scams, or you have to have money in the bank to cover them, or you can only buy products from their catalog, which you know is not at Wal Mart prices.  Even if you do have bad credit, there are companies who will give you unsecured credit cards.  But if your credit is really bad and you are deep in debt, you should really give a second thought to whether you really need to apply for a credit card.  Always consult your personal credit advisor, which hopefully you have if you have a bad credit problem.  You want to avoid a secured card if possible.

Department Store Credit Cards
One thing you should never do is obtain credit cards from ANY department store or other retail stores.  They'll probably scratch us off their Christmas list for saying that.  The APR on these on department store credit cards is 18-21%, and most people don't bother to notice that it's much higher than their MasterCard or VISA, which is 5-15% typically.  Sure the stores reel you in saying "we'll give you 10% off today's purchase if you join, you can just pay it off in full so you don't get the interest".  Only problem is no one ever pays it off in full when the bill comes, now you're paying 18% APR.  I don't have a single department store card, everything goes on my 6% APR credit cards.

If You Are Rebuilding Your Credit

Use the card to buy gas or food, and pay it off in full each month to establish a pattern of responsibility.  You can't get blood from a stone and the moral of the story is to not get into these situations to begin with.   The way to build solid credit is to pay your credit bills on time.  So how do people with bad credit get into these situations?  By not taking their financial pulse and making a budget.  You must have a budget and stick to it.  Remember our Credit Rule #1?  If you don't know how much money you owe your creditors, you have a credit problem.  End of Sermon.

TRICKS TO AVOID CREDIT CARD FEES

If you have good credit and normally pay your bills on time but one month something happened and you were a little late you should try this.  A friend of ours actually did this and was successful.  Call up you credit card company and explain that the payment just slipped your mind and due to your past history you think that they should remove the late fee.  If they do not give in simply threaten to close your account and transfer your balance elsewhere.  If you are a good customer this will get their attention.  The only way for them to make money is to have accounts with balances each month.  The last thing that they will want to do is loose yours if you normally pay on time.

Are you tired of paying those annual fees?  Here's something you should try.  Call up the credit card company and tell them that you have many other cards which don't charge annual fees.  Tell them that unless they remove the annual fee you will cancel the account.  If they really want your business, they'll oblige. If not, be ready to cancel the account.  But if you have credit problems or have been late with your payments more than once, you may not have a chance with this one.  It's still worth a try.

Credit card offers you get in the mail with low APR
Make sure to read the fine print.  You must know when the introductory period will end, it's usually a 6 month program with most offers.  It may save you quite a bit of money to transfer your balances to a card with an introductory low APR (of course, you shouldn't be carrying any balances to begin with) but make sure to watch that introductory period ending date.  As that date approaches you should contact your other cards to see if they'll allow you to transfer your balance at a lower APR.  Keep moving your balances around to your accounts that have low APR transferred balance offers.   Most low APR offers are usually 6%-10% depending on the economy.  By moving your higher APR balances to these lower APR offers, you'll avoid ever paying the typical 18% APR that most cards have, for about 6 months.  This whole process is like your grandparents going to different banks every 6 months, moving their CD's to whichever bank has 1/10% higher rate that day.

Alternatives To Credit Cards

A great credit card alternative is called a check card.  A Check Card is like a combo ATM card and credit card from your checking account. The check card acts like a credit card, but the transaction amount is deducted from your checking account, just like using your ATM card in the grocery store checkout.  To make a purchase at a restaurant or store, just give them the card and they treat it as though it's a credit card, and when the transaction is complete, the money is taken directly out of your checking account.  For example, the NationsBank check card has a VISA logo on it.   It's not a VISA card, but any store that accepts VISA can process these cards.   By using the check cards, the money comes right out of your bank and thus there is no interest.  This can save you thousands of dollars annually because it forces you to pay for it on the spot, and you can never spend more than what you have in the account, preventing you from running up a high credit card debt.  This is a great alternative to secured credit cards. Just make sure you save all your receipts, and don't forget to enter them in your check book.  Also be careful no to spend too much money with a check card.  It's not like running up a balance with a credit card.  On a check card by "running up a balance", you are actually running your checking account down to zero, so be careful.  You don't want to be blindly spending and then suddenly find out you have zero in your checking account and now you can't pay your rent check tomorrow.

Click Here to find out how to pay lower interest on your credit card debt

Go to the next chapter How To Establish Credit