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A Beginner’s Guide for Using Credit Cards

· Credit Cards Service,Finance

A Citibank Credit card provides you credit according to the contract. There are various providers which can provide you with credit cards. You can avail your credit until you are repaying the credit amount timely. These cards have a lot of benefits if used responsibly. These cards can also reduce your credit if not used responsibly. Thus, the usage of these cards matters a lot.

 

Before signing the terms and conditions of these credit cards, you should read the document properly. Carelessness in reading the document can cause a huge loss to you. If you are a new credit card holder then you can get easily confused by the terms like credit fees, rewards, interest, limits etc. To make this easy for you, all the terms are defined below:

  • Credit limit: This is the maximum amount you can use to purchase the goods or services. When the limit is exceeded you cannot even use a $1 from that account.
  • Annual fees: If it is mentioned in the document then it is the fee you need to pay for keeping the card. Your annual fee depends upon your annual plan and credit limit.
  • Annual percentage rate (APR): This is simply the interest rate which is charged for the balance carried. When you make purchases, there is a time in which there is no interest charged. After that time the interest is charged according to APR. Since your APR is annual, by dividing it by 12 you can get your monthly APR. This fluctuates annually so accordingly your monthly APR will also fluctuate.
  • Advance cash APR: If you use your card to get cash instead of good or service. Then advance cash APR is applied. This is generally higher than the normal APR, which is discussed above.
  • Penalty or Penalty APR: This APR is applied when you do late repayments. This is imposed as a fine or extra interest. This can be easily avoided by doing timely payments.
  • Late payment fee: In most of the cases there is a defined fee on the late payments. You cannot avoid that fine in case of irregular payment activities.
  • Foreign transaction fee: This fee is charged when there are foreign payments.
  • Balance transaction fee: This fee is charged when you transfer from existing card to any other card. The balance transaction fee is generally between 4%-5% of the total fee.
  • Auto pay: This is the feature provided to avoid late repayments. If you can avail this feature, avail it as it can save you from fines.

 

Rewards: In many cases, there are reward programs. You get rewarded for the purchase of higher amounts. The rewards can be in the form of perks or cashback.

 

Sign-up bonus: On certain cards, there is a signing up bonus. You need to use a significant amount of money in a given time to avail this.

 

Importance of practising responsible credit behaviour:
The most prominent thing which matters in credit cards is timely payments. You need to practice timely payments to keep your credit score higher. By doing timely payments, avoiding overspendings, keeping your utilisation low, paying all the balances you can maintain your credit.

 

Checking your credit card report can also contribute to this. By this, you can avoid the mistakes or errors if any in your credit report.

 

Choosing a card which fits your needs: There are a lot of credit cards available in the market. If you are a beginner you should start with secured credit cards. By learning slowly you can reach the topmost credit cards. The main thing which matter is your goal or need. By comparing a lot of cards, you can separate which fulfils your needs. Further you can see the Credit Card Comparison.

 

Here you should note that if your credit card application is rejected then don’t apply again and again. This can make your credit score worse. Instead, wait and examine the reasons why it was rejected and eliminate the reasons.

 

Below are Top 3 Citibank Credit cards:

  • Citi® Double Cash Card

APR: (13.99% - 23.99%) (Variable)

Annual Fee: $0

  • Citi Rewards+℠ Card

APR: 13.49% - 23.49% (Variable)

Annual Fee: $0

  • American Airlines Advantage MileUp℠ Card

APR: 15.99% - 24.99% (Variable)

Annual Fee: $0

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