A credit check for credit cards…
When you apply for a credit card you are required to fill out a credit history. The analysis of “credit worthiness” can be a two-way street, however. As a credit consumer, ask the following questions:
- What is the annual percentage rate, and if it is adjustable, what index is used?
- When do finance charges begin to accrue?
- What’s the fee for transferring card balances and how long does the teaser intro rate last?
- If I use “credit access checks,” when do finance charges begin accruing and are there any extra fees for their use?
- Are there extra charges if I use the card at an automated teller machine (ATM)?
- What is the annual fee, and will it be waived under certain conditions?
- How do I benefit if I already have a credit line or account with a particular lender?
- Does the lender have other programs available (a gold credit card, for instance) that offer a better rate or lower fees?
- If the lender is offering special incentives (for example, buyer protection insurance), will I really benefit from them?
- How are the reward points calculated: fixed %, tiered scheduled, rotating categories?
- How can reward points be redeemed: cash, merchandise, gift cards, travel, entertainment?
Once you have all the answers, you can determine if a card issuer is “credit-worthy” for your financial lifestyle and circumstances.