Just about everybody has some sort of credit card these days. Whether it's with a retail store, gas chain, or with the large credit card companies. The truth is that there is a large variety of choices when it comes to interest rates, annual fees, late penalties, balance transfers, and payment terms. Following these "5 Simple Rules" when applying for a credit card, can save the consumer a ton of money and lots of headaches, down the road.



Rule #1: Try to find a credit card with a low or even no interest, balance transfer. This is extremely beneficial to the borrower, so that he or she, may have the ability to transfer their higher interest rate credit cards to the 0% or low interest credit cards.

Rule #2: Always look for a credit card that has a grace period on payments that are late. Many credit card companies hike up interest rates, whenever a card holder is late on a payment within a certain period of time. This certain period of time is usually between six months and a year. Some credit card companies will boost the interest rates anywhere from 5 to 10 percentage points, after just one late payment. Some credit card companies reverse the 0% balance transfers, which in turn forces the card holder to make interest payments on the balances. So that low interest credit card, now turns into an out of control debt monster that will devour all of the borrower's income.

Rule #3: Try to find a credit card with no annual fee. If the borrower has good to excellent credit, say with a credit score of 550-800, then it is extremely easy to search online to find a little or no annual fee credit card. Unfortunately, if the borrower has bad, little, or no credit, then paying an annual fee is almost impossible. A credit card applicant with good to excellent credit shouldn't have to pay any annual fees at all. Obviously, there are exceptions to this rule such as business, revolving, or corporate credit cards, which many offer extremely high or even no credit limits.

Rule # 4: Only apply for a credit card with a company that has a proven track record with a solid reputation in the financial industry. Many credit card companies have a reputation of honesty, fairness, and excellent customer service. However, there are many credit card companies who have reputations of changing terms frequently, raising interest rates often, having bad customer service, and receiving a large amount of complaints from consumers. It will save the borrower a lot of time, headaches, and money to find a credit card company that is reputable.

Rule #5: Never apply for a credit card with a company that stipulates that they can accelerate your payment of the debt. Many cardholders don't know that numerous credit card companies can, and do, sometimes raise the minimum monthly payments due by the borrowers to extremely high amounts. Some credit card companies even raise the minimum monthly payments to more than double the regular payments. So beware of the cardholder terms of agreement. Study the terms and conditions of the credit card very carefully.

If you follow these “5 Simple Rules”, then you too, will be able to steer away from pitfalls that befall millions of the credit card holders, and you will be able to say confidently, that “Yes, I have a good quality credit card.”