Credit Card FAQs

How Old Do I Have To Be To Get A Credit Card?

credit card faqs In the United States, a person must be at least 18 years old to obtain a credit card. People under the age of 18 can sometimes get a prepaid debit card. Another alternative is that a parent or guardian can add their child that is under 18 years of age onto their account, resulting in a credit card being issued in the child’s name. The child becomes a co-signer, but if payments are defaulted on, it will affect the parent’s credit.

What Is A Grace Period?

The grace period is the time between the credit card bill due date and the time that interest will be added to the amount due. If the bill is paid during the grace period, which can range from 10-25 days, the cardholder will not have to pay interest fees on the balance of the account.

What Is A Balance Transfer?

If a person already has a credit card and then applies for a new one, the balance of the existing credit card account can be transferred to the new account. This is very attractive to many cardholders because credit cards often offer a promotional introductory rate of 0% interest on balance transfers and new purchases on the new card. This introductory promotion can last anywhere from a couple months to two years. This is a great way to pay off credit card debt without incurring interest.

What Is A Penalty Rate?

This is also referred to as the user default rate and is a penalty rate. When a person exceeds their credit limit or pays their bill late, the lender will increase that person’s standard interest rate to the penalty rate, thus making the cardholder pay more in interest.

Should I Sign The Card?

Credit card companies require the cardholder’s signature on the card in order for it to be valid. It is also against the law for merchants to accept a credit card that has not been signed. With that being said, many merchants do not check for signatures and most stores have machines that require the card owner to swipe their own cards, so many merchants have no idea if a credit card is signed or not. An alternative is to write “See ID” or “Ask For Photo ID” on the card for security purposes. This way, it is not as easy for someone to steal the card and copy the signature.

Should I Close Accounts That I Don’t Use?

Having an open credit card with no balance can increase a person’s credit score. It shows the credit bureaus that the cardholder is current on their payments and decreases the debt-to-available-credit ratio. Having open but unused credit cards does increase the risk of identity theft, but experts agree the benefits outweigh the disadvantages. If the cardholder can be vigilant about potential theft, keep those unused cards open.

How Many Credit Cards Is Too Many?

This number is different for everyone. A person has too many credit cards when they can’t handle them all. A cardholder could have 30 credit cards and pay off the balances off every month, and be fine. 30 cards is not too many for this person. There are people with 2 cards that can’t pay the monthly bills. For these people, 2 credit cards is too many. Never over extend yourself by applying for more cards than you can financially handle.

Can I Get A Credit Card If I Have Bad Credit?

A person with less-than-optimal credit history or a poor credit score may still be able to obtain a credit card. There are cards that are specifically made for people who need to improve their credit, although the cards with the best rewards are always reserved for those with good or better credit. The lenders of these types of cards are willing to take the risk, but there is a price to pay. The interest rate on these cards are significantly higher than average credit cards. Some lenders might also require a person with poor credit to pay an annual fee or put a down payment on the credit card. Many people feel this is a small price to pay to improve their credit scores.

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