TransUnion, one of the three main U.S. credit reporting agencies (along with Experian and Equifax), has some advice for credit card users. And, since TransUnion is one of the companies that provides your credit history information to credit card companies, banks, employers, landlords, and others, it's a good idea to listen.
TransUnion, whose website notes that it "offers products and services to promote greater financial health," urges potential card holders to be selective when picking from among the tidal wave of credit card offers. It encourages consumers to stick with a couple of credit cards they are happy with, and to avoid applying for extra cards unnecessarily. The reason is that each time you apply for a credit card, the activity shows up on your credit report, with excessive applications making you appear credit hungry. Additionally, it could lower your credit score.
If you do decide to apply for a new credit card, TransUnion recommends that with so many cards available, you don't need to jump at the first offer you get in the main. Instead, shop around. CreditCardXPO.com offers a wide variety of credit cards for all types of people.
Since every credit card has different terms and conditions, it is important to understand the main terms when shopping for the best deal. TransUnion encourages consumers to become familiar with the following:
- APR (annual percentage rate): The yearly percentage rate charged when a balance is carried on a credit card. The APR is applied each month you maintain a balance. Therefore, consumers benefit from having a lower APR.
- Annual fee: The yearly fee charged to the cardholder. Unless the card is a reward credit card, it most likely is not worth having a card with an annual fee. Grace period: A period up to 28 days during which you can pay your credit card bill without being charged a finance and/or late fee.
- Introductory rate (or intro APR): A temporary, lower APR that is later increased. It is important to be aware of what the credit card's rate will increase to after the into period ends.
- Other fees: You should find out the amount of any additional fees for the credit card, such as cash advance fees.
After you have applied for a credit card, been accepted, and the card arrives in the mail, activate it immediately. Then place the credit card in your wallet or another safe place. Otherwise, TransUnion cautions, you may put the card down, forget about it, and it could end up in the wrong hands.