Credit Card FAQ's

What is an introductory (or intro) APR?
An introductory annual percentage rate (APR) is a temporary APR that typically changes to a higher rate after the intro period (typically 3-12 months). Many people make use of these promotions to make a large purchase (or purchases), which they can then pay off in a series of months.
Some credit cards have an intro APR attached to only purchases, some have an intro APR attached to only balance transfers and some have an intro APR attached to both balance transfers and purchases.
Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.

What is a balance transfer and/or balance transfer rate?
In the most basic terms, a balance transfer is a way of moving a debt from one credit card to another credit card. This is often done to save money, as the new credit card may have a lower finance rate (APR) than the old credit card.
Occasionally, credit cards have promotional balance transfer rates that typically last from 3-12 months. A "balance transfer rate" is the rate (APR) that is attached to balances transferred to that card from another card. This "balance transfer rate" may differ from the rate (APR) that is attached to new purchases made with the card.
Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.

What is a balance transfer fee?
A fee charged by a credit card company to transfer a balance from another account to that particular credit card. It is generally 1% to 5% of the transferred balance (sometimes up to a certain dollar value). For example, a balance transfer fee could be 3% of the transferred balance up to a maximum of $50. Not all credit cards charge this fee.

What is a fixed APR credit card?
Fixed APR credit cards carry a fixed (stable) interest rate that typically lasts for as long as you use the card. For example, if you transfer a balance to a credit card with a fixed APR on balance transfers of 10%, the APR for this balance will typically stay at this 10% level until the balance is paid in full.
In summary, a fixed APR on a particular balance lasts for the life of that balance. This differs from an variable APR, which can change over time. Some credit cards offer a fixed APR on only purchases, some offer a fixed APR on only balance transfers and some offer a fixed APR on both purchases and balance transfers. So it is possible to have, for example, a credit card with a fixed APR on balance transfers but a variable APR on purchases.
Some people choose a fixed APR credit card to ease the burden of constantly switching balances from one card to another once low introductory APRs disappear and higher APRs take over.
Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.

What is an instant approval or instant decision credit card?
Certain credit cards offer instant response (or instant decision), otherwise known as instant approval, to people applying for the card. With these credit card offers, you should be able to find out if you have been approved for that particular credit card or not in a matter of minutes.
However, certain circumstances do occasionally arise in which the credit card issuer will need more time to determine if you are approved for the specific credit card or not.
It is not guaranteed that you will receive an instant decision with these credit cards. However, these credit cards do offer this feature in most cases.

What is a "rewards" credit card?
Rewards credit cards give various rewards to cardholders for making purchases with the card. A cardholder accumulates rewards based on the dollar amount of his/her purchases with that particular credit card over a period of time.
Currently, you can find rewards credit cards that give:
- Free airline tickets
- Other travel rebates
- Automotive rebates
- Gasoline rebates
- Entertainment rewards
- And more ...

Because some rewards programs can be costly for credit card companies, some rewards credit cards come with an annual fee. Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.

What is a "cash back" credit card?
Cash Back credit cards give cash rewards to cardholders for making purchases with the card. A cardholder accumulates cash rewards based on the dollar amount of his/her purchases with that particular credit card over a period of time.
A typical cash back rate hovers around 1%. However, some cards offer a higher cash back percentage with increased usage and some offer a higher cash back percentage at select merchants. Many cash back cards offer cash back on purchases but do not offer cash rewards on balance transfers or cash advances.
Each cash back credit card is a bit different, so be sure to read the terms and conditions to find out what cash back percentage you can expect, whether there is a limit on how much can be accumulated in a year, etc. Be sure to thoroughly look over the terms and conditions for each specific card.

I am a student - Which credit cards can I apply for?
Students generally have little or no credit history. Because of this, students may often find it difficult to get approved for a credit card. Luckily, student credit cards do exist. This type of credit card is set up to help students build up the credit history that most don't already have.
Student credit cards are often scaled-back in terms of rewards, features and other benefits, but can still be a valuable commodity. If used wisely, a student can take the first step towards building a solid credit history.
Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.

I have bad credit - Which credit cards can I apply for?
Credit can go from good to bad to poor for a number of reasons, including missed payments, late payments, etc. On the other hand, bad credit can improve to good credit, too. But this takes a little bit of work.
Depending on your situation, debt consolidation and/or credit repair may be the route to take. Also, certain credit cards are made to help "rebuild" credit histories. Secured credit cards are for people with no credit or poor credit who are trying to build or rebuild credit history. But some unsecured credit cards can also serve similar purposes.
Often with cards that help to rebuild credit, low credit lines are given ($250 or so) and additional fees may apply (application fees, etc.). Be sure to read over any terms and conditions for any of these services before applying. Be certain of any fees that you may incur before proceeding. But if you use the card responsibly and pay all of your bills on time, you can ask for a credit increase down the road. The extra fees and low credit lines will be worth it if it helps get your overall credit back on track.

What is a "secured" credit card?
Secured credit cards require collateral for approval. With secured credit cards, a security deposit is needed to secure the credit card. The amount of the security deposit usually equals the credit limit for that particular credit card. Generally, secured credit cards are for people with no credit or poor credit who are trying to build or rebuild credit history.

What is an "unsecured" credit card?
Unsecured credit cards are not secured by collateral. Customers qualify based on credit history, financial strength and earnings potential.

What is a prepaid card?
Prepaid cards are, in fact, not credit cards. Prepaid cards act like credit cards but, in reality, are more like debit cards. These types of cards have many benefits, including: No finance charges, easy budgeting, avoiding debt, etc.
With prepaid cards, the cardholder determines the credit line. Generally speaking, a cardholder's credit line depends on how much money he/she transfers to the card. Therefore, there is little risk of running up credit card debt, while budgeting is made easier.
Although most prepaid cards do not charge finance fees, other fees may apply, including: monthly fees, startup or application fees, overlimit fees, ATM fees and more. Be sure to thoroughly look over the terms and conditions for each specific card before applying.