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Applying for a credit card

If you are reading this article, you are probably thinking about applying for a credit card soon. While this is a noble endeavor for the right reasons, you need to make sure you apply for the correct one for your circumstances. You may be able to get a great interest rate if your credit is good, but if it's spotty you will have to watch out for the sharks out there who promise their customers the world, only to deliver them a whopping 23% APR with a $300 limit and $250 in fees just for activating the card (yes, it exists, from a bank in North Dakota).

If you have good credit

With good credit and a good income, just about any card is available. Often, if you have particularly good credit, you will get offers in the mail and not even have to go out looking for them. Of course, if it came in the mail, it's probably not worth going for anyway.

In fact, the best credit card can even be something usual, for example a rewards card from a grocery store. A surprisingly large number of grocery stores have partnered with a local bank to provide rewards cards that double as visa cards, and as a discount card as well. A few stores will also send customers coupons when they spend a certain amount.

Good credit can also be a help with other things, for example a good credit can get you discounts on insurance, or a no annual fee credit card, or otherwise reward you for building up and maintaining a good credit score.

Bad Credit Credit Card

Even though you may have bad credit, this does not mean you have to suffer under a card like the one in the first paragraph. The best thing for you to do could well be to apply at your bank for a secured credit card. This card will give you a low limit, much more then most credit cards, and will ask for a security deposit ranging anywhere from 25% to 100% of the limit. On the other hand, it will give you the chance to re-establish your good credit score. Once you've done that, you'll find that banks are willing to extend you much more credit, and will remove the restrictions.

You will still need to take care, of course. With good credit or bad, it is unlikely that you really want to go with one of the cards offered to you through the mail. These are usually very bad deals, and if you want a credit card you're much better off going to your credit union or bank and getting one there. You may even find that they let you arrange for the card online.

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Author Mammon is an professional financier, and an expert on cash rebate credit cards. Click to see his site on point rewards cards.

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