1) What is
a secured credit card?
A secured credit card is a credit card that requires a security
deposit. These types of credit cards are generally for people with
no or damaged credit. Your credit line will represent a percentage
of your security deposit or savings account balance. If you
establish good credit with the card, the credit card issuer may
extend your credit line or offer you an unsecured card.
2) What is an unsecured credit card?
An unsecured credit card does not require a security deposit. Such
credit cards are intended for individuals with good or excellent
3) What is a grace period?
A grace period is the amount of time the card holder has to pay
the balance, before interest is charged to the balance. Grace
periods vary, but usually range from 10 – 25 days depending on the
credit card issuer.
4) What is a balance transfer?
If you already have a credit card, you can transfer your existing
balance on the previous card to a new card. Some credit cards
offer low balance transfers.
5) My credit is damaged. Can I still get a credit card?
Yes. Even if you have bad or damaged credit, you can still obtain
a credit card. You will most likely have to apply for a secured
credit card, which requires a security deposit.
6) What is an Annual Fee
A flat, yearly charge similar to a membership fee
7) What is an Annual Percentage Rate (APR)
The APR is a measure of the cost of credit that expresses the
finance charge, which includes interest and may also include other
charges, as a yearly rate.
8) Finance Charge
The dollar amount you pay to use credit. Besides interest costs,
it may include other charges associated with transactions such as
cash advance fees.
9) How do airline mileage plans
Most airline mileage plans
co-branded, issued by a financial institution and an affiliate
airline. Typically, air miles are earned with every use of the
card. Most cards offer one mile per dollar spent. These earned
miles are transferred to the cardholder’s account with that
airline, where they may be redeemed. Some banks also offer airline
mileage plans without affiliations, and the customer may choose
10) What additional fees should
I be aware of when applying?
It is important to understand that
card issuers are required by law to disclose any fees to
customers. You must read all the fine print to discover these
disclosures. Some cards have an "over-limit" fee, which
is usually $20 to $25 when you have charged something beyond your
credit limit. Another fee to be aware of is a late payment fee,
which again ranges from $20 to $25, for payments made after the
due date. There is also often a transaction fee for cash advances.
This fee may be a set rate, such as $2, or a percentage (commonly
2%-5% of the amount advanced), or a combination of the two. These
fees are in addition to the regular interest rate.
11) What is the benefit of
having a gold or platinum card?
The gold and platinum cards are set
apart from other cards because of their higher credit limits and
extra perks. They vary according to each card issuer, as well as
the credit status of the customer. Various features that these
cards offer include car rental collision insurance, travel
accident insurance protection, and extended warranty insurance.
Often, a higher household income is required.
This credit card FAQs page is a product of CreditCardDiva and does
not refer to any specific credit card or product mentioned on this
website. We offer FAQs to help inform the consumer and are in no
way suggesting any particular course of action. It is the
customer’s responsibility to read the terms and conditions of any
product offered through CreditCardDiva.