Credit cards have become one of the most fundamental parts of American life. We use them every single day, performing millions and millions of transactions across the country (and all over the world when we go traveling). Credit cards come in many, many different forms, offering great interest rates and rates so high that they should only be used in cases of emergencies. When we use them, and stay on top of our payments, month after month, year after year, we are building our credit histories, and a solid credit history is something everyone should be striving for. If you want to get a credit card, but aren’t sure how to go about doing it, read on to learn how.

Applying for a credit card is pretty straightforward. The first thing you want to do is research the various credit card offers out there, and pick the one you like best. There are cards that are student-friendly, for example, or that offer significant rewards, rebates, and incentives for people who travel a lot. Once you’ve made your decision, verify what they need from you, such as a driver’s license, or social security number. Then, if you’re applying online, fill out the forms as instructed. If you’re doing it by hand, fill out the application. You can also apply by phone.

Credit card companies will then review your records and then determine your credit rating. If it’s excellent, you will probably get the credit card. If it’s not, you could be denied. Applying for a credit card with a bad credit history may mean that you have to apply for a secured credit card – one that requires you to pay the credit card company a deposit of, say, $1,000 in order to get a credit line of $1,000. (This way they will have money to cover your credit card bills should you default on your payments.) There are plenty of credit cards out there for people with less-than-perfect credit, so if that’s you, don’t be disheartened.

Before you apply for a credit card, try to sit down with a financial advisor to go over all your options. You want to make sure you know exactly what you’re doing before you commit to any major financial contract.

You are trying to repair your poor credit history, because you’ve misused a credit card in your past. You do not need to be told how difficult it is to get a credit card. Even if your financial situation has changed, you may need to prove your creditworthiness before your credit score begins to reflect your changed habit.

The truth is, even if you are not getting offers in the mail, there are many places online where you can search for the best deal on credit cards for people with bad credit, including both secured cards and unsecured cards, and get the best interest rate for your needs. But often, if your credit score is considered bad, you are not going to qualify for a decent interest rate. Indeed, for borrowers with bad credit, your credit offers may have interest rates as high as 24% - not to mention steep annual fees, “program fees,” “participation fees,” and other monthly charges. If you are desperate to rebuild your credit, it might be worth it to you to take on this type of card, but be sure to read the fine print and know what you are getting into.

For a person who is unable get any kind of unsecured card, a secured credit card might be a useful tool to rebuild your credit rating. A secured credit card is not exactly the same as a debit card, but it does involve using your own cash as “security.” With this type of card, your “cash collateral deposit” becomes your credit line for that account. For example, if you put down a deposit of $500, you will have a $500 line of credit. You may be able to extend your credit line by adding more money to the deposit, or, sometimes, the bank will reward your timely payments by extending your credit line without an additional deposit.

As with any offer, be sure to read the “fine print” and make your payments on time. Even a one day late payment can ding your credit rating and undo all your hard work, not to mention result in late payment fees, and an interest rate hike as well!

When you acquire a credit card, what happens is that the credit card issuer extends you a line of credit, and charges you an interest rate for the privilege of that credit. In former times, this practice was known as “usury” and was condemned by many religions as immoral. The principal argument against usury was that it created profit from avarice and greed rather than labor or work. The charging of interest is still illegal in some Muslim countries, stemming from the belief that lending money at interest leads to extensive worry about money instead of God.

Here in America, credit card interest charges are the principal way that credit cards create revenue for the credit card issuer. The practice of charging interest commodifies the concept of time. The card issuer – most often, a bank – gives you, the consumer, an account number and an associated card that can be used to make payments at various locations with money that you have borrowed from the bank. The bank pays the bills presented to them, and charges you interest on the card for any remaining balance that you have not yet paid off. The longer you maintain a balance on the card, the more interest they charge, which is compounded to the principal and added to your balance. Over time, this can create a snowball effect and if you do not pay off the balance, you will continue to accumulate credit card debt without even making a purchase.

How does the bank determine what interest rate it charges you? Banks set your interest rate based on your creditworthiness, as determined by credit history reports from the major credit bureaus, such as Experian, Equifax and Transunion. Typical credit card interest charges in the United States can be between 7% and 36%, based on the borrower’s credit rating.

If you have a favorite retailer, or you constantly find yourself out at the mall making purchases, you may want to explore the benefits of retail rewards credit cards. Retail credit cards give you various rewards for making purchases of retail goods. Sometimes those rewards are tied to specific stores, companies or online merchants such as Amazon.com, Victoria’s Secret or Disney. Others apply to certain general categories, such as sporting goods and outdoor camping gear, but are redeemable at a variety of merchants. These sorts of offers bring business to the stores and if you are in the habit of making a lot of purchases at a particular retail location, they might offer you benefits, rebates, or coupons you would not have otherwise received.

While these sorts of offers may look good on the surface, it pays to look closely at your credit card rewards program to see just how rewarding it really is. It’s a question more consumers might want to ask themselves, since in the last analysis, the reward value of a point may be far less than the dollar value, or real value, which you could be able to purchase with the equivalent amount of money. Additionally, if you carry a balance on your card, the amount of interest you end up paying can often exceed the value of whatever reward you are getting.

If you are looking for ways to benefit from your retail purchases, retail credit cards may be a good option for your financial situation and shopping patterns. With all the different interest rates, reward programs and fees available to you, it pays to understand the difference between different rewards programs and shop around before committing to a card, to determine which type of reward program is best for you and your lifestyle.

When credit cards were first introduced, they were issued by merchants and had a pretty standard set of features. As far back as the late 1800s, merchants used cards or “credit coins” as a way to extend lines of credit to their customers. These credit cards were a private arrangement between the business and the customer, and were only accepted at the business that issued the card. The credit was a way of developing customer loyalty and giving better customer service. It wasn’t until about the mid fifties that banks began issuing their own charge cards and “plastic” became a method of payment for most American consumers.

As time went on, one of the challenges facing the growing bank card industry was the difficulty of getting broad acceptance of bank-issued credit cards. A traveler in San Francisco, for instance, might not be able to use a card issued by the Bank of New York. Credit cards needed to work nationally and internationally. Thus, the concept of the credit card association was born.

If you have a MasterCard or Visa, you are participating in a credit card association. The Visa and MasterCard associations do not issue credit or debit cards directly; they are an association formed by thousands of banks worldwide, and the cards are issued by the member banks. Visa and MasterCard are not directly responsible for the credit cards or loans that are branded under their card name. The financial institutions that issue the cards are responsible for the debts.

The credit card associations create revenue by charging transaction fees to consumers, and also to the financial institutions that participate in the network. They also set what are called interchange fees, which are based on something called “basis points. can be up about $.10 per transaction, based on the size of the transaction. Some large merchants are able to negotiate directly with the card association for lowered interchange fees, but the amount of those fees are not public knowledge.

American Express, Diners Club, and Discover are not credit card associations. These companies issue their cards directly, rather than through a bank, and maintain their own clearance networks.

In a competitive environment, many banks will offer you a special terms to compete for your business. They may offer you special retail incentives, or airline miles, or special deals on interest rates. One of the ways they can try to win you business is by offering what are known as introductory interest rates.

In order to lure your business, many credit card companies will offer what are called introductory credit card interest rates. An introductory rate is a low rate of interest – sometimes even 0% - which lasts for a short amount of time. This “teaser rate” can last for several months or a year, depending on the terms of your agreement.

There are many advantages to choosing a card with a low introductory interest rate. For instance, with a low introductory rate, or even 0% interest for the first six or twelve months, you can transfer your existing balance to a new card and begin a grace period of low or non-existent interest rates. For the savvy consumer, this strategy is an excellent way to reduce credit card debt, because it gives you a chance to start paying down a high credit card balance without incurring a fortune in finance charges.

However, you should be sure to read the fine print to understand what you are accepting along with an introductory credit card interest rate. After the introductory interest rate expires, your terms will change and your interest rate will go up. If your introductory rate is contingent on a credit card balance transfer, there may be associated charges such as a transfer fee. Also, you’ll want to make sure that the interest charged at the end of that introductory period is only on the remaining balance, and not retroactively applied to the total amount transferred to the card. Always be sure that you have read the terms and conditions so you know what to expect.

Also, it’s important to plan ahead and know how long your introductory interest rate will last. If you find out your interest rate is in effect for only three months, it is wise to pay off as much of your balance as possible, or look for another card. If you have a good credit score (700 or above) you may be entitled to get a good rate on another card from the same company, as credit card companies always want to retain good customers.

There are a wide range of credit card deals to choose from with different features, rewards programs, and interest rates. Before you apply, be sure you know as much as you can about the best credit card deals available to you and what is going to suit your financial goals and lifestyle.

The most common type of card, and the one we generally think of as a credit card, is an unsecured credit card. This means there is no need to put down a security deposit before the bank extends the credit line. These types of credit cards are readily available from banks and financial entities, and are generally offered at different interest rates.

Interest on a credit card, or the “annual percentage rate” (also known as the APR) can be calculated in a variety of ways. Many banks will offer you what is called an “introductory APR” at a low rate to sign you up. This “teaser rate” can last for several months to a year, depending on the terms of the credit card agreement. However, after the introductory APR expires, your terms will change and your interest rate will go up. Always be sure that you have read the terms and conditions so you know what to expect.

Two other examples of common credit card deals balance transfer cards and low interest credit cards. Balance transfer cards are designed to allow you to transfer a balance from a high interest rate credit card to one with a low interest rate. Some banks will offer an introductory APR of zero percent on this type of credit card. Typically, balance transfer credit cards will only take balances from credit cards that are owned by other banks – your bank will probably not let you transfer your high interest credit card balance to a lower interest credit card balance; but it never hurts to ask.

Low interest credit cards can be very useful, and may refer to either a low fixed rate APR, or a credit card with a low introductory APR that jumps to a higher interest rate after a certain amount of time. Be sure to compare low interest rate credit cards before making a decision about which credit card to sign up for.

Generally, the point of a credit card is that you can use it in place of cash under certain circumstances. In a world where credit cards and debit cards can be used for almost anything, there are still some circumstances in which you must use cash. In a cash emergency, it is possible to withdraw cash against the line of credit represented by your credit card. That is called a cash advance, and it’s an option cardholders can use in the event they are in need of actual currency.

For most credit card customers, the cash advance limit is a smaller percentage of your total credit limit as determined by the bank that holds your credit card. The dollar value of your credit limit, as well as your cash advance limit, should be plainly displayed on your monthly credit card statement, along with any associated fees and interest rates.

Getting a cash advance is a relatively simple matter: most credit cards allow you to use your credit card at an ATM, with the use of a Personal Identification Number (PIN). If the amount of your cash advance does not exceed your current cash advance limit, you should be able to receive currency with no problem. However, if you go over your cash advance limit you might incur penalties, the same way you would if you went over your credit limit.

The great disadvantage of getting a cash advance is that it is very expensive. Interest rates on cash advances are almost always greater than they would be on an identical amount incurred as a credit purchase. For instance, if your interest rate on credit purchases is 14%, your cash advance interest rate could be substantially more – even up to 23% or 24%. Also, interest on the cash advance continues to accrue at that rate until the balance is paid off. For that reason, it’s almost always better to find some other way to get cash than to rely on a credit card cash advance.

When credit cards were first introduced, they were issued by merchants and had a pretty standard set of features. These days, the range of credit card deals you can get is staggering. With all the different interest rates, reward programs and fees available to you, it’s important to understand the difference and know what kind of card will suit your financial situation and your lifestyle.

Today the consumer has a variety of credit card awards and rewards programs to choose from. For instance, charitable donation rewards allow you to make a donation to the nonprofit of your choice, depending on how many rewards points you rack up through credit card purchases. Retail gift cards, or airline reward miles, are other points programs that are available to you as a consumer when you use a credit card with a rewards program.

While these may look good on the surface, it pays to look closely at your credit card rewards program to see just how rewarding it really is. It’s a question more consumers might want to ask themselves, since in the last analysis, the reward value of a point may be far less than the dollar value, or real value, which you could be able to purchase with the equivalent amount of money.

For instance, gift cards can often be the most rewarding of points programs, if you can get a gift check at a retailer where you would be shopping anyway. Partnerships with selected retailers enable credit card companies to offer a gift card for less than their cash equivalent. But for many other programs, you may end up spending more than you are saving by racking up gift points. Additionally, if you carry a balance on your card, the amount of interest you end up paying can often exceed the value of whatever reward you are getting.

In the end, it pays to know the real value of your card’s reward points program and what comparable cards without rewards programs are offering, in terms of interest rates and annual fees. If you end up spending more in interest and spending money you wouldn’t otherwise spend, it might cost you less to go out and buy that airline ticket yourself than to get it through your “free” miles.

When you get your monthly statement from the credit card company, it includes a calculation of your interest over the period, which is represented as a monetary value. How does the bank come to calculate this monetary value which it charges you an interest? When you acquire a credit card, the interest rate quoted to you is the APR, or Annual Percentage Rate. This interest may be compounded daily, or monthly, and is charged to what is referred to as your Average Daily Balance, or ADB. Most banks use a simple formula based on these two values to determine the monthly interest charged to you.

For example, the bank takes the APR, which is the percentage of interest expressed as a fraction – for instance, 14/100 for 14% - times the ADB over 365 days, times the number of days the credit has revolved (for instance, 30 if the interest is calculated monthly. So to calculate your interest, take the APR and divide it by 100, then multiply it by the amount of the daily balance, divided by 365, then take this total and multiply it by the number of days it has been since you made payment on the account. Thus, you will get your monthly interest amount.

If you have different balance segments at different interest rates – for example, if a portion of your balance is put toward a cash advance, or a balance transfer – your charges can be much more complicated. In that event, when several interest rates may apply, the allocation of payment is generally at the bank’s discretion, and they may allocate your payment toward the portion with the lowest interest first, thus leaving the higher interest balance – for instance, the cash advance balance – in place to collect more interest.

As the rates and terms may vary, it pays to look into how much you might be able to save by making a credit card balance transfer to a low interest credit card.