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Credit
Card
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Find a Credit Card
There
are many ways to find a credit card. Certain life changes such as
buying a new house or starting college frequently tip off credit card
companies and they will find you, sending applications out of the blue.
Another way is to go to your own bank and ask about their credit card
offerings. If you have a credit union try them first. Credit unions
very often offer the lowest rates. Look at offers that come from
organizations you may be a part of such as professional organizations,
universities or senior citizens groups such as AARP. You can also do an
internet search and apply online.
If
you need a place to start your search, the Federal
Reserve Board has prepared an explanation of some of the
issues involved. Sites such as CreditCards,
YourCreditNetwork
or CreditCardGuide
exist to help to actually obtains a card.
Once you have your card in hand, you have taken the first step towards
your online shopping adventure.
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Avoid Interest Charges
Consider
using a debit card from your bank instead of a credit card. Payment for
debit cards come directly out of your account, with the result that you
incur no interest charges.
If
you prefer to use a credit card, here's a tip which could save you
hundreds of dollars over the years: in order to avoid paying interest
charges, pay your complete balance when the bill comes, not the minimum
payment. That means never charging more than you have the ability to
pay off immediately. If your circumstances allow you to follow that
rule of thumb, then your credit card becomes simply a tool to help your
online shopping and not a financial liability.
If
you already have a credit card with a balance that is not feasible to
pay off immediately, consider this suggestion: apply for a second
credit card account and use it in the manner described in the previous
paragraph. This is now your dedicated internet card and you avoid
adding to the interest you are trying to pay off on your first card.
Do
this with caution, however. Some financial advisors recommend having no
more than one credit card to avoid accumulating too many cards and
losing control of your ability to pay. If you know yourself and your
own habits well enough to follow the tip with discipline, you should be
safe.
When
you have to make a purchase that you cannot pay off in one lump sum,
pay as much over the minimum payment as you can afford each month. By
doing that you can completely eliminate at least some of the interest
charges.
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Before You Get a
Credit Card
Virtually
every online retailer accepts payment by credit card. Owning and using
a card is the key to having access to deals on the internet that you
would never find nearby.
The
credit card business is extremely competitive. If your credit is
reasonably good, credit card companies are all too eager to have you as
a customer. Compare rates from different companies. Be aware if the low
rate they offer is an introductory rate which will expire after a set
period of time. Also, read the terms carefully before signing up to
determine whether there are additional charges such as annual fees.
Remember
though, the purpose of a credit card is to give you credit. This means
paying interest. Interest charges can take away the the savings
advantage that internet buying gives you.
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If You Have a Poor
Credit Record
Suppose
your credit history is not so good? Fortunately, you are still not
locked out of the online shopping experience. A debit card may be the
solution for you. A debit card looks like a credit card, but takes
money for its transactions directly from your checking or savings
account. Ask your bank about availability.
Note
that a debit card is not the equivalent of a credit card in some key
ways. With a debit card you cannot withdraw more than you have in your
account. A credit card allows you to reverse the charges under certain
circumstances. A debit card is considered a cash transaction and is
treated as such. Consider debit card usage the same as handing over
cash, complete with the finality that entails.
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About Privacy
Policies
A
financial transaction on the internet requires that the retailer ask
for personal and confidential information. To assure your privacy, a
reputable web retailer will post a privacy policy on its site.
Each
privacy policy is unique to the individual site. A typical example can
be found at the web site of the Council of Better
Business Bureaus. Net Shop Assistant supports this policy and
those like it and encourages anyone who is concerned about privacy
issues to locate the privacy policy on a given web site before making a
transaction.
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