Credit Cards

Credit Cards: What You Need To Know

What do creditors look for when they are deciding who to give credit to?
They look at the Three Cs...

Character - do you intend on repaying your debts?

• Have you used credit before?
• Do you pay your bills on time?
• Do you have a good credit report?
• Can you provide character references?
• From your credit history, does it look like you possess the honesty and reliability to pay credit debts?
• How long have you lived at your present address?

Capital - what are your sources to repay the debt?

• What property do you own?
• Do you have a savings account?
• Do you have investments to use as collateral?

Capacity - can you repay the debt?

• Do you have a steady job?
• How long have you been at your present job?
• What is your salary?
• How many other loan payments do you have?
• What are your current living expenses? What are your current debts?
• How many dependents do you have?

Building Your Credit History

• Establish a steady work record.
• Pay all bills promptly.
• Open a checking account and don't bounce checks or overdraw your account.
• Open a savings account and make regular deposits.
• Apply for a local store credit card and make regular monthly payments.
• Apply for a small loan using your savings account as collateral.
• Get a co-signer on a loan and pay back the loan as agreed.

Before You Sign Up for a Card

• Shop around for the best terms. www.BankRate.com is a great resource for finding the best available deals.
• Read and understand the contract.
• Don't rush into signing anything.
• Once a contract is signed, get a copy of it.
• Figure out total price when paying with credit.
• Make the largest payments possible.
• Know the penalties for missed payments.