Online credit cards are available with different features and forms. If you're planning to use one, you need to know the benefits, application process, interest rates and refund options. You can then make a decision on the basis of the information. It can be difficult to find the right online credit card, but these guidelines will help you make it easier.
Benefits
Credit cards offer convenience and many benefits. Credit cards allow you to build your credit history which can help you get better interest rates. There are also rewards and points available for purchases. Many credit card companies offer a free credit score. However, these scores are not updated as often as WalletHub's free credit score service, and they don't provide personalized credit advice.
Many credit cards offer bonus points for spending, which you can then exchange for merchandise, travel, or statement credits. You might even receive special gifts if your spend is certain. Many credit cards also offer introductory bonuses to help you open an account. These bonuses can help you save a lot on interest over the long-term.
Apply process
An online credit card application process is different from an offline application. First, a customer should specify their Street address to begin the application process. After providing this information, a system will lookup the Customer’s delivery codes (which should equal B). If this field does not exist, the system will not begin the application process.
Applicants will usually need to submit their name and address as well as income and bank account information. Some issuers may require additional information such as a credit score. This is necessary for two reasons: To confirm your identity and to ensure that you can pay the monthly payment.
Interest rates
One way to avoid paying interest on purchases made on your credit cards is to pay the full balance every month. You may be eligible to negotiate a lower interest rates depending on your credit score. In some cases you may be able avoid any interest payments by making all payments in time. This is an option if you are unable to pay any interest.
The Federal Reserve has recently raised rates for most credit cards. While this is good news to consumers, it can also disappoint many. Most credit card issuers don't have to share any increases with new applicants. However, historically, the increase in federal interest rates has translated into dramatic increases in APRs for new credit cards. Six rate increases have been announced by the Fed since March. These include two quarter-point increases and four three quarter-point increases. Many credit cards have seen similar increases to their APRs. Some are even advertising APRs three points higher than they were last Spring.
Refund options
Many credit card companies offer refund requests online. Most refunds will be applied to the account balance. Sometimes, however, a check is issued instead. This is an option if your account has a negative balance for several months or you have a bill coming up.
Although refunds are usually processed within a few weeks, the whole process can take up to six months. The amount of time it takes for a refund on your account to appear depends on how long it takes the merchant to respond to you.
Card issuers
Credit card issuers may be banks or other financial institutions that offer consumers the means to make purchases. They can also offer rewards or report payment histories to credit agencies. The card issuer sets the credit limit, interest rates, and fees. They also make a profit from the relationship they have with customers and their payments.
The fees card issuers charge vary depending upon the card used and the amount of transactions. The typical fees are between one and three percent of the transaction amount. These fees are split with payment processing networks. The fees are designed to make money for the credit card issuer, and are usually negligible when compared to the benefits of rewards programs.