It is possible to get a 0 APR card credit – but not easy. The average American has a credit score of about 661, according to Forbes magazine. This score falls into the “fair” range of credit – not a very good commentary on American financial strength but a fact. But you want to go beyond the average; you want to be extraordinary. You want to have… good credit. Or better yet, excellent credit. Bring on that 750, baby! Then zero APR credit cards will flock to your door!
Following are 6 things that you need to know in order to successfully complete your quest for good credit:
As they say, knowledge is power. The most important thing that you can do is be informed – know what your credit score is. Some credit cards will offer you free or reduced fee credit reports when you join. In fact, some cards will go so far as to print your FICO score on your credit card statement each month. Awesome. Of course, there are other ways to get free credit reports and your FICO score. SuzeOrman recommends MyFico.com to get your true FICO score and annualcreditreport.com as the only site to get your free credit report – you can get one a year, maybe more if you have been denied credit.
You aren’t going to get a 0 APR card credit with bad credit, but you can fix things. When you see your report you will notice that things are listed as positive, negative or neutral. Rejoice for the positives, don’t worry about the neutrals and get to work on those negatives! Pay off your debt and pay down high balances. Know that there really are no credit cards to help rebuild credit with no annual fee – you are likely going to have to pay at least a $29 annual fee, but that’s a small price to pay to rebuild your credit.
Minimum payments are just that, the least that you can pay to be considered current on your card. Most often these are just 1% of your balance, meaning that it can take you many, many years (and huge amounts of interest) to actually pay a card off making minimum payments. When you make bigger payments you pay off debt faster which shows in your debt to income ratio, which accounts for about 35% of your credit score. So making extra payments goes a long way towards building a better credit score.
Mistakes happen, even to banks. Always read your credit card statement each month and ensure that all the charges are really yours, that the interest rate looks good and that no erroneous fees have shown up. If you see a problem call your credit card company immediately.
Cancelling credit cards can make sense if you want to avoid temptation or stop paying annual fees. But be careful because canceling a card can appear as a negative on your account, especially if you no longer have enough revolving credit to demonstrate your financial prowess. Keep at least two cards open and try to keep their balances at less than half of your credit limit – the lower the better. Remember, the longer your card account has been open the better it shows on your credit, so don’t cancel older accounts if you can avoid it.
Be informed and do your research if you have a special situation such as bankruptcy or foreclosure, problems that could prevent you from getting 0 APR card credit. Issues like this stay on your report for a certain amount of time, but often the damage that they do to your score minimizes substantially as time passes. Get the facts so that you always know where you stand.
SuzeOrman,Credit Report: http://apps.suzeorman.com/igsbase/igstemplate.cfm?SRC=MD012&SRCN=aoedetails&GnavID=84&SnavID=20&TnavID&AreasofExpertiseID=154
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