The 3 "A's" of Your Credit Card Deal

Information is power, it is a fact. The more you know, the more difficult it is to mislead you, even if it is a highly self-profit credit card company. Sometimes it is the matter of the quality, not quantity of information that lets you play your own game. When you make a credit card deal, you more than the usual want to be in the know of the peculiarities and understand them perfectly well to avoid numerous traps of the credit card industry.

Are you going to apply for your first plastic or just another one to join those already in your purse? If yes, the following piece of information will make you basically literate on credit card use and so - a partner, not a victim to your creditor

There are three very simple things to understand to make your credit card a really profitable deal. Learn them by heart and the confusion with credit card terms will rid you of a headache for good.

The APR on your credit card. It is the annual percentage rate that determines the overall cost of your credit card deal. You should try to get the lowest credit card rates possible, otherwise why borrow money at all? The present day fierce competition among credit companies allows you to find and have a most attractive interest on your plastic.

Available credit. Normally you cannot spend more than you have on your credit card, so you have a definite credit limit available. You run a serious risk of being penalized if you charge an amount more than the available credit. Going over the limit not only leads to an over the limit fee which is rather hefty, but also damages your payment history.

A very important thing to know about credit card limits is that your bank or credit company, based on your good payment history and credit score, can very often increase the initial available credit.

Illiterate or inexperienced cardholders may think of this fine gesture as encouragement to spend more. Well, very probably your creditor hopes you do this, planning to collect more from you in increased rates and fees.

In reality, however, your lender just does not explain. In fact, the credit card limit increase can work for you. How? Imagine that you received the increase but continued spending in the same amounts. Thus, your debt to credit limit ratio will increase and it will generally improve your credit score.

What's the conclusion? When a credit card company increases your credit limit, you can improve your scores if you just keep yourself from excessive spending.

Available cash. Credit card is known as a cashless form of paying. However, all credit cards allow you to withdraw some cash from your bank account. There is a certain limit to the cash available and you are always charged a large fee and a high interest rate for making the cash advance.

The cash advance limit is usually much lower than your total credit and you can never withdraw more than the half. In addition, as soon as you make a cash advance, the amount is taken from your account and the limit available drops.

So, do you feel more confident now about your credit competence? There are lots of other credit card terms you need to know, but almost all of them are based on these three. Be informed. Gain power.

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