When it comes to choosing and using a credit card, then one of the key decisions that you’ll make is that whether you will pay your bill in total every month or just pay off part of it.

To know your “payment profile” is really very important for you.

There will be a balance left in case if you pay off just the minimum or even most of what’s due. So in order to know where you really stand, you’ll need to know that what interest rate is charged by your credit card to what’s not paid and it is also necessary to know that what you’ll be paying to maintain an unpaid balance.

Analyze your Credit History

Fees is applied by card companies to a number of card uses — for instance a late fee, or an over-the-limit fee. Before you go any further honestly take a look at your own credit history and analyze that which problems or habits are most likely to arise in your card use. You should be honest with yourself – have you missed payment deadlines more than you would have ever like? If yes than you should not select a card where the interest rate shoots up whenever you miss a payment.

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Whether you are apply for a credit card, you should ask a phone representative to send you information related to your credit card, you should also hook up with online applications of a credit card company or receive an uninvited application through the mail, you should never attempt to sign up until that you have asked about some key questions that are really important to ask before you signup.

You have to find out the answers to the following questions:

• Is your card company offering an introductory rate? What is that rate and how long does it last for?
• After the introductory rate time period is finished, what will your rate be?
• Does the card company charge any fees for application?

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Just think over that as you have been consulting with a consultant and paying his fee with your credit card or for example, if you use your credit card to pay to retread your tire, the bank may draw the conclusion that you are, or are about to be, in financial distress and consequently adjust or withdraw your credit limit. Think your application for a loan has been rejected because of your affiliation with property consultant or any mortgaging company. Again just think that your credit card provider decrease your credit limit just because you shop at the same place where people who have bad credit history come to shop as well.

The Figure (Above) Gives Us An Insight Of Financial Profiling

You Are Welcome to Financial Profiling or Behavioral scoring.

Take an example A family used to do shopping using American express card regularly, they shop for around $5,000 in a month and usually paid the full amount back. You’ll be shocked to know that their credit limit lowered about 75% of the original credit limit. This is a live example of victims of financial profiling despite the fact that they didn’t make anything wrong. The bank indirectly impacts their credit rating by reducing the ratio of in-use to available credit.

Consumers also find no opportunity for recourse. Individuals are not given justification for the reduction of their credit limit and often report difficulties in contacting the bank to negotiate a resolution.

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