This is a series of posts about ‘AKPK DMP Blogger’s Book Review: Tip-Tip Kewangan Untuk Rakyat Malaysia by K.C Lau’ – Part 1, Part 2, Part 3, Part 4 and Part5.

Being a work from home woman who makes money online, this Bahagian 2: Tip Menjana Wang surely sparked off my interest. Making money online, woohoo!

Bahagian 2: Tip Menjana Wang (Tip #8 – #12)

Tip #8 – Menjana Pendapatan Pasif Sambil Melayari Internet. Okay, there are suggestions of setting up blogs, Squidoo lenses and HubPages to make money here!

If you are thinking of making money online, ya, the tip here gives you general ideas on how and where you can make money from online.

The tip here suits beginners who would like to make money online, but not me and other bloggers/internet marketers/affiliate marketers who are currently using the above mentioned money makers.

Tip #9 – Dapatkan Wang Tunai Daripada Barangan Terpakai Anda. Selling used stuff online at eBay and other auction websites? Opps, not for me!

Tip #10 – Jadikan Minat Anda Sebuah Mesin Menjana Wang. What’s my passion now? Blogging. Does it make me money? Oh, yes. Does it make me abundant money to pay off my debt fast or turn my vacant house in Ipoh into a homestay resort? Oh, not yet.

Let me dig into The 8-Day Internet Wonder by Edwin John, also given free by K.C.Lau to see if I can push my niche blogs to generate more money online.

Tip #11 – Tukarkan Kad Kredit Daripada Lawan Menjadi Kawan. Here you can learn how to turn your credit card into your friend rather than enemy by taking advantage of the grace period, interest-free installment plans, free gifts, rebates and reward points.

There are also tips on how to eliminate your credit card debt. K.C mentioned getting micro loans from family members/friends. Of course, when it comes to loans, there are interest charges involved.

To be honest, we did get some micro loans from family members at 10% interest rate per annum. It’s true that people are more willing to loan you money when you give them interests. And guess what? You tend to be less inferior in front of them because you pay them interests!

Tip #12 – Pelajari Peraturan-Peraturan Penting Dalam Pelaburan. Opps, about investments! I am not at this stage now, so I skipped this part here.

Go to ‘AKPK DMP Blogger’s Book Review: Tip-Tip Kewangan Untuk Rakyat Malaysia by K.C Lau’ – Part 4.

I, the AKPK DMP blogger, chanced upon this interesting article, ‘Those Bloody Banks, Credit Card Companies and Bank Negara!‘ by Fahri Azzat at loyaburok.com, at The Malaysian Insider.

You may have missed this article that relates how banks and credit card companies can be so unreasonable when it comes to credit card terms. Enjoy reading!

(Source) JAN 16 — Diana Chee Vun Hsai, like many of us owned a credit card. She had two. One from Citibank Berhad, the other from HSBC Bank Berhad. On 7 September 2008, HSBC called up her to alert her about her credit card being used. When she checked her purse, she discovered both her credit cards were missing. She notified both the credit card companies of the loss of her credit cards on the same day and lodged a police report at Dang Wangi police station about it the following day. She understandably thought that was the end of the matter. She was wrong.

On 16 September 2008, Citibank told Diana Chee Vun Hsai they were billing her for the unauthorized transaction of RM 1,859.01 done on 6 September 2008. She responded through her solicitors to inform Citibank that the limit of liability for a lost credit card was RM 250.00 as provided in clauses 15.1, 15.2 and 15.3 of the Bank Negara Guidelines BNM/RH/GLO-041-01 (“the BNM Guidelines”). Citibank’s lawyers replied pointing out to her that the terms of her credit card the crux of which is as follows:

“Our client imposes a duty on the cardholder to notify the loss one (1) hour prior to the unauthorized use and to provide proof of acting in good faith and exercising reasonable care and diligence to prevent such loss or theft of unauthorized use of the card before our client can exercise its discretion whether to resolve the liability or not. Such a clause is not in contravention of the Bank Negara guidelines.” (emphasis mine)

I have emphasized that portion to demonstrate just how unreasonable banks can be; to limit your losses arising from the loss of your credit card to RM 250.00, you have to inform Citibank one hour before the unauthorized transaction takes place, which you would naturally know nothing about. Additionally, you have to prove good faith and demonstrate that you exercised reasonable care and diligence to prevent such a loss. How absurd is that! Even after you show all that that, it is still at Citibank’s discretion whether to “resolve the liability or not”. Is it any wonder the sensible man loathes banks despite yielding to them? They borrow your money, charge you a higher rate for borrowing back and offer you pittance for its use. But we shall leave this for another day.

Diana Chee rightly did not agree with the absurd reply and sued Citibank for several declarations the main ones being (i) that the BNM Guidelines issued pursuant to sections 25 and 70 the Payment Systems Act 2003 have the force of law and (ii) the term relied upon by Citibank to deduct the sum of RM 1,859.01 was illegal, void and contrary to public policy.

Justice Mohd Apandi Ali who heard the case at the outset opined that Citibank was an operator under the Payment Systems Act 2003 and therefore bound by the BNM Guidelines, which his Lordship very helpfully reproduces in its entirety for our benefit. I would strongly recommend those with credit cards to read and understand it. This would prevent credit card companies from taking advantage of your ignorance and fear of seeking legal advice. Clause 15.2 of the BNM Guidelines was referred to and is worth considering in full:

15. Liability For Lost Or Stolen Credit Card

15.2 The cardholders’ maximum liability for unauthorized transactions as a consequence of a lost or stolen credit card shall be confined to a limit specified by the issuer of the credit cards, which shall not exceed RM 250.00, provided the cardholder has not acted fraudulently or has not failed to inform the issuer of credit card as soon as reasonably practicable after having found that his credit card is lost or stolen.

His Lordship then opined quite rightly, “This ‘one hour prior to reporting of the loss card’ clause, to my mind is not only unreasonable and ridiculous but it is contrary to the provisions of cl. 15.2 of the Bank Negara Guidelines. In fact, the RM 250 is the maximum liability of the cardholder in such circumstances, and that the onus of proving fraud or unreasonable delay to report loss of the card is upon the issuer of the credit card”. So in this case, the Judge ruled that it was Citibank that had to prove any alleged fraud or unreasonable delay on the part of Diana Chee before they can deny her the limitation of liability.

This is my favourite part:

“The cardholder has complied with the said terms of reporting and confirming the loss of the credit card. The respondent cannot have the discretion, despite having it so written in the agreement, to circumvent the Bank Negara guidelines, with a view to limit its liability.”

There you have it. Citibank despite knowing the BNM Guidelines defiantly made terms of agreements for their credit cards that not only infringed the BNM Guidelines but was designed with the purpose of limiting its own liability. This you can appreciate could translate into increased profits for them.

The Judge then rightly goes on to point out that breaching the BNM Guidelines is an offence punishable under section 57 of the Payment Systems Act 2003 which prescribes a fine not exceeding RM 500,000.00. If the credit card company continues to offend it then it will be additionally liable to a fine not exceeding RM 1,000.00 for everyday that the offence continues. His Lordship states that, “the issuer of the credit card is also liable to have its approval revoked by Bank Negara if the issuer has failed to comply with any of the Guidelines issued by Bank Negara”. So clearly, the BNM Guidelines is an offence and if your credit card of bank is in breach of it, you should lodge a complaint with Bank Negara.

But it is not just the credit cards that are ripping us off. An interesting paper written by Kalavathy Maruthavanar titled “Internet Banking — A Boon or A Bane? A Study on the Legal Issues Relating to Internet Banking in Malaysia” (Developments in Malaysian Law: Selected Essays, Sharifah Suhanah Sy. Ahmad, UM 2007) suggests that our local banks are in flagrantly in breach of the BNM guidelines for internet banking as contained in the “Minimum Guidelines on the Provisions of Internet Banking Services by Licensed Banking Institutions” (referred to after this as the BNM Internet Banking Guidelines), which were issued pursuant to section 119 and section 126 of the Banking and Financial Institutions Act 1989 (“BAFIA”), and remains in force by virtue of section 77(4) of the Payment Systems Act 2003.

Kalavathy focuses her attention on four areas but I will focus only on two which I feel relevant here:

The first area is the Standard Form of Contract (“SFC”) between the bank and the user. Here she points out that the SFC generally forces the customer to agree to indemnify the bank for all and any loss arising from using internet banking regardless of whether they are at fault or responsible for the fault. She also points out that banks commonly exclude liability for negligence and for “any technical, hardware or software failure of any kind”. Basically the customer will have to bear the loss no matter what happens even when the bank is responsible.

Kalavathy points out that such clauses are in violation of Part 5, Clause 1.2(iii) of the BNM Internet Banking Guidelines which provides as follows:

“The customer know their rights and liabilities and are fully aware that they are responsible for their own actions. The contractual arrangements for liability arising from unauthorized or fraudulent transactions have been laid out to the customers. The arrangements should provide for sharing of risks between the banking institution and the customers. However, customers should not bear any loss arising from system failures.”

She also points out the relevance of the BNM Guidelines On Consumer Protection On Electronic Fund Transfers where Clause 17(1)(a) and (b) provides that:

A customer shall not be liable for loss -

(a) not attributable to or not contributed by the customer;

(b) caused by the fraudulent or negligent conduct of officers or agents appointed by, the -

(i) financial institution;

(ii) companies and other financial institutions involved in networking arrangements within this country; or

(iii) merchants who are linked to the card system.

So it appears we have local banks clearly in breach of the numerous BNM Guidelines issued.

The second area concerns the privacy aspect of internet banking. The BNM Internet Banking Guidelines approach is laudable. Clause 4.1 stresses that, “Bank Negara Malaysia considers the privacy of consumer personal information to be an important element of public trust and confidence in the Malaysian banking system”. Clause 4.4 places the responsibility of providing privacy protections in the online environment on the banks. They have to stipulate their Privacy Policy Statement on their websites and ensure that it conforms to conditions contained in clause 4.7. — BNM Internet Banking Guidelines at clauses 4.8 — 4.17 requires the banks to set up a Customer Support Service to handle queries and complaints, and oversee all internal controls.

Kalavathy then discovers that notwithstanding those guidelines, many banks Privacy Policy Statement do not comply with them because:

(i) most of those statements permit dissemination of information to the whole bank’s group and related companies;

(ii) some of those sites contain cookies that track your activities on the internet;

(iii) a customer will not be protected if they click on a third party link from the bank’s website;

(iv) information collected for promotions and contests can be used for marketing.

So even if the Privacy Policy Statement meets with the legal requirements, they do not necessarily do so with its spirit.

Both these developments indicate that though there are many good and noble BNM Guidelines out there, it suffers from the usual lack of enforcement. Bank Negara has to realize that it is no use coming up with all these noble Guidelines without backing it up with regular and consistent supervision and enforcement, more so with banks because they are so wealthy and powerful. Bank Negara has to realize that as consumers with little ability to negotiate terms with a bank, so it is all the more important that information is provided to us directly. This way we can point out and take those banks to task when they treat us as connedsumers instead of consumers, or better yet, living and breathing human beings — not just a financial statistic.

This is sensible and logical. That is probably why Bank Negara does not do it. Kalavathy reports, “The BNM Guidelines are issued by Bank Negara solely to domestic banks. These guidelines are not avaiable to the public and it has been questionable if a lay person can enforce any Bank Negara guideline in a court of law”.

As explained above, the position has moved on since then and BNM Guidelines now have the force of law.

The question now is will Bank Negara publicize all those fine and noble sounding guidelines for public education and awareness.

If they do not, that would raise the further question of, why not?

* This article is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.

You have a debt problem, but it’s not serious enough to get you into AKPK debt management program yet? Lucky you! If you don’t want to resort to enrolling in AKPK’s DMP or declaring bankruptcy in future, then make sure you start managing your personal debt now.

Here is Raymond Roy Tiruchelvam’s article on How to Manage Personal Debt.

THE “easier said than done” phrase latches on to this topic like ants to sugar. While getting into debt is made easier today with the many innovative marketing plans undertaken by financial institutions, getting out of if, leaves much to be pondered.

For those who do not see the light at the end of the tunnel, Bank Negara has introduced AKPK or Credit Counselling and Debt Management Agency. I am assuming a single source of funds being financial institutions, and not “ah-longs” and other unconventional sources.

There is actually one step to be undertaken prior to managing your debt, which is managing your cash flow. It does not mean that if one is a millionaire, there is no need for debt management … well perhaps there is no need, since the ability to source for debt is high, but everyone will need to manage their cash flow, let it be millionaires or paupers.

Let’s look at some steps that we can take to ensure that we are able to manage our personal debts so that we do not go into the “PN4” or “PN17” status (which for companies implies a financially distressed state).

Let’s start with liquid debts, credit card and car loans. For the former, never follow the minimum payment requirement of the bank, which is 5% of outstanding sum. The reality is that it does not diminish in 20 months (5% X 20 months = 100%) – which is the general misconception.

Instead, spread the payment over a reasonable payable period. For example, if you purchase a personal computer for RM1,500 perhaps, you want to make a RM300 monthly payment over 5 months, rather than pay RM75 in the first month, then RM71 for the second month and so on (assuming one follows the minimum 5% payment, excluding interest charge).

As a matter of fact, if one were to purely pay the 5% minimum payment, do you know that it will take 50 years for the sum to trickle down to RM100. And mind you, even with that, the debt won’t be fully settled.

As for car loan, do not take a hire purchase (HP) contract for more than 5 years. What would a car costing RM80,000 be valued at after 2½ years? Depending on the type of car, continental or eastern, a 5-year HP term will value it at RM40,000 (assuming a simplicity straight line depreciation, 100% hire purchase financing, excluding interest with zero value at the end of the payment term).

Assuming one needed cash, don’t you think it’s easier to find a buyer at RM40,000 compared to if you were to take a 9-year car loan whereby you will need to find a buyer at RM62,222 (remaining loan balance after 2 years for a 9-year HP plan).

Naturally, one would say if not for the 9-year term, he or she will not be able to afford the vehicle … but that’s exactly the point. If you can’t afford it, then don’t buy it!

Next comes personal loan. Firstly, it baffles me that banks are giving out “clean” loans today, meaning non-collateralised, non-guaranteed loans as personal loans to almost everybody with a monthly pay slip. If you are unable to pay, there is little recourse, as compared to hire-purchase loan, where you may have the option of selling the car. Hence, unless you are sure of the purpose and that the usage of the funds will return a cash flow, do not indulge in one.

Using electronic means via Internet banking and online payment systems is a good way to manage your cash flow. Today many banks have this facility that allows you to also format standing instructions to promptly pay a fixed sum on a particular date towards debt settlement. This will help you ensure that priorities take precedence. Therefore, it’s only the balance cash after settling debts that will be available for disposal.

What will be the comfortable debt to income ratio? Zero is preferable, otherwise a 25% maximum limit of disposable income is recommended. For example, if you had bought the RM80,000 car mentioned earlier, on a 5-year term; assuming a simplified zero interest scheme, you would be paying RM1,333 monthly installment.

Therefore following the 25% debt to income ratio, you should be earning a minimum of RM5,333 per annum. This is after tax and EPF, therefore gross monthly salary should be about RM6,200. So after reading this, do you think you have overspent on your car? There is no under-spending by the way, since the ratio is only an indicator, and I am sure you would probably want to also invest in a housing loan.

You can also increase your capacity to loan, by simply borrowing money to invest where the returns are higher than the cost of funds.

If you can find one an avenue that guarantees this position, then do inform me, I too am curious!

Raymond Roy Tiruchelvam is a former senior manager – economics and investment analysis at an oil and gas outfit.

If you think that you do not see the light at the end of the tunnel, then attend AKPK’s briefing to see if you need a debt management plan to help you get out of debt.

Tell me you can still keep your calm after seeing the outstanding balance of your credit card as of today and in March is RM6,300 and RM6,400 respectively.

I think any reasonable mind will go mad or freaked out after seeing no noticeable decrease in credit card balance despite being in a debt management program, right?

This morning, I thought of doing a spreadsheet for all my credit card accounts. When comparing the figure of March and November statements of a bank, I was shocked to see RM6,300 and RM6,400.

How could it be? I had already been in AKPK debt management plan for one year, so logically, the amount owed should have dropped to less than RM6,000, right?

Ya, I was mad and freaked out. I knew it’s because of the late payment charges that showed up almost every month for the last few months.

I remember my Ipoh credit counsellor had told me before that there’s nothing to worry about the late payment fees. They would not show up anymore once the banks had everything updated.

I also thought the banks would remove the late charges from their record sooner or later, so I didn’t call or write to the banks. But after giving them so many months to get updated, the late charges still showed up in the statements.

Enough! Too much! So I gave AKPK Ipoh branch a call. As usual, the ever helpful Ms Lina answered the phone.

I told her about banks (except Public Bank) which still had the late charges printed on the monthly statements. After listening attentively to my complaint, Lina assured me not to worry about the late payment fees.

According to her, banks would stick to only collecting the agreed amount of outstanding balance plus interest charges. I hope the banks really do so.

To know the latest correct amount of each of my credit card, Ms Lina even gave me every bank’s phone number and name of person who is in charge of AKPK cases.

I did call one of the banks and raised my concern regarding the late payment charges. Again, I was reassured that there’s nothing to worry about the late fees.

Congratulations on getting your very first credit card! It’s my hope that you can use your credit card wisely to avoid getting into deep credit card debt and having to resort to debt consolidation, debt management program, debt settlement plan or bankruptcy.

If I had been careful when it came to using credit cards, I wouldn’t have gotten myself into deep credit card debt and enrolled in a free debt management program known as AKPK debt management program to help me lower my monthly payments from more than RM1,500 to RM320, reduce interest rates from 18% to 6% or 7%, waive late payments and over-limit charges.

Credit cards, when used in moderation, could be helpful in managing your finances. But splurging through the use of credit cards is almost financial suicide.

To prevent you from acquiring credit card debt that leads you to financial death, let me share with you how you can manage the way you use your credit card.

1. Prioritize Your NEEDS Before Your WANTS. Buying big ticket items that you don’t really need might give you that instant gratification that impulsive buyers are addicted to. But that temporary high would eventually turn to long-term down feeling due to your high-interest added credit card debt.

Imagine after 15 months of owning the 42″ Plasma TV, you are still paying down the amount owed, its interest charges and interest on the owed interest charges! So depressing!

2. Never Go Over Your Credit Limit. In order to be able to manage your credit card payment, never go overboard when it comes to your credit limit. If it’s possible, just use about two-thirds of your limit.

3. Keep the Statement of Your Credit Card Account. For easy reference in future, keep a record of all your credit card transactions.

Always spend some time comparing the list of your purchase for the month with the statement to prevent being charged inaccurately. If your list and the statement of account do not match, report this to your bank.

Self-control is still the best way to prevent getting piled up debt. I have been there before and I tell you, it’s no fun having accumulated debt.

You know how suffocated and stressful I was before I signed up with a free debt management program? My piled up debt was actually caused by late payment fees, over-limit charges and miscellaneous fee charges.

Am I worried about my credit card debt now? No, I am not. But I used to be very worried and stressed out about it before I enrolled in a free debt management program called AKPK debt management programme (DMP).

What about you? Are you worried about your credit card debt?

You should be if your credit card debt has spiraled out of control; you pay more than 15% of your monthly income to your credit card bills or/and borrow cash from one credit card to pay another.

You are not the only one who is dealing with credit card debt nowadays. In fact, almost 40% of credit card holders are in the same predicament!

So what should you do to avoid the need of getting help from debt relief options such as debt consolidation, debt management program, or debt settlement and worst of all filing for bankruptcy?

Start doing credit card debt management to help yourself get out of debt as fast as possible!

Most financial experts will advise you to stop using your credit cards. Quit using credit cards is to prevent you from adding new debt to your existing outstanding balance.

If you have more than one credit card, pay the minimum payment on them all. Then, pay the most to the credit card with the highest APR. Once the card with the highest APR is paid off, keep paying the minimum payment to the rest of your cards and pay the most to the next highest APR. Do so until all the credit cards are paid off.

Another way to help you is try balance transfer deals that offer 0% interest free period for 6, 9 or 12 months to save some money.

Credit cards are convenient, but you don’t have to use them all the time and put everything from groceries to petrol to night’s-out on them. Instead of using credit cards, cultivate the habit of using cash to help yourself curb your spending habits and get into more credit card debt.

If you are really concerned about your credit card debt, start doing debt reduction before you end up resorting to debt consolidation, debt management plan, debt settlement or bankruptcy.

“Should I Apply for a Credit Card?” If you ask me – The DMP Blogger – this question, it’s for sure that I will discourage you from applying for a credit card.

As a credit card debt woman who is currently under AKPK’s free debt management program (DMP), I will surely advise you to cultivate the habit of using cash, rather than swiping credit cards.

But, I am not your loved one or family member, right? Why would you want to listen to me? So, the decision on whether you should apply for a credit card is up to you.

With credit card ads in television, newspapers, websites, shops and almost anywhere and everywhere asking you to apply for a credit card, it’s difficult to resist the temptation.

Besides, when you look around, most people have credit cards or multiple credit cards. So, why shouldn’t you apply for a credit card?

Furthermore, you have been told that there are endless benefits associated with having a credit card. The most important benefit of a having credit card is none other than the convenience it offers. Instead of carrying a lot of cash on you which is both inconvenient and unsafe, you just need to carry a plastic card with you.

Moreover, you get interest free credit. This means that you don’t have to pay the bills till the next monthly billing cycle. With this benefit, you can buy now and pay later when your salary arrives. What a great reason to apply for a credit card, isn’t it?

In addition to that, you get to enjoy interest-free installment payment plan. You can buy the Samsung LN32B460 32-Inch LCD HDTV or Orient Men’s Multi-Eyes White Automatic Watch you have been longing for today and pay for it in installments on your credit card.

Another good reason to apply for a credit card is the discounts on shopping. Due to the tie-ups between credit card companies and the merchants, you, as a credit card holder, get to enjoy deeper discounts, reward points or even cash back benefits.

See, there are so many benefits of applying for a credit card, aren’t there? So, why shouldn’t you apply for a credit card?

Whether you should or should not apply for a credit card, it’s a matter of personal choice.

Is applying for a credit card now as easy as last time? Well, I am not so sure. Since I started credit card debt reduction in 2007 and AKPK debt management program in October 2008, I haven’t bothered much about credit cards.

However, judging from the credit card ads and offers that are still widely seen on the newspapers, magazines and online, it’s my guess that getting credit cards is still very easy.

These days even if your credit is bad, you can still get a credit card. There are tons of credit card companies out there that are willing to offer credit cards for people with bad credit or credit cards with no credit check.

As a credit card debt woman who is now in a free debt management program, my two cent opinion – Do Not Apply for a Credit Card if You Don’t Have Any.

You know, having a credit card almost always means that you are going to go into debt, be it a little or a lot.

Cautiousness is very important in using your credit card. If you are not sure that you can handle a credit card, then rethink applying.

You need to be sure that when the credit card statement comes in that you can make the payments. If you are not completely sure, then don’t get a credit card until you are ready.

If after analyzing your financial situation, you still think that you can handle a credit card and its payments, make sure that you read the fine print of the banks or credit card companies’ terms and agreements to make sure that there are not going to be any surprises.

I am a credit card debt woman who no longer owns a credit card. Of course, I am still loaded with credit card debt that needs a few years to pay off through AKPK free debt management program (DMP).

It’s difficult to find an adult who doesn’t own a credit card these days, isn’t it? Credit cards, especially to working people and those who live very busy lives, are ultimate financial saviors.

Well, credit cards used to be my savior too when I needed cash or a particular item urgently. I loved the glamor and the convenience credit cards brought to me that I got myself 7 credit cards and ultimately loads of credit card debt.

It’s the convenience of carrying credit cards compared to carrying cash when making purchases that triggered my thirst for material things, led me into the temptation of buying stuff that I didn’t really need and eventually got me into the unmanageable credit card debt.

Having a credit card is a big responsibility. If you don’t use it carefully, you may owe more than you can repay and be suffocated by high interest rates, late payment fees, over the limit fees, cash advance charges, retail interest fees and miscellaneous fees that add exponentially to your existing outstanding balance.

So, you are perfectly clear with the endless lists of pros and cons of using a credit card and ready to apply for a credit card. Let me share with you some of the helpful tips that can make your credit card shopping journey easier.

First, surf the net and do some research on the types of credit cards available on the market. By doing this, you can familiarize yourself with different credit card types and terms.

Balance transfer credit cards, low interest credit cards, cash back credit cards, reward points credit cards, retail rewards credit cards, travel points credit cards, gas rebate credit cards, home improvement rewards credit cards, airline mile credit cards, bad credit credit cards, business credit cards, student credit cards, and the list goes on.

Being a form of borrowing that involves charges, credit cards usually have underlying credit terms and conditions that affect your overall cost.

So, it’s best to compare terms and fees before you apply for a credit card and agree to open an account.

Some of the important terms to be understood well include the annual percentage rate or the APR. Being a measure of the cost of credit expressed as a yearly rate, make sure you know the APR rate before you apply for a credit card.

Aside from APR, you should also find out the periodic rate so you would have an idea of your outstanding balance and finance charge for each billing period.

Other important terms to know before you apply for a credit card are free period or grace period, annual fees, transaction fees and other charges, and balance computation method for the finance charge like average daily balance, adjusted balance, previous balance, and two-cycle balances.

I am not that type of person who is patient enough to research on all the credit card terms, that’s why I ended up in deep debt trouble and had to resort to enrolling in a free debt management program to get out of debt.

If you are also not that type of person who is patient enough to understand all the terms, you should at least get the card issuer to give an explanation how the balance is computed and it must appear on your monthly billing statements.

Once you are familiar with the types, terms and fees of all credit cards available on the market, your next step is compare numerous credit cards that would best serve your needs.

Different types of credit cards offer different options, depending on what your needs are. Some are geared toward individual consumers, while others are set up in ways that work best for small business needs.

And lastly, you may now apply for the right credit card of your choice by filling out a credit card application by visiting a bank representative or through online.