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Choosing a Credit Card
Who provides revolving credit?
A. Revolving or open-end credit is becoming increasingly popular in this country, as more people have credit cards than ever before. Discover, MasterCard, Optima and Visa are examples of the many credit cards issued by banks, savings and loans, and credit unions. In your shopping for a bank credit card, you need to recognize that credit cards with the Visa and MasterCard logos or marks are issued by thousands of different savings and loans and credit unions. Hence,
if you do not like the terms on one Visa card, you can always check with other issuers to see if their terms are preferable. Major retailers issue their own credit cards, and oil companies also have their cards, although many of the oil companies do not offer revolving credit, only 30-day credit (except on purchases of tires, batteries and accessories).
How may I choose a credit card that is right for me?
A. Selecting a credit card is like selecting a suit or dress; you want a good "fit." Because there are many card issuers, you have a wide choice among cards. In this section, we will examine terms that are typically offered to consumers by banks and other issuers of credit cards. It is illegal for card issuers to send you a credit card unless you have asked for it or unless it replaces a card you previously asked for. Furthermore, under the TILA, every solicitation for a credit card must contain a brief disclosure statement. Disclosures more extensive in nature are due before the first time you use the credit card you have applied for, and specific disclosures about finance and other charges and transactions are required with your periodic statement (usually monthly). In this section we use examples from actual solicitations and explain how they might affect the "fit" of the card offered to your own credit needs.
How should I judge the APR shown in the solicitation?
A. The law requires credit grantors to quote the APR and to tell you the balance calculation method they use to figure the finance charge you pay. Since credit grantors use many different methods to compute that balance to which the APR is applied, credit grantors who quote identical APRs may charge you very different dollar finance charges each month. It depends on how you use the account and how they calculate the unpaid balance for assessing the charge.
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