There are 3 popular consumer credit bureaus:

  1. Equifax
  2. TransUnion
  3. Experian

If you lose your credit card then you should lock the credit card account immediately to avoid any misuse. These days it can be easily done via mobile app or by calling customer care. Issuer cancels the lost credit card and issues a new credit card.

Secured credit card requires customers to make a deposit. This deposit acts as a security in case the customer is unable to pay the outstanding balances on credit card. Generally, the credit line is same as the amount deposited.

Interest is charged by the card issuing bank when full payment is not made by the due date mentioned on the statement. 

Secured cards can help in building credit.

Issuers assign an expiration date to the physical card and not to the customer account when a new credit card is issued. If the customer is active and is in good credit standing, issuers generally re-issues a new credit card to the customer just before the expiration of existing card.

Variable APR means the APR will vary by the changes in Prime Rate. Each credit card is approved with an APR. For Example: You have a credit card with APR of 17.24% variable. If the Prime Rate is 3.25% then actually the APR on the credit card is Prime Rate+13.99%. If Prime Rate increases to 4.0% then APR on your credit card will become 17.99%.

Check the prime rate changes since year 2000 here

Number of credit cards one should have varies by individual’s credit history, spending patterns, ability to manage multiple credit cards and other factors related to savings and credit goals. Having only one credit card might not be a bad idea if that card meets requirements but there are some cases where having multiple credit cards might be helpful. One example is a credit card fraud. When there is a fraudulent transaction on a credit card then it is blocked by the issuer. If you have only one credit card which gets impacted by fraud then you will be left with no credit card while you are waiting for the new card to arrive. Another is foreign exchange fee for travelers. If you are an international traveler then it might be a good idea to have one card which doesn’t charge fees on foreign spend. Some merchants don’t accept credit cards from certain networks.    

It is more important to manage the credit card debt than the number of credit cards. Also, it can be a hassle to manage monthly statements and payments if you have too many credit cards.

Credit limit is assigned based on the credit score and other attributes in the credit report. As you maintain good payment behavior on the credit card, credit limit can be increased after a certain period which varies by issuers.

Balance transfer is a process of transferring outstanding balances from one lender to another. You can save money by transferring debt at a higher interest rate with one credit card issuer to as low as 0% with another credit card issuer. This also helps in managing less credit card accounts by consolidating balances with one lender. Always check balance transfer terms and conditions and balance transfer fees before transferring balances.

Credit limit is assigned based on the credit score and customer’s ability to pay. CARD Act of 2009 states that a card issuer should consider ability to make required minimum payments for opening a credit card or increasing a credit limit. 

Soft inquiry occurs when a lender wants to market a product.  Lender pulls the credit report to market products to customers. Soft inquiries do not impact the credit score of the customer. Only the customer and the bureau can see the soft inquiries on the credit report and they are not shared with other lenders. Soft inquiries are posted for:
  • Pre-screen offers,
  • Pre-qual checks on issuer website,
  • Free score from issuers
Additional cases of soft inquiries for existing customers:
  • Adding another card with a bank
  • Credit line increase

Hard inquiry occurs when a customer applies for a lending product like a credit card, mortgage or a loan. Lender pulls the credit report to make decision on the application. Too many hard inquires adversely impact credit scores. Hard inquiries stay on the credit report for 2 years but generally impact the credit score for one year. They are initiated by the customer.