Comparing Credit Cards
A lot of people are unaware that their credit card has
an annual percentage rate (APR) of 12% or higher. Most
new credit card holders are sucked in by credit card
issuers with low introductory offers. These low rates
often only last for the first few months and then jump
up. Credit card issuers make their money by adding in
hidden fees and off the interest payments from those
who have unpaid balances.
The most important point to keep in mind while
searching and comparing for a credit card is to
determine the true cost of the credit card. You
probably have received a number of free card offers in
the mail offering gift incentives or low interest
rates to get your attention. After a while, it becomes
difficult to determine which card is actually offering
the best deal.
Read the fine print and see how long the advertised
credit card introductory rate is valid for. Check to
see what balances it applies to. Sometimes the low
rates offer only apply to the balance you transfer
over from another card. In some cases, if you are late
one day on your credit card payment, the interest rate
may increase permanently. In the cases where you are
late on a payment, there is often a minimum late fee
and financing fee that will be tacked onto your
payment. Adding in the late interest and fees,
sometimes a credit card with a rate of 5% can jump to
20% by factoring in those late fees and interest.
Additional Fees
Credit card issuers are issuing more and more fees
these days. These are the main fees to watch out for
when comparing credit card offers.
- Annual fees - There are plenty of credit cards
with no annual fees, so unless you have bad credits or
really want a particular credit card, choose one with
no annual fees.
- Closure fees - Believe it or not, there is a such
fee as a closure fee that will come into effect when
you close the account. These are not so common anymore
but still a fee to watch out for.
- Late fees - All credit cards will have late fees.
Most of the time, it will be around 20-25 dollars
minimum plus whatever the financing charge is.
- Foreign Transaction Fees - Again, most cards will
have some sort of foreign transaction fees. They can
just be a percentage of each charge of a flat
transaction fee for each usage.
- Cash Advance - All cards will have a high cash
advance rate while some will have a fee to it as well.
Whatever is the case, don't get a cash advance on a
credit card, it is highway robbery.
Credit Cards Are Good When Used
Correctly
Don't be scared off by all these things you have to
worry about when it comes to credit cards. Having 1-3
credit card will help you when you apply for a home
loan or auto loan. It shows banks you are able to pay
off your monthly bills and don't overspend.
