Isn’t that true? That credit cards companies decoy you in with big promises but most of the time back off form the promises they made.
It would be difficult enough to find any people that would not agree to this sort of behavior by credit cards companies. It is really unfortunate to know the common opinion that when credit card companies approach you and you have the attitude of being fully agreed to their terms and conditions then they will be surely take full advantage from you.
But I guess you believe in getting rich slowly, likely to be more careful about your finances and adequately careful when you are spending your money.
So let me tell you five specific guidelines to keep in view both while getting a card and using it, to avoid any trap that incurs losses.
“As low as 9.99% APR!”
Your interests could be as low as 9.99% or as high as 20.99% or whatever determined by the company.
The Facts:
You must lead the “Schumer box” (where the interest rate is shown, mostly on the backside of application).If the company is offering you interests rate which is beneficial to them. Then you have to watch out that you might not be incurring any losses, or you may choose a credit card that offers a single take it or leave it rate. In that way you might be approved or rejected but you don’t have such feelings that someone cheated you.
“Up to 5% Cash back”
Several credit card companies offer you much less than 5% rebate until you spend a certain amount per year. Their rebates may fluctuate from 5% rebate for the first $300 purchases per month to 1% or less.
The Facts:
Don’t accept cards that offer a rebate “up to” a certain percentage and accept those only which offers a full percentage and keep a check on monthly or yearly rebates.
“0% APR on balance transfer for 12 months”
First of all these days the balance is not transferred without paying 3% of balance upfront.
Secondly, almost all card companies take your payments and first apply them to lower rate. For e.g. you transfer $1000 to a card at 0%.The cards interests rate on new purchase is 13.99%.As soon as you buy a new stuff from credit card your bill is due on you, you have to pay it and from now you won’t get 0% APR on balance transfer because now you are paying bill at 13.99% rate.
The Facts:
The easy thing is that you would stop using you credit card until you pay it off.
Now you can get another credit card at 0% rate on purchase for 12 months then you can use it simultaneously, paying your old card balance. By moving with such strategy you are paying off your high interest debit while doing new purchases at 0%. This is quiet similar to transferring the balance at 0%.
Another way is that you recognize that 0% rate is not forever and eventually you have to pay the bill.
“Your Credit Card has a limit of $3000”
It seems that your card company restricts the purchases beyond limit but in reality they will let you to do so and charge you a penalty fee of $39.
The Facts:
Don’t think that Card Company is taking good care of yours by cutting off when you cross your credit limit. It is your responsibility to keep an eye on your spending and avoid crossing the limit. It is for your own benefit to keep yourself away from your credit card limits.
“Any time for any reason”
Unlike other promise, this one is really very unpleasant. In every card agreement it is one of the clauses that card company can change the interest rate whenever they want, they will give you only 15 days notice and you cannot stop them doing so.
The Facts:
Get a second credit card before it is too late. That card you will use when your interest rate suddenly becomes too high and there is no way to get rid of it when the company decides to play a spell.
Credit Cards are not for unwise people. If you are deciding to have one than take into your consideration all factors relating to credit cards and make good strategies to manage this responsibility.
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