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7 Tips When Getting A New Credit Card
How many times have you taken out a credit card based purely on its current interest rate or balance transfer option?
You may be surprised to note there are at least 7 elements worthy of consideration when you take out a new credit card. To judge a new credit card on just one or two options could easily result in a bad deal for you. You need to consider the following 7 options when you take out a credit card:
1. The Initial Concessionary Interest Rate And Period
Many credit cards offer a 0% interest rate on purchases for a limited period, usually six to nine months. This option can be very attractive particularly when you do not repay the balance in full each month.
After the initial period the rate reverts to the standard rate, usually in the 10 to 16% range although this can be considerably higher.
Some cards however have no interest free offer but have a much lower permanent rate, from about 6.9% (although it will vary in line with general interest rate charges).
If you are likely to have a long term balance (if you are unable to pay off the debt within the first 6 to 9 months) this option could save you money in the medium to long term. You will not be able to switch to this rate if you have taken the 0% initial rate offer.
2. A Monthly Interest Free Period On New Purchases
This relates to the period between your purchase of an item and when you will be charged interest on that purchase amount. Many cards have a policy of only charging from the payment date after the item appears on your card statement.
The effect of this is to give you between approximately 25 days and 56 days interest free credit on all purchases. Clearing your balance within this period will result in no interest being charged.
Some cards will charge interest immediately from the date of purchase and are therefore not suitable if you clear your balance each month.
3. The Annual Fee
Many cards have now implemented an annual fee. This fee is chargeable whether you clear the debt each month or if you roll over your debt.
4. 0% Balance Transfers
When taking out a new credit card you will normally have the option of transferring any outstanding balance to your new card with no interest charged for a specified period.
Although marketed as a "0% balance transfer" many are not totally free of charge. An increasing number now charge a one off charge of 2-3% of the amount transferred as an "administration chearge" for handling the transfer.
This is legally not an interest charge but it amounts to the same thing - you are charged a fee by your credit card company based on the amount transferred.
The availability of true 0% balance transfers is disappearing and in all likely hood will completely disappear sometime soon. If a 0% balance transfer is important to you take advantage soon, however be aware that many of these cards have higher subsequent interest rates.
5. The Availability Of Cashback
Many cards now offer cashback on purchases. This is usually is between 1/2 and 1% of new purchases (excluding balance transfers and cash withdrawal). If you do not repay your account in full each month take this into account when considering the interest rate chargeable.
It is only where you repay the card in full each month that this is a true cashback on purchases and if you do repay in full each month you may choose to make this a priority.
6. The Rewards And Discounts Offered With Your Credit Card
Rewards are where you can purchase goods or services at a discount by using your credit card, or you have free insurance on purchases made using your credit card.
In the credit card business nothing is free. If there are rewards offered the cost will be built in somewhere (usually a higher interest charge) so compare with other cards not offering the same rewards.
7. Credit Card Payment Insurance
Whether you take this option or not most cards now offer some sort of payment protection insurance in the event of sickness and disability. In the past this cover was limited to paying the minimum monthly payment however many cards now pay 10% of the balance on the card at the time your claim commences and may be worth considering.
Be very careful with this insurance as it will exclude any condition you suffer from when the cover commences and similarly any redundancy announced before the cover commences.
Taking out a new credit card is more complex than it seems at first. As you can see when considering a new credit card there are a number of aspects which must be taken into account and t can be very difficult choosing a new card.
There are many comparison services available that can help you cut through the confusion and I suggest you consult one or more before making your decision.
In all cases prioritise your requirements and only apply for the credit card which best matches your circumstances. Don't just pick the card with the longest balance transfer period or lowest interest rate as it may cost more in the longer term.
The rewards credit card is one of the most famous types of credit cards that is offered by multifarious companies around the globe to attract more and more clients.
The Online Lenders Alliance (OLA) is an organization representing the growing industry of U.S. based companies offering online consumer short-term loans, also known as payday loans. The OLA released the following statement. Thoughts, comments and identification of companies you know conducting this type of activity are welcome. Details on how to do this are below.
The February 2010 deadline is looming for credit card issuers to implement consumer friendly procedures contained in the Obama administration's new law. In these final months leading up to the implementation, banks are squeezing out their creative juices to design new fees to help make up for projected shortfalls in revenue caused by the new law.
Has the current state of the economy dragged you down? If it has, you are certainly not by yourself. Many other consumers are finding it more and more of a challenge to keep up with their financial obligations, even their house payments. Increasing debt results in a great deal of stress, which can hurt your well being, even make you sick.
Credit cards are a special financial tool that must complement their holder's monetary requirements to actually work for them. Take some time to investigate and ascertain what offers and advantages would work best for you monetarily. Like, if you take a balance each month then you obviously are required to find a card that has a low interest rate.
Following that you might secure a better card with better rates and better rewards. Nonetheless, when you pursue this method, make sure that you're in a position to properly handle your credit card use to continue being punctual with your transactions and avert any unnecessary expenses like late charges, over limit fees, and so on.
Many financial consumers have learned about the secret about purchasing their credit scores. It is actually a dirty secret because the credit bureaus that sell these scores do not have to clearly disclose to you the facts about the scores you are buying. Let us tell you why your credit score just got more confusing: The scores you buy are not the scores used by lenders.
The only thing you should execute is to complete their applications online on the internet and await for the reply often by your e-mail or using postal mail. Strive to be safe in selecting a credit card with rewards and aim to gain low rate of interest if feasible. Moreover, notice what other fees they will bill for just in case. Be smart in selecting your credit card.
New television ads about purchasing your credit score have replaced the infamous garage band in the pirate costumes. A recent ad for a company owned by Experian teaches kids and parents the effects of cosigning for a credit card. Financial consumers have learned the hard way about the dangers of cosigning for student credit cards. Now this topic is hitting the mainstream airways.
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