5 Crucial
Tips When Shopping For Low Interest Rate
Credit Cards
When
looking for low interest rate credit
cards, consider these tips for finding
the best one for your situation...
Kate Rieger
Tips For Low Interest Rate Plastic
|
By Aubrey Clark
In today’s market low interest rate
credit cards are easily found online, in
the mail and at your local bank. There
really isn’t a difference where you
decide to shop for your new credit card
most places offer the same deals from
the same card issuers. However, there
are definitely some features you need to
be aware of and avoid if possible. I
have listed the most crucial points to
be aware of when shopping for low
interest rate credit cards, they are as
follows:
Universal Default – Universal
default is a buried clause in the fine
print of almost all low interest rate
credit cards. It basically says that if
you are late on payments they can jack
up your rates at will. The scary part is
that they can use your payment history
from other accounts to enact the clause.
Say for instance if you co-signed for a
car with someone and he misses a payment
you can be penalized, harshly. Interest
rates can nearly triple when this clause
is enacted.
Payment Grace Periods – It used
to be that consumers had a full 30 days
to pay their balances before the credit
card company started charging interest.
This isn’t true anymore. In fact the
average grace period is about 22 days
now. Even the low interest rate credit
cards are practicing the shortened grace
period. Some of your credit cards
designed for bad credit do not have a
grace period at all! Always find out
what your grace period is.
Cash Advances – Be careful when
you pull into that ATM to get some cash
for the day. Most credit card companies
have higher rates for cash advances than
they do for purchases. The cash advance
interest rates can be almost 30% when
you consider the fees added for the
transaction. Also, you must pay the cash
advance back over and above your regular
payment to get rid of the higher
interest rate. There is rarely any grace
period for cash advances either. We at
Credit Card Banc strongly advise against
taking cash advances from any credit
card.
Two-Cycle Billing – This sneaky
trick is usually buried in the fine
print. Two cycle billing is when the
credit card company will charge you
interest based on the on the average
balance carried on the card, not the
actual balance. Say for instance if we
charge $1000 on the card in January with
the intention to the balance off
completely by March in two $500
payments. Let’s assume your interest
rate is 10%, which makes your interest
$100. Februarys you make a $500 dollar
payment leaving a $500 balance. Your
Interest on this balance is $50.00. Not
so with two cycle billing. The card
company will average the balances which
is $750. Your interest due is now $75
not fifty. Look out for this trick when
comparing low interest rate credit
cards.
Fees, Fees and more Fees - A lot
of market low interest rate credit cards
will charge a hefty fee to cover their
expenses. This is because most people
that can qualify for a market low
interest rate credit card pay their
balances in full each month. If the rate
on the card is low enough I really do
not mind a reasonable annual fee, the
call is yours. However what about the
other fees? Account set up fees, monthly
fees, over the limit fees, late fees,
additional card fees and a host of other
fees. Honestly look at your spending and
payment habits and the possible fees you
might incur. It could make the
difference between a good deal and a bad
one.
In closing, I can’t stress enough that
you need to read the fine print! Look at
the fees, look at the billing cycles and
compare all of these variables with your
spending and payment habits. If you
carry a balance on your card often and
always pay your bills at the end of the
month it may benefit to take a slightly
higher interest rate in lieu of a better
billing cycle and lower late fees.
About the Author: Aubrey Clark is a
syndicated writer at
CreditCardBanc.com and writes on
subjects ranging from
low interest rate credit cards to
What is a Good FICO Score?
Source:
www.isnare.com
Permanent Link:
http://www.isnare.com/?aid=232402&ca=Finances
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