Consumers often have
the first credit card that they ever applied for,
never really analyzing how the interest rate affects
their payments, but many other options exist and can
help consumers decrease their payments and achieve
financial stability.
With interest rates on some credit cards rising to
over 23%, even low balance credit card debt can be
crippling. One of the first research elements a
prospective borrower should look at is the interest
rate on transferred debt. This interest rate is
often lower than the usual interest rate for the
credit card, and can be an especially good deal for
borrowers who have debt already. Another element to
consider is the interest rate on new purchases –
this rate will be the main concern in the years to
come, as this new credit card will probably become
the most heavily used. Borrowers often worry about
annual fees, but these are often temporary. Getting
a credit card with low interest rates will save a
borrower significant sums, usually much more than
the annual fee. Plus, once good credit is
established, the annual fee may later be waived.
Another interest rate will usually apply, as well –
the rate for cash advances. Cash advances are
usually limited to a couple hundred dollars, but
credit card companies often insist that when paying
back the balance, the credit portion must be paid
back first, then the portion that the cash advance
applies to. So if you are going to keep a balance on
your credit card, be aware that cash advance
interest rates are higher than the regular interest
rates. Cash advances can be incredibly helpful in
emergencies, though, when a credit card cannot be
used.
Visa and MasterCard are by far the most commonly
accepted credit cards, so less commonly used cards
such as American Express and Discover often offer
special rates for new customers. These rates are
worth attention, even if you think that you may not
be able to use the card as easily as your previous
credit cards, because transferring the balance to
these new cards to obtain the lower interest rate
may significantly lower your payments. While your
AmEx or Discover Card may not be accepted as often,
they can be a good tool to achieving your financial
goals.
Even less commonly used are credit cards that are
store specific, such as gas cards or department
store cards, but these cards can offer incredible
deals on interest rates. They rely on the fact that
consumers will often switch their spending patterns
to the new gas station or store, and this increased
revenue makes up for the lower interest rates. A
slight change in your habits, such as consistently
using the new credit card at the new gas station,
can lower payments and improve credit scores.
Researching new credit cards can seem daunting, but
by comparing the four main factors, which are the
regular interest rate, the rate on transferred
balance, the rate on cash advances, and the annual
fee, you can reduce your credit card payments
significantly.
The author runs the finance website http://www.pawninfo.com
about short-term loans and payday loans, and any or
all of this article may be reproduced in any form as
long as there is a link to the website. The HTML is
Pawn Shops and Short Term Loans
About the Author
The author runs the
finance website http://www.pawninfo.com about
short-term loans and payday loans, and any or all of
this article may be reproduced in any form as long
as there is a link to the website. The HTML is
Pawn Shops and
Short Term Loans
