Credit Cards are not all the same - Choose wisely
Choosing a credit card can be a complicated task. It was much easier when a credit card
offer came from your bank or your credit union. Nowadays, credit card offers come from
many retailers.
The credit card business is just that, a business. As with any business, the competition can
be fierce.
Interest rates, annual fees can vary greatly and the terms for each credit card offer are not
always the same.
offer came from your bank or your credit union. Nowadays, credit card offers come from
many retailers.
The credit card business is just that, a business. As with any business, the competition can
be fierce.
Interest rates, annual fees can vary greatly and the terms for each credit card offer are not
always the same.
Do not just accept a credit card on
the bases that you are approved.
Doing so can cause a tremendous
financial hardship if you don’t
understand the terms.
The following explains the types of
credit cards that are available to
many people. Make sure you
understand how each works and
choose the type of credit card that
will work best for you.
Zero To Low Interest Rate Cards
These types of credit cards are ideal
for transferring existing high interest
rate credit card balances. If you are
the bases that you are approved.
Doing so can cause a tremendous
financial hardship if you don’t
understand the terms.
The following explains the types of
credit cards that are available to
many people. Make sure you
understand how each works and
choose the type of credit card that
will work best for you.
Zero To Low Interest Rate Cards
These types of credit cards are ideal
for transferring existing high interest
rate credit card balances. If you are
able to pay off your credit card transfer balance within one year, this could be the credit card
for you.
These types of credit cards offer a rock bottom interest rate and this can save you a ton of
money.
However, the low interest rate offer usually lasts for a limited time. After the ‘special offer
period’, the interest rate then goes up to the normal 14 to 18 percent. In addition, if you are
late only once, the high interest rate can kick in immediately.
If you choose this type of card to transfer an existing high balance, pay it down immediately
or the higher interest rate at the end of the ‘special offer period’ may cause you to pay a
whole lot more.
Rewards Credit Card
A rewards card is good if you pay your credit card balance in full each month. Cash back,
airline miles, or points will be insignificant if you have to pay a high interest rate or a high
annual fee.
In addition, make sure you understand the redemption policies, as they may be complicated,
unfavorable or hard, if not impossible, to meet the card conditions.
The key again is to pay off the credit card balance each month so that you don’t pay for the
benefits by paying lots of interest.
Secured Credit Card
A Secured Credit Card is ideal for someone trying to re-establish credit. Your bank or credit
union may offer a secured credit card, so make sure to ask.
Be aware that annual fees and application fees may apply and interest rates are high and
can vary widely so shop around for the best deal.
You are also going to have to make an initial deposit on a secured credit card and your
credit card limit will be relative to the amount you deposit.
Student Credit Cards
College students beware! Students can easily qualify for these types of credit cards and
usually do not need to have established credit.
These credit cards most always come with very high interest rates and a student with no
experience handling a credit card can quickly build up lots of interest charges and late fees.
for you.
These types of credit cards offer a rock bottom interest rate and this can save you a ton of
money.
However, the low interest rate offer usually lasts for a limited time. After the ‘special offer
period’, the interest rate then goes up to the normal 14 to 18 percent. In addition, if you are
late only once, the high interest rate can kick in immediately.
If you choose this type of card to transfer an existing high balance, pay it down immediately
or the higher interest rate at the end of the ‘special offer period’ may cause you to pay a
whole lot more.
Rewards Credit Card
A rewards card is good if you pay your credit card balance in full each month. Cash back,
airline miles, or points will be insignificant if you have to pay a high interest rate or a high
annual fee.
In addition, make sure you understand the redemption policies, as they may be complicated,
unfavorable or hard, if not impossible, to meet the card conditions.
The key again is to pay off the credit card balance each month so that you don’t pay for the
benefits by paying lots of interest.
Secured Credit Card
A Secured Credit Card is ideal for someone trying to re-establish credit. Your bank or credit
union may offer a secured credit card, so make sure to ask.
Be aware that annual fees and application fees may apply and interest rates are high and
can vary widely so shop around for the best deal.
You are also going to have to make an initial deposit on a secured credit card and your
credit card limit will be relative to the amount you deposit.
Student Credit Cards
College students beware! Students can easily qualify for these types of credit cards and
usually do not need to have established credit.
These credit cards most always come with very high interest rates and a student with no
experience handling a credit card can quickly build up lots of interest charges and late fees.
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God Bless.
Carlos Cruz
Debt Credit Learning Center
Carlos Cruz
Debt Credit Learning Center