Whether you're looking to expand your available credit, take out your first credit card, or transfer credit card debt to another card, you will no doubt have plenty of credit card offers from which to choose. Some of them will probably provide the kind of financial help you're looking for, while others may make a mess of your credit if you're not careful. Here are some tips for evaluating credit card offers so the card you pick eventually works for you--and not the other way around.
- Check the interest rate. This is the thing people most typically check when they get a credit card offer, and with good reason. A high interest rate means you can end up paying a lot more than your principal. For instance, I took out a credit account with a computer company and was glad I could make a purchase I could never make in cash. The monthly payments were very low and so was the price of the PC. Great deal, I thought. However, once I started making those great low payments, I noticed the company's interest rate of around 30%. That's insane! Thanks to the interest rate--and many months when I could only make the minimum payment--I will have paid about $400 dollars on top of the original price for this computer. Convenient? Yes. Affordable? At the time. Overall a "great deal?" Not at all. Before you take any credit card company up on its offer, learn how much you will be charged in addition to what you actually spend.
Also, note that a lot of credit cards have separate rates for cash advances. I personally have vowed never to take out cash on a credit card ever again--the rates are just too high. However, sometimes, you need to do it. Just be sure you know the kind of rate you're dealing with. Same goes for balance transfers--read the fine print or check with customer service to see which rates apply.
In short, look for a fixed (permanent) low interest rate when evaluating a card.
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Author: B. Danesco