June 22, 2010
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News: Getting The Best Credit Card Deal
Are you getting ready to shop for a credit card and don't know exactly what to look for? New legislation has made it seem a bit confusing, however, you can find the best card to suit your lifestyle by following a few simple steps when shopping for a new card. First, avoid the low interest credit card. Cards with an initial introductory low interest rate will typically jumps up after the initial introductory time expires to a rate greater than the industry average. Some of these cards increase interest rates to as much as 30 percent. Avoid low introductory interest rate credit cards.
Understanding the importance of paying your monthly payment on time is valuable. Most cards have default clauses that allow lenders to significantly raise the card's interest rate if the cardholder is late. New federal rules mandate that lenders give 45 day notice prior to increasing any interest rate and a review of the account after six months to determine if the cardholder has been paying on time. If so, the lender will be forced to once again reduce the interest rate on the credit card to the contracted interest rate. Furthermore, cardholders are subject to a late payment fee that could cost as high as $39.
Don't be followed by the cash advance option on a credit card. Lenders love for you to take cash advances including those handy dandy card cheques. Why? Lenders charge a higher interest rate on cash advances and card cheques than regular purchase transactions. Read the contract before making your choice to determine what the interest rate is on cash advances. Additionally, most banks typically charge a fee of 2 percent to 3 percent on cash advances. If you decide to accept a low interest card, use it wisely. Take advantage of the initial low interest period and then quickly pay off any debt incurred during the initial time period. Lastly, read the cards terms and conditions thoroughly. If there is anything you don't understand, call the lender for clarification.