Credit Repair
Tips ~ Bad
Credit Credit Card Offers
A Credit Card Jargon Buster
Credit cards, as part of the financial
industry, use a massive array of jargon. You can’t
be expected to recognise all these technical terms,
and some of them are quite important – so
here’s a quick
guide, in alphabetical order.
Affinity card. This is a credit
card that gives a certain amount to a charity of
your choice, depending on how much you spend. It
is generally best to avoid any charity that wants
you to sign up for such a card – don’t
let guilt lead you to a high interest rate.
APR. Annual Percentage Rate. This
is your overall interest rate, calculated yearly,
and given as a percentage of your balance.
ATM. Automated Teller Machine.
A cash machine. It will give you money when you
put your credit card in, but will probably charge
an extra fee.
Balance transfer. This is when
you transfer your debt (‘balance’) from
one credit card to another. The usual reason for
this is to try and keep as much debt as possible
on a lower-interest card.
Credit limit. Your credit limit
is the maximum amount you can spend or withdraw
from your card. Going over your credit limit will
result in your card no longer being accepted, and
you being charged an over-limit fee.
Fixed rate. A fixed rate card
is one where you are given a rate when you sign
up for the card and that rate, at least in theory,
stays the same for the whole time you have the card.
In practice, though, interest rates can be changed
for almost any reason.
Grace period. Your grace period
is the amount of time between when you spend money
and when you start paying interest on it. Good cards
can have a grace period of up to two months –
bad ones might not have one at all.
Minimum payment. A minimum payment
is the absolute lowest amount you can pay back to
the credit card company each month – you should
pay more, but you don’t have to. Minimum payments
are usually around 2% of your balance.
Sub-prime. This is a phrase used
in the industry to describe customers who are a
bad credit risk, but are seen as worth lending to
anyway. If you are identified as sub-prime, you’ll
start getting offers for loans secured on your property
– they know that if you can’t pay, they’ll
get their money anyway.
Teaser rate. A ‘special
offer’ low rate, usually written in enormous
letters. You will see many offers with “LOW
4.9% APR” in inch-high letters, followed by
“for first six months, 21.9% thereafter”
in microscopic ones. Teaser offers can sometimes
be worth taking, but not if they tie you in for
longer than the period of the offer.
Variable rate. This is an interest
rate that is worked out by adding a certain amount
to the current base rate. Taking this option will
allow your credit card to be affected by changes
in national interest rates – a good idea if
you think they might go down, and a bad one if they’re
on the way up.
Credit Card Resources
Unsecured Credit Cards for bad credit
Reward Credit Cards (good credit required)
Guaranteed Approval Pre-paid Credit Cards
Payday Loan Companies
Secured Credit Cards
About the Author
Liz Roberts is a loan consultant with NewHorizon
Finance and has been providing consumers
and business owners with financing since 1989.
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