What Awaits To Multiple Credit Card Users
Many credit card surveys conducted by various groups reveal one thing – that a lot of consumers are stuck in bad debt due to uncontrolled credit card spending. In fact, most people own not one or two credit cards, but multiple credit cards that are packed with high interest rates and expensive charges.
If you are planning to apply for a credit card, or if you want to replace your old credit card with a better one, what unwanted elements should you watch out for? Check out the following factors:
Changes in terms.
Somewhere in the fine print, you may find a disclosure stating that your credit card company can “change the present terms at any time” as long as you are given advanced notice. What that means is your present reasonable rate can change especially if your credit card has a variable interest rate.
Therefore, make sure that you review all bills and notices sent by your issuer to avoid unpleasant surprises. If you find that the upcoming rate would be too much, you may call your issuer and request to retain your current rate or you may decide to switch to another card.
Incredibly low introductory rates.
A lot of credit cards come with low rates or zero interest rates. However, before signing up for the offer, check the conditions that apply. How long will the 0% APR last. More importantly, how much will the APR be after the introductory period?
Cash advance rates.
Generally, consumers are discouraged from using their credit cards to take out cash advances since these transactions are instantly charged with interest rate. Nevertheless, it is still a good thing to check the cash advance rate and fees, just in case you may need to use it one day.
Unreasonable penalty fees.
Avoid credit cards that impose very high late penalty and overdraft charges. Although your goal should be to pay your bills on time, missing a single payment could be a burden because of these additional charges.
High annual fees.
While your credit card may offer a low rate or an amazing reward system, check out the annual fee. How much will you need to pay each year just to keep your account active? Some cards may carry annual fees ranging from $80 to $100 and above, which is fairly expensive, if you really think about it. You may be better off with a credit card that has reasonable interest but with a low annual fee or with no annual fee at all.
High interest rates.
Even if a credit card comes with a zero interest introductory period, remember that it’s just temporary. What happens after the introductory period? You may be surprised that the interest rate will soar so be sure to read the Terms and Conditions before submitting your application.
