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Just ask yourself: is the credit card working for you or are you working for your credit card? Most people’s response to that question will depend on how they use their “plastic pal” as credit cards are sometimes known. As many people with burned fingers will tell you, they didn’t realize that things had got so bad until too late, because most credit card companies try so hard to make themselves sound like a charity. Well, take it from me, they aren’t.

However, this is not an anti credit card campaign. They have their plus points – in America, for example, if you want to rent a vehicle, you must have a (major) credit card. But, consider this situation:

You get an offer in the post that sounds good, perhaps it’s a new television or refrigerator. But it costs $2,000. You have a credit card with a $5,000 limit, so you go out and purchase the product right away. Often, this is how your repayment schedule will work out. Most credit cards charge a minimum percentage of the remaining balance (typically 2 percent) per month. Assuming the interest rate is 18 percent and you choose to repay the minimum amount of $40, $30 of that will go towards interest and only $10 will come off the $2,000 you borrowed!

Does it sound scary? Well, it doesn’t have to be. The moral of the illustration is to use the credit card very, very carefully.

Credit Cards Dos and Don’ts

There is a lot of truth in the saying that credit cards are not a substitute for not having money. Every time you use a credit card this should be the theme song playing in your head. Moreover, you would do good to remember the following too:

Dos.

1] Always plan for the purchases that you need and those that you only want. You need the essentials, and you want everything else. The ability to make a distinction might help you plan wisely.

2] If you are caught up in financial difficulties, it’s always a good idea to talk to the credit card supplier who might re-schedule your payments. If you just default, that only helps to build up a bad credit history and you might find yourself being denied credit in the future.

3] Unless it is an emergency, staying within your credit limits will help you a lot. If you must spend over the limit, ensure you are within manageable levels, say within 30 percent.

4] If your letterbox is full to the brim with details on credit cards that have better offers than you are currently receiving, you could always approach your issuer for a better deal. They want to keep your business, so they will hear you out.

Don’ts

1] Do not use your credit card to purchase household items. It is very expensive in the long run.

2] Do not just pay the minimum amount. You will end up paying exorbitant amounts of interest. The quicker you are able to clear the debt the better.

3] Do not use the credit card to buy things you can’t afford.

If you are thinking onchanging or getting a Credit Card, have a look at the free advice on our website on using Credit Cards wisely.

categories: credit cards,credit,finance,loans,mortgage,money,self help,advice,banking,funds,debt,shopping,auto,other

If a credit card is used properly, it is one of the most powerful financial tools. But not everybody can afford to pay the expensive interest rates that most credit card issuers charge. This is where low interest rate credit cards can assist people who plan to keep a balance on their account and not to pay the full amount monthly. But, what does interest or APR mean for when talking about low interest rate credit cards?

Basically, APR is the charge for credit as an annual interest rate. APR stands for “Annual Percentage Rate” and can be used to compare different credit and loan offers. The APR on credit cards is most often calculated monthly based on the current amount on the credit card.

The monthly interest is worked out as if the current card balance would remain the same over a year; the interest on the amount over a year (APR) is calculated and divided by 12 to get the monthly interest. It is a must that all lenders tell the client what their APR is before signing any agreement.

Although the arrangements and terms do vary from one lender to another, it is better for people to get low interest rate credit cards because the lower the APR, the better the deal for them to spend more money shopping.

Why ought you choose low interest rate credit cards? Low APR credit cards are a good choice for those people who prefer tighter financial budgeting. The APR determines the balance over a period of time, it being the most important attribute of a credit card.

In low interest rate credit cards, the amount of interest one must pay on his or her credit card balance depends on its APR. So the lower the APR is, the better it is him or her because it means they have to pay less interest. APR’s on low interest rate credit cards can either be ‘fixed’ or ‘variable’.

If you are intending to have low interest rate credit cards, there are many cards that offer low APRs to be found online. These low interest rate credit cards are chosen using a factoring scheme that organized these cards by computing a number of their attributes to put the best deals at the top.

One of the questions one has to pose when looking for low interest rate credit cards is about the charges: whether they vary or are fixed. If these charges are variable, they might affect the repayments and if these rate are fixed, the repayments remain the same. Searching for low interest rate credit cards should also include inquiries on the possibility of any charges that are not included in the APR like optional payment protection insurance or an annual fee.

If there are any, make sure that you know what they are and when you have to pay them. Lastly, when searching for low interest rate credit cards, you should include questions on the terms and conditions of the credit and how these conditions suit you.

If you are looking for low interest rate credit cards, you could begin looking for a scheme that could help you save hundreds in interest with a low interest credit card and low cost processing. Most low interest rate credit cards offer 0% APR for the first months on purchases, cash advances, and balance transfers.

Low interest rate credit cards sometimes offer rebates on certain items purchased. They also offer $0 liability on unauthorized purchases, and no annual fees. Some low interest rate credit cards have very good introductory rates for purchases. They sometimes offer good deals if one carries high amounts on other cards and need to transfer the balance.

Indeed, having low interest rate credit cards can be useful and convenient, and can even assist create a strong credit history that will help you with future activities like home-buying, paying for higher education, and even getting a job. But, before you apply for low interest rate credit cards, consider the advantages and disadvantages especially with regard to the current financial situation you are in.

If you are thinking about changing or applying for low interest credit cards, have a look at the free advice on our website about using Using Credit Cards wisely.

Just ask yourself: is the credit card work for me or am I working for the credit card? Most people’s response to that question will depend on how they treat their “plastic friend” as credit cards are often known. As many people with huge credit card debts will tell you, they didn’t realize that things were so bad until too late, because most credit card companies try so hard to make themselves seem like a charity. Well, take it from me, they aren’t.

But this is not an anti credit card campaign. They have their plus points – in America, for example, if you want to rent a car, you have got to have a (major) credit card. But, think about this scenario:

You receive an offer in the post that sounds good, maybe it’s a new TV or fridge. But it costs $2,000. You have a credit card with a $5,000 limit so you immediately purchase the product. Typically, here is how your repayment schedule will play out. Most credit cards charge a minimum percentage of the total balance (usually 2 percent) per month. Assuming the interest rate is 18 percent and you choose to repay the minimum amount of $40, $30 of that will go towards interest and only $10 towards the principle!

Does it sound worrying? Well, it doesn’t have to be. The moral of the story is to use the credit card very, very carefully.

Credit Cards Dos and Don’ts

There is a lot of truth in the advice that credit cards are not a substitute for not having money. Every time you use a credit card this should be the theme replaying in your head. And you would do good to remember the following too:

Dos.

1] Always plan for the purchases that you have to have and those that you just want. You need the essentials, and you want everything else. The ability to make a distinction might help you plan wisely.

2] If you are caught up in financial difficulties, it’s always a good idea to talk to the credit card issuer who might re-schedule your payments. If you just default, that only helps to build up an unfavourable credit history and you might find yourself being denied credit in the future.

3] Unless it is an emergency, staying within your credit limits will help you a lot. If you have to spend over the limit, ensure you are within manageable levels, say within 30 percent.

4] If your mailbox is full of information on credit cards with more favourable deals than you currently are enjoying, you may approach your issuer for a better deal. They want to keep you as their customer, so they will listen.

Dont’s

1] Do not use your credit card to purchase household goods. It is too expensive in the long run.

2] Do not just pay the minimum amount. You will end up paying exorbitant amounts of interest. The quicker you are able to clear the debt the better.

3] Never use the credit card to buy things you can’t afford.