When you’re looking at a credit card offer, take a look at the small print – it seems like a maze, but it’s vitally important. With the trend nowadays towards easier-to-read ‘summary boxes’, there aren’t as many excuses for ignoring the terms as there used to be. Anyway, credit card lenders are devious, and there are plenty of things there designed to catch you out – here’s what you should be on your guard against.
Annual Fees.
Even though you’re already paying them interest, many credit cards still charge you an annual fee. It’s not as common as it once was, but it’s still around. You should be especially careful to check for fees on Gold and Platinum cards – even though they’re not that hard to get any more, they still tend to charge much higher fees than normal cards.
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Once you’ve got a credit card, you’ll find that you can do more with it than just pay for things with the card. You might be sent a credit card chequebook, for those times when you’re paying someone who can’t accept your card.
You might also be offered cash advances – a way of withdrawing cash directly from your credit card, either to your bank account or from a cash machine. This is designed for when you need cash in an emergency. You really shouldn’t overuse either of these features, and here’s why.
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If you’re in a really bad situation, and you just can’t even make your minimum payments this month, don’t worry. You can negotiate your debts, and pay back much less than you owe – as long as they get their debt plus interest in the end, no-one is expecting you to pay the full amount when you just can’t afford to.
Settling your debts takes a lot of time, and many people find it intimidating. If you do it right, though, you’ll be surprised at how kind your creditors (that is, the people you owe money to) can be.
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So you’ve got a few credit cards, and you’re quite happy with them overall. Still, wouldn’t it be nice to save a little money on interest? It all adds up over time, and more quickly than you’d think. If you’re a good customer, you’d be surprised how easy it is to get a better rate.
Pay on Time, But Not Everything.
The most desirable customers for the credit card companies are the ones who make a payment on time every month – but don’t pay off the whole balance. After all, running no balance every month means that you pay no interest, and the company makes no profit. If you keep up the pattern of running a relatively small balance each month, then the companies will start falling over themselves to offer you better interest rates.
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Getting a sense out of a deal is, in some instances, the most difficult thing to do. This is because most people could not instantly figure out the benefits they can derive from obtaining it.
Take for example the case of business credit cards. Some people contend that business credit cards are crucial in the growth of a business, while other s contend that it is just one way of losing their investments.
But whatever the point there is, only one this is certain, it is still a credit card and just like any financial decisions, extensive consideration is a must.
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