Posts Tagged ‘Minimum Payment’

There are literally thousands of credit cards out there to choose from. You receive offers in the mail, in your email, over the phone, and on the websites you surf to on the Internet. We are inundated with credit offers, but are all credit card offers worth taking? The answer is a definite no. There are many things about accepting the offer of a credit card you need to know.

How do I know which credit card offers to accept and which ones I should stay away from? Is one of the most common questions we get at http:www.youngparentsmagazine.com , says Jennifer Tarzian. People want to know how to choose a credit card wisely.

If there is one thing consumer advocates and the banking industry do agree on, it is that the abundance of convenient credit gets a lot of people in trouble because they are financially uninformed. Financial education is not subsidized by the credit card industry, but is included in a the most recent version of the Bankruptcy Reform Act.

That bill, which has been stalled for years, would make it much harder for consumers to shed their unsecured credit card debt when they go into bankruptcy. It would also require both credit counseling prior to filing for bankruptcy, and post-bankruptcy instructional courses on personal financial management as a condition to discharge debt.

So the only financial education available comes way too late, since youre already in trouble when they offer it. All this means we have to be even more careful when choosing which credit cards to sign up for.

Credit card issuers are often accused of tempting consumers into carrying more debt than their income justifies. Then, when the customer is drowning in debt — stumbling to make even the minimum payment — they will pile on late fees, jack up interest rates and begin what often becomes a crescendo of collection calls.

How do I avoid that? Choosing which credit cards you accept is just as important as how you use the credit cards you do accept. The rest of this article will focus on choosing credit cards wisely. To find out more about how to keep your credit score high and use credit cards wisely, go to http:creditcards.youngparentsmagazine.com , where Jennifer Tarzian can help you.

Do You Know What You Can Afford?

Credit card mailings can be tempting, offering teaser rates, rebates, and rewards. Its up to you to figure out whether you are financially stable enough to accept them. According to Tamara Draut, Director of the Economic Opportunity Program at the nonpartisan public policy organization Demos. “When consumers are extended credit, they think it’s because the banks see them as being capable of borrowing, while it very well may be that they are not financially prepared to take on additional debt.”

“People say, if I can’t afford it, why was I offered credit,” says Jim Tehan, spokesman for Myvesta, a nonprofit consumer education organization. Tehan says that credit card issuers target consumers based on data-mining technology that can only give one part of the picture. “They don’t know what consumers can afford — only a consumer can say what they can truly afford.”

But banking industry veteran Walter Wriston, former CEO of CitigroupCitibank, argues that credit card issuers shouldn’t be the ones deciding who can afford what. “Should we say to somebody, say, you’re 21 years old: ‘You can carry a rifle and fight our war. You can vote in a presidential election. But, unfortunately, you’re not smart enough to know how much money to borrow?’”

That means, its up to you. You decide whether or not you can afford to have more credit or not. Look at the credit cards and loans you now have. What is your total credit limit including all of your credit cards, loans, and accounts? What is your total debt owed to those credit cards, loans, and accounts? These are all things you should think over before you fill out that credit card application.

Comparing Credit Card Offers;

Many people still carry credit cards with annual percentage rates (APRs) of 13% or higher. After all, there’s a whole industry of card issuers out there devoted to using hidden fees and interest rate gymnastics to gouge you as best they can. Consider this: According to Gerri Detweiler, author of The Ultimate Credit Handbook, some credit card companies are actually trying to get rid of card holders who pay off their balances each month. “The card issuer might try to move you to a card with an annual fee or a debit card,” she says.

The key to getting a better credit card deal is figuring out how much a given card really costs you. You’ve probably gotten a stack of card offers in the mail over the past week, each sounding cheaper than the next. Just plug in a few numbers, and our analyzer will calculate the true cost or net interest rate of each one so you can compare them side by side.

And if you’re looking for a specific type of card one that, say, gives you airline mileage or no annual fee check out our credit card rate center and pick out those that best fit your needs. Go to http:www.bankrate.comsmmratecc_home.asp?web=smm and use the calculator there. Compare the offers you get in the mail to all credit cards.

I hope you find this tool and the information we provided here useful. Our goal at http:creditcards.youngparentsmagazine.com is to provide young parents and others how to choose credit cards wisely, how to reduce credit card debt, how to improve their credit score, and how to stay financially healthy in general.

It is a sad fact of life that credit card companies are very willing and fast to slap a penalty charge on your account for every mistake, delay and slip up you cause, immediately and without a second thought. These penalty charges can amount to millions of pounds taken from consumers each month. They are a necessary part of all credit card operations and are fair in the sense that it means that customers who do everything correctly and on time are not penalised for the extra work and expense that other customers cause, but what you will want to do is make sure you are not one of the unlucky customers that is paying for these extra expenses.

The best way to avoid these penalties is to look at the entire situation from the point of view of the credit card company. Really, all they want from you is to keep your card safe, to stay within your credit limit, and to make at least your minimum payment, on time every month. If you manage to do these simple tasks you will avoid ever incurring a penalty on your account.

The problem is that it is very easy to slip up on these things. Its not easy at all to keep track of your outstanding balance, especially as we use credit cards for more and more things and companies begin placing holds and other such transactions on customers accounts without them necessarily knowing or understanding about them. Then there is the fact that it is very easy to forget or become late on a payment. Every one has busy periods in their life and sometimes we simply have other more important things on our minds than paying our credit card bill on time. Some people are less organised than others and for them it can be very difficult making sure all their credit cards are paid out in full and on time.

If your card is lost or stolen without any fault on your part, and you call your credit card company as soon as you find out, you will only be liable for a maximum of 50 pounds. And if you manage to let the credit card company know before any thing has been spend on your stolen card you will not be liable for any thing. This is also the rule that applies for identity theft and fraud so you can feel safe using your credit card online. Taking a few simple steps can mean you are virtually never subjected to credit card penalties.

If you are new to the world of credit cards, then you need to know the basics before going ahead and choosing the right credit card. Although all the terms and companies offering cards can seem confusing at first, if you do your homework then learning the basics takes no time at all. Here are some hints and tips regarding the basics of using and finding a credit card:

Borrowing money

Credit cards are probably the most common way of borrowing money. Credit cards are available from so many different sources, both offline and online. There is a wide variety of different types available, and at first glance it can be very confusing. However, what you need to remember with all credit cards is that you are borrowing money, and that the credit is not free. Once you realise this then you will be in a better position to get a card that suits your needs.

Interest rates

Unless you intend to pay your credit card bill off in full each month, then you need to be aware of the interest rates of cards. The rate is calculated as APR, or Annual percentage rate. The typical rates right now are around 13-18%, depending on the company you choose. Lower interest rates are obviously better, but remember that there can be other charges as well such as late fees or transfer fees, etc. Also, if you are going to pay the money off very slowly, then you should look at other types of money lending as credit cards do have high interest rates.

Paying your bill

The options for paying your bill vary, and some cards have different requirements. A few cards require you pay the whole bill each month, but most only require that you pay a minimum payment. This is usually around 2% of the entire balance. If you are not paying back your card in full each month, then pick a card that has benefits for doing so. Some cards offer cashback of around 0.5% or more, meaning that you get money back each time you buy something.

Fees

Most credit cards have a range of fees that you will be charged. These include fees for late payment, over-limit fees, and annual usage fees. If you know you might be late with payments sometimes, then pick a card with low late fees. Also, try and avoid cards with annual fees, unless the rest of the package is very good. Some cards have introductory offers, like no interest or fees on transfers for six months. These cards are good if you need to transfer debt or you know you can pay back the balance during the introductory period.

Debt

Remember, if you are not careful you can get into credit card debt that can be hard to get out of. Only spend what you can really afford, and try to pay back as much of the balance as you can each month. Credit cards are great for emergencies or spreading the costs of expensive items, and if you know the basics then you will get a better deal on your card.