Understanding Credit Card Offers and the Fine Print

Credit cards are by far one of the most confusing things that we simply must understand, that is if we want to get the best interest rates available. With so many technical terms and fine print, the consumers are left scratching their heads in a mass of confusion with these little pieces of plastic. They can offer us the freedom to purchase items that we may not otherwise have been able to afford due to a lack of cash flow. There are many types of cards to choose from and the interest rates as well as the credit limit can vary greatly depending upon the individual’s credit history and needs when applying for a credit card.

Major Misconceptions with Credit Card Terms & the Fine Print
One of the major misconceptions among consumers applying for credit is that catchy little phrase, ‘fixed-rate’. When reading the fine print on your fixed-rate credit card, you will discover that by making late payments or going over the limit can automatically change the rules to your account by receiving a significantly higher interest rate. The fine print is always something that you should read thoroughly. It is one of the most confusing things to understand and many people are penalized and never quite know the reason why.

Using Department Store Credit Cards
Department store credit cards will generally carry a higher interest rate and usually have lower limits then a Visa, MasterCard or American Express credit card. The average interest rate of these department store credit cards can be as high as 18 to 21 percent regardless of your credit history. The fees for being late on a payment can become astronomical and they offer very little in the way of rewards. They can also take years to pay off if you decide to make only the minimal monthly payment.

Secured credit cards
These are great for someone with a damaged credit history or no credit history at all. This type of card will help you to establish credit or reestablish your credit. This type of card is secured by opening a savings account and putting a set amount of money into that account. A secured credit card is not a debit card and if full payments are not made each month, interest is charged on the outstanding balance. Many of these types of credit card offers will come with high fees like registration and set-up charges that eat away most of what you have put into the savings account. A good annual fee for these types of cards typically can run between 20 and 35 dollars per year.

Excellent Card To Own
American Express is a highly recognized card and used by millions of consumers each year. The card comes with benefits like no finance charges and often no credit limit. The downfall is that it has to be paid off monthly and your credit history has to be near-perfect to get this type of card.

Revolving credit
Revolving credit means that a credit card issuer allows you to carry a balance. This type of card has finance charges and requires a minimal monthly payment. The payment varies on how much you have charged on the credit card. Typically MasterCard, Visa, Optima, and Discover cards carry this type of credit options.

Late Fees
Late fees are typical for most credit card issuers. Most credit card companies will allow for a set number of late payments, but after that your interest rate can be increased as well as applied fees and charges. This can also cost you dearly on your credit report. All credit card companies report late payments and over the limit charges to credit reporting agencies. This can hurt you when you apply for credit in the future as you will probably be offered a card with a higher interest rate.

Grace Period
There are roughly about 25 days, during which you can pay your credit card bill without paying a finance charge. Under almost all credit card plans, the grace period only applies if you pay your balance in full each month. It does not apply if you carry a balance forward. Also, the grace period does not apply to cash advances, ouch!

What is a Variable Rate?
Variable rates can be highly annoying as the word variable means just that. Your credit card interest rate can go up or down at any time. The rate is figured out by a margin that comes from percentage points those credit companies get from the Treasury bill rate or the Federal Reserve. The issuer of the credit card will multiply the index plus the margin by another number to calculate the rate.

Excellent Credit & Low Interest Rates
Low interest rates can be hard to get. Keeping your credit history clean by paying your credit card bills on time and not going over your limits gives you the best chance for being approved for these types of cards. Some cards offer an interest rate as low as 5 percent, but the average card is 9.9 percent. Many of these cards also offer a fixed rate which is great for making a large purchase or transferring high interest credit cards with a large balance over to a low interest credit card. Many of these cards offer rebates and other rewards.

Cards For People that Have Excellent Credit Down to the Worst Credit Ratings
The Chase Platinum Visa Card is designed for those with superior credit ratings. A great way to consolidate your higher interest rate credit card accounts and recieve all the prestige, perks and privileges of Platinum. You’ll get 0% interest for up to 15 months depending on your credit rating. No annual fee.

Blue Cash from American Express was designed for those with excellent credit ratings. You’ll get 0% interest for up to 15 months depending on your credit rating. Up to 5% cash back on purchases. No annual fee. A balance transfer rate fixed at 4.99%, online fraud protection with a built-in smart security chip.

The Chase Perfect Card was designed for those with good credit ratings. A good, all-around low interest credit card that’s built for the long-haul. Not a lot of bells and whistles but you will get a 0% APR, no annual fee, and 6% cash back on gasoline purchases!

The Aspire Visa wasdesigned for those with bad but not poor credit ratings. If you’ve had late-pays, strikes against your credit rating and are paying high interest rates this is the card to help re-build your credit. The Aspire Card has an APR as low as 9.90% depending on your credit rating, no security deposit required and a low annual fee.

ElitePlus Prepaid MasterCard was designed for those with very poor credit ratings and who have filed bankruptcy. This is a pay-as-you-go interest-free MasterCard. This card does not require that you open a savings acccount. There are very few cards available for those who have filed bankruptcy, and this one is a great choice.

Citi Dividend Platinum Select was designed for college students who want to establish a credit history. There are no annual fees, no minimum income requirements and you don’t need a co-signer to be approved. You’ll get 5% cash back on gasoline, supermarket and drugstore purchases.

First Premier Bank Mastercard was designed for people that have been turned down in the past due to poor credit ratings. This is one of the easiest cards to get as they have four different plans to choose from, and they offer 9.9% APR on purchases.

Orchard Bank Mastercard offers consumers a credit card selector tailored to your needs. They offer credit cards to consumers with poor credit ratings which can vary from secured to unsecured, and if you are approved you can receive your new card in as little as three days.

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