Even with a reduction in bank credit and tighter lending standards, there is an abundance of credit cards that consumers can choose to apply for. Between the new low rate credit card balance transfer offers to a plethora of credit card rewards and credit card cash back offers, the market is full of credit cards.
With the number of credit card offers starting to rise, too many consumers are not prudently shopping and comparing new credit cards to see which credit card best fits their needs.
When it comes to shopping for a new credit card there is more to the process then just signing on the dotted line and accepting a new card even if it has no annual fee or upfront costs. Three key credit card components to review are the credit card interest rate, the credit card fees and the credit card rewards or other benefits offered.
There is nothing more important in a credit card then the credit card interest rate or the amount of money it will the account holder to use the credit card. Too many credit card holders fail to see just how costly caring a credit card balance is by holding credit cards that above the average arte or are at least higher than comparable card that they could obtain.
Consumers that are shopping for new credit card and even those consumers that are simply carrying significant balances on their cards should spend some time determining the best possible credit card rate available.
Similar to shopping for the best credit card rate, consumers should also compare the best credit card fees. Comparing credit card fees may not be as straight forward as it sounds. It may seem prudent to simply accept a credit card that offers no annual fees. But, sometimes the annual fee can come in conjunction with a very low credit card rate or lucrative credit card rewards program. When there are comparable credit card available and one has no annual fee while then other charges a fee, the choice is clear – no annual credit card fee.
Sometimes there are limited options to avoid annual fees such as with credit cards for consumers with less than perfect credit. Watch out for fees gone run amuck including annual fees, one time only account set up fees, additional card fees, membership fees, and more. Credit card fees can be expensive. The lower the credit card fees are, the better the credit card.
Credit card rewards are used by credit card companies to attract new customers and keep existing customers active with their cards. Credit card rewards give account holders something back in return for using the card. Credit card rewards may be trivial bonus amounts or substantial rewards. Credit card rewards can include air travel, gas, or even in cash back. But, there is something to know about reward cards.
Compare rewards offers carefully to avoid paying a higher interest rate for limited benefits. When applying for credit cards with reward program, pay attention to the rate at which rewards are earned. Credit card rewards programs vary significantly, with different percentages of pay back based on the amount of net purchases made with the credit card. Search for the credit card offer with the best possible rate of return with the rewards.
Account holders can always maximize the credit card reward benefits by paying off the balance each month and thus avoid the credit card interest charges and still earn the rewards offered with the card.
Bestcreditcardrates.com helps consumer’s research credit card offers to help find the best credit card with the lowest credit card rate to fit their needs.
For many credit card holders the number one issue pertaining to their credit card use is not using or choosing the right credit card but reducing their existing credit card balances. For these credit card holders, their credit card balances need to be managed better and the balances need to be driven down.
A common problem for consumers that are trying to manage or reduce their credit card debt is the simple lack of understanding regarding the credit cards and credit card debt they own. The first step to tackle the task of reducing credit card debt or to even select the best credit card to use is to dig out the most recent statements for all credit card bills and determine exactly how much is owed and what the interest rates are on each of the credit card statements.
The information regarding the current credit card balance should be easy to find as should the credit card rates and terms. If any of the data is difficult to ascertain, call the credit card company and get that information and while you are speaking to the customer service representative request a rate reduction or ask if there is anything else they can do to help you. The credit card company is a service provider, make your service provider do their job – don’t be intimidated about asking for a lower rate or better terms.
The next step to maximize your returns is to switch to the best credit cards available with the best credit card rates in order to reduce the monthly interest charges. A number of credit card companies continue to offer zero percent balance transfer rates for six months or longer. For a credit card holder paying 19.9% on a total credit card balance of $6,500.00 the savings in interest charges per month will be slightly over $107.00. That means over $100.00 extra dollars per month can be paid towards debt reduction during the zero interest rate period.
Now it’s time to avoid new charges that are not paid off monthly. There is nothing wrong with using a credit card for the many benefits that they offer such as payment and purchase protection, credit card rewards offers, security and more as long you don’t accumulate more debt. The key is to retire the new charges as soon as they come in. Unfortunately, too many consumers are not aware of their expenditures an engage in far too much conspicuous consumption simply because the credit card is available. If you don’t actually have the money, don’t spend it. The key is to break the habit of using credit cards without a connection to the real cost of what you are buying.
To avoid less obvious unwanted usage, go to any online accounts or other bills that have recurring charges to a credit card and delete the credit card numbers to avoid unneeded expenses.
To get started on reducing existing credit card debt, one the best methods is to make the minimum payment on each credit card balance, then make an extra payment each month on whichever debt has the highest outstanding credit card interest rate and reduce that balance until it is gone and move on to the next highest interest rate until all debts are paid off.
Stick to a plan of using the cheapest credit available with the best credit card rates, avoid new debt and reduce costly debt to free up more cash flow and enjoy life without the burden of worry over excessive interest charges.
Managing the credit card due date is one of the most valuable benefits of many credit cards that is often ignored. Managing the credit card due date and credit card grace period can turn a good credit card into the best credit card.
The credit card grace period is the number of days between the closing date and the upcoming payment due date. During that time, account holders can make purchase transactions that are interest free as long as the credit card balance is paid in full. The number of days for the grace period can vary from one credit card to another.
Most credit card companies assess steep penalties for late payments. They charge a fee for each late payment and will often increase the credit card account interest rate as well. The late payments and rising credit card interest rates receives the most attention from credit card holders and financial advisers. But with good financial management, not only will credit card holders not have to worry about any potential late fees or a higher credit card apr but prudent credit card use can be turned into a an interest free short term loan with rewards.
All credit card bills have a due date. If your credit card payment does not get posted by the due date, the account is almost guaranteed to be assessed a healthy late fee. For this reason alone, it is important for credit cardholders to watch their payment due dates. For account holders that are having a hard time managing the due dates on credit cards or other financial obligations, some credit card companies allow their customers to set their own due dates or at a minimum change the due dates they have be given.
Once the credit card due dates are properly established and managed within an individuals budget its time to use the grace period to gain a benefit from credit card use. When the credit card company sets a grace period that may be 25 days in length, the account holder can make purchase transactions up to the available credit card limit and then pay that amount back before the grace period ends and earn all the rewards that may be offered by the credit card based on the transaction amount made during that billing cycle and pay no interest on the charges.
For instance the Chase Freedom credit card earns a 5% cash back bonus on purchases made in categories like gas, home improvement and department stores. The 5% is earned on net purchases and the credit card holder can make these purchases during the month, exercise the 21-day grace period that comes with this Chase Bank credit card before paying the charges back, earn the rewards and pay no interest as long as the balance is paid within the 21-day grace period. This option is available on a number of credit cards available today.
For those credit card holders that already have balances on a credit card, it is not possible to make transactions that are interest free. But these card holders can take the time to obtain a new credit card with a nice rewards package and decent grace period and make all new charges on the new credit card while slowly paying off any other credit cards with existing balances as soon as possible.
It is always wise to be too careful when it comes to credit and credit card use, and that means taking the time to read all the fine print. Check the monthly statement to see what the current credit card balance is, what the grace period is and the credit card rate. Make certain you understand the terms when you’re shopping around for a new credit card. The new credit card doesn’t have to have a better credit card rate or rewards program, but by using a new credit card for all new transactions without carrying a balance you can make purchases for a short period of time interest free and earn rewards bonuses. Just remember to manage paying down the old credit card balances.
There are number of questions that consumers should answer before applying or accepting a new credit card. By answering these questions, a credit card applicant can become confident that they are obtaining the best credit card to suit their needs.
The most fundamental question to ask before moving on with a new credit card is what is the credit card rate? Unless the credit card users intends to always payoff the monthly credit card balance before the expiration of the grace period and avoid incurring any finance charges, the credit card rate or credit card APR is the biggest cost in using a credit card that has a recurring balance.
When determining the credit card rate it is essential to investigate whether the credit card has a teaser rate or introductory rate. Introductory credit card rates can be valuable for either a balance transfer to lower an existing credit card rate or for short term large purchases that can be repaid within the introductory rate period. But it is unwise to choose a credit card based solely on the introductory interest rate if that credit card is going to carry a balance for some time after the introductory period ends.
The other essential question to ask about the costs of the credit card is whether or not the card has an annual fee. An annual fee works for the credit card holder if the credit card rate is significantly below that of a comparable credit card with no annual fee but with a higher rate or for a credit card that may have a rewards program that can be exploited to more than cover any annual fees.
Answers to questions regarding other credit card costs such as credit card cash advance charges and late payment fees should be answered but these questions should not be as essential in deciding the best credit card since these are charges that should be avoided. Credit card cash advance fees and late payment fees are unnecessary fees that should be avoided at all accosts and that should have little to do with determining what credit card is best suited for an individual.
Once the questions regarding the costs of the credit card are answered, the next set of questions should revolve around the potential rewards or benefits of the credit card.
Measuring credit card rewards offers may not turn out to be an easy task. Credit card reward programs have been increasingly complex over the years. Credit card rewards programs may include cash back on purchases, points toward airline travel or merchandise or gift certificates or other similar benefits that may involve earning goods and services.
Reward points earned are often calculated at different rates depending on the credit card. Credit card rewards may be earned at the rate of one point per dollar spent or can run as high as 3 points per dollar spent. Some rewards have restrictions as to what types of purchases earn the points and some points that are redeemed for merchandise are redeemed through catalogues with prices that are higher than prices that can be found in some retail stores. For that reason, many credit card holders redeem their rewards for gift certificates at retail stores that can be used for any merchandise.
It is imperative to be aware of the rules and restrictions, including limits on how rewards are earned and much can be earned as well as how the credit card points can be redeemed or deadlines that may be imposed for taking advantage of the rewards offered.
A question regarding the benefits of the credit card may also involve the credit card credit limit. How much is the credit limit may be a key factor in deciding whether to obtain a certain credit card. Unfortunately, this question can be difficult to ascertain since the credit card limit is most often established after the credit card application is reviewed by the credit card company.
The bottom line for consumers is to find answers to these questions and more to help determine whether a new credit card is truly the best credit card to obtain. Understand the features of credit cards, credit card rates and any bonus or reward programs thoroughly. Before any consumer signs up for a new potential debt obligation, that is an inherent part of credit card use, think carefully about whether it will be useful and beneficial.
Comparing credit card features and costs can be done efficiently and quickly with web sites such as Bestcreditcardrates.com that list the various credit card offers by category and displays the costs and features in an easy to read format.
When credit markets tighten and consumers grow increasingly weary of their debt levels, especially credit card debt, this is the time to clean up any lose ends and unnecessary charges with the credit card accounts.
One of the fist steps to clean up frivolous charges is close some of those enticing credit card accounts. More credit report information sources and financial gurus talk about the potential damage to someone’s credit score if they close out a credit card instead of simply letting it remain open but unused.
It is generally accepted that a credit score weighs the current credit position and the length of time that credit has been available, therefore closing out a long time account can have some detrimental impact. However, the impact from having the account closed is rather small. More important than the loss of the long term rating from the closed credit card account is the damage that may come from excessive credit card debt at high interest rates on an account that is used simply because it is available for use. Potential damage to a credit score and more importantly damage to an individual’s household budget.
For credit card holders that no longer want to use their credit card anymore, the best step is to contact the credit card company to close down your account. By closing the account, the chance that the credit card will be used or that someone else will improperly use the credit card or account number and use it to make purchases is eliminated. This procedure will also make certain the account information doesn’t fall into the wrong hands and you become the victim fraudulent credit card charges or even worse, identity theft. Card holders should also shred the credit card and any access checks linked to the credit card account.
Closing the credit card account will have an impact on someone’s credit score but before anyone accepts the conventional advice, evaluate what your needs are and make an informed choice on what is right for your credit and debt position. Unruly credit card debt and burdensome credit card payments will probably out weigh a lower credit score.
Consumer should also spend some time and review all the charges that come on their credit cards to stop those frivolous recurring charges to the credit card account. Recurring charges like magazines that are not read, credit monitoring services that are of little value and more. When closing the account, the account holder will need to contact any company or creditor that automatically bills to the credit card account. Numerous credit card holders place accounts such as the telephone bill, newspaper and magazine subscriptions, online services, credit card services such as credit alerts and insurance automatically charge your credit card. The credit card account holder will need to contact each company to ask them to stop billing the credit card account and make arrangements to pay the bill with alternative payment methods or terminate the services altogether.
The big step in reducing unwanted charges is to pay down those credit card balances to avoid excessive finance charges. This is of course easier said then done, but ignoring the credit card balance does nothing to help develop a plan, no matter how long, to reduce the burden of excessive credit card debts and payments.
A two part solution for reducing the credit card balance is to work on a household budget to control additional debt and mange the resources that are available as well as consolidating the existing credit card debt. Numerous credit card companies continue to offer 0% credit card rates on new credit cards for a short period of time. Even though the introductory credit card rate may be for a relatively short time frame, a 0% rate for six months on a $6,000.00 credit card balance can yield some very significant savings.
To manage a household budget, credit cards can be employed to facilitate the process, but a budget must be adhered to like the law. All income has to be accounted for as well as all expenses, no matter how small. Using one credit card for all transactions can help to easily monitor the monthly expenses as well as offer the bonus of obtain credit card rewards for all the transactions.
From time to time, credit card companies may decide to change the terms on individual credit card accounts and credit card offers. For example, the credit card company may change the APR on an existing account, or change or add fees. The change may be for a variety of reasons. They may be increasing fees or interest for all their credit card customers. Or they may be changing the terms on an account holder who has paid late or have gone over their credit card limit. Card holders should read all notices sent with the credit card statement or sent separately by the credit card company and use this opportunity to change credit cards and improve your financial position if the credit card terms change is less than favorable.
Card holders that may have questions or don’t like the changes to their account, should contact the credit card company immediately. Be sure to compare the current credit card rate and terms to those are currently available in today’s market, it may very well be time to open a new credit card with more desirable terms. Far too often, credit card holders fail to capitalize on changing market conditions and credit card industry competition by finding a new low rate credit card.
Credit cards normally have annual interest rates between 13% and 26%. If a credit card holder makes only the minimum credit card payments they will be still paying on them for several years. If you have the reached the point where you are so far in credit card debt because of too much credit card debt and you can’t see any way out, you may want to consider a non profit credit counseling company.
When you take advantage of the services of a non profit credit counseling company you may be able to reduce your credit card rate, eliminate late fees and in some cases reduce the overall amount of debt. Your creditors will get their money and you will save or at least repair your credit rating. If your credit card debt is becoming too much of burden to handle, now is the time to take action before your credit situations becomes worse or your home goes into foreclosure or you have to resort to bankruptcy. Everyone wins and you will reduce the length of time it will take to get out of debt.
Non profit credit counseling companies may be the way for you to pull yourself up out of the crushing weight of your bills and be able to breathe freely again knowing you are taking steps to pay off your debts and hopefully have some spare cash. And even if your credit history becomes poor and your credit score plummets, there are still credit cards available to use for necessities and to reestablish a good credit history.
Secured credit cards, prepaid credit cards and credit cards targeted for individuals with a less than perfect credit history are options available. Secured credit cards are available that don’t even require a credit check, work just like regular credit cards and report your credit history with the card to the major credit reporting agencies.
Non profit credit counseling companies will work with your creditors to bring down your payments. Credit counselors will work with the credit card companies to reduce your debt and interest charges where they can. They can stop the phone calls from bill collectors. Most credit counseling companies will handle the debts and payments so you pay one payment to the company and they will see that the bills are paid on time. You will receive a monthly statement of the bills that have been paid and when they were paid from the credit counseling company and you will still receive statements from your creditors as well.
One important thing to remember is that, as with any type of business, you need to do your homework before you enter into an agreement with a debt consolidation company or credit counseling company. There have been some of these companies who have taken the money from clients and done very little to help lower the credit card debt and charge a high monthly fee for their involvement. Others have not paid the bills on time and the client’s credit score and credit history turns even worse. Do some research before handing anything over to one of these firms.
Make sure you are clear about how much they will charge for a fee. You will also need to make it clear that you expect the money to be disbursed to your creditors as soon as they receive it. Debt consolidation can be a godsend but you need to make yourself clear and make sure they are clear about how they do business.
In the long run, as long as you are aware of the problems with some of the bad operators you have the advantage. A reputable non profit debt consolidation and credit card counseling company can help you get back on track with your credit, your credit cards and other financial problems you may be having.