|
|
|
|
CREDIT CARDS LOANS/INVESTMENTS BANKING/TRADING
December 1999 Credit Card Tips by Curtis Arnold, CardRatings.com Founder/Public Relations Director
Credit Card Tips
In addition to encouraging credit card competition through promoting the most attractive cards in the country, we strive to help consumers cope with credit card debt by teaching various debt reduction strategies. We hope that you find the following tips beneficial.
Interest Rate Awareness:
We can not stress enough the importance of being aware of interest rates when using your card(s). Please utilize the lists above!!! High rate cards can be put a BIG dent in your pocketbook. To illustrate our point again, a cardholder with an average balance of $2,500 and a 19.99% purchase rate will pay $1000.00 in interest alone in just two years! The same cardholder would pay only $400.00 in interest if the rate were lowered to 8.00%, a difference of $600.00! Also, be aware of cash advance rates. Cash advance rates are typically much higher than purchase rates and usually there is no grace period for cash advances (not to mention cash advance fees). Therefore, avoid cash advances if at all possible.
Taking Advantage of Promo Rates:
While introductory or "teaser rates" are generally short lived and are intended strictly to entice consumers, savvy consumers can benefit a great deal from promotional rates. Look for cards that offer longer term introductory rates and longer term promotional rates on balance transfers (6-12 months). Some cards even offer very attractive long term promotional rates on balance transfers...rates that are good until the dollar amount transferred is entirely paid off!
Consumers that have more than one card with available credit can transfer balances between cards in order to take advantage of promo. transfer rates (a ploy known as "card dumping"). Finally, when the promo. rate period ends (for transfers), it is a good idea to call the card company and request an extension of the rate. Consumers with a good payment history often get extensions. You must be aggressive when dealing with credit card companies! You can also negotiate to have your regular interest rate lowered. Threatening to pay off a given card often puts consumers in a bargaining position when dealing with credit card cos.
bravenet.com
