Why seek the best credit card rate?
The convenience of buying with ‘plastic’ has become a cornerstone of the consumer economy. Sadly, millions of American families use their credit cards, not just for convenience or when shopping for luxuries, but often just to make ends meet.
"Money and success don't change people;
they merely amplify what is already there."
- Will Smith, Actor |
With credit cards becoming more prevalent in our society, you may wonder how you can control, reduce or eliminate credit card debt? Is it even possible to get help with credit card debt? Is there any hope to reverse the downward spiral of debt once you find yourself caught in what seems to be a debt trap?
It may take some time and focused determination, but debt elimination can definitely be achieved. The process involves, in part, finding the best credit card rate in order to consolidate your higher rate cards. Start shopping around for a lower rate credit card and transfer your other balances.
Balance transfers can be an excellent short term strategy if you plan on paying off the credit card balance within the introductory period. Often times this allows you to pay just on your principle debt (without paying interest) for a period of 3 to 12 months.
Some cards offer interest free on just the balance amount transferred - some on purchases within a certain time period and some both.
Also look at the interest percentage they charge after the interest-free period. These rates can vary widely and the offers are geared to lure the user into taking on even more consumer credit card debt, so be careful and read the fine print!
If you do decide to transfer balances to a lower rate card, be sure to manage the process closely. The card that you are switching to provides the funds need to payoff the old issuer. If this payment is made via check, there is a gap between the issue date of the check and the date the check clears the old account. Be on the lookout to make sure you don't get charged additional interest and fees during this gap period.
Examine the check transfer policies for both companies to ensure that you understand how each card processes these kinds of transactions. Research the terms on the disclosure.
Another strategy for getting the best credit card rate is to simply ask for better rates from your current credit card company.
Credit card statistics say that more than half the people who make the effort to call their credit card company to ask for a reduced rate, will be approved for a lower rate. If your current issuer refuses or won't lower rates far enough to be of real help, look for a better deal.
If you have been making regular payments, you might have enough credit history to receive a lower-rate card somewhere else. Be very careful, a lot of the offers you may see are actually introductory rates, not fixed rates. For example, you may be promised a low 5% annual percentage rate, but after the introductory period of 3 to 6 months, the rate can shoot up to 18% or higher.
Lastly, pay attention to the annual fees on your card. Your apparently low-rate card may not be as low as you think it is, if it charges an annual fee. The best credit card rate is the one that has no annual fees added in.
Always shop for a no-fee card with a low variable rate and pay no attention to the marketing gimmicks of the low introductory offers.
If you are a long time reader of our website, you already that we do not recommend using credit cards at all, as it only leads to credit card debt collection at some point in your financial future.
Without a doubt, the best credit card rate is actually a NO-RATE card. That’s right, use your Debit Card instead and avoid paying any interest or fees to anyone!
For additional assistance in understanding terms and conditions of credit cards, read our free guide credit & charge Cards.
"The man who never has money enough to pay his debts
has too much of something else."
- James H. Aughey |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
