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 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 the situation as it is, how do you control or reduce credit card debt? Is it even possible to avoid the downward spiral of the debt trap?
It may take some time and it will definitely take determination, but debt elimination can definitely be achieved. In one small measure the process involves 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 balance. Balance transfers can be 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 transferred, some on purchases within a certain time period and some both.
Also look at the interest they charge after the interest-free period. These rates can vary enormously.
If you plan to change cards, be alert when transferring the balance. The card that you are switching to pays the due amount to the old issuer. If this payment is made via check, there is a gap between the date of issue of check and the date of clearance. This can also be the time when both, your old and new issuers charge interest.
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 ask for better rates from your current credit card company.
Statistics say that more than half the people who make the effort 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 regular with payments for a while, you might have enough credit history to get a much better lower-rate card somewhere else. Be very careful, a lot of the offers you may see are introductory rates. For example, you may be promised a low 5% 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.
Obviously, you know already that we do not recommend using credit cards at all, so the best credit card rate is actually a NO-RATE card. That’s right, use your debit card instead!
"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.
