Are Low Interest Credit Cards Really Low Interest?
Are Low Interest Credit Cards Really Low Interest?
Article by Esme Bean
The interest rate you pay – which is best calculated as an annual percentage rate – may not be the best way to determine if you have the most beneficial deal you can get. Most people are not familiar with the various ways finance charges are calculated which is part of the story when you are seeking low interest credit cards. Following is a list of the four most common methods of calculation regarding how finance charges are figured:
Calculation Methods
Average daily balance – The credit card company averages your daily balance. For example, if you charged a purchase of 0 on the 1st day of July and 0 on the 17th, your average daily balance would be 0. That number multiplied by approximately one-twelfth of your annual percentage rate (APR) equals your monthly finance charge. The company may calculate your interest on either a daily or monthly basis.Daily balance – The credit card company takes the actual balance you carry each day of your billing cycle and multiplies it by approximately 1/365th of your APR and then adds it together.Two Cycle Balance – This method of calculation is similar to an average daily balance except the daily average is based on your last two billing cycles, not just one. If you do not pay off your credit card in full one month, you will be hit with retroactive interest on your next bill.Previous Balance – The beginning and ending balance of your statement are shown. The finance charge is based on the outstanding balance when the billing cycle begins.
Other charges are also factored into the cost of your credit card. There are annual fees and late fees as well as other penalty fees to be considered based upon your method of bill paying and credit history. Awareness of your own payment style is important because if you know that you are occasionally late with your credit card payments – in spite of your best efforts to be timely – perhaps a card with a slightly higher interest rate but lower late fee might be a better deal for you.
Of course, the lower your interest rate, the more you will save on the finance charges that the company applies to your outstanding balance. Consequently, you should consider credit cards that offer you a low introductory rate – at least for the first six months. Read the fine print so you are aware of the change in interest rate when the introductory rate expires. You should also be aware if the company will make any changes other than the rate of interest. If you currently have a card with a bank that charges high interest rates, you can always transfer your balance to another bank with a lower rate.
Some credit card companies’ offer perks along with your card. Some of these rewards that are commonly included are:
Discounts on various goods and services.Frequent flier milesInsurance on auto rentals or on travel.Cash rebates on some purchases made with your card.Insurance on purchases made with your card.
Regardless of the type of credit card you choose, be sure to read the fine print and save all the change notifications sent to you by the bank. Some people consider this information sent with their credit cards to be junk mail, but be aware it is important financial information that may cause you penalties and affect your interest rate later on.
About the Author
Card Fusion has the information to help you decide which credit card is best for your situation. The Learning Center is an excellent resource when shopping for a credit card. Esme Bean has been researching and providing information related to the credit card industry for many years.
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Do We Really Need Credit Cards?
Do We Really Need Credit Cards?
Article by Uma A Ilango
DO WE REALLY NEED CREDIT CARDS?
Do we really need credit cards? Surfing the internet and interviewing my friends and family for an answer to this question, I came across a multitude of replies which generally moved towards the direction of a resounding NO. The only ones who were advocating the necessity of credit cards seemed to be credit card companies and banks. I’ve taken an objective stand and drawn from my personal experience to provide you with a non-biased and an informative answer. In 2007, about 73% of American families had credit cards. Out of every 10 families with credit cards, 8 had credit card debts. That’s almost a whopping 180 million people in credit card debt. Please refer to http://www.creditcards.com for further information on the statistics.
It is no wonder that there was such a resounding negative answer to the necessity of credit cards. Scores of people all over the world are swearing to cut up their credit cards once they clear their credit card debts and advising anyone they see to never fall into the trap of signing up for a credit card. They even go far enough to proclaim that credit cards are evil and a vice. However, the nagging question is if credit cards were really all that unnecessary and evil, why do so many millions of people sign up for them in the first place? According to my understanding, it is mainly due to some serious misconceptions. Let us look at them first.
The most common misconception is that a credit card is required to build a good credit history. This is one of the common reasons given when encouraging people as young as 18 to sign up for credit cards in college. However, all you need to do to build a good credit history is to pay all your bills promptly. This can be utility bills or your rent. It need not be a credit card bill. People also believe that you need credit cards in case of emergencies. Honestly, no financial advisor will ask you to sign up for a credit card in case of emergencies. Responsible financial planning techniques involve saving six to eight months of expenses for emergencies, not owning a credit card.
While it is true that you can’t be carrying around large amount of cash and you may find yourself needing a Visa or MasterCard when bank cards are not accepted, the solution need not be a credit card. It can be a debit card. Debit cards come as Visa or MasterCard and therefore, can be used wherever credit cards are accepted. You can also use these debit cards for phone or online transactions. They are as universally accepted as credit cards and can be as convenient. Although I have just debunked some common reasons provided for getting a credit card, I would like to add some good of credit card by drawing from my personal experience over a period of about 9 years now.
I started work as a teacher right after university. I found myself suddenly swamped with the need to purchase suitable formal clothes, shoes and bags for classroom teaching and sportswear for physical education and extracurricular activities. I did not have the money in my savings to buy what I needed. I signed up for a low interest credit card with no annual fees. I purchased what I needed and paid up for them over the next three months. Besides getting a loan from someone, credit card was a good solution for me at a time that I was starting to build myself financially. It helped me stretch my dollars the 3 months. A few years later, I decided to quit my job and do my Masters degree. During this period, I decided to work as a private educator and opened up my own business. Although I had saved up substantially by that time, I did not want to use it in case I did not make much money in my business. As my cash inflow was not fixed, I used my credit card to invest in items such as tables, chairs and teaching materials. Once again, having the credit in hand helped me stay confident as independent. Once again, I paid it off in a matter of 5 months.
Despite owning the card for a couple of years by then, I did not start to despise it like the majority of credit card holders. I did not get myself into debts and cut up my card. On the contrary, I was quite thankful for such a handy financial tool in times of need. Recently after my wedding, I got my husband and myself a new credit card – one with a low interest rate, low annual fees and a really good rewards program. We charge all our bills to that card, including utilities, grocery and shopping. Although we are sent monthly statements, my husband and I keep track of our expenses charged to the card on a weekly basis. This ensures that we never go above our monthly budget and will never end up spending beyond our means.
Once again, instead of finding ourselves cursing our credit card for financial difficulties, we are loving it for making so many things simpler for us. It is so easy to track every bill in one statement. It also makes our monthly bookkeeping process a breeze. Furthermore, we also get discounts at many outlets and petrol stations for using our credit card. To top it all, we get rewards points that we exchange for spa treatments and movie tickets. In response to the people who hate credit cards, I’d say it really isn’t the fault of a knife if it is used to hurt someone. The problem has never been the credit cards but the misuse of credit cards by people. If you had been lured into getting a credit card by the misconceptions, then switch your financial strategy to one that suits your money management style. If you had gotten yourself a bad deal with high interest rates and costs, learn what to look out for when searching for good credit card deals, do an extensive research and read the fine print conscientiously.
So, do you really need credit cards? To people who may not be able to control their misuse of the buying power offered by credit cards, my answer is no. If you have a tendency to buy impulsively and overspend, stick to debit cards and cash. Be honest with yourself when identifying your money managing style. As for those who exercise excellent money management as well as self control, the answer is still a no. You do not really need credit cards. However, it is definitely a good financial tool that can benefit in many ways other than just financially.
About the Author
Uma Ilango is a programmer from profession. She writes regulary at. Thousands of new articles are added every month.
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Categories: 0% Interest Credit Cards Tags: Cards , Credit, Need, really
Can You Process Credit Cards Online? If Not, Your Business is Really Missing Out
Can You Process Credit Cards Online? If Not, Your Business is Really Missing Out
Article by Richard A. Manfredi
In today’s world, not being able to process credit cards online can be a huge detriment to your business. If you can accept credit card payments anytime, anywhere, it can mean the difference in having your business succeed or fail.Even if you run a traditional brick and mortar business, you still need to be able to process credit cards online. Thanks to the explosion of the world wide web, we now live in a society where customers expect to be able shop anytime – and do it right from the comfort of their own homes.If you accept credit card payments online, the process is similar to taking credit cards in your store. With online purchases, the transaction can be approved instantly, and the money can be transferred into your account in just a day or two.And, by being able to process credit cards online, you open yourself up to a whole new group of customers. People who live on the other side of town, on the other side of the country, or on the other side of the world can now buy from you. Think of how many more profits you could see if you really did open up your inventory to the world wide web!But, being able to process credit cards online comes with a couple of different nuances than just swiping a credit card in your store. Above all else, you need a payment processor that is safe and secure. No matter how eager people are to shop online, they are not going to hand over something as important as their credit card number if they do not think it’s safe to do so. That’s why you need to find an online payment processor that specializes in fraud prevention and encryption. In fact, there are total merchant services out there that will handle all of your online transactions, set up the proper security parameters, and can even customize your account so that only certain employees have access to customers’ credit card numbers.By working with professional merchant services, you can also take advantage of other opportunities. For example, some companies may throw in freebies in exchange for getting your business. If you sign up for an online credit card payment processor, you may get a free credit card terminal that accepts payments on the go – like if you make deliveries, or need a way to accept credit card payments at a trade show or street fair.
About the Author
Richard A. Manfredi has written about http://www.total-merchant-services.com”> www.total-merchant-services.com. Total Merchants Services enables your business to accept credit card payments, internet credit card processing and obtain retail merchant accounts.
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Categories: Instant Approval Cards Tags: Business, Cards, Credit, Missing, Online, out , process, really
Are Store Cards Really Worth It?
Are Store Cards Really Worth It?
Article by Matthew Lloyd
A store card is merely another type of a credit card with some differences:
You can use a store card only in a shop or a chain of shops that are owned by one company You can use the store card to make purchases online, at the store’s website
Both types of cards:
Allow you to buy now, pay later Charge some interest on the deferred payment Offer incentives
However, store card users often don’t even realize they are being taken for a ride.
The Advantages of a Store CardIf your credit history is good, then you may stand to gain some benefits using a store card. Initially, you may be tempted to accept a store card because you might be given some discount on your purchases, usually, 10%. If you pay off your outstanding every month, regularly, then you may get other benefits in the form of discounts or first previews of new merchandise. However, there is an ugly side to store cards about which most consumers are unaware.
The Disadvantages of Store Cards
The APR is often double the rate offered on regular cards. Regular credit cards offer interest rates between 8 – 20%. Store cards might sometimes charge a shocking 30% rate of interest. Store cards often come with an insurance policy which can be expensive Regular credit cards normally offer an interest free period during which you can pay off your debts without paying another penny as interest. Store cards may not offer such an interest free period. This means that, the moment you make a purchase your interest rate starts. Imagine the amount of interest you would pay if you don’t clear your balances every month. A Competition Commission study revealed that the Britons pay an extra £100 million a year due to the high interest rates charged by store cards Most store cards also charge a high late payment fee.
Managing Store Cards for Clear GainsYou need to take certain steps if you wish to benefit from using your store card:
Clear your balances every month, without fail Read the fine print and see the amount of interest you will be paying on your card Select a store card that offers the same APR as a regular credit card. If you do your research, you will find some store cards do offer more reasonable rates of interest. Some store cards also offer an interest free period so they are certainly more attractive than other store cards that offer no such interest free periods Select store cards from shops that you actually frequent. There is no point in getting a store card from a shop located at the other end of town.
About the Author
Matthew Lloyd writes for About Your Money. His articles provide users with useful advice on a variety of financial products, including credit cards. To find About Your Money visit www.aboutyourmoney.co.uk
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