High interest rate credit cards are the bane of borrowers everywhere. But even if you find a credit card with a lower than average interest rate, you aren’t in the clearing just yet. You will still have to review terms that could still potentially make a lower interest rate card less appealing than a higher rate card.
With credit cards being as competitive as they are, almost every credit card comes with a certain grace period in which you don’t pay any interest. This is a key time to load up on items you want or need, and not have to pay a large sum of money in addition to the price of said items. Be careful for the bait and switch, in which rates jump sky-high after the grace period.
Annual fees are another concern that you should have. Annual fees are applied to credit cards so credit companies can make a bit more money annually- even if you don’t have debt on your account. In this instance, you would have an interest-free introductory offer and still have to pay $55 or more for an annual fee. Creditors are required to make you aware of this fact.
Missing a payment is something that credit card owners dread. We all know that when a payment goes awry, there will be a penalty fee to pay in compensation. It’s possible to find a creditor who will either waive such fees, or make sure that the penalties applied will be negligible. When the economy is in the state that it is, even a small break like this can mean a lot for your family.
When credit cards aren’t being used, the credit company in which they belong to may charge you a fee. It seems ridiculous, but it’s true. If you don’t have a minimum account balance on your credit card at a specific point in the pay period, a number of credit card companies will actively apply a penalty as a result. That way a credit card is always making the parent company money, regardless if you are in debt or not.
Remember that nice interest rate you were promised? Credit companies can take it away with even one slip up. Credit companies have the right to raise interest rates as they see fit, so long as it is stated in the contract. There should be a sense of control in the limbo that this creates, so inquire as to what penalties would be applied before obtaining a credit card.
In Conclusion
A contract is a binding legal document that will be enforced- whether you like it or not. Keep that in mind when you sign the dotted line for a credit card application, and all the while look out for disguised fees.
Learn more about compare credit cards and low apr credit card guide.