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What to Take Away From a Credit Card Offer

Credit card offers are a jumble of small print and percentages, and there are some key points that you should focus on when evaluating a card's pros and cons. If you're on the hunt for a new card, make sure you take the time to compare and contrast several different offers so you can select the best one for your lifestyle. CNN Money wants us to know how to spot a credit card ripoff, and here are the main areas that I focus on when I'm sorting through the fine print.

  • APR: The annual percentage rate will appear in big bold print, but that number doesn't tell you everything about how much you'll be charged to borrow money. Pay attention to whether the APR is fixed or variable; I always seek out a fixed APR over a variable one so that I don't have any interest rate surprises when the prime rate increases. Most rates are variable, so be sure to do your due diligence, and if there's an introductory rate, take note of when it expires.

There are two more aspects of a credit card offer you should especially keep in mind, so just

.

  • Default rate: While none of us ever plan on making a late payment or going over our credit limit, mistakes do happen. Find the explanation next to an asterisk that describes what actions (or inaction) would trigger the default rate, which can be more than 30 percent!
  • Finance charges: Issuers can calculate a finance charge in one of two ways: two-cycle average daily balance / two-cycle billing or average daily balance. Because two-cycle billing means you might pay interest on debt you've already paid off, ideally you want a card that uses your average daily balance to calculate the finance charge.

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ilanac13 ilanac13 7 years
there's so much fine print, and i think that when credit card companies target college kids or younger adults, they are pulling the wool over people's eyes. you see the low introductory interest rate and don't realize how much you're going to pay in the end - or you don't see all the little words that tell you that you could be signing your life way if you accept the card and are approved. i think that's why i don't have any credit cards now - i don't think that they help me out in any way. if i can't afford something - do i really need it?
lizs lizs 7 years
Annual fees are good to look at, too, along with the conditions on any special offers (0% balance transfers, low intro rates like you mentioned, Savvy). I got a card from a new bank back when I was feeling adventurous online (~7 years ago), and when the bank folded my rate jumped to more than 30%, as per the fine print that I didn't think I needed to read because I'm not one to miss a payment. Always pays to take the two minutes and see what you're getting into....
lizs lizs 7 years
Annual fees are good to look at, too, along with the conditions on any special offers (0% balance transfers, low intro rates like you mentioned, Savvy). I got a card from a new bank back when I was feeling adventurous online (~7 years ago), and when the bank folded my rate jumped to more than 30%, as per the fine print that I didn't think I needed to read because I'm not one to miss a payment. Always pays to take the two minutes and see what you're getting into....
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