Credit cards are a double edge sword. People are addicted to the plastic crack. They buy stuff they don’t need to impress people they don’t like. Plastic money has Americans hooked. Advertisements for cards are everywhere. How bad is it? According to some statistics the average American household has over $15,000 in credit card debt.
I do not advocate that everyone should have a credit card. If you can not control your cash you definitely can not control your plastic spending. I teach Financial Peace University classes and we strictly preach debt freedom and get rid of your cards. Why? Because most people will spend when they carry a credit card. Furthermore those same people will not pay off their current charges and carry a balance VCC buy . Thus putting them back into credit card debt.
There is a myth that you need credit. That is a lie. You don’t need credit to survive. It does make it easier to travel, rent cars, and book hotels. But the truth is you can do that with a debit card. The buy now pay later syndrome is why so many people are in debt. This is how people get trapped and are on the path to financial disaster.
With credit card use comes great responsibility and guidelines are easily found. Don’t overuse them, don’t spend money you can’t afford to pay back, don’t open too many credit accounts, etc. Still, the usefulness of credit cards endures. Credit cards are so useful, in fact, that many companies have noticed the high demand, making the marketplace very competitive for consumer choices. Before you impulsively sign up for a card, take a moment to make sure your plastic suits your needs. And before you write off entirely, consider the benefits.
Credit cards are great tools while traveling because many automatically convert your money into different currencies. They can also serve as identity cards, especially when they include your photo. They are better than walking around with a lot of cash, which can be stolen, or even traveler’s checks, because stolen cards can be reported sooner and prevented from use.
So what type of card is right for you? The easy answer comes if you have trouble paying off your account balance in full each month or if you’re seeking to consolidate debt. In either case, you’ll want to find a card with a low interest rate. If you pay your balance in full each month or if you’re interested in these cards for the rewards programs, the decision starts to get more complicated.
As the economic recovery has gained momentum, you probably are seeing a large increase in the promotional offers in your mailbox. This is great news for consumers and if you are interested in getting a zero percent credit card, you certainly will have a number of different options to choose from. The key with choosing the right credit card and making any type of serious finance decision is doing a bit of research and having a clear understanding of what your goals are. One thing is for sure you can often save a significant amount of money by using a 0% credit card, but each offer should be viewed independently.
The finance and banking market is very competitive and the companies try as much as possible to attract customers by offering the best deals for their credit cards. Many credit card companies are offering credit cards with zero interest rates, but a lot of these cards will have short term teaser rates and may include fees when transferring a card balance or other limitations. This is why its very important to review all of the cards terms and conditions. Key questions to ponder, are what happens to my rate if I am late with a payment or worse what if I go over my credit limit. There are certain cards that are very forgiving when it comes to these issues, but a large percentage of card companies will automatically increase your interest rate and you could be hit with large fees as well.
If you can use the card in a responsible manner, the zero-percent promotion may may be a great deal for you. But, you really have to be careful with how you use the card so that the interest-free period doesn’t get terminated. If you have a good credit record, it is likely you will be offered zero-percent credit card.
There are a few things you need to watch out for when applying for these cards. You need to know if the zero percent interest is limited to a promotion period or offered for life. Some companies may these promotions for the lifetime of the card, if you comply with the rule. Whereas, some zero-percent cards have expiration date. That is, they are valid for a certain period, from a few months up to a full year, after which the interest rate will go back to normal, may be even higher than the normal rate. Therefore, you have to read and understand the terms on the card offer before you accept it.
Before you apply, consider what you are getting the card for. Decide if you are going to use the card frequently or rarely. Decide if you want a credit card that offers cash back, air miles and other rewards. All these considerations will help determine the best credit card for you.