| The intense competition among credit card | | | | interest at a higher rate will remain untouched by |
| companies has squeezed their creative brains hard, as | | | | your payments. However, there are cards that offer |
| they try to come up with innovative features on | | | | the low rate for both transfers and new purchases, |
| their various credit cards. One of the most attractive | | | | which is more advantageous to you. |
| - and substantive - features invented by the credit | | | | Allowable amount to transfer. Most credit card offers |
| card companies have been the low-rate credit cards. | | | | allow transfer balances up to your credit limit, which is |
| It is a smart move to take advantage of these | | | | great. This can be a little tricky, though, because |
| cost-saving credit card offers. Potentially, you could | | | | they often do not specify exactly how much you |
| actually get the bulk of interest savings from these | | | | can transfer. It's tricky because it is possible for you |
| low-rate credit card offers, especially when you are | | | | to go over the credit cards credit limit if there are |
| trying to manage your credit card debt. Indeed, there | | | | transfer fees and other charges to be paid, and if |
| are people who would advise that you jump from | | | | you do go over that you will get hit with an over-limit |
| one credit card to another, taking advantage of the | | | | fee. Discuss this area thoroughly with the account |
| 0% apr credit card introductory offers and save | | | | representative to be certain you don't break any |
| yourself a lot of money in interest charges. It would | | | | rules. Remember, if the bank thinks it can charge |
| be like getting an interest-free loan every time. | | | | credit card fees for something, they will. |
| However, as attractive as such offers may seem, it | | | | Balance transfer fees. Now most balance transfer |
| would not hurt to thoroughly investigate the finer | | | | offers do not really impose transfer fees. Just double |
| details of the credit card terms. The credit card | | | | check to make sure; read the fine print carefully. |
| companies, after all, are there to make money, so | | | | There could be transfer fee schedules based on the |
| why should they be giving away their chance to | | | | amount transferred, which could be something like: a |
| make profits with these 0% apr credit card offers? | | | | flat minimum fee for any amount; a 2% fee on the |
| Being in the business of lending money, credit card | | | | amount transferred; or, a maximum fee to serve as |
| issuers earn money by charging interest on credit | | | | a ceiling. It is not saying that credit card fees are |
| card balances. | | | | automatically onerous, but you must know so that |
| It would be prudent, therefore, to check for hidden | | | | you can calculate if indeed you will save money when |
| costs in these attractive offers before you apply for | | | | comparing the credit card fees to what you currently |
| a credit card. Prudence requires that you study and | | | | are paying. |
| understand the entire offer. Despite a possible | | | | Different rates for different amounts transferred. |
| distaste for it, you should read the credit card terms, | | | | There may be a varying schedule of rates for |
| the back of the offer, and all of the fine print. | | | | different amounts transferred. This could be present |
| You should study these conditions every time | | | | in the credit card offer letter, but then again, it may |
| consider new credit cards. It's not that you begrudge | | | | not. Some banks may graduate their interest rate |
| the credit card companies the right to impose | | | | such that the bigger the amount transferred, the |
| interest and credit card fees; it's just that you would | | | | lower will be your rate. For instance, amounts below |
| not want any surprises and would prefer to get the | | | | $3,000 will be at 8.9%, $3,000 to $4,999, 7.9%; and |
| better end of the deal. Let us look at some of these | | | | over $5,000, the interest is 6.9%. Again you need to |
| details. | | | | know this to calculate the amount you will save on |
| Interest rate. This will always be the most important | | | | the credit cards. |
| factor when evaluating credit cards. You will have no | | | | Late payment condition. You should really be careful |
| problem finding the nominal rate because it is usually | | | | with this condition imposed on credit cards. The |
| printed in big bold type in the credit card offer letter. | | | | advantages of the low-rate credit card offer could |
| The long and the short of interest rate is this: if you | | | | suddenly terminate and end up costing you hundreds |
| want a balance transfer as a means to save money, | | | | of dollars if you do not read the terms and |
| you'll have to make certain that your current rate in | | | | conditions. Contract provisions like this usually go to |
| your existing credit card is significantly higher than the | | | | the superfine print area, and could read something |
| interest rate in the new offer for credit cards. While | | | | like, "However, if a minimum monthly payment is not |
| other considerations should also be weighed, you will | | | | received by the close of the first billing cycle |
| agree that if this condition is not true, there is no | | | | following the payment due date, your promotional |
| way you will save money on the new card. | | | | APR balances will be 24.9%." That's a jump to the |
| Action date. This may not be as obvious, as it is | | | | stratosphere from a very low rate credit card offer, |
| buried in smaller print. The offer from the credit card | | | | and that is for being late once! This is where you |
| company may specify the latest day for you to take | | | | realize that it is costly to be late on any of your |
| advantage of the offer. Sometimes, the offer will | | | | credit cards. The bottom line is that when you opt to |
| specify different rates for different action dates. | | | | take the low rate offer, make your payments on |
| Effective period. You need to know how long the | | | | time. |
| low rate will be applied to your credit cards. The | | | | Interest rate after intro period. You must know what |
| introductory periods on credit cards, vary anywhere | | | | the rate will be when the introductory period is over. |
| from three months to fifteen months, and this | | | | Hopefully, the bank will raise the rate to a fair level, |
| obviously will impact how much you can expect to | | | | but if you comparison shop, you will find that some |
| save. The longer the time you're in the low rate, the | | | | rates can reach close to 20%. That can be painfully |
| more money you will save. However, if there are | | | | high. You need to know this rate after the promotion |
| credit card processing fees included as a condition on | | | | period phases out, to be more realistic in your |
| the transfers, you need to calculate a break-even | | | | estimate of savings. This assumes that you will not |
| time, that is, you must be in the lower rate for a | | | | switch to new low-rate credit cards. If the bank tries |
| certain length of time before you start seeing any | | | | to gouge you, you probably will. There are so many |
| savings. | | | | other offers on credit cards to choose from out |
| Application of payments. You have to make certain | | | | there. |
| how payments will be applied to your credit card | | | | There are benefits to be gained from these low-rate |
| account. Sometimes, the credit card issuer will apply | | | | credit card offers. To ensure that you will enjoy |
| your payments to the balance you transfer from | | | | these benefits to the maximum, you must do your |
| other credit cards, which is subject to the low rate | | | | homework and become credit card smart. |
| offer, while new purchases which may accrue | | | | |