Shopping Around for Your Credit
The cardinal rule when seeking to take out new credit, especially for
credit cards, is to shop around; this should be a prerequisite for
almost any product that you buy, be it financial or not. Shopping
around for credit cards is made even more important because of the
fact that interest rates can vary so much between lenders. While some
credit cards offer rates of around ten per cent, others are up in the
region closer to thirty per cent. You do not want to be paying more
than you have to for anything, and especially not for your credit
card. The Fair Credit and Charge Card Disclosure Act requires credit
and charge card issuers to include this information on
credit applications.
Beware: Teaser Rates
Some cards are advertised
with very low introductory interest rates called teasers.
The rate is good for a short period of time. If you know
you can pay what you owe while the low rate is in effect,
it could be a good deal. But if the teaser time runs out
and you still owe money, you could end up paying a higher
rate than you might have without the special introductory
rate. Just one late payment could also cancel the teaser
rate.
Beware: Offers to Skip a Credit Payment
If your credit company
invites you to skip a monthly payment without a penalty,
it is probably not doing you a favor. You may still owe
finance charges on your unpaid balance. And interest will
probably be adding up on any purchases you make after the
due date you skipped.
Beware: Credit Insurance
When you take out a loan
for a big purchase, a salesperson may try to sell you
credit insurance. Your credit card company may also
encourage you to purchase credit insurance. The coverage
may be promoted as a way for you to protect yourself if
your property is damaged or lost. Other credit insurance
offers promises to make loan payments if you are laid off,
become disabled or die. It is almost always better to buy
regular property, life or disability insurance instead of
credit insurance. |