There are a number of companies out there ready with a credit card offer for you. But before signing on those documents it is important to evaluate the offer carefully. At the end of the day, the one who has given you this offer is in the hardcore money making business. You should carefully consider some factors in order to understand whether the offer at hand fulfills your interests more or that of the company itself. There are certainly some ways to find that out and make an informed decision in this regard. Go further through the post to know more.
- Your first responsibility after getting the offer in hand would be to find out who exactly has sent it. You would be doing this instinctively, anyhow. Have a good look at the reply envelope and the letterhead as well. Proceed after seeing names like “Credit Card Administration” or “Processing Center”.
- The next big step would be to compare the APR stated for the purchases. The APR is shown in big type and it indicates the percentage of your balance that you pay in interest every year. The APR might change once you apply for your credit card and your credit history is evaluated. In case, the introductory rate is mentioned then it should also be indicated as to how long that rate would last. But please remember that in case you’re opting for the low interest credit card then you would be not be entitled to as many rewards as what would have been the case if you had opted for higher interest credit cards. Balance transfers and cash advances have different APR and might as well entail a balance transfer fee.
- Besides the APR and the variable rates also check out the penalty rate as well. The default or penalty rate is charged when you go over your credit limit or pay late. Therefore, it would be advisable that you look for credit cards which have lesser stringent terms and conditions.
What Should You Specially Watch Out For?
If you are particularly co signing on your daughter, son or wife’s account, then please remember that you would be held accountable for his/her credit card behaviour. Today, it has become very difficult for young adults to get approved for credit cards without due credentials. So their parents are often found chipping in as cosigners or underwriters.
If you are opting for the easy payment option whereby you would be able to pay for huge spends with the help of smaller payments, without having to pay any interest, know for a fact there is a catch. The longer time-frame actually means that any slip up over a considerable period of time could lead to higher costs.
Why Is It “So” Important to Evaluate a Credit Card Offer?
As already indicated above, evaluating a credit card offer remains absolutely important today. The APR, default rate everything should be considered wisely in correspondence to your payment capacity. A negative or damaged credit report can seriously affect your financial future. It puts your chances of securing loans and insurance at risk. So keeping these factors in view, you should seriously weigh the pros and cons of a particular credit card offer. If all this seems too confusing to be handled by yourself, you can seek the aid of a Your Personal Financial Mentor for the same. Also you can visit UnitedFinances.com for more update information on credit cards.
Categories: Credit Cards