Credit Card Tutorials

Credit Card Fraud

Deciding its time to buy a new vehicle you set off to the car dealership in search of that new car you’ve been dreaming of getting for last year. Once you have everything picked out, down to the sound system and DVD player, you and the sales person go to sit down to do all the paperwork. That’s when it happens, you get the bad news. Your credit score is way too low and you’ve been turned down. The sales associate goes over the reasons with you, stating that there have been many large purchases made in your name and non of them were ever paid for.  You have no idea what the sales associate is talking about, you haven’t made any large purchases in at least a year and half. After talking with the associate and arguing over your credit and the purchases you didn’t make, you leave furious and without a clue.

This is common among American’s, as credit card fraud occurs every 5-10 seconds, and it happens to someone just like you. You have excellent credit, have never made a payment late and suddenly you’ve been declined at a car dealership, or to buy furniture, a house maybe, or even get a new credit card. (more…)

What to Look for when Comparing Credit Cards

The purchase of any item should involve careful consideration and comparison shopping methods. Shopping for financial services such as credit cards is no different. There are many aspects which should be taken into account when comparing credit cards.

APR
APR is defined as the annual percentage rate that is associated with the card. Cards with a lower APR are available to those consumers that have a higher credit rating as the risk associated with the lender is lower. Most often, the credit card with the lower APR is the one that consumers are going to choose.

Introductory Offers
Introductory offers vary from company to company but often entail lower interest rates, or even zero interest rates for a period of twelve to eighteen months. This zero percent APR is available on balance transfers and purchases throughout the introductory period. Be sure to determine any fees that are associated with the balance transfer (which are often a standard of 3% of the balance that is being transferred to the credit card).

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Credit Card Interest

A majority of the people these days carries credit card debt. The reason is not so much their inability to understand the consequences of that debt, but because they are unaware of the credit card interest being charged to them and how that impacts their purchasing power. Most people, after having been told of the APR do not realize what it truly means to be charged an interest rate of 20 %. It is not however their fault either. Credit card companies deliberately try and couch these details in technical jargon to ensure the customer’s confusion.

Credit Card interest is simple terms is profit for the credit card company. Credit card companies work on the principle that they provide money for the present transactions, provided they have it returned to them by the end of the month. The cost of this present transaction is the amount that they charge as credit card interest. Their investment, which is the money they provide at the moment, earns them the interest. So in effect, it is their return on investment.

If a person was to be told that he would make a return of around 20 % on his investment, he/she would be delighted. These are the sorts of interest rates that huge financial institutions aim for. However if the person were to be told that he is in fact, giving up 20% more of his money every time he uses his credit card, that would leave a slightly distasteful impression. Credit card interest is precisely that. It is the amount that users have to pay to be able to utilize their credit cards at present.

Most people who are in debt suffer precisely because they have failed to understand the concept of credit card interest. Being unaware of the accumulated debt and the consequent interest rate being charged, consumers foolishly believe that minimum payments can suffice and their credit card debt will eventually shrink back. However, surveys have shown that once under debt, consumers do not easily come out of it unless they drastically change their shopping habits. This is why it becomes essential for people to first understand that their credit card interest is not something to be taken lightly. Card companies try and promote their products by advertising lower rates or redefining the names but in effect, these are just gimmicks. Credit card interest rates do not change unless a broader shift in economy takes place. Consequently, consumers should analyze their shopping habits before proceeding since ultimately, they are the ones paying the credit card interest.