Introduction:Many credit cards are becoming more expensive, both in interest charged and in other fees. Getting credit card debt under control is the best thing you can do for your personal finances.
I have a card that has an O.K. interest rate, about 10 percent. It has a low maximum, only $500.00 a month. It charges a $5.00 fee monthly. That equals an annual fee or $60.00 It also ads 12% to the interest rate if the card is maxed out. If I only use half the limit I am paying an additional $24% just on fees than 10% on top make $34%. Not a rate I am willing to pay. That card will be canceled this month.
Look at the annual fee on credit cards. If you have an annual fee that is more than 1% of what you use on the card in a month you are adding 12% to your rate. Consider finding a no annual fee credit card.
Miss one payment and your interest rate may jump to 29% or more. If that is the case pay that card off quickly and consider canceling it. Many cards recently have raised rates for customers even when they borrow at a rate lower than ever. Try to pay off card balances.
Many credit cards have 6 month or one year teaser rates. If used wisely transferring to a low teaser rate can save a lot of interest. On problem has been retroactive interest on department store cards created for large one time purchases. The card may have zero interest for 6 months. The problem is if you pass the 6 month card and have not paid off the loan interest may be charged backdated to when you made the purchase.
If you never pay extra, and only pay the minimum monthly amount required, a credit card can take more than a decade to pay off. Even an extra $20.00 a month will cut years off a card balance.
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