Monday, March 30, 2015

Credit Cards

Credit Card – A form of Borrowing

Credit card is one form of borrowing which involves some charges and its terms and condition could affect the overall cost. It is advisable to do some research on the terms and the fees before any agreement to open a credit or a charge card account.

 Being unaware of the terms and their charges could leave the user disappointed when faced with the overall cost they may encounter. At times shopping with the credit card could save you money on interest and fees. Issuers of credit card tend to have wide scope in charging interest though they should brief the customers on the interest rate. It is also essential for the customer to read the fine print in the original credit card agreement as well as in any supplemental copy.

As per the federal law, interest rate tends to increase on existing balances under some conditions like when a promotional rate may end and there is a variable rate or when the cardholder tends to make a late payment. The interest rate on new transaction may also increase but after the first year. If the customer is faced with an issue regarding the credit card, they should first try resolving the same directly with store or the credit card company or the financial institution.

Consumer Financial Protection Bureau

If the matter is not resolved, they could file a complaint with the Consumer Financial Protection Bureau – CFPB which presently accepts complaints with regards to credit card issues and take them up either through phone or through their site at For any guidance regarding credit card debt, fees and high interest rates, customers could contact a credit counselling service or debt Management Company who can render the necessary guidance and support. They could also provide practical as well as legal financial advice with regards to the use of credit. Beside this, they could also make attempts on renegotiate the terms of the credit agreements and make arrangement to pay off the debts. One needs to check on the debt management company though all arenot the legitimate ones.
    Credit Card Eligibility Calculator

    Some of the following credit card eligibility calculator could be helpful to individuals such as:

  • Bad Credit – For bad credit scorers- Those who apply for credit card and have been rejected need not go in for the same. They should check on cards that would fit their profile and try to rebuild credit rating by using the top `bad credit’ credit card and ensure to pay in a timely manner
  • Interest free spending- 0% Spending – If the need to borrow for a purchase arises, the right choice needs to be taken, credit cards are far cheaper than loans though if misused it could add debts which may be difficult to pay off
  • Balance transfers – Cut existing debt costs – Shifting the prevailing credit card or store card debts to new balance transfer card could save much wherein the balance transfers when a credit card could pay off debts on other credit or store cards. Thus one owes the new card though at a lower rate which means they can be debt free much quicker.
  • Travel Money – Several cards add 3% cost than the banks to the exchange rates which can be avoided by a specialist card that does not add this percentage and you get a good exchange rate. This could be used for overseas spending though one should bear in mind to repay in full to avoid the additional burden of interest.
  • Balance transfers and spending – All-rounders - Most of the banks offer introduction deals to attract new customers with cards that could be either good balance transfer deals or low rates on new spending. All-rounder cards offer cheap intro rates for balance transfers as well as purchases and if a person needs to move debts from an existing expensive card as well as need to use a card for purchase, they could be checked since they cannot damage the credit score with additional applications.
  • Cash back – pays when spend – The cash-back credit card tends to pay you each time you make a purchase where top cards tend to pay around 5% introductory cash-back while other offer 3% on fuel and transport spending. Besides these, there is also other good fee free; cash reward cards which are like cash-back cards offered.
  • 0% Cash in Bank account – Money Transfer – The money transfer credit card enables the customer to pay money from their new credit card in the current account with a small fee wherein they get a long interest free period in repaying the debt. Should the customer fail to repay the same within the given time period, they are charged with a high interest rate.
  • Get Air miles while spending – Airline credit cards are an addition of regular flyer programs and one could earn points or miles on spending as well as earn bonus for signing up. The miles earned from spending could be added with those earned from flying or by other credit card reward schemes like converting Tesco Clubcard points.


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