Credit Card Quick

Is now the Time to Transfer your High-Interest Credit Card Debt?

Choosing Credit Card

You may be receiving great balance transfer offers in the mail as of late, and you may be inclined to accept one of them and transfer your other higher-rate balances in an effort to lower your monthly payments and streamline your credit card debt.

However, just like any other financial decision, it is always best to look at every factor when considering if a balance transfer offer is right for you, or if it is the right time to accept one of these offers.

The following is a checklist that you may use to decide where the balance transfer offer is right for you:

• Introductory rate period – Balance transfer offers typically come with a low introductory rate that is designed to lure you into accepting the card. In fact, you can usually score a zero percent introductory rate when you accept a balance transfer offer. However, you will want to focus on the length of the introductory period to determine if transferring the balance will work for you. In other words, it is best to determine whether you can realistically pay off your balance during the introductory period, as the default interest rate after the introductory period ends will likely be much higher, thereby putting you into the same situation as you were before you accepted the balance transfer offer.
• Consider whether the low introductory period will counteract the balance transfer fee. Most balance transfer offers come with a balance transfer fee, which is usually a percentage of the amount transferred. This fee, which is usually about 5 percent of the transferred balance, can be quite a chunk of change. Therefore, it is important to consider whether transferring your balances will make financial sense. Consider the interest you will pay on your credit cards if you do not make the balance transfer, and then consider the amount of the balance transfer fee. You will quickly be able to determine whether it will benefit you to transfer your higher interest rate balances.

You’ve Consolidated your Credit Card Balances: Now What?

Credit Repair

If you have great credit, but too much credit card debt, you may have already considered consolidating your credit card debt. Consolidating your credit card onto a loan or credit card with a competitive interest rate may be a good idea, provided you don’t find yourself in the same position in a few more years.

Many individuals choose to consolidate their credit card debt in an effort to lower their interest payments and to ease the burden of paying multiple bills each month. For those reasons, it is often quite advantageous for individuals to use the services of credit card consolidation.

However, unless consumers make a game plan once their consolidation takes place, they may be doing little more than freeing up their credit cards to begin spending once again.

One of the main problems with credit card consolidation and balance transfer loans is that, once consumers pay off their debt, they begin, once again, spending on the credit cards that they recently paid off.

With that said, it is usually a good idea to have a game plan in place so that you can better deal with your credit card consolidation in a responsible fashion:

• If you know that you will likely begin spending on those credit cards once the consolidation has taken place, cancel the cards. Some credit card analysts tell individuals to not cancel any accounts because it will affect their credit score, but the truth is that a small hit on one’s credit score is better than mounting credit card debt. In other words, canceling cards is always the lesser of two evils if you have trouble controlling your spending.
• Set up a repayment plan and stick to it. You can begin making a considerable dent in your consolidation loan or balance transfer if you calculate how much you can afford to pay each month and then stick to your plan. There is no better satisfaction than watching your credit card balance dwindle, month after month.
• Set up a reasonable household budget and take the time to find out why you overspent on your credit cards so you begin to see where your money is going every month and how you can avoid going back to that situation.

How to Avoid Credit Card Fees

Introduction

Sure, the new CARD Act has done a lot to reduce the amount of money we pay out in credit card fees. But, the reality is that there are still plenty of ways in which credit card companies can still charge you fees; fees that may not seem like much until they start adding up, day after day, month after month.

Let’s start with the obvious: if you pay your credit off, in full, each month, you won’t have to worry about pesky finance charges. Unless you are certain that you can pay off your balance in full, don’t charge it! Many of us have found ourselves in the unfortunate situation of not being able to pay off our credit card balances in full each month and end up with mounting debt. In addition, pay close attention to your card’s billing cycle and your due date, and plan to pay the bill at least five days before the due date to avoid any finance charges.

However, in addition to finance charges, you may be paying other numerous fees for your credit card:

• Annual fee – The simple fact is that you don’t need to pay an annual fee for the privilege of accepting a credit card. Although some individuals accept an annual fee because of other rewards and incentives offered by certain credit cards, in general you should not have to pay an annual fee on a credit card. If you have a good credit history with your credit card, chances are you can negotiate to have this fee removed.
• Cash advances – Cash advances should not be used, if possible. First of all, they come with exorbitantly high interest rates; second of all, there are often fees associated with them. Avoid them at all costs and you’ll be much better off.
• Balance transfer fees – Although it may be hard to do, many creditors are now offering fee-free balance transfers. Considering that balance transfer fees may cost as much as 5 percent of the balance of the transfer, this could end being quite a costly fee for you.

The Best 0% APR Credit Cards

Choosing Credit Card

There are many attractive credit cards available now which offer zero-percent introductory APRs, both for balance transfers and purchases. Therefore, it may become quite difficult to compare these zero-percent APR credit cards.

The first feature to look at when comparing zero-percent APR credit cards is the introductory period, as the interest rate will no doubt rise substantially after the introductory period has ended. In addition, pay close attention to other terms and conditions, as well as additional features of these credit cards. Remember: there is a great deal of competition in the world of zero-percent APR cards, so take your time to find the one that best suits your needs, wants and budget!

With that said, here is our comparison of some of the most popular zero-percent APR credit cards currently available:

• NASCAR RacePoints Platinum Plus Visa Credit Card (Bank of America) – The NASCAR RacePoints card features a zero-percent introductory APR on balance transfers and cash advance checks during the first 12 billing cycles. Other features include free online account access, no annual fee, rewards for NASCAR Experiences and Collectibles, and an opportunity to earn RacePoints on every purchase.
• Pulaski Bank Visa/MasterCard – The Pulaski Visa/MasterCard features a zero-percent introductory APR on all balance transfers for six months, along with no balance transfer fees. This credit card, at the time of this publication, has the best credit card rate in the country, at 7.99 percent.
• The Platinum Business Credit Card (American Express) – The American Express Platinum Business Credit card features no annual fee and additional cards with no fees. The introductory rate for this card is zero percent for the first 12 months. Other features include an option to enroll in a fee-free membership rewards program and automatic discounts with companies such as FedEx, Delta and Courtyard by Marriott.
• Bank of America WorldPoints Platinum Plus MasterCard – This card features a zero-percent introductory rate for the first 12 months, as well as fraud protection, 24/7 concierge service, no annual fee, and points that are redeemable for brand-name merchandise and dining certificates.

Comparing the most Popular Balance Transfer Credit Cards

Introduction

We love balance transfer credit cards, especially when they come with really great terms. Because most creditors have begun loosening those belts that have been so tight for the past year or so, many individuals are seeing the return of credit card offers in their mailbox, and balance transfer credit cards are becoming a more common sight.

With that said, it is important to understand that all balance transfer credit cards are not created equal and the introductory balance transfer period is often quite different from one card to the next. Here’s a quick comparison of some of the most popular balance transfer credit cards currently available:

• Capital One Platinum Prestige Credit Card -  This popular balance transfer credit card features a zero-percent APR until August 2011 on balance transfers and purchases, and balance transfer requests can be processed in as little as 48 hours. Other features of the Capital One Platinum Prestige card include a $0 fraud liability, 24-hour roadside assistance, travel accident insurance and no annual fee.
• Citi Platinum Select Master Card – This card comes with a zero-percent APR on balance transfers for 18 months and a zero-percent APR on purchases for 12 months. The APR on the Citi Platinum Select will be based on the prime rate. Just some of the goodies offered with this card include: discounts on gift cards; travel discounts; and merchandise discounts. There is no annual fee for this credit card.
• Bank of America Cash Rewards Visa Signature Card – The first perk offered to customers of this card is a $50 statement credit after spending $100 in retail purchases in the first 60 days the account is open. Other features include three-percent cash back on gas, grocery and drug store purchases for the first six months and one percent on all other purchases. In addition, customers of the Bank of America Cash Rewards Visa Signature Card enjoy a 25 percent bonus on all cash reward redemptions of $300 or more. This card also comes with a zero-percent introductory interest rate that lasts from seven to 10 billing cycles.

Common Terms for Balance Transfer Credit Cards

Introduction

Balance transfer credit cards are becoming increasingly popular in the credit card sector, as many individuals are searching for easy ways to consolidate their higher-interest credit cards into one, easy-to-manage credit with a lower interest rate.

However, balance transfer credit cards may be a bit more confusing to understand, based merely upon the fact that the entire balance transfer process will vary greatly from one credit card to the next. Because of the differences in terms and features between balance transfer credit cards, it is important to thoroughly read the cards’ terms and conditions.

And in order to understand the balance transfer credit cards’ terms and conditions, you must first have a good understanding of the terms commonly used:

• Annual Percentage Rate (APR) – The APR is essentially the cost of using the credit card; it is commonly expressed using a yearly interest rate. The credit card company simply charges a fraction of the annual rate (for every 30 days) when figuring out the finance charges on the outstanding balance. This calculation is often referred to as the “periodic rate.”
• Balance Transfer – Balance transfer is essentially the process of transferring debt from one credit card account to another.
• Balance Transfer Fees – Many balance transfers come with a fee that is charged by the credit card company for completing a balance transfer request. The balance transfer fee is either a flat fee or a percentage of the balances transferred.
• Credit Limit – A credit card’s credit limit is the maximum that you can borrow on a credit card.
• Default APR – The default APR on a credit card is an APR that is imposed by the credit card company when a customer fails to uphold his or her credit card agreement. Default APRs can be imposed on customers who fail to pay just one of their credit card payments on time.
• Introductory APR – Many balance transfer credit card offers come with an introductory APR, which is the APR that is charged during the introductory period. Once the introductory period has ended, the credit card company will change the APR.
• Purchase APR – The purchase APR will be the APR imposed for purchases; this will often differ from the introductory period for the balance transfer APR.

The First Five Things to do when you Receive a Credit Card Offer

Introduction

As the lending industry loosens up a bit, you may be surprised to see more credit card offers in the mail. In fact, if you are receiving credit card offers then you can be certain that you are the small minority of credit card users being aggressively targeted by credit card companies because of your excellent credit.

These unique circumstances may provide you with the opportunity to snag that really great credit card for which you’ve been looking. However, with multiple credit card offers being delivered into your mailbox every week, how do you begin examining and comparing the offers?

Although each credit card offer will come with its own benefits and advantages, there are five things that you should take a moment and review when comparing credit card offers:

1. Review the APR – The APR on the credit card will likely allow you to eliminate certain cards right off the bat. So, it only makes sense to take a look at the card’s APR immediately upon opening the credit card offer.
2. Review the terms of the APR – A credit card’s APR is only as good as the terms and conditions that are attached to it. Don’t be fooled by a low, promotional APR; instead, find a card with a great low, fixed interest rate so you won’t have to play the game of transferring to another credit card the moment the card’s promotional APR expires.
3. Review the balance transfer options – If you have outstanding debt on other credit cards, you may consider transferring those balances to your new credit card. Luckily, many credit card offers come with balance transfer options; just be sure to check the terms and conditions, including the APR, associated with the balance transfer offer, as they will usually differ from the card’s general terms and conditions.
4. Review the card’s rewards – If rewards are what you’re after, then examining the rewards is likely high on your priority list. Don’t skim through this material, though, as credit card rewards often come with their share of terms and conditions. Instead, take the time to read this information carefully.
5. Review all other terms and conditions – It can’t be said enough: take the time to read the small print! Your job as an informed consumer should be to make sure you completely understand all aspects of your credit card, and this happens when you read all of the card’s fine print.

Have you put your Balance Transfer Checks to Good Use?

Introduction

If you have a strong credit score you have likely received balance transfer checks with your monthly credit card statement. If you’ve never put these checks to use, you could be missing out on some great opportunities.

The best balance transfer checks from your credit card come in the form of 0% APR. You may also receive balance transfer checks with three or six percent APRs, which are also nothing to sneeze at. The great things about balance transfer checks are that you have the luxury of lower APRs, even if your credit card APR is considerably higher. Another great benefit to balance transfer checks is that you are often awarded the lower interest rate until that purchase is paid off.

Paying off High-Interest-Rate Loans

Credit card balance transfer checks are therefore great for paying off other higher-interest rate loans. From car loans to other credit cards and personal loans, balance transfer checks can be used for nearly any other type of loan, provided you have the credit limit to accommodate the transfer.

Many people also use balance transfer checks to pay for large things, such as home improvement projects, college tuition or vacations. Still, others simply write the balance transfer check to themselves, deposit the money into their bank account and use the cash for a wide variety of things.

Your Alternative to Personal Loans

One of the advantages of balance transfer checks over personal loans is that they usually come with much lower interest rates and they can be used on virtually anything you want or need. In addition, because you are already a credit card customer, you need not go through any type of loan application or approval process.

Balance Transfer Fees

One of the downsides of balance transfer checks is that you may have to pay a balance transfer fee or other type of fee. Keep an eye out for these fees, as they can often be steep. However, also consider the money you will save if you transfer your higher-rate balances to one with a 0% APR.

In conclusion, it is always best to weigh your options when it comes to balance transfer checks, as they may be able to provide with a low-interest loan to do any number of things.

The Downfall of a 0% APR offer and How Avoid It

Introduction

That 0% introductory APR on balance transfers looks like a pretty enticing offer when applying for a credit card. Who wouldn’t want the chance to get a card with that allows you to avoid interest for the first six months or so while consolidating your credit card balances into one easy monthly payment?

Unfortunately, such an alluring offer can get you into trouble if you are not careful. While the selling point of such cards is to save the consumer some cash, using 0% APR transfer cards could wind up costing you higher interest rates if you fail to use them correctly.

Why am I Being Billed with Interest? I Thought I Had a 0% APR…

Essentially, you do, but read the fine print. Chances are, that 0% rate only applies to balance transfers, not to purchases, cash advances and so forth. Thus, if you’re using your credit card for something other than transferring the balance of your other cards onto one with a better rate, you’re going to wind up paying more. To top it off, that fine print most likely states that all of your payments will apply first and foremost to the current balance with the lowest interest rate. Therefore, on a card with 0% APR on balance transfers, your higher interest balances will remain unpaid until you have paid off the zero-interest balances. And here you thought you were saving money!

What to Do

0% introductory APR credit cards are not a bad thing to have. On the contrary, they are quite beneficial and can save you a ton of money, if you know how to use them correctly. Sure to read the terms and conditions closely so that you will know what to expect and can be prepared. Find out for sure exactly what that 0% rate applies to. If you want a 0% rate on more than just your balance transfers, try looking for a card that offers the same rate on both purchases and balance transfers. By doing this, you can use your card for everything you need without worrying about unexpected high interest rates.

If your card does not offer 0% on purchases, it is a good idea to either use it minimally for purchases or to eliminate the practice altogether, using the card only for the savings with balance transfers, at least until the introductory period has run it’s course.

The Dreaded Late Fee: How to Avoid It

Introduction

You’ve been waiting for your monthly credit card statement. It seems like it is arriving later and later, leaving you little time to get the money in the mail. Because of the sluggish way the mail tends to run, you’re lucky if your payment makes it in the door ahead of the clock. You did your part, yet the following month, your credit card company still slams you with a huge late fee.

You can not help it that they don’t send those billing statements out way ahead of time, or that the credit card company not only wants that payment by a certain date, but has also decided to consider it late is they receive the payment after a certain time of the day. You also can not help how long it takes the postal service to get your money to the company, and you certainly are not responsible for Mother Nature, who can add to the delays. What you can do, is to be prepared and to help yourself. Here are a few tips to help you avoid paying more than you owe, simply because of late fees:

Set Up Automatic Payments

If you know you can have the money in the bank and are comfortable setting up ACH withdrawals, allowing the credit card company to automatically deduct the payment from your bank account will allow you to avoid those annoying late fees. You’ll want to stay on top of things, however, ensuring that the money is there, you don’t wind up overdrawn. Check your balance and statements often around the time of the withdrawal to ensure that everything is going smoothly and that no mistakes have been made that could wind up costing you more.

Pay Online

Most credit card companies give you this option. You’re payment will post much sooner, ridding you of headache and hassle. Simply do a  manual transfer from your bank account. This is different than automatic bill pay, as you control when this occurs and the frequency of it as well.

Be Prepared in Advance

If you still prefer the tried and true method of sending money orders through the mail to make your payments, know you’re balance and due date in advance. You can call the credit card company (many have automated systems for this) to find out this information before you ever receive the bill itself. Prepare a money order for the full balance or the amount you plan to pay. That way, when the bill comes, you can drop it right back in the mail within 24 hours. Even better, if you know the billing address, you could just send it as soon as you know the balance in advance. Hang onto your money order receipts. You will want proof of payment as well as a way to track that money order, just in case.

Balance Transfers

Transferring you balance to a lower interest card might be another way to avoid those late fees, but watch out! This means you’re carrying an additional balance on another credit card where you could encounter late fees if you are not prepared.

What to Do When a Late Fee Appears

If you genuinely know that you mailed your payment ahead of time, or there was some kind of disaster, such as an ice storm or tornado or earthquake, among others, that got in the way and slowed things down, cal the credit card company. Be honest with them and ask them to waive the late fee. Often, they will do just that, so long as the privilege is not abused.

Credit card late fees don’t come cheap. You want to avoid them altogether or try to get out of them if there is a good reason why your payment is late or you do not deserve the added charge. Following these tips should help you to breathe a bit easier when opening your credit card bill.