Thursday, August 16, 2007

Credit Card Traps

In preparation of my upcoming trip, I thought it necessary to take on a new credit card. I ONLY did this to ensure I would have a back up plan for my savings. I have never been to Europe, and I've heard it's quite expensive.

We all get tons of these offers in the mail everyday. They all make tempting offers of 0%'s and low interest rates and it makes you wonder, 'How many of these are actually credit card traps?' There is inevitably fine print to be considered, if you can decipher the codes and footnotes.

So, I read each one and made a choice. As it turns out, the credit card I applied for, has an introductory rate of 0% on balance transfers until August 2008. Awesome! This way, I can free up a large portion of my balance on another card that actually has a better rate for purchases. I had to research all the current rates that I'm being charged on the different cards, find out what the cash advance rate is, because it's always higher, and then I could make an informed decision about the best way to take advantage of the great offer, instead of it taking advantage of me.

Are you familiar with that information on your cards? What are your current rates? Have your introductory offers from long ago, now ran out? If so, what is your new rate?

My suggestion is to educate yourself on the terms and conditions that accompany each offer. They are all different. We all need to learn to use credit cards much more frugally than we have been. Using these offers are helpful in your financial planning and if you ever consider debt consolidation or other forms of debt management. It's your money and you work hard for it. You owe it to yourself to make informed decisions. Perhaps, if you need help getting started, you could consider credit counseling! Can't hurt :)

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