Making Sense of the Complexity of Credit Cards
Initially, credit cards may seem simple to understand. From a consumer's perspective, credit cards offer a quick and easy way to buy something now and pay for it later. While this is in essence what a credit card offers, there are lots of important details and financial considerations that go into selecting the right credit card and using it responsibly and effectively.
Credit card users are very diverse in their use of credit cards. Some people use credit cards to be needed or strongly desired items with the intent of paying for it on or near payday. Credit cards that offer grace periods for consumers and strong perks and rewards may benefit borrowers of this type. Grace periods are periods after which card purchases are made, when know interest is applied to the consumer. This allows consumers who paid their card balances immediately to avoid finance charges. By selecting cards with slightly higher APRs, consumers can sometimes get more beneficial rewards programs.
Some consumers use credit cards for practical financial purposes. For instance, some borrowers turn to zero percent promotional credit cards as a way to consolidate or move debt from more expensive personal loans or credit cards. Many credit card companies offer credit products with zero percent balance transfer or purchase promotions for new customers. Depending on the borrower's credit, promotions may extend up to 12 to 15 months at times. This can be a great way for borrowers to save lots of money in monthly interest charges if they move balances from higher rate cards. Generally, the strong APR promotions offer slightly less rewards benefits or other perks.
Along with selecting the right type of credit card product, consumers need to be aware of all the factors that affect the card's use and financial implications. Consumers need to be knowledgeable about promotional rate cards to understand how the promotion works and what happens after the promotion. It is important to note the standard rate of the card before taking it because of a promotional rate.
Consumers also need to ask about annual fees. Some cards charge fees to users for having the card. Others only charge fees if the card is not used during the year. Some cards offer no annual fees. Credit reporting practices of the Card Company, and credit requirements and limitations are also important considerations for consumers when looking for the ideal credit card. Article Source