Christmas is right around the corner, and that means your mailbox is going to be stuffed with lots of incredible credit card offers. And boy, will they be enticing! No annual fee. Zero percent interest. Who wouldn’t want a card like that?
The problem with almost all of those offers can be found in the fine print – those pages of lawyerly disclaimers that clarify how “special offers” really aren’t very special.
Look closely at the disclaimers to find out how much these cards really cost you. Here are a few tips to help you judge the offers coming your way:
Look at the rates – Credit card offers have an incredible rate on the outside of the envelope, but the fine print shows how promotional low rates are for a limited time and can be applied only to new purchases, often times not balance transfers.
Look at the penalties – The penalties are always in the smallest, hardest to read print. They’re part of the big profits banks plan on. If you’re late for just one payment, your promotional rate can jump to 25% APR and more! How is a credit card worth it when being late once causes your rate to go so high?
How they calculate interest – It’s recommended to pay off your balance monthly, but most people carry a balance and are charged interest. The fine print will show you how the cards calculate interest. It’s usually calculated on an “average daily balance” but some credit cards calculate interest on a “two cycle” system: if you pay in full one month but only partially the next month, you’re charged interest for both balances!
Fees, fees, fees – No matter what the promotional rate is, credit cards from the big banks charge fees that you really don’t notice at first, until they start piling up. Are there fees for balance transfers? What are the over-limit fees? Hidden credit card fees, like penalties, are the ways big banks profit off you.
Look for sensible alternatives – “Rewards” cards with no annual fee and a low interest rate can be the best answer. With a Rewards card, you get points for your everyday shopping. Look for alternatives, such as Fresno County Federal Credit Union, which offers a low-rate, no annual fee MyRewards VISA card, without the hidden fees.
Manage spending – Once you get your credit card, pay it off every month. If you carry a balance, pay more than the minimum. Live within your means. Don’t overspend and keep to a sound budget.
Members count on the MyRewards VISA from Fresno County Federal Credit Union. For more information about membership in Fresno County Federal Credit Union, and the low rate MyRewards VISA, visit online at www.FresnoCU.com.