Avoid these credit card tricks

When you get a letter from your mailbox from a credit card company offering you great perks such as rebates, mileage credits and low interest rate, what do you do? Some of you may be easily attracted to the offer and read through the entire letter. Some, however, who are conscious of their budget and who may have had a bad experience with the plastic can just throw the letter to the trash bin right away with no looking back.

People have different views on credit cards. Those who have no experience with it yet can grab the offer instantly but those who have accumulated debts in their cards can swear they won’t add another one ever again. The truth of the matter is credit cards actually help consumers in a lot of ways. As long as it’s used in the proper way, it won’t bring financial harm most especially debts to the user.

But there are also things that consumers need to be aware of regarding hidden tricks carried out by credit card companies that can lead you to incur higher balances. Financial advisors strongly recommend then that consumers have to educate themselves about the terms and conditions of the credit card to ensure that they’re not being taken advantage of.

Minimum monthly repayment. Unaware to credit card holders, some companies charge an additional amount above the minimum monthly due at the set monthly interest rate. As such, it will take many years for a consumer to pay off his or her balance while paying only this minimum amount due. And not only are you taking longer to settle your balance because you’re also incurring a higher bill and paying thousands of dollars in interest. The technique then is to try as much as possible to pay more than the minimum monthly amount due.

Irresistible interest rate. Many consumers are guilty of falling for credit cards offering low interest rates. Who wouldn’t be? But these are only come-ons to get more customers. The reality is that only consumers with a good credit history can avail of the lowest advertised interest rates. If you have a bad credit record, don’t even dream about this. The current policy in the USA is that the typical interest rate or APR should be offered to two out of three borrowers but the truth is, only those found to have favorable financial capabilities get approved.

Higher credit limit. Getting another letter saying your credit limit has been increased can be a source of joy for many card users. This can be taken as a reward but then again, it can also tempt you into spending more than the usual.

Late payment fees. Any late payment can lead you to incur a higher balance on your credit card bill. It’s because several fees are immediately applied. The best solution then is to always pay on time regardless of the type of bill you’re paying. Even for the short term unsecured loans you’re taking out, be they the payday or cash advance, your most important obligation is pay your dues in a timely manner.

These hidden credit card tricks are worth your attention. If, however, the plastic is not that attractive to you, a good alternative is taking out short term loans instead. They’re not only affordable but convenient to avail of today.…