You probably see a lot of credit card offers on a daily basis whether it’s on television, the internet, a magazine or in the mail. In the advertisement, you probably see or hear APR mentioned several times in the form of Introductory APR, Standard APR, Cash Advance APR, Balance Transfer APR and Default APR. The differences between these APRs might be confusing at first but they are pretty simple to understand.

Introductory APR refers to the initial interest rate you receive for purchases on the credit card when you first get it. This Introductory APR is usually really low (around 0%) and lasts between 6 and 12 months.

Standard APR is the interest rate the credit card goes up to after the Introductory APR period is over.

Cash Advance APR is the interest rate you receive for cash advances.

Balance Transfer APR is the interest rate you receive for any credit card balance you transfer over to your new credit card. As a side note, if you have a high interest rate credit card and the new credit card company’s Balance Transfer APR is lower than your present credit card’s interest rate or if they offer the Introductory APR for balance transfers, transfer your balance to the new credit card if you can pay the balance off within the Introductory APR period.

Default APR is the interest rate your card goes up to if you are late on payments or go over your credit limit.

Credit Cards: Why You Should Pay More Than The Minimum

In today’s world of online shopping and bill servicing, credit cards have become almost an essential part of our everyday lives. No one would argue that they don’t make life easier, but it’s also true that they have a dark side in that it’s all to easy to build up debt.

Of course, it’s simple to advise against getting into debt by overspending with your card, but that advice is perhaps a little hollow for people who have already built up a balance. If you’re lucky, that balance is not yet too much of a problem, but one almost guaranteed way of setting your debt on the slippery slope is to continue spending with your card while only making the minimum monthly repayment required by your card issuer.

Each month when you receive your statement, the minimum amount you have to pay will be clearly shown, and many people choose to have this amount repaid automatically through their banks. This makes it easy to keep your account up to date, and gives the illusion that you’re keeping on top of your card balance.

The problem lies in the size of the repayment you’re making. In the early days of plastic, the minimum repayment level was generally around 5% of the balance, but over the years this has drifted inexorably downwards with 2.5% to 3% being the norm nowadays, with some cards going as low as 2%.

Why is this a problem? Surely a lower repayment amount is attractive, as your credit will cost you less each month, putting less pressure on your budget? This is true to an extent, but the problem lies in the long term. To get an idea of how bad an idea only paying the minimum is, we need to look a bit more closely at your credit card statement.

As well as showing the familiar annual interest rate, or APR, your card statement will also show the monthly rate of interest charged on your balance. A typical card might show a rate of around 1.6% a month. In simple terms, this means that each month you will be charged 1.6% of your balance in interest. Compare this to a 2% repayment, and you’ll see that over three quarters of everything you pay is swallowed up in interest charges, leaving your original debt virtually untouched.

This situation is bad enough, but it gets worse when you consider that the interest rates charged on other ways of using your cards such as instant cash or overseas use can be much higher. Monthly rates for withdrawing cash, for example, can be nearly as high as the minimum repayment percentage. If you withdraw a significant amount of cash within a month, it’s quite possible that the whole of your repayment can go towards interest, with your debt level not reduced at all.

So even from this quick look at repayment levels, it’s plain to see that if you only make the minimum payment required on your statement, you’ll be prolonging the life of your debt by many years and vastly increasing the amount of interest you’ll be paying in total. How can you avoid this?

The best way is to set up automatic payment of the minimum, so that you’ll be sure that every month you’ll at least be staying within the terms of your credit agreement and not risking damage to your credit rating. Then, at the end of the month, make an extra payment of as much as you can afford without borrowing from another source. Even if you can’t afford to pay a large amount, every little helps especially as all of it will count towards reducing your balance and not servicing interest charges.

Credit Cards have become a part of our daily lives these days and it is hard to imagine a day going without the comfort of a credit card tucked in your wallet. However, convenience comes with risks, which arise due to our negligence. As soon as your credit card arrives, follow a few steps to avoid any inconvenience.

First Step With A New Credit Card

You should duly sign credit card as soon as you receive it. Report the errors (if any) to the credit card company immediately. You should keep important numbers to be used in case of loss/theft of credit card, your pin number and phone banking details such as your password and terms and conditions, payment options and activation guide safely. It helps to keep an identity card with your credit card, which might come handy if you encounter any signature mismatch or any problem during any transaction through your credit card.

Precautions With Credit Cards

Credit card use calls for caution to avoid being duped of your hard earned money. You should in all circumstances avoid handing over your credit card or its details to someone else like your friends. You should avoid using cordless or mobile phones while communicating your credit card details, as it is easier to intercept the radio waves. While handing your credit card to the gas station attendant you should be careful as your 16 digit card number and its expiry date can be copied by him while swapping a couple of times, which can be misused to commit a fraud. During an Internet transaction through your credit card you should go through the terms and conditions as well as the privacy policy of the website/company as it is at this platform where your credit card information can be hacked by miscreants.

Credit cards have become more secure with government and other agencies taking steps for its safety and reducing inconvenience to the consumer. Even then, the onus is on you to take steps to secure your credit card and information, starting by taking evasive steps right from the time when your credit card arrives.

There is nothing as exciting as owning a credit card and enjoying the freedom to spend. You want that expensive dress use the card. You always wanted to buy your wife that beautiful piece of jewelry well why not? Just use the card. How about that much-desired holiday to the mountains? Cant afford it? Why not? Just use the card. And before you know it you have run up the bill, hitting the ceiling on the limit and you are in a spot. How do you pay back and get out of this mess?

Millions of Americans have experienced this and struggled to get out of this quagmire of debt. But it is very difficult indeed. You may even have more than one card, which brings you to a bigger mess with large debts to clear. Difficult and very upsetting situation indeed. Remember, every time you use the card and do not pay back the whole amount, you are paying an interest rate. Do you know how much you are paying? Do you know that you also have to pay annual fees and finance charges? Do you know that you have to pay huge interest rates when you take a cash advance on your credit card? A cash advance on your credit card is possibly the worst thing to do unless absolutely necessary. The fees you pay to the company can clean you up financially if you are not watchful.

You have received this really promising offer from a credit card company that says it will take on the entire balance outstanding from your other credit card with low interest rates. Most tempting and many US citizens have taken up the offer only to realize that while they do offer you a low interest rate initially, after the first year, the interest rates shoot up. However, most often, they do offer low interest rates making it worthwhile to transfer your balance outstanding from other cards and therefore, reducing your balance to pay back. Ensure that this low interest continues beyond the initial period.

Please do not get into the system of paying the credit card issuer only the minimum amount required of you. This is the best way to run up a mammoth amount on your credit card until you reach the point of no return and then it is too late. You have a huge bill to pay and not enough time and not enough money. Paying the entire balance or even more than the minimum will ensure a larger saving on the interest. Pay as much as you can every month to enjoy a clean slate.

A credit card trap is very easy to fall prey to and difficult to get out of. Keep your wits about you and try to avoid this very commonly seen problem among the citizens of United States today across ages, earnings, etc.

At one time or another most all of us apply for and get more credit cards than we need. We feel like we have to be able to purchase almost any type of item at anytime, whether we can really afford it or not. Having several credit cards allows one to buy products and services at will. Is that a good thing or bad?

There are many companies offering credit cards and loans online, but all may not fit everyone’s needs. A credit card is a great financial tool that needs to be used wisely and cautiously. Never allow yourself to get so far behind on your creditcard balance totals that you can only afford to pay the minimum payment amount or small amounts each month towards the reduction of your debt. That is the interest rate trap. Once your cornered on paying minimum amounts, you will most likely be stuck there for years if not for a lifetime.

However, having credit cards can be a positive, productive personal finance tool and does not have to be a negative to your credit status or your lifestyle. A couple of key points:

Convenient to use and carry
Offers valuable consumer protections
Use it with caution and good judgement
Pay off your monthly bill in full each month,
which eliminates interest charges

Having credit cards is a priviledge and huge personal responsibility. You must utilize and manage your credit rating wisely and carefully at all times. The saying ‘ if you can’t afford to pay cash, then you can’t afford it ‘ is a true statement and we should all take heed to its warning. Using creditcards in this manner makes them your friend and not your foe. Having credit cards in your name is not bad just take care not to go into debt for more than can repay. Doing so will only serve to damage your credit rating and it can and will create larger credit problems for yourself into the future that may be difficult or impossible to repair.

When shopping for a new credit card, comparison shopping is important, because it can save you money. Be sure to consider all of the costs and terms of each of the credit offers. These can make a real difference in how much in fees and interest charges you will possibly be paying each month. Be sure to compare these costs with any of your existing financial instruments, cards, loans, mortgages, etc. You may be able to replace some of your current debt with less expensive options. Some of the costs and terms to consider are the annual percentage rate (APR) for goods and services as well as for any cash advances you may request, the annual fee, and the grace period. Also compare other fees, late-payment charges, and over-the-limit spending fees.

Credit & Debit cards are a way of an important perspective of an individual in the society. The proper use of credit card early in life can help build confidence and begin good financial decision-making that will ultimately provide benefits for living a good debt free life. In addition teens would build an upgraded knowledge on balancing the need of credit card in future especially in the process of their studies and other car / home buying processes.

It has been recently estimated that the teenagers have been targeted consumer segment having in hand credit card solicitations as early in their teens. Credit card issuers never mind the fact that youngsters must be 18 to have a credit card of their own. Credit card holders are prominent among college students. College credit card surveys shows that at least 80% of the undergraduate students have at least one credit card under their own name without any other person being responsible for the payment. It has been observed that the students carry higher unpaid balances on their accounts. This ends in students opting to work for extra hours to keep their bills closed. This will gradually cut their study time.

The credit card company representatives have encouraged credit card offers to teens. In no way the credit card companies are responsible for the unreasonable risks after they offer credit cards to college students solely under their name. In such cases parents should be forced to take up with the responsibility for the sake of their children because the children take some more time to grow up and learn to deal responsibility with the credit.

To overcome all these shortcomings due to credit card for the teens parents should expect their children to be trained properly in using a credit card. Its been surveyed that the children will learn lot by watching the parent use the credit card wisely. The parents can best do this by letting their children help them with the bills and match the receipts to the statement. This will give an idea for the children about the interest charges, penalties imposed for late payments, etc., its also important to give the children about the different types of credit available and their purpose. Finally its necessary to demonstrate responsible credit card use for the children in their life.

How often have you seen someone going through their wallet searching for a credit card in the checkout line- and were shocked by the number of cards they had in their wallet? Credit cards can be used as a form of identification when applying for a major purchase, or when renting a car; and they can be used for convenient purchases that you wont have to pay for until a month after you buy them.

Except, thats not how it usually happens. Typically, people who have an abundance of credit cards use them frequently, and have to carry a balance from one month to the next because they are unable to pay each card off in full when the bills come in. So what happens then? Credit card holders are being charged high interest rates for each of their purchases, sometimes up to 24%! Credit cards are habit forming. It is very easy to pull out a piece of plastic, swipe it through the register and buy something you couldnt afford otherwise. Its tempting to think that the money will come later, and youll pay for it then. More often than not, the bills are more than the money you have later to pay them with. A study in 1999 showed that consumers in America used credit cards to charge over $1.2 trillion.

Even with this kind of negative usage, credit cards, when used properly, are a terrific source of financial convenience. The trick is to not over indulge yourself when you use them.

Its also helpful to keep only one or two credit cards available to you at one time. Even if you receive a new credit card offer in the mail every day, you should stick to having a general use credit card (one that can be used for any kind of purchase), and one for emergencies. An emergency credit card allows you the peace of mind of knowing if an unexpected expense comes up that you have to pay, but dont have the extra money available to pay it, you at least have a backup in the form of a credit card that will allow you to pay for it.

Using a general use credit card should be done with extreme discipline. Select one that offers rewards, cash back or other features that you can benefit from. Make your weekly purchases on your general use credit card, from gasoline to groceries, and keep track of your purchases so you know how much money you are using on the card. That way, you will know when youve reached your spending limit for each week based on the amount you have budgeted for such purchases. Set aside money from your paycheck each week for your credit card. When the bill comes in the mail, immediately send out the check for the FULL AMOUNT. This avoids finance charges, but has allowed you to earn interest on the money for the full month that you kept it in your bank account prior to mailing the payment!

When you use a credit card for your every day purchases with the discipline required to keep your spending in check, you are going to benefit greatly from the rewards programs and interest free purchasing power you get when you pay off your balance each month in full. You are able to keep higher amounts of money in your bank accounts for longer periods of time, allowing the money to earn a little interest before the credit card payment is due. You also are building a strong credit rating by making purchases and paying them off each month, and will help you when its time to apply for a mortgage or large loan for a new car or boat or other high ticket item.

There are credit card tips, and then there are credit card secrets. These latter are little known tricks that credit card companies play on you, as well as tricks you can use to get rid of fees and pay off your debt sooner. Here are some of the best credit card tips, tricks and secrets.

1. You can get rid of annual fees. If you have good credit, just call and ask for fee to be removed. This worked on three out of four cards I called on, and I just dumped the other. Of course the threat to do the same with the others is what got the fees dropped.

2. Read the fine print, and pay on time. Be aware that under “universal default” rules, if you are late on one card, your interest rate can be increased on other cards as well. They love to get you with this one.

3. Watch for changing due dates. This is a trick used by some credit card companies to get you to pay late, so they can collect the late fees. They will also be able to raise your rate, and the rate on other cards you may have. Don’t assume that your payment due date will always be the same.

4. Use promotional checks with care. Transferring balances to 0 interest promotions can be a good idea, but watch out for those that charge “balance transfer fees.” Transferring a balance that you were going to pay off soon anyhow will just cost you more if there is a 3% transfer fee.

5. Try credit unions for cards. Their cards usually have lower rates. My credit union Visa rate hasn’t been over 10% in years, and I have zero liability for unauthorized charges.

6. Ask to have the late fee waived. If you’ve never been late before, some credit card companies will waive a late fee – but only if you ask. Why not try it? All it takes is a phone call.

7. Pay in full every month. Credit cards are for convenience, not for hiding the true cost of things. Don’t pay interest – just pay the balance every month.

8. Don’t buy the credit card insurance. This typically stops your payments when you are injured or unemployed. It is one of the most over-priced insurances out there, and doesn’t eliminate the debt, but just delays it.

9. Avoid credit card security insurance. It pays for unauthorized charges when your card is stolen, but you are only liable for the first $50 if you report the theft in any case, and many cards already have 0 liability.

10. Pay high-interest cards first to reduce credit card debt. If you have $200 monthly to apply to your credit card debt, pay only the minimums only on all cards but the card with the highest interest rate. Put all the rest of the money towards that one. Once that one is paid off, work on the next highest. This is the fastest way to get rid of your credit card debt, and the most important of these credit card tips.

All technological marvels have their drawbacks and this is true of credit cards too. One form of credit card fraud is skimming or making copies of information stored on credit cards. Every time your credit card leaves your hands, it becomes vulnerable to skimming.

Skimming In Public Places

Skimming usually takes place in a retail store, restaurant or a shop. A dishonest waiter or cashier may swipe your credit card for payment and then swipe it again with a skimmer. This is a small pager-sized device with a slot, which can be easily purchased over the Internet. It rapidly records the information stored on the credit cards magnetic strip. This information is passed onto thieves who paste it onto counterfeit credit cards. Your money is now in their hands. The only way to prevent this is to keep a close watch on your credit card.

Skimming also takes place at ATMs, especially in less-supervised non-bank areas like malls. They are set up for skimming before your arrival. It could be a plastic sheet inserted inside the slot, which prevents the machine from reading your card. A small camera fitted on the ATM records your PIN number while you try repeatedly to access your account. You leave believing that the ATM has swallowed your card. The thief turns up and takes your card and the camera. He can now withdraw large amounts from your account.

A superior technique allows you to withdraw cash but a camera records your PIN number while a skimmer inside the ATM reads your credit card.

How To Avoid Skimming

To reduce skimming-related risks, simply walk away if you find anything suspicious about the ATM. If the machine swallows your card, report it immediately.

Apart from these measures, always check your credit card statements carefully for surprise purchases. Keep low credit limits to minimize losses. Tear up all receipts, slips and statements after using them, preferably with a shredder. Credit card companies are also vigilant. They usually ring up customers immediately if they find unusual purchasing patterns. Newer technologies in credit cards and ATM machines also make skimming impossible. However, the changes are not yet universal. Till then, keep your eyes on your credit card.

So you’ve thought about getting a credit card, but all you’ve heard about from parents, friends, co-workers, and the like is that they are just trouble. Horror stories of over limit charges, finance charges, late fees, mysterious charges, telemarketers, and missing bills dance through your head like sugar plumb fairies in children on Christmas Eve. Its important to know, going into your first, or even your fifth credit card experience, that as a credit card holder, you have certain rights that go along with your responsibilities.

Heres a rundown of some your credit card rights:

Prompt Credit for Payment:

Your creditor is required to post payment received within twenty four hours of receiving it. In order to insure that this system goes smoothly from your end, make sure that you make yourself familiar with the payment procedures for your card.

Refunds of Credit Balances:

If you overpay your credit card bill, that is the total amount, not a specific monthly bill, you have a right to receive a credit on your account. You can also request that the credit card issuer send you a refund of the over-paid balance. This only applies if you have completely paid off the total amount, and have issued additional payment. It does not apply to an overpayment of a monthly minimum. If you overpay your balance, your creditor will automatically credit your account the additional funds, which you will not be required to re-pay, as it is your money. However, if you submit written request for a refund of the balance, they must issue you a refund within seven days of receipt of your request.

Resolution of Errors:

If you feel as though there is an error on your billing statement, you must submit a written complaint within sixty days of the error’s occurrence. An investigation must follow within two billing cycles, and no later than ninety days of receiving the complaint. This is federal law, and for more information you can contact the Federal Trade Commission.

Removal of Unauthorized Charges:

If your card is lost or stolen, report it immediately. Following a lost or stolen report, the cardholder is not liable for any charges. If you find fraudulent charges on your account, you can be held accountable for up to fifty dollars per card. However, fifty dollars is the most you will owe for unauthorized charges, even if the thief uses your card to access an ATM machine. The best way to avoid any payments on your behalf for stolen goods is to report a missing or stolen card as soon as you discover it missing. This way, the company will cancel the card and you will not be held responsible for any charges.

It is best, going into any new experience, to understand your rights and responsibilities. Request a written copy of these rights from your credit card company, and feel free to call them with any questions or concerns. Make sure that you arm yourself with information, and you will never be caught unawares.