Have you applied for a credit card lately and found out afterwards that the card is nothing more than a rip off. So in this article I’m going to cover 4 questions you should ask yourself before you apply for your next credit card.
4 Questions You Should Ask Yourself
- What is the interest rate? A lot of times interest rates are an illusion with credit cards. For example let’s say the normal rate on a credit card is 13.99% and you decide not pay the full balance owed at the end of the month. In the next month you will have this interest tacked on top of what you owe, depending on what kind of credit you have. If you have good credit the rate will be lower, but if you credit isn’t so good you will pay the13.99%.
- What is the default interest rate? Now let’s say you paid on time for several months and all of a sudden you stopped paying on time. The credit card company will use a special privilege called a default interest rate. This means the creditor has proved you not to be a loyal customer and raised your rate as a result. In most cases the rate will jump to a staggering 32.99%.
- Is there an annual fee? Why do credit card companies charge annual fees, I don’t know. My guess is they are trying to sell you on the fact that the particular card you are buying is a real status symbol and as a result you must pay a fee for it. The real truth is that no card is worth a fee. In fact there are a lot of credit cards out there without fees. So the next time someone says you need to pay a fee, avoid them like the plague.
- Do you get rewarded? Finally, what do you get for a reward? Some cards offer great rewards while others are much to be desired. Make sure you know exactly what you are getting. A lot of airline and zero percent credit card offers can be tricky to follow so make sure you read all the fine print. Credit card companies have been also known to change the rules in the middle of the game and when you thought you were getting a great deal is now a disaster.
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