Friday, October 25, 2013

What You Need To Know About Credit Card Interest Rates

Being responsible with your money does not really require that you get rid of your credit cards. If you think about it, the purchasing tool is not really the issue here. The problem lies in how you choose to use it. There are people who own credit cards but never had any problems with debt. How did they manage that when you can’t even keep up with your minimum payments? Here you are, looking for the best debt relief company to help with your credit problems while others are calmly charging purchases without worrying about their finances going under.

The answer is simple. They know everything about credit cards and they understand how to use it. You need to simply educate yourself about these cards to keep yourself from abusing its use and thus end up in debt.

One of the most important factors of a credit card is the interest rate. You have to understand this if you want to avoid having it on your balance. The high interest of a card account is one of the reasons why this balance can grow immediately. So if you can get rid of it, you should be alright. So how do you do that?

When you use your credit card to make a purchase, that does not automatically accrue interest. You still have the grace period to keep that from happening. The grace period is the time between the date of purchase and the due date of the billing statement where that transaction is included. If you pay within this time, you only pay for what you purchased. You are not wasting your money on interest rates. If you do this for every purchase, you don’t have to worry about the high interest on your card.

The thing about these rates is that your creditor has the right to raise it even when you displayed a good payment behavior. So despite looking for a low interest credit card, that can change and go higher over time.

While the creditor has this right, you also have to know that you have the right to refuse when the creditor implements this change. The law mandates that they send you a notice before implementing the change. You can call them to say that you do not want to accept this interest rate revision. One of two things can happen.

The first is the creditor will accept your request and retain your old interest rate. You have to get a written confirmation that this is what they will do. Follow up until they send you the document.

The other scenario is you will close your credit card account. This is the least likely scenario because the creditor would want to keep you as a client. But in case it does happen, you have to be prepared to pay the balance of your debt. You do not have to worry because the creditor has to accept a payment plan that you can afford.

Just keep these interest rate facts in mind, make better spending choices and stick to your budget - that should keep you from incurring too much credit card debt.

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