Interest and Your Credit Card
The interest rate on your credit card really comes into play when you carry a balance each month.
If you have a high interest rate 19% is not uncommon and carry a high balance, your monthly charge could be very high indeed.
Then within the amount you pay if you see the amount that pertains to your interest, you can be shocked by just how small an amount you are actually paying of off your balance.
Many people just pay the monthly minimum all the time and then suddenly it dawns on them that the balance is never decreasing, it is in fact increasing and all because of the high amount of interest being charged to their account each month.
If you find that you will be carrying a monthly balance then it would be a wise idea to shop for a credit card with a lower interest rate.
The best thing with using a lower interest rate is that if you keep paying the amount that you have gotten used to, you will in fact be paying off your balance at a much faster rate.
Some credit cards will have an APR rate, Annual Percentage Rate, which is charged on a yearly basis versus monthly.
So if you intend to carry a balance this may be a good option for you.
APR cards can be good if you have several cards that you wish to consolidate and end up with on low payment each month.
Keep in mind that even though some cards offer very low rates, there is often a yearly fee attached to them, in essence making them not so cheap.
Do your homework and consider all the options before deciding which way to go.
Other cards have air miles and other reward programs attached to them.
If you travel a lot or use your card for your business then one of these cards may suit your purposes well.
Before applying for any type of credit or APR card make sure you read all the terms and conditions before signing any paperwork.
If there is anything you do not understand make sure to get all your questions answered first.
Once you understand how the interest amounts work, it is easy to become a smart and wise consumer and an effective credit card user.
If you have a high interest rate 19% is not uncommon and carry a high balance, your monthly charge could be very high indeed.
Then within the amount you pay if you see the amount that pertains to your interest, you can be shocked by just how small an amount you are actually paying of off your balance.
Many people just pay the monthly minimum all the time and then suddenly it dawns on them that the balance is never decreasing, it is in fact increasing and all because of the high amount of interest being charged to their account each month.
If you find that you will be carrying a monthly balance then it would be a wise idea to shop for a credit card with a lower interest rate.
The best thing with using a lower interest rate is that if you keep paying the amount that you have gotten used to, you will in fact be paying off your balance at a much faster rate.
Some credit cards will have an APR rate, Annual Percentage Rate, which is charged on a yearly basis versus monthly.
So if you intend to carry a balance this may be a good option for you.
APR cards can be good if you have several cards that you wish to consolidate and end up with on low payment each month.
Keep in mind that even though some cards offer very low rates, there is often a yearly fee attached to them, in essence making them not so cheap.
Do your homework and consider all the options before deciding which way to go.
Other cards have air miles and other reward programs attached to them.
If you travel a lot or use your card for your business then one of these cards may suit your purposes well.
Before applying for any type of credit or APR card make sure you read all the terms and conditions before signing any paperwork.
If there is anything you do not understand make sure to get all your questions answered first.
Once you understand how the interest amounts work, it is easy to become a smart and wise consumer and an effective credit card user.
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