The Fine Print is Where It Is At!
The fine print on a credit card offer can mean the difference between a credit card you keep for years and one you regret getting for years. If you are applying for a consolidation card, the fine print can be even more important. You’re trying to get out of debt honestly instead of taking the easy way out with bankruptcy and you get an offer in the mail with exciting and colorful print on the envelope promising a low, low interest rate, only to get screwed six months later when your rate triples. Here is a list of things you need to look for in the fine print of your next credit card offer.
The heart and soul of any credit card is the interest rate. Everyone knows that the lower the rate, the better the card, but what do you do with a card that has a low rate now but maybe not such a good rate later, or, a card that has 2 or even 3 different interest rates for each kind of purchase. The first thing to do is to take a deep breath. Most folks with good credit get anywhere from 2-3 offers A WEEK from credit card companies trying to get you to sign up for their consolidation card. Take all the offers you get over a three week period and lay them out side by side. There are several different things you need to consider to pick the best card for you and your financial situation. The intro rate, believe it or not, is actually the least important part, even though the credit card companies want you to believe the opposite. Look at what the balance transfer rate will be after the intro rate wears off. The lower the rate, the better the card. One caveat, however. Many cards are introducing separate interest rates for different types of charges. The fashionable thing to do is to offer a low, fixed rate, sometimes as low as 4 or 5 percent, on transfers, but offer a 20 percent rate on new purchases and a 23.99 percent rate on cash advances. This is all about self control. If you think you can stop yourself from using your shiny new card and only use it to consolidate and pay down your balance transfers at a low rate, then go for it. If not, choose the card with the lowest overall interest rate.
But the interest rate is only part of the story. Most people don’t realize that the majority of consolidation cards come with an annual fee, and sometimes, a slew of other fees, too. If the annual fee is reasonable, say, under $50, and the card comes with some excellent interest rates, it might still be worth getting the card if it has the lowest overall rate of all the offers you get. But if the card is loaded with an annual fee, a membership fee and lots of other fees you’ve never heard of, toss it in the basket. There will be more offers coming and they won’t all have that many strings attached.
Finally, credit limit is a major consideration. Some cards won’t even tell you what limit you’ve been “pre-approved” for so it is to the fine print we go. Most likely, the limit is printed somewhere on the offer. If it isn’t, call the company offering you the card. If it isn’t high enough to transfer over the vast majority of your balances, don’t bother