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Saturday, February 14, 2009

Lured to Another Credit Card?

By Paul J. Easton

Getting a credit card can be very easy but getting rid of the debt along with it is pretty troublesome. It is time to be more cautious than ever before accepting another new credit card. Make sure that this time around you are getting the best credit card and not fall trap with the one that will get you in more debts. Let us take a look at how credit card companies lure us into signing up.

Credit cards come in various forms and they feature low interests, airline miles and other rewards. But watch out for the fine print and be very careful about the terms because they are always subject to change, which can be very soon.

Getting that new card can be a trick, so be wary. If you are getting a new card just to transfer a balance because of the lower interest, find out exactly how much the company will charge for the transfer. Most of them will not tell you unless you ask them first. In addition, most low-interest introductory offers apply to the balance transfers only and not to your new purchases.

Some credit cards give you gifts for spending money and keeping a balance on your card. One of these tricks is by way of entering your name in a monthly drawing for a prize. These cards are very enticing because it will make you think that it is just okay to use the card because you have a perk like having a chance to win a prize when you use it. By easily justifying the use of it, these cards can be very dangerous.

Credit cards with certain rewards or dividends like rebates and airlines miles are great that they sound too good to be true. And in fact, it is. How can they be in business if they just give away discounts and rewards? Most reward card holders carry a balance and this is the bad news. And the higher interest rates of these reward cards to your balance can more than offset the reward they are giving you. The same with balance transfer introductory offers, reward offers are subject to change with little or no notice.

We have presented some of the neat ways how credit card companies lure you to maintaining a balance and keep paying for the interests. Which one have you been lured into?

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