Monday, 18 June 2012

Compare Low Interest Credit Cards

How to Compare Low Interest Credit Cards

One card does not fit all, so while a low interest credit card sounds like the best option it may not be, but before making a final decision it is good to compare the various cards on the market. When comparing credit cards with similar interest rates, consider the following before making a decision:

It is always wise to make sure you know exactly what you are getting yourself in for when making any financial decision, in other words read the small print.

1. Rewards.

Does the card offer cash-back or other rebates, such as air miles? Do you get an immediate discount on certain goods or at certain stores when you use it? Do you receive coupons for using it?

2. Benefits.

If you travel internationally or make purchases in foreign currencies, check to see if the card has a foreign currency conversion fee. If you rent cars frequently, check to see if the card provides free or reduced rental insurance.

If you need to use a check or get cash from your card, compare the interest rates/fees associated with cash withdrawals.

3. Length of Offer.

When looking at a low-interest card, the most important thing to be aware of is how long the low-interest rate lasts, and what the rate will increase to when the special offer expires.

If you plan on card-hopping, then select the card whose low rate lasts the longest.

However, if you plan on keeping a balance on the card for a while, you should consider both the length of the initial interest rate period, and what the rate will be afterward. For example, if you plan on carrying a balance for more than a year, it would be better to take a card with 0% interest for three months and a final rate of 9.99% than to take a card with an interest rate of 0% for six months and a final rate of 19.99%.

Sunday, 17 June 2012

Low Interest Credit Cards For College Students

What You Need To Know about Low Interest Credit Cards For College Students : Even A Low Interest Rate Student Credit Card Can Get You Into Trouble

If you are a college student or are the parent of one, it would not be unexpected if you were to want to apply for a credit card to help with paying for ongoing monthly college expenses. And of course, a low interest card would be preferable since it would save you money over time. In fact, student credit cards have been a staple of the financial life of students for over three decades. During the '90s and '00s, in particular, card companies aggressively pursued college freshman, enticing them to sign up for new cards with the promise of cash-back offers and giveaways.

However, before you apply for a credit card of any sort, it is a good idea to consider all of your options in terms of how to pay for college living. Even a getting yourself a low interest card can potentially get a college student into financial hot water in the form of building up overwhelming debt over time. The combination of high interest rates, excessive fees, and undisciplined students has led to a growing debt problem for many college students.

Here are 5 insights about why you should beware of even a low interest rate student credit card:

1. A student card has become much harder to secure on one's own

As per new legislation passed in early 2010, credit companies are no longer allowed to approach college campuses or to offer free giveaways as a way to pursue new sign-ups.

2. Your card will require a cosigner

In addition, the new legislation stipulates that anybody under 21 is now required to have a cosigner on their credit cards. Usually, this means a parent - although some students will take advantage of loopholes, such as having a graduate student cosign the application.

3. Low rate student cards usually are accompanied by hidden fees

Students find it very difficult to qualify for low interest credit card offers, even with a cosigner. However, even when they are approved for a low interest card, there is usually a downside to such deals, such as the presence of excessive fees like annual fees and account sign-up fees.

4. You will likely end up with about $4,100 in credit card debt upon graduation

According to a recent Sallie Mae study, the average college student carried about $4,100 in card debt upon graduation. The takeaway: high interest or low, most student cards end up building up very high balances by the time the student graduates. This debt might follow the student for years to come.

5. Consider a prepaid debit card instead

One viable alternative to getting a student card: get a prepaid debit card instead. The user (student or his/her parents) just loads the card with a balance in advance. These cards feature the major credit card logos, so they can be used anywhere a credit card is accepted. But, there is no application process, no credit check, and no cosigner required. And, more importantly, there is no interest paid and no way to run up a balance that will follow the student around for years after graduation.

Consider these 5 insights as you decide whether to apply for a student credit card. One viable option for you: have the parent cosign on a credit card application for the purposes of using the card as an emergency backup. But, for daily expenditures, use a prepaid debit card instead.