Credit Card Spring Cleaning
It is almost Spring, time for most Americans to clean out their homes and spruce up their yards. This is also a good time to give attention to credit card accounts and make sure they are in good shape. Since many households have multiple credit cards, it is easy lose track of how much you owe and how much credit you have left.
It is not enough to quickly glance at the bill just to see the minimum payment due without paying attention to the current APR or available credit. Credit card companies are now aggressively punishing accounts that go overlimit with far-reaching effects.
"If your cards are close to the limit or you use your card for a major purchase, it is too easy to forget how it will affect your balance," says Bill Hardekopf, CEO of LowCards.com. "Even if you go just $5 over your balance, you will receive a hefty fee, and possibly a much higher default APR and higher rates on all of your other credit cards. Getting a cash advance is especially dangerous because they it has a higher interest rate (typically 20%) that could quickly send your balance over."
Most credit card companies now charge $35-$39 for overlimit fees. The default rate is now as high as 30%, which most cards now apply if the account is overlimit only once. For cardholders with a $9,000 balance, that could add approximately $2700 in interest each year. The financial damage is even greater if other cards also raise the rate to default rates. For tight household budgets, the larger interest payments could be devastating.
In the next few months, many households will receive tax refunds. This is a great chance to pay down credit card balances and avoid overlimit situations. "Paying down your credit cards is the best way to use your tax refund. Reducing your balance also lowers the amount you have to pay in interest, accelerating your pace to pay off your credit cards," says Hardekopf.
If your account is consistently close to the limit or is in default, this will also cause problems on your credit report. People in these areas are perceived as higher risk and will receive a lower score and higher interest rates for any loans such as auto, credit card or mortgage. Higher interest rates can wreck a household budget.
LowCards.com ( http://www.lowcards.com ) is a website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards/rebates, and lowest intro rates. It also gives and unbiased ranking and review for each card. Created by Hampton & Associates, the company has been analyzing the credit card industry and supplying objective websites on various consumer expenses for over five years.
For more information, contact Bill Hardekopf at 1-800-388-1910 or Billh@LowCards.com.
It is not enough to quickly glance at the bill just to see the minimum payment due without paying attention to the current APR or available credit. Credit card companies are now aggressively punishing accounts that go overlimit with far-reaching effects.
"If your cards are close to the limit or you use your card for a major purchase, it is too easy to forget how it will affect your balance," says Bill Hardekopf, CEO of LowCards.com. "Even if you go just $5 over your balance, you will receive a hefty fee, and possibly a much higher default APR and higher rates on all of your other credit cards. Getting a cash advance is especially dangerous because they it has a higher interest rate (typically 20%) that could quickly send your balance over."
Most credit card companies now charge $35-$39 for overlimit fees. The default rate is now as high as 30%, which most cards now apply if the account is overlimit only once. For cardholders with a $9,000 balance, that could add approximately $2700 in interest each year. The financial damage is even greater if other cards also raise the rate to default rates. For tight household budgets, the larger interest payments could be devastating.
In the next few months, many households will receive tax refunds. This is a great chance to pay down credit card balances and avoid overlimit situations. "Paying down your credit cards is the best way to use your tax refund. Reducing your balance also lowers the amount you have to pay in interest, accelerating your pace to pay off your credit cards," says Hardekopf.
If your account is consistently close to the limit or is in default, this will also cause problems on your credit report. People in these areas are perceived as higher risk and will receive a lower score and higher interest rates for any loans such as auto, credit card or mortgage. Higher interest rates can wreck a household budget.
LowCards.com ( http://www.lowcards.com ) is a website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards/rebates, and lowest intro rates. It also gives and unbiased ranking and review for each card. Created by Hampton & Associates, the company has been analyzing the credit card industry and supplying objective websites on various consumer expenses for over five years.
For more information, contact Bill Hardekopf at 1-800-388-1910 or Billh@LowCards.com.
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