The Ins and Outs of Credit Cards
English: First 4 digits of a credit card (Photo credit: Wikipedia)
Finance is a tricky subject to understand at the best of times and even harder when we are living in an age where making the right choices is imperative. With the cost of living ever increasing and more people turning to credit to keep them going throughout the month, knowing all you can know about your financial decisions has never been more important. However, with varying amounts of interest rates, credit limits and understanding how to avoid debt, it is no wonder many people get confused.
Whether you are looking to change your current credit card or interested in taking out your first, there are many points you will need to consider; using a comparison site like Creditcard.com.au can help you find the best credit card for first time users, and compare interest rates for your circumstances?
Credit Cards for Bad Credit
Credit cards are a great way to rebuild credit ratings, as long as you can afford them in the first place. There are some credit card providers that offer cards for those of us with a poor credit history, that’s the good news. The not so good news is that they tend to come with very high APR (annual percentage rates) interest – this is the amount of interest you will repay over the course of a year. This is where you can get caught out and it can cause further damage to your credit score. If you have made the decision to take out a credit card to rebuild your history, then the best and least expensive way to manage it is to pay the full amount off each month. By keeping the credit limit low you can manage your payments in full and not get hit with the interest rates.
Balance Transfer Credit Cards
Balance transfer credit cards have increased in their popularity over the past few years for two reasons – firstly many people are turning to consolidating multiple credit card balances into one card as a means of paying off debt, and secondly they are a great way to save yourself interest payments for a set period of time. There are many credit companies offering balance transfer deals including interest free periods of 6-12 months and flexible teaser interest rates, if a 0% isn’t offered.
The best way to find the right card for you is to do your homework. If you have multiple cards and you are looking for a way to consolidate them, then you may want to go for a longer period of lower interest payments etc.
Look for Cards with Added Perks
As more and more of us are turning to using our credit cards on a regular basis, it is important to look at cards that give us that little bit more than just credit. Whether this comes in the form of air miles, cash back or reward vouchers, there are plenty of them out there. This form of cards is generally only available for those of us with good credit histories, so you may find that you will have to rebuild your credit first.
Look at your personal circumstances to choose the right perk for you. For example, if you frequently travel for work, then having a card that gives you air miles is a great way to save money off flights, food and drinks at the airport. If you are a frequent shopper, then many cards such as Play.com’s credit card offer vouchers back every time you spend $100.
Manage your Account
Finally, when using credit cards you need to manage your credit effectively to avoid debt or any other issues that may arise. The best way to do this is to pay more than the minimum payment each month, preferably paying the full amount each month. Don’t look at the credit as extra money on top of your pay, it is just an extension of your incomings, that if paid in full on time each month, can strengthen your credit score and offer you flexibility with your finances.
Category: Credit Card
