Scrutinizing Credit Card Offers

By Leni Parrish on March 25, 2010

My sister is very much into reviewing various credit card offers in her mail. The offers are timely since she is considering getting another card that can help her manage her finances. Smart that she is, she wants to fully understand the concept even if she has to go over the application again. I say that is a good step because I know that she does not want to ruin her good credit rating because of one misstep. She also knows that by comparing offers, she can land on the best possible option.

One of the common terms she looks out for in the credit card offers is known as Annual Percentage Rate or APR. This is the cost of credit and is represented as the interest charged on any outstanding balance in the account. Companies have varying APRs based on how the card is utilized. My sister knows that while other companies have low interest rates, the same company might charge higher in other finance costs. Those rewards programs may also charge you with higher APR. The key is to know what will work best for you in the event that you need to carry over some of the balances.

My sister plans to avail of the balance transfer so she is also taking that into consideration while looking at credit card offers. She reckons that some of her existing balances need to be transferred to the new card because the APR of her existing cards are high. Hence, she is in search for a company that will give her a lower APR to transfer balances so that it will yield savings. Most balance transfer programs also have a certain APR for only a period of time (i.e. six months) from the time of activation. She also noted that the lower APR is only applied to the transferred balance and not on new purchases. My sister is very wary about the fine prints like these so she makes sure that she gives full attention to details.

One of the credit card offers, my sister found out, has no grace period at all. That piece of paper went straight to the trash can because she is not interested in being charged immediately after each purchase. Grace period is the number of days that a company allows the balance to be kept unpaid and still will not incur an interest. Most card companies list this period from 20 to 30 days. People with high credit score may actually request for a longer grace period, so my sister is actually eyeing the possibility of a 30-day period for her new account.

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