I love reading articles from Gerri Willis, CNN personal finance editor and author of the book "Home Rich: Increasing the Value of the Biggest Investment of Your Life". Mainly because she has the same view on personal finance that we do.
We've discussed many time at being aware of the possible cost, higher interest rates, and excessive fees when you apply for a balance transfer with a new credit card.
Most people now the term APR (annual percentage rate) but the number of credit card holders should really pay attention to "effective APR."
"An effective APR represents your total cost of credit. Now, keep in mind, this may be more than just an interest rate. If you are paying an annual fee, if you incurred a balance transfer when transferring the balance to that card...those are costs that will add to the interest rate that you're effectively paying, effectively raising the cost that you pay on that balance." says Greg McBride, senior financial analyst at bankrate.com.
Gerri suggests to beware of:
- Introductory rates
- Payment schedules
- Cash advance fees
- Late Fees
- Default rates
Be sure you crunch the numbers when determining the best credit card for you.You can manage these expenses very easily by following these simple rules: make your payments on time, keep an eye on your rate schedule and avoid cash advances whenever possible.
No comments:
Post a Comment