Knowing Nits and Bits of Credit Card Deal
A Credit Article Contributed by Tushar Goel
What is Credit Card Deal?
It is when you are looking for a new credit card and want it to be your best deal, simple. In a sense when you want it to be a profit making venture for yourself; you should look at it from a point of view that reflects your intention of getting to a point where you end up loosing none of your precious dime even when you are asking for credit.
What is Credit Card?
There is very simple logic to what credit card is. Credit card is your commitment towards a banking company that you would take some credit from them on that card and would pay some interest on the amount you took.
What Do You Need to Know about Credit Card Deal?
Getting credit card deal is no big deal in itself. What is needed is knowledge of all the finer prints that directly affect your wallet and their understanding.
Which Points Should We Know about Credit Card Deal?
First and foremost point to know about a credit card is if it has any fee attached to it. The best one is when there is no annual-fee attached. And there are many which do not have annual fees attached to them. How is that possible? It is possible because the credit card company thinks that more people will use the freebie and thus the revenue generated would be more than normal and inturn the incoming interest amount will increase which would fill in for the absent annual-fee.
Second what is the Annual Percentage Rate(APR)? It is the rate of interest that you pay on the amount that you borrow on the credit card. The whole crux of a credit card deal is its rate of interest, lower the rate, better the card. There are many variations in the rate on different cards. There is a difference in rates and there is difference in the type of interest that they levy on the card. The two types of interests are fixed-rate and floating-rate.
Types of Credit Card Deals
In the fixed-rate type, the company offers a particular and fixed floor and no matter what the variations in market, or how much credit you take, the interest in calculated according to this particular rate only. But we have to be ware of the fact that the fixed rate can sometimes change too although the customer is notified in written, 15 days in advance about the change.
But most of the cards have variable type of interest, this interest keeps changing. Although the change is dependant on a market based index which generally is the Wall Street Journal prime rate. In this kind of interest type, the rate of interest increases when the index is on the rise and the rate of interest decreases when the index is on the down slide. What is important to note is if the rate really slides in the same proportion as it does at the time of the increase.
Other things to look for are the grace period that the card allows to pay up the amount before they apply interest charge, there has to be some.
And what are the penalty provisions if you fail to pay up the amount in the stipulated time. The penalty amounts should not be too high.
