Recognizing a Good Credit Card Deal
A Credit Article Contributed by Tushar Goel
Can We See Credit Card Deal?
It is rather very easy to catch a good credit card deal. What is needed is a thorough understanding of the fundamentals of a credit card and strings attached to it plus some patience to keep still and analyse what is best for us and compare the requirements with the great deals in the market.
Basic Number 1 - Apr of the Credit Card.
APR means the Annual Percentage Rate of a credit card. It is the rate at which the interest is levied on the amount that you borrow on the card. In simple terms it is calculated as the average compound interest plus the principal amount equally divided by the total number of months for which the amount if borrowed. Thus the most important parameter in the APR is the rate. You should have a good look at the rate of interest figure.
Saying that I should tell you that there are generally two broad categories of type of APR in credit cards. They are firstly the Fixed rate of interest types and secondly the variable rate of interest type. In the fixed rate of interest type the rate at which the interest is charged on the principal amount of purchase is generally fixed, means it should not change. But there is no guarantee that it can not change.
The credit card company may decide, at any time, to change the rate of interest, but it is required by the federal law to notify about the change 15 day in advance. The second form of interest is the variable type in which the rate of interest is volatile and it keeps on changing. Mostly the companies change the rate depending on a market based index, for example Wall Street Journal index, based on which the interest rates fluctuate.
When the index goes up, the interest rate goes up and when the index goes down the interest rate goes down too, but generally it is never a nose-dive. What remains to be seen by the customer and which he should take a mental note of is if the rate decreases according to the market index or not.
Fee Basics about a Credit Card Deal.
you should have a very fair idea about the kind of fees that the credit card asks for. The fees can reflect the quality of the deal more than anything else. So it is important that you have a keen eye for the fees that the credit card asks for. First and the foremost is the annual fee. There are many credit cards already in the market that do not charge any kind of annual fees to start with. But there are some examples of those which charge some annual fees too.
I would recommend a card with does not have an annual fee. Plus we should be able to recognize the deal from penalties too. These could be late payment penalty or over-the-limit spend penalty. A keen eye for penalty can help us grab the best credit card deal on the shelf.
Other Credit Card Deal Basics.
The most important and basic question that you should ask a credit card sales person is about the grace period of the card. A grace period is the amount of time (in days) that you get to make the payment before the interest is applied to the spent amount. You should simply reject the card that has n credit period. On the other hand you should have an eye for the card with maximum grace period.
