Jumat, 17 Mei 2013

Four Facts About Credit Cards You Need To Know

Credit cards can be a great tool. They can be used to earn trips. They can be used to avoid carrying large sums of cash. They can also be a major problem for people who do not use them properly. Getting a credit card is an important step, and there are some things the applicants need to know before sending in an application.

1. Credit Cards Can Cost Money

Many credit cards cost money to carry. Annual fees on common credit cards can range anywhere between $30 and $500 depending upon the card. Those with higher annual fees usually come with greater perks, but it is important to weigh whether the annual fee is worth the expense. There are credit cards that do not charge annual fees, and those who are not interested in rewards might rather opt for these cards.

2. Interest Costs Money

Credit cards can be convenient, and this convenience can lead people to spend more than they need to spend. Those who are unable to pay off their balance each month can get into trouble spending more than the actual cost of an item due to interest charges. Most credit cards charge between 10 and 20 percent per year on outstanding balances. This amount can add up for those who have made large charges over a period of months or years.

3. Credit Cards Can Pay Rewards

Holding some cards and paying off the balance each month can actually benefit some cardholders. Many cards will offer cash back. Getting one percent back by using a card on purchases that would be made anyway is smart. Other cards will offer travel rewards like hotel points or frequent flyer miles. These can be used for flights or rooms on future vacations. Of course, paying interest for failing to pay off the balance cuts into the benefit of these cards immensely.

4. Credit Cards Can Hurt Credit

Those who are unable to make the monthly payment on their cards can see their credit hurt immensely. Some people can get so deep into debt that it looks as though they might never escape. Those who find themselves in such dire straights might want to look to honest credit restoration companiesthat offer services like the credit repair by Lexington Law.

Credit cards can be a great opportunity, but this opportunity can also come with great responsibility. Those who are responsible can earn great rewards. Those who spend too much can get into serious financial trouble. Therefore, it is good to weigh the options when it comes to getting a credit card.

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