Don't Let Credit Card Companies Win The Interest Game
By Joseph Kenny
Owning the credit card can be an incredibly useful item, the handy little piece of plastic often saves the day when you are stuck for cash. And as long as you pay off a good percentage of your balance every month, there is no reason why it would even cost very much to use this very convenient little helper.
The card is convenient and easy-to-use, there are however some transactions that should be avoided. When using your card these things make huge profits for credit card companies, and can cost you a considerable amount of money.
Using the ATM while out shopping or enjoying an evening's entertainment is the incredibly convenient, and a way of prolonging your enjoyment.
Unfortunately credit card companies are very aware convenience factor, and most cards charge a 2% to 3% interest the for cash withdrawals at an ATM.
In addition, unlike purchases with a credit card there is no interest-free holiday. The same applies to credit card cheques, there is no interest-free period, and there will be additional interest charges added.
Most people really look forward to their holidays abroad, so do credit card companies. They take great enjoyment in people's annual holidays, as they make a huge amount of money on credit cards used outside the country.
The average total additional charges for the British holidaymaker total approximately 100 pounds. Companies usually charge higher interest rates on purchases made outside the UK with a credit card. Paying with cash is a much better option, if you want to keep away from additional card charges.
You should of course, take your credit card with you when going on holiday, but it should be kept in your wallet as emergency option, not for regular usage.
Many people treat their credit cards as if they provided an instant personal loan. People often select the credit card that has a high limit, to use in the purchase of big ticket items. Typically, they will then take over a year to pay back that purchase.
If you do not have a card with an extremely low permanent interest rates. You are probably paying as much as three times the interest you would through a normal bank loan. Online loan companies interest rates start around 5%; the normal minimum for credit card purchases is 12%.
The ultimate pleasure for credit card companies is people who only pay only the minimum required amount each month. Paying the minimum on your card, it will take you over 15 years to repay the balance, that is and incredible amount of interest. This is why; credit card companies offer the minimum payment option. Instead of encouraging customers to pay off a percentage of what they owe each month.
You should always endeavor to pay as much as you possibly can each month off the balance of your card. Some credit card companies offer direct debits equal to the minimum payment, if you have this option perhaps, you should consider a canceling it and making a larger payment each month.
Many people see it as a status symbol to obtain the highest possible limit when applying for a credit card. They also see it as available cash that they can use in an emergency. For many people neither of these two options are what a card actually ends up being used for. Many people run their card very close to their maximum limit, most of the time.
This ensures the credit card company a good interest payment every month. When applying for a card it is best to take an available limit, of an amount that you actually need, rather than the most you can possibly get.
About the author
Joe Kenny writes for Credit Cards Web, offering compare credit cards or onlystop.com for some great credit cards, for US residents with credit card debt visit Rebuild for credit card debt relief from http://www.FreeArticlesAndContent.com
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