Monday, July 29, 2013

Messages From Readers: More On Credit Cards

I don't know why but I thought this was hysterical.
photo credit: JoelJohnson via photopin cc


Sometimes I get nice comments from readers that teach me more about something that I wrote about on my blog. Here is a credit card related comment I'd like to share!


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"In addition to being able to negotiate over fees, if your account is in good standing, you often can negotiate interest rates charged on a credit card. It is best to request this when you have no revolving balance- certainly not when you are maxed out. If you have a balance transfer offer from another credit card, it doesn't hurt to mention that when speaking with a representative. 

Interest charged over time on a revolving balance can be considerable, as can shaving a few points off the interest rate. It pays to maintain a clean credit history!

- Larry S. 

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Here is some clarification because his comment brings up some new vocabulary:

You're in "good standing" with your credit card company if you pay all your bills on time. If you don't pay your bills on time, then you have a revolving balance, which just means that you owe the company money (and that amount changes over time as it accrues interest). You are "maxed out" when you have met your credit limit, which is a number that you should always know. 

Larry mentioned something called a "balance transfer offer," and it works like this: Let's say that you owe $200 on your first credit card. (We'll call this Card A) with 12% APR (the interest rate). A balance transfer offer from another credit card company would allow you to move the balance ($200) to a new card, Card B, which would ideally have a lower interest rate, maybe even 0% introductory rates (introductory means that it will be really low when you first get the card, but go up significantly in a couple months or a year). You could end up paying off that $200 at a much lower rate, which could save you if you're really struggling. 

Just pay in full and never spend more than you have and you can avoid learning all this vocabulary because it won't matter. :) 

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As always, contact me with questions or suggestions! You can either comment directly on the post or send me an email to moneymattersjoan@gmail.com. 

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