Know If a Credit Card Company Wants to Rip You Off
photo credit: orphanjones
The average American receives credit offers monthly, and you’re likely no exception. But choosing your next credit card is not a decision to be taken lightly, especially with lots hidden charges and fees hiding among those offers. So review this list to determine if a credit card offer is a rip-off:
- A low APR: The typical APR — annual percentage rate — is 11.32%. If you have a credit score of 720 or higher, you deserve an APR of under 10%. If cards offer you higher rates, throw the offer away: it’s a rip-off.
- Annual Fees: You shouldn’t have to pay for using a credit card — that’s what interest is for — so unless you’re opening an airline or cashback card, say no to annual fees.
- Check out penalties: Interest rates can shoot through the roof if you go over your limit (30% or higher), so double and triple-check what a card’s penalty will be. You’ll find the penalty rate in the Schumer Box.
- High loan rates: A good credit card will offer you an average of 21.65% interest on a cash advance, plus a 2-4% fee. This already feels like robbery, so if a card charges more, run for the hills.
- Shady finance charges: FInance charges should be based on your average daily rate or average daily balance.
This entry was posted on Wednesday, August 27th, 2008 at 5:32 am and is filed under Credit & Debit Cards. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
