Research before applying for that new credit card
Credit counseling services can teach borrowers a lot about credit cards and their intricacies.
However, many of these details should be learned well before adding plastic to your arsenal of financial options.
According to ABC News, one main area of credit cards many borrowers fail to understand before it’s too late is just how much interest payments cost when carrying a monthly balance.
The news outlet notes the majority of American carry balances on their credit cards, and the typical interest rate runs between 10 and 20 percent. This means that over time, consumers are spending considerably more money on even minor purchases.
Meanwhile, unexpected credit card fees are another reality that many borrowers fail to understand. Many cards come with special offers, such as no fees for the first year, ABC News reports. However, this future expense can be pushed the peripheral of a borrower’s priorities and sneak up on them when money is tight.
Further, credit cars often shift the way a consumer views expenses. Because credit cards offer a mean to make a large purchase a borrowers many otherwise be unable to afford, many people are more willing to swipe their cards on purchases for which they would have never used cash.
Before diving into a new credit card, remember to research the fine print of each lender in order to gain full control of your finances.