Creditcard Deals: Read Fine Prints Before Signing Up

2008-10-03 10:57:23

( Financial )



While mortgage lending institutions are imposing strict credit standards to would-be borrowers, credit card companies are still aggressive in trying to attract new customers by continuing to send creditcard offers in the mail. If you are interested in checking out the creditcard deals, such as low-rate balance transfer, then make sure that you study them closely. There are a number of traps on this type of creditcard deals.

High transaction costs

When transferring balances from one credit card to another card first hit the market, the credit card companies did not impose upfront fees on the creditcard deals. Since some customers were able to earn money from the system after the expiration of the teaser rate period, credit card companies have found a way to discourage this strategy by imposing a one-time transaction cost for balance transfers. It is not uncommon to see credit card companies charging three percent on a balance transfer these days.

Other Things You Should Watch Out for

It could be that the rate on the balance that you transfer to the new card is not the same as the rate on your regular purchases. This is often the strategy of the credit card companies to entice you in signing up for these creditcard deals. In most cases, they will charge you with low interest rate on your balance transfers and high rates on the items that you purchase.

Creditcard deals of these types come with a promotional period which is usually between six and twelve months. After this period, the interest rate on your credit card will revert to the standard or even higher rate.

Whatever creditcard deals that may have been sent to you, it is always advisable to read the terms and conditions. You may also want to research more about the creditcard deals on the internet.


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