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Making the Right Decision on Credit Cards

Many of you receive credit card applications in the mail on a consistent basis. These credit card companies offer very low APR rates to entice you into applying. Most of time, the letters inform you that you have been pre-approved for a credit card and given a very low introductory rate . They may also offer incentives and other perks as well.

If you have received a credit card application in the mail, stop and think for a moment. If what they are offering sounds too good to be true, it usually is. As of this writing, credit card companies have been increasing their interest rates, reducing credit limits, and engaging in practices that has forced the government to enact legislation that would prohibit them from increasing interest rates retroactively, without notice.

If you currently have credit cards and have been a victim of the credit card company's tactics, it is a good idea to seek out lower-interest rate credit cards and close your existing accounts that have either jumped to a an all-time high of 30% interest, decreased your credit limit, or asked for payment twice in one month.

You can easily go online and compare all of the various credit card companies to determine who is offering the best APR rate. As we mentioned earlier, the first part of credit card legislation has taken effect, and the rest of the new legislation will take effect in February 2010. This will stop the unfair practices currently being perpetrated on consumers, and will open up a competitive market so that you can apply for the best and lowest interest-rate available.

Ideally, the solution to the credit card debt dilemma is not to have any credit cards at all, except one to be used for emergencies only. However, as ideal as this may be, it is not practical. What is practical is paying down all debt so that you can manage your budget, and live a life without the stress of living from paycheck to paycheck.

Variable Program Credit Card

There are several credit card companies that change the APR interest rate based on the economy and the market. This means that every time there is a change in the economic index, the APR rate for your credit card would also change. This is because the index’s performance ultimately determines the rate of interest for your credit card. These rate change credit card programs are referred to as variable programs.

Thus, the change in rate could either decrease or increase the rate or the charge that is ultimately applicable to you account. Unfortunately, over the last year the interest rates have soared. We have already mentioned that new legislation requires all credit card companies to notify you about rate changes 21 days prior to the change.

There are currently several credit card offers that seem quite good but, in the end, there might just be too many catches. You should make sure that you do a thorough research before applying for a credit card. Remember, the aim of all credit card companies is to make a profit. Thus, choosing the right credit card company based on your needs is essential.

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