One of the most basic elements which determines how expensive your credit card is by using is it's interest rate, or ANNUAL PERCENTAGE RATES (Annual Percentage Rate). The lower this particular figure, the less money you'll be charged for that privilege of borrowing money on the actual card. As APRs are so important when creating the choice of which new card to use for, many advertisements and promotions function strikingly low rates, at least at first, in an effort to lure within new custom. This is all well and great for people applying for new cards, but how about existing cardholders? Why is keeping a watch on your APR important? The first thing to note is that when credit card issuers refer to the APR of the card, they invariably use the term 'variable' enclosed in brackets, and this really is vitally important. This one word basically means how the card issuer has the legal right to change the quantity of interest they charge on a greeting card debt, regardless of the ra
te they quoted and delivered when you initially applied. All they need to do would be to inform you in writing before they make any changes for your requirements, although this is often done using a longwinded 'terms and conditions' document that might not make it immediately apparent what is actually changed. So what's to stop credit card issuers from dramatically increasing their rates, using the potentially devastating consequences that could entail for that financial health of their customers? Recently, competition between issuers has ensured that any rises will be small enough to keep their customers happy - it had been far too easy a matter for any customer to jump ship to another bank when they were upset. These days, the scenario isn't as simple. The credit crunch that we're hearing a lot about, along with troubling times throughout the economy in general, means that it's getting a lot more difficult to be approved for a brand new credit card. Already issuers are tig
htening up their acceptance criteria, and the quantity of rejections is rising fast. Some analysts predict that through the end of the year, the average rejection rate for credit applications is going to be over 70%. What this means for existing cardholders is that they're much more subject to their issuers, who know that many customers have nowhere else to visit. Couple this with falling bank profits due to bad debts, and it's clear that there'll be considered a temptation to increase rates to squeeze more profit from each account, especially for customers with sub-standard credit ratings. Because of this, it's vital to focus on any letters you receive from your card issuer. If you're told that your APR is going to be increasing, write back expressing your discomfort, and say that you'll be buying new card from one of their competitors like a matter of urgency. This can usually have the effect of making them back and leave your rate unchanged, but if it doesn't work, seriou
sly consider applying for a brand new lower rate card and transferring balance onto it, before the credit crunch really begins to bite and causes it to be nigh on impossible to escape the clutches of the current bank.
Michael writes for Charge card Sense, where you can compare low interest rate credit cards as well as balance transfer credit cards to find the best solution for your financial requirements.
View this post on my blog: http://creditcard.valuegov.com/keeping-track-of-your-credit-card-apr/
te they quoted and delivered when you initially applied. All they need to do would be to inform you in writing before they make any changes for your requirements, although this is often done using a longwinded 'terms and conditions' document that might not make it immediately apparent what is actually changed. So what's to stop credit card issuers from dramatically increasing their rates, using the potentially devastating consequences that could entail for that financial health of their customers? Recently, competition between issuers has ensured that any rises will be small enough to keep their customers happy - it had been far too easy a matter for any customer to jump ship to another bank when they were upset. These days, the scenario isn't as simple. The credit crunch that we're hearing a lot about, along with troubling times throughout the economy in general, means that it's getting a lot more difficult to be approved for a brand new credit card. Already issuers are tig
htening up their acceptance criteria, and the quantity of rejections is rising fast. Some analysts predict that through the end of the year, the average rejection rate for credit applications is going to be over 70%. What this means for existing cardholders is that they're much more subject to their issuers, who know that many customers have nowhere else to visit. Couple this with falling bank profits due to bad debts, and it's clear that there'll be considered a temptation to increase rates to squeeze more profit from each account, especially for customers with sub-standard credit ratings. Because of this, it's vital to focus on any letters you receive from your card issuer. If you're told that your APR is going to be increasing, write back expressing your discomfort, and say that you'll be buying new card from one of their competitors like a matter of urgency. This can usually have the effect of making them back and leave your rate unchanged, but if it doesn't work, seriou
sly consider applying for a brand new lower rate card and transferring balance onto it, before the credit crunch really begins to bite and causes it to be nigh on impossible to escape the clutches of the current bank.
Michael writes for Charge card Sense, where you can compare low interest rate credit cards as well as balance transfer credit cards to find the best solution for your financial requirements.
View this post on my blog: http://creditcard.valuegov.com/keeping-track-of-your-credit-card-apr/
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