For those in the US , the CARD Act has some regulations which can help card holders enjoy a lower interest rate. One provision in the act states that credit card companies should assess an account every 6 months to determine whether the reason for the increase in interest is no longer present. For example, if the cause of the increase is a late payment, the interest would be re-assessed after six months should the account show exemplary payment behavior. The key here would be to regularly pay what you owe to have your rates reduced.

The other method is through negotiating directly with the credit card issuer. Though there are no guarantees, it won’t happen if you don’t try. What you could use as bargaining chips would be how long you have been a customer, that you are a regular purchaser, and that you would like to continue your relationship with the card issuer. You can also do some research as to whether you’re eligible for any new interest rates your issuer would give to new and existing clients. It wouldn’t hurt to ask your card issuer if they can offer you something better.

Although, the time when it would hurt to have your interest rates lowered down would be when you don’t have a stellar payment history. A request for lower rates usually entails a re-assessment of your account. If you have been not a great customer for the card issuer, the opposite effect might happen. You might get slapped with a higher interest rate or get some form of penalty when you make your request. So, it’s essential that you make your request with a good credit standing and history.

The last option for you would be to switch card companies. You can also use this as one of your negotiation tools. Credit card companies are more willing to keep a good client than get new ones. There are transfer cards being offered today with low interest rates. You would have to do a lot of shopping to find one that has the lowest rates. But take note that to enjoy the low rates, credit history would still play a major role. Otherwise, transferring would make no sense. Another thing that you should be aware of is that closing an account generally means a dip in your credit score. So you also need to have the proper timing when closing your account.

You don’t need to be stuck paying high interest rates, not if there are these options for you. But remember that these options would only work if you have built a good credit score and payment history for yourself. Being a good payer is still the basic of the basics.

Closing and opening accounts generally have negative effects on your credit or FICO score. Closing an account means the end of payment and purchase history, and so it would affect several factors that make up your credit score. This is especially true if you’ve had the account for a considerable amount of time.

Opening accounts usually is harmless, but when done with frequency, the negative effect comes from the frequent credit inquiry that credit card issuers make on your score. This is because FICO considers frequent requests for your score as a risk flag. This is complicated further if some of your applications were rejected. These can make you easily lose up to at least ten points from your credit score. Another disadvantage is that the lessened score can also prevent you from getting a lower APR on your new account application.

Even if you pay all your balances and dues every month, you might not be getting the best credit score possible from your actions. Generally, being a good payer results in a good score, but if you max out your balance and limit from time to time, it will also raise some flags and would result to a decrease in your credit score. The reason is that when you go near the limit with frequency, you’ll be considered as a risky borrower since one slip-up could make you fall into debt easily.

But that is not all. Having a maxxed-out card, even though you ‘re able to pay it off in time, would also mean you’d have a high debt-to-credit ratio. When this number is high, it also increases your risk factor in the eyes of credit reporting agencies. Even if it is temporary, remember that scores are gathered over time, and those instances don’t go away easily. These would still be included in calculating your credit score.

Also, carrying a balance is better than having none at all. Of course, credit agencies would like accounts where they can earn on the interest. This also ensures that there’s constant activity in your account. One way you can do this is to rotate the use of your cards so that each account would have some form of balance and activity.

Good payment history and behavior is crucial to getting a solid credit score. But how you manage your accounts also form part of the equation. So long as you know the effects of closing and opening accounts, carrying balances, and using your credit limit, you could use these information to augment your good payment behavior. By also covering these aspects of credit card account management, you’ll be getting the best credit score possible for yourself.

The new regulation may make it harder to get a card, but it also makes it safer for young people to own a credit card. Before anyone under 21 can be approved for a card, he or she should show some form of income or asset that can offset possible debt. Having a part-time job, a trust fund, or any other form of income would be sufficient to show that you can pay off what you owe. And if you don’t have those, other options would be to get a co-signee who would pay the debt if you default, or have you sign up as an authorized user under your parent’s credit card. Young people may have a few more hoops to go through, but it’s all for the best.

One challenge that kids may encounter in applying for a card is that some issuers don’t like having co-signees. This is because with a co-signee, the legal responsibility is split between the cardholder and the co-signee. Credit card companies prefer the authorized user setup since it would be easier to go after the parents should the kids’ debt swell up.

Another challenge is that some credit card accounts don’t report authorized users to credit rating organizations. This means even if your kid has a card under his or her name, no credit history will be built. That takes away one of the biggest advantages of having a credit card early, and that is to create a good, solid credit history to make it easier to apply for loans and financial aid in the future.

With those in mind, you should make sure that your co-signee has a good credit rating to appease the minds of credit card issuers. Also, before signing up as an authorized user, make sure that it gets reported to credit reporting agencies. Once you have those set, you place yourself in a better position in reaping the advantages of owning a credit card early. The system may make it harder to get a card for young people, but it also makes it easier to keep kids on the right track when it comes to credit card management.

When you’re applying for a mortgage or any other major loan, hold off that balance transfer or do it ahead of time. Balance transfer credit cards entails the creation of new accounts, and new accounts result to a dip in your credit score. Though the dip in the score is minimal–a couple of points–a decrease is still a decrease. Especially when applying for mortgage, you would need every point that you can get from your credit score. Your credit standing can result to a decrease or increase in the interest rates that you pay. The good thing is the credit score dip is temporary. If you pay your dues on time and manage to lessen or eliminate your balance, your credit score is sure to improve. The only thing is, it will take a couple of months to bring your credit score back to where it was before. The problem here is not with the balance transfer itself but that of timing.

It’s also a bad idea to use balance transfer cards as means of extending your credit. Though you can certainly do so, that would be not using balance transfers the smart way. Balance transfer cards offer a way of paying your debts with lower interest and your main goal should be to eradicate your balance and save through them. You shouldn’t get the lower interest just because you would like the extra credit at a lower rate.

Also make sure that you can pay off the balance in the time frame of the balance transfer’s offer. Whether it’s 6 months or 18 months, you should be quite confident that you can cover all your old balance by that time. This is because the offer of balance transfer cards are good only for the time period set and if you pay your dues on time. The card company can raise your rates after the introductory period, so you should be aware of how much they will charge you. If you’re not careful, you may end up paying your old and new credit balance under a higher interest rate compared to your old card.

If you’re also thinking that you can just keep doing a balance transfer after each introductory rate expires, then think again. Some offers restrict you from doing a balance transfer after the special rate ends. And even if you’re allowed to, you can’t be sure that your next application for a balance transfer card would be approved. Aside from that, you can’t also guarantee that the same low rates will be available in the future. You may end up paying balances at a higher interest rate than you expected.

These are some scenarios where getting a balance transfer would be a bad financial move. You should always keep in mind that your aim is to eliminate the debt and improve your credit score. You should use balance transfer credit cards to help you in that goal and not hinder it.

In general, the percent offered is a 2% refund on your purchases. There are also some cards that offer up to 5% refunds. This may be a small amount, but if your purchases total to a significant amount, it’s a welcome refund. At the very least, it’s better to get something back rather than nothing. Since you don’t traditionally save on credit cards, having some of your money back is still an advantage however you look at it.

This rebate can be applied to your balance, or it can also be applied to an investment fund. It depends on the kind of cash back credit cards you’re looking at. It would also depend on what works best for you, as some people prefer to place the money on investment funds either for retirement or for their kids’ college education. These deals make it more enticing for people looking to save for the future.

As great as cash back credit cards sound, they are not for everyone. These cards are usually offered to people with high credit scores. Also, the income bracket that these cards require are higher than average. So, the acceptance is more restrictive. In a sense, these cards are marketed to those people who are in good financial health and are more than average spenders and earners.

Aside from the income, monthly and annual expenses should be considerable to feel the rebate’s effect. That means you have to use the card more in order to get more rebates. If you’re not a really heavy credit card spender, then cash back credit cards might not be best for you.

It’s also not just about spending; it’s also about paying. People who make these kind of cards work are those who are able to pay off their balance in full every month. This is because cash back credit cards offer a higher interest rate compared with regular credit cards. It would make no sense to save some 2% on your purchases when you can be facing more than 20% in APRs. So, to keep those interest rates from being effective and fully enjoying your refund, you should be able to make your balance zero at the end of each month.

With cash back credit cards, there is a way to save. But as always, there are caveats. Though like an oxymoron, you have to spend more to save more. And aside from that, you also have to be able to pay back immediately what you spend. This may be a high requirement for most, but if your are capable of managing it, saving on cash backs is manageable. And as always, look at the fine print. No matter how good the deal may sound, there is always a catch.

The format and the terms may vary between different card companies, but the basics should be the same. If you look for the common factors that all cards have, understanding your own statement should not be difficult. If there are some terms that are still unclear to you, you should contact your card company to get more information about it.

As with all statements, you have there your basic account information. Things such as account number, the billing period, the date, and amount due. You should also find here your credit and cash advance limits.

Another of the standard sections in any card statement is the balance summary. In this section, you should see what your previous balance is, the total of the payments you made, the new transactions, and your current balance. Here, you get a snapshot of your account history with the credit card rates applied regarding your current balance. It also shows you how near or far you are to your credit limit.

Next is the detailed list of the card transactions that you made for the billing period. You should find here the dates when the transactions were made, reference numbers, and the merchants that accepted them. You should give this area some special attention since this is a common area for discrepancies. This is also where you can check for anomalies and possible cases of fraud. As such, this is an important section to scrutinize. One good practice is to keep copies of all your card transactions and then do reconciliation when the statement comes. This will help you track your transactions more efficiently.

Another important section would be the finance charges section. Here, you can find the credit card rates applied to your account. You should also see here your current APR and it’s monthly breakdown. You should also see here any fees applied to your account such as late payment fees or cash advance fees. Knowing this part of your statement can help you keep tabs on your current interest rate and APR.

As the cliché goes, you should also look at the finelines. These contain information about some of the fields on the statement and the conditions that govern them. You should also look at the back of the statement for additional information and advisory.

If something seems amiss, you shouldn’t hesitate calling your card company about it. If you have a valid dispute, you should also follow it up with a formal letter to your card company. But remember, this dispute won’t happen if you don’t look at your statements carefully.  And so, it literally pays to know your credit card statements.

If you’re one of those types who can afford to simply pay whatever’s indicated in their credit card’s billing statement, then this article is not for you. If you want to get the lowdown on that little thing called APR on the bill, then keep reading.

What is APR? APR stands for Annual Percentage Rate. It pertains to an annualized interest rate placed on your purchases. Usually, the APR applies to your outstanding balance that goes over the allotted grace period. The amount you are charged for the remaining due—the finance charge—depends on the APR. Higher APR also translates to higher finance charge, so make sure you pay the balance on time!

There are more detailed terms relating to the credit card APR. Nominal APR pertains to the simple interest rate computed for one year. When you say effective APR, or EAR for short, that means the fee plus the compound interest rate, computed across one year. EAR is known as the “mathematically-true interest rate.” That is probably because it takes all sorts of fees involved in the account into consideration.

You don’t have be too scared of the finance charge, as long as you pay the balance before the allotted grace period ends. When you settle the full balance before the end of this grace period, a finance charge won’t be applied to your balance.

APR can also depend on your type of credit card spending, whether you made a purches, got a cash advance, or made a balance transfer. For each, credit cards usually have different APRs. It would be wise to be informed of the APR implemented on your credit card for each kind of purchase.

Hopefully, our discussion has helped shed some light on the term Annual Percentage Rate. The next time you see “APR” on your billing statement, you’ll have an idea what it means and what it pertains to. With a knowledge of how APR works and how your spending is affected by it, you can now plan and manage your spending more wisely.

Debt mitigation is not bad or necessarily a scam. But it is when the company or party that offers that service promises you lowered rates and reduced debt in a matter of weeks or months. These companies would even sweeten the offer by giving a money-back guarantee. The truth is, it’s easier said than done. Creditors don’t normally lower rates or offer credit card debt reduction that easily. And if they do, you can certainly do it yourself by addressing the credit card company directly. The sad truth is these “debt mitigation” companies don’t deliver as promised, and getting your money back is almost impossible.

Another scam is the promise of assured credit card approval for those with bad credit or credit card debt. The catch is you would need to pay an advance fee to the company before you receive your card. But once you’ve made the payment, you won’t hear from the company that offered the card again. Since those with bad credit would have difficulty getting a card approved, assured approval sounds like a good deal, and thus gets victimized.

You should also watch out for those claiming that they can get rid of some of your debts from your credit history. What these companies do is challenge all or most of your credit card debts with the credit card companies and credit reporting agencies. Those debts that are valid for investigation then gets cleared temporarily from your score while waiting investigation results. The scammers would then show this cleaned out report as your new credit score or balance. But of course, that score won’t stay that way since most, if not all, of your debt are legitimate debts incurred by you. When you find that out, you’ve already paid the company money for their supposed “services”.

These are just a few examples. And there are lots more since these scam artists tend to get more creative as time passes. Just remember that anything that promises a quick fix should be treated with a lot of skepticism, or just ignore them completely to be safe. You know of the adage: “If it’s too good to be true, then it probably is.” So be smart and responsible. Work on your credit card debt slowly but surely. It’s much better than having a debt on your hands while also being had by a scam.

You may ask why would companies offer such a card? The reason is tough competition among credit card companies. A balance transfer is a way for a credit card company to get new accounts from competitors. Though they may not make large profits, their chances of earning would be increased if they have more clients. And of course, balance transfers also carry a charge and so the companies do earn a little while also getting a new customer.

Depending on the offer, you can get up to 0% interest on your old balances or new purchases made with the balance transfer card. These rates are usually teaser or introductory rates that lasts from 6 to 15 months depending on who’s offering. Even if you don’t get 0% on the existing balance, you can still get a low interest rate to pay on the balance that you transfer. As mentioned earlier, there are also balance transfer fees which can be 3-5% of your existing balance, or a fixed amount with a cap.

But surely, there’s a catch. Of course, there is. One thing to note is that the offer is also dependent on your current credit score. The better the score, the better the offer. You may find that the offer is for 0% interest, but the fine print may state that it’s limited to those with good credit scores. You may only be eligible for one with a higher interest rate.

Another thing to watch out for is the interest rates and fees that would kick in should you miss a payment. The truth is, these fees and interest rates can be hefty. This makes it all the more important that you keep paying your dues religiously if you don’t want to incur those penalties.

If you have chosen an offer that works for you, remember that balance transfers take time for processing, usually four weeks. Because of this, you should put charging your old card on hold during this period. Additionally, once the transfer is over, you should also consider cutting the old card since that may entice you to use it and add to your existing credit.

Balance transfer credit cards are good ways to address your increasing credit balance. You get to enjoy lower interest rates that can give you enough breathing room to get you balance to zero. But be sure to shop around for the best deal, and, as always, check the fine print. Once you manage to do those, you’ll find balance transfer credit cards to your advantage.

There are different types of rewards depending on the type of credit card or even depending on the bank that issues the card. Miles programs net cardholders airline miles for every certain amount in your purchases. These miles can be used to purchase flights.  The amount required to earn miles depends on the bank and the system.

Points systems, on the other hand, award points instead of miles, but work much the same way. Once you have accumulated a certain amount, you can exchange it for equivalent products or use it for purchasing stuff you want to buy.

Perhaps the most ideal for most people is the cash-back system. These are automatic rebates that are credited to your account for each purchase. This way, you reap the card’s benefits instantly without needing to accumulate any points or miles—instant gratification for many who do not want to deal with the hassle of keeping track of their points or miles.

You can also opt for special credit cards that are tie-ins with retailers or stores, with special discounts to particular establishments or goods. These serve dual purposes: the credit card itself, and something like a loyalty card for a particular store. If you know you spend a lot on a certain retailer, then this card might be beneficial for you.

There have been many people who regret taking the particular credit card they got because they simply couldn’t take advantage of the rewards program of their card. Some don’t make enough purchases to earn enough points in a points-based system; some don’t travel, which is why they can’t take advantage of miles-based programs.

Simply put, since you’re getting a credit card anyway, make sure the one you get coincides with how you plan to use the card and if you can benefit from using it by maximizing the rewards that come with the card. Make sure the card serves your needs, and make sure that serving your needs will also get you some extra value.

Here’s a good example. You don’t like to travel, and you’re not interested in the points-based reward system that offers you predetermined freebies. Your best bet when it comes to a credit card would be to get one that offers instant cash-back for each purchase.

Choosing a credit card becomes easier if you tailor the card to your needs. After all, that’s what credit cards are for—tools that we can use to augment our financial capabilities and to acquire goods and services that won’t otherwise be readily available to us. Use that credit card wisely, and you will eventually reap the rewards. The key, of course, is to get the rewards that you want.