By Lily Wolf
You could be one of those people who got promotional offers for a low interest credit card and immediately enrollled before reading the contract. A few years ago, Greg Lipinski applied for a couple of low interest credit card offers but he didn't read the contract to make sure he knows what he is applying for. His application was immediately accepted and he got his credit in just a couple of weeks. He was even given a huge credit limit, which sounded so good, and within a year, after the offer expires, his APR skyrocketed and he was laden with debt when he couldn't keep up with his payments.His interest rate went from 1.5% to 29% in just a span of nine months, he had to ask his mother to co-sign a loan so that he can pay his debts. To make matters worse, he used his other credit card to pay the balance of the other credit card, which helped him stabilize his credit history but buried him deeper into debt.
A case like this is not unusual. You can be tempted by offers like this when you are trying to build a good credit history. But what many failed to do is to read the fine prints that usually states that the APR will jump once the introductory rate expire. This can be very devastating. But there are ways to protect yourself from rate hikes like this.
Here are a few tips to observe before you apply for any creditcard:
1. Make sure to read the fine print on the contract before signing up.
The application you get in the mail discloses what will happen to your interest rates after the introductory offer is up but they are usually written really small so you have to look for them. read it and try to understand what the card offers and what will change after the introductory period expire.
2. Research.
Look at the websites of big banks (i.e. BMO or TD Canada Trust) and check what rates they offer. You might notice that their rates varies for students, businesses or wealthy customers and these rates usually stays with the card and does not expire after a specified period and they don't hike up their rates unless the client abuses his credit. Just don't be hasty in signing up, compare offers and choose the best one.
3. Choose the best options you can find.
The best thing you can do is to choose the card that offers the the lowest permanent rate (the rate that will apply after the introductory period is over), lowest initial rate and zero annual fee.
4. Speak to a representative.
Talk to someone who is up on a higher ladder, like a manager, not just the representative who is trained to convince you to sign up. Don't signup upon reading a piece of paper. Inquire about their rates and what they can do for you. It is best to tell them that you are shopping for the best offer you can find.
5. Be aware of the introductory time period.
The rate change witll occur without warning and credit card companies will count from the time they accepted your application instead of when you recieve and register your card> Just make sure that the balance on your card has been paid off before the rate change occur so you won't have to pay your bill with the higher rate.
VIA CreditCards.com
Keyword: Credit Cards
