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[05:25:14 AM Wednesday, June 06, 2007]
If you compare online credit card offers, look for the rewards!
Are you surfing the web all day, looking for good credit card offers? Beware of the so-called fee free offers credit card companies and banks present you. Don’t believe their “no annual fee” campaigns. Banks have never focused on charity, and they don’t really have plans in the near future to do so.
As a matter of fact, give these companies a taste of their own medicine: They are trying to make as much money as possible by levying high charges on transactions, other than the ones they mention in their credit card offers. So, why don’t you turn their zero percentage rates into your advantage? But before we reveal to you the secret of how to avoid paying too much, let’s have a look at how these zero rate deals are put into practice.
How it really works… If you apply for credit card online, most credit card companies will instantly approve your application. After their instant approval, you are allowed to transfer money from your own balance to theirs. If they make you a balance transfer credit card offer, you will keep a zero percentage rate on your own credit card balance. If you buy additional stuff with your credit card, they will charge the usual annual percentage rate. So far, so good. At least, that’s what you would think, wouldn’t you?
The next step, though, shows these credit card companies in their true colors. They will make you pay off the entire balance before you can take advantage of their zero percentage rate deal again. In reality, many people are accumulating their debts vastly and rapidly. The low rate is too tempting, especially if you are craving for e.g. new furniture or expensive computer stuff.
What’s in for you? So, how could you take advantage instead?
Well, our first answer is quite simple and straightforward: make a balance transfer and stop it. But that doesn’t sound very reasonable, does it? That’s not why you would apply for credit cards online, is it? For most people, this approach will definitely not work.
Is there a trick, then? Well, this question will lead us to our second answer, which is a bit more complex and complicated than the first one. You will have to take three steps:
The first step is to find a zero percentage credit card offer. Compare credit cards and offers as extensively as you can. Take out the best credit card offers – good credit card offers are not enough, you are looking for the best ones. Find the one that applies the zero percentage rate at the longest period (usually from 6 to 15 months).
Bear in mind that some offers require you to buy new stuff with your credit card regularly for a certain amount of money – if that is the case, take out the one that leaves out this requirement. Ready? Well, isn’t that just wonderful? You’ve just taken out the best deal: you won’t pay too much for your compulsory (monthly) purchase, and if you buy more the charges will be next to nothing.
The second step consists of setting up a repayment scheme for the money you spent in step one. If full repayment is too hard for you at once, you can accept a new credit card offer, if your zero percentage rate period runs out (so after that period of 6 to 15 months). Keep track of all possible new credit card offers.
The third step may sound a bit surprising: Get yourself a second credit card. Have a look at all new credit card offers again, and pick out a card with a low annual percentage rate or a special rewards program: extra student rewards (if you are a student, of course), additional airmiles, you name it.
What’s the result of all that? Well, what you’ve done, is this: you’ve taken the money you needed at the zero percentage rate and set up a repayment scheme. You’ve also received a new credit card to keep on living your life as you please, without accumulating the debts you made with your first credit card.
The only prerequisite for this approach is that you are a stable, well-organized, and disciplined type of person to stay out of the zero percentage temptation.
Compare credit card offers
You could come up with a lot of different credit cards that offer low annual percentage rates and zero percentage rates on balance transfer.
In order to get you started, we made a summary of the most promising offers we could find surfing the net.
Zero percentage rate cards (limited time frame of the offer):
Blue from American Express® (15 months at 0%)
Discover Card® More Card (12 months at 0%)
Citibank® Platinum Select® MasterCard (12 months at 0%)
Low rate cards (percentage of the offer):
Discover Card® More Card (10.99%)
Citibank Platinum Select® MasterCard (11,24%)
As for the rewards program, it is hard to see the wood for the trees. Maybe you should look for a card comparison tool. Many of such tools are available throughout the entire Internet.
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