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Now that you have to have a credit card to do most things that you want to do, lenders are finding ways to cash in on this. They are offering incentives to get you to get their card and use it more. What options should you choose? Here is the guide. One of the incentives is weather to choose a fixed rate or a variable rate. A fixed interest rate is very good option. A fixed rate will not change no matter what happens with current economical situation in the coutry. A fixed rate card will protect your personal budget from surprises of paying higher APR from one month to another. Unfortunately, there are not many companies offering fixed interest on cards now. But still there are some. A variable rate can change from time to time. If the economy goes down, your credit card rate goes up. If the bank has to borrow money from the federal government and they are charged a high interest rate that will also affect your APR. This options is less recommended, you you have a chance to get around it. One thing you have to be careful of is surprise monthly payments. If you go on a spending spree and cannot pay off your credit card bill in full, then the interest rate applies and your monthly payments rise very high. One more feature, that banks are offering is balance transfer. This is where you can use one credit card to pay off the other. The only problem with this is that the debt doesn’t go away it is still there just on another card. These incentives are usually offered to new customers and have a limited time they also come with an introductory interest rate offer. As soon as the introductory period has passed, you will pay the interest the the amount you transferred. The only way this option is of any good is if you are able to pay off the transfer within the introductory period or before the interest rate is added. Other than that this option is not a good idea. One major disadvantage to transferring from one card to another is now since the debt has been transferred you now have a credit card with all your credit available and this tends to be an invitation for people to go shopping again and charging up the card that was paid off, this creating two cards with debt. When you transfer debts from one card to another, pay attention to the "transferring fee". It means that, to take advantage of low introductory rate, like 0% for 6 or 12 months, you will be forced to pay 3% of the transferring amount, but usually not more than 100$. Also, you need to pay attention to annual fee. It can be 0$ for the first 12 months, but later you can be charged from $20 to $150, depending on card you choose. It today's society you need to have a credit card in your wallet. Banks are making them look more exciting by offering things like the option of a fixed and variable rate and balance transfer options. The only way that a creditcard will not be your worse nightmare is if you keep track of your spending and pay them off every month. Otherwise when you transfer money it may seem like a good idea but if you do not pay it off before the introductory time period you most likely will never pay it off. Going with variable percentage rate could make sense if the economy is going up and will stay there for a long time, but if it goes down you will pay this change with your bill. A fixed rate card is the best way to go because you will pay the same every month if you can’t pay it off every month.
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