Reading between the Lines of a Credit Card Offer
Contributed by Jessie Hart
Reading Between the Lines of a Credit Card Offer
The daily mail has arrived and peeking out at you from the stack of envelopes is a credit card offer. Tearing open the seal, you read that you have been "pre-approved" and that a line of credit is waiting with your name on it. Act quickly! " you are instructed, because the card will soon expire. But before you respond to this credit card offer, there are several things you should know.
Credit companies are always looking to get something out of their end of the deal; that's what keeps them in business. The statements made in their offer may appear to put you on the winning end of the bargain, but there are important facts you need to know which may not be as loudly proclaimed on the credit card offer as their "low rates" are.
Deciphering the Codes of a Credit Card Offer
Understanding the terms and conditions of a credit card offer is the first step to proving how much of a deal it will actually be. There are several aspects of the card that you will want to have full knowledge of before you sign a contract with the credit card company.
The APR (or annual percentage rate) is one of the primary terms to look at. It is the cost of credit, measured by yearly rate. It should be disclosed to you in the offer, again in the contract, and should be restated on every bill you receive in the future. On the monthly statement, the monthly working of the APR should also be shown. There are two forms of interest: variable or fixed.
Variable interest rates allow the company issuing the card to alter rates based on several factors, including economic indicators. If this is the type of card being offered, the issuer must inform you exactly how much the rates are liable to change and what would cause them to change.
