Reading The Fine Print On Credit Cards

We've all seen it: the teaser rate. It's the credit card offer that comes in with an unbeatable 0% rate for three to six months, sometimes even a year. What happens after that? Did you read the fine print? If you have never had a credit card before, it pays to understand that a teaser rate is subject to change, even before the term of the rate is up. When you are getting revolving forms of credit, you will be responsible for paying back what you owe and are often at the mercy of the credit card companies once the balances are high. Keep your balances low or paid off, and you can easily get good rates anywhere. Make late payments and hold high balances, and your interest rate will increase, often with little notice. You could end up paying a lot in credit card late fees and finance charges and hold the debt for many years.

One way to avoid a long-term debt is to deal only with short-term loan vehicles. A cash loan made on your income instead of your credit history is usually limited to $600 or less and subject to repayment by your next pay cycle. If you have never tried a cash loan, the first one is typically free and has not service charge. Lenders who deal with a cash loan are not interested in seeing your credit history, but if you pay the debt back on time, it helps to build a good credit history. If you maintain all your debts on a short-term basis, you will cultivate a cushion of credit that can work in your favor when times go bad.

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