Regular APR vs. introductory APR

An introductory annual percentage rate (APR) is a temporary, low APR that lasts for a specified amount of time and is attached to a specified type of transaction.

For example, a credit card may offer an introductory 0% APR on purchases for a period of 12 months. This means that all new purchases made with the card for the first 12 months will be attached to a 0% interest rate. There are two things to note in this example:

• In the above example, the introductory APR is only attached to purchases, so other transactions made with the card, such as balance transfers or cash advances, will be attached to different APRs (not the 0% APR).

• In the above example, the APR on purchases will convert to the ongoing (or regular) APR once the initial 12-month period is over. The regular (also called ongoing) APR is usually much higher than the introductory APR.

A regular APR is a non-introductory interest rate that is applied to balances on a credit card. Regular (or ongoing) APRs are usually listed as either fixed or variable.

It is important to note the differences between introductory APRs and ongoing APRs when deciding which credit card to apply for. Depending on your specific situation, a card with a low introductory rate may or may not suit your needs. If you do opt to apply for a credit card with a low introductory APR, be aware that the APR will jump to a higher rate after the intro period ends.

However, if you plan on carrying a balance on the credit card for long period of time, applying for a credit card with a low regular APR may be a wiser choice, as the APR will usually stay more consistent over time.

For more information on this topic, see Introductory APR cards vs. low regular APR cards

Fixed vs. variable APR

When comparing the various credit card offers available online, you may have stumbled across the terms "Fixed APR" and "Variable APR." If you are unfamiliar with the way credit works, the difference between these two terms can be a little confusing.

In theory, a fixed APR is an annual percentage rate that is stable, or does not change, while a variable APR is an annual percentage rate that varies, or fluctuates up or down. Fluctuations depend on the current interest rate market or other factors set forth by the credit card issuer. Variable APR’s are often tied to the current prime rate, which is a commonly used interest rate used by banks at any given time. For example, a credit card can have an APR of Prime + 5%, which would equal the current prime rate plus 5%. So, if the prime rate goes up or down, so does that card’s APR.

Fixed interest credit cards do not necessarily remain the same interest rate forever, as market fluctuations make it is unrealistic to think that a credit card company will settle on one interest rate for their cards and never change.

However, a fixed APR tends to stay more constant than a variable APR. The interest rate on a fixed APR credit card can increase when overall interest rates go higher, but change is not automatic and is usually accompanied by advance notice. Credit card with variable APRs, on the other hand, can change interest rates more often and often without any prior notification.

Occasionally, you can find a credit card that offers a fixed APR for life on a certain balance. For example, you may be able to find a credit card that offers a 6.9% fixed APR for life (until the balance is paid in full) on all balance transfers made during the first month of card membership.

When you are shopping for a credit card, it is a good idea to look for fixed interest rates as long as those fixed rates are low compared to all the other offers you find. It may not remain that same interest rate for as long as you have the card, but at least there will not be as many fluctuations as with a variable APR card.

For more information on this topic, see Fixed APRs versus variable APRs.

About balance transfers

A credit card balance transfer is the act of moving an existing debt from one credit card to another credit card. With a balance transfer, the existing balance is transferred to another credit card and then is subjest to the new card’s interest rates and fees.

Balance transfers are often done to save money, as the new credit card may have a lower annual percentage rate (APR) than the old credit card. Occasionally, a credit card will have a promotional balance transfer rate (as low as 0%) that typically last from 6-15 months.

Before transferring a balance, take the time to completely understand the specific balance transfer offer you are interested in. Find out how long the promotional balance transfer rate will last, what the interest rate will increase to after the promotional period, and if there are any one-time balance transfer fees involved.

It is also important to check whether or not a balance must be transferred within a specified amount of time in order to receive the promotional rate (Example: A balance must be transferred within the first 30 days to obtain the rate mentioned in the specific offer).

Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.

About balance transfer fees

When you transfer debt from one credit card to another, you may be charged a balance transfer fee. This is usually a percentage of the amount you transferred up to a maximum dollar amount. Many people transfer balances from credit card to credit card without realizing that they could be charged an additional fee on the amount borrowed.

This “balance transfer fee” is charged in addition to the “balance transfer rate” that you may be offered. Some credit card balance transfer fees are based on the amount transferred (i.e. 3% of the total amount transferred) while other credit cards have a standing transfer fee for all amounts (i.e. $50 for each transfer).

Some, but not all, credit cards charge balance transfer fees. And those that do charge balance transfer fees sometimes have promotions where this fee is waived for a limited time. You can still find credit cards with no balance transfer fee offers, but be sure to read over any terms and conditions that apply to the offer before transferring a balance.

Check with your current credit card company or read over the terms and conditions of a specific credit card before transferring any balances. This way, you will know about any fees that may occur with a balance transfer transaction.

Online credit card application security

Technology has come a long way since the early days of the Internet. For starters, online security is better than it used to be. Today’s secure transactions are done online using a secure system for transmission of personal information. You can always tell when you’re using a secure service because you’ll see a yellow padlock on the bottom right hand corner, or the URL will begin with “https://”.

Banks are working hard to keep your information secure. Some banks require two forms of identification or two separate pin numbers for accounts. When you call a bank operator via the phone, they will ask you a series of questions to ensure your identity. Banks also take online security very seriously and take great measures via encryption and other methods to keep your information safe online.

You can also enhance the security of your online experience by only submitting information on reputable Web sites. When in doubt, confirm for the “https://” at the beginning of the URL (on pages where you will be submitting personal information), look for any certifications or security seals that the Web site may declare or even research the details of the company yourself.

Here at e-wisdom.com, we only link to credit card applications that utilize Secure Socket Layer (SSL) technology and secure your information using the latest data encryption technologies.

You may also opt ot only work with larger banks and financial institutions online, as their online security is most likely up to the latest standards. Today, you can apply for credit cards online with little worry that your information will be collected by an outsider. When in doubt, a quick check of the Web site and/or company can put your mind at ease.

We take the security of your personal information very seriously and only partner with companies that utilize Secure SSL Technology to keep your information safe.

Old credit cards – Keep them or close the accounts?

Should you always cancel old credit cards that are no longer used when you open a new credit card account? The answer to this question depends on several factors that vary from person to person.

First, how much total credit do you have available to you? Too little credit can potentially be a bad thing. Make sure that you will be comfortable with your total available credit before closing an old credit card account.

However, too much credit can potentially be a bad thing, too. Do you really need the additional credit available through the new card and the old one? If you do, you might want to keep the old one. But be aware that more credit available now can lead to more debt down the road.

Finally, what other advantages do the old credit cards have? You may want to keep it to earn rewards or receive other special savings at a later time. Another possibility would be to have a credit card available only for emergencies.

In some cases, it can be beneficial to keep old cards and not cancel them. If you have a positive history with a specific credit card, paid off all balances and made every payment on time, keeping this credit card account active can potentially affect your credit score in a positive way. Even if you no longer use the card, your credit score can still benefit from the card’s positive history.

All things considered, it’s often best to keep — not immediately cancel — old credit cards when you get approved for a new card. Take a short time to look at all factors involved before deciding whether to keep the old card or not. Don’t make a quick decision without researching how closing an old account may affect your credit score.

About additional credit card fees

The cost of a credit card often goes beyond the interest that you pay on any balances you carry. Credit cards can come with unexpected, extra fees and costs. Unless you take the time to thoroughly read the credit card disclosures, you may not be fully aware of what types of fees are associated with the credit card.

You may already know you’ll be charged a late fee if you don’t submit your monthly payment on time. Another credit card fee that most consumers are familiar with is an over-the-limit fee, which occurs when the credit limit is exceeded.

Some other fees attached to credit cards include annual fees, balance transfer fees, cash advance fees, maintenance fees, monthly fees and even application fees (when you initially apply for the card).

If you have good credit, there is no reason why you should have a card with a ton of fees attached. If you have less-than-perfect credit, you should expect extra fees to be associated with the credit card.

Compare credit cards with an eye on the fine print. Be certain to look over the terms and conditions of any offer before applying to avoid any surprise fees.

Searching for billing errors

Credit card billing is often automated, and there are plenty of opportunities for errors to occur. Be sure to always review your credit card statement at the end of each billing cycle. But what exactly should you look for?

• Make sure that the amounts you have on your receipts for the month are the same as the amounts listed on your credit card bill. Be sure to compare every purchase you made throughout the month with what is listed on your itemized bill.

• Look for any questionable charges on your account that may indicate possible identity theft or fraud, or just a simple mistake. You should call your credit card company if something like this shows up on your account. If they are unable to shed light on where the charge came from, then you should officially dispute the charge both over the phone and in writing.

• Lastly, make sure that your previous payment was correctly applied toward your balance. If you find any errors of any kind on your statement you should not simply assume that you are the one making the mistake. Always pursue these items with your credit card company until you are satisfied with the result.

If you do discover a billing error, keep in mind that they can often be corrected with a little effort. Be patient and take all the right steps and the billing error should be corrected.

For more information on credit card billing errors, your rights as a consumer and best practices in disputing errors, see this resource on the Fair Credit Billing Act.

Cash advances and additional fees

Cash advances on most credit cards – obtaining cash from the available funds on your credit line – may result in extra fees and a higher interest rate.

Before you take a cash advance, first look at the fees associated with cash advances. You may be charged a cash advance fee by both the credit card company and the bank that issues the funds to you. If you use an ATM, you may have to deal with ATM fees as well.

Often, a credit card company may begin charging interest on cash advances immediately. This means that you do not have the same grace period as you would with a regular purchase made with the card. And the interest rate may be higher with cash advances than the interest rate you are used to paying on purchases.

Be sure to understand all aspects of obtaining a cash advance from your credit card. Check the terms and conditions of the card so that you are familiar with the fees and interest rate involved with such transactions.

Oftentimes, it is best to try not to use credit card advances as a default means to get cash in your hands. Instead, use your debit card or write a check at the bank.

Maximizing your rewards

You have undoubtedly heard of the myriad rewards which can be obtained using a reward card program. Some cardholders use their rewards credit cards to earn airline tickets, others use them toward hotel stays, and still others prefer to receive cash back or gift cards as their reward.

If you are looking for the best credit card rewards, you need to look beyond what the rewards are that you will earn and instead look at how long it will take you to earn those rewards

It certainly sounds appealing to open up a reward card account which earns points toward free gasoline, but how long will it take you to earn enough points to cash that in? Take a look at the terms and conditions of the reward program and see if there are certain purchases which can speed up your point accumulation. Many rewards cards offer double and triple points for purchases at certain establishments.

If you can find a reward card program which doubles your points when you buy items at an establishment where you frequently use a credit card anyhow, then this is an excellent way to maximize the points you earn. Special offers such as these can turn a good reward card program into an excellent one.

For example, some credit card companies offer a higher percentage of reward points for certain purchases such as gas, groceries, or travel expenses.

Be sure to understand all the specifics associated with the travel rebate card before you apply, otherwise you may find yourself making purchases under the assumption that you are earning double or triple points when you actually aren’t.

Maximizing the reward points that you earn is really an exercise in reading the terms and conditions of the program and getting a good understanding of when and where you can earn additional bonus points. If you are able to take advantage of special bonus point provisions, you’ll likely benefit greatly.