Three Tips for Selecting Credit Card Offers
Credit card offers come in the mail and e-mail, begging you to pick them, practically ignoring the fact that getting credit is harder than ever. So while it's understandable you may want to seize any offers you get, there's something very important to keep in mind: The interest rates for credit card offers are going up. So to ensure you're getting a good credit card, here are some things to consider before applying.
Teaser rates are a tease
Sure, some credit cards at comparison sites are offering 9.9 percent for up to 18 months, but remember to really read the fine print before applying for a card. If you miss a payment -- although the Credit CARD Act of 2009 gives card users more leeway than in the past -- you may lose that teaser rate. That, and "up to" can be squirrelly language. It might be 12 months or seven. And talk about a tease -- if your credit isn't the best, you might instead be offered a higher rate than what was advertised, say, 15.99 percent, only to later see it climb higher after the introductory period is up.
Remember that 'variable' means change
In the old days -- a couple years ago -- credit cards often had fixed rates. Now variable rates are in. It's crucial to remember that interest rates won't be low forever. Once the Fed starts raising short-term interest rates, the variable interest rate will inevitably rise, too. If your debt is under control, that may not be a big deal. If you're using the credit card as the glue to hold your financial life together and you have a serious debt load, that could be a big problem down the road.
Look for weird fees
Annual fees are pretty standard in credit card offers, but some other oddities include "processing fees," where you're charged before your card is even activated. Look for strange fees; if you're spotting something you think is inherently ethical, that's a good clue that this credit card offer is something you should decline.