Mark Carolin

Posts Tagged ‘Interest Rates’

Making sure that you pay the lowest rate of interest chargeable on your credit card usage is vital if you want to maintain an effective money management scheme. As such, knowing how to make sure you pay the lowest interest rate on your credit card should be viewed as an essential element to deciding which credit card you should select.

As we all know, credit card companies are not in the business of giving away a free service and one of the ways in which they make a big part of their income is charging interest on any balance you carry-over from one payment period to another. Although this interest is charged monthly, interest accrues on interest and consequently credit card companies are required (in most cases by consumer law) to advertise their interest rates not as a monthly sum, for example 1.9%, but rather as annual figure, for example 22%. Because the interest rate advertised is calculated over the period of a year, it is known as the Annual Percentage Rate, or APR for short, and is the quickest way of telling which credit card company charges the lowest rate of interest for using their card.

Having said this, there are a couple of additional things you need to keep in mind when comparing the APR advertised by different card issuers, namely:

Annual Fees

Does the issuer you are considering using charge any annual membership fees? This is an important question because some issuers can ‘hide’ fees payable for using their card in the form of an annual fee. Indirectly this allows them to lower their APR comparable to those issuers who do not charge membership fees. However, when you include the membership fee as part of the interest rate, often the amount you are being charged is higher than if you had decided to use the services of a provider that charged a slightly higher APR, but no annual membership fee.

Credit Rating

Your credit rating will affect the interest rate you pay on nearly all your borrowing and a credit card is no different in this regard. If you have a good credit rating, you should be expecting to pay less APR. Conversely, if you have a bad credit rating, you should not be too surprised if you find that you are being asked to pay a higher APR.

Default

It would be hard to emphasis how important making at least the minimum repayment on your credit card each month is. If you do not, you will likely find that your provider will increase the rate of interest you are being charged on your account. Sometimes this can occur even though it may not have been your fault that the payment was made late, for example you made the payment but it was received late, and without the provider being required to inform you that this default caused the interest rate on your credit card to change. It is, therefore, imperative that you read the small print of any application form you complete to check and see if the interest rate will change because of any non-payment or late payment and if the issuer will be obligated to inform you that the interest rate has changed.

Of course, the only way to make sure that you pay no APR on your credit card usage is to ensure that you clear your credit card balance each statement payment date. Unfortunately, however, most of us are cannot afford the luxury of paying off our credit balance each statement period and the card issuers know this. So, to make sure you are paying the lowest APR possible, read the fine print of the application form and make sure there are no hidden extra fees or charges and that the rate of interest you are paying really is the card’s advertised APR!

Today’s recession has had an impact on personal and business credit cards. Over the past 1-2 years many any people are receiving letters from their credit card lenders informing them of an increase in interest rates or a decrease in the credit limit.

Small business credit cards can be an additional source of financial income. They also help in keeping other lines of credit open. Using this type of credit card can ensure that suppliers are paid on time while giving the business an interest-free period (float) in order to obtain enough money to pay off the credit card debt. As the recession has begun to deepen, businesses have found that obtaining credit cards for their business has become much more difficult.

The worst thing a new business owner can do is to use their own personal credit card to finance their business purchases. This makes it very difficult to separate business and personal finances, but also makes the individual responsible for the debt of the business. Not a good thing!

Some businesses are using business even credit cards to pay their tax bill, which is tempting as it avoids any fines for late payment. There is however a fee for doing so. Usually, this fee is significantly lower than the penalty would be for not paying taxes on time.

There are still plenty of opportunities out there for small businesses who have good credit record to take advantage of their business’ credit cards. Even though lenders are stricter in their acceptance criteria than in previous years, you should not give up. Before applying for credit make sure that you meet all the requirements for acceptance. Every time your credit is check, the credit score goes down. As a result, only apply for cards when you feel confident that you will be accepted.

Using gas only credit card you not only benefit from convenient gas payment but also you can use it to purchase items like groceries, pizzas and drinks, which you anyway do. Credit card for gas purchases give you reward points no matter where and how you spend it. When the points reach a certain number, you can exchange these points at a gas station for fuelling up your car.

The benefit of gas credit cards do not stop here. You can go an extra mile with numerous benefits that gas credit card companies offer. They have tied up with gas station workshops, convenience stores and many eating joints at the gas stations. People holding auto and gas credit card can avail these facilities at huge discounts. You can also enjoy great discounts for the spare parts and services such as car wash.

Some gas credit cards even offer free accident insurance for your car as well. This insurance however provides limited coverage with low risk amount. However, you will get attractive discounts when you get your car insured and pay the amount through your gas credit card. Now you have a reason to be happier because all these transactions at discounted price earn you more reward points and could earn you free gas also.

Search and Compare for Best Gas Credit Card

You should search and compare various offers from credit card companies when selecting an auto and gas credit card. Consider the interest rates that the credit card company is charging. Check whether the special features provided by the gas station credit card come at normal interest rate or not.

Do they have any hidden costs or high annual or other charges for user to avail those benefits? Some companies offer zero processing fees and no annual charges. A good gas reward credit card is the one that provides free gas reward point as introductory offer.

Applying for Gas Credit Card

You can apply for gas only credit card online over the Internet. The application form is simple that allows you to complete it within minutes. The credit card company will process your application securely and after several checks to ensure the integrity of the applicant, you will receive notification about the approval usually within a few days.

Prepaid business credit cards are real convenient for business use. You get to control how much money you like to have. This is better than running around with cash. Many services nowadays require some sort of banking account and in my opinion prepaid is the way to go. Don’t you hate credit cards that have so many fees? You are charged with monthly fees, over drafting fees, late fees and interest. This is a lot of money that could be going into your pocket.

Maintenance is kept to a minimal when you have a prepaid business credit card. You will never get a over drafting fee. You only spend what you have fund in your account. This is how you fund your business with your money.

Weighing The Benefits

No interest – never pay a dime on interest rates Online Bill Pay – Set dates to pay expenses automatically to avoid late fees Purchase Online – Be able to buy online or over the phone Security – You have the same protection as the major credit cards Increase Credit Score – By paying bills on time you could increase your credit score No Debt – You only spend what you fund

Applying for a prepaid card is simple and can be done from a store or even online. i recommend purchasing online as it is safe and convenient. This gives you the option to open an online account to track your balance and transactions. These cards are accepted world wide just like the major credit card. You too can be on the road to financial freedom by building you credit score with the credit builder that comes with every new account.

The developments leading up to the Icelandic financial crisis makes for an interesting read, only because of the fact that a lot of factors actually contributed to it. The problem really was – No one was able to understand the magnitude of the problem at hand, resulting in the entire situation to spill over in a big way.

The Krona was depreciating

The national currency of Iceland, Krona, didn’t do well in the lead-up to the final bust. Starting January 2008 until September 2008, the Krona had slipped 35% against the value of Euro. It was not that the Euro was strong in itself, but the Krona was way too weak compared to the Euro. This almost triggered a price rise, which resulted in inflation climbing up to 14%.

Eventually, banks in Iceland raised their interest rates to deal with the inflation, to 15.5%.

The Central Bank of Iceland tried to benchmark the value of Kroner at two instances. The first of these was on the 6th October, when they failed to do so. And the other came on the 8th October, when the bank decided to peg the value at 131 Kroner to a Euro.

This attempt failed too, and by the next day, the Krona was dealing at 340 to a Euro, which is when FME took over the last standing major Icelandic bank. In days coming by, the value of the Krona went on to be determined by a lot of factors, most of which don’t play a role in the normal sense in determining the valuation of the national currency.

October 2008 was the signal that the worst for Icelandic banks had indeed come, as the exchange reserves of the Central Bank of Iceland dipped by 289 Million Dollars.

Lack of strong action spelt doomsday for the banks

The news that the Iceland Government was planning to nationalize Glitnir, a leading bank by purchasing 75% of its stake at 600 Million Euros, made some people sit up and take notice. One of the leading banks was apparently in trouble and surely, this was a sign of worse things to come by. Apparently, what had happened behind the scenes was The Financial Supervisory Authority didn’t let the take-over of 75% stake go through.

Considering the fact that Glitnir had about $750m in debts meant one thing – This development sounded the death knell for banks.

Developments over the next some days meant that banks had completely stopped inter-bank credit lending facilities, leading to Prime Minister, Geir Haarde announcing a new set of regulatory measures. In the coming week post this announcement, two other banks, Landsbanki and Kaupthing, bit the dust, literally speaking.

No activity on the stock markets, either

All this frenetic activity resulted in investors moving out their money out of the stock market. The national indices of Iceland saw a freefall like never before, and finally, the FME drove the final nail in the coffin, by suspending the operations of the stock markets. The markets remain shut for 8 days, before resuming on October 14th.

On resumption itself, the markets nosedived 77%, as a result of the indices and the values of the three major banks being set to zero.

Broadly speaking, these were three major developments that resulted in the ballooning of the Icelandic financial crisis. As discussed before, all of these could have been prevented easily by some proactive measures by the Government. As it turned out, the measures were retro-active.

It used to be that in order for people to shop around conveniently, they have to get a loan the old-fashioned way. They need to go to the bank and enter into agreement for a conventional loan. Consumers are required to put up a certain item as collateral for the loan and once they are unable to pay for it, their collateral will be liquidated by the bank in order to cover their losses.

The along came credit cards. Instead of giving up collateral, cardholders have to pay higher interest rates. To entice more people to get cards, virtually all companies are coming up with all sorts of attractive offers. One such tactics is the concept of reward credit cards. Reward cards are cards with accompanying rewards programs. While this concept has started a long time ago, it just caught on recently.

Credit reward cards are excellent because consumers to get rewarded for something that they usually do anyway; use their cards to make purchases. This benefits both the cardholder and the company. Cardholders are rewarded; credit card companies get more customers.

There are two types of credit reward cards being offered in the market today:

Cash Back Cards

These types of cards provides cash rebates depending on how much the cardholder spends over a specified period of time. Do note that different credit reward cards offer different cash back rates though there are also some card companies that apply a tiered system. If you are interested to get a cash back card, it is best to inquire about it personally.

Air Miles Cards

The concept is simple; the more you use this reward credit card, the better the chances of booking a getaway Each purchase a cardholder makes using an air miles card will earn them some credit, taking them closer to getting a plane ticket to certain destinations.

These are the two major types of credit reward cards though there are also cards that give shopping rebates, hotel rebates and even car rebates. To know how to get which best reward card is the best for you, you need to assess your own needs and preference. From there, search the internet for more information and use reputable comparison sites to determine each card’s features and offers.