Applying for Credit Cards: Think Twice

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When holiday shopping you may be using your credit cards more than other times of the year. Credit cards are a
wonderful convenience, especially when traveling or shopping by catalog or internet. The major issuers, Mastercard, Visa, American Express and Discover offer rewards programs and the store credit cards often offer additional discounts during sales.

The strategy behind the marketing is to increase cardholders’ balances and thereby increase the amount of interest that is paid. If you pay your balance on time, then credit cards are simple to use and you can reap the benefits. However, it’s much easier to spend money, including money that you don’t have, when using a credit card.

The credit card companies are constantly sending pre-approved offers and cash advance checks. Although the offers have low initial interest rates, the rates generally rise after several months or if you miss a payment. In fact, the rate may rise to as high as 25% per year. In addition, the cash advance checks that you can spend “however you like” begin accruing interest as soon as they are cashed, just like a loan. Don’t be fooled by these offers no matter how good they may look. The best thing to do is to shred or rip up the letters when you receive them.

There is no such thing as “free money!”

For more information, or if you have any questions, please call Jacky at 610-283-7085.

By: Jacky Kennedy Sisson
Surrey’s Daily Money Manager