Credit cards are not free. They have several different types of cost that are associated with them. These fees are charge for the use of the credit card and should be understood by any person who wants to use a line of credit in order to purchase items.
The annual fee is a fee with a flat dollar amount that is issued for the use of the card each year. Some credit card companies do not charge any annual fees and a person should consider using that card before deciding on that any other cards. Some other fees that may be charged by using your credit card are processing fees, charges for when you exceed your credit limit, late payment fees, balance-transfer fees, credit life insurances, and application fees. Therefore, it is best to look at all the factors that go into a credit card before you decide which card you will use.
However, one the most important factors in dealing with credit cards are financial charges. Finance charges are calculated based on the interest rate that your credit card company will give you for the card's use. The interest rate is often described as an annual percentage of the principal and is calculated by dividing the amount of interest by the amount of the principal. Finance charges/Interest Rates are the main expense of using a credit card, and they can become very high without proper attention. The interest rates vary greatly from one card to another card, so if a person wants to find ways to save money than they need to shop around and look for cards that have low interest rate and plans.
Generally, a low interest rate below 9.99% is extremely good. However, only those individuals with good credit rating will get this score. If a person has bad credit ratings and/or is just beginning their credit lines they will be charged with higher interest rates. Sometimes up to 31.99%. Also, beware of cards that try to sell you 0% interest rates. Those types of cards are traps! They may have 0% interest rates at first, nevertheless, those rates are only for a limited amount of time - usually only for six months. Afterward, the interest rates may become shockingly high, so watch for this trick in promotions.
A credit card with a low interest rate is very difficult to come by in today's economy. However, if you have a good credit standing and history finding a low rate is possible.