charges (that does not inlclude the $2000 of debt)!
Fact Number Two: Switching to an 8% APR card from a 16% APR card will save you aprox. $500 per year in interest charges on a $5000 balance.
Ok, ok sign me up I hear you cry. Well hang on there Tigger, one moment before you jump into the credit card labyrinth and promise me your firstborn. Using a small amount of your gray matter (AKA your noggin/brain) you can avoid most of the pitfalls of the credit card game. I use the word game because it really is a game and you've gotta play by the credit card rules or they'll put you in the cooler which normally means ponying up more of your hard earned lolly(cash) or at worst getting a higher interest rate than you had with your old card.
So credit card guy, impart to me your bountiful knowledge. I'm gonna make this a 3 step process so here goes:
Step 1: Read the fine print.
You want a 0% Apr card but is it for purchases or balance transfers or both? Most people will want to transfer a balance and do not care about the 0% Apr on purchases but make sure you understand what the 0% Apr is related to. If you're unsure then call up the credit card company and ask them.
Step 2: Pay your bill on time
Sounds logical but really, buried in the fine print on page 1000 of the terms and conditions is a clause that states: If you are late making a payment, any introductory/special rates terminate and the standard purchase APR will apply to purchases and balance transfers. If you fail twice to make a required payment or if you exceed your account credit limit twice, your purchase APR will be 19.99%. If you fail 3 times to make a required payment or if you exceed your account credit limit 3 times, your purchase APR and cash advance APR will be 24.99%.
Yikes! This is straight from Discover's website. You normally have to allow 5 to 10 business days for the credit card company to get the payment so I suggest you sign up with your bank for on line bill paying or get an electronic debit order for them to automatically take out a certain amount each month. If they do hit you with a late fee and you have a good payment record with them you might try calling them up and asking them to waive the fee with the threat that you'll cancel your account if they don't. I have use this on one occasion and it worked so it never hurts to ask right.
Step 3: Keep an eye on your balance
So your limit is $2000 but the nice credit companies will gladly let you go over it and slap you with a $25 fee for the pleasure (in some cases even if you go over by a dollar) If you are making purchases with your new card check you account on-line weekly .
That's it, and remember that I'm as much a fan of credit card companies as you are but in some cases they are a necessary evil and sometimes a lifeline in time of financial trouble so let's ride them hard, to our advantage not theirs and hopefully one day we can cut up those little piece of plastic.