Friday, November 20, 2009
Credit Card Informations
Credit cards are really cool, right? You get a easy credit limit and you can pay for things you love with your card. When you pay for something with your credit card,you are actually buying things on credit. You have to pay interest on your credit card balance and as long as you don't go over your credit limit, everything's easy and fine.
Here are some of the frequently asked questions and answers -about credit cards .
What is interest?
Interest is money that you pay a lender for the privilege of using his money to buy something on credit.
What is this about 'interest rates' and percentages?
The interest rate =Is the monetary amount you're paying for borrowing money on your credit card. It's is a % of the balance on your card, usually as an annual percentage rate. The lower the annual percentage rate, the less interest you're paying .
Now, Why would you take a card with a interest rate?
Most people don't want to pay a high interest rate. Credit card service providers decides what interest it will charge you, they determine that by looking at your history of paying bills. If you have a good reputation of paying bills on time, then you'll qualify for lower interest rates. If you haven't ever had any bills to pay, or if you've had trouble paying your bills, that will show in your credit history. As it's a riskier to lend you money, banks will charge a higher interest rate. People might also take a credit card with a higher interest rate for the gifts and rewards that come with that card. If the card includes special gifts that you want, they may offset the higher interest rate and make it more worthwhile for you.
'outstanding balance'. ?What is it?
Outstanding balance is the net amount that you owe on your credit card. Banks and Credit card companies compute what's called an 'average daily balance' for each month and base your interest charges on that.