For those with Credit cards

[Shana-chan]

Could someone explain to me how the repayment process works with credit cards? How much do they charge per month (like, if you have a $1,000 charge on it)? Or do they charge you once every six months? FOr the 0% intro APR, is it really 0% if you pay it off before they bump up the APR, or do they charge the APR after the intro rate, even if you pay it off?

I'm considering getting a card, but they're soooooo evil! I just need a little info. Thanks.

[BrigidMoon]

Hope this helps from: http://money.howstuffworks.com/credit-card8.htm


Financial Jargon
Before we get into shopping for a card, let's go over some important terms you'll encounter in credit-card brochures or discussions with potential lenders:
Annual fee - A flat, yearly charge similar to a membership fee

Many companies offer "no annual fee" cards today, and lenders who do charge annual fees are often willing to waive them to keep your business.

Finance charge - The dollar amount you pay to use credit

Besides interest costs, this may include other charges such as cash-advance fees, which are charged against your card when you borrow cash from the lender. (You generally pay higher interest on cash advances than on purchases -- check your latest bill to find out what you're paying for this service!)

Grace period - A time period, usually about 25 days, during which you can pay your credit-card bill without paying a finance charge

Under almost all credit-card plans, the grace period only applies if you pay your balance in full each month. It does not apply if you carry a balance forward. Also, the grace period does not apply to cash advances.

Annual percentage rate (APR) - The yearly percentage rate of the finance charge

Interest rates on credit-card plans change over time. Some of these adjustments are tied to changes in other interest rates, such as the prime rate or the Treasury Bill rate, and are called variable-rate plans. Others are not explicitly tied to changes in other interest rates and are called fixed-rate plans.

Fixed rate - A fixed annual percentage rate of the finance charge

Variable rate - Prime rate (which varies) plus an added percentage (For example, your rate may be PR + 3.9 percent.)

Introductory rate - A temporary, lower APR that usually lasts for about six months before converting to the normal fixed or variable rate (This is a hot topic -- more about it later.)

[Shana-chan]

Thanks for helping, but that's not the part of the card I'm confused about. Everything they talk about in the brochures I understand. Just the parts that I'm asking about I'm confused about. Those are the parts I need help with. :/

[~BEBZ~]

Ok hon, maybe this will help. One of our cards has a $1,500 limit, which we have maxed out. The payment we have to make monthly is around $35, and that is cause we are getting charged double interest since we went over our limit. One thing they don't like to tell you is that if you ever go over your limit they will start charging you double interest. The only way you can get it down is to make your payment on time for at least six months and not go over again. Plus if you go over you get charged a hefty penalty. We would have never went over, but one thing we didn't know was they charge your card for your monthly interest payment. So make sure that you always leave about $50 on it. Plus, a cash withdrawl has a much higher interest rate plus our card charges us a ten dollar fee. That's why they are so evil, they charge you interest on your interest and hit you with every fee and charge they possibly can, and get away with it. Just make sure that if you do apply for one that you read EVERYTHING on the back of the contract agreement, which usually only amounts to the application you send in. Even though I hate the things they are handy for emergencies or like with us, when your husband has been out of work for six months.

We have another card that has a $300 limit, and when it's maxed the min. payment is only $10, if that gives you any clue.

[PoisonIvy]

Pay it off every month and ya don't have to pay any interest! :toofless: Never put more on it in a month that you can't pay off the next month or you'll be payin' $50 or more for a $20 pair of jeans! :tarotwitc That's how ya get into trouble!

[Shana-chan]

Thank you very much! That was what I was curious about. ^.^

[Kyan's Daddy]

A couple things to know about credit cards:

Let's say you have a $1000 balance, and your minimum payment is $30 a month. Sure, you think that it will take you about 3 years at that payment to pay it off, but you need to realize that A) they charge you an exorbinant interest rate, which they B) compound daily!!!

So, in reality, you take that $1000 balance and only pay the minimum, it takes something like 7 1/2 years to pay it in full... You end up spending close to $3k to pay off your $1000.

I do NOT use credit cards. I pay cash for everything I can. Why? Because it's too easy to ring up the credit cards, get yourself in trouble, and next thing you know, you are swimming in debt, with no way out.

If you absolutely MUST have a credit card, you need to pay it in FULL every month. Once you fall behind, it's really, really hard to catch up.

[Lunadria]

A couple things to know about credit cards:

Let's say you have a $1000 balance, and your minimum payment is $30 a month. Sure, you think that it will take you about 3 years at that payment to pay it off, but you need to realize that A) they charge you an exorbinant interest rate, which they B) compound daily!!!

So, in reality, you take that $1000 balance and only pay the minimum, it takes something like 7 1/2 years to pay it in full... You end up spending close to $3k to pay off your $1000.

I do NOT use credit cards. I pay cash for everything I can. Why? Because it's too easy to ring up the credit cards, get yourself in trouble, and next thing you know, you are swimming in debt, with no way out.

If you absolutely MUST have a credit card, you need to pay it in FULL every month. Once you fall behind, it's really, really hard to catch up.

I totally agree with you and swore I'd never get credit cards. However, I found taking a debit card abroad didn't help me much because not all business' accep it and therefore I have now applied for one. I will only ever use it for when I'm abroad and on business and that is the only reason I gave in and applied for it.

[Shana-chan]

I don't use credit cards either, but I was really curious about the minimum payment. I know I'd be able to pay off $1,000 within a year, which would be perfect if I got a 0% apr, but until I could pay it off, I needed to know how much minimum payments would be.

I use a debit card, too. If there are places that say they only take credit cards, then just ask them to use it like a credit card. The only difference is that the amount won't be charged right away, it'll only be charged when they actually send the amounts off to the card companies.

[Lunadria]

I don't use credit cards either, but I was really curious about the minimum payment. I know I'd be able to pay off $1,000 within a year, which would be perfect if I got a 0% apr, but until I could pay it off, I needed to know how much minimum payments would be.

I use a debit card, too. If there are places that say they only take credit cards, then just ask them to use it like a credit card. The only difference is that the amount won't be charged right away, it'll only be charged when they actually send the amounts off to the card companies.

Yes, but when you're driving through France and need to insert your card at the tolls there isn't the option to ask anyone.

[Shana-chan]

Okay.... That's not relevant here AT ALL.

[Lunadria]

Okay.... That's not relevant here AT ALL.

Well, it is, it's a reason for me needing one if nothing else.

[Shana-chan]

Well, it is, it's a reason for me needing one if nothing else.

Yea, but this post is about me asking about a credit card for myself, not for you. o.O I won't be going to France anytime ever (I'm poor, that's why I was looking at credit cards). o.o

[Amethyst Rose]

Another thing to consider about credit cards is that they help to build your credit. Even if you don't use them you should have them. We never used to have credit cards...used cash for everything, including buying a car. But when it came to buying a house, the bank didn't care that we were responsible enough to pay cash for everything instead if using credit....they wanted us to have at least 2 credit cards and another loan behind our name (all timely paid off, of course).

I realize this isn't relevant to the conversation, the same as needing one for travel abroad isn't relevant, but it is something to consider in the future....it's always good to look ahead. :)

[Kyan's Daddy]

(I'm poor, that's why I was looking at credit cards). o.o

If you're poor, that's why you SHOULDN'T be looking at credit cards. Credit = money you don't have.