We’re coming upon the time of year when some people are realizing that the holiday season is going to strap them financially. I am not going to preach and say you shouldn’t get a credit card to buy presents for the kids and family. I think most of you know that and are probably sick of hearing about it.
What I am going to do is point you to a few articles to read before you begin filling out any application you can get your hands on.
- Dumb Little Man – 9 things to Consider when choosing a Credit Card
- Dumb Little Man – Things you don’t see in the T/Cs
- Get Rich Slowly – The Only Credit Card Guide you will ever need
- The Federal Reserve – How to Choose a Credit Card
If you think that all of the finance blogs are just spinning your wheels, here is an excerpt from a report released this morning by the GAO, which is an arm of the U.S. Congress:
- As many as three different interest rates for different transactions, such as one for purchases and another for cash advances, with rates for purchases ranging from about 8 percent to 19 percent.
- Penalty fees for making a late payment or exceeding a credit limit, with the latter averaging $31, up from $13 in 1995.
- A higher interest rate — sometimes exceeding 30 percent — as a penalty for paying late or other actions.
Some credit card issuers use a billing method that charges interest on credit card debt already paid by the consumer, the study found.
The point is very, very simple. Read before you sign and do what you can to make credit cards your last option.
There are clearly other great articles on this issue. If you have a resource that you’d like to add, feel free to leave it in the comments. If it’s blatant spam, it will get deleted.
Source of the GAO Excerpt: Associated Press via Yahoo News