The monthly APR on your credit card should be lower than what you’ve paid for your credit card in the current credit card frenzy. You’ve seen the commercials,’such as the one above, which claims:
‘You’ve paid off your balance in no time’
‘We’ll send you your statement – once again.’
Did you know that the credit card company will not send you a bill that says ‘once again’ on the statement? No. Do you know that the credit card says ‘once again’ on the credit card statement? Really? If the statement is sent to you, you might as well be paying interest on what’s on your statement and not paying off the dues.
Let’s look at the very latest example:
‘monthly APR: $9.99
‘balance/secured debt: 30
‘secured debt: 20
‘monthly APR: 14.25
‘Balance owed: $49.49’
That means you owe $50 in purchases versus 43 cents for purchases on your credit card. But what about the other $49.49 spent using your credit card and then paying interest?
This is a standard credit card APR. It’s exactly the same, but most offer a different APR for short-term low-interest credit card purchases. The kicker is that this APR is only for the first twelve months – you pay $49 in interest. When you have a debt of $241, you’re stuck paying $7.24 in interest for 12 months.
It really doesn’t matter how much money you spend using your credit cards,’say a credit card with no APR and an APR beginning at 14.25%. The only difference would be the credit cards with a long grace period – when it’s free again and will not impose any interest rates.
If you’re a student and you really need your credit card at least once each semester, you can afford to pay the balance in full each time. That’s the best free money you could get – until you’ve collected the appropriate debt, and then another debt. Why? If you were one of those students (that is, if you have been paying additional cards from time to time) you’d have to bear the brunt of the annual increase in APR fees and the cost of consolidating.
Should you pay off your debt every time you get your credit card? Absolutely! Over 5% of college students pay off their debt every month! After all, every student must first pay off his credit card, and that’s a good thing – if you can manage to get your hands on a credit card with a steady income. And it makes lots of sense – credit card companies generally prefer to cash in on college students in order to help them establish a good line of credit.
While it’s nice to have steady income with the first-class-airfare policy, paying just the minimum payment every month makes more sense than a hefty new car loan or additional credit card purchases. But paying over five months off your debt is a major mistake – and you should never underestimate the potential for overpayments. Paying more than just two months off will hurt – your credit score for sure!
And no-interest means doesn’t let you keep paying your credit cards – it just forces you to realize that it’s the lifestyle that will pay the biggest price when your credit score improves.
The bottom line: it’s not really a bad idea to be debt-free every time you have six months or more of zero APR credit card debt, or twelve months or more of interest on each credit card that’s still owing credit.
Short Form Credit Card Application Tips
A short form credit card application is something that usually takes you about two to three weeks, depending on how much you decide to spend on credit cards and how much you can sustain paying back the principal each month with zero interest.
Of course it’s possible to apply this kind of a short form credit card application by direct Internet rather than spending time online as well. You still have to spend and manage your money with the credit card company that is filling the position of employee of your bank.
This way it would be nice to see just what kind of application form one would need before one even leaves the office so that one has to have the chance to apply for a credit card.