The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
It can be easy for consumers to figure out exactly what their credit card accounts are costing them every year, and all it takes is a little math and some projection. However, consumers who sit down to figure out how much their credit card costs them every year need to think about not only the rates and annual fees they pay, but also other factors that may similarly affect their bottom line every year.
[Free Resource: Check your credit score and report card for free before applying for a credit card]
For instance, it can be easy to calculate how much an annual fee costs every year, but a bit more difficult to figure out how much an interest rate costs. That’s because it can fluctuate from one month to another, depending on repayment habits. However, taking the time to look at past repayment habits over a number of years — as long as consumers are saving their statements for long periods of time — might be helpful in predicting this because they might be able to spot times of year during which they tend to carry more of a balance, or months where they are effective in reducing it consistently. This might help them to guess at what future changes they might face, and perhaps even take steps to avoid the habits that lead to higher costs in the coming months.
Similarly, many consumers attempt to reduce the price they pay for credit cards by finding rewards cards that grant them cash back or points for every dollar they spend, but these can actually end up being more costly if the borrower isn’t careful. That’s because these cards traditionally come with interest rates and annual fees higher than those for traditional accounts. As a result, consumers should take a careful look at what their current spending habits earn them in points or cash back, and then use that information to figure out how much they’re truly paying for such an account. The costs might outweigh the benefits.
[Credit Cards: Research and compare credit cards at Credit.com]
In any case, if you find that your credit card costs too much every year either because of an annual fee or interest rate, it’s a good idea to look into new accounts that would reduce your costs, and save you more money over time.
Image: x-ray delta one, via Flickr
April 9, 2024
Credit Cards
October 21, 2020
Credit Cards
August 3, 2020
Credit Cards