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Choosing The Right Credit Card:

Don’t get taken by the fine print! 

With the holiday season upon us, our shopping lists are growing. It’s also perfect timing to discuss something equally important — choosing the right credit card. Yes, they’re helpful and convenient. But choosing the right one can be complicated. 

When that 0% offer might be a sneaky little elf. 

You’ve probably seen and received numerous offers that promote 0% APR. Your APR, or Annual Percentage Rate, translates to the cost of borrowing money when using your credit card. If a card offers 0% APR, you don’t have to pay interest for the money you borrow for a specific timeframe. 

Sounds great, doesn’t it? But there are pitfalls. For example, when the promotional period expires, you typically get hit with a high rate that can make paying back what you owe a lot harder. A high APR will immediately impact the cost of the card and any balances you carry. 

When to say no to 0% APR: 

  • You can’t pay off what you spend before the 0% deal ends. 
  • The rate after 0% is higher than other credit cards. 
  • You’re tempted to spend more because of the offer. 
  • Fees associated with the card make a seemingly “great deal” not-so-great.

Retailer Cards: Not the Gift That Keeps on Giving 

Retailer credit cards are like coupons for cake — they’re fantastic now but don’t satisfy your needs in the long run. Stores love to offer you their own credit cards when you’re at the checkout, promising big discounts and special deals. But here’s the rub: they usually have much higher interest rates (22% or more), which adds hugely to the cost of money you’re borrowing. 

What to watch out for with retailer cards: 

  • Your interest rate soars after the initial discount. 
  • You’re making purchases (you don’t need) to get the discount. 
  • You’re penalized with a higher rate if you don’t pay off your balance in full. 
  • You’re charged exorbitant fees, sometimes hidden in the fine print.  

The Fine Print: Where the Tricky Stuff Happens 

When you’re excited about getting a new credit card, it can be easy to ignore the fine print. But that’s where the big banks and retailers hide their secrets. Think of it like a list of ingredients in your favorite junk food — you need to know what’s in it before you eat it. 

The fine print can tell you about fees, rate changes (when and why your APR might increase), and other important rules. So, grab your magnifying glass and read it carefully! 

Things to consider: 

  • Fees for late payments or going over your credit limit. 
  • The length of time your 0% APR lasts.  
  • The card’s standard rate after the promotional period ends.  
  • If the APR is fixed or variable. Variable rates are harder to plan and budget for.  
  • Difficult rules or conditions that are misleading or unclear.

Paying Off Holiday Balances  

Spending too much money over the holidays isn’t difficult, but paying those balances off can be. Here’s the secret to avoiding too much holiday debt: 

  • Budget: Before shopping, figure out how much you can spend without getting into trouble. Make a list and plan — and stick to it!
  • Use the Right Card: If you’ve got a card with rewards or cash back, use it wisely to get a little back from your purchases.
  • Pay More Than the Minimum: Always try to pay more than the minimum payment due. This strategy helps you pay down debt faster and can save you money on interest. Better yet? Pay your balance in full every month.
  • Plan to Pay It Off: If you do spend significantly over the holidays, make a plan for how you’ll pay it back. Maybe you’ll cut back on some extras, stay in, or eliminate a few subscriptions in the new year. The key is to keep on top of your debt and pay it off quickly.

Wrapping It Up 

Choosing the right credit card isn’t just about landing a 0% APR offer. It’s about finding a card that fits your needs, has a reasonable fixed rate — and won’t surprise you with hidden fees later. Remember, using a credit card is like borrowing money from your future self.  

Not sure where to start? For help sorting through the fine print of a card offer you receive, see us. We can share the pros and cons and assist you in making the right choice. 

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