Wednesday, March 16, 2005

Credit Cards

Just recently I have started credit card shopping...we have two major cards total and I want to get rid of one of them (because of a monthly due we pay on it even when we don't use it) but don't want to be left without a back up so I started shopping around to see what the best deal was...

I thought about doing the miles or money back options but they all seem to have a minimum finance charge per month even if you pay it off (which we do) and a huge annual fee (like 4 times the amount of most regular cards). I looked at just getting a regular little fixed rate one and those seem to be on the endangered species list.

It seems in the years that we have been with our two cards, that things in the credit card arena have changed. I figured with the really low interest rates out there that getting a card below 10% fixed APR would be a no brainer...companies would be beating down my door to offer them to me... well I was wrong...most companies don't offer fixed APR cards anymore. I have to figure it is because the interest rates are so low and they don't want to get caught in the long term with those rates if they ever should go back up (which we know they will) so they all offer variable APR which means your interest rate could completely sky rocket if you weren't paying attention. The minimum finance charge seems to be their way of getting around the consumers that pay off their card every month. I use my credit card instead of cash and the benefit would be lost if I had to pay a finance charge on an empty balance every month.

I am thinking right now that my current "most used" card company would love for us to close our account because they don't offer fixed APR at all anymore and every card they have has a minimum monthly finance charge (the one we have doesn't and we only have an 18 dollar annual fee and a decent interest rate). We pay them off every month so they really only make the annual fee off us and the 3% off the retailers.

So I had to go on a serious hunt and finally did find a card at my own credit union that offers a fixed APR with a low or nonexistent annual fee...perhaps when the interest rates go back up, there will be more out there to have but for now....happy hunting to anyone looking for it and make sure you read that fine print...that is where the variable APR resides.


Joanne said...

My American Express Blue card has no annual fees or monthly fees and I'm pretty sure it has a fixed APR, however I've been in it since the beginning of Blue so it may have changed... I love them too because the rate is so low.

Cindy-Lou said...

That's funny, I was reading this and already planning to suggest a credit union! Credit unions are the way to go. Can you tell I work for one?