Although credit cards are not as easy to qualify for as they once were, in recent months more and more credit card companies are once again vying for business with special introductory offers.
Before taking out a new credit card just because interest rates and terms look interesting, use a free online credit card calculator to see just what you are getting yourself into. These are small, user friendly programs you find online and you only need to enter a few bits of information into the credit card debt calculator to see what you will be paying over the long term.
Many credit card companies are under fire from government and consumer advocate groups because of their misleading adverts when it comes to making credit card interest rates look lower than they are.
Altogether too many consumers were lured into transferring all their credit card balances to a new card because it was advertised as having 0% interest for the first few months. Thereafter, interest rates looked appealing but when the numbers were entered into a credit card interest calculator, the APR was not as appealing as they were led to believe.
In fact, recent studies have shown that a credit card APR calculator proves that what looks to be 9% according to the adverts is actually closer to 29% in many cases when looking at the annual percentage rate.
The APR includes other amounts besides just the yearly interest being charged by the credit card company. Any fees, loan insurance, compound interest and other administrative fees are also calculated into the APR which is why you should run your figures through both a credit card interest rate calculator and a credit card APR calculator.
You will see how much more you will really be paying month to month by comparing the two figures.
Another area you should investigate before taking out a new credit card is how long it will take you to pay back what you charge.
For instance, if your credit limit is £5,000 and you only make minimum payments each month, a credit card repayment calculator would indicate how many years it would take to repay the loan and how much you would be paying in the long term.
A credit card payment calculator is always good to use, especially if you aren’t sure you will be able to pay more than the minimum payments. You would be surprised how much that £5,000 is actually costing you.
Sometimes these handy little online programs are referred to as a credit card minimum payment calculator or a credit card payoff calculator but the end result is still the same. You will be able to accurately calculate how long it will take you to pay off any given amount based on the interest rate and other associated fees.
More times than not consumers find that they are paying back much more than they bargained for. The best advice is to take the time to use a credit card calculator online before you sign on the dotted line for a new credit card. You just might find that your current card offers a much better deal.