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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 to see what you will be paying over the long term.
Credit Card Interest Calculator
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 interest calculator.
You will see how much more you will really be paying month to month by comparing the two figures.
Credit Card Payment Calculator
Another area you should investigate before taking opting to use this payment method 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 calculator is good to use, especially if you aren’t sure whether or not you will be able to pay more than the minimum payments.
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 that come with your credit card. More often 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. You just might find that your current card offers a much better deal.
Credit Score Calculator
Before you apply for a credit card, the loan provider or bank may research your credit score to provide them with the confidence that you will pay back what you borrow. Your rating also has an influence on how much a provider is prepared to lend you, and over what period of time.
You can use a credit score calculator to work this out and takes your previous financial history, credit limits and other negative events such as bankruptcy, repossession of property and tax lien into account.
Credit score calculators are also available for you to calculate your current score and plan on ways to improve it, boosting your chance of receiving an approved credit card application.
Here are a few simple ways to improve your credit rating and improve your chances of paying less interest on your card:
- Don’t miss payments – including phone, gas and other utility bills
- Get on the electoral roll – you will not be able to get credit without being listed!
- Cancel unused credit cards
You may want to consider a credit-builder card if you have poor history to increase your chances of being accepted and improve your ranking on the credit score calculator.