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Having a credit card or three can be a thrilling adventure: all of the sudden you have more cash available and can buy things that you otherwise couldn't afford. You understand that you need to pay your bills on time, pay the minimum payment every month, and that you can obtain cash advances. Yet, do you know what risks are involved in minimum payments and cash advances? Educate yourself to avoid the most easily misunderstood credit card traps:

Paying the Minimum Monthly Payment on Credit Cards

The minimum monthly payment is a very small amount that your credit card company requires you to pay each month to keep your balance in good standing. It seems like a dream. You owe $1,200 and only need to pay $50 this month. Unfortunately, this dream has a harsh reality to it. The less you pay, the higher your interest and the faster you balance climbs, whether you are making new purchases or not.

If you pay only the minimum due, even on a small amount, it may take years to pay off the debt. What you will really be paying is interest, and lots of it. The smartest way to avoid this trap is to pay as much as you can each month, or only spend what you can afford to pay in full. It might seem like a dream to pay such a small amount, but in the end in can turn into a nightmare in interest and debt.

On the flip side, if you miss a payment or pay less than the minimum, you will be charged a late fee on top of current interest charges and will likely get a negative mark on your credit report. It is imperative that you at least pay the minimum, no matter what your financial status.

Credit Card Cash Advances

Cash advances seem easy enough: go to the nearest ATM and withdraw whatever amount of cash you need. What you may not know is that most cards charge a special fee on a cash advance, the interest rate is usually higher than on normal purchases, and you pay interest every day until you pay the advance, without a grace period.

Be sure to check the details on the credit card contract to find out what fees you will pay for this easy transaction. The best policy is to only use advances for emergencies. If you get in the habit of withdrawing money from you credit card, you could see your balance skyrocket in no time.

Back to the Articles

Yes, low APR credit cards are on the rise. Many credit cards are competing for your business to give you the best and lowest rates available today. There are so many credit cards from you to choose from that they are doing all kinds of things to get your attention including lowering their interest rate and giving you no annual fees.

Why is this happening? Because there are so many credit card companies. They all want your business and this is an attractive incentive to get you to apply and own one of their credit cards. If you choose a low APR credit card over one with 19.99 percent you are sure to go with the lower APR.

The only problem is that sometime these 0% and low APR credit cards are only promotional ways to get you to apply and then later your interest rate will rise. Many credit card companies have low APR credit cards for a certain amount of time such as 3 months, 6 months and some up to one year. You will have to compare to find out which one keeps the lower APR after the promotional period to ensure you are getting the best deal around.

No matter what the reason low APR credit cards are here to stay as long as the companies are competing for your business. Just remember to compare everything they offer besides the lower interest rate. You may find that several credit card companies are now offering other wonderful incentives for you to apply with them such as reward programs.

No matter which company you choose, you will enjoy the low APR credit cards even if it is only for a limited time. You will be able to save money on your purchases because you will not have to pay any interest until the promotional period is over. Just be sure your balance is very low when the interest rate kicks in and you will be fine.