High Rate Credit Cards To Avoid
While most people who have their finances in order choose to pay off their credit card balance in full every month, there are those – for various reasons – who will only pay off part each month.
Those who have a zero balance at the end of each month incur no interest fees, something that probably doesn’t make them particularly popular with their card issuer. For it is those who pay interest that generate most of the issuing bank’s income from card holders.
Most cards, in this current climate of historically low banking rates, hold their credit card interest rates at reasonably low levels (but still well above national base rates), while others keep their rates low but charge an annual fee for all card holders.
However, when you look around the world, you might find punishingly high rates and few of the privileges enjoyed by card holders in Singapore.
In the United Kingdom, for example, high rate credit cards are still offered to customers which might be termed as “sub prime”. Offering relatively low credit limits to reflect the poor credit rating of the customer, these cards are an alternative to what are known as “payday loans” – short term loans with annual interest rates up in the thousands of per cent.
One “bad credit” card we found weighs in at a typical 59.9% p.a, at a time when the national base rate is 0.5%. In fact, the Black Diamond card goes up to 69.9% p.a., which is punishing for any borrower who doesn’t pay off their full balance every month.
In the United States, while interest rates are typically lower for “bad credit” cards, most insist on an annual fee, while one – from the First Progress bank – insisting on a S$400 refundable deposit as well as an annual fee.
Whatever card you choose, it pays to do your research and find the best deal to reflect your financial circumstances and the card-holder privileges that suit your lifestyle. Don’t get taken for a ride by a bad card issuer.
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