Credit card debt poses many challenges to consumers. In America, it is estimated that over $1000 dollars are paid as interest per family every year. The average consumer owes around $9,000 in credit card debt and this is an aspect, which need to be tackled proactively. Consumers can determine the way in which they get rid of these card debts while at the same reaping the benefits offered by the credit cards.
On average, credit cards attract an interest of 14% with some imposing interest rates as high as 25 percent. The problems are worsened by having credit card balances. There are things, which need to be emphasized such as high interest rates or reward programs, which do not really match spending habits. As credit is loosening, it is expected that new card offers will come up in 2013.
Owing to the onset of recession in 2008, many credit card companies got rid of the 0 percent APR balance transfer. However, this 0 percent feature has made a comeback and you will see many cards offering 0% balance transfers. If you have a card balance, which attracts high interest rates, you could opt for a new card and transfer the balance. However, you need to be careful because it comes with an upfront charge.
Whereas you may have a 0 percent transfer for up to 18 months, the interest rates may skyrocket after that period. If you are not in a position to clear the balance in a short-term period, this perhaps could be the best option. However, if you are able to settle the balance in a short period, you may opt for a minimal balance transfer rate, which will eventually attract a considerable increment in the interest rates after the intro period.
According to a consumer advocate Beverly Harzog, card issuers have one of their new year resolutions as getting out of debt. Taking advantage of balance transfer offers could help consumers enjoy lower interest rates on their credit cards and perhaps settle their balances faster. Although a recent court ruling gave card issuers the ability to pass transaction costs or swipe fees to consumers, this may not actually be implemented by the issuers.
It is highly unlikely that merchants will charge swipe fee, which could increase the overall costs of having a credit card. Prepaid cards are expected to boom in 2013 and in future and this is because they are a good way of managing finances. With prepaid cards, you spend what is in your card and you cannot spend more unlike credit cards. For people who are struggling with bad credit, they can use prepaid cards to help them manage their debts appropriately.
This is because they are limited in spending and this means they reduce the probability of incurring more debts, which could ruin your creditworthiness further. Moreover, people are going also to seek for reward credit cards. These cards can help people who spend a lot to get rewards in form of travel points, cash backs and other reward programs. The rewards can offer free flights or cash amount that could be used in purchases.