Credit Card Offers

For the novice or aspiring cardholder, credit card applications and offers can be quite confusing, considering all of the seemingly esoteric terminology used by financial institutions. Without the proper understanding of the terminology, cardholders can be persuaded into applying for credit cards that charge unfair fees and interest rates. Before applying for a card, applicants should understand the following important credit card terminology:

Balance

Since credit cards are actually ongoing loans, the term “balance” can be somewhat confusing, as the money within the credit card account does not technically belong to the cardholder. The

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Yesterday, this blog dug deep into a new research report from comScore Inc. to reveal how consumers value different product features when theyre shopping for new plastic. Today, well use the same document to explore continuing changes in credit card use.

Credit card use evolving

In 1990, U.S. credit card transactions had a total value of about $800 million, according to Nilson Report figures quoted in a Columbia Law School study. The same source says that that figure had risen to approximately $1.7 trillion by 2006.

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As credit card companies compete heavily to solicit new customers by offering lower interest rates they have to find creative ways to recuperate some of the profits that they lose due to these lower interest charges. There are a plethora of different types of credit card fees that cardholders are subject to.

The following paragraphs outline five of the more common credit card fees which are likely to be encountered.

Late Payment Fees

Late payment penalties account for millions of dollars in charges, and no credit card is immune to them. These fees usually range from $15-$40 per billing cycle and are incurred every time a payment is missed or less than the minimum amount due is paid.

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On Tuesday, UPI reported on research carried out by Oregon State University (OSU). Its article appeared under the headline, credit card debt called the American way. Just how fair is that?

Very fair, according to Michelle Barnhart, one of the OSU researchers who conducted the study. She told UPI that various factors have created a culture of debt in America. And she went on: Its easy to sit back and blame consumers for just spending too much, but the truth is we have an entire infrastructure set up to support, maintain and encourage credit card use and debt.

Credit card debt down

But hang on a minute.

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The current influx of credit card offers arriving in your mailbox brings good news, believe it or not. Its one of the signs that the economy may be improving. According to a study recently conducted by Mintel Comperemedia, 1.4 billion credit card offers were mailed out in the last quarter of 2010. Thats up from 551 million for the same quarter of 2009. If you pick the right credit card deal, you could get a fresh start on paying off credit card debt.

Credit card deals on the upswing

A barrage of offers means credit card companies have loosened their hold on consumer credit and actually want more credit card business.

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With homeowners being burdened with some of the highest mortgage interest rates ever seen, and with many of them having to cope with monthly housing expenses that exceed their income capabilities, it is not surprising that Australians are trending towards conservative credit card spending. In particular, 35% of the citizens of Western Australia have a savings account with a zero balance and are currently paying mortgage payments that are less than ideal for their income.

The high mortgage rates are not the only contributing factor, as the cost of food and energy has also increased, causing many Australians to reconsider their personal finances.

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