Credit Card question?
when would I be subject to a finance charge?? What would I do to get that?
Answers:
A finance charge only goes on when you carry a balance on your card. So lets say you charge$200 dollars worth of stuff on your card but you only make a payment for $100. You therefore still have a $100 balance on your card, and your credit card company will charge you for holding that balance on your card, that charge is called a finance charge. By saying they will charge a minimum finance chard of 50 cents each billing period, that means that if you have any balance at all you will be charged at least 50 cents. The amount of your finance charge depends upon the balance amount you have on your charge, but no matter what if you carry a balance (don't have your card paid off) then you will be charged. If you pay your card off every month, you will not be charged.
The minimum finance charge is an automatic charge if you don't use your card at all. If you use it, they won't charge you.
You would only be subjected to a finance charge if you carry over a balance. Then the minimum charge comes into play.
If you got an offer from Cap 1, chances are you can get a card with someone else - which is EXACTLY what I would do. Now I wouldn't close the first card, just get the balance wayyyy down or paid off. You don't want to do that unless you already have over 3 revolving accounts.
Here's the deal with Capital One: They don't report your credit limit, which tends to deflate their customers' scores. In fact, when testifying before congress in 2003, they advised that they 'routinely' withhold credit limits from credit reports. This makes it look like their customers all have their cards 'maxed out.' Who knows why they do it, but my guess is that they are trying to create a captive customer base by 'gaming' the flow of information to their advantage. That would prevent their customers from being able to shop for a better card.
Good luck!
I would be very careful with 'pre-approved' credit card offers. Although a credit card company might say you've already been 'pre-approved'-- they haven't even run your credit report yet, and more than likely you won't qualify once you complete their application. If you had a 19% interest rate on your previous credit card-- it's hard to believe Capital One would approve you for 8.90%.
But you should definitely shop around and look for better offers. I can see you dropping from 19% to 12%-14%. But it's very unlikely you'll get 8.90%.
'Minimum Finance Charges' are added to your account each month if you aren't carrying any balances and haven't accumulated any interest. Basically, the bank is just making sure they get something-- even if you don't use the card. Although it's not uncommon, it's pretty easy to find cards without this charge.
If you'd like to compare other offers-- start here:
http://www.asapcreditcard.com
Hope this helps. GOOD LUCK!
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