Credit Card F.A.Q.
As the owner and editor of a credit card website, I get quite a few emails asking questions about different factors of credit cards. With that said, here are a few questions that I happen across quite a bit and the best answers that I can give to them:
Question: Are balance transfer credit cards a good way to reduce overall interest?
Answer: In loo of the fact that many consumers don’t know much about credit cards, it actually surprises me how often I am asked this question. The reality of it however is that the answer really depends on your unique situation. What I will suggest is to look at a few key points when deciding if balance transfer credit cards are going to be a good option for you. The first is that you should make sure that the new standard interest rate is lower than the standard interest rate on the account that you want to transfer the balance from. If so, you should also look to see if there are any balance transfer fees. If there are fees, do the math to make sure that the fees will be outweighed by the savings of the promotional interest rate. If all is well at the end of all of these factors, chances are balance transfer credit cards are a great option for you!
Question: Can I be put in jail if I were to not pay my credit card debt?
Answer: Before I answer this question, I want to say that this is ridiculous! It is sad that we live in a world where some consumers are forced to even ask this question. With that said, the simple answer is NO YOU CAN NOT BE JAILED FOR NOT PAYING YOUR CREDIT CARDS! However, there are a few repercussions that you should be ready for if you plan to go into long term default! First off, by not paying debts, the debt will grow because of accumulating interest and fees. If you plan to be back on your feet within the next few months, this may prolong your financial hardship. Another issue that shortly follows non payment of credit cards is low credit scores. Because the consumer did not pay past loans, it will be incredibly difficult to get loans in the future. Finally, the worst that can happen is that the consumer will find themselves in a court room being sued for the amount owed. Even after a judgement however, you can not be jailed for non payment of credit card debt!
Question: How long should I keep an account in good standings before I ask for an interest rate reduction?
Answer: This one really depends on the lender and the financial forecast all around. Also, keeping your account in good standings isn’t always enough to qualify for lower interest. However, generally if you do keep your account in better than good standings meaning you pay more than your minimum payment every month early. It means you never let your balance get above 50% of your credit line and you are always aware of each transaction! However, if you do all of this for at least 12 months, you should qualify with many lenders for a lower interest rate if market conditions are right.