Chances are you've received a telemarketing call lately or letters offering you a new credit card. Should you sign up - or just tear them up? How do you shop for credit cards?
First of all, consider the "just say no" approach. If you keep your credit cards to a minimum, you lower the chance of unwittingly falling into expensive credit card debt. It is also usually not a good idea to sign up for a credit card just to get so-called "free prizes."
Second, if you are considering a card, remember to shop and compare. Take your time. Get all the information before you decide whether to apply and which card to pick.
The following are some questions to ask when you consider getting a credit card:
* What are the interest rates?
Cards often have multiple rates, stated as the APR or annual percentage rate of interest. Very low advertised rates usually are only "teaser" rates, and a much higher regular rate kicks in after a few months.
* Are there steep "penalty" rates?
Penalty rates may be triggered by as little as one late payment, and they can soar as high as 24 to 30 percent APR for some out-of-state card issuers! Check what triggers penalty rates and how long they pertain.
* Are there other hidden fees?
Most cards have cash-advance fees with no "grace period" - the interest clock starts ticking at once. Late fees and over-the-limit fees can go as high as $30 on some out-of-state cards. However, cards from Iowa issuers can't go that high. See if the card charges an annual fee.
* Avoid "add-on" expenses, and consider "opting-out."
Many credit cards now "cross-market" other products such as credit card protection plans, insurance or buyers clubs. Most of these are not a good value for the money and simply rack up more charges on your balance.
Manage your credit cards carefully to avoid expensive credit card debt. Pay on time and pay the full balance each month if you possibly can. Most credit card companies will not impose a finance charge (except on cash advances) if you pay in full before the due-date on your bill.
Avoid "maxing-out" on cards or paying only the minimum amount due.
To file a complaint, or for more information, contact the Iowa Attorney General's Consumer Protection Division, 1-515-281-5926, or go online at www. IowaAttorneyGeneral.org.