Evaluating Credit Card Offers: Essential Terms You Must Understand

Credit card offers, they're everywhere! They appear in your mailbox. They pop up while you're surfing the Internet. They're in slick brochures next to the cash register or gas pump. They're in full-page ads in the Sunday papers.

If you need a new credit card, how do you choose? You should evaluate each offer carefully, and to do that you must understand these essential terms.

Annual Percentage Rate (APR) :

The interest rate charged on your account balance. (But see "Balance Calculation Methods," because the rules for computing interest from your balance and your APR can vary.) Your statement will typically show the APR and a monthly and / or daily rate based on the APR that's actually used to calculate your Monthly interest. There may be several APRs applicable to different portions of your balance, for example an introductory rate, a regular purchase rate, and a regular cash advance rate.

A fixed APR is set by the credit card company, which can generally change it with as little as 15 days advance notice, especially if you run afoul of any of the "gotchas" in the terms. These "gotchas" are often very consumer-unfriendly. For example, many companies these days reserve the right to raise your rate if you've been late on a payment to another, unrelated company.

A variable APR is tied to some widely used economic index, such as the Prime Rate. It may be stated as "prime + x%, currently y%," for example "prime + 7%, currently 13.5%." This means that when the Prime Rate is 6.5%, your APR is 13.5%. When the Prime Rate goes up or down, so does your APR. But beware, because some of the same "gotchas" apply to variable APRs as to fixed APRs. Read the fine print. It may state that if you're late with one payment, your APR will no longer be variable but will rise to an exorbitant fixed rate, usually over 20%.

The penalty APR is the rate to which your APR will immediately be raised when you violate any of the "gotchas" in the terms. This rate is usually at least 50% higher than the regular APR. Again, be sure to read the fine print to see what situations will trigger the penalty APR. You'll often see these: failure to pay this or any other account on time, exceeding your credit limit on this or any other account, excessive credit balances on your accounts in aggregate.

Balance Calculation Methods:

These are important to understand, because your APR is only part of the story when it comes to calculating the interest you'll be charged each month. The other part is how the balance is calculated to which the APR is applied. In any case the balance is multiplied by the daily or monthly interest rate. But the balance calculation is not as straightforward as you might think.

1. Two-Cycle Balance. This is the worst method from a consumer's point of view because it can lead to the highest interest calculations. Unfortunately, it's also becoming the most widely used method. To calculate the balance, add together the average daily balances for the current billing period (sometimes even including new charges) and the previous period. Here's why this is so unfriendly to you. Say you have run a balance for a few months and finally pay it from $ 200 down to zero at the end of May. You think it's safe to use the card in June for a new $ 100 purchase, and if you pay the $ 100 by the end of the June grace period, you will not owe any interest on it. But you're wrong. Since your average daily balance in May was not zero (say it was $ 120), and since you used the card in June, your interest will be calculated on May's average balance again, so even if you pay the whole June purchase in June, you Will still owe additional interest. In other words, you must wait two months, allow the account to cycle once with a zero balance, before it's safe to use it again – "safe" in the sense that you will not incur extra interest if you pay the balance in full By the end of the grace period.

2. Average Daily Balance. This was once the most common calculation method and is still popular. Add the daily balance for each day in the billing cycle, then divide by the number of days in the cycle. Depending on the terms, this may or may not include new charges.

3. Adjusted Balance. This is the best method from a consumer's point of view, but it's rapidly going the way of the dodo. Take the balance at the beginning of the billing cycle, then subtract any payments or other credits recorded during the cycle. Do not include new charges during the cycle. For example, if your beginning balance was $ 1200, and you paid $ 400 during the cycle, the balance to which your monthly rate will be applied is $ 800, regardless of any new charges.

Balance Transfer:

This means that you're charging card X to pay off (all or part of) the balance on card Y. So the balance is, in effect, transferred from card Y to card X. Why would you want to do this? Usually to take advantage of an introductory low interest rate when applying for a new card. Look closely at the terms. Sometimes these introductory rates last only a few months. The best ones are for the life of the balance. You will often have to pay a transaction fee equal to 3% of the balance transferred. Sometimes these fees are capped at $ 75 or so. Be sure to see whether or not the transaction fee excepts what you'll save in interest. If so, do not do it. Sometimes the credit card company will agree to waive the fee, especially on a new account. Do not be afraid to ask.

Cash Advance:

A cash loan charged immediately to your credit card account. Usually there is no grace period for paying off a cash advance, which means you'll be charged interest starting from the day of the loan, even if you pay it in full by the end of the billing cycle. Also this type of charge may have a higher APR than purchases or balance transfers. Check your terms. Note that some kinds of transactions, like buying casino chips or lottery tickets, may be valued as cash advances. This can also apply to writing a purchase check to your own bank account. Be sure to read the fine print.

Credit Limit:

The upper limit on your account balance. Exceeding it may result in penalties. Be very careful if your balance is close to the limit ("maxed out"), because you can exceed it without charging anything new if you fail to pay enough. Remember that just because the company has approved you for a certain limit does not mean you can afford to take on that much debt.

Disclosure Chart:

An important portion of the Terms and Conditions statement. It's a little bit like the Nutrition Statement on a food package because the law dictates what has to be listed here. If you can not stand to read all the fine print, be sure that you read this part.

  1. Fixed APR or APRs after any introductory rate (s) have expired
  2. Rule (s) for calculating variable APR (s) if applicable
  3. Grace period
  4. Annual fee if applicable
  5. Minimum per-cycle finance charge
  6. Additional fees if applicable, such as cash advance fees
  7. Balance calculation method
  8. Late payment and delinquency fees
  9. Over limit fees

Grace Period:

The time, calculated from the account cycle date, during which you can pay the balance in full without having any interest charged. This usually applies only to purchases, and only if you've paid the previous month's balance in full and on time. (Sometimes even that's not enough. See "Two-Cycle Balance" calculation method for an additional "gotcha.")

Pre-Approved:

This can be very misleading. It does not mean the company is guaranteeing to issue you the card in the offer. It just means that they chose you to receive this offer based on some general screening of your credit report. They always reserve the right to deny or alter the offer based on a more detailed examination of your records.

Training For a Marathon – A Primer

Do you have aspirations for running a marathon? Even an Olympian runner would agree that training is the most crucial part of the game. While training for a marathon, it is important that you prepare properly. If you do not pay attention to proper training, you are doomed to fail. If you have already tried it and found it too challenging then sure you need to get with the program.

As is generally the rule, to get better at something, you need lots of practice and commitment. Brilliant people from all walks of life have just this one secret – practice. Training basically is a mixture of practice, expertise on part of the instructor and commitment on part of the trainee, all brought together to form a winning combination. In addition, trainees in many fields, especially sports, benefit from their natural skill and talent. The good news about running is that it does not require any special skills. One just needs to be able bodied and in good health and the rest can be left to the training regimen.

Training for a marathon requires you to constantly push your body to gain more in terms of stamina and endurance. This requires you to proceed in a consistent manner. Haphazard training will not only fail to give the desired results but will also be a source of discouragement because your body will deteriorate rather than improve. Let us discuss a few guidelines that can be helpful when training for a marathon:

Firstly, you must develop training routines that place minimal stress on your body. Running puts pressure on your joints, ligaments, tendons, muscles and nervous system. Some degree of slow steady running is necessary to develop the stamina required for marathons but it is imperative to not overdo it.

Secondly, you need to develop other areas of your body that will support your long distance runs. These organs are the heart, the lungs and the muscles. Healthy heart and lungs ensure adequate oxygen supply is maintained to your tissues, and developed red muscles (through aerobic exercise) Ensure that you do not tire easily.

Lastly, you need to read the signs of your body during training for a marathon. Do not torture your body. Gradually make your training harder and harder and take a day of rest and / or lighter training every now and then to allow your body to recover fully.

A Guide to Help You Pick Your Next Piece of Furniture

Buying furniture does not have to be a stressful or painful activity. In fact, it can actually be a bit fun when you know how to distinguish the quality pieces from those destined for the dumpster. The following guide will hopefully demystify the inner workings and construction of furniture so you can focus on picking out the perfect color, print, and texture for your home.

Upholstered Furniture

Your furniture sets the mood, tone, and overall feel of your home just as your wardrobe conveys these same exercises about you. Upholstered furniture is perhaps the most telling sign of these characteristics as the use of color, design, and texture come into play more here than with any other type of furniture. Pieces that generally fall into the 'upholstered' category include chairs, sofas, love seats, sectionals, and sofa beds. This guide is designed to make your decision less daunting by eliminating some technical terms and giving you some insight into what lies benefit the cloths and cushions.

Woven Fabric Covers

Woven fabric means simply that the fabric is woven by a machine that interlaces two yarns running at right angles to each other. The most widely used group of decorative upholsteries sold in the United States consist of woven fabrics. These woven fabrics can be natural, such as linen and cotton, or man-made fibers like polyester and olefin. In most cases, fabrics are blends of various fibers like the popular cotton-polyester blend. The most popular types of weaves are as follows:

O Jacquard weaves are fabrics with differently colored yarns or fibers woven into highly decorative designs. These weaves are most often found in traditional furniture styles.

O Pile fabrics have loops or cut fibers standing up densely from the surface to form a three-dimensional texture. Depending on color and design, pile fabrics can be suitable for traditional or contemporary furniture.

O Textured fabrics are woven from yarns that have been processed to give them more bulk, crimp, stretch, or otherwise altered. Chenille is an example of a very popular textured weave. Textured fabrics are often woven to resembble antique, homespun cloth.

O Plain-woven fabrics consist of one color with their character resulting from the type of yarn or fiber used. Depending on the texture, plain weaves can be used on formal or informal furniture and with a variety of styles.

O Printed fabrics are first woven and then printed with a decorative design. Chintz and polished cotton are examples of fabrics that are often used for prints, although textured fabrics with blends of nylon, rayon, cotton, and polyester fibers are also often printed.

Non-Woven Fabric Covers

Non-woven fabrics are produced by the bonding and or interlocking of fibers. These fabrics can be made by mechanical, chemical, thermal, or solvent means, or with an adhesive, or any combination of these. Examples of non-woven fabrics include:

O Vinyl , which may or may not be laminated to a fabric backing. Vinyls are preferred on furniture that is subject to hard usage. Also called Naugahyde®, vinyl is often thought of as a substitute for leather, and can be printed in a variety of patterns.

O Flocked fabrics are made by gluing pieces of cut fibers onto a flat woven cloth base. These fibers form a three-dimensional surface much like pile. Flocked velvet is an example of this kind of fabric.

O Knitted fabrics are made by interlooping one or more sets of yarns. This is a reliably inexpensive way of manufacturing fabric.

O Suede-like fabrics , such as Ultrasuede® are often used in decorative upholstered furniture covers to give the look and feel of genuine suede, without using animal hides and usually at less cost.

Inner Construction

The construction and inner workings of an upholstered piece of furniture can be as mysterious as an episode of Murder, She Wrote (ask your Grandma). But hidden under the decorative fabric or cover lies the secret to the piece's overall function, comfort, and longevity. No need to call Angela Lansbury in order to solve this case, read on as we forget what makes your chair or sofa tick.

The frame is the single most important component in determining whether or not a piece of furniture is going to stand the test of time. You probably figured wood as being the most commonly used frame material, and this, of course, is true. But any old hunk of tree will not due if you plan on passing this wonderful chair, sofa, love seat, or whatever on to your children or grandchildren (they'll probably just put it in storage or sell it at a yard sale anyway ). Hardwoods, such as oak, alder, ash, beech and birch are what you're looking for in a frame. These hardwoods have a tighter grain and allow for screws, pegs, and nails to be set securely. Also, the best-made frames use wood that has been kiln-dried . This process consist of heating the wood in an industrial oven to remove excess sap and moisture. The process also makes the wood resistant to absorbing any outside moisture. If you're wondering what the problem is with moisture, I'll tell you. If you already know the answer to this, then skip to the next paragraph Mr. Egypt Smarty-Pants. Moisture can cause warping and swelling, can lead to loose joints and fastenings, and in severe cases can cause mildew or rotting, other than that, it's great.

The quality of the frame depends not only on the materials used, but how they're joined and held together. To create a strong, rigid frame, a variety of woods and laminates can be used in joints and for blocking and doweling.

O Joints are places where one piece of the frame meets another. These points of intersection need to be secured and reinforced with blocks and dowels to allow the frame to hold up over time.

O Blocking reiter to placing additional 'blocks' of wood behind or diagonal to joints and corners to help relieve the stress these areas encounter. Blocks also provide lateral support and create a larger area for screws and fasteners to set wood elements securely.

O Doweling is the process of drilling into both pieces of the joint and then placing a pin, or dowel into the hole, so further connecting the two pieces and adding extra support.

A quality chair or sofa will employ some type of inner spring system, usually in the back as well as the seat area. These systems add comfort, as you might expect, but they also work to take some of the stress off the joints of the frame. Here are some of the spring systems being used:

O The coil or cone spring system uses eight-way, hand-tied double cone springs to provide extra comfort and support. This technique involves fastening the cone springs tightly to the base and expertly tying their tops together with a strong cord. This is the only system that allows for side-to-side movement in addition to up and down movement. Hand-crafted quality comes at a price, though, and while this is widely considered the best spring system, it is also the most expensive.

O The sinuous wire spring is made in a continuous zigzag or "S" shape. These wires run parallel to each other and are quickly directly to the frame and to each other. Similar to this system is the formed wire spring, where the continuous wire is formed into rectangular bends and angles instead of the zigzag pattern.

O The grid suspension system is composed of a wire grid, sometimes covered with paper or plastic-coated wire, which has one side fastened directly to the frame. The other side is connected to the frame by helical springs.

O Some manufacturers use elastic webbing instead of wire springs. The strips of elastic usually intersect and weave together and are fastened directly to the frame. It is best to avoid furniture that uses this technique.

Arm yourself with this knowledge and make a more informed choice the next time you purchase furniture.

How to Avoid a Credit Card Charge-Off

The simplest way to avoid a credit card charge-off is to learn and understand the credit card system. Here are some tips:

Sending Credit Card Payments Through The Mail:

Some credit card companies actually require you to use their own pre-printed envelopes, but even if they do not, it is a good idea to do so in the interest of more efficient processing of your payment. Make sure you have included the billing coupon and have written clearly the amount that you are paying. Include your check, also written legibly, and remember to write your account number on the check.
When Ronald Reagan was running for President, he was asked what he was going to do to make the post office more efficient, to which he responded that he would start mailing workers workers their paychecks. Allow ample time when you send your check to the credit card company.

Change Your Credit Card Due Date Something That Is Convenient For You:

Many people find that the greatest number of their bills, such as their mortgage or car payment, are due at the first of the month. If these places a burden on your ability to pay your credit card bill that may also be due at the first of the month, a simple way to avoid this problem is to just ask your card issuer to change the due date for your monthly payment. There is no harm in the asking, and many card issuers offer this ability to change the due date of your bill as an option. One important thing to remember, though, is that it may take a couple of billing cycles before this date change is fully implemented. It is important to make sure that your bill is paid promptly when due until your change of due date becomes effective. Otherwise, you could find yourself on the wrong side of a late fee.

About Late Fees:

In the classic television detective series Columbo, which starred Peter Falk, Lieutenant Columbo always appeared to be distracted and disorganized, but in reality he was extremely focused and observant. One common scene that brought delight to fans of the show was when Columbo left a room in which he had been speaking to the murderer. He kept turning around and starting question after question with, "Oh, just one more thing …" Then he trapped the criminal. Well, the credit card companies are not Lieutenant Columbo and we consumers are certainly not murderers, but when it comes to trapping us in the fine print of their credit card agreements, it always looks like there is "just one more thing."

Make Your Credit Card Payment On or Before The Due Date:

Your monthly payment is due on whatever date of the month it says on your credit card bill. If your payment is late, the fine print of your card agreement provides for the right of the credit card company to assess a late fee, which can be as much as $ 35 for each late payment. In the past, some credit card companiesave their customers five or even ten days of grace after the due date before assessing a penalty, but that is not the situation any longer. So you send your payment with sufficient time to arrive at the card company on your bill's due date.

But, just one more thing: Some credit card companies deem your payment late if it is processed later than 1:00 pm on the day of your due date. Some of these companies do not receive and process mail until after 1:00 pm; Therefore, the real date by which your monthly payment must be received is a day earlier than the date indicated on your contract. So you need to make sure your payment gets there three days ahead of the due date. Another Note: If the envelope contains a staple, a paper clip, or a note from you, the fine print of the contract specifics that there may be a delay of up to five days in posting your payment. This may cause a late payment to be assessed on a payment that arrived at the card company prior to the due date of the bill. I'll bet Lieutenant Columbo read the fine print before sending in his payment.

Make Your Credit Card Payments On-Line:

The most efficient way to make credit card payments is to make the payment on-line if the company offers that service. You can specify the amount you want to pay, which account you want it deducted out of, and specify the date you want the payment made. By paying your cards this way, you can set the payment to be made exactly on the due date so the credit card company is not getting your money any earlier than the due date and you have the peace of mind knowing you will never be late On your payment. Just be sure to set this up at least 3 days before the payment is due, otherwise there might not be enough time to process the payment in time.

Avoid Credit Card Interest Rate Hikes:

Another problem with late payments is that they can also trigger penal interest rates as high as 29%; So, for example, instead of the 10% interest rate your card may carry, your rate will now be jacked up to 29% effective immediately. In fact, even if you are timely in your payment, credit card companies generally reserve the right to raise your rate to a penalty rate if you are late with any other payment to any of your creditors, whatsoever they may be. Just read the fine print.

Can not Make Your Credit Card Payment?

If you're struggling with making your monthly payments, before you're ever late on a payment, CALL YOUR CREDIT CARD COMPANY! Most companies will come up with a reduced payment plan if you're experiencing a hardship. You'll want to do this as soon as you determine that you can not make your payment, before the due date. You'll want to negotiate a payment that you can afford with your credit, then send that payment in on or before the due date so it does not affect your credit.

You'll want to be sure to get this agreement in writing and be sure to negotiate that this reduced payment WILL NOT be reported as a late payment on your credit report. Sometimes creditors will agree to a reduced payment, but they'll go ahead and report it as being 30 days late because it's less than what was contractually agreed to. If you get a letter from the credit card company agreeing to the reduced payment, along with a statement from the company that they will not report you as being late to the credit bureaus, you'll have the proof you need to send into the credit Bureaus if they do not hold up to their end of the bargain. This happens more often than not, so make sure you protect yourself.

"Settling" Your Credit Card Balance For Less Than The Full Amount:

"Settling" a credit card account basically means that you're paying less that the full balance. This technique is usually used if the account has already been charged off and can only be done if you have the money to pay them in full. If you're going to try this, you'll want to try to negotiate a "Pay for Deletion", which basically means that whatever amount the two of you agree to settle the account for; The credit card company is also agreeing to remove the account from your credit report. By doing this, the charge-off and late payments will no longer negatively affect your credit score.