Be sure to check out the interest rate before you sign up for a new credit card
January 29, 2022
On LinkedIn Wednesday, I read an article about the Capital One Venture X credit card by Ana Staples, a reporter for Bankrate, an independent, advertising-supported publisher, and comparison service website.
Staples said she loves credit cards, and she enthusiastically recommended the Capital One Venture X credit card. She wants to travel more and thinks that the card will be a great one to use.
The annual fee for the card is $350, and you get a 100,000-mile bonus when you spend $10,000 in the first six months.
Staples said that’s less than other popular luxury cards such as the Chase Sapphire Reserve, $550 a year, and the Platinum Card from American Express, $695 a year.
The problem with the article is she didn’t tell her readers that the interest rate for the card is 16.99 percent to 23.99 percent depending on your credit score. That’s a high rate for a credit card. Imagine how much interest you’d pay if you don’t pay off your credit card balance monthly.
Almost half of Americans carry a balance on their credit cards, a new survey found, and paying it off was proving to be a challenge: Only about 30 percent of people with credit card debt said they’d be able to pay it off this year.
Staples should have included the advice that you shouldn’t use credit cards like the Capital One Venture X if you don’t play off the balance of your credit card each month.
In the United States, 47 percent of consumers don’t pay off their credit card every month.
Be sure to check out the interest rate of any new credit card you’re considering signing up for. And check your local credit union to see what it has to offer.
As of March 2021, the national average interest rate for a credit card from a credit union was 10.97 percent compared with 12.55 percent at banks, according to the National Credit Union Administration.
When I wrote in the comment section about lack of information about interest rates in the article, Staples said:
Whatever the rate is, we should encourage people not to carry any balance, ever. (Unless they have a 0% APR card and know they can pay off the debt before the intro period expires.) Assuming carrying a balance is a given is problematic. Use your cards to earn and take advantage of perks, not to carry debt and pay expensive interest.
The takeaway is don’t sign up to get rewards from credit cards if you don’t pay off your balance every month. Paying interest will likely wipe out any advantage you gain from rewards.
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