Playing The Credit Card Game
– By Priya Jestin, Staff Writer
For most of the month we live in a wonderland where we flip out a magic card every time we fancy something and want it. This magic (credit) card seems to be like the genie – ready to fulfill our every wish and whim. But the genie always takes his pound of flesh at the end – that’s something we usually tend to forget.
The same rule applies with credit cards. Most people believe that as long as you don’t go over your credit limit, everything’s fine. With credit cards, you have to play by certain rules – botch that up and you are in big trouble mate. And to play by the rules, you need to know certain credit card basics.
Most people don’t CHOOSE to pay a high interest rate. The bank decides what interest rate it will charge you, usually based on how much of a ‘credit risk’ you are. They determine that by looking at your history of paying bills. If you’ve got a history of paying bills on time, then you’ll qualify for lower interest rates. If you haven’t ever had any bills to pay, or if you’ve had trouble paying your bills, that will show in your credit history, too. Since it’s a little riskier to lend you money, banks will charge a higher interest rate.