With the current credit crunch, business owners trying to get capital, or loans for their businesses are finding it increasingly difficult to finance their short-term loans.  Rather than putting your company in jeopardy, and trying to run your business without any working capital, or credit, consider a short-term loan by applying for a credit card.  Although small business lending has dropped dramatically, over the last few weeks, the consumer credit card market, and the business credit cards are still taking and approving applications.  So if your small or medium-sized business is in dire need of emergency cash, or overnight loans, consider applying for a personal credit card offer, or applying for a business credit card.

Shop for lower rates

In order to make your credit card payments count as much as possible and to get out of debt sooner, you can try to get lower interest rates. Sometimes card companies will offer a promotional balance transfer that is 1.99% for a six month period of time. Duration of the promotion and interest rates can vary greatly.

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Dont assume that every offer from the same credit card company is the same deal. The card companies will mail you an offer with different rates on the same advertisement. Some at full interest rates, mixed in with the lower rates. If you decide to use the checks that they mail you, you might use the wrong one and get the higher interest rates. If you call in for a promotional offer make sure you take notes of the day you called the rate, duration of the promotion, and who you helped you on the phone. It is extremely important to read the fine print and ask questions about the balance transfer fees and time limits.

If you have a card with a balance already on it, dont use it. Get a card without a balance because if you dont you will be still be paying a higher interest rate. The payments go to the low interest transfer first and the balance that existed already sits there adding up interest every month. Call the credit card company to check your balance on the card so that there are no charges on it at the time you do the transfer.

There are also offers for the life of the balance transfer that will lock you into a fixed interest rate for the duration of the balance. The interest rates will be higher, for instance the short term offer will be 1.99% and the fixed rate for the lifetime offer will be 3.99%. You have to weigh out the benefits and the downfalls of both types of offers. The short term offer can be good if you are diligent and confident that the rates will be low in the future and you are prepared to do another balance transfer or pay of the whole amount in a short period of time. Usually the short term promotions have a higher amount for the initial transfer fee. When shopping around for a good balance transfer check to see what the minimum and maximum balance transfer fee will be. The average is around $50 maximum; however some credit card companies will go up to $150 or more, seldom is there no fee on these short term promotions. The long term fixed rate until the balance is paid off will more often have no balance transfer fee at all. This can make up for the higher interest that you pay over the short term.

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If you have limited credit resources left you should try to get a fixed rate promotional so that you can lock in a low interest rate for the duration. It should be your goal to get the debt paid off as soon as you possibly can. The lower the rate in the long run the sooner you can pay off your debt.

Sometimes credit card companies offer the low interest promotional and when you get your first billing statement you may be in for a surprise that the interest rate is not correct. It is extremely important to verify that you got the correct interest rate on the statements. If it is not correct call the company to get it corrected as soon as possible. Always check your interest rates on every credit card statement. If at any time a card rate goes up you will be aware of the problem, and hopefully it will prompt you to shop around for a better rate or contact the card company to lower the rate if possible. Never pay your bill late on a balance transfer because you will lose your low interest rate and default back to very high rate of 19.99% (this interest rate varies too).

Having a good credit score can help lower your interest rates. It is important that you always pay your bills on time; this will help improve your credit score. Paying more than the minimum balance is also another good way to improve your credit score. If you have had bad interest rates in the past because of late payments, you can lower your rates by improving your credit score.

The goal is to pay off the higher interest cards first and pay the minimums on the lower interest cards. After time hopefully, the debt will decrease and you will be on your way to erasing the credit card debt.

Consumer Action and American Express partner new free, multilingual education initiative
Dec. 12, 2005 – Here’s one thing you can check off your holiday list-getting to know the terms on your credit card.

Credit cards get a lot of use during the holiday season-but how well do you know your card? Consumer Action and American Express have partnered to create a free, multilingual consumer education series called Credit Cards: What You Need to Know.

“We created our campaign to educate consumers about credit card terms and conditions so that they will learn how to compare credit card offers, read and understand credit card terms and conditions, maintain their credit card accounts in good standing and avoid penalties and fees,” said Ken McEldowney, executive director of Consumer Action.

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The holiday season is a busy time-credit card due dates and credit limits are not at the top of our minds. But the way you handle your credit card is important. Not managing your credit wisely can lead to:

• Increased annual percentage rates (APRs)
• Unnecessary fees * A decline in your credit score
• Denials of future credit

“Credit Cards: What You Need to Know” is designed to help consumers:

• Understand the types of cards available
• Sort through card offers
• Compare card terms and conditions
• Avoid penalty rates and fees
• Find more information and assistance

The “Credit Cards: What You Need to Know” series is available on Consumer Action’s web site (www.consumer-action.org). It includes a brochure available in Chinese, English, Korean, Spanish and Vietnamese; a question-and-answer backgrounder guide; a training guide for presenting the materials in a classroom setting and a 65-slide PowerPoint set.