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Credit Card Surfing 101 and How it Can Affect Your Credit Score

Tip! The key to finding a lender, who specializes in low credit score refinance loans is to do your research. The power of the internet cannot be underestimated, when it comes to shopping for a poor credit refinance lender.

With the tremendous competition building up, many credit card companies have started offering introductory 0% APR credit cards. Aimed to attract new credit card applicants, no interest charges are applied to outstanding balances during the 0% APR period. With this, users can afford to pay only the minimum each month without being charge hefty interests until the promotional period is over.

This situation forms a loophole that can be exploited by credit card surfers. Purchases are made with their 0% APR credit cards till the maximum credit limit. Only the minimum amount imposed by the credit card company will be paid each month without incurring the cost of interest charges. Once a card is maxed out, credit card surfers will make an application for another 0% APR credit card and repeat the same cycle.

Sounds like a great way to get free cash, doesn’t it? Well while you may be able to surf through a few cards, sooner or later you are bound to come to a road block. With huge debt piled up with interest rate charges imposed after introductory 0% APR rate period, credit card surfers will have to face snowballing debt once interest rate charges come into the picture. The exception to this is when credit card surfers pay off all their outstanding debt before this happens.

Tip! If you have paid off all your debt, and your credit score seems to be at a stand still, you might want to make small purchases each month with your credit card and pay them off immediately. Often times the credit bureaus like to see at least some kind of activity.

Otherwise, with multiple credit cards in their hands, each of which are charged till the maximum in credit limit, any default or late payments will result in a bad credit score. Now, what are the consequences of a bad credit score?

Well, now that you are labeled as a high risk lender, you probably won’t be entitled for any more regular credit cards. The only ones that you could acquire are high interest credit cards catered specifically for consumers with bad credit reports. This puts you at a disadvantage as you are now paying higher interests.

Apart from that, getting your loan approved for a car or a house will also be a challenge. You probably will have to pay much more in interests than others. In the end, it may be best that you don’t make the purchase until your credit report is set straight. This will only happen if you pay off your outstanding credit card debt and maintain a good payment history for the next 6 months to a year. This is the hard part as you need to work harder or take on another job to get your debt cleaned up.

Tip! My credit score will drop if I check my credit - Fortunately, this is a myth. If you check your own credit report it doesn’t harm your credit at all.

Alan Bernstein recommends Find Credit Cards to apply for an American Express credit card today.

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This entry was posted on Wednesday, July 23rd, 2008 at 3:46 pm and is filed under Credit Score Online. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

One Response to “Credit Card Surfing 101 and How it Can Affect Your Credit Score”

  1. Credit Crunch » Credit Card Surfing 101 and How it Can Affect Your Credit Score Says:
    July 23rd, 2008 at 4:16 pm

    […] Professional Finance Article Site: On this site, you can find all the related finance articles. You … wrote an interesting post today onHere’s a quick excerptTip! The key to finding a lender, who specializes in low credit score refinance loans is to do your research. The power of the internet cannot be underestimated, when it comes to shopping for a poor credit refinance lender. With the tremendous competition building up, many credit card companies have started offering introductory 0% APR credit cards. Aimed to attract new credit card applicants, no interest charges are applied to outstanding balances during the 0% APR period. With this, users can […]