Opening a New Card in South Florida? Be aware of these 4 Things

After the global impact caused by the Coronavirus, millions of people across the US have suffered financial hardship, this is especially true amongst the older generations. Layoffs, businesses closing down, and overall national economic instability have caused many to rely on loans and credit cards to stay afloat. This has translated into many Americans being more submerged in debt than ever.

The good news is that recent reports show that over the past year the national Credit Card debt decreased by over $100 Billion. The bad news is that while Credit Card debt is declining nationally, South Florida’s credit card debt is doing quite the opposite. 

A study conducted by WalletHub revealed that Americans paid $82.9 billion in credit card debt in 2020 alone. And a report from the Federal Reserve states that credit card debt was $108 billion lower at the end of 2020 than it was at the end of 2019. However, South Florida does not follow this trend. 

The average Credit Card debt in Miami is $13,701 per household. Fort Lauderdale and Pembroke Pines observed a $600 and $930 increase in Credit Card debt, respectively. 

Many South Floridians have relied on Credit Cards to survive the Coronavirus, and if you know how to manage Credit Card debt, it can truly be a valuable resource. However, you must be aware of certain aspects before signing up for a new card so that you may save yourself some hassle down the line. If you are considering getting a new credit card in 2021, here are 4 things you must be aware of:

1. Balance Transfer Fees: A balance transfer fee is a fee that you may incur when you transfer credit card debt from one card to another. It’s usually around 3% to 5% of the total amount you transfer, typically with a minimum fee of $5 to $10. Credit Card companies may charge Balance Transfer Fees to offset their own costs, specially if they do not charge you interest. Review the contract to know if your card issuer is going to charge Balance Transfer Fees.
2. Introductory Interest Rates: Credit Card issuers typically offer introductory interest rates to new cardholders to incentivize opening an account with them. The temporary rate is usually 0% APR (Annual Percentage Rate). If you’re opening a new card, you MUST know that this is a temporary rate, and read the fine print to discover the rate that will be in place once the introductory rate period ends.
3. Membership Fees: Also known as “Annual Fees” are a cost that credit card companies charge to allow you to keep the card account open. Issuers that charge these fees usually offer perks or rewards to its cardholders, and charge fee to offset their costs. Make sure to check if the card you are considering has an annual fee, and determine if it makes sense for you.
4. Rate Increases and Late Fees: If you fail to pay your card in a timely manner your card issuer will charge you an additional Late Fee. The average late fee is $36. In addition, if you are late with your card payments regularly, the credit card company may increase your interest rate as a penalty. This will make it ever harder to pay on time, and can affect your credit score. Make sure to consider this before opening a new card. 

Considering these 4 things before opening a new card can save you much trouble and hardship, will allow you to determine whether a specific card suits you, and will help you find the best card issuer for your particular situation. 

We, at Adams Law, PA, are dedicated and passionate in helping debtors take control of their personal finances and get out of debt through a bankruptcy filing. Contact us by phone (844) 321-6168 or by email lawyers@richardadamlaw.com to request your free consultation and no-obligation case evaluation.