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Avoiding
Credit Card Traps
By: James H. Dimmitt
The next time you open your credit card statement,
take a closer look at the small insert titled “changes
to your creditcard agreement”. You know the one
I’m speaking about. It’s that small, folded
paper written in legalese that you promise to read
some other time (but of course that time never comes)
or you just discard it with the other “junk”
inserts.
First and foremost you must understand that using
your creditcard after you’ve received this notification
results in your automatic “agreement” to
the new terms in the notice. To prevent these new
terms from affecting your account you must stop using
that creidit card immediately or by the date given
in the notification statement.
The most common modifications to creidt agreements
include new APR’s (annual percentage rates),
new fees and/or changes to existing fees, or a change
to the grace period on your account. The grace period
is the number of days during which any credti used
for purchases may be repaid in full without incurring
a finance charge.
Not knowing or not keeping track of the dollar amount
limit on your card is another trap you should avoid.
Creditcard issuers will allow you to charge a small
amount over the limit set on your account. However,
don’t be surprised when you get hit with an “over
limit fee”, usually around $35.00 or higher,
on your next statement. Also, be prepared for your
APR to be increased if you go over your credit limit.
You’ll also trigger an increase to your interest
rate if you miss your payment due date. Some companies
consider your payment late if not received by noon
or 1 p.m. on the date due. Along with the higher rate,
you’ll also pay a “late fee” of $29
on up. Be sure to use the company’s preprinted
envelope when sending your payment. These envelopes
allow the pre-printed bar code to be scanned by the
post office so that it can be delivered more efficiently.
If you’ve counted on those few extra days from
the time you mail your check and the time the check
clears your bank, beware! Many creditcard issuers
have switched from the traditional method of processing
checks to a new electronic process. This new system
shaves off a day or more from the traditional method
it normally takes for your check to clear by electronically
debiting your account.
If you’re considering paying your creidit bills
online, check to see if any additional fees will be
charged for using this type of payment. I recently
received an e-mail message from one of my creditcard
companies announcing how easy it would be to make
my payments online.
Included in fine print at the bottom of the e-mail
was this note - “A fee of up to $14.95 may be
charged for this service and will be deducted from
your checking account”. Hmmm, spend 37 cents
on postage and mail my payment five days before the
due date or pay now and get charged an additional
$14.95 fee? I’ll bet you can guess which choice
I made.
Taking the time to carefully read and understand your
creditcard agreement now will help you save money
by avoiding unnecessary fees or climbing interest
rates later down the road.
About the Author
James is editor of “To Your Credit” a FREE
weekly newsletter focusing on money management news
and tips. You can subscribe to his newsletter and
also get a FREE copy of your credit report when you
visit: http://www.yourfreecreditreportnow.com
more resources ...
This article on creditcard reveals all the related
areas Home Articles and Counselling Avoid traps. The
word comes in a dual plastic money or creidit you
are adding. On the other hand the moment you are using
the plastic money or crdit you are adding a credt
to your name. A seems to be a very attractive item
to possess but when you see an interest of 18% on
the, you start looking for lower interest cerdit.
Don't apply for a card unless they tell you what your
actual rate will be. This is hard because most of
them are not set up to tell you. Generally you will
need to know your scores and have a copy of your report
handy. Try to find a card that gives you a confirmed
rate before you apply.
www.debtconsolidationcare.com/avoidcardtraps.html
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