If you have ever found yourself in credit card debt, you have probably been a victim of the credit card company tricks including fluctuating interest rates and finance charges. In most credit card contracts, there is a universal default clause that allows your credit card company to increase your interest rates with no notice and for no particular reason.
Your rate can increase due to a late payment, because you took out a loan or anything else that the creditor might deem risky and an impact on their repayment schedule. You can ask for a lower interest rate, but that’s chancy, and the creditor is under no obligation to make any change in your rates.
Another trick that credit card companies can pull is to give you a shortened grace period for repayment of the credit card amount before levying finance charges on your account. If you get a shorter grace period, you will have less time to make a payment. You can avoid late payments by using online payment services so that you can make payments without waiting for checks to traverse the postal service.
Keeping track of due dates on credit cards is very important. Each company has specific guidelines as well as deadlines in order to charge you extra due to making late payments. Some company’s on-time payments come right down to the hour and minute that you need to pay by. And if you’re one minute late, you could incur a late fee, higher interest rates and a negative entry on your credit report.
You can do simple things to avoid extra costs and negative credit entries. Plan to send your payment out of a few days in advance of the due date, and where possible, use the online bill paying service to set up an automatic payment. That way, you will always be on time, and even if you pay an extra charge for calling it in by phone, your interest rates will not suddenly skyrocket, and you won’t get a lot of finance charges tacked on top.
When you sign up for credit card, you sign an agreement that specifies a fixed interest rate, but that doesn’t necessarily mean that your rate won’t change. What it means is that your creditor must notify you prior to changing the rate. If you are subject to a rate increase and you continue to carry a balance from month to month, the amount that you pay in interest and finance charges will also increase.
Credit card companies are in the business of making money, and they have all kinds of tricks to help you pay them more. When your creditor informs you of an interest rate increase, you should exercise the option to continue paying your balance at the current interest rate. What you’ll need to do in order to accomplish that is to close the account, and that could be a move that will affect your credit score. If at all possible, should your credit card company do something that you don’t like, try to pay off as much of the balance as you can each month until you pay it down to zero.
These are just some of the ways that you can offset and defend yourself against credit card companies and the fine print on the account applications that always seem to favor the lenders. It’s your money so pay attention to your credit card accounts and make sure you not a victim of these tricks of the trade.
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February 9th, 2009 at 6:20 am
It is possible that the credit card companies change interest rates and due dates – but that is NOT the reason people get into credit card DEBT. Debt is when you buy more than you have money to pay. If you are using a credit card as credit – where it is paid in full each month – then there is no fear of the different tactics of the credit card companies.
March 14th, 2009 at 11:04 pm
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