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Credit card bills hide hidden dangers
Credit card companies can pretty much do as they wish
The credit card industry is a profitable one, and you can easily add to their profits by failing to read the fine print in that accompanies your bill each month. Be careful, or your fees and interest rate could climb dramatically.
Continued below
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Credit card statements can hide a lot in the fine print
The typical American household carries 19 different debit and credit cards. And why not? They are generally safer than using cash, they provide an easy way to make purchases on the Internet, and they allow buyers to make purchases for which they do not immediately have cash on hand. In today’s economical climate, having at least one major credit card is essential. If you doubt that, try renting a car without one.
On the other hand, if you are not careful, a credit card can be a very expensive financial tool. The major credit card companies are very quick to point out their favorable terms, such as a “permanent” low interest rate, or a “free” transfer of balances from other cards, or the easy with which one may take out a cash advance, or the “zero percent” teaser rate offered to new customers.
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What they do not often mention is the numerous charges that could end up on your bill if you fail to read the terms carefully. Here are a few things you may not know about that could come in handy.:
- There is no such thing as a “permanent” interest rate, no matter what your credit card company may say. If they decide to keep your rate low for a long time, be thankful. The fine print on your bill generally states that the company may raise your rate at any time, for any reason, provided that the give you fifteen days notice. “Permanent” is permanent only until the company decides that they want to raise your rate. Then “permanent” becomes temporary.
- Late fees apply if your bill arrives late. That seems straightforward. Be aware, however, that “late” means anytime after the specific time of day the bills are declared to be due. If your statement says that the bill is due at 11 AM, Eastern time, then it is late if it arrives after that time, even if it shows up later that day. And that could cost you as much as $39 in late fees.
- Want to use your credit card at an automatic teller machine to get some cash? You can do it, but a fee will apply, as will an interest rate that will be considerably higher than for purchases. And interest accrues beginning the minute you take the money out of the ATM. There is no grace period for cash advances.
- While card issuers like to tout their balance transfer abilities, do not assume that moving the $5000 balance over from one of your other credit cards will be free. There may be a fee, and it may be treated as a cash advance, which comes with higher fees and interest rates than purchases do. If it is treated as a cash advance, you will not have a grace period, either. Be careful with this one; it could cost you hundreds of dollars.
These are but a few of the things one has to watch out for when using a major credit card. We will cover others in part two of this article about credit card bills. Be careful when using your plastic; it could cost you a lot more than you bargained for.
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