Avoiding Credit Card Traps

The next time you open your credit card statement, take a closer look at the small insert titled "changes to your credit card 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 credit card 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 credit card immediately or by the date given in the notification statement.

The most common modifications to credit card 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 credit 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. Credit card 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 credit card 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 credit card 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 credit card 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 credit card agreement now will help you save money by avoiding unnecessary fees or climbing interest rates later down the road.

© 2004, http://www.yourfreecreditreportnow.com

About The Author

James H. Dimmitt

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

jimdim815@aol.com

---

Student Credit Cards 101

Almost all students have and use student credit cards. Some... Read More

10 Ways To Boost Your Credit Score

1. Deleting Errors in 48 HoursThis is the absolute fastest... Read More

Credit Card Companies Are Out for Your Money

You're probably thinking "Tell me something I don't know" but... Read More

How Healthy Is Your Credit

There's only one way to discover the "health" of your... Read More

How to Repair a Bad Credit Rating

If you have a bad credit rating, then you might... Read More

Identity Theft ? Monitor Your Credit Report

The recent security breach at credit card processor CardSystems Solutions... Read More

Warning: Free Credit Report Imposter Websites Springing Up on the Web

A recent amendment to the federal Fair Credit Reporting Act... Read More

Credit Damage: Getting Compensated for Your Loss

Until recently lawyers for victims of credit damage had little... Read More

Cash Advance ? How Does It Work?

If you want a cash advance or a payday/paycheck loan,... Read More

Finding Reputable Credit Card Companies

You're interested in getting the best credit cards for your... Read More

The Right Way To Credit Repair

If you have a bad credit rating, then you might... Read More

All Is Fair In Love, War, and, Your Credit Report - At Least It Should Be! Understanding the FCRA

Fact: Over 150 million Americans have credit report with the... Read More

I?ve Heard About FACTA; What Does It mean?

What FACTA means is that if you, as an individual,... Read More

How To Eliminate Credit Card Debt

There is almost nothing more troublesome than having too much... Read More

Your Credit Rating and How To Check It

There is a lot of confusion surrounding UK credit ratings,... Read More

A Summary of the Fair Credit Reporting Act

This summary of the Fair Credit Reporting Act will explain... Read More

Dealing With and Repairing Bad Credit

Bad credit can be a burden for otherwise good credit.... Read More

Credit Report ? Check Yours Regularly - and for Free

In the twenty-first century, there are few documents that have... Read More

What Happens When Your Credit Is Damaged? Do You Have Recourse?

The good thing about bad credit is that you can... Read More

7 Consumer Credit Laws You Should Know if You are Trying to Repair Your Credit

There are seven consumer credit laws you should be aware... Read More

Bad Checks, Bounced Checks, & NSF Checks

Negotiable instruments like checks and drafts have become an indispensable... Read More

Rewards Cards: Are They Worth It?

Virtually all consumers will have a credit card at some... Read More

A Debt Mentality

While working through my own debt situation, and helping others... Read More

Various Types of Credit Cards - Part 2

Several different types of credit cards offer several different options,... Read More

Keep Your Credit History Clean - Remove A Negative Credit Record From Credit Report

The three major credit bureaus, Experian, Equifax and Trans Union... Read More

Consolidating Credit Cards

Credit card consolidation is a popular solution for those with... Read More

Credit Cards And Loans - So Many Options - So Little Time

Credit Cards and Loans sounds like just two things, but... Read More

Can Credit Search Entries Affect Your Ability to get Approved for a New Loan in the UK?

About Search Entries:Every time a lender checks your credit history... Read More

Guide to Credit Terms

Listed below is a useful guide to credit card terms.... Read More

Know Your Credit Card Rights

When you apply for a credit card, the application that... Read More

Credit Report Secrets: Do You Know What They Reveal?

If you've ever applied for a credit card or loan,... Read More

How to Save Money on Your Credit Cards

Credit card companies make their money on the 85% of... Read More

What is the Check 21 Act?

Check 21 is the common name for the Check Clearing... Read More