Knowing your credit card payment terms is critical for every credit card holder. It's crucial that you fully understand the rules governing your credit card account.
Many credit card companies take every opportunity to slap you with an assortment of fees for a variety of reasons, including: no use, use above or below certain limits, late fees and so on.
"The highest use of capital is not to make more money,
but to make money do more for the betterment of life."
- Henry Ford |
Consider this free credit card debt counseling advice. If you insist on using a credit card and you wish to maintain a continued state of sound financial health, you need to understand the terms and conditions of your credit card.
Make no mistake, it is essential to read the fine print of the contract and all materials presented when the card is offered. This is where the less scrupulous card issuers implant terms and conditions that maximize the fees they can charge consumers.
Some credit card payment terms include surprise charges or penalties for some specific act or omission related to the use of their credit card.
It is a federal law requirement for issuers of debit and credit cards to disclose the terms and charges of their program. Most card issuers do comply with the law but the average consumer is not aware of how to compare product offers in a balanced way.
A 2006 survey conducted by Braun Research revealed that thirty three percent of consumers are unable to read or understand the 'fine print' disclosures and twenty percent cannot locate critical credit card payment terms.
As many as forty four percent of the people surveyed did not even know the APR (Annual Percentage Rate) that was applicable on their credit cards. Twenty percent did not know their credit limit.
Surprisingly, a whopping seventy percent is unaware of Universal Default policies. These policies allow creditors to increase rates even when you have a perfect payment history on your credit card. Your interest rate can suddenly double if you are late in your payment to any other creditor!
Here are some things that you need to be aware of when you sign up for any credit card:
Low Introductory Rates:
Beware of such offers. Many credit cards offer 0% interest for an initial period, typically for 6-12 months, after which you are charged a much higher interest rate.
Built into the terms and conditions are declarations from the lender that they reserve the right to change the terms whenever they want, and for any reason. This of course covers hiking the APR even further.
Grace Period For:
(a) Delayed Payments: Typically, there is no grace period beyond the due date. If your payment arrives even a day after the due date, be ready to face additional fees and higher interest rates.
So practical advice includes paying off credit card debt, the entire balance, each and every month to avoid paying any interest on your purchases. (Or better yet, just don't use a credit card and avoid having to read the credit card payment terms at all!)
(b) Purchases: Some cards do not offer any grace period on payments for purchases made. Interest can be charged right from the moment the sale is recorded. Never sign up for a credit card with this condition!
Credit Limits:
Don't charge beyond your pre-established credit limits. Even if your transaction is approved by the card company, you may end up with a $20 to $30 fee for going over your credit limit.
These are just a few of the items consumers need to know about when using credit cards.
Educate yourself by reading the complete credit card payment terms upfront and avoid the hassle of being educated by the credit card debt collection companies later on.
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"Never spend your money before you have it."
- Thomas Jefferson |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
