1. Interest Backdating
Nearly all credit card issuers charge interest from the day a charge is posted to your account if you don’t pay in full monthly. However some credit card companies charge interest from the date of purchase. THIS COULD BE DAYS BEFORE THE COMPANY HAS EVEN PAID THE STORE ON YOUR BEHALF!
Remedy: Find a credit card manufacturer that does not interest backdate or pay the bill in full on the due date.
2.Two-Cycle Billing
Credit card issuers using this method of calculating interest charge two months worth of interest for the very first month you failed ot pay off your balance in full. The issue arises when you switch from paying in full to carrying a blance from month to month.
Remedy: Again switch credit card users or always pay your balance in full.
3. The Right to Setoff
In many instances you may have money on deposit at a bank as well as have your credit card issued from that bank. In the fine print of the agreement that you signed when you opened the account you may have granted the bank the right to take funds from your deposit account when you become delinquent on your credit card.
Remedy: Choose separate banks, or avoid being delinquent.
4. Fees Are Negotiable
On many of your cards you may be paying upwards of $50 per year as an annual fee on your credit card. Your cards may also be subject to finance charges of more than 18 percent.
Remedy: As a good customer, you can ask the bank to reduce the interest rate and wave the annual fee. Also, you can you can always switch to a lower priced card.
5. Interest Rate Hikes Are Retroactive
When you sign up for a credit card with a common low teaser rate similar to 7.7 percent, when that trial or low rate period expires, your leftover balance will likely be subject to the regular and substantially higher interest rate.
Remedy: Close the account or pay in full before the rate increases.
6. Shortened Due Dates
Most card issuers offer a 25-day grace period in which to pay for new purchases without incurring finance charges. Some banks have shortened the grace period to 20 days -- but only for customers who pay in full monthly.
Remedy: Ask to go back to 25 days.
7. Eliminating Grace Periods
As always, that magnificent offer you received in the mail for a platinum card with a $25,000 credit limit and numerous perks may not be so great. The most common problem or string attached is the card has no grace period. You are charged interest on every purchase from the day you buy it, even if you pay on time.
Remedy: Throw the offer out immediately!
8. Disappearing Benefits
Many banks persuade you to sign up with extra benefits such as a 6 percent discount on all travel or protection if an item is purchase or lost or a lifetime warranty. Many banks have actually cut back on these perks without announcing it.
Remedy: Read annual disclosure of changes and ask your bank, switch cards if need be.
9. Double Fees on Cash Advances
Many credit cards impose both finance charges and a transaction fee on cash advances. Also, interest begins from the day of the advance, and the additional transaction fee can be up to 2.5 percent of the amount taken. Be very weary of cards advertising “no finance charges.” Transaction fees will most likely still apply.
Remedy: Don’t do cash advances.
10. Misleading Monthly Minimums
It may seem to you to be beneficial to have a credit card where you only need to pay 2 percent to 3 percent of your monthly balance. It is just the opposite however. The bank stands to make far more money from all of the finance charges the longer you carry out these payments and of course you pay every penny.
Remedy: Pay all your credit cards off monthly.
1 Comment
Your tips are most welcomed
Your tips are most welcomed and this is also a perfect timing because I want to apply for a credit card and I find it hard to make the right decision. So far, www.ApplyOnline.CitiCards.com looks most promising for what I need.