The Changing Credit Card Rules
admin on May 20th, 2008
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Consumers are getting smarter, which means credit card companies have to change the rules to make a bigger profit. Getting caught in one of these traps could cost you big.
Grace Periods Are On Their Way Out
Most credit card companies have already reduced their grace period from 25 days to 20 days, but now many companies are completely wiping out the grace period. No grace period means you start accruing interest the moment you sign that credit slip or press the purchase button online. Credit card companies can change these rules whenever they want, so as soon as you miss a payment or decide to do the smart thing and pay off your credit card each month, they can take your grace period away in order to create more income for themselves.
Smart Consumers Need Not Apply
Being a responsible credit card user can now mean more fees will be added to your account. Credit companies are charging fees for closing your account, failing to use your credit for a certain amount of time, paying off your card each month and even charging a fee each time you use your account (in addition to interest charges!)
“As a Valued Client – Skip Your Payment This Month!”
This happens around the holidays a lot, you’ll receive a letter from the card company inviting you to skip a payment so you have extra money for the gifts you need to buy. Of course they don’t tell you that this little “gift” from them will cost you higher interest rates or extra payments in the future.
Convenience Checks
Another favorite around the holidays is sending you convenient paper checks you can write to yourself, with of course a special gift of no grace period, a high interest rate or additional fees. Merry Christmas!
Lowering Your Minimum Payment
Credit card companies hope you never pay off your debt because the longer you have it the more money they make. To encourage you to take longer they lower your minimum payment. If you can’t pay off your card every month, at least pay more than the minimum payment in order to pay off the balance faster and save interest payments.
Do You Know When Your Payment is Due?
You think you know when your payment is due right? It’s been the same day for years, so you would know if you are late. Well, now companies are adding due TIMES to bills which means if your payment is processed after that time on the due date you could be slapped with late fees.
