Credit-card users should be aware of traps

[question everything]

CBS MARKETWATCH

June 27, 2004

(snip)

It becomes particularly lucrative for credit-card companies (and costly for you) when a simple oversight, such as making a late payment, triggers several different fees. In this situation, the late fee could also push your card balance over the credit limit, triggering an over-the-limit fee and an increase in the interest rate charged on your balance because your card payment is late and your balance exceeds the limit.

Through credit bureaus, your account information and payment activity for all of your credit accounts is now widely available and used by financial institutions. That means your credit-card issuer can use your late payments on another credit card or loan against you.

According to Consumer Financial Education, nearly 40 percent of credit-card companies say they increase interest rates charged to current cardholders who pay late on other accounts.

Other traps set by card issuers include reducing the interest-free grace period from 31 days to an average of about 21 days. As a result, flat-footed customers end up incurring additional interest and late fees.

Card issuers also attract customers with "no annual fee cards." But buried in the fine print of the card agreement is a charge for a minimum monthly finance fee to all customers, even those who pay their balance in full.

More..


Find this article at:
http://www.signonsandiego.com/uniontrib/20040627/news_1b27credit.html

[Dirty Hippie]

1. What timing!

I was just reading a credit card offer because I want to transfer my balance and it stated the you can be in default if you fail to make a payment to the credit card company or any other creditor when due. I was wondering WTF?

Thanks for your post. It explained everything.

[Commie Pinko Dirtbag]

2. Why, silly, it's CLASS WARFARE of course!

Members of the same Army gotta STICK TOGETHER! :nuke:

[question everything]

4. If you do transfer your balance for a zero interest

do this and then don't use the card until all is paid, unless it specifically says that the zero interest applies also for new purchases and most do not. Thus, any payment you make go to the lowest interest - zero - first while the new purchased accumulate interest at the going rate - 12, 14, 21 - whatever it says.

Also, keep in mind that at the end of the promotion period - 6, 8 or 12 month - whatever balance remains will start carry interest. Thus, either divide the sum into the number of month to determine your monthly payment so that all is paid by the time the promotion period ends, or be ready to start paying interest. Whatever you do DO NOT SEND THE MINIMUM DUE. This is a clever way to keep you owing money forever. And, if one statement tells you that you do not have to send money because you paid more than the minimum due last time - ignore this. You will start earning interest on the unpaid amount.

[gpandas]

3. also, read the fine print...

they are required by law to reveal practices. astounding number of people will sign forms without reading them. make your payments on time, or, better yet, burn the cards.