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12 Credit Card Secrets. Banks Don't Want You to Know |
1. INTEREST
BACKDATING
Most card issuers charge interest from the day a charge is posted to your account if you
don't pay in full monthly. But, some charge interest from the date of purchase, days
before they have even paid the store on your behalf!
REMEDY: Find another card issuer, or always pay your bill in full by the due
date.
2. TWO-CYCLE BILLING
Issuers which use this method of calculating interest, charge two months worth of interest
for the first month you failed to pay off your total balance in full. This issue arises
only when you switch from paying in full to carrying a balance from month to month.
REMEDY: Switch issuers or always pay your balance in full.
3. THE RIGHT TO SETOFF
If you have money on deposit at a bank, and also have your credit card there, you may have
signed an agreement when you opened the deposit account which permits the bank to take
those funds if you become delinquent on your credit card.
REMEDY: Bank at separate institutions, or avoid delinquencies.
4. FEES ARE NEGOTIABLE
You may be paying up to $50 a year or more as an annual fee on your credit card. You may
also be subject to finance charges of over 18%.
REMEDY: If you are a good customer, the bank may be willing to drop the annual
fee, and reduce the interest rate -- you only have to ask! Otherwise, you can switch
issuers to a lower- priced card.
5. INTEREST RATE HIKES ARE RETROACTIVE
If you sign up for a credit card with a low "teaser" rate, such as 7.9%, when
the low rate period expires, your existing balance will likely be subject to the regular
and substantially higher interest rate.
REMEDY: Pay in full before the rate increase or close the account.
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