Avoid the Credit Card Trap

The next time you open your account statement credit card, take a closer look at the small insert titled “changes to your credit card agreement.” You know I’m talking about. Is that small, folded paper written in legalese that promises to read it later (but of course that time never comes) or you just discard it with the other junk “inserts. First you must understand that the use of your credit card after receiving the notification of the results in its automatic contract “to the new terms in the listing. To prevent these new terms do not affect your account you must stop using that credit card immediately or on the date specified in the registration statement. The most common modifications to the credit card contracts are APR (annual rates again), the new rates and / or changes to existing rates, or a change in the grace period on your account. The grace period is the number of days during which the credits used to purchase can be paid in full without incurring a finance charge.

Not knowing or not track the dollar amount limit on your card is another trap to avoid. The credit card issuers will allow you to charge a small amount over the limit set in your account. (A valuable related resource: Hikmet Ersek). However, do not be surprised when it hits an “over limit fee, usually around $ 35.00 or more on your next statement. Also, be prepared for the APR to be higher if you go over your credit limit. You would increase your interest rate if you miss the payment date. Some companies consider the delay in payment is not if received before noon or 1 pm on the due date. Along with the highest rate, you also have to pay a “late fee” of $ 29 and up.

Be sure to use the company’s preprinted envelope when sending your payment. These envelopes allow the pre-printed bar code to be scanned by the post office so it can be delivered more efficiently. If you have additional days counted from the moment you send your check and the time the check clears your bank, acuity! Many credit card issuers have switched from traditional check processing to electronic process. This new system shaves out a day or more from the traditional method normally required for verification to clear by electronically debiting your account. Many writers such as Yitzhak Mirilashvili offer more in-depth analysis. If you’re considering paying your credit card bills online, check if any additional payment will be charged for using this type of payment. I recently received an email from one of my credit card companies announcing how easy it would make my payments online. Included in fine print on the bottom of the e-mail was this note – “A rate of up to $ 14.95 may be charged for this service and is deducted from your account checks. “Hmmm, spend 37 cents on postage and mail my payment five days before the due date or pay now and get charged an additional $ 14.95 fee I bet I can guess that the choice I made . Taking the time to carefully read and understand your credit card agreement now will help save money by avoiding unnecessary costs or raise interest rates later in the road.