Why is it that people with the worst credit ratings always seem to be the ones with multiple credit cards? They tell you they have bad credit as they’re pulling out the plastic to pay for unneeded purchases. That’s enough to turn anyone off getting a credit card – ever!
However, you can't avoid using credit cards forever and its pure necessity to build up your credit rating. So we’ve established that having a credit card is a necessity in many cases, but that doesn’t mean you need to apply for one blind. You are responsible for doing your research on sites like this one, to be able to distinguish the unsavory tactics of one credit card company from another. The key is to be informed about credit cards and everything they encompass before you sign your name and start charging away. That’s where we come in handy. We will inform you of all the ins and outs of credit cards. We will warn you what to watch out for:
According to a 2004 Consumer Affairs Report, credit cards are used to pay for roughly $1.5 trillion worth of merchandise every single year – that’s a lot of plastic money floating around, and you don’t want to get your credit card cut up at the counter of Target or worse, you don’t want to get denied a mortgage when you try to purchase your new home. This is why we’ve put together a list of the top – things to know when it comes to credit cards:
You’re lucky if you can even read it, let alone figure out what the heck it means. Credit card companies have a habit of making their cardholder agreements basically incomprehensible, and that’s because a team of lawyers wrote it! All lawyer jokes aside, your cardholder agreement is meant to be hard to understand – and that’s because if you carry over your balance or sign up unaware of annual fees – they’ve made money from you. So make sure you understand.
What exactly happens when you don’t pay the balance on your credit card?
What the annual fees are for having the card in the first place?
I only paid the minimum payment! You charged $568 to your credit card last month, but you only paid the minimum payment of $20. Sounds like a great deal – doesn’t it? Well, you’re not walking away as debt free as you think you might be. Sure most credit card companies demand and even encourage you to only pay the minimum required payment of 2%, but if you carry a balance at the end of each month, you will pay interest. Make sure you’re aware of how much your interest fees are, they can add up, put you in debt and ruin your credit history.
You will notice the payment amount on your first credit card bill, but did you take the time to heed the payment deadline? Credit card companies are sticklers for deadlines. By that, I mean that if they don’t receive your payment by the deadline on your credit card bill, you will most certainly be charged interest. This doesn’t include the mailing time. Your credit card bill must be paid and returned, and postmarked before the date of the deadline. I missed mine by a day during the first 6-months of my Visa ownership, and I was charged $25 in interest. ONE DAY! So don’t be late with your credit card payments if you don’t have $25 to just throw away. You better bet the credit card company will be happy because that’s $25 extra dollars in their pockets(https://upgradedpoints.com/credit-card-fees).
The idea of transferring the balance of one credit card to another sounds like a great idea doesn’t it? But don’t get in the habit of paying off one credit card with another until you are versed in transfer fees. Transfer fees exist just for this purpose, and they can be upwards of .5% when you use a credit card with a lower interest rate to pay the balance off on another. In the long run, it can end up costing you more in transfer fees than it would have in interest.
Don’t get excited when you’re allowed to go over your credit card limit!
It’s Christmas time. You’re standing at the cash register at Walmart waiting for the cashier to dial the credit card company. You’ve just gone over your credit limit and they’re calling the credit card company to ask if it’s still alright to process your purchases. As you take the receiver to talk to the credit card company, sweat trickles down your brow. You breathe a sigh of relief as the credit card representative tells you they will allow you to go over your limit. Woo-hoo! However, when you receive your credit card bill for December you realize that you were charged $35 in over-limit fees! Going over your limit carries a hefty penalty. Be sure you know what you’re over-limit fees are before the cashier makes that call.
If you consistently carry a hefty balance on your credit card from month to month, you may be deemed a high-risk customer. This means you can expect to see your interest rates increase. These are known as variable interest rates. If you read the fine print on your credit card agreement, you’ll soon discover that they offer low introductory interest rates. This is great if you’re the kind of person who pays of their balance at the end of every month. If not, you may be a victim of interest rates as high as 25% as a penalty for going over the limit or because you carry a large debt.
Just because it’s a contract doesn’t mean it can’t be changed – not by you, by your credit card company. You’re probably thinking that changing a binding contract is wrong, and you would be correct in that statement. However, if you take a close look at your credit card agreement, you’ll notice that somewhere in small print it may say that the credit company has the right to change the terms and conditions of client agreements, for any reason, if they provide you with 15 days' of notice. This could be a change to your interest rates, your ability to carry over a hefty balance without penalty and so on. So if you receive a letter in the mail from your credit card company, please read it. Not everything is as severe as it may seem. On the Internet, you can take debt and not be afraid of sudden interest charges or fine print. An answer is personal same day loans! After all, it is their job, and it’s better to be knowledgeable than weighed down by debt because you didn’t understand your credit card contract.
Wishing you all happy and smart spending!