Credit Card Info
- September 3, 2008
Credit Card Debt – Avoid the Dirty Tricks
Are you excited about getting finally approved and being given a shiny credit card for shopping? Learning about some important credit card debt facts will enlighten you to see what a credit card entails more than the much hyped cliché of a hassle free shopping. This information could save you from future sorrows.
You cannot be blamed for sure. Most of the credit card companies offer irresistible packages whenever you get a credit card from them. Free annual fees, additional airlines mileage or discount to merchant stores are some of these offers. However, with all of these marketing highlights, a customer should be informed of the actual cost it will take to own and use the card. The real interest rate is one of the important credit card debt facts to consider. Some will declare imposing low interest rates but with hidden charges on some conditions. As neophyte on card usage, you will usually fall into this trap of enjoying a low initial interest rate. It will be much later on when you have become a veteran spender that you will be presented the real deal of a higher interest rate in the succeeding months. This is one major feature to watch out for, or better yet, not to fall for.
Another dirty trick on the interest rate arena is that some card issuers charge two rates based on the type of balance that you keep. If you do not intend to pay the total amount due in full for a given month, and have a certain balance ‘roll over’ to the succeeding month, there usually is a separate interest rate for this transferred balance. Add to that the rate imposed on recently purchased items and you will be dealing with a lot more than you expected.
It is also important to analyze the credit card’s grace period and cut-off period. If you are not smart enough, you will be outwitted by those who will start charging interest right at the day you bought the item. Ideally, a fair length of time of 25 days a grace period should be given for you to pay off your credit card balance before it starts accruing interest. Without the grace period, you will end up owing the credit card company some cash even after payment every month. Sad to say but true indeed, these are just some ugly credit card debt facts to be wary about.
Fees are another way for credit card agencies to pull in revenues. Late fees are mercilessly charged, regardless of reasons, for being late for payment for say, even a day. And this fees are enormous, as it affects the entire rate for the whole balance. The late fees are separately calculated and are charged on a per day basis, depending on how many days the payment got late.
Awareness on the pros and cons of credit card use is a major debt help to become a responsible consumer and avoid negative debt consequences.. This should be the main goal of credit card agencies before luring young or innocent Americans to their products.