Avoid These Credit Card Fees!

February 17th, 2009

These fees can turn your credit card life into a living hell. Avoid if you can!

Universal Default

Considered one of the seediest credit card tricks ever devised, the universal default clause is an entry in your terms and conditions that basically allow the company to raise your interest rates on credit cards when you are late paying other bills, such as your mortgage or car loan. The interest rates are deathly serious too, sometimes reaching up to 35% annually!

Lately though, more and more consumers are widening up to these and some companies (like Citibank) have already made statements about abandoning the practice. To avoid it, make sure to ask your issuer if the clause is included in your credit card’s terms. If it is, it may be time to shop for a new card.

Double Billing

When you carry balances on your card month to month and your credit card company practices double billing, chances are highly that you’re experiencing its effects every billing cycle. This happens when the bank calculates finance charges based on the full price of a purchase, regardless if you’ve already paid part of it during the past month. To make sure you don’t fall prey to cards that bill this way, always inquire with your issuer. If they don’t calculate interest based on a single cycle, best move on to a different credit card.

Late Fees

Late fees on credit cards represent an average of around $30 with penalty interest rates reaching up to 35 percent. The bad news is, you can get charged for late payments even if you tried to pay on time. For instance, a delay in your mail-in payments or not making bank cut-offs can sometimes be enough to get you flagged for late payments and all the serious fees that come with it.

The easiest way to avoid late fees is to automate your credit card payments online. If you know you’re going to be late, you can also call up the bank and ask if you can be spared from the late fees. Most will acquiesce especially if your account is in good standing with the issuer.

noel Posted in Credit Card Guides

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