The best argument against democracy is a five-minute conversation with the average voter. »» Winston Churchill
Avoiding The Small Print Traps With Credit Cards
Posted on August 16, 2007
Stumble it!
| 
Email This Post
| 
Print This Post
|
In my ongoing quest for credit education I came across a great article today full of advice when applying for a credit card. It highlights twelve “small print” items many people miss when considering their debt management strategies. The full article is well worth the read, in fact I’ve bookmarked it for a future reread as well, but I thought I’d hit the highlights for you here-
- The 0% APR Trap-
Not only is the 0% APR advertised discretionary until they’ve actually issued the card, but it only lasts a short amount of time and investigating the fine print will show ways they can reduce even the introductory period that it typically covers. - Default APR-
The legalese within the agreement is full of ways they can bump you from whatever rate you initiated the card at to what’s known as the “default APR”. This can easily be as high as 35%! - Fixed or Variable APR-
There’s actually no such things as a “fixed” APR when it comes to credit cards. The card provider can change your APR essentially whenever they desire. - The APR Shell Game-
It used to be you could look at a credit card application or agreement and see what the APR was. These days, there will most likely be a box full of different APRs. How in the world are you supposed to find the best deal when they won’t allow themselves to be pinned down for even a moment? - Late Fees-
This section gets my vote for best article subheading ever: “Going from carriage to pumpkin at midnight (or 5 p.m.)” Isn’t that just grand? The hidden truth here is that it doesn’t matter when your payment arrives at the credit card company. All that matters is when they decide to process it! - Want cash? That’ll cost ya!-
Credit cards really only have one purpose - short term loans to cover whatever expense you may have at the moment. Why should it matter to the credit card companies whether you take that loan as cash or immediately apply it to a purchase? For some reason it does, and though they advertise the ease of getting a cash advance, paying it back may be much more difficult then you think. - Pay To Play-
APR isn’t the only fee you’re going to pay however. Even if you never use your credit card, or actually pay it off in advance of having any charges, there are still plenty of fees to keep an eye on. - Playing With Your Emotions-
This one really drives me batty. You know you’ve seen (or may even have) a credit card that asserts to support one cause or another. If you really believe in some charitable organization just send them the money yourself. Why do you need a credit card company to handle any part of your donation? - Two-cycle balance computation-
Honestly, I have no idea what those words mean. Well, I do understand a little bit better now, but not well enough to explain it to you myself. Read the article for the details but I can sum up my basic understanding in three words: bad for you. - Don’t use the card? Pay anyway-
That’s right, credit card companies are now charging you to not use their cards. - Overseas Adventures-
So many people love their credit cards on vacation. “This way I don’t have to worry about changing to the local currency” is an oft-repeated phrase. Well, you should worry, because not only are there more fees involved (big surprise there), but guess who’s deciding the conversion rate. - The Long Road of Minimum Payments-
It may seem like a great service to only have to pay $30 per month on that new plasma television, but do you really want to still be paying for it after it’s taking up space in a landfill?
Related Posts: » Filed Under: Personal Finance
» Trackback to: Avoiding The Small Print Traps With Credit Cards
No Responses to “Avoiding The Small Print Traps With Credit Cards”