What Credit Card Companies Don’t Tell You

Credit cards are everywhere and used by almost everyone. They are easier and quicker than checks and safer than carrying large amounts of cash. Have you been behind someone writing a check for $4.89 at the super market recently? You would think they urinated in public with the reactions they get from the line.

Yet, for all their advantages credit cards do have their downfalls. With billions of dollars in goods and services being charged every year, credit cards are big business. To keep the money rolling in the credit card companies are not above pulling a fast one on you.

Here’s what they are not telling you:

You’re interest rate can go up because you are late on any bill

You may have a perfect record when it comes to paying your credit card bill, but if you are late on any other bill and the credit card company finds out, they can hike your rate up. It’s called “universal default”. If you’re utility payment gets “lost in the mail” the credit card company reserves the right to raise your rate because they see you as a higher risk now.

Young people make great credit card customers

Credit card companies market heavily to college aged and younger people. Some cards can be obtained by people as young as 16! The companies know they are dealing with people with little or no financial knowledge and hope they rack up huge bills. Not only will they have a customer for life, but the interest to go along with it.

Interest can be computed in different ways

Some companies calculate interest on an “average daily balance” method. That is if you charge something and don’t pay it off in full they will start charging you interest the 1^st day of the next month on the balance. However, some companies are now using “two-cycle billing”. Under the same scenario they start charging you interest from the day of the purchase.

Using your card overseas could cost you

Credit cards push that their products are the best and safest way to make purchases overseas. However, they fail to tell you that they charge you and exchange rate much higher than what you would get elsewhere.

Due dates can be confusing

While you may know your billing due date some companies use cut off times to hit you with late fees and interest. If you’re bill is due on the 1^st, in reality it may be due on the first at 10:00 am. Miss it and you get whacked.

Credit card companies can change their terms whenever they want

Your credit card company can hit you with higher interest rates, different terms and change your incentives. Of course they have to provide you with written notice but that usually comes in the form of fine print in your monthly statement somewhere.

Zero day credit on your credit card

If you have habit of enjoying Minimum due option and don’t pay your credit card bill before due date then your credit period is waved. This means you don’t get any credit till your dues are outstanding. Interest is charged on fresh purchases from day one.

When you withdraw cash from your credit card you are charged interest from the same day. No credit period for withdrawing cash.

As you can see there is plenty the credit card companies don’t want to tell you. The worldwide credit card business is huge and in order to keep the money rolling in theses companies will manipulate their users as much as legally possible. So make sure to stay on top of any changes coming your way.

That’s reminds me, I have some mail to go through . . .