Family Issues

Some people are so compulsive when shopping even though they have lack of money. Thos people will tend to drool and salivate when they are only able to window shop. That’s why institutions decided to create the credit card.

This apparatus was created to help people without cash to use the card instead. To some people, this will be the perfect thing to satisfy their demand. However, because they tend to be so eager of the credit card there are some traps or pitfalls that they will tend to overlook and pay bigger for their mistakes.  This article compiles all the common traps that credit card users often fall into.

1. Universal default clause – this trap allows the credit card company to raise the interest rate you have all of a sudden if you o not pay your bills on time or have been starting to get bad credit reports. The bad thing is they will monitor your credit report. From the 0% interest rate they will hike it to 24.99% with one slip up.

2. Finding a fixed rate credit card is very rare. The bad thing about it is, even if you have been given a 15 day letter that the rates will increase after, the interest rate hike will immediately take effect the following day. The existing balances and purchases you have already made will also be subjected to the interest rate hike.

3. Late fees are becoming stricter. If you are not able to pay the late fees on a certain deadline time, the fees will be outrageously high. If you also go over the limit of the deadline of payment the penalty fees will also hurt you.

4. A 1 to 2 percent foreign currency charge is also charged to foreign travelers on their purchases. These fees are not illegal, but they should have explained and notified the foreign travelers about this fee.

Based on the consumer’s annual survey about credit cards, here are the results.

1. In a period of 6 months to a year the interest rates of credit cards are dramatically increased because of 1 or 2 late payments.

2. Credit cards that make you pay late fees amounting to $35 has doubled.

3. When you are just starting to use the card the interest rate is only 2%, eventually the interest rate will increase after the first few months.

4. Most credit card firs will not show their annual percentage rate until their credit report has been properly screened. Instead they give meaningless rates which make it hard to compare other credit card companies.

Tags: Visa Card, American Express, Budget, Credit, Debit