Be Aware Of Credit Cards Fine Print Traps

Thursday, July 26, 2012, 2:00 AM | 3 Comments

Americans can’t live without their credit cards. They don’t go out without them. That is fine as long as they don’t accrue credit card debt that they can’t get rid of. Americans seem to be back in the habit of free spending using their cards.

Credit card lenders are happier than ever. Obesity is bad for humans but consumers are once again putting money in lenders’ already swollen bellies. They ought to be happier than ever.

No matter you are a newbie like a student or an expert in spending freely, you can be sure the lenders one day will get you for this.

Before you sign up for a new credit card, read and read again the fine prints. If you don’t, you give the lenders free hand in charging the interest you never expected and the amount of the late fee if you miss the due date.

Be aware of the following credit cards fine print traps:

  1. The 0% introductory APR

    You have to be extremely careful not to fall for this trap. It may not be a trap if you really understand it.

    Most probably this 0% introductory APR is for transfer only. Once you do that, the question is how much would the credit card issuer charge in interest when you make a new purchase – perhaps an arm and a leg.

    This may be good for folks who need to transfer the account but have decided to pay for new purchases before the due date and in full.

  2. Late fees or penalty fees

    The 0% APR evaporates and is replaced with as much as 30% if you are late in paying two consecutive payments on top of late fees generally between $15 and $30.

  3. Fixed rate APR

    Fixed rate APR does not mean the lender will charge you one fixed rate no matter what. It simply means you have the right to be informed before the lender makes changes in interest rate.

  4. Inactivity or spending less

    Almost everyone has seen the “the no annual fee.” That’s Okay as long as you have reached (spent) the preset annual spending on the credit.

    If you spend less, then the lender has the option of charging annual fee, generally between $35 to $50.

  5. The issuer will most probably waive off the annual fee for the first year only. After that, it’s conditional.

  6. Minimums

    The minimum payment is simply a set percentage of your balance. Experts warn that making the minimum payment every month will take you approximately four times as longer than making a fixed payment that you would and should have set for yourself.

    This way you would not waste money on interest and would avoid carrying debt for a longer period of time.

In a Nutshell
When it comes to credit cards, always think and slow down at the yellow light. That means you must proceed with caution.

The best way to proceed with caution is to read the fine prints carefully before signing your new credit card agreement.

Be aware. Keep an eye on purchases and prices, know your credit card terms, and watch your statements carefully.

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  1. 3 Responses to “Be Aware Of Credit Cards Fine Print Traps”

  2. By Rayane on Aug 12, 2012, 11:16 pm | Reply

    Lenders are like scared lttlie kids they rely on what everyone is telling them, and your credit report says it all. If you were to lend me $50 and I never paid you back will you ever lend me money again? What if I tell all my friends will they lend you money? Your credit report conveys this information, faster than girls spread cooties.If you have negative items, contact the people you owe and tell them you are willing to settle on the debt (offer them 40% of what is owed) create a letter for them to sign off on that states you want all negative items removed from your credit report and a letter stating that everything was PAID IN FULL (not settled, or settled as agreed). Once you settle, contest the listings on your credit report with all the credit bureaus:Equifax, Experian, and TransUnion. Then begin to pay large amounts toward your active credit cards NEVER spend more than 40% of the credit available (if your credit limit is $1,000 dont go over $400 on the card). always pay your bills on time (not late) then it takes time and you should begin to see your credit score rise 35% of your score is debt to income (what you have borrow vs what you are allowed to borrow)35% is payment history (something you need to get cleared up)10% length of credit history (so dont close accounts you have paid off)Hope that helps

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