Credit cards - Your statement can hurt you

Be careful when you use your credit card, or your fees or penalties and interest rate could climb significantly. The bank card industry is a lucrative one, and you can effortlessly add to their returns by failing to examine the fine print that accompanies your statement each month.

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Bank cards are generally safer than carrying cash, they provide an easy way to buy things on the Web, and they allow shoppers to make purchases for which they do not currently have cash available. The average American household holds 19 different debit and credit cards. In today's economical climate, having at least one major charge card is essential; you can not, for instance, rent a car without one.

A lot of charge card accounts offer such amenities as a "permanent" low rate of interest, or a "no-cost" transfer of balances from other accounts, or how easy it is to take out a cash loan, or the "0%" promotional rate offered to new customers. The major credit card companies are very quick to point out their favorable terms.
 

What the credit card firms infrequently mention is the numerous charges that could end up on your bill if you fail to read the terms in detail. If you are not careful, a credit card can be a very costly financial tool.

Below are a few things you may not know about that could be useful:

Late fees pile up, and are many times as much as $39. Late fees apply if your payment arrives late, even if your personal check arrives on the day the payment is due. If your statement says that the bill is due at 11 AM, Pacific time, then it is regarded as late if it arrives after that time, even if it shows up the same day. Paying late means even one minute after the exact time the bills are declared to be due.

There is no grace period for cash advances. Interest on cash advances accrues starting the minute you take the money out of the Teller machine. Your are free to use your credit card to get funds from an ATM, but a charge will apply, as will an interest rate that will be considerably higher than for purchases.

Be cautious when moving balances to a different account; it could cost you hundreds. While issuing banks like to tout their balance transfer programs, do not presume that moving the five thousand dollar balance over from one of your other accounts will be free. There may be a fee for a balance transfer, and it may be treated as a cash advance, which comes with higher charges and rates of interest than for purchases. If a balance transfer is treated as a cash advance, you will not have a grace period.

There is no "permanent" interest rate, no matter what your bank may claim. If they want to keep your rate low for a while, be thankful. A "permanent" rate of interest is permanent only until the issuer decides that they want to raise your rate, at which point "permanent" becomes brief. The cardholder agreement on your bill frequently says that the company may raise your rate at any time, for any reason at all, as long as they give you 15 days notice.

Be careful when using your plastic; it could cost you a lot more than you expected. These are only a few of the things one has to be on the lookout for when using your charge account. These things are useful, but they can be expensive if you aren’t careful.