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Your Credit Card May Be Costing More Than You Think!
Do you know what your credit card is truly costing you? Many
people assume that they do, but aren't familiar with the hidden
fees that many credit card companies are charging. In fact, if
you don't keep close tabs on your credit card, you may end up
paying hundreds of extra dollars per year-without ever really
knowing it!
And if you're trying to budget your money, those hidden fees
can add up!
Let's take a look at some of the most common credit card fees,
and then talk about how you can avoid them.
Grace Periods
In the past, we could always count on grace periods before we
ever had to start paying interest. For example, if we charged our
card to the limit, and could get it paid off before the grace
period expired, then it would be like a free loan-we wouldn't
have to pay any interest.
Unfortunately, the credit card companies are making this
harder and harder to do. For starters, many of them have reduced
the traditional 30 day grace period to 20-25 days.
If you hold a credit card, but didn't realize this, then
you're likely paying interest without even knowing it! What's
worse is that more and more credit card companies are eliminating
grace periods altogether. That means if you charged lunch today
at noon, at 12:01 pm, you would be already paying interest on
it.
How about your credit card? You need to take a close look at
the fine print and find out what kind of grace period you have.
If your credit card company has reduced it significantly, or
eliminated it altogether, you should seriously consider canceling
it and getting a more user-friendly card.
Late Fees
When is the last time you checked to see what amount your
credit card company charges you for a late fee? The truth is that
these fees have doubled in just the past ten years, and that,
combined with the reduced grace period, means that the credit
card companies are raking in a lot of dough on late fees!
If it's possible, you should try and send off the check (or
electronic transfer) the day that you receive your credit card
bill. There are three reasons why it's important never to be
late. The first is obvious; you will want to do everything in
your power to avoid a hefty late fee. Next, if you are late, it
will likely be reported to the credit agency and you will have a
bad mark on your credit report. The third is the direst, and
we'll discuss it below.
Interest Rate Hikes
Did you know that if you are late--even one time-on your
credit card payment, the company will in all likelihood raise
your interest rates? That's right; one late payment gives them
the right to do it. What's more, that isn't just limited to your
credit card payment. Any late payments from any lender that show
up on your credit report gives them the justification to raise
your rates, so be careful!
Copyright (c)2005 by Michael Ambrosio. You may publish this
article on your site or in your newsletter provided this resource
box remains in tact. Michael Ambrosio is the author of many
credit related articles. Visit his website today: http://www.yourcreditandyou.com
and rebuild your credit.
MORE RESOURCES:
Credit - Google News
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