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Six
Credit Card Secrets Banks Don't Want You To Know
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1. Interest
Backdating
Most card issuers
charge interest from the day a charge is posted to your account
if you donąt pay in full monthly. But, some charge interest
from the date of purchase, days before they have even paid the
store on your behalf!
REMEDY:
Find another card issuer, or always pay your bill in full by
the due date.
2. Two-Cycle
Billing
Issuers which
use this method of calculating interest, charge two months worth
of interest for the first month you failed to pay off your total
balance in full. This issue arises only when you switch from
paying in full to carrying a balance from month to month.
REMEDY:
Switch issuers or always pay your balance in full.
3. The
Right To Setoff
If you have money
on deposit at a bank, and also have your credit card there,
you may have signed an agreement when you opened the deposit
account which permits the bank to take those funds if you become
delinquent on your credit card.
REMEDY:
Bank at separate institutions, or avoid delinquencies.
A
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4. Fees
Are Negotiable
You may be paying
up to $50 a year or more as an annual fee on your credit card.
You may also be subject to finance charges of over 18%.
REMEDY:
If you are a good customer, the bank may be willing to drop
the annual fee, and reduce the interest rate 9 you only
have to ask! Otherwise, you can switch issuers to a lower- priced
card.
5. Interest
Rate Hikes Are Retroactive
If you sign up
for a credit card with a low "teaser" rate, such as
7.9%, when the low rate period expires, your existing balance
will likely be subject to the regular and substantially higher
interest rate.
REMEDY:
Pay in full before the rate increase or close the account.
6. Shortened
Due Dates
Most card issuers offer
a 25 day grace period in which to pay for new purchases without
incurring finance charges. Some banks have shortened the
grace period to 20 days9 but only for customers who
pay in full monthly.
REMEDY:
Ask to go back to 25 days.
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