Things You Need to Know About Your Credit Cards

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You know that little trifold piece of paper that comes in the envelope when you receive a new credit card, the one that it takes a magnifying glass to see the print, the one that most of us choose not to read. That little piece of paper could contain information that could save you a lot of money.

Credit card companies have begun the practice of reviewing your credit report on a regular basis. They are looking for late payments with other creditors or a high debt-to-income ratio. If they find either of these, they may raise your interest rate. The reason they will give for the increase is that if you paid someone else late you are at risk of paying them late or going over your limit.

Credit card payments not only have a due date, some credit card companies have a specific time on that date that the payment is due. Credit card companies do not allow a grace period. Making a late payment will subject you to a late fee that could be as high as $50. If you make two late payments in any twelve month period, you will probably see an interest rate increase also.

Beware of “fixed” interest rates. They are fixed until the prime interest rate goes up. Your interest rate can be raised at anytime as long as you are given a 15 day notice in writing.
Decreasing grace periods is another problem. Typically, a grace period used to be 30 days. Now, many of them are 25 days and some are as little as 21 days.

If you have applied for a credit card with an introductory rate, check the card member agreement to make sure that you have received what you have applied for. Credit card companies have been known to pre-approve you for a credit card with an advertized set of terms and then send you a credit card that has a different set of terms.

The credit card agreement that comes in the mail with your credit card can be very boring and tedious reading, but it will be worth it in the end because it will likely save you money.