Ten Unknown Credit Card Facts
Credit card companies are not your friends. The Bank of Mayberry has long been bought out and replaced by giant computers. You are a number to the credit card companies and there are ten things everyone on this Earth should know about them. I will briefly list them here, and follow up with subsequent articles on each one.
#1 Beware Of Universal Default The most hideous fact about this predatory banking system is Universal Default. If you see anything about Universal Default mentioned in the little tiny brochures they send you now and then, get rid of that card. They will monitor your credit report to see if you are ever late on anything, if you have too much debt to your income, or you just carry high balances on your credit cards. If so, you are a high risk to them and the law allows them to jack your interest rates to the moon to protect themselves.
#2 Huge Fees On Cash Advances The card companies routinely charge up to 30% interest for cash advances! You will end up paying off the debt two to three times at those rates. How many times do you have to pay off the debt? NEVER take a cash advance, unless it's an emergency!
#3 Teaser Interest RatesThey lure you in with low rates, however, after a period of time, they can go to over 20% interest. And miss a payment or pay them late, and you can go to over 30% interest!
#4 Never Get A Credit Card Where You Do Your Checking Or SavingsIf you missed a payment, or stopped paying them, they usually take the money from another account. It happened to me; I went into overdraft on my checking and instead of taking it out of savings like they use to do, they added it to my credit card and are charging me high cash advance interest rates over 20%!
#5 No Grace Period CardsUltra low interest rate cards sometimes offer no grace period, however, they charge interest from the date of the first purchase. Read all the fine print before you sign up for any card! Avoid them at all cost.
#6 Short Grace PeriodsSometimes they give you twenty five days to pay with no penalty, however, they change the numbers at will and if you are not careful and they shorten the date and you don't notice or have automatic withdrawal, they will nail you with up to $35 penalty every time you are late, and that could set off wave of other cards also raising their interest rate to over 30% under "Universal Default."
#7 Minimum PaymentsThe card companies only put a bare bones minimum payment each month. Usually a little more than the total interest for that month if you have high rates. Well, at that rate, it could take twenty to eighty years to pay off your debt, and you will pay two to three times the amount in interest!
#8 Two Cycle BillingSome cards use a two cycle billing process, where they charge two months of interest if you go from paying the card off each month, to paying installments. Avoid this by paying off the card in full each month.
#9 Negotiate a Better Interest RateJoining consumer credit counseling is going to trash your credit for eleven to thirteen years, and all they will do is lower your interest rates. Usually, you can get the card companies to do that on your own. If not, threaten to close the account and raise your voice. I recently read that the creditors are starting to install software to detect increased levels of anger, and you might get switched to another department who can help you. If not, tell they you want to close the card right now and pay it off as soon as possible. That worked for me a couple times to get rid of high yearly fees.
#10 Be Careful Of Zero Interest Rate PurchasesUnless you plan to pay off your furniture or jewelry store purchases before the zero interest period, your entire accumulated interest since you opened the account will automatically be added to the balance the day after the promotional period ends. This means, if you buy something on zero interest for two years, pay it off before two years to avoid two years of finance charges being added to the principal balance.
That's our report, Ten Unknown Credit Card Facts. If you are having difficulty paying the credit cards, or your interest rates are very high, and all you are paying is interest, then you need to do something. We have prepared a report that outlines the good, the bad, and the ugly about Debt Settlement.
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Christopher WinklerAuthorSenior Debt Analystmailto:firstname.lastname@example.orgDebtChemotherapy.comDebtChemotherapy.com/products/pennies/penniesebook.html