10 Things You Should Know About Credit Cards
July 11, 2011
1. Interest Backdating
Most card issuers charge interest from the day a charge is posted to your account if you don’t 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.
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Issuers using 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 that permits the bank to take those funds if you become delinquent on your credit card.
Remedy: Bank at separate institutions, or avoid delinquencies.
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 more than 18 percent.
Remedy: If you are a good customer, ask the bank to drop the annual fee and reduce the interest rate. Otherwise, you can switch issuers to a lower-priced card.