Technically, credit card companies are required by the Federal Law to state all fees associated with the credit cards they offer. However, these fees are not explicitly written unless you take a look at the Policy Agreement or the Terms and Conditions which can be found when you sign up your online application.
For most consumers, it is easy to get overwhelmed by the major features of the credit card and sign up right away. These offers can sound really exciting at first read glance but if you take a closer look at the agreement form, you may find that some fees or terms that may be unreasonable. You might be surprised to discover such fees only when your credit card issuer starts sending your billing statements. Obviously, not inquiring about the "hidden" fees can be frustrating for a credit card holder.
Generally, credit card holders are forced to pay high fees because they fail to pay off their balances on time. For example, a credit card which has a high APR can be a burden if you fail to pay off your purchases by the end of the month. Aside from expensive interest rate, you are also charged with a penalty fee or late fees. Add these fees to the original amount you owe and it becomes more difficult to keep up with your debts.
Some credit cards don't give the full 30 days of grace period. Instead, the card holder is only given 20 days or less to pay off their balances before they get charged with the interest and late penalty fees.
You can also get penalized if you go beyond your allowed credit. Exceeding credit limit can put an additional burden of as much as 24% to your actual credit. Imagine how much you'll end paying when all these fees are added to your account.
Apart from these fees, you credit card company may also change your present rates based on your performance. This clause is stated in the agreement where it says that the credit card issuer have the right to change the rates following a 15-day notice to the card holder. If you own more than one credit card, you should be particularly aware of this clause.
If you're in the habit of not making your payments on time with either one of your creditors, your credit card can increase the present rate of interest and the penalty fees in your account. Why not take the time to examine the contract of your present credit cards and make sure if such clause applies to either one of them?
Another important factor to check will be the minimum remaining balance you're allowed on each of your credit cards. You can be charged with a penalty fee if you go below the minimum amount in your remaining balance.
Obviously, given these possible fees you can incur, taking your time in choosing your credit card cannot be emphasized enough. There are credit cards in the market that not only offer reasonable rates but reasonable terms as well. When choosing a credit card, always compare each one from the other to avoid getting ripped off with unreasonable credit card fees.
About the Author:
Liz Roberts is a freelance writer and loan consultant. The website BadCreditResources.com offers resources that specialize in providing loans and
credit cards for bad credit.
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Date Published :
Dec 1 2008