Credit Card Traps

Rule #1, read ALL of the fine print. If you are not clear on something ask someone else what they think it means. Ask an attorney friend, CPA (certified public accountant), financial planner, banker or other person in the financial industry. Chances are they will have several questions about the fine print, too.

Rule #2, don't apply for a card unless or until they tell you what your actual rate will be. This is hard because most of them are not set up to tell you. Generally you will need to know your credit scores and have a copy of your handy.

Even then you are unlikely to find someone through their telephone maze that will or can actually answer your question. Try to find a card that gives you a confirmed rate before you apply. A conscientious company will first request a copy of your credit report from one of the credit bureaus before quoting you a rate.

Look on http://www.bankrate.com for current rates offered by various credit card companies and banks. Often smaller banks and companies offer better deals and are not as strict or hard to deal with. Check with your local banks also. At least with a locally issued credit card "you know where they live".

Rule #3, always mail your payment at least 7 days before it is due. Or try paying through the Internet. Many companies now offer that payment method. It can also save you time and stamps.

Rule #4, check your statement each month to be sure you are still at the interest rate you signed up for. If your rate has been increased, look for a late payment fee, or some other reason for the increase. Call the company and ask them why they increased your rate.

If your rate was unjustly increased (they processed the payment late or credited it to your account late, but it was not received late) then ask them to change your rate back to what it should be.

Even if you did make a late payment, most companies will reduce your rate after six months of on-time payments. But if you don't ask, they will keep you at the higher rate as long as they can. Gary Winnick