29 Sep 11 Mistakes to make on a Credit Card, Part 2
More mistakes to make on your credit card accounts. If you haven’t read Part One, go on back.
- Foreign Charges
You’ve bought something on credit while on vacation in another country. In addition to the exchange rate on the date that the cahrge hits your account, creditors can add 1% to 3% (of the purchase) fee on all purchases in addition to the 1% exchange rate fee. Now that purchase just cost you as much as 4% more than you thought. What a bargain.
- Cash advances
Take a cash advance on your card and it will likely bear a different interest rate than if you made a purchase. Mny cards will then apply your payments to the lower interest rate balances first, thus assuring that the higher rate amounts will bear interest for a longer period of time.
- Low minimum payments
The convenience of lower payment amounts might sound like a good thing, but it assures that you will be paying on the account for along period of time assuring more interest being earned.
- Balance Transfers
The credit limit on new cards may be changed before you realize that you transferred a balance larger than the limit causing over limit fees and penalty interest and ac reedit ad that is already maxed out.
- The Latest and Greatest new credit card offers
Read those offers carefully. A new credit card may have have starting fees. A card with a $300 limit may have come loaded with a Program Fee of $96, an Annual Fee of $48, an Account Set-Up Fee of $56 and a Monthly Participation Fee of $8, but charged at an annualized rate of $96. Just open one of these accounts and you will have $296 in charges without having made a purchase. If you buy something over $4, you’ll get hit is an overlimit fee and a late fees and likely an interest charge.
- Cut up Your cards
Be prepared for an inactivity fee for those credit cards you have successfully paid off and not longer use. Close the account and get hit with a penalty on the credit score.
Continue on to see what the Credit Card Holder’s Bill of Rights does for you…