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How Much Is Your Credit Card Really Costing You? |
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Most people do not give much thought to how much the use of credit
cards really costs. While you may think you are aware of the
costs of credit, there are many hidden fees and charges that often go
unnoticed by consumers until it is too late. If you do not keep a
very close watch on your credit card fees, you could end up paying
hundreds of dollars per years without evern realizing it. If you
are trying to stay within a budget, hidden credit card fees can be a
real drain on your finances.
Here are some of the most common types of credit card fees and what you can do to avoid them:
Your grace period may seem to be a period of time in which you can pay
your bill past the due date without accruing additional interest of
fees. While this may have been true in the past, credit card
companies are making it more difficult to pay your bill late without
any extra charges. In previos years, if you charged the maximum
on your credit card but were able to pay your balance in full before
the end of the grace period, it was like a loan extension that cost you
no additional money. The majority of credit card comanies have
reduced the grace period to less than 25 days and some have eliminated
grace periods all together. A purcahse you make at noon today
will usually begin accruing interest immediately. Check the fine
print on your contract with the credit card company. If you find
that you have no grace period before interest starts to build, consider
switching to a more user-friendly card.
Late fees can really add up. Make certain you know what the late
fees are for your credit card and under what circumstances you can be
charged. Late fees have increased dramatically over the past
several years. This fact combined with a reduction in your grace
period means a hefty profit for credit card companies. Whenever
possible, send your payment the very day you recieve your credit card
statement. There are several reasons to never make a late payment
on your credit cards. The most obvious reason is that you will
avoid any late fees. Next, a late payment can be reported to the
major credit bureaus, leaving a bad mark on your credit report.
There is also the possibility that by making one late payment, your
interest rate can be raised permanently.
You may not be aware that even with a single late payment, your credit
card company can, and most likely will, increase your interest
rate. One late payment gives your credit card company the right
to raise your interest rate to the maximum allowed by law. This
does not just apply to your credit cards. Any late payments
reported on your credit report can give all your lenders the right to
raise your interest rates. A late payment means higher risk to a
lender and you may find that several of your interest rates go up due
to a pate payment listed on your credit report.
Keeping your interest rates low and avoiding hidden charges and fees is
the best way to save money over the long-term when it comes to your
credit cards. Managing your credit is one of the most important
factors in your overall finaincial stability. Make sure you
understand completely the terms and conditions of your credit cards and
all other credit accounts you may have such as your car loan, mortgage,
and any other revolving accounts. By making your payments on
time, you will save hundreds or more dollars each year in interst and
other fees.
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Credit Card Articles > Credit Card Debt > How Much Is Your Credit Card Really Costing You?
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