Things That May Not Be Disclosed By Your Credit Card

The Federal Law mandates all issuers of credit cards to disclose all fees and terms in their contract. However, did you know that what you read in the fine print may not be everything you need to know about your credit card? This article discusses possible things that may not be disclosed by your credit card company.

Balance Transfer Fees. Watch out for credit cards that offer zero interest rate on balance transfers yet imposes unreasonable balance transfer charges. Some credit cards charge 3% to 5% of the amount you’re transferring. Would you be charged each time you transfer a new balance to your card?

Two-Cycle Billing Method. The two-cycle billing can be deceptive, if you don’t understand how it works. This method of billing calculates your monthly charge based on your previous and current charges. That means even if your previous balance has already been paid, it would still be considered on your next bill. If you have a large amount of balance last month, your interest rate for this month can be high on account of your previous balance.

15-day Notice. Don’t forget the 15-day notice condition in your credit card contract. This means, your credit card issuer can increase your rates and fees at any time provided that you’re sent the 15-day advance notice. If you own a credit card, make it a point to check your monthly billing statements and notices from your credit card. Thus, in case of changes in your billing, you can immediately call up your credit card issuer and discuss the matter.

Lower minimum payments mean higher costs. A low minimum payment due does not guarantee a good deal. Remember, the longer you carry over balances in your account, the more costs you end up paying.

The Universal Default Clause. Examine the Terms and Conditions carefully and see if your credit card imposes the Universal Default clause. This clause gives creditors and lenders the power to increase their interest rates at any time if the borrower delays on his/her payments on any of his/her account. Even if you submit your credit card payments on time, if you fail to submit one payment on time on any of your account, you can get penalized with increased rates and costs without warning.

Very short grace period or none at all. A sufficient grace period is a very important feature for a credit card since it gives the cardholder the chance to pay off balances without incurring the additional interest rate costs. Surprisingly, more and more credit cards today provide a very short length of grace period. Some do not even provide a grace period at all.

Before signing up for a credit card, check the length of grace period it offers. Remember, cash advances are not covered by the grace period. If you’re going to take out cash from your credit card, you will be automatically charged with the interest rate even if your card offers a lengthy grace period.

Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on credit cards for bad credit,credit cards for good credit and other credit-related issues. Its main objective is to help people build good credit. Copyright © 2008

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