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[08:08:49 AM Monday, March 05, 2007]
Fine print and credit card offers
It is one of the responsibilities of a credit card holder and one of the most important parts of owning a credit card - paying attention! Most card holders go through the entire process of searching through their credit card offers and comparing credit cards to find the best cards for them.
Credit card companies realize this and often try to sneak in details in the finer print of the applications. Credit card companies realize that most of their customers do not want to be bothered with reading the small print on the credit card applications and would rather just apply and pay later. As a credit card holder you must fight back and read the print so you have a great idea of what you are getting into ahead of time.
While reading the fine print does mean taking a couple of extra minutes in the entire process it doesn't mean you have to spend all day reading size six font! There are a few basics that a credit card applicant should be aware of:
• APR (Variable rates): All the junk credit card mail that you have ever gotten from VISA, MasterCard, American Express or Discover has been dominated by large, fee free numbers. It does not matter what bank supports the card, Citibank, HSBC, First PREMIER Bank, Advanta Bank, Orchard Bank, etc, you will have to be aware of these surprise APR's. Many credit cards try to sneak these APR's in as a second interest rate. For instance, they start off by saying you can have 0% APR for 6 months - before exploding to 25%!
• Fees: Many credit cards offer fee free cards. Many credit card companies advertise no fees when it comes to annual fees, balance fees, cash, advance fees, inactivity fees, etc. Many times these fees are waived for a specific time period before being brought back in. You must be aware of the time period you will be fee free.
• Interest rate calculation: Credit card companies can sometimes hook card holders by the way they calculate their interest rates. Just how these companies figure out how to charge interest baffles many card holders - and for good reason! Outside of minimum payments and such, a card holder must look to see if their bank policies include payments for double billing cycle payments.
While most credit cards go off of an average daily payment method some decide to go with the double billing cycle. This means the due date for your credit card may be figured out two weeks prior to the billing statement. However, the company will charge you for the interest compiled during those weeks. It is a complex calculation so a card holder should be aware that they may be getting charged in this fashion.
• Grace periods: Ah, figuring out just how much time you have each time you pay off the balance of your card without being charged interest is so important. How many days is your grace period? While your credit card may start off with one particular grace period it can change dramatically - and quickly! Grace periods typically range from 15 days to 30.
A few other things credit card holders should look at when seeking out the fine print of their credit card applications are the credit limit changes and the bad credit penalties. Your credit score does have a significant role in your application process, as it will make a difference in how quickly your credit limit will go up.
Credit limits go up periodically, depending on your credit score and usage history. While it would be great if everyone had excellent credit but it is just not a possibility. Some have good credit while others have bad credit. Some cards will penalize you by being especially stringent if you are late on payments or so forth. Often credit card companies will advertise that you can get a credit limit of up to $50,000 but will only give you $1000 if your credit score is too low.
While most consumers hate the very idea of reading such smaller, boring print it is often the maker or breaker of credit card applications. Some cards will be advertised so well by banks but will turn out to be fine friendly.
Knowing what you are and aren't paying for will ultimately help you save money by spending as little as possible in interest and fees. No one likes reading small credit card print; so by being the exception to the rule and reading the print you can avoid problems. Those who apply online for credit cards are especially prey to fine print problems because they are trying to save time. Be the exception, save some money!
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