12/04/2014
What You Need to Know Before Using a New Credit Card
The holiday shopping season means you will likely receive many credit card offers online, in the mail or at the checkout of major retailers. Accepting a credit card without understanding the terms can leave you paying huge fees and staggering interest rates. As a LegalShield member your provider law firm is there to help you understand all the fine print and make sure you understand what the new card will actually charge you.
Visit www.legalshieldassociate.com/jlogan to find out how you can become a member quick and easy for one small monthly fee and get the peace of mind this holiday season.
1. Closely examine “Introductory Interest Rates.” A “Low Introductory Interest Rate” is a great way to get consumers to use a card. Introductory rates are temporary and may increase drastically in a short period of time, locking you into exorbitant payments that can bury you financially.
2. Review all variable interest rates and fees that apply to your account. Your credit card company may charge fees and higher interest rates for cash advances, making a past due payment or going over your credit limit. In addition to late fees and over limit fees, your credit card company may also charge annual fees, as well as fees for balance transfers, use of ATMs and other actions. Know all of the potential fees and avoid them whenever possible.
3. Take note of when your payments are due and the penalty for late payment. Make sure you understand the due date for your payments and the penalties and interest imposed for late payments. They may be large, cumulative and disastrous for you.
4. Understand your payment options. You may be able to pay online, by phone or by mail. Some options may carry fees, while others do not. Understand the options and only use the cards that do not impose a separate fee for making a payment.
5. Know your credit limit and stay below it at all times. Your credit limit is the maximum debt you are authorized to carry on your credit card account. Most credit card companies will let you exceed your credit limit, but many impose substantial fees for doing so. These fees can accumulate quickly and can result in fee debt larger than your credit debt. Additionally, exceeding your limit may be reported to credit agencies and substantially damage your credit score.
6. Check the fine print in your cardholder agreement. Credit card companies know that virtually no cardholder reads the cardholder agreement. It is always very long and printed in nearly unreadable small print. When you accept the credit card you are bound by the cardholder agreement regardless of its length, print size or whether you read it. For the sake of your financial health, take the time to read the cardholder agreement and understand all the obligations and penalties you are subject to BEFORE you accept the credit card.
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