I’m not one of those people who think credit card companies are inherently evil. Credit card companies are companies whose goal is to make a profit for their shareholders. Hey, that’s fine. There is capitalism at work.
But to make a profit, they sometimes cross the line and get a little sneaky – especially when it comes to the fine print. It’s usually easy to find the big things like the annual percentage rate (APR) and annual fee, and it should be.
But everything else? It’s like putting together a bookcase that you bought at IKEA without getting directions. And that can even be a difficult task with the directions.
You are the boss!
You have more power than you know. Think of it this way: the credit card issuers work for you, not the other way around. And when you have excellent credit, you really are in control of your credit history.
Don’t let the thought get you that you have to accept the rates or terms offered by your credit card company. If your tariff increases, call – pronto – and find out why. And then try to negotiate a lower price.
Even if you don’t have a good credit score, you are still responsible. You may not have as much bargaining power as someone with excellent credit, but you can still ask for excellent customer service and quick answers to all your questions. If you are dissatisfied, this credit card company doesn’t deserve your business. Time for a better credit card.
Everything is negotiable (even before you apply for a card)
You can ask for a lower APR, change your due date to work better with your cash flow, and even request that a late payment be removed from your issuer’s report to the credit bureaus. You don’t always get what you ask for, but it usually doesn’t hurt to ask for it.
When could it hurts? If you have a low credit score and request an increase in the credit limit, the issuer may fear that you are becoming a risk. This could lead to a credit limit to decrease. So make sure your credit score is good to very good before trying to get better terms.
If you receive several credit card offers in the mail, you can play them off against each other. Let’s say the offer for Card A includes 12.99% APR on purchases and an annual fee of $ 95. And let’s say the offer for Card B is 15.99% APR with a fee of $ 95, but that fee is waived for the first year.
With both letters in hand, call the issuer for Card B and ask if you can get an APR the same as what is offered on Card A, which will lower your APR to 12.99%. And while you’re at it, ask to have the annual fee waived two Years. You may not get everything you ask for, but you will likely get a better credit card deal than any of the offers you received in the mail.
The 45 day notice you receive when your APR increases is misleading
the Credit Card Act 2009 provides consumers with much-needed protection. If a credit card issuer makes a major change in terms, such as increasing your APR, federal law now requires the company to notify you 45 days in advance.
Specifically, this means: you have 45 days before you have to Counting the additional interest accrued at the higher rate. But you actually get interest at the new higher rate on all purchases you make only 14 days after sending the message. So on 15NS On the day after the date of the postmark, the interest on your account starts at the new higher interest rate for new purchases. You just don’t have to pay for it until 45 days have passed.
Is that legal Yes it is. But don’t rely on this being explained clearly. If you notice an increase in the APR, check the postmark date so you know when the new tariff will go into effect – and carefully review all new purchases as you now have a higher APR.
According to the 2009 Credit Card Act, grace periods are not required
In the event that you are not familiar with the term, a grace period allows you to pay your invoice in full by the due date and not pay interest on your purchases. A grace period is usually between 21 and 25 days.
the MAP law does not require credit card companies to have grace periods on their cards. However, if the card issuer decides to offer a grace period, the KARTENgesetz requires this to be at least 21 days. The lack of a grace period is usually not a problem with major credit cards, but you need to look at the grace period on each of your cards and note how long it is.
If you have bad credit, be careful reading the fine print and look out for a grace period on credit cards that you are considering. If there isn’t, interest will be paid on your purchases as soon as they are added to your account.
The credit card payment protection insurance is kind of worthless
You have likely received calls or emails about this type of insurance. I’m all for insurance when it comes to my health, my car, my house and so on. But the difference is that health insurance, for example, actually pays off when I need it, so I didn’t waste any money on premiums.
Credit card payment insurance supposedly allows you to suspend monthly payments on your balance for a period of time if something unfortunate like losing your job happens. However, there are so many exclusions in these guidelines that they are not as valuable as your credit card company claims.
And it’s not cheap. You pay about $ 0.89 for every $ 100 of your monthly balance. Example: Your monthly credit is $ 1,800. Your insurance benefit is $ 16.02. If the balance stays roughly the same over a year, you’ll end up paying $ 192.24. And then if you need to take out insurance, it may not come through for you.
Cash advances are an expensive way to borrow money
The APR and transaction fees for cash advances are pretty clearly stated in the Schumer box for every credit card. But you have to read the fine print to find out that there is no grace period for a cash advance.
And it’s getting worse. Typically, you pay a higher APR on a cash advance than on purchases, and you typically pay a 3% to 5% transaction fee. The effective annual interest rate can be 25% or more and the interest starts accruing immediately. Borrowing $ 2,000 off your credit card could cost you 25% interest plus a $ 100 transaction fee!
Do you know who is ahead in this scenario? The credit card company is undoubtedly winning. Cash advances often lead to debts and the issuer then charges your balance for a very long time. Just say no! “To a cash advance.