The fine print in credit card application forms never really get read, do they? Most of the time, because of the excellence of credit card marketers; credit card first-time applicants get caught hook line and sinker. Online credit card applications have more attractive baits – promos and freebies with points you earn from swiping that gold card of yours.
And then, the billing comes and most student credit card owners realize they do not have enough cash to cover what they spent. Almost all would accrue late payment charges and this deathly cycle goes on and on for the longest time.
Do you realize that accrued debts due to paying only the minimum amount required can become larger than your actual expenses?
So before you sign up for that credit card, know the following pitfalls you might fall into.
The first is that credit card issuers actually want you to just pay for minimum amounts required monthly. This way, they can charge you more through interests.
The second is that zero-percent interest offers are not always good for you. They’re beneficial if you can maintain paying your credit card dues on time. If you don’t, normally, credit cards have the policy that they can charge you interest already as late payments waive your right to the zero-percent interest package.
The third is that it doesn’t matter to these credit card companies when you receive your statement; the only thing that matters is when your due date is. So this means that sometimes, the credit card issuer can choose to delay sending your statement to optimize the chances of your payment to be late. Even a one day delay in your payment can cost you late payment charges, plus higher APR.
Fourth is that credit card issuers do have hidden transaction fees. You may have been too lazy to read all the documents that were sent together with your card, but it does not mean that credit card companies will accept your excuse of ignorance. Cash advances have fees, quasi-cash transactions have fees, overcharging (even to only a dollar) has fees, and transfers have fees. Everything has fees. They are services, of course they have charges.
Fifth, not all credit card companies have grace periods for payments. Monthly dues, if not settled on or before the due date can have significant repercussions, as what was discussed above. Some credit cards companies give up to about 30 days (the average now is 23) while some do not have grace periods at all.
The safest way really, is to not have a credit card at all. However, not having credit history may be to your disadvantage as you may well know. Everything revolves around credit so you eventually will need to learn the tricks of this trade. For now, it is best to be armed with awareness of what these credit card companies offer in reality.
Tags: Avoiding the Pitfalls of Unknown Charges, Credit Card Fine Print