If you are like most Americans, you are likely taking more than $5,000 in credit card debt. Although credit cards offer lots of convenience and it is wise to take at least one, the price of that convenience continues to go up. Lately many credit card firms have come under examination by lawmakers in Washington. Several credit card executives in the past were called in to testify before a Senate panel to clarify some of their present practices. Practices that some lawmakers consider to be unjust. A few of these practices, like increasing people’s interest rates for no motive, and charging interest on accrued fees have turned into a huge problem. If you are carrying high balances in your credit cards, after reading this post you will likely need to pay them all off, cut them up, and throw them away. Here are a few reasons why you can not manage to continue to carry credit card debt.
Credit card disclosures…. have you ever attempted to read the provisions and conditions of your credit cardholder agreement? Probably not, because if you did you probably will not have consented to take their credit card. The problem is, to be able to keep folks in the black credit card — firms issue disclosures grouped full of small print in a language no one has mastered yet. As soon as you sign your name on the bottom line, you fundamentally agree to all the stipulations, allowing people to basically do anything they need. So if you do not fully understand your credit cardholder’s terms and conditions, do not stress you are not alone.
Any fees which you have been charged are added to the outstanding monthly balance. By adding the fees to the outstanding balance, credit card firms can charge you interest on those fees. That needs to be illegal! To be able to go over your available credit limit the bill must be approved by your credit card business. So in other words, they’re going to let you go over your credit limit just to allow them to rake in a fee for doing so.
Grace Periods…. a grace period applies from the time you receive your invoice till the real due date arrives. Therefore, if you pay your balance in full every month, the grace period applies to the brief time period before interest begins to accrue. Yet if you take a balance from month to month there’s no grace period, new purchases will really start to accrue interest instantly. So if you don’t pay your balance in full every month you do not have a grace period anymore.
Two Cycle Charge…. many credit card firms now uses a bill that is two cycle to compute the balance issue to interest. If your credit card firm uses this system, you are paying more. Also called double billing, the credit card business uses the last two months worth of bills to determine your balance, whether you carried a balance the previous month or not. So in other words the credit card can use a balance you carriied two months past to discover your finance charges today, even if last month you’d no balance. I wonder how the credit card firm describde this one to lawmakers in Washington!
Musical Interest Rates… do not be surprised if one day you receive your statement just to discover that your interest rate has gone up. Seems silly to me! Nearly every credit card business out there includes a clause within their cardholder agreement that merely says interest rates are subject to change, and often times they’re merely required to give you a 15 day notice. Of course you’ll be able to select to not except this policy, but if you differ your credit card firm will shut your account and you may not be able make new purchases with that card. If you pay your invoice late they’re going to increase your interest rate every time.
Once again another practice to ensure more of your cash ends up in their pockets!
Although these practices don’t represent every credit card business out there today, the sad truth is most credit card companies do you use these strategies. So when you consider all these costs being applied to that small suitable plastic card, you got to ask yourself a question, can one manage this? For most folks the answer is no. This would be a good time to learn if the credit cards you take are charging you these fees. If so, this might be a good time to pay them off and remove them. These are only a few of the reasons why you can not manage to continue to take credit card debt.