Sneaky Credit Card Rates

Everyone has Credit Card. It is an unfortunate fact that there are a lot of people who are tied up to their Credit Cards. They may have salaries but those are just enough to pay for their Credit Card debts. It is almost a vicious cycle that most cannot easily walk away.

Besides, Credit Cards provide the convenience of not having to bring cash. Credit Cards also provide protection for consumers because in case of dispute, payment can be halted. Buying products with the use of Credit Cards virtually gives you the chance to evaluate the product and return it if you do not like it or change it.

You already know some of the bad side of Credit Cards. The interest rate is almost over the top and paying them up is a little bit difficult because of the increasing interest rate. Consumers may even abuse their privilege in using Credit Cards. There are transactions that should be paid in Cash but Credit Cards are used instead, since it offers a convenience that is not provided by using Cash.

. Changes in Credit Card Rates

You may not know it but your Credit Card interest rate changes without warning you. These are almost sneaky and unfortunately, Credit Card companies are getting away with it and you cannot do anything about it. These changes in Credit Card rates are legal and they know when to implement them.

. Introductory Rates

The sneakiest way of increasing their interest rates in Credit Cards is the introductory rate. Credit Card companies will heavily market their Credit Card with an introductory rate of at least 3%. The 3% rate looks really good but they will not last for more than 18 months. Usually Credit Card companies will only offer the introductory rate for six months. If you have a bad credit line, you may enjoy the introductory rate for only three months.

After the introductory rate, watch out – your interest rate will balloon to as much as 18%. You will never be informed about it and you will just find it out in your Credit Card bill. This interest rate will be applied immediately to everything that you owe to the Credit Card company.  You maybe buying that product for only 3% at the time of purchase, but once it cross over the next billing cycle you have to pay the product with the new interest rate.

. Late Payment Penalties

Another technique used by Credit Card companies to increase your Credit Card interest rate is through late payment penalties. Usually, late payment penalties only come with additional percentage on top on what you have to pay. But Credit Card companies may increase your Credit Card interest rate if you are late in payment. If you miss paying two billing cycles, expect an increase of your Credit Card rate. And the increase is not just 1% to 2%; the increase could be at a whooping 6%-9%.

For example, you maybe enjoying an interest rate of 18% but if you are unable to pay for your Credit Card bills in time for two consecutive months, your interest rate will jump up to 27%.

. The Fine Print

Credit Card companies can get away with it because all of these penalties and conditions are written in fine print. They will never inform you about it because they will think that everything has been written already – only a lot smaller that you would ignore them.

That is why it is recommended to read the fine print before signing up for any Credit Card. But more importantly, control your Credit Card spending so that you can easily pay your Credit Card bills on time.