Credit Card Terms and Conditions
Credit card companies can change the terms and conditions of your account. They will send you advance
notices about changes in fees, interest rates, billing, and other features. By reading these “change in terms”
notices, you can decide whether you want to change the way you use the card. For example, if cash advance fees increase, you may decide to use a different card for cash advances. If you have a card with a variable rate or if you have an introductory rate that is ending, be aware that credit card companies are not required to send you a notice about raising your interest rate. Interest rates are listed on your monthly bill. Read your bill carefully and take note of any changes.
Making Minimum Payments
If you can’t pay your balance in full each month, try to pay as much of the total as you can. Over time, you’ll
pay less in interest charges—money that you will be able to spend on other things, and you’ll pay off your
balance sooner.
How to avoid credit card fees
Credit card companies not only charge late payment and over-the-limit fees, but also fees for cash advances, transferring balances, and having a payment returned. Some companies charge a fee when you pay your bill
by phone. Pay attention to the transactions that trigger these fees. If you need a cash advance, withdraw enough so that you don’t have to take a second cash advance—and incur a second fee—later in the month. Read your credit card agreement to learn more about the fees that your credit card company charges.
Stay within credit limit
If you go over your credit limit on your card, your card issuer could charge a fee and increase your interest
rate to a higher penalty rate. To avoid this, keep a record of your spending or check your balance online.
Also, be aware that some merchants (for example, hotel and car rental companies) put a “hold” on your
credit card based on their estimate of the amount you will charge. This can reduce your available credit until
the final charge is processed.
Paying Your Credit Card Accounts
Paying your credit card account on time helps you avoid late fees as well as penalty interest rates applied to your account, and helps you maintain a good credit record. A good credit record leads to a higher credit score, which helps you qualify for lower interest rates. Know the date your payment is due. If your bill is due at an inconvenient time of the month—for example, if it’s due on the 10th and you get paid on the 15th— contact your credit card company to see if they will change your billing cycle to fit your cash flow.
Top 4 Credit Card Don’ts
Susan McCarthy, a financial adviser in Oklahoma City and author of The Value of Money, lists her top four credit card don’ts:
- 1. Don’t make only the minimum payments. This stretches out your payment and, thanks to the interest, significantly increases your overall cost.
2. Don’t carry too many cards. Multiple cards make it easier to rack up debt because it’s harder to keep track of your spending. Having lots of cards isn’t necessarily bad for your credit, but misusing them is. So limit your plastic to two national cards (store cards often carry higher interest rates) that you manage carefully.
3. Don’t miss payment due dates. Not only will you be hit with a late fee-as high as $39 on some cards-but your interest rate could also jump. Sign up for online banking or pay over the phone if you’re up against the deadline. (You may pay a processing fee, but it will probably be less than the late fee and the possible interest-rate hike.)
4. Don’t take cash advances. These advances generally come with sky-high interest rates and service fees, making them a far too expensive way to get cash. Avoid at all costs.
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